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UTILITY WEEK | 29TH SEPTEMBER - 5TH OCTOBER 2017 | 9 Policy & Regulation "We're not just wearing belts and buckles, we're also wearing a parachute," he adds. Delay to reforms The renewable energy industry is more concerned that earlier reforms to the RHI have not yet been implemented. These were first proposed in early 2016, but have been repeatedly held up by political upheaval. They were not confirmed until December, then legislation tabled in the spring had to be withdrawn when the election was called. Now, the Department for Business, Energy and Industrial Strategy (BEIS) has split the legislation into two parts. Some came into effect on 20 September, including resetting the tariff for biomass plants to a previously higher level. However, measures to raise the tariffs granted to biogas and biomethane projects to previous levels, and introduce tariff guar- antees, where a tariff can be secured before it is commissioned, have not materialised. According to BEIS, these need to go through a more lengthy parliamentary process. The ADBA says the changes are crucial to further development of biomethane plant. Development of up to 25 plants has stalled until the regulations are implemented, it estimates. "Our industry has been ready for more than a year to respond to the changes. We're aware of around 20-25 plants, or £130 million in investment that is waiting to go ahead. With the delay, some of these pro- jects are at risk or will have to renegotiate finance," Koller says. BEIS stalling policy Shadow energy and climate change minister Alan Whitehead MP has been pressing the government to implement the new regula- tions. "BEIS is absorbed in what is happen- ing about Brexit and neglecting other areas that need attention simply because its mind is on other things. There's a lack of capacity, a lack of co-ordination and urgency," he says. Even once the government implements the regulations, another delayed policy is pressing on the industry's mind: the Clean Growth Strategy. Renewable heat is vital to the country's future decarbonisation plans under the fih carbon budget, which envis- ages these technologies providing supply for around 13 per cent of homes and more than half of business use by 2050. Currently there is no policy for renewable heat aer March 2021, when the RHI ends. Aaskov points out that the government needs to start consulting soon on post-2021 policy for renewable heat to avoid stalling projects with a lead time of three to four years. But Whitehead fears the government will not prioritise renewable heat. "The RHI urgently needs very considerable expansion in its scope and underwriting. All the signs at the moment are that the government is not taking that seriously," he says. Focus on electricity Many advocates of low carbon heat, includ- ing Rotheray, complain that government has ignored its potential in favour of a focus on low carbon electricity. Government funding towards decarbonising electricity dwarfs that for heat, he says. He points to the contrast with the offshore wind sector, where ever larger projects are being developed and massive cost reductions have been achieved through a combination of policy certainty from government and innovation from industry. "A very clear policy has been set out over a significant trajectory in timescale and there has been constructive working between industry and government. The RHI has been the opposite of that." Brexit opportunity Richard Lowes, researcher at the University of Exeter Energy Policy Group, says all the recent changes to the RHI have been "tinker- ing around the edges" rather than address- ing the main issue, which is that the scheme has overwhelmingly supported small-scale biomass over other technologies. Biomass plants make up 86 per cent of projects supported by the non-domestic RHI, according to the latest data from BEIS (see below). The fuel source has a higher carbon content, so is less effective at decarbonising heat than other technology, Lowes says. The design of the RHI has been skewed towards meeting EU renewable energy tar- gets, which has prioritised biomass because it is a cheap technology to develop in the short term. Once the UK leaves the EU, it could redesign the scheme to target financial support more towards longer-term, more sus- tainable technologies such as heat pumps and solar thermal, Lowes says. Rotheray believes a fundamental rethink of renewable heat policy is needed. He claims the definition of renewable heat under the RHI can be quite restrictive, giving the exam- ple of heat pumps, which are not counted as a renewable technology if they take heat from waste, but are if they take heat from the ambi- ent air – even though this is less efficient. "The first thing we need to think of is the greenhouse gas content of heat. That's where the focus needs to be, and the artifi- cial definition of what is renewable and what isn't is not helpful. "The fih carbon budget is very clear – if you want to achieve it, you have to decar- bonise heat. The government needs to be ambitious. The UK has successfully led on other areas of the energy sector and it could lead on this." Tariff band Number Percentage of total Small solid biomass boilers (<200kW) 12,870 68% Medium solid biomass boilers (200-1,000kW) 3,467 18% Large solid biomass boilers (>1000kW) 67 0% Small solar thermal (<200kW) 311 2% Small water or ground source heat pumps (<100kW) 733 4% Large water or ground source heat pumps (>100kW) 177 1% Biomethane 88 0% Biogas 763 4% Air source heat pumps 417 2% CHP 59 0% Deep geothermal 0 0% TOTAL 18,952 100% LATEST IMPLEMENTATION FIGURES UNDER THE NON-DOMESTIC RHI Source: BEIS "BEIS is absorbed in what is happening about Brexit and neglecting other areas that need attention simply because its mind is on other things. There's a lack of capacity, a lack of co-ordination and urgency" ALAN WHITEHEAD MP