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Update on the Renewable Heat Incentive (RHI)

Posted on: 2011-10-12 10:42:04

Update on the Renewable Heat Incentive (RHI) from DECC

DECC was planning to launch the Renewable Heat Incentive (RHI) for non-domestic generators on 30 September 2011. State aid approval is a necessary condition for the scheme to go ahead. As part of that process, the European Commission expressed concerns that the large biomass tariff is set too high.

The DECC have now we have now received the letter from the European Commission providing state approval for the RHI -  subject to a reduction in the large biomass tariff. This means a change to the regulations and submission to Parliament before the scheme can open to applications. They intend to do this as soon as possible so that the scheme is open before the end of November.

They are unable to launch the scheme as a whole until this process has been completed.

WHAT IS THE RENEWABLE HEAT INCENTIVE?

On 10 March 2011, the Government announced the details of the Renewable Heat Incentive policy to revolutionise the way heat is generated and used. This is the first financial support scheme for renewable heat of its kind in the world.

At a time when we can see many problems with relying on a rapidly changing world and continuous reliance on oil and gas, they are proposing to put in place a key foundation stone of our energy future where both carbon reduction and energy security are assured.

The Renewable Heat Incentive (RHI) policy document, sets out the detailed arrangements for this scheme, which will provide long-term financial support to renewable heat installations to encourage the uptake of renewable heat.

SCHEME DETAILS

The scheme will be introduced in two phases.

In the first phase, long-term tariff support will be targeted in the non-domestic sectors, at the big heat users – the industrial, business and public sector – which contribute 38% of the UK’s carbon emissions. Under this phase there will also be support of around £15 million for households through the Renewable Heat Premium Payment.

The second phase of the RHI scheme will see it expanded to include more technologies as well as support for households. This transition will be timed to align with the Green Deal, which is intended to be introduced in autumn 2012.

The RHI will be administered by Ofgem E-Serve.  

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