Yesterday’s announcement of the outcomes of the RHI consultation has delivered some clarity on the intentions to continue supporting biomass boilers and biomass CHP.
Simply put, the intention is that there will not be boiler size dependent tariff payments. There will still be Tier 1 and Tier 2 rates, but every boiler will get these regardless of size. The rates which BEIS anticipates applying are higher than the current large biomass boiler rate but lower than the medium biomass boiler rate and they will deliver improved income for small biomass boilers running longer hours than currently.
Tier 1 band is set to increase to the equivalent of 35% load factor (up from 15%). This means that the eligible heat (kWh thermal) for payment of Tier 1 is now boiler size x 3,066 hours.
Good news for installers of large biomass boilers, systems commissioned and application made post 14th December as these will be eligible for the new rates as soon as the regulations come into force. This is so that projects in build right now don’t stall.
The original consultation suggested that CHP would be subject to tiering as per biomass boilers. The response states this will not be implemented because of the power efficiency rules that came into force in August 2016.
The August rules saw the introduction of a 20% power efficiency threshold for biomass CHP. BEIS have confirmed their intention in this latest response that this threshold should be 10% for projects installed and commissioned between now and prior to spring 2017… HOWEVER, the response states that there will be a short consultation on the effects of increasing this back to 20% in early 2017.
The drying of digestate will cease to be an eligible use of heat and there will be work carried out to determine if drying wood fuel should continue to be eligible.
Demonstration of planning permission having been granted, or not required, will be eligibility criteria for all new applications from spring 2017 for preliminary and full application. In addition, it will be an ongoing obligation that the relevant planning permissions are maintained for the lifetime of RHI support for these installations.