Renewable energy chiefs warn biomass businesses will struggle under new tariffs

The new biomass tariffs
The new biomass tariffs

The British government has published the new tariffs for biomass boilers, and other renewable heat technologies, under the Renewable Heat Incentive,

The small biomass tariff has already been reduced by 67% since July 2014 by the degression mechanism.

And three major biomass heat companies have already ceased trading –  Purple Energy, Imperative Energy, and the biomass heat arm of British Gas.

The new tariffs will be adequate to support continued domestic household-level deployment, said the Renewable Energy Association.

But small and medium sized projects under the non-domestic RHI, which includes projects in schools, hospitals, and community centres, will struggle as tariffs remain below what industry analysis has concluded is a viable level for widespread installation.

It is unclear what the impact of these changes will be on large biomass installations, which the Government is targeting for growth.

Biomass heat has performed the majority of decarbonisation under the Renewable Heat Incentive to date, with sustainable wood pellets or chips replacing what are typically inefficient heavy oil boilers in rural and off-grid properties. The industry employs almost 12,000 people. At least three major biomass heat companies have ceased trading since the beginning of the consultation.

Julian Morgan Jones, Chairman of the Wood Heat Association and Managing Director of South East Wood Fuels commented: We welcome the increased tariffs for domestic biomass heat projects. The Government is recognising the important role that biomass projects at the household level have played, and will continue to play, in the decarbonisation of our heating system. Our hope is that these reforms will result in a surge of the growth of large biomass.

“The picture, however, for small to medium sized non-domestic projects is bleak. Small and medium sized projects, given these tariffs, will almost completely end. The most apparent losers of this policy will be rural and off-grid schools, hospitals, and council estates, which is where most of these systems have been deployed. 

“This cut will cost skilled jobs, damage a supply chain and may mean that the decarbonisation of heat becomes more expensive.”

 

FACT FILE

Biomass heat carbon emissions savings: Through life-cycle analysis in the Government’s Biomass Suppliers List, biomass heat has demonstrated an 87.47% GHG saving compared to the EU fossil heat average, significantly above the 60% required minimum.

Biomass deployment under the RHI: Biomass heat has represented 91.5% of installations in the non-domestic RHI, and delivered 80.3% of the renewable heat. In the domestic scheme, it represents 34.5% of installations and has delivered 55% of the heat. 

Biomass sustainability: The increased demand for woodfuel provides the economic basis for bringing under-managed UK woodlands back into sustainable management. Active management benefits woodland biodiversity, wildlife, local economies, and forest carbon stock. All wood fuel is controlled by the government, which requires woodfuel producers to put in place sustainable forest management practices and to provide evidence that wood can be traced from a sustainable source.

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