Biomass heat industry argues renewable heat reform contains mixed blessings

Biomass heat industry argues renewable heat reform contains mixed blessings

Posted: 14 December, 2016. Written by WHA News

  • Government announces new tariffs for biomass boilers, and other renewable heat technologies, under the Renewable Heat Incentive,
  • Domestic tariffs adequate to support the growth of this low-carbon fuel source,
  • Returns for small to medium non-domestic biomass projects will likely not be viable to support widespread installation.

This afternoon the Government released its response to the consultation on the Renewable Heat Incentive (RHI). The consultation, which closed on the 27th April 2016, attracted criticism for proposing to slash tariffs for biomass heat by 45%, which was projected by the Government to lead to a 98% drop in installations.

The new tariffs will be adequate to support continued household-level deployment. Small and medium sized projects under the non-domestic RHI, which includes projects in schools, hospitals, and community centres, will struggle as tariffs remain below what industry analysis has concluded is a viable level for widespread installation. It is unclear what the impact of these changes will be on large biomass installations, which the Government is targeting for growth.

Biomass heat has performed the majority of decarbonisation under the Renewable Heat Incentive to date, with sustainable wood pellets or chips replacing what are typically inefficient heavy oil boilers in rural and off-grid properties. The industry employs almost 12,000 people. At least three major biomass heat companies have ceased trading since the beginning of the consultation.

Julian Morgan Jones, Chair of the Wood Heat Association and Managing Director of South East Wood Fuels said:

“We welcome the increased tariffs for domestic biomass heat projects. The Government is recognising the important role that biomass projects at the household level have played, and will continue to play, in the decarbonisation of our heating system. Our hope is that these reforms will result in a surge of the growth of large biomass.

“The picture, however, for small to medium sized non-domestic projects is bleak. Small and medium sized projects, given these tariffs, will almost completely end. The most apparent losers of this policy will be rural and off-grid schools, hospitals, and council estates, which is where most of these systems have been deployed.

“This cut will cost skilled jobs, damage a supply chain and may mean that the decarbonisation of heat becomes more expensive.”

—ENDS—

For more information or to request an interview, please contact:

James Court
Head of Policy and External Affairs
+44 (0)20 7981 0857
jcourt@r-e-a.net

Notes to editors

  • Today’s consultation response can be found online here.
  • Tariffs for non-domestic biomass used to be and now are (taken from consultation page 26):

,
* The small biomass tariff has already been reduced by 67% since July 2014 by the degression mechanism.

  • Biomass heat carbon emissions savings: Through life-cycle analysis in the Government’s Biomass Suppliers List, biomass heat has demonstrated an 87.47% GHG saving compared to the EU fossil heat average, significantly above the 60% required minimum.
  • Biomass deployment under the RHI: Biomass heat has represented 91.5% of installations in the non-domestic RHI, and delivered 80.3% of the renewable heat. In the domestic scheme, it represents 34.5% of installations and has delivered 55% of the heat.
  • Biomass sustainability: The increased demand for woodfuel provides the economic basis for bringing under-managed UK woodlands back into sustainable management. Active management benefits woodland biodiversity, wildlife, local economies, and forest carbon stock. All wood fuel is controlled by the government, which requires woodfuel producers to put in place sustainable forest management practices and to provide evidence that wood can be traced from a sustainable source.
  • Three major biomass heat companies that have ceased trading include Purple Energy, Imperative Energy, and the biomass heat arm of British Gas.

About the Wood Heat Association

The WHA is the UK trade association for the modern wood heating and related biomass heating industry including wood fuel suppliers, biomass boiler and stove installers and distributors, and anyone involved in the supply chain. The WHA is a fully owned subsidiary of the Renewable Energy Association. Members range in size from major multinationals to sole traders.

About the Renewable Energy Association (REA)

The Renewable Energy Association represents renewable energy producers and promotes the use of all forms of renewable energy in the UK across power, heat, transport and renewable gas. It is the largest renewable energy and clean technology trade association in the UK, with approximately 700 members, ranging from major multinationals to sole traders. For more information, visit: www.r-e-a.net
 

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