The government has announced plans to extend the commissioning deadline for projects that have received or applied for tariff guarantees as part of the second allocation round for the Non-Domestic Renewable Heat Incentive (RHI) scheme.
The extension is intended to give leeway to projects that have been delayed as a result of the coronavirus lockdown.
The tariff guarantee scheme was introduced in 2018 to allow applicants to secure a tariff rate before their installation has been commissioned and accredited.
In a consultation published in April, the Department for Business for Business, Energy and Industrial Strategy (BEIS) proposed extending the commissioning deadline for projects that have already been awarded a tariff guarantee as part of the second allocation round until at least mid-March 2021. These projects currently have until 31 January 2021 at the latest to complete commissioning.
However, based on the feedback, the department has now decided to extend the deadline until 31 March 2022 for all projects that have applied for a tariff guarantee by 29 June, regardless of whether one has been awarded yet. It means all eligible projects will get at least 14 month of additional time.
Energy Minister Kwasi Kwarteng said: “It is right that we offer certainty and breathing space to companies embracing renewable heat technology across the country.
“Renewable heat will play a key role in the UK’s economic recovery as we redouble efforts to tackle carbon emissions. With government support, these vital projects are on course to stop 108 million tonnes of CO2 from polluting the atmosphere, while also helping to create new green collar jobs.”
BEIS also confirmed plans to close the non-domestic RHI to new applicants from 31 March 2021, hold a third allocation round for tariff guarantees and extend the domestic scheme by 12 months to 31 March 2022.
As detailed in a separate consultation issued in April, the department is planning to replace the former with a new support scheme for biomethane production and the latter with upfront grants of up to £4,000 for the installation of heat pumps.
REA chief executive Nina Skorupska said: “The decision to extend the tariff guarantee scheme shows strong leadership from the government when it comes to deploying larger scale heat decarbonisation projects. Reviewing the scheme in light of the impact of Covid-19 and adapting it is exactly the type of governance needed if we are to bounce back from the lockdown whilst adhering to our legally binding net zero targets.
“Despite this, the announcement rings bittersweet for a number of those in the heat sector. Choosing not to extend the Non-Domestic RHI further alienates a number of renewable heat technologies and projects that are already facing a twelve-month policy gap. Unless supported, potential for growth in renewable heat will be undermined and the already established sector at risk of financial collapse and loss of jobs.”