The Department for Business, Energy, and Industrial Strategy (Beis) is to ease the impact of cuts in financial support for biomass companies.
Without fanfare on 7 July, the former department Decc, now incorporated into Beis, proposed an amendment to the Renewable Heat Incentive (RHI) that affected combined heat and power (CHP) systems.
Support for biomass CHP plants that used less than 20% of their fuel for electricity production was to be withdrawn from those applying after 1 August.
The Renewable Energy Association (REA) accused Decc at the time of not consulting the industry before proposing the change.
Head of policy and external affairs James Court said investment worth more than £140m would be affected as the industry had not expected the change to take place until 2017.
Now Jessie Norman, parliamentary under-secretary for industry and energy, has announced that the department will look to soften the tariff changes for certain biomass CHP plants.
Under the new proposal, during a transitional period until 31 March 2017, tariff reductions will apply only to plants that produce just 10% power. The REA has welcomed the proposed amendment.
Renewable heat analyst Frank Aaskov said: “Transparency in Government decision-making is key to maintaining the confidence of investors developing the UK’s much-needed low-carbon infrastructure.
“Critically, the transition period should create a runway in which projects that have been under development or construction, some for as much as two years, can be completed.
“This proposal is a constructive step towards restoring the previously damaged confidence of investors in the biomass CHP sector.”