Questions remain over effectiveness of RHI

Published:  04 April, 2018

NAO, National Audit Office, OFTEC, RHI
Paul Rose, OFTEC

OFTEC has restated its calls for an overhaul of the domestic Renewable Heat Incentive (RHI) following a recent report from the National Audit Office (NAO) which confirms the scheme ‘has not achieved value for money’.

Published at the end of last month, the ‘Low-carbon heating of homes and businesses and the Renewable Heat Incentive’ report examines progress against the RHI’s key objectives and costeffectiveness of the scheme, alongside monitoring, evaluation and non-compliance.

The findings validate OFTEC’s long-held concerns that takeup of the RHI has been ‘much lower than anticipated’ with the scheme delivering just 78,048 new installations in Great Britain (as at December 2017) at a cost of £1.4bn. NAO estimates that at this current rate, the RHI will achieve around 111,000 new installations by March 2021 - just 22% of the original 513,000 target.

The cost effectiveness of the RHI was also described as ‘uncertain’ and ‘likely to be worse than the Department’s estimate’. Furthermore, the report states that the Department for Business, Energy & Industrial Strategy (BEIS) has failed to keep track of sums paid out under the scheme, with overpayments to RHI participants in 2016-17 as a result of non-compliance with the regulations estimated to be as high as £3 million.

Commenting on the report findings, OFTEC CEO Paul Rose said: “NAO’s study underlines the major concerns we have held about the RHI since its launch almost four years ago. Take up has remained poor and this is largely due to the high up-front cost of installing renewable heating technologies which is not addressed by the scheme.

OFTEC says a more affordable and practical alternative to the domestic RHI is urgently needed to help consumers, particularly those off-grid, migrate to low carbon heating solutions.

In partnership with leading industry manufacturers, OFTEC will soon begin testing the viability of a synthetic bio-oil called HVO as a potential low carbon liquid replacement for kerosene. If the fuel meets technical and sustainability requirements, OFTEC says bioliquids must be recognised in any future versions of the RHI and financial incentives should be provided to help consumers cover any cost differential in the price of a renewable liquid fuel.

Paul Rose continues: “As an industry we are working hard to find a low carbon solution for the 1.4 million UK households who currently rely on oil heating which will overcome the cost and practical issues associated with the current renewable heating op;tions on the table."

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