Scottish energy firms hit by uncertainty over future of Renewable Heat Incentive

Fergus Ewing
Fergus Ewing

Scottish Energy Minister Fergus Ewing is campaigning for Scottish businesses which are losing out due UK Government indecision on the future of the Renewable Heat Incentive (RHI).

The RHI is a UK Government initiative that provides financial incentives to increase the uptake of renewable-energy heating projects.

Ewing is pressing the UK Government to commit to the long term sustainability of the RHI – which it has so far refused to do – and has written to UK Energy Secretary Amber Rudd asking for urgent clarification.

The Scottish Government has set a target for 11% of non-electrical heating supply to come from renewable energy by 2020.

Star Renewable Energy is a Glasgow based company which installs water source heat pumps, a low carbon technology that extracts heat from water sources to heat buildings efficiently. It has already seen some schemes delay decisions about capital investment until there is further certainty on whether or not the RHI will continue beyond March 2016.

Dave Pearson, Director of Star Renewable Energy, said: ““Our company has been involved in major projects across Europe and we have seen how low-carbon heating has the ability to provide warmth to houses, offices and factories in even the coldest of climates, like Norway.

“In the UK we are now seeing increasing interest from large scale projects in utilising water source heat pumps to heat homes and businesses. Our company has participated in feasibility studies, supported by the UK Government, for tens of millions of pounds of potential UK projects which could be scrapped if the RHI isn’t confirmed. We have already seen some schemes delay decisions about capital investment until they have some certainty on whether or not the RHI will continue beyond March 2016.

“The RHI is a world class incentive scheme, and it is imperative that it continues. If funding is maintained beyond March 2016, I’d like to see pre-accreditation of all large scale projects in order to drive the market.”

Ewing added: “The Scottish Government believes that development of a sustainable renewable heat industry will be a key factor in helping Scotland meet its climate change targets and provides huge business opportunities. I was pleased that 2014 saw the biggest rise in heat capacity generated from renewable sources in Scotland – an increase of 42% from the year before.

“Our target remains challenging and will require us to use all the levers at our disposal, particularly the RHI.

“Without continuation of the Renewable Heat Incentive, or a substantive replacement, there will be a substantial impact on renewable heat businesses and jobs in technologies, with disastrous results for the future of these Scottish businesses.

“The uncertainty from the UK Government has been going on too long now and it is time to provide clarity for this industry.”

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