Carbon Connect responds to Government’s consultation to drastically reform the Renewable Heat Incentive

Carbon Connect’s report proposes an alternative means to balance out the disparity in uptake of different technologies.

Public policy advisory body Carbon Connect has responded to the Government consultation to drastically reform the Renewable Heat Incentive (RHI) by calling instead for increased commitment to renewable heat technologies.
On 3 March the government outlined a series of reforms to the RHI. The plans, which follow on the heels of a reduction in the level of support offered by the scheme announced in the Autumn Spending Review, could see a 98% reduction in the deployment of non-domestic biomass boilers and an end to support for solar thermal from 2017 onwards.
Carbon Connect’s Policy for Heat report found that the non-domestic RHI scheme has delivered a poor diversity of technology uptake, with small and medium biomass boilers accounting for 95% of installations. The domestic scheme has been slightly better in terms of diversity of uptake, but biomass is still the largest portion of installations.
The report calls for a wide mix of renewable heat technologies to be given relevant support to increase uptake of technologies such as solar thermal, heat pumps and geothermal, as these were not being appropriately supported by government.
12% of the UK’s heat needs to come from renewable source by 2020, an ambition the British Government has agreed to. It could be said that the RHI is in need of reform – at current levels, it is not fulfilling its intended purpose of driving low carbon heat effectively and in 2013 it supported only 0.6 TWh, comprising just 3% of the low carbon heat in the economy. This must improve, and the changes proposed by the Government would seriously hamper its ability to reach the level truly needed to meet ambitions.

Solar thermal wrong turning?
The non-domestic scheme has been unsuccessful at driving uptake of non-biomass technologies. Cutting support for solar thermal, and potentially for anaerobic digestion would be a huge error of judgement, and seriously jeopardise the Government’s ambition of meeting 12% of heat demand from renewable sources by 2020. DECC’s figures show that Solar Thermal held a 17% share of installations in the domestic RHI, which is not insignificant in the decarbonisation challenge. Despite this, it only provides 2% of the non-domestic scheme’s installations. The aim should be to grow this share, not cut it all together.
The renewables sector is considered to be one of the fastest growing business sectors in the UK to date, supporting a swathe of jobs. In May 2015, the Renewable Energy Association reported that “In the UK as a whole, employment in renewable energy increased by 9% across all sectors, bringing the total number working in the industry to 112,026… The increase in renewable energy employment is now outstripping growth in market values in many sectors.”
The report also calls on the Government to introduce a mandated renewable heat market share target, rather than an ambition, as this current ambition is far from being reached. An extension of the RHI would give DECC the certainty to plan and make any amendments needed to re-balance the funding system beyond biomass heating.
Carbon Connect is calling for the Government to give more substantial support to promoting the various technologies on the market in the form of a national low carbon-heating technology deployment feasibility strategy. This would make deployment of different technologies more effective and efficient.