U.K.'s RHI open for applications

By Lisa Gibson | November 28, 2011

After a delay in implementation and a reduction to large biomass power tariff levels, the U.K.’s Renewable Heat Incentive is open for applications as of Nov. 28.

The RHI program offers long-term support to compensate for capital and operating costs, as well as to remove additional barriers and ease financial costs, for thermal technologies classed as renewable under the U.K.’s Renewable Energy Directive. Support will be distributed in the form of tariffs based on technology and size.

When the program made its way through Parliament in July, it was still subject to approval from the European Commission. The U.K.’s Department of Energy and Climate Change was ready to launch the first step of the program, dealing with nondomestic generators on Sept. 30. But the commission came back to the DECC with an approval that hinged on a reduction of the tariff for large biomass technologies from at 2.7 pence (4 cents) per kilowatt hour to 1 penny (2 cents) per kilowatt hour.

With the new tariff level in place, applications can now be submitted. “We are relieved by today’s announcement,” said Tim Minett, chief executive of U.K. wood pellet supplier CPL Distribution. “There is no denying that the delays to the Renewable Heat Incentive’s launch knocked confidence among board-level decision makers and a large number of projects to install renewable systems have been stalled as a result. On the basis of our own dealings, and feedback from biomass boiler manufacturers, we believe there are at least 250 major investment projects currently in limbo. To put it bluntly, there has been a huge amount of interest in the RHI but in the absence of absolute clarity over the tariff rates, people simply weren’t willing to trust politicians’ assurances given the backdrop of the cuts in feed-in tariffs elsewhere. “

The fears are eased with the announcement that applications are open, he said. “This should allow us to convert expressions of interest into real signed contracts, and businesses and the public sector will then start to see the real and substantial savings this incentive scheme will deliver. It should deliver some new jobs, which are much-needed in the current market. With the delays now behind us, this green light for the Renewable Heat Incentive will be a significant stepping stone in the U.K.’s transition towards a low-carbon economy.”

To apply, click here.