Renewable energy incentive opens at lower rate

Renewable energy support scheme offers big benefits despite reduced rate and delayed start.

Growers investing in biomass heating and similar systems could see big benefits from the Renewable Heat Incentive, according to industry figures.

The Department of Energy & Climate Change opened applications for the financial support scheme on Monday, after the planned 30 September launch was postponed at 12 hours notice.

Businesses can apply to receive a fixed-rate payment from the Government for heat they produce using a renewable heat system such as solar thermal panels, heat pumps or a biomass boiler.

The incentive has been launched at a lower rate than originally proposed to make it compatible with EU state aid rules, leading to some criticism.

Tim Pratt, technical director at energy consultancy Farm Energy, said: "It's a bit of a disappointment because they were talking about quite a nice rate for larger boilers and that has been slashed.

"It was going to be 2.7p per kWh and it is now 1p. That has taken the edge off it a bit, particularly for larger growers. There will probably be a bit of a dead spot. Anything less than 1MW is still looking quite good, but larger than that you will need lots of megawatts because of economies of scale."

Pratt stressed that growers were still set to benefit and he has 20MW of applications going through at the moment. "For nurseries with oil boilers less than 1MW, it's a nice opportunity. They are looking at three years payback.

"They could be looking at £400,000 for 1MW. A lot of growers haven't grasped the impact of this yet."

NFU chief renewable energy and climate change adviser Dr Jonathan Scurlock added that many growers had been left feeling discouraged by repeated delays. "They will be pleased that, at last, this scheme is finally getting off the ground," he said.

Grower response to Renewable Heat Incentive

"We are going to benefit but not as much as we would have done before the rate was reduced. We have ended up halving the size of our scheme and the uptake will probably be a fraction of what it was going to be. However, our boiler is being delivered on 19 December and it should be ready soon after the new year. It will meet our heat needs, which means we will have very green cucumbers. There will be a seven-year payback time. The capital expenditure on these projects is huge."

David Schellingerhout, managing director, Glen Avon Growers

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