Government must adopt RHI ‘lock in’ mechanism says industry

Two industry groups have called on the Government to change budgeting rules for the renewable heat incentive (RHI), to increase investor certainty and unlock hundreds of millions of pounds of funding.


In a joint letter, the Combined Heat and Power Association (CHPA) and the Renewable Energy Association (REA) have urged the Government to adopt an enhanced preliminary accreditation scheme – a mechanism to allow investors to ‘lock in’ tariff rates to guard against further falls before the project has been completed.

As it stands, the industry is facing a lack of funding certainty for renewable heat projects which are starting construction now, but will not start operating until after the next election.

CHPA head of policy and communications Dr Tim Rotheray said: “Companies are ready to make renewable heat investments right now, and the Government can make this happen at no additional cost to taxpayers.

“If the Government addresses this issue, it can unlock a major investment potential helping the UK to achieve its renewable energy commitments at a lower cost whilst delivering tangible employment benefits.”

REA Head of Policy Paul Thompson pointed out that the approach needed to mitigate against the risks of policy change has already been adopted by the feed-in tariff for renewable electricity.

“The solution is there, all that is needed is the will to make it happen,” he said.

Thompson added: “Large-scale renewable heat schemes can take years to complete. An investment decision made today may not see a scheme commissioned until 2016.

“Without that assurance, the RHI will not effectively incentivise new investments for renewable heat projects.”

Conor McGlone

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