The Combined Heat and Power Association (CHPA) today warned that investors need more certainty if the RHI scheme is to drive the deployment of cost-effective renewable heat projects, including highly efficient combined heat and power.
The CHPA says that in details published by the Department for Energy and Climate Change (DECC) on the Renewable Heat Incentive for commercial and industrial heat users, the government announced it would not introduce a mechanism to allow investors to ‘lock in’ the value of the RHI payments when they reach financial close.
DECC also acknowledged that Enhanced Preliminary Accreditation would help provide investor certainty, but concerns about how such a scheme would work in practice prevented it from being implemented at this time.
Dr Tim Rotheray, head of policy at the CHPA, said: “There are a number of proposed large scale renewable combined heat and power projects which, if built, will insulate industry against rising fossil fuel prices and help them reduce their emissions. Investors need to know now that the RHI payments will be there when they complete the project. If the RHI fails to incentivise large scale renewable heat schemes, it will only make meeting the 2020 renewable heat target more difficult for government and more expensive for taxpayers.
“We welcome the government’s commitment to continue working with industry stakeholders over the next year to work on these challenges and we encourage them to recognise the vital importance of providing the energy industry with the confidence they need to invest in large scale renewable heat.”