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Energy efficiency is not just low-hanging fruit; it is fruit on the ground.Stephen Chu, US Secretary of Energy
RHI reforms... more questions than answers?
The recent RHI degression announcement has thrown yet more uncertainty on the future on the RHI scheme. While the Department for Business, Energy and Industrial Strategy (BEIS) continue to keep business as usual, there are many questions erupting as to what, when and how the RHI reforms will happen.
Here is our response to the questions many of you have been asking us:
Have you heard anything about when the RHI Reforms will come into effect? I get the feeling that everything has gone quiet and that we could be on the existing scheme for another quarter. What is your view?
We haven’t heard anything formally from either BEIS or Ofgem as to when the reforms will come into effect, but our feeling is that it will before the end of the next quarter. BEIS will have to give 21 days’ notice, and we expect that it will be late April/early May when we next hear of it.
This really does not help the industry. Do you think there is any risk of them closing the RHI scheme completely?
The government has committed to the scheme until 2020, so there does not appear to be a risk of it disappearing in the short term. We certainly don’t think it is dead, and we are still getting positive vibes from our clients and colleagues.
The scheme in its new form actually makes smaller systems more appealing, and bigger systems will get a better rate, so rather than installing two 995kW boilers, you can now put in a 2MW boiler and get the same tariff, which is significantly more economical and easier to design.
I see a lot of activity around drying waste, but the questioning from Ofgem suggests that they will also be stopping this. Is that your view?
Ofgem is currently focussed on ensuring that there was a commercial activity in existence before the biomass was installed, and are really keen to see that fossil fuels are being replaced by biomass.
However, what is being dried is likely to become a focus, particularly where waste is concerned. The Environment Agency are concerned that people do not have the right permits to handle waste, and they want BEIS to give Ofgem the ability to withhold or claim back RHI payments if the correct licencing is not in place.