U.K. Plans to Boost Renewable Heat Tariff, Cut Some for Biomass

The U.K. government proposed increasing payments made to commercial premises that generate heat from renewable sources, while cutting tariffs for medium-sized biomass boilers.

Office blocks, factories and community centers may receive increased payments for installing ground-source heat pumps, large biomass boilers and solar-thermal technology, the Department of Energy and Climate Change said today in a statement as it starts a consultation on the proposals.

The rates for medium commercial biomass of 200 kilowatts to one megawatt in capacity will be reduced by 5 percent from July 1 to 5 pence a kilowatt-hour or 2.1 pence a kilowatt-hour, depending on the additional investment required in the installation, according to the statement.

“The renewable heat incentive has been running for nearly eighteen months, so now is a timely moment to look again at the tariffs,” Energy and Climate Change Minister Greg Barker said according to the statement. “We need to make sure they are set at the right level to continue bringing forward investment and growth and at the same time keep costs to the taxpayer to a minimum.”

DECC also said it will reduce tariffs for new applicants if uptake of the technologies is greater than forecast, according to the statement.

The department proposed increasing the tariff for large biomass boilers of more than one megawatt from 1 pence to 2 pence a kilowatt-hour. Ground source heat pumps would rise to 7.2 pence or 8.2 pence a kilowatt-hour from 4.8 pence or 3.5 pence now, depending on the size of the system. Solar thermal kit of as much as 200 kilowatts in capacity would rise from 9.2 pence a kilowatt-hour to as much as 11.3 pence.

The consultation will close June 28, according to DECC.

To contact the reporter on this story: Sally Bakewell in London at sbakewell1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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