UK proposal to reform RHI negatively impacts biomass, biogas

By Erin Voegele | March 04, 2016

On March 3, the U.K. Department of Energy and Climate Change launched a consultation on reforms to the Renewable Heat Incentive. According to the U.K. Renewable Energy Association, the proposed changes would dramatically reduce the number of biomass boilers installed under the RHI program.

The REA explains that the new changes propose to reduce biomass boiler tariffs by up to 61 percent by 2017. Some tariffs were already cut by 58 percent during the past year. According to the REA, the additional reductions would cause significant consequences for the overall biomass supply chain. The association also points out that the biomass heat industry has delivered the majority of the U.K.’s legally binding renewable heat target to date.

The DECC has also proposed to reduce or remove subsidies for the use of energy crops in anaerobic digestion systems, and for digestate drying. The REA notes these cuts would come at a time with the industry is already suffering from significant reductions and deployment restrictions under the Feed-In Tariffs scheme.

If enacted, the REA argues thee RHI cuts would collapse an industry that the government has invested in for more than five years, and side-track progress on meeting U.K. renewable heat targets. The DECC expects changes to non-domestic biomass support to reduce annual installations from 7,132 systems in 2014, and 3,023 systems in 2015, to only 65 systems by 2021. According to the REA, this represents a reduction in the installation of biomass boilers by 99.1 and 97.9 percent when compared to 2014 and 2015, respectively. The proposal would also be expected to reduce the number of domestic biomass boilers, from 4,721 in 2015 to 1,000 in 2021, a reduction of 78.8 percent.

The bioenergy industry is not the only renewable energy industry that could be negatively impacted by the proposal. It also aims to remove solar thermal from the RHI.

“The REA has a long-term vision for an affordable, secure, and low-carbon future energy system. Consultations such as this however make apparent that the Government’s own energy policy is short-sighted,” said Nina Skorupska CBE, chief executive of the REA. “This consultation proses yet another series of sudden and severe changes to the U.K.’s energy sector. The Energy and Climate Change Committee this week said that such changes have ‘marred the U.K.’s reputation for stable and predictable policy development,’ and we couldn’t agree more.”

The consultation closes April 27. Additional information is available on the U.K. government website.