The Government is introducing an amendment to the Infrastructure Bill which will amend the existing primary legislation governing the schemes. The changes proposed will allow significant improvement in the efficiency and cost effectiveness of both the non-domestic and domestic RHI schemes.
In summary, the key changes are as follows:
1.The Energy Act 2008 currently limits the administration of the RHI to either Ofgem or the DECC Secretary of State.
- The proposed amendment will allow the Secretary of State to appoint an alternative delivery body to administer the RHI schemes.
- In making the proposed change, the Government will retain the power for Ofgem to administer the scheme in the future; and Ofgem will remain the scheme administrator for the time being.
2.The Energy Act 2008 currently allows for payments under the scheme to be made to the owner of the renewable heat installation or, in the producers of biomethane, biogas and bio-fuels for heating.
- The proposed amendment will allow these parties to assign the payments under the scheme to a third party, allowing the scheme administrator to make payments directly to the assigned party.
- This could lead to an increase in both demand for and supply of renewable heat technologies by allowing consumers to access finance for renewable heat installations more cheaply and easily.
3.The Energy Act 2008 currently requires that all secondary legislation in relation to the schemes be made via the affirmative resolution procedures, regardless of their level of complexity or materiality.
- The proposed amendment will allow for some changes to be made by the negative resolution procedure, offering a more streamlined approach to amending aspects of the scheme in the future.
The Infrastructure Bill was introduced to the House of Lords on 5 June 2014. The Bill and its supporting documents are on the Parliament website.