The Renewable Energy Association (REA) has expressed frustration over a Government decision to reduce tariffs for medium-sized biomass boilers under the Renewable Heat Incentive (RHI) scheme.
DECC launched the Renewable Heat Incentive (RHI) scheme in November 2011 to support and promote the use of renewable energy to produce heat for industry, business and public sector organisations. Participants in the on-demand scheme received up to 9.2p per kWhr for the heat and energy they generated that they used themselves.
But now the department has announced it will reduce the tariff for medium commercial biomass boilers (200kw to 1MW) by 5% from 1 July 2013 and launched a consultation on increasing tariff levels for heat generated by ground source heat pumps, large biomass and solar thermal kit.
The REA said the decision to cut medium-sized biomass tariffs will undermine confidence in the biomass heat sector and claimed that there was no suggestion that tariffs were too high.
“With the RHI massively underperforming, it’s deeply frustrating that Government is about to cut the one technology that is actually delivering,” said Paul Thompson, REA head of policy.
He added that to date payments for the RHI scheme have amounted to less than £12m.
The energy and climate change minister Greg Baker said that the tariff review was needed to make sure that tariffs are set at the right level to attract investment in the sector and to limit the costs for taxpayers.
He said: “The Renewable Heat Incentive has been running for nearly eighteen months, so now is a timely moment to look again at the tariffs.”.
The REA nonetheless welcomed the launch of a consultation on raising tariffs for a range of power facilities, praising in particular the proposal to increase the support for large-scale biomass boilers.
DECC has proposed to double the tariff for large (1MW and above) biomass boilers to 2p per kWh.
The consultation will end on 28 June 2013.
DECC also said that it is finalising details for launch of a RHI scheme for households, due to start in summer 2013.