The long awaited reforms to the Renewable Heat Incentive (RHI) Scheme are set to come in to force on 22nd May 2018. Following the consultation to reform the RHI scheme which was held back in 2016 and the subsequent hold up blamed largely on Brexit, the reforms proposed under the consultation have only now made their way through parliamentary debate this month receiving approval from the House of Lords yesterday, 10th May.
Changes being introduced have removed some eligible heat uses amid concerns that certain uses for renewable heat were being created solely for the purpose of receiving support payments under the scheme.
Other changes which we expect will stimulate an upsurge in deployment levels include increased tariff levels and tariff guarantees which will help to promote confidence amongst investors backing new projects seeking financial support.
Restrictions on feedstock types for anaerobic digestion will mean that at least 50% of the biogas produced by AD plants will have to be derived from feedstocks classified as wastes or residues.
The introduction of the revised RHI regulations coming in to force are welcome news to bioenergy sector, particularly the biogas industry with deployment of new AD plants largely being on hold since the December 2016 consultation response. We expect to see a rush of new plants moving forward to construction throughout 2018 taking advantage of the reset tariffs and the tariff guarantee mechanism.