‘Significant’ policy gap remains following UK’s RHI closure consultation

A ‘significant’ policy gap remains following the publication of the UK Government’s Renewable Heat Incentive (RHI) closure consultation, according to the Association for Renewable Energy and Clean Technology (REA).

Based on consultation responses and work with the scheme administrator Ofgem, the UK Government said it intends to proceed with ‘the majority’ of the proposals outlined in the consultation:

  • The non-domestic RHI will close on 31 March 2021 as the UK transitions to future support schemes that most strategically target tax-payers money

  • Heat pumps – allowing the modification of capacity for shared ground loop (SGL) systems, so participants can receive non-domestic RHI payments without requiring the total capacity to commission all at once

  • Biogas and biomethane: allowing the transfer of registration of production to introduce fluidity in the biomethane market; introducing provisions on the use of fossil fuels in AD to ensure accurate carbon savings; enabling non-domestic RHI participants to also claim on the Department for Transport’s Renewable Transport Fuel Obligation scheme, to incentivise biomethane production

  • Biomass: mandating participants to comply with a fuel quality standard and to carry out annual maintenance checks on their biomass boilers to increase efficiency and improve air quality emissions. The government will not restrict the burning of waste wood in biomass boilers, since existing processes already provide a good enforcement regime for waste wood.

The REA said the move to enable biomethane projects to use both the RHI and renewable transport fuel obligation (RTFO) was ‘welcomed’ as a positive aspect, as was the focus on improving fuel and maintenance standards in biomass heat.

However, the REA is concerned that a ‘significant’ policy gap post-March 2021 remains, with a lack of clarity around support for the delivery of commercial or industrial-scale renewable heat projects.

Mark Sommerfeld, policy manager at the REA, said: “The REA is pleased that the government has taken on board our members’ concerns in their final decisions concerning the closure of the non-domestic RHI in March.

“Moves to make it easier for biomethane projects to benefit from both the RHI and RFTO going forward are particularly welcome, enabling the further growth of the UK green gas sector. Equally, we welcome the pragmatic decisions to continue to improve standards around fuel quality and maintenance for biomass heat installations, something the wood heat industry has advocated for a long time.

“However, this consultation also brings into sharp relief that the non-domestic RHI will close in March, with no comparable scheme or ambition in place to continue its success.

“As it stands, there will now be a very limited route to market for commercial heat decarbonisation projects and the pipeline for such developments is dramatically slowing.

“This is a policy gap that needs urgent attention if the UK is to achieve its 2050 net-zero decarbonisation targets, which require almost total decarbonisation of heat in all buildings.”

The Wood Recyclers’ Association (WRA) has welcomed clarification from the UK Government that non-domestic Waste Incineration Directive (WID) compliant renewable heat incentive (RHI) boilers are allowed to continue to use post-consumer waste wood as biomass fuel.

Richard Coulson, incoming chair of the WRA, said the announcement was “common sense”.

“Energy companies have invested millions of pounds in abatement technology to ensure compliance and safe handling of wood fuel to produce renewable energy,” said Coulson.

“It made no sense to propose that non-domestic Chapter IV compliant boilers could not continue to use fuel derived from post-consumer waste wood.

“Indeed this is the best outcome for the environment as many forms of post-consumer waste wood can be difficult to recycle and the recycling capacity to handle all of this waste type is also not available.

“Post-consumer waste wood such as manufacturing and joinery offcuts is much easier to recycle and, therefore, it’s correct that it should be re-used or recycled first.”

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