The future of the Northern Ireland Non-Domestic Renewable Heat Incentive Scheme

Closed 6 Sep 2018

Opened 14 Jun 2018

Overview

Why we are consulting

The Department for the Economy (‘DfE’ or ‘the Department’) has a responsibility to develop and implement a long-term tariff structure for the Northern Ireland Non-Domestic Renewable Heat Incentive Scheme (‘NIRHI’ or ‘the Scheme’) to replace the current interim arrangements.  The purpose of this consultation document is to take your views on the future of the Scheme, including tariff options and other issues as the Department develops arrangements that it intends would be implemented from 1 April 2019.  The objective of the Scheme is to support the generation of renewable heat.  In doing so, the Department must balance its obligation to provide a reasonable rate of return on investment to the Scheme participants that receives State aid approval from the European Commission, with its duty to safeguard the public interest.

This consultation is about options on the future of the Non-Domestic NIRHI Scheme only. It does not relate to other policy issues such as Scheme eligibility and compliance matters or to the Domestic NIRHI Scheme.  Any reference in this consultation to ‘the Scheme’ relates solely to the non-domestic NIRHI Scheme.

What we are consulting on

The primary focus of this consultation is on the small and medium sized biomass boilers which account for the majority of the projected expenditure on the non-domestic Scheme. The original tariff structure for small and medium biomass boilers was based on a single tariff under the Renewable Heat Incentive Scheme Regulations (Northern Ireland) 2012 (‘the 2012 Regulations’). This was replaced by a tiered tariff structure for new entrants to the Scheme with small and medium biomass installations in November 2015, which was extended to all small and medium biomass installations under the 2017 Regulations.  In order to inform the development of the options, the Department commissioned energy consultancy Ricardo Energy and Environment (‘Ricardo’) to undertake a review of the current tariff structure.  A full copy of this Tariff Review is included as part of the suite of consultation documents. The Department is considering the following eight options for future payments to the small and medium sized biomass boiler owners on the Scheme:

  1. Tariff structure under the 2017 and 2018 legislation is not continued;
  2. Retain tariff structure under the 2017 and 2018 legislation;
  3. Revert to original tariff structure under 2012 Regulations (including post 18 November 2015 installations);
  4. Adopt the base case tariff structure proposed in the Ricardo Tariff Review (the ‘Tariff Review');
  5.  Adopt the tariff structure from the Tariff Review excluding fuel costs;
  6. Adopt the hybrid tariff structure from the Tariff Review;
  7. Adopt the current GB tariff structure; or
  8. Adopt the tariff structure for entrants to the GB Scheme in autumn 2015.

Each of these options is set out in greater detail in this consultation.

A compulsory buy-out is also considered.  This would involve closing the Scheme and no further payments other than a one-off payment to participants, which would reflect the additional capital cost of a biomass boiler minus the level of RHI payments received to date.

We are also seeking your views on other important elements of the Scheme, such as:

  • Whether there should be a voluntary buy-out option element under some of the options, aimed at participants who expect that their installation(s) would not achieve a satisfactory rate of return and wish to withdraw from the Scheme;
  • What level (if any) should be used for the Annual Usage Limit;
  • The tariff structure for other technologies and large biomass installations; 
  • What basis (if any) should be used for the annual inflationary uplift in tariff levels; and
  • The need for public subsidy to encourage the deployment of Combined Heat and Power (CHP) plants.

The outcome of this consultation process and the long-term solution will take full account of  all the evidence provided during this consultation exercise as well as data provided by Scheme participants in relation to capital costs, the Ricardo  analysis, the views of the European Commission and evidence from the recent Judicial Review of the 2017 Regulations.  Ultimately, decisions on the way ahead will be made by Ministers and will be implemented by new legislation, given that the 2018 legislation, as approved by Parliament in March 2018, only provide for the period to 31 March 2019.

How to respond

This public consultation is open for the next twelve weeks until 6 September 2018.  Throughout this consultation a number of issues have been specifically highlighted for comment and feedback.   Please respond using the question and answer template provided. Your response will be most useful if it is framed in direct response to the questions posed, although further comments and evidence are also welcome. Copies of this consultation can be printed from the Department’s website.

We encourage respondents to respond to this consultation online survey, however responses submitted in writing or by email will also be accepted. Email responses to this consultation should be sent to RHI.Consultation2018@economy-ni.gov.uk

Alternatively you may post your response to the Department at:

Non-Domestic RHI Scheme Consultation
RHI Taskforce
Department for the Economy
Netherleigh
Massey Avenue
Belfast
BT4 2JP

If you require an alternative format (Braille, audio, CD, etc.), please contact the Department on 0300 200 7835 and appropriate arrangements will be made as soon as possible.

Following the end of the consultation, the Department may publish anonymised quotes from your consultation response but these will not identify you as an individual.  Further detail on this, and how it relates to access to information legislation, can be found at end of this online suvey.

Impact Assessments

The impact of the range of tariff options was analysed for equality of opportunity and the need for an Equality Impact Assessment (EQIA) was screened out.  As the introduction of one of the range of tariff options would not involve any changes to the current method of processing or handling of data, a full Privacy Impact Assessment has also been screened out.  A copy of both screening forms can be viewed on the Department’s website.

A Rural Needs Impact Assessment (RNIA) and a Partial Regulatory Impact Assessment (RIA) have been completed and are available on the Department’s website.  The RNIA and Partial RIA will be revisited to ensure all relevant issues have been taken into account and finalised prior to the introduction of any new legislation.

Audiences

  • Citizens
  • Business
  • Voluntary and Community Sector
  • Government Department
  • Local Government
  • Private Sector
  • Voluntary & Community Sector
  • General Public
  • Political Representatives
  • Accommodation
  • Agricultural
  • Construction
  • Education
  • Forestry and logging
  • Manufacturing
  • Motor vehicle wholesale, retail and repair
  • Office & Administration
  • Residential care
  • Retail/Wholesale
  • Sports/recreation
  • Warehousing and transport

Interests

  • Farming
  • Agriculture
  • Environment