Further RHI Holdups and Biogas Goes Big in China

Although the RHI (Renewable Heat Incentive) is now up and running at a commercial level it’s still very much a work in progress. The scheme is currently running at about half of its expected levels and subsequent changes including the introduction of tariff degression and the removal of grandfathering to sustainability criteria mean that investor confidence is not that high.

The domestic scheme isn’t even up and running yet but I just spotted a note from DECC which says:
……As part of the process necessary to implement the scheme, approval from the European Commission is required. This is because the RHI falls under EU ‘state aid’ rules that control certain types of government support.  The European Commission has granted state aid approval for the domestic RHI, although third party owners of renewable heating systems were not included in this decision. Third party owner means anyone who does not own or occupy the property to which the renewable heating system provides heat.

Rather than risk further delay to the launch of the domestic RHI we will proceed on the basis of the Commission’s decision, which will mean third party owners will not be eligible to apply when the scheme opens this spring. It is still our intention to include this group in the scheme, however, and we are currently looking at options as to how best to achieve
this and when we will be able to make such changes.

This does not impact on homeowners who have secured financing for their renewable heating system through a third party, but rather refers to models where a third party retains ownership of the renewable heating system and claims the domestic RHI directly for that installation.  Private and social landlords come under a different category, and will still be eligible for
the domestic RHI because they own the properties in which the technology is installed…………..

This effectively means that 3rd parties can’t claim RHI and households have to invest directly. I think this could have really serious implications from an ESCo perspective as the ESCo model simply won’t be possible.
One potential workaround would be the inclusion of green deal capital for RHI investments but this all sounds a bit complicated. This is a big problem but hopefully new state aid can be gained allowing ESCos to develop and flourish as they should.
Turning briefly to China, did you know that the Chinese Government has been massively pushing domestic level biogas? Estimates suggest that there are now around 30 million gas digesters in China. That’s more that the total number of gas commections in the UK!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: