Climate change watchdog calls on Government to adequately fund Renewable Heat Incentive

Speaking to GreenWise, following a letter from Committee on Climate Change chairman Lord Adair Turner to Energy Secretary Chris Huhne about 2020 renewable energy targets, David Kennedy, chief executive of the CCC, said: "Clearly there has to be financial support for renewable heat because it is so expensive to implement. The RHI is the appropriate instrument and funding that instrument needs to be adequate to bring forward investment.

"We’ve not heard much about the RHI from the Government and we are saying it needs to act within the next few months – not the next few years."

The RHI, which is due to launch in April 2011, will guarantee payments for up to 23 years to those who install technologies such as ground or air source heat pumps, biomass boilers or bio-methane or bio-diesel projects, but funding it will be costly and it is though cuts could be made to the scheme in the upcoming spending review. It has been reported that the cumulative gross resource costs of the RHI could be more than £25 billion.

In Lord Turner's letter, published today, he said the current level of renewable heat penetration in the UK was still "very low" and the market needed financial support from the Government to ensure its growth.

Marking it as a "matter of urgency", he wrote: "In order to ensure viability, current uncertainties over the Renewable Heat Incentive (RHI) should be resolved."

CCC calls for reduction in renewable heat and transport targets
The call for clarity on the RHI was made as the CCC urged the Government not to increase the current renewable energy target of 15 per cent by 2020. However, it recommended current renewable heat and transport targets be reduced to ensure they could be met.

"We think the renewable heat target should be slightly lower than 12 per cent – around 10 or 11 per cent," said Kennedy. This is because the investment required to achieve the current target could be too costly, the CCC said.

On transport, the CCC is recommending to drop the current 10 per cent target to eight per cent, based on the findings of the Gallagher Review, which suggested that a target of around eight per cent for biofuels in 2020 would be sustainable.

Kennedy said the shortfall on the overall 15 per cent target for renewable energy from reducing the heat and transport target would only come to around one per cent and that this could be made up through improving energy efficiency and through the impact of the recession on emissions.

"Whether the target is 14 or 15 per cent is not the point," he said. "We are at three per cent at the moment and although we are confident on biofuels, we are long way from feeling confident on [meeting targets] on heat and electricity."

Urgent action on renewable electricity
As well as clearing up uncertainty over the RHI, Lord Turner also called for urgent action in a number of areas to deliver renewable electricity targets, set at 30 per cent by 2020. They included finalising regulatory arrangements for offshore transmission, agreeing investment to upgrade the onshore transmission network, reducing the planning application period for new renewable projects and increasing the planning approval rate addressing uncertainties around financial support mechanisms –  such as banding of the Renewables Obligation – and considering the role the Green Investment Bank could play in supporting investment in offshore wind.

Today’s letter was written in response to a request by the Energy Secretary in the summer for the CCC to spell out its thoughts on the renewable energy ambition to 2020.

In the letter Lord Turner also set out how the CCC would carry out its renewable energy review and said it would carry out a separate bioenergy review.

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Related links:
www.theccc.org.uk/