Government plans to end subsidy under the Renewable Heat Incentive (RHI) for biomass in ‘urban’ areas from January 2019.
The department for business, energy and industrial strategy (Beis) has set out its thoughts in a consultation. Under its proposals, domestic and non-domestic biomass in towns and cities will no longer receive support.
The government says air quality concerns are behind its moves to cut subsidies.
According to government estimates, the RHI is set to cost taxpayers £23bn by 2042. Biomass has hoovered up the vast majority of subsidy under the scheme, which has been slammed as underperforming and delivering poor value by the government’s own auditors.
The National Audit Office suggested overpayments could be much higher than scheme administrators, Ofgem, calculates, citing “weaknesses” in the regulator’s estimate.
The NAO also said the extent of ‘gaming’ (i.e. cheating to earn more money by oversizing equipment or venting heat) was unknown, through consultants and technology providers privately suggest it is commonplace.
As such – and to improve air quality, says Beis – government plans to change the rules from January 2019. Interestingly, Beis defines urban areas as any town above 10,000 homes.
Existing biomass schemes that have been accredited will still receive payments.
See the consultation here.