Biomass industry leaders have welcomed news that the UK Chancellor, the Rt Hon Rishi Sunak MP, has announced £100m funding and a twelve months’ extension to the Renewable Heat Incentive (RHI) giving the sector a level of certainty in terms of protecting jobs and delivering short-term renewable heat projects.
In his first Budget speech, the Chancellor set out the Government’s funding commitments for low carbon heat including:
- £100 millionof exchequer funding in total for 2022/23 and 2023/24 for grant-funding for households and small non-domestic buildings, to install heat pumps, or biomass in limited circumstances, to replace fossil fuel heating. This will form part of government action to help build supply chains ahead of future measures to phase out high-carbon heating; and
- £270m for a Green Heat Network Fund to run from 2022 to 2025, to follow on from our Heat Network Investment Project. This new targeted fund will ensure that heat networks adopt the most cost-effective low carbon heat sources and will avoid locking in gas generation in the sector.
Ahead of such schemes being established, the Chancellor also confirmed that the Government will also:
- extend the Domestic Renewable Heat Incentive (DRHI) for a year in 2021/22, maintaining support for heat pumps, biomass and solar thermal;
- Introduce a third allocation of Tariff Guarantees under the Non-domestic RHI (NDRHI). These will be available for all technologies that have been eligible for the previous two allocations.
Mark Lebus of Biomass Heat Works! and Chair of the UK Pellet Council, commented, “This is positive news from the Chancellor and a step in the right direction for both the biomass heat industry and the UK Government regarding delivering heat decarbonisation, net zero policy. The announcement now provides a degree of clarity and certainty to protect and sustain 46,000 jobs and 700+ supply chain companies, as well as push on with new investment and renewable heat installation projects in the short-term.
“£100m funding to replace fossil fuel heating in homes and small, non-domestic buildings and an extension to the RHI post 2021, albeit for twelve months, is essential to address climate change issues whilst encouraging a continued switch to renewable energy. It will also play a key part in the supply chain process when creating new woodland areas so we’re supportive of the Budget announcement made today and very much welcome the opportunity to work closely with BEIS ministers to develop and deliver future policy.”
A consultation will be launched shortly by Government setting out details on the proposals for new exchequer grant-funding to support biomass deployment, and publish further information on the proposed changes to the RHI schemes and the future of the Non-Domestic RHI scheme. The Government will also be consulting on details of the Green Heat Network Fund later in the year.
For the 2020 Spring Budget statement go to https://www.gov.uk/government/publications/budget-2020-documents/budget-2020