The Renewable Energy Association has dubbed the lowered tariff for the Renewable Heat Incentive as an “unwelcome surprise” to the industry.
The government’s renewable scheme was delayed when the European Commission objected to the level of tariff for biomass. Today it was given the go-ahead with a lower tariff for large biomass projects. DECC hopes it will open for applications by late November.
Paul Thompson, the REA’s head of policy welcomed the announcement after the “shock” postponement but said that the new subsidy level is disappointing.
He said: “At more than 60%, the size of the reduction in the large tariff is an extremely unwelcome surprise and will badly undermine projects at this scale – which would have provided excellent value for money and greenhouse gas savings even at the original tariff.”
But others in the industry disagreed.
Tim Minett, Chief Executive of UK biomass supplier CPL Distribution said that with the chief obstacle to the scheme out of the way, the industry should continue relatively unscathed.
Mr Minett said: “The overwhelming majority of businesses will be unaffected by the revision which affects only the largest biomass installations of more than 1MW, which is sufficient for the heating needs of major users like hospitals and prisons. Most will be comfortably under this.”