Renewable heat budget flatlines

Spending on renewable heat will flatline in 2015/2016, under plans set out by chancellor George Osborne today.

The Treasury’s spending review document says proposed new Renewable Heat Incentive tariffs and a higher budget cap will “encourage increased take-up”.

However, the Renewable Energy Association said the budget rise of just 1 per cent to £430 million was not nearly enough to meet energy and climate targets.

The industry body said spending on renewable heat needs to roughly double every year in the early years in order to reach a target of 12 per cent of heating by 2020. In the three years from 2011/12, the cap has risen from £56 million to £424 million.

REA chief executive Gaynor Hartnell said: “It is important that the UK meets its renewables target in the most cost-effective way possible. Heating from biomass is one of the cheapest means of doing this.

“This poor settlement, coupled with next week’s tariff reductions for medium scale biomass installations, sends a very bad message over the government’s long term support for this sector.”