Energy efficiency is not just low-hanging fruit; it is fruit on the ground.Stephen Chu, US Secretary of Energy
Abrupt legislation change puts renewable energy projects at risk
On the 1st August 2016, an unexpected RHI regulation amendment will come into force, which will significantly cut support for Biomass CHP projects - biomass boilers that provide heat to steam or Organic Rankine Cycle (ORC) turbines to generate electricity. The industry has received only three weeks’ notice, and at least 40 renewable projects (worth over £140m) are expected to be hit hard by this abrupt change in legislation.
Farm Energy Centre, alongside the NFU (press release below) and the Wood Heat association, has been working on behalf of Biomass CHP installers and clients to halt the progress of this legislation until proper industry consultation on its effect has taken place. Our project list demonstrates that nearly 40 projects, with £140m of investment committed to 200MW of heat output and 20MW of electric output, will be affected.
The new amendment to the Renewable Heat Incentive (RHI) regulations will impose a power efficiency requirement on new Combined Heat and Power (CHP) installations. A minimum power efficiency of 20% will be required in order to claim the full CHP tariff on the heat they produce. Systems with efficiencies below 20% will only receive the CHP tariff for a proportion of the heat, greatly reducing the available support. Currently, all of the heat produced by a CHP is eligible for the higher CHP tariff, and so installers are now questioning the viability of their CHP projects.
No official statement announcing this impending change has been released by the Department for Business, Energy & Industrial Strategy (BEIS), and the CHP industry is angered by the lack of communication and consultation. Many of the affected projects have been under development for several years; with the average spend being around £3m each. Technically complex, these projects have little flexibility to meet the new 20% power efficiency requirement with such short notice.
If you have a project that is similarly affected, please get in touch by emailing Jon Swain on email@example.com.