The Renewable Heat Incentive (RHI) debacle

The launch of the Renewable Heat Incentive has been put back several months in an embarrassing last-minute change of plans by DECC. The announcement was posted on DECCs website  hours before the RHI was due to come into action, so many people who have been preparing applications based on the current information are now left in limbo until further announcements are made. Some people will already have made investments on the basis of the RHI tariffs and are now wondering whether this was a good idea. This setback is a result of worries in Brussels that the tariff for biomass is set too high. The concern in the industry is not that the delay in itself will lessen the impact of the incentive, but that this is another example of this Governments stop-start behaviour on renewable energy policies. The incentive has been on the cards for years and there was plenty of time to get this issue resolved in time, but DECC still haven’t managed to do so. One has to wonder about the ability of the team at DECC running the project and question whether the right people are in place to make it happen. The leader of the original team was Hergen Haye who was moved across to deal with the Nuclear policies over a year ago. That doesn’t look like it was the best move ever, with two significant players in the UK nuclear market both pulling out of it in recent weeks.

DECC needs to get this dealt with in the shortest possible timescale or risk losing investor confidence in the RHI having already damaged it seriously with changes to the FiT.

DECC could use this hiatus and bring forward the introduction of the domestic RHI instead of delaying it and waiting for the introduction of the Green Deal. That would go some way to restoring investor confidence that this Government is treating the growth of the Uk renewable energy industry seriously.

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