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REA happy to kiss capital energy grants goodbye

The Governments capital grants for renewable energy from biowaste have been slammed by trade body the Renewable Energy Association (REA).

However, the body did welcome Government findings that the potential for wood waste fuel was not being realised (see mrw.co.uk story), but policy director Gaynor Hartnell said she was not surprised.

She said: The REA has taken the lead in pushing for the Department for Business Enterprise, Regulatory Reform to allow Ofgem to take a more flexible approach to demonstrating biomass energy content and we are pleased that this important issue has prominence in the report [from the Department for Environment, Food and Rural Affairs]. 

However, she added: Were frustrated by the slow progress towards an effective mechanism for boosting renewable heat and have called for the rapid introduction of a tariff-based mechanism. Capital grants are not the answer. Enabling legislation for such a measure has been tabled for debate in the report stage of the Energy Bill, with huge cross party support and backing from all major non-governmental organisations and many other organisations including the Co-Op and Federation of Small Businesses.

Hartnell was also not impressed by the Governments recent announcement of a £4million fund to support the installations of biomass-fuelled heating and combined heat & power (CHP) projects (see mrw.co.uk story). She said: The REA would happily kiss goodbye to the bioenergy capital grants programmes if a renewable heat tariff were introduced.

Each grant round has been riddled with problems, despite the best efforts of the officials presiding over them. The latest problem is how State Aid rules deal with a combination of revenue support (from the Renewables Obligation) and capital grants. Generators might have to give the grant back in order to qualify for ROCs. They simply dont know if they are applying for a grant or an interest free loan.

Image: REA policy director Gaynor Hartnell

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