Listening to the “emergency” budget today was fairly tedious. We were waiting for mention of some forward thinking on carbon reduction, energy, renewables, perhaps the greenest budget ever. We heard nothing. The Renewable Heat Incentive funding is set to close to new applications in April of 2016, and we, like most people in the industry, would like to know the governments thinking moving forward.
Amongst the welfare cuts, increase in the minimum wage, freezing fuel duty at the pump, the Chancellor has produced a package of measures worth £1.3bn to support the North Sea Oil based companies and help to expand production. He has removed the Climate Change Levy exemption on renewable energy produced electricity and confirmed the ending of subsidies for on shore wind. He channeling all vehicle excise duty into the building of new roads, perhaps this will help reduce miles travelled.
This does seem to be at odds with the Climate Change Comittee report that was published at the end of June 2015. This clearly states that whilst the delivery of bioenergy seems to be delivering to target, with the halt in funding the industry needs to “urgently” know what comes next. The Renewable Heat Incentive has not delivered the amount of heat pump installations as expected. The committee recommended in their 2014 report that the awareness of the RHI needs to be improved (at 21%) and this needs to be complimented with additional training as support for installers.
On the face of things there has been an unprecidented 8% fall in carbon emissions in the last year. They can largely be counted for by the following:
- A very mild winter (and perhaps more mild winters on the way)
- Closure of coal power production
- A change in accounting measures
- A reduction in the public sector estate, with many local councils selling off their building stock (and therefore not heating them.
- Some good progress in renewable electricity generation
The main issue from the report is that for the targets to be met in the future you can only close so many power stations. There is significant CO2 being produced from heating. Low carbon heat makes up between 1.6 and 2.1% of the heating total in 2014 with an ambition to get to 12% by 2020. Buildings make up 16% of all CO2 emissions. If you add in the falling away of the retrofit of insulation or the lack of input into the development of standards for new homes or new social homes, then this area becomes a budget that may not be reached.
The Telegraph suggested that the Chancellor would review the Levy Control Framework this morning, as this was spiralling out of control. There was no mention of this in his speech. This money, raised through taxes on energy bills to pay for renewable energy (all electricity) strategies, e.g. FiTs
Looking forward we do know that there are 10 months of support for new renewable heating projects. Financially it makes better sense to install a biomass boiler if your needs are greater e.g. 40kW domestically or more than 100kW non domestically. If you would like advice on what to install, what it costs, what incentive you may achieve then get in touch with us through the “contact us” form or phone 01225 580 401