On 10 March 2011, the Government announced the details of the Renewable Heat Incentive policy to revolutionise the way heat is generated and used. David Blake, Energy Recruitment Manager at Allen & York, investigates.
The Renewable Heat Incentive (RHI) policy document, sets out the detailed arrangements for this scheme, which will provide long-term financial support to renewable heat installations to encourage the uptake of renewable heat. From conversations we’ve had with our contacts within the market place, there are positive signs for the way in which the RHI will affect the installation levels of renewable energy technologies. The incentives published by the Department of Energy and Climate Change (DECC) of an increase in the number of industrial, commercial and public sector installations by seven times to 2020, look achievable.
Nevertheless, the key difference that could make or break this is the fact that, unlike the FiT, the RHI is being financially supported by the treasury and not the energy user, so again there is a dependence on the governments’ decisions around reward levels. In addition, recent revisions of the FiT (after a very short period of time) show how unpredictable incentive schemes can be. These revisions can be seen as a direct result of large firms and utilities monopolising the FiT incentive, which is an issue that will hopefully be addressed by the RHI. This time the playing field seems to be more level, with room for the smaller providers as well as the large energy companies, which is a positive step forward.
Heating is responsible for 46 percent of UK carbon emissions and with the RHI aiming to cut that by ten percent by 2020; this will not only support a predicted 150,000 jobs in the heating industry, but also bolster the renewable energy market within the UK. I have come across a certain degree of scepticism surrounding the RHI, probably due to the frailties of the FiT, however if successful, the RHI could be an integral part of strengthening the security of the UK renewable heating supply and reducing our dependence on fossil fuel heating. It is hard to predict whether this incentive will be a success, but I believe it’s the best option to date and would like to see it work.
