More energy uncertainty as RHI launch is postponed

Plans to bring in state funding for biomass burning businesses have been put on hold after European officials questioned levels of funding.

The European Commission (EC) questioned this week what it sees as too higher a level tariff for large biomass, as a result the Renewable Heat Incentive (RHI) for non-domestic generators, which was due to start from today (September 30), has been postponed.

The move follows a summer of uncertainty for investors and energy managers as the government dithered on plans to change Feed-In Tariffs (FITs) and other environmental policies, which prompted groups like the CBI to demand action.

The existing level of 2.6p/kWh will need to be reviewed by the Department for Energy and Climate Change (DECC) and the new rate will need parliamentary approval – potentially delaying any RHI roll out for weeks.

While this current set back is not the government’s direct fault industry figures called on it to resolve the problem ‘immediately’.

Organic energy managing director, Andy Boroughs, said: “This will add to more dithering and indecision in the market.

“We need swift action to resolve this last-minute delay, yet again there is frustration in the industry that we are once more forced to explain to customers that there will be a RHI launch we just don’t know when

“Many customers and investors planning to order large scale systems may delay decisions.

“Investment plans will no doubt be based on the original figures so if the new figure is substantially reduced, this will affect investors who are looking at large-scale systems.”

Biomass supplier CPL Distribution chief executive, Tim Minett, said: “The primary frustration is the timing – everyone had geared up for the well-publicised launch date and then at the 11th hour it is postponed, meaning many businesses will have been caught out.

“But, the good news is the tariff Brussels has an issue with is for the largest installations, those over 1,000 kWth, which is enough for major heat users like prisons and hospitals, and therefore the investment plans for the vast majority of installations will be unaffected except by the postponement.”

A statement on DECC’s website read: “We are unable to launch the scheme as a whole until this process has been completed.

“Therefore, unfortunately, we will not be able to open the scheme for applications today as we had originally planned.

“Once we have received written confirmation from the EC, we will make a further announcement about what this means for the large biomass tariff and the timing of the launch.”

Luke Walsh

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