Surprise cuts to RHI

Surprise cuts to RHI

Will unexpected cuts affect the renewable energy sector? 

The Department for Business, Energy and Industrial Strategy (BEIS) has laid a surprise cut to Renewable Heat Incentive (RHI)* support for biomass CHP** systems in a move which the Renewable Energy Association (REA) has decried as “abrupt” and “very negative”.

The changes were included within an amendment laid in parliament and are specifically aimed at biomass-fueled combined heat & power systems which use less than 20% of fuel for electricity production.

James Court, head of policy and external affairs at the REA, noted that while the amendment claimed that “no impact on the private or voluntary sectors is foreseen,” such an abrupt cut to support threatened to significantly impact the biomass CHP sector. “It is the suddenness and the lack of consultation that is the core issue here. Over £140 million worth of investment is affected by this change.”

Arthur Kay, Founder and CEO of bio-bean said, “bio-bean were surprised and concerned to hear of further cuts to the RHI, especially in light of the recent consultation to the contrary. The newly formed Department for Business, Energy and Industrial Strategy (BEIS) has a real chance to show strong leadership on this matter and need to understand that “going green” is not a compromise. When done well, green energy is cheaper than conventional fuels and enhances our economy and energy security. The fast-growing bioenergy and circular economy sectors provide the most impactful, rapid and cost-effective route to achieving our obligations under COP21. Further regressions are therefore a major step in the wrong direction.”


*Renewable Heat Incentive (RHI): a Government-backed measure introduced in 2011 to make encourage the production of renewable heat.

**Biomass CHP: Combined Heat and Power systems simultaneously generate electricity and heat.