After long delays, the latest set of Renewable Heat Incentive (RHI) reforms have come into effect today (22 May 2018) after successfully making their way through both the House of Commons and the House of Lords earlier this month.

The latest regulations introduce a swathe of new features designed to give larger projects some tariff certainty and also to prevent the exploitation of the scheme.

The list of changes to the scheme are summarised below:

• Introduction of a tariff guarantee: The ability for larger projects to ‘lock-in’ to a tariff before committing to financial spend, thereby giving those projects with longer lead times protection from tariff reductions that could occur between the start of a project and commissioning.
• Uplift to biogas/biomethane tariffs: The biogas and biomethane tariffs will be reset to previously available rates (see table below), subject to feedstock requirements.
• Biogas/biomethane feedstock restrictions: In order to qualify for the reset highest rate, at least 50% of the gas produced must have come from feedstocks that are wastes, or a proportionate reduction in tariff will apply.
• Removal of eligibility for new wood fuel drying projects, digestate drying and waste processing or drying.  
• Six month extension for some wood fuel drying projects: Projects that can demonstrate that wood fuel drying formed part of their proposed RHI installation (through planning permission, equipment purchase etc.) prior to the consultation response (19^th January 2018), will be given a six month extension from today to install, commission and apply for accreditation.
• Return to 20% threshold electrical efficiency for Biomass Combined Heat and Power (CHP): Biomass CHP projects will need to demonstrate that their projects can produce 20% electrical energy when compared to fuel input in order to qualify for full Biomass CHP rate. If they can’t then their tariff will reduce proportionately.

Other changes include the introduction of shared ground loop regulations for heat pumps and the revision of degression (tariff reduction) thresholds.  

These changes have taken 26 months to come into effect - the original consultation 'The RHI: a reformed and refocussed scheme' was released in March 2016! These reforms also build on the August 2016 change to the efficiency threshold requirement for Biomass CHP and the September 2017 introduction of a common tariff for all sizes of Biomass Combustion, severely diminishing returns to the ‘small’ and ‘medium’ biomass tariffs.   

The tariff rates are:

Although these changes have taken some time, the changes are largely considered positively and welcomed as much needed clarification to aid the scheme to its current anticipated end date in 2021.

If you have any questions and discover how we can help you make your project a commercial success, please call us on 024 7669 8899.