RHI Update: Start Date Delayed

Phase One of the Renewable Heat Incentive (RHI) was due to commence today, 30 September 2011.

The Department of Energy and Climate Change (DECC) announced on 29 September 2011 that they would not be able to open the scheme for non-domestic generators as planned on 30 September 2011.

This delay is due to the requirement for State Aid approval. DECC announced that the European Commission is concerned that the large biomass tariff is set too high, and stated that: "We understand that the Commission has given state aid approval for the RHI, subject to a reduction in the large biomass tariff, and we expect to receive written confirmation of this very soon."

This reduction to the large biomass tariff required by the European Commission will mean that the RHI regulations need to be amended and submitted to Parliament for approval. This process will take time. However DECC did confirm that: "We are committed to launching the scheme as soon as possible to minimise disruption to stakeholders."

Paul Thompson, the Renewable Energy Association's head of policy said: "This last minute announcement is desperately disappointing. The industry has been gearing up over the last six months to deliver on the government's ambitious plans for renewable heat."

For information on the RHI scheme, please see here.

New regulations came into force on 6 September 2011

The Renewable Heat Incentive (Amendment to the Energy Act 2008) Regulations 2011 (SI 2011/2195) came into force on 6 September 2011.

The first set of regulations, which introduce RHI, have widened the definition of biogas so that it not only includes production by anaerobic digestion, but by a range of methods, including gasification and pyrolysis. These regulations have also amended the definition of biomass so that it does not allow for the burning of "peat" as a biomass fuel source. These amendments are to the Energy Act 2008.

Should you require any advice or further information with regards to this issue, then please contact Annelie Carver on 01392 687714, or email her at annelie.carver@michelmores.com.