the renewable heat incentive explained 1 paul bourgeois director zero carbon britain ltd
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TheRenewable Heat Incentive
explained
1
Paul BourgeoisDirector
Zero Carbon Britain Ltd.
Agenda
• Introduction• Context and History• Technology RHI rates and accessing them• Progress to date• What are the options?• Designing heat technologies• Case Studies
2
Context and History• Legislation• Government Strategy• Renewable Heat Incentive history
3
Energy Act 2008
• Royal Assent on 28th November 2008– Implemented the legislative aspects of the Energy
White Paper 2007– Secretary of State to establish a financial support
programme– Carbon Capture and Storage (CCS)– Feed in Tariffs– Smart metering...
4
UK Renewable Energy Strategy
• July 2009• 20% reduction on greenhouse gas emissions• 20% energy from renewable sources
– 12% from renewable heat
• All by 2020• 60% by 2050
5
• Renewables Obligation (RO)• Feed in Tariff (FiT)• Renewable Heat Incentive (RHI)• Increase bio-fuels to 5% by 2013/4• Green Deal
Main support initiatives
Why are heat incentives needed?
• A policy mechanism to accelerate growth• Long term generation contracts
– 20 years for most technologies
• Price certainty over a fixed time• Retail Price Index (RPI)• Payment levels are performance based
7
The RHI, as originally planned• Announced on 10th March 2011• World first• First phase until 31st March 2012
– Non-domestic – metered heat– Domestic – limited to £12m via voucher scheme
• Second phase from 1st April 2012– Non-domestic – additional technologies– Domestic – similar to Feed in Tariff
8
What actually happened
• Non-domestic scheme– Phase 1
• Launched 28th November 2011
– Phase 2• Consultation to extend to new technologies• Air quality and biomass sustainability issues• July 2012
9
Applicable technologies
• Heat generation and Bio-methane production• Biomass boilers (including CHP biomass)• Solar thermal• Ground source heat pumps• Water source heat pumps• Deep geo-thermal• Energy from municipal waste• On-site biogas• Injection of bio-methane into grid
10
Non-domestic RHI Tariff RatesTariff name Technology Eligible size Rate
Small Biomass Tier 1 Solid biomass/solid waste (CHP) < 200 kWth 8.3p
Small Biomass Tier 2 Solid biomass/solid waste (CHP) < 200 kWth 2.1p
Medium Biomass Tier 1 Solid biomass/solid waste (CHP) 200 - 1000 kWth 5.1p
Medium Biomass Tier 2 Solid biomass/solid waste (CHP) 200 - 1000 kWth 2.1p
Large Biomass Solid biomass/solid waste (CHP) > 1000 kWth 1.0p
Small Heat Pumps Ground & water source, deep geothermal
< 100 kWth 4.7p
Large Heat Pumps Ground & water source, deep geothermal
> 100kWth 3.4p
Solar collectors Solar thermal collectors < 200 kWth 8.9p
Bio-methane/Biogas Injection & Combustion, not landfill gas
All scales 7.1p
11
Tier 1 and 2• Tier 1 rate purpose is to compensate heat
users for the installation and fuel costs.• Tier 2 tariff is slightly lower than the fuel cost
to incentivise not wasting heat.• Tier 1 applies annually up to the Tier Break
(installed capacity x 1,314 peak load hours, i.e. kWth x 1,314)
• Tier 2 applies above the Tier Break.
12
What happened - Domestic
• Renewable Heat Premium Payments– Voucher scheme operated by the Energy Saving
Trust from 21st July 2011 to 31st March 2012– 26th March 2012
• Extended in light on lengthy consultation• Not coinciding with Green Deal – October 2012
– Summer 2013
13
Renewable Heat Premium Payment - RHPP
• For domestic properties - £12m (Phase 1)• £3m through Social Housing projects• Solar thermal (any property) - £300• Air Source Heat Pumps - £850• Ground Source Heat Pumps - £1,250• Biomass - £950• Phase 2 – additional £10m
Cost Control Measures - Timeline
• RHI from general taxation• September 2012 – Extending to other
technologies and Deployment of household Renewable Heat Incentive
• End of financial year – Cost Control Regime policy to be implemented
• Summer 2013 – Domestic RHI to be introduced
15
Access to payments• Microgeneration Certification Scheme (MCS)
– Up to 45kWth for heat generation
• MCS Products and Installation Companies– Standards and levels competency– Building Regulations Compliance
• Certification through one of 16 bodies• REAL Assurance Scheme• Over 45kWth direct to Ofgem
16
A Mark of Quality
Certification
Body
Certification
Body
RHPP Phase 1 Statistics
• August 2011 to March 2012
• £2.95m (less than 25% take up)18
Technology Vouchers issued Vouchers paid Conversion rate
Solar thermal 2479 1277 51.5%
Ground source 1389 710 51.1%
Air source 2571 1348 52.4%
Biomass 996 569 57.1%
RHI Non-domestic Statistics
• 28th November 2011 to 31st March 2012• 20 installations accredited• 5.25MW total capacity
– 80% Biomass– 15% Ground source heat pump– 5% Water source heat pump
• 376 applications (5.3% successful)– Incomplete, insufficient detail, inconsistencies
19
The big question...
Uncertainty or opportunity?
20
Opportunities
• On site generation• High heat demand
– Short payback periods– Minimal transmission losses
• Cross fertilising initiatives– Stimulated by Green Deal
• New build agenda– CfSH, Passivhaus, home economics
21
Burning questions? or
Q&A at the end
22
• Consultancy and Advisory Service• Carbon reduction project management• Supply chain development• Passivhaus and Code for Sustainable Homes• Certificated and bespoke training courses• Sustainable Construction options appraisal
paulb@zerocarbonbritain.co.uk
Zero Carbon Britain
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