Isra-Mart srl: Scotland warms to Renewable Heat Incentive

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The Scottish government has confirmed it will support Westminster's Renewable Heat Incentive (RHI) when it launches in the autumn, ensuring that the ambitious incentive scheme is available UK-wide.

Scottish energy minister Fergus Ewing announced today that he had reached agreement with his UK counterpart, Greg Barker, on the proposed scheme, and Scotland would offer the same level of incentives to businesses and households generating renewable heat, as will be available in the rest of the UK.

Supporters of the RHI predict the scheme will revolutionise the UK's renewables sector by providing households and businesses with guaranteed payments in return for the heat they generate.

The incentives are expected to provide those firms that deploy heat pumps, solar thermal systems, biomass boilers and anaerobic digestion technologies with a rate of return of between five and 12 per cent, making large numbers of renewable heat installations financially viable.

"Scotland is warming to renewable heating, but we need to accelerate the use of green technologies," said Ewing. "Businesses – from small enterprises to the largest industrial users of heat – will be eligible for the RHI, while individuals will get help to install new equipment that can cut bills and reduce fuel poverty."

Scotland already provides the UK's leading renewable heat market, generating about three per cent of its heat from renewable sources.

The Scottish government said the RHI would help the country meet its target of generating 11 per cent of heat from renewables by 2020. However, industry sources said that with the country already planning a wave of new biomass facilities, the government was considering raising the target further.

The Scottish government had expressed some reservations about introducing the RHI amid fears the resulting increase in demand for biomass could place unsustainable pressure on the country's timber industry.

Ewing said "serious doubts" had been raised by the industry over the availability of Scottish wood supplies and he reassured the sector that safeguards would be put in place to protect the sector from the impact of increased demand.

"Our policy is to see the biomass used in energy production utilised in the most efficient way, for heat and in areas off the gas grid," he said. "We will also review the support mechanism for biomass used in electricity generation later this year."

He also confirmed that the UK and Scottish governments will jointly host a wood industry summit in Scotland in the coming months, intended to "ensure that the needs of our timber sector are understood and their interests are protected, not damaged".