On Wednesday afternoon Chancellor George Osborne delivered the first Comprehensive Spending Review of this Parliament. This is the reaction of Scottish Renewables, REA and Wood Heat Association.
Niall Stuart, Chief Executive of Scottish Renewables, said: “We are pleased to see the continuation of the Renewable Heat Incentive, though we will need to work through the detail of the expected reforms and the intention to bring down spending by around £700m by 2020/21. Increasing the use of renewable heat is essential to meeting legally binding carbon targets.
“The Chancellor also announced changes to tax reliefs on investments in renewables, which are yet another cut in support for the sector and which lessen its attractiveness to investors.
“We did, however, see a positive development in research and development with the Department of Energy and Climate Change’s innovation programme doubling its investment to ensure it can develop low carbon and renewable energy technologies, including smart grids.
“Overall, the spending review still leaves us with no real clarity on the crucial issue of how government will support the growth of renewables beyond 2020. The Committee on Climate Change’s latest reports suggest we need to double the output of renewable power between now and 2030 if we are to meet carbon budgets, and we need to start planning how we intend to do that now.”
Dr. Nina Skorupska, Chief Executive of the REA said: “We welcome the government’s commitment to renewable heat and pleased they have listened to industry and our members, but the devil will be in the detail’
“Our members recognised the need to make savings and presented to Treasury and DECC how we could optimise the RHI budget. A £700m cut is large, but we look forward to working with the government on reforming this crucial area.
“We still have a large challenge in hitting our renewable heat targets, and the RHI alone won’t achieve it, heat networks, energy efficiency and Green Gas still have a large part to play.”
Julian Morgan-Jones, Chairman of the Wood Heat Association, a subsidiary of the REA said: “We cautiously welcome the announcement on the continuation of the RHI. The growth of biomass boilers has pushed out dirty oil and has saved money for off-grid domestic consumers who have limited options for how to heat their homes.
“Biomass boilers represent one of the most cost-effective routes to our 2020 heat targets. Since 2011 over 24,700 biomass heating systems have been installed in homes, schools, hospitals, community buildings, and food production.
“Biomass heat is an outstanding success story for policy intervention in the problematic area of heating. The sector is developing a mature supply chains and requires stability to continue to drive costs down. Doing so can provide low cost, low carbon heating for rural communities alongside jobs and economic benefit.”