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Renewable Heat Incentive Scheme (Amendment) Regulations 2014

I am extremely grateful for the general support that the noble Baroness has given to the regulations. As she and I are both aware, given that the scheme is the first of its type in the world, there will be lessons to be learnt as we go in looking at how technologies respond and react to the work we are doing. As she rightly points out, renewable heat is

really key to being able to manage some of the stresses that will be put on the power sector in the longer term.

To respond to one or two of the noble Baroness’s direct questions, she asked about the solar thermal element and the difference between the incentives there. The key, of course, is that to achieve our 2020 renewables target we have to be able to set tariffs to consider all technologies. The width of the question is about ensuring that all technologies are able to partake in there without distorting the market for any technology that wants to come in but cannot find space to be supported. Of course we have to work to value for money as well.

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The noble Baroness also asked about the complexity of degression, which may put investors off. We have seen an increasing number of applications but I take her point: it is an incredibly complex area to work through. However, we work very closely with industry to ensure that small and medium-sized businesses in particular are able to take advantage of this. As we have shown through consultation and our meetings, we have responded to ensure that small and medium-sized businesses are not left out of being able to take advantage of the measures that we are taking. On our progress to date, we have more than 4,000 accredited installations, 781 megawatts of capacity and 1.175 terawatt hours of eligible heat, while £56 million has been paid out.

The noble Baroness asked a number of detailed questions. I always feel that it is much better if either we put the answers in a letter to her and place a copy in the Library or, as she has suggested, we have a meeting with officials where she can get the answers in much more detail. The overall agreement between the Government and Opposition Front Benches is that we are heading in the right direction, and of course we will look to improve the measures as we work them through. It is right to ensure that, where technology has become much more mature and is able to cost the taxpayer less, we always put a focus on trying to divert our attention to some of the newer technologies which will need support. That is the only way that we will be able to get innovation built in.

The noble Baroness asked about bioliquids. As with previous answers, my notes say that the case for heating with bioliquids is currently being developed. I think I said that to her last time as well but, once we get to a much more illustrative place, obviously we will have that debate. I am grateful for the noble Baroness’s constructive remarks, and I look forward to these regulations being passed.