Details of RHI scheme emerge; official announcement imminent

An announcement on the much-anticipated Renewable Heat Incentive (RHI) Scheme – which is due to commence in 2018 – is expected to be made tomorrow, by the Department of Communications, Climate Action and Environment.

It is hoped that substantial details on the scheme will be confirmed tomorrow, after a proposal was reportedly brought before Cabinet earlier this week and received approval.

However, the proposed scheme would still need to receive EU state-aid approval before being launched. If it gets the go ahead, it is thought that the Sustainable Energy Authority Of Ireland (SEAI) would administer the scheme.

Leaked information, according to sources within industry lobby groups, indicates that the scheme – which will be made up of multiple tiers – will run for a period of 15 years.

The scheme will be open to applicants in the industrial, commercial and agricultural sectors; it is not expected that domestic-scale projects (i.e. residential homes) will be covered by the scheme, sources added.

On biomass heating technologies, it is understood that a rate of about 5.6c per kilowatt hour (kWh) will be available up to 300 Megawatt hours (MWh) in the first tier of the scheme. This would equate to a rate of approximately €56/MWh.

The rates are set to decrease as you move down through the remaining tiers, of which there could be six. The second tier is expected to be up to a limit of 1,000MWh.

Meanwhile, anaerobic digestion (AD) heating technologies are set to be subject to similar tier boundaries to their biomass counterparts, according to sources. It is suggested that rates for the first tier will be around 3c/kWh or €30/MWh.

However, sources from industry lobby groups have also indicated that there will be no support for biomethane gas grid injection from AD in this phase of the scheme.

It is also believed that installation grants – of up to 30% – will be available for air, water and ground-source heat pumps.

Awaiting department confirmation

Caution must be aired as of yet though, as details have yet to be officially confirmed by the department – but an announcement is expected early in the morning.

In previous responses to parliamentary questions on the scheme, Minister Naughten outlined that €7 million was allocated in Budget 2018 to fund the first phase of the RHI scheme.

When asked about the scheme last month, the minister said: “The proposed RHI addresses key objectives set out in the National Mitigation Plan, the Energy White Paper and the Programme for Government.

The scheme has a significant role to play in contributing to meeting our renewable energy and emission reduction targets for 2020 and beyond. In addition, the scheme will open up new opportunities for the domestic bioenergy sector.

“The development of the scheme has involved detailed economic analysis, extensive engagement with industry and two public consultations.

“The scheme is designed to stimulate and support the replacement of fossil fuel heating systems with renewable energy by commercial, industrial and agricultural heat users in the non-emissions trading sector (non-ETS),” Minister Naughten said.

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