Ring-fenced RHI is great for business and the environment

December 22, 2015

In the recent autumn statement, Chancellor George Osborne announced that the Renewable Heat Incentive (RHI) – the scheme that guarantees payments for those exporting natural gas back to the grid – will continue to increase towards £1.15bn per year in 2020/2021.

Despite a slight dilution of the scheme, it is good news for current producers or those planning to invest in production facilities in the year ahead, as there had been fears that the scheme could be scrapped altogether.

This is very positive news not only for the environment – using methane as fuel rather than releasing it into the environment significantly reduces greenhouse gas emissions – but also for the many businesses for which it could prove a useful revenue stream.

Biogas production in the UK increased by 40 per cent in 2014/15 according to the Department for Energy and Climate Change, and we’ve seen this reflected in significant increase in demand for gas-to-grid installations over the past two years.

The tariffs on offer for feeding biogas into the grid means many businesses are sitting on a potential asset that they may not even be aware of. Farms are a great example of this. We recently completed a biogas entry point for a large farm in Warwickshire to process the biogas it produces and ensure it is in-line with the exacting requirements of the national grid.

The volumes of gas produced by the farm mean the investment in equipment is projected to pay itself off rapidly, at which point waste products which were once merely an inconvenience and a minor expense will actually contribute to the farm’s bottom line.

It’s now easier than ever to turn waste into biogas on-site, with a wide range of easy to install and operate solutions now on the market to suit businesses of all sizes – from small single-site concerns to multi-site, high-volume operations.

So, with the technology already well developed, the government is to be applauded for doing its bit by safeguarding the financial incentive. Of course, what happens beyond 2021 is still up for discussion, so those looking to maximise their returns from a biogas installation would be wise to act sooner rather than later.