The renewable heat incentive is the world’s first long-term financial support programme for renewable heat, and is central to our efforts to deliver renewable energy to consumers and businesses across the UK. In March this year, my Department launched a consultation on measures for the RHI. As is the case for everything my Department is doing, a central aim of this reform is to ensure that the scheme offers value for money and allows us to make the transition to cleaner heating technologies in a manner that is affordable for the UK.
I can assure my hon. Friend that the Government are providing support for small and medium-sized biomass companies through a range of incentives, including the renewables obligation, the feed-in tariff and the renewable heat incentive. We expect biomass to play an important role in industrial processes and district heating, where there are fewer alternatives for low-carbon technologies, and we want to ensure that we bring forward deployment in these areas.
The consultation that the Secretary of State mentioned reveals an intention by the Government to provide 55TW hours of renewable heat by 2020. That is 9% of UK heating, but it is 3% less than the original 2020 renewable heat target. How does she intend to hit that target, given that there is now a shortfall in heat and in transport?
It is more about the number of houses or businesses that we support for the renewable heat incentive and not always about the pure cost. It is not necessarily about the league table of costs, but rather about the outcomes that we get. We are consulting on the renewable heat incentive and looking at that in order to ensure that we deliver the best value for the taxpayer. I am committed to making sure that we use the money in the most cost-effective way.
The Secretary of State did not address the question of the relationship of the renewable heat incentive proposals and finances to the UK’s contribution to the EU renewables target of 12% by 2020. As my hon. Friend Jonathan Reynolds mentioned a moment ago, we are still short of that target. Is the Secretary of State confident that the measures and finances that she has suggested in the new RHI proposals will enable us to reach that target, or is she actively considering other measures to make sure that we do?
The hon. Gentleman will be aware that the renewables target for 2020 covers building, heat, transport and electricity. The renewable heat incentive is a key part of that. That is why we have had the consultation. We will now examine those responses in order to ensure that we direct the funds that we have in the most effective way. We recognise that although we have made good progress towards the renewables target for 2020, there is more work to do, but we believe that we have sufficient policies to address the need, but we are going to look at what else can be done, particularly in respect of buildings and transport, to make more progress from the halfway mark that we have reached so far.