A subsidy scheme to encourage green heating systems has “not achieved value for money” and the government needs to act urgently to cut the carbon emissions of millions of homes and businesses, according to the National Audit Office. The government’s Renewable Heat Incentive (RHI) was launched in 2011 to encourage a shift to low-carbon heating systems by paying participants for up to 20 years. The government had paid out £1.4bn as of August last year and has estimated total lifetime costs for the existing scheme of £23bn to 2040-41. In its report, the NAO found that the government did not have a “reliable estimate” of the amount it had overpaid participants that had not complied with the regulations, nor of the impact of participants “gaming” the scheme. These could “accumulate to reduce the scheme’s value significantly”, it found.The NAO also found that the take-up of the scheme had been much slower than forecast. At the end of last year there were just over 78,000 new installations. The watchdog estimates the RHI will reach 111,000 installations by March 2021 based on the rate of uptake last August, just over a fifth of the government’s original target of 513,000 by that date. The report, which looks at the scheme in Great Britain only, does concede that measures put in place by the government to control the costs had enabled it to avoid “the budget control problems” that occurred in a similar scheme in Northern Ireland, which was a factor in the collapse of the executive. “This assessment of the RHI’s failings is reminiscent of the Green Deal – an overly complex policy which assumes that incentivising consumer choice is the only way to bring change,” said Richard Black, director at the Energy and Climate Intelligence Unit. “The problem is that where our homes are concerned, people don’t behave like automata driven by economic information – we respond as people, and changing your heating system, like having your house insulated, is a major upheaval,” he added. The government would most likely end up opting for “a systemic transformation based on a low-carbon gas such as biomethane or hydrogen, which would be minimally disruptive”.
FT 23rd Feb 2018 read more »
The UK’s Renewable Heat Incentive (RHI) scheme has not delivered taxpayer value as the government does not have a reliable estimate of how much it may have overpaid to those participating in the scheme, according to Parliament’s finance watchdog. A National Audit Office (NAO) report assessing the success and value of the RHI said today the scheme was a “novel approach” to decarbonising heating in UK homes and businesses, but warned that improvements were needed to avoid the costs of the scheme potentially spiralling in future.
Business Green 23rd Feb 2018 read more »