The UK Department for Business, Energy and Industrial Strategy (BEIS) has released its response to the consultation on the Renewable Heat Incentive (RHI) schemes with reforms for Spring 2017, including new incentives for biogas use.

The RHI schemes were introduced to kick-start the transition to low carbon heating in the UK. The schemes provide financial incentives to households and non-domestic consumers, including public bodies and charities, to help bridge the gap between the cost of renewable heating systems and conventional alternatives.

However, the original scheme was more popular than expected and encouraged profiteering. Following a consultation, the Government has now (14 December 2016) launched a reformed scheme to ensure the scheme "focusses on long-term decarbonisation, promotes technologies with a credible role to play in that transition, and offers better value for money".

Renewable energy technologies which will be eligible for the reformed domestic RHI scheme in Spring 2017 include biomass boilers and stoves, air source and ground source heat pumps and solar thermal systems. In addition to these technologies, non-domestic applications can include deep-geothermal energy, biogas-combustion systems, combined heat and power (CHP) systems using a range of renewable fuels and sources, and the production of biomethane for injection into the gas grid.

Key changes
There will be increases in support for domestic heat pumps, to encourage growing installation numbers to 2020 and beyond, but with a cap on larger installations. There will also be changes to the support given to ground source heat pump systems supplying multiple properties.

Biogas and biomethane producers and users will receive improved incentives. However, new plant will be required to produce at least half their biogas and biomethane from waste-based feedstocks to receive the maximum rate, thus helping to divert wastes from landfill. There will be a small uplift to tariffs for biomethane injection to support continued deployment alongside these changes.

The reforms will introduce one level of support for all new non-domestic biomass boilers with a cap on annual payments for new domestic biomass systems to make sure owners of larger properties are not overcompensated (as for new heat pumps).

The Government is also taking action through the Energy Company Obligation to reduce the amount of heat needed through energy efficiency measures.

RHI support for domestic solar heat systems will remain at the tariff of 19.74p/kWh over seven years. Applications of solar thermal in industry up to 200kW in size will also continue to be supported.

Industry reaction
The announcement was met with by considerable relief by the supply industry and their representative trade bodies.

Paul Barwell, Chief Executive of the Solar Trade Association (STA) commented: “Solar thermal is back, which is great news for businesses and families who want to bring down their energy bills and do their bit to mitigate climate change. It is to the new Energy Department’s credit that they listened to the very strong arguments we made for retaining solar thermal within the RHI.”

Simon Lomax, Managing Director, of ground source heat pump manufacturers Kensa welcomed the proposed refinements to the RHI, saying he trusts they will quickly receive parliamentary approval. "It is encouraging that Government has confirmed its belief that ground source heat pumps are a strategically important technology," he added, "and have offered more attractive support, particularly for residential properties served by shared ground loop."

Charlotte Morton, Chief Executive of the Anaerobic Digestion and Bioresources Association (ADBA) also welcomed the news, saying: "We are pleased to see that tariff levels have been reset – this should support higher levels of deployment. We do not believe, however, that the restrictions on feedstock for new plants, which could have unintended consequences, are justified.

“The introduction of tariff guarantees is extremely welcome and we will continue to work with the UK Government and with our members to ensure the UK AD industry keeps growing and reaches its full potential – for example by calling for urgent action on food waste collections in England."