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Government scales back RHI funding

Biomethane and small commercial biomass tariffs under the Renewable Heat Incentive (RHI) scheme are to be reduced on 1 October.

The latest RHI quarterly forecasts revealed that applications received on or after this date which are subsequently accredited by Ofgem will be subject to degression.

The new tariffs are as follows:

 Existing tariff (p/kWh)New tariff - 1 October 2015 (p/kWh)
Up to 40,000 MWh7.246.52
40-80,000 MWh4.253.83
80,000+ MWh3.282.95

 

The announcement follows a number of regulatory proposals that sees the Government scaling back its support for the anaerobic digestion industry.

In July, the Department of Energy & Climate Change consulted on the possible removal of pre-accreditation for Feed-in Tariffs (FiTs).

This was followed by another consultation that offered to drastically cut FiT funding or scrap the scheme entirely from the beginning of next year.

The Anaerobic Digestion & Bioresources Association (ADBA) said the impact of the degression was in line with industry expectations and was likely to have been priced in by developers.

Charlotte Morton ADBA

But ADBA chief executive Charlotte Morton, left, said: “The biggest question is over the future of the RHI scheme as a whole.

“ADBA’s latest market report demonstrated that the number of biomethane plants has tripled between 2014 and 2015, and to continue this growth the Government needs to commit to extending the RHI budget beyond March 2016.

“A failure to commit to a renewed, viable RHI will jeopardise the UK’s ability to meet the Renewable Energy Directive target of 12% heat from renewable sources by 2020.

“Home-grown green gas from AD could play a huge role in this, meeting up to 30% of the UK’s domestic gas demand and reducing our dependence on imported natural gas from Qatar and Russia.” 

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