A few days ago the Minster of State for Climate Change, Mr Greg Barker, made an announcement on the Renewable Heat Incentive. I was going to write about it, but instead of an essay, I thought that I would add a commentary on the Minister’s statement. I have therefore set out the statement and my comments, and I hope that the Minister can find time to read them and take account of them.
“The Renewable Heat Incentive (RHI) is the first of its kind in the world and provides long term support for renewable heat technologies such as heat pumps, biomass boilers and solar thermal panels.”
The Renewable Heat Incentive may be the first of its kind but like nuclear fusion exists as a concept, when it comes to its application on residential homes, which is the major part of the of where the emissions are created and where the incentive is needed.
“On 26 March 2012 I reaffirmed Government’s commitment to growing the UK market for renewable heat technologies by announcing further support for the domestic sector under a second phase of the Renewable Heat Premium Payment Scheme (RHPP).”
Weasel words indeed. The alleged reaffirmation comprised merely of saying that the residential RHI would come into full operation now three years after this “world’s first” incentive was announced (instead of two years), on uncertain terms.
“At the same time I set out our delivery timetable for providing longer term support for households,”
Not quite true, Mr Barker. You did not set out the delivery timetable but extended it!
“expanding the non-domestic scheme and transparent plans for staying within our budget for this year.”
There was no expansion of significance and the public and solar thermal industry still do not know what the actual yearly incentive will be! That is lack of clarity, not transparency.
“I am pleased to report that we are on track to meet the RHI delivery timetable and have met our first milestone.”
I do not understand what milestone has been met. Can Mr Barker explain what it is because as far as I can see he has simply pushed the milestone further down the road and then run backwards.
“In March we consulted on a mechanism for more effectively managing the RHI budget in the short term. Today, I am pleased to publish our response which will ensure we have a stand-by budget management mechanism in place this summer, enabling the sustainability of the scheme by allowing us to keep within the budgetary limits set by the Comprehensive Spending Review (CSR). Further, I can confirm that we are on track to consult on longer term proposals in July 2012 as planned.”
This is re-arranging the deckchairs stuff. The mechanism to ensure that the RHI will be kept within budget will be in place (a) nine months before the RHI for residential homes will take effect and (b) for the rest of the RHI at a time when there is not much take up of the RHI. Over spend is not a present worry. The lack of incentive being predictable and available now is by far the most important issue.
To ensure the supply chain can be maintained with the available funds in this spending review period, we have set an upper limit of £70m for 2012/13. However, it is important to note that the funding amounts announced in the spending review for 2013/14 and 2014/15 are unchanged.
The supply chain in the solar thermal industry lost faith with anything that DECC published some time ago. The supply chain has had any certainty while there is uncertainty as to what incentive the supply chain cannot plan. On a small business level, a qualified installer will have had to renew his or her MCPS qualification for two consecutive years without having any business income from that qualification.
The upper limit of £70m ensures that the 2013/14 budget of £251m would be enough to pay for existing installations and new installations, were the 2012/13 limit to be reached. A higher limit for 2012/13 would leave insufficient funds available in the following year for new installations and therefore could be very damaging to the renewable heat industry.
Agreed but by then will there be a solar thermal industry left in the UK to damage?
In the event of having to use the stand-by mechanism, a notice period of one week would allow for a much higher trigger point for suspension of the scheme (£67.9m, 97% of the £70m limit) compared with one months’ notice (£56m, 80% of the £70m limit) and would also reduce the chances of scheme suspension being triggered unnecessarily.
Probably the least important thing about the RHI.
We recognise the need to provide comprehensive information on current and forecast scheme expenditure and make it publically available. To do this we will provide a weekly information update on our website, tracking our committed expenditure. If required we will also provide an estimated date of suspension prior to the formal notice period, in the event of an unexpected surge in uptake such that suspension is likely to be triggered.
This will be helpful if the world’s first renewable heat incentive is ever fully implemented.
I would like to thank all those people who helped us develop these plans. I can confirm that after careful consideration, should we need to use the stand-by mechanism, this will be done when the spend in 2012/13 is forecast to reach £67.9m with a formal notification period of one week. Given current uptake figures, we do not currently envisage having to use this mechanism. However, we have learnt from our previous experiences and want to provide assurances to the market and the public that we are spending money on the RHI in a sustainable way.
There is no sign that they have learnt from previous errors, but are repeating them.
Government remains committed to the deployment of renewable heat and as such we are continuously looking at innovative ways of supporting it across all sectors.
I simply do not believe this.
Filed under: climate change | Tagged: climate, genersys, renewable heat incentive, RHI, solar panels, solar thermal, solar water heating | 1 Comment »