Balcas Complete Solutions invites you to the RWM Exhibition in the NEC on 15-17 September to find out why now is the time to install a fully funded, industrial application for contract heat supply for 20 years. Visit us on stand 4D34 to discover how large industrial users of process heat are achieving carbon reduction and cost savings with our turn key installations.
secure the Incentive - there is no certainty, and changes are possible
tariffs are being reduced - as uptake increases, the Incentive decreases
Government’s current policy is for the Renewable Heat Incentive to be open to new entrants until 2020. There is no certainty, however, about its continuation in its present form beyond March 2016. A budget needs to be confirmed in the government’s Comprehensive Spending Review that will be published in November. Legislation will then need to be passed to give the RHI a new budget. Changes in qualifying conditions are also possible.
Every quarter government compares likely RHI payments for the next twelve months with the budget already assigned for the coming year. The tariff for any technology or technology band is reduced if forecast payments exceeds its budget. It is further reduced if the total RHI budget is exceeded.
For example, for boilers in the biomass technology band <200kW the forecast payments are £149.9m., exceeding its budget by £53.3m. There have been reductions in the tariff for this technology band in each of the last five quarters : 5%, 10%, 10%, 15% and 25% - a compound reduction of 50%.
Likely payments for boilers in the biomass technology band 1 MW+ are less than the budget currently assigned, but they are increasing.
Delay entails risk. Lock in the Incentive. Do it now.
“Current oil prices are unsustainable. It’s hard not to see oil hitting $100 a barrel at some point in the next five years”
Oil guru who called 2014 slump sees a return to $100 (Bloomberg Business)
Since 2009 there has been a reduction of 30% in the cost of fuel oil used in many large industries. The carbon reductions that are immediately achievable are of course unchanged, but the financial argument for biomass is less compelling at this time. Opinions about timing vary but there is general agreement that oil price will not remain at the current low level.
It is for a twenty year term that Government’s Renewable Heat Incentive is available. It is within a fraction of this time that there is consensus that the oil price will recover.
A twenty-year proposition cannot be evaluated on current conditions. Things will change. The cost of oil is not the only thing that will change. The RHI is inflation-linked so will increase. The tariff is likely to increase by 70% by the end of the term.
Position for the future. Lock in the Incentive. Do it now.
To receive your free tickets to visit us at the exhibition or for any other queries, please contact Roisin McManus.And if you cannot meet us at the NEC we will be pleased to visit you.
roisin.mcmanus@balcas.com +44 (0) 28 6632 3003 www.balcas.com
Balcas
Balcas processes 1,000,000 tonnes of woodfibre per year, and is the longest established, and largest producer in Britain and Ireland of renewable biomass fuel. Balcas has a successful track record of operating Heat Sale Agreements; designing, installing, funding and providing brites fuel to biomass boilers maintained on customers’ sites.
Heat Sale Agreement
Customers are charged only for kWhs of heat supplied, and benefit from government’s Renewable Heat Incentive. Heat Sale Agreements are for up to 20 years.Some customers have reduced their carbon emissions by 90%. Others have already achieved industry reduction targets set for 2050.
brites
brites is a high-energy renewable wood pellet fuel manufactured by Balcas.
brites is displacing 100,000,000 litres of oil per year.
brites fuel is reducing customers’ carbon emissions by 300,000 tonnes per year.
brites fuel is certified as being produced from sustainable well-managed forests.