Report published 16 May 2018. Government response published 30 July 2018.
Report and response published
Scope of the inquiry
The Renewable Heat Incentive (RHI) scheme was designed to encourage individuals and business in Great Britain to switch from heating powered by fossil fuel to heating powered by low-carbon sources. For each unit of energy produced from renewables, the government pays a tariff to the person or business producing it.
The scheme is run by Ofgem, the UK’s energy regulator, which is overseen by the Department for Business, Energy and Industrial Strategy. It anticipated delivering 513,000 RHI installations by 2020.
According to a recent National Audit Office report, RHI had delivered only 78,048 installations as of December 2017, with a projected total of 111,000 by March 2020. This is 22% of the number originally expected. Further, the Department now expected to generate 65% less renewable energy through RHI than it originally projected.
The NAO were also concerned that Ofgem was not working effectively with other public bodies to manage the scheme, and that the complex regulations around RHI allowed participants to ‘game’ the system.
The Public Accounts Committee will ask the Department for Business, Energy and Industrial Strategy, and Ofgem, why the scheme has delivered far less than planned, what they plan to do to improve the situation, and how confident they are that they can control the costs of the scheme after 2020.
Please note that the Committee is not examining the operation of the Renewable Heat Incentive in Northern Ireland. This is because it is run by the Northern Ireland Executive rather than by the UK Government. You can find out more about Northern Ireland RHI here.