Expert warns Renewable Heat Incentive hitch could take months to resolve

by Search Gate staff. Published Fri 30 Sep 2011 13:32, Last updated: 2011-09-30
"Suppliers and installers facing a period of uncertainty," says Boroughs

An eleventh hour block on the introduction of the Renewable Heat Incentive will add to “more dithering and indecision” in the market, according to renewables expert Andy Boroughs.

The green energy business chief said he feared the concerns raised by the European Commission on the tariffs for large biomass systems could see the RHI stopped in its tracks for a considerable length of time.

“We need swift action to resolve this last-minute delay, yet again there is frustration in the industry that we are once more forced to explain to customers that there will be a RHI launch we just don't know when,” said Mr Boroughs.

The businessman was one of the first to introduce low carbon heating systems to the UK, with his company, Organic Energy, the UK's sole distributor of the leading ÖkoFEN wood pellet boiler range.

“This will add to more dithering and indecision in the market. The delay could be long, firstly the DECC will need to calculate a new tariff after the EC said the existing number of 2.6p/kWh for large systems was too high.

“The DECC then has to submit the new number for approval by the EC, once this is accepted it will need parliamentary approval. All the other tariffs in the RHI have been approved so everything hinges on this one revision.”

Although many ranges attract a tariff which has been approved by the EC, all sections of the RHI will be put on hold until the large scale tariff has been reset.

Boroughs added: “Many customers and investors planning to order large scale systems may delay decisions. Investment plans will no doubt be based on the original figures so if the new figure is substantially reduced, this will affect investors who are looking at large scale systems.

“Organic Energy has been able to grow its market in spite of all the disruption that the RHI has caused, but the industry as a whole cannot achieve its potential with repeated delays like this. If the Government is serious about its commitment to renewables, the DECC needs to react quickly to ensure the sector does not stall.

“Of course customers which meet the criteria will still receive payments once the scheme starts so there is no reason to delay. After all, customers still need to heat their buildings and the tariffs for our boilers have been approved.

“But there will be some suppliers and installers facing a period of uncertainty. The most important thing is that the industry needs stability, not the stop-start dithering which is happening currently.”

DECC has said that once it receives written confirmation from the Commission, it will make a further announcement about what this means for the large biomass tariff and the timing of the launch.

A statement from DECC, said: “DECC was planning to launch the Renewable Heat Incentive (RHI) for non-domestic generators on 30 September 2011. 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. 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.

“Changing the large biomass tariff will require the RHI regulations to be amended and submitted to Parliament for approval. We are unable to launch the scheme as a whole until this process has been completed. Therefore, unfortunately, we will not be able to open the scheme for applications on 30 September 2011 as we had originally planned.

“Once we have received written confirmation from the Commission, we will make a further announcement about what this means for the large biomass tariff and the timing of the launch. We are committed to launching the scheme as soon as possible to minimise disruption to stakeholders.”

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Comments about Expert warns Renewable Heat Incentive hitch could take months to resolve

We can only guess at how much this is making potential biomass users even more cautious. Any feedback yet on how they may be viewing this?
Tim hamper, Cheddington, Bucks around 2 years, 2 months ago

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