Businesses rush to secure heat subsidies ahead of RHI tariff cuts as domestic biomass nosedives


BiomassApplications for domestic biomass support under the renewable heat incentive fell by almost two thirds the first three months of the year, new figures show.

The drop off (61% fewer applications compared to Q4 2015) follows a 20% reduction to biomass tariffs under the incentive effective January 2016.

Meanwhile, applications under the non-domestic scheme increased 10% on the previous quarter and 51% on Q3 2015 as businesses rushed to beat looming tariff reductions. Applications for biogas support made up more than a third of the total, with a flurry of applications coming in March after Decc signalled a 10% tariff cut.

Applications by large CHP developers via the non-domestic RHI have also more than tripled during the first quarter.

The data shows that small-scale biomass boilers make up the bulk of applications approved under the non-domestic RHI. Small and medium scale biomass boilers represent 94% of accreditations, according to Ofgem. Generating almost 2GW, they represent 89% of the total capacity (2.4GW) supported by the scheme. Some 30 large biomass boilers are generating 8% of the total, or 171MW.

Agriculture is the single biggest sector supported by the RHI in terms of capacity. Around 3,900 installations have been accredited within the farming sector of a total of 14,000. That represents 27% of the total, with generating capacity at 758MW (32% of the total).

By volume, the accommodation sector has the highest number of installations (4724, representing 33%) and the second highest capacity (517MW equating to 21.5%).

Wood manufacturers, which like farmers have their own bi-product fuel sources, make up the next highest percentage of capacity with 7.5% of the total (180MW).

The figures come as Decc consults on significant changes to the RHI, proposing to set one support rate for biomass generation. The department intends to curtail smaller biomass schemes and encourage larger projects, which it says will deliver better value for money. Critics have warned that cutting support levels will kill off smaller scale biomass, with fewer businesses benefitting as a result.

However, a survey of readers of The Energyst found that many believe the RHI has been open to abuse, with biomass boilers often oversized to maximise subsidies. While more than half of readers surveyed believed the RHI has been an effective incentive, 43% said it was not.

The reader survey formed part of a broader report on decarbonising heat, which also includes views of financiers, academics, consultants and end users across multiple heat technologies. The report is free, download it here.


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