EU Delays Renewable Heat Incentive



    euro flag         

         Energy and Climate change    

The Renewable Heat Incentive (RHI) was due to be open for applications today.  The incentive offers long term (20 years) financial support to organisations who install renewable heat generating installations to encourage the uptake of renewable heat.

  The first phase will apply to applicants such as schools, hospitals and large offices choosing qualifying technologies over traditional fossil fuel heating systems, but will not accept domestic applications.

  The Department of Energy and Climate Change (DECC) said in a statement, that the European Commission had expressed concern that the tariff for installations with a high yearly KW h banding was set too high.

  To ensure fair competition inside the EU, the Commission has control over 'state aid'; however that approval is issued on a case by case basis.  "State aid approval is a necessary condition for the scheme to go ahead. As part of that process, the European Commission has expressed concerns that the large biomass tariff is set too high," DECC said. "We understand that the Commission has given state aid approval for the RHI, subject to a reduction in the large biomass tariff, and we expect to receive written confirmation of this very soon."

  The European Commission objections have forced DECC to push back the opening of the RHI.  The surprise postponement to the scheme has worried many in the sector along with environmental, who have expressed concerns that more hurdles have been presented to potential investors in what is already a nascent industry.

  But DECC believes the EC concerns have been overcome, after revising the amount of money available for larger biomass projects. The tariff for projects over 1MW is being reduced from 2.7p per KWh to 1p per Kwh.

  A DECC spokesperson said today: "We appreciate that this is frustrating, however without this change the scheme would not have been able to proceed."

Once the regulation change has been approved, DECC hopes to open the scheme before the end of November.