In July this year – with no formal consultation with industry and only 21 days notification – the Government introduced changes to the Renewable Heat Incentive tariffs for biomass combined heat and power plants with under 20% power efficiency.
The UK Renewable Energy Association warned that the changes put over £140 million of low-carbon investment at risk.
But Jessie Norman MP, Junior Energy Minister has now confirmed that the Department for Business, Energy, and Industrial Strategy would soften changes introduced to tariffs for certain biomass CHP plants introduced in August 2016.
During the new transitional period (until 31 March 2017) the tariff reductions will only apply to plants that produce 10% power (known as power efficiency, with the remaining 90% being heat), whereas before the tariff reduction applied nearly immediately to projects with up to 20% power efficiency.
Frank Aaskov, renewable heat analyst at the Renewable Energy Association, said: “Transparency in Government decision-making is key to maintaining the confidence of investors developing the much-needed low carbon infrastructure.
“We welcome the proposed compromise announced today by Mr. Norman. Critically, the transition period should create a runway in which projects that have been under development or construction, some for as much as two years, can be completed.
“This proposal is a constructive step towards restoring the previously damaged confidence of investors in the biomass CHP sector.”