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The Renewable Energy Association has urged the government not to withdraw support for renewable heat, which could be cut by up to 35 per cent.
The new Department for Business, Energy and Industrial Strategy (BEIS) laid an amendment in parliament earlier this month to reduce the support for biomass combined heat and power systems under the Renewable Heat Incentive without consultation.
The REA is calling on BEIS to withdraw the amendment until a consultation has been launched to examine the impact on these projects, or introduce a grace period for those who can demonstrate that they have already made a significant financial commitment.
REA head of policy James Court said: “Despite the amendment claiming ‘no impact on the private or voluntary sectors is foreseen’, the abrupt cut in support significantly impacts the biomass CHP industry. It is the suddenness and the lack of consultation that is the core issue here.
“The industry was preparing for a new tariff structure from spring 2017. Over £22 million has been paid in non-refundable deposits.”
BEIS will cut support for units that use less than 20 per cent of their fuel for electricity production. The Renewable Energy Association (REA) claims this could put over £140 million of investment at risk.
The REA surveyed 36 companies that are developing the projects in the UK, 34 of which had already made major equipment orders for the construction of their facilities or put down non-refundable deposits. REA discussions with member indicate many companies are facing up to a 35 per cent reduction in their anticipated tariff.
The change will affect all plants applying on or after 1 August 2016, giving projects 21 days’ notice.
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