A Scottish renewable energy provider has welcomed long awaited reforms to the UK’s RHI scheme believing they will promote greater access to green energy while giving the taxpayer more value for money.
VG Energy says that the support fund will treble from £430 million in 2016 to £1.15 billion in 2021 as the government looks to develop an energy system for the nation that is secure, affordable and clean.
The changes to the financial incentive programme, set up five years ago to encourage investment into renewable heating technologies, are set to come into force on September 20.
Suppliers had been working to complete current projects by October 1 on RHI figures that were expected to remain in force until September 30.
The earlier trigger date has taken developers and landowners by surprise and if they are in the middle of installing renewable heating technologies, projects developed with financial structures based on the present RHI figures, they face a race to complete them before the change
A raft of changes will be triggered, including new tariffs for domestic RHI in relation to biomass plants, air source and ground source heat pumps and solar thermal plants.
Key changes in the new RHI scheme:
- Alignment of non-domestic biomass tariff (tier 1: 2.96p/kWth, tier 2: 2.08p/kWth) and changes of load factor from 15% to 35%.
- New degression triggers until July 2018
- Domestic demand limits for domestic biomass, ASHP, and GSHP
- New tariffs for domestic RHI
- Biomass plants: 6.54p/kWh
- Air source heat pumps: 10.18p/kWh
- Ground source heat pumps: 19.86p/kWh
- Solar thermal plants: 20.06p/kWh
VG Energy, headquartered in Scotland, has successfully installed 650-plus commercial biomass boiler projects across the UK.
Managing Director Steven Rawding said: “The RHI reforms are to be generally applauded as strong positives for the renewable sector and we believe that they will help widen access to the scheme, delivering more projects, which is good for the industry and the environment.
“Other aims of the reforms are to ensure that RHI is affordable by firmly controlling costs and maximising the benefits of the scheme to deliver more value for money for the taxpayer. That has to be applauded.
“We are also optimistic that the changes will help develop sustainable markets and innovation in technology to keep the UK’s renewable sector moving forward, with support for strategically important technologies.”
“The non-domestic RHI has largely supported agricultural and leisure sectors to date, mainly with solid biomass technologies, and on the domestic side large properties with high heat demands.
“But the signs are that we are now moving on to another stage of development, with energy intensive industries and businesses finding that the figures add up for their green energy plans and more district heat networks looking to invest in renewable technologies.
“We also believe the reforms will open up access to families who so far have found they have not got the funds to take their interest in renewable heating systems further.”
6 Sept 2017