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UK Gov’t urged to reallocate £100m unspent budget to heat decarbonisation projects

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The UK Government has been urged to reallocate some of the £100 million (€117 million) of unspent budget to save more than 31,000 tonnes of CO2 per annum.

With the Non-Domestic Renewable Heat Incentive (RHI) set to close this week, the Association for Renewable Energy and Clean Technology (REA) is calling for the reallocation of unspent budget to help support 19 ‘shovel-ready’ projects, which could deploy more than 78 MWth of renewable heat capacity, helping to deliver significant carbon savings.

The most recent budget updates for the RHI, which also includes the Domestic RHI (due to close in March 2022), indicate that it still has more than £100 million (€117 million) of unspent budget. The change would ensure that these projects can immediately begin to deploy, using existing funds already allocated to the scheme.

“Our members and the broader low-carbon heat industry have 19 large-scale projects that are ready to be built over the next two years,” said Dr Nina Skorupska CBE, chief executive of the REA. “Their delivery would help contribute to the government’s heat decarbonisation agenda, as well as support the UK’s Green Recovery.

“Supporting these projects requires no new budget, yet government inaction has put their future at risk. A straightforward change to the RHI would ensure these projects are delivered using existing money allocated to the scheme, especially given there remains no comparative scheme to replace the Non-Domestic RHI to support commercial heat decarbonisation.

“The discussions on this change have coincided with the government’s announcement of significant new funding for the oil and gas industry’s transition to clean energy. We must support all parts of our economy in our drive to net zero, but not pursuing these low-carbon heat projects is another missed opportunity from the government.”