UK govt cuts biomass subsidy after EU pressure

By Henning Gloystein – Reuters
Photo by Wood Perfected

The British government is reducing its planned subsidies for biomass following pressure from the European Commission, which said the aid was set too high, the UK’s department for energy and climate change (DECC) said on Wednesday.

DECC was planning to launch the Renewable Heat Incentive (RHI) for non-domestic generators on September 30, but the EC expressed concerns that the biomass tariff, at 2.7 pence per kilowatt-hour (KWh), was set too high.

The programme aims to pay subsidies for the use of renewable energy technology for heating, starting with business customers and extending to households.

“The Commission has now given state aid approval to the RHI subject to the large biomass tariff being reduced from 2.7p per KWh to 1p per KWh,” DECC said.

“We appreciate that this is frustrating, however without this change, the scheme would not have been able to proceed,” a DECC spokesperson said.

DECC said that revised regulations had now been re-laid in parliament to reflect the required amendment to the tariff for large scale biomass.

“We hope to open the scheme to applications by the end of November 2011, subject to parliamentary approval,” the department said.

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