Non Domestic RHI Application Process Overview

13 February 2014

Agenda:

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A. Overview of the Non-domestic Renewable Heat Incentive (RHI) scheme

B. Uptake of the non-domestic RHI

C. Developments in the non-domestic RHI:

i. New Air Quality requirements

ii. New metering requirements

iii. Heat loss assessments

iv. Application process

v. Ongoing obligations

D. Update on the domestic RHI scheme

E. Questions

A. Overview of the non-domestic RHI scheme

• The RHI aims to increase the uptake of renewable heat technologies by providing incentive payments to eligible generators of renewable heat.

• Introduced by the Renewable Heat Incentive Scheme Regulations 2011

• DECC responsible for policy and Ofgem administer the scheme

• Range of eligible technologies including solar thermal, solid biomass and ground/water source heat pumps

• 20 year payment for renewable heat used for “eligible purposes”

• Open to applications from businesses and district housing schemes

• Need to complete online application form and undergo technical review to ensure installation meets the eligibility requirements

• Meter heat use and submit quarterly meter readings

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B. Uptake of the non-domestic RHI

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Non Domestic RHI Monthly Accreditation Figures

September 2013 Regulatory Changes

C. Developments in the non-domestic RHI

• New Regulations passed on 24 September 2013 : – Introduced air quality requirements for biomass boilers

– changed metering requirements: standard vs. multiple

– enable accredited installations to be relocated

– allow heat to be used in process other than in buildings in certain circumstances

• Amended Regulations passed on 13 December 2014

• Upcoming changes in the Spring – New eligible technologies: air to water heat pumps, energy from waste

– Revised tariffs for CHP, large biomass (>=1MW), solar thermal, ground source heat pumps, geothermal

– Eligible source of heat for GSHPs extended to include heat from cooling

– Seasonal performance factor (SPF) requirements for heat pumps

– Grants can be repaid without the current restriction on commissioning date. Deductions can be made if grant cannot be repaid to the grant providing authority

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i. New Air Quality Requirements

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What? • Limits to emissions of oxides of nitrogen (NOx) and particulate matter (PM). • PM: 30 grams per gigajoule net heat input (g/GJ) • NOx: 150 grams per gigajoule net heat input (g/GJ) • Confirm testing according to several standards EN303-5, EN14792 and EN13284 Why? • Reduce air pollution How? • Submit valid RHI Emission Certificate or Environmental Permit Who? • All solid biomass installations submit an application from 24th September onwards for full

accreditation (or additional capacity) • Unless they have a preliminary accreditation that was granted before 24th September

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• RHI Emissions Certificates Version 2.1 – published 18th December 2013

• The template is not mandatory – but must contain all the information in our

template

• It must be issued by a testing laboratory accredited to ISO 17025

ii. New metering requirements • Classifications of simple and complex have been replaced by

standard and multiple

• Standard =only one quantity is needed to work out eligible heat output

• Multiple = more than one quantity

• Quantity = can be multiple meters but all measuring same variable from: – eligible plant, ineligible plant, eligible heat use, ineligible heat use

(including quarterly heat loss deduction)

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Standard and Multiple Schematics:

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Standard

Multiple

• To determine the metering requirement for your installation, see further examples

in the Metering Placement Examples

iii. Heat Loss Assessments

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• For applicants who wish to assess whether they can either disregard heat loss from external pipework or deduct it in place of installing additional meters

• Complete the Heat Loss Assessment spreadsheet and email with detailed information relating to pipe lengths and insulation properties

• Outcomes:

– The HLA confirms external pipes are “properly insulated” and

• All pipes are are less than 10m – heat loss disregarded

• Some pipes are more than 10m, but collective heat loss is less than 3% of annual generation – heat loss disregarded

• Some pipes are more than 10m, and collective heat loss is more than 3% of annual generation – need to complete the “PI calculator” and will be deducted quarterly

– The HLA confirms external pipes are not “properly insulated” and therefore need to complete the Non-PI Calculator and, if Heat Loss figure is accepted, it will be a quarterly deduction

• Buried external pipework cannot be properly insulated to the standard required by the regulations: BS5422:2009

iv. Application process

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• See guidance on our website

• In particular the series of easy ‘User Guides’ with key tips

• And the Guidance Volume 1 (eligibility requirement) and Volume 2 (ongoing obligations)

The RHI Register:

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• Authorised Signatory (owner) creates online account

• Approximately 70 questions

• Will take around an hour to complete once all required information has been gathered.

v. Ongoing Obligations:

• Submit quarterly periodic data

• Keeping accurate fuel records

• Maintain heat meters.

• Selection of sites audited

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• Due to launch in Spring subject to parliamentary schedule • Energy Savings Trust answering pre-application questions from applicants and

installers should contact MCS • Ofgem website being developed and guidance published in near future • Open to applicants who have installed eligible technologies since 15th July 2009 • Application after launch date will have to adhere to NOx and PM emission limits • Online application form • Eligible technologies: solar thermal, biomass boilers/stoves, air-water heat pumps

and GSHP • Applicants in receipt of a grant or RHPP can repay through quarterly payments • Payments received quarterly – generation “deemed”. Only metered in some

circumstances • MCS listing does not guarantee eligibility (there will be a Product Eligibility List) • Stoves must have a ‘back boiler’ and must use pellets only • Back-up plant on the system need to be metered for payment • Voluntary metering and monitoring service package (MMSP) for pellet boilers • Fuel sustainability requirements are anticipated to come into force in the Autumn

