UK’s BEIS publishes response to Renewable Heat Incentive consultation
The Department for Business, Energy and Industrial Strategy (BEIS) has published its response to its consultation on the Renewable Heat Incentive (RHI) today (14 December, 2016).
For biogas and biomethane, the reforms will vastly improve the carbon cost-effectiveness of further support, BEIS said in its statement response.
New plants will be required to produce at least half their biogas and biomethane from waste-based feedstocks to receive support for all their production. This will help divert wastes from landfill and make use of available resources.
There will also be a small uplift to tariffs for biomethane injection to support continued deployment alongside these changes. In addition, the reformed scheme will reverse any reductions to the tariff in support of new biogas plant that occur between the date of the publication of this document and the date on which the regulations come into force.
Going forward, the government will continue to bear down on value for money risks and consider how to deliver this in a way that minimises negative air quality impacts. For biomass, the reforms are intended to support further deployment where the technology offers best value for money and is likely to have a long-term role, such as in high-temperature industrial processes.
The reforms will introduce one level of support for all new non-domestic biomass boiler deployment. The reforms also introduce a cap to the annual payments for new domestic biomass systems to make sure owners of larger properties are not overcompensated (there will be similar caps in place for new heat pumps). Alongside this, there will be a slight increase to the tariff for new domestic biomass systems, resetting the tariff at a previous level, to allow the technology to continue to deploy
According to BEIS, the reforms will also improve certainty for investors in larger projects. So far, the scheme has been dominated by spending in relation to smaller scale systems. “Tariff guarantees” will help address this imbalance by providing certainty to investors regarding the tariff they will receive earlier in the project lifecycle. Without this reform, the risk is large-scale projects will continue to be relatively rare or will require significantly higher tariffs, BEIS said.
The reforms will also make some changes to the RHI’s budget management rules to take account of projects with tariff guarantees and to simplify the degression rules. The reforms also make other changes to the scheme to drive value for money, such as making some additional heat uses ineligible for support in the non-domestic scheme.
The Anaerobic Digestion and Bioresources Association (ADBA) has welcomed the publication today of BEIS’ response to its consultation on the RHI.
Commenting on the announcement, ADBA chief executive Charlotte Morton said: “It’s great to see that the new ministers in BEIS remain committed to decarbonising heat in the UK and continuing to support the UK’s burgeoning green gas industry.
“We are pleased to see that tariff levels have been reset – this should support higher levels of deployment. We do not believe, however, that the restrictions on feedstock for new plants, which could have unintended consequences, are justified.
"The introduction of tariff guarantees is extremely welcome and we will continue to work with the UK Government and with our members to ensure the UK AD industry keeps growing and reaches its full potential – for example by calling for urgent action on food waste collections in England.
“Biomethane and biogas have been real success stories from the RHI, and the continuation of this scheme will allow the UK AD industry to build upon its success to date, decarbonising heat without any changes for the consumer.”
This story was written by Liz Gyekye, editor of Bioenergy Insight.