D. Update on domestic RHI scheme

The Domestic RHI – Key Differences

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Domestic Non-domestic

Property

Property must have domestic EPC – single domestic dwelling, social / private landlords and self builds

Commercial, industrial, public sector, not for profit and district heating for multiple homes

Requirements Energy efficiency requirements MCS compulsory Product Eligibility List

Eligible heat use Not heating single domestic property Not funded by grants Quarterly meter readings

Payment period

Payments made over 7 years, based on heat produced over 20 years

Payments made over 20 years

Measuring Usage

Deemed renewable heat output, however some installations will need to be metered for payment, e.g. if bivalent or a second home

Eligible heat use in metered on actual generation or use

Tariff setting

Compensates for additional costs of installing renewable heat technologies compared to conventional heating technologies

Compensates for additional cost over fossil fuel heating, provides incentive to overcome non-financial barriers and a return on additional capital invested

• What does a woodchip producer need to do to ensure woodchip is covered by certificate?

Answer: Only use fuels within the range and below the max moisture content which the test lab has declared will not result in emissions above the limits (question 3b and 3d respectively of the RHI Emissions Certificate).

• What metering arrangements are possible with external pipework?

Answer: It depends on whether the external pipework is “properly insulated” according to the Heat Loss Assessment spreadsheet and what other quantities are on the system (ineligible uses or plant). See metering placement examples and Vol 1 para 7.56 onwards

• Will future changes to metering requirements mean an original simple installation needs to be amended to be complex?

Answer: No, installation is assessed to be eligible under the regulations in place at the time of accreditation. If additional plant added at later date, it will be assessed under the regulations in place at the time and can take advantage of new metering arrangements (Vol 2 chapt 7)

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E. Questions

• Can I dry woodchip and use it for my own use?

Answer: Drying woodchip indoors is eligible if considered to be a process. If done outdoors it only considered an eligible heat use if it is done on a commercial basis. Will be assessed on a case by case basis. Vol 1 (para 6.3).

• Tariff review dates and trigger levels

Answer: Tariffs reviewed by DECC quarterly based on installed capacity data provided by Ofgem, against forecast and budget. DECC to announce degression on 01/03/14 and revised tariffs published 15/03/14. See Vol 2 para 5.7-5.14

• Is clean farm waste wood, with no paint or glue, basically considered to be pallets?

Answer: This will be assessed on a case by case basis and will be the responsibility of the applicant to demonstrate that their fuel aligns with that listed on the certificate. Ongoing fuel eligibility requirements (volume 2 version 3) section 4 (4.13-4.48)

• Why are meter readings required quarterly unlike FIT?

Answer: The timing of meters readings is based on the date your application is originally submitted, with readings taken each quarter within ± 3 days (Vol 2 para 3.19)

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E. Questions continued

E. Questions continued • Does the commissioning date of the plant determine whether or not it is affected

by degression?

Answer: Date of accreditation determines whether or not installation is affected by degression and what tariff it will receive, not the date the plant was commissioned (Vol 2 para 5.12). However if additional capacity is added, in some circumstances the original capacity might be affected by degression (Vol 2 para 5.43)

• Can building management systems be used to provide quarterly meter readings?

Answer: Yes, meter readings collected remotely by building management systems or energy management software can be used as long as the meter itself is eligible and maintained as per manufacturer’s requirements.

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E. Questions continued • Can an installation funded by ECO or ERDF also apply for the RHI

Answer: An installation may also apply for the RHI as long as they have not received grants from public funds towards the costs of purchase and/or installation.

Grants from public funds are defined as made by a public authority or by any person distributing funds on behalf of a public authority.

ECO is an energy company obligation distributing private company funds so would not be classed as a grant from public funds.

ERDF funding is from public funds and therefore if any ERDF funding has been received for the purpose of purchase or installation the installation would not be eligible for the RHI.

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E. Questions continued • Regarding the domestic scheme, when will the product eligibility list be published

and why does MCS accreditation not guarantee eligibility for the DRHI?

Answer : Anyone will be able to view the Product Eligibility List to check whether a certain product is eligible for the scheme. The list will be of use to all our stakeholders including installers, those who have already installed a renewable heating system and those who are thinking of installing.

It is important to provide assurance that a product is compliant with the rules laid out in the Domestic RHI regulations. Therefore we have sourced data from the Microgeneration Certification Scheme (MCS) and Solar Keymark and defined whether each product meets the scheme’s eligibility criteria. Additionally, we have sourced data from HETAS to manage the air quality standards of biomass heating systems. For more information about DECC’s policy intent please see Chapter 3 of https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/212089/Domestic_RHI_policy_statement.pdf .

The Product Eligibility List will be updated weekly to ensure it is up to date with new products and any changes to the regulations. This will be available from launch date expected Spring 2014.

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Non RHI questions 1. What is the purpose of reporting quantity of saw log as biomass as proposed by draft ROO

2014 regulations?

From DECC: The purpose of the definition of a saw-log is to help monitor whether wood is being diverted from sawmills to energy use that is suitable for timber processing. (i.e. of sufficient dimensions and quality (straightness, absence of knots/branches etc.) to be sawn into timber).

2. What is the origin of the definition of saw log used in the draft ROO 2014 regulations?

From DECC: It proved challenging to identify a definition of saw-log that was widely in use, that was also suitably precise for referencing in UK legislation. However, we have had feedback from several stakeholders that the definition of saw-log included in the ROO2014 is too narrow, and volumes of wood unsuitable for sawmills/timber processing could be considered as being within scope. Contact details as above.

For more information on either of these answers, please contact caroline.season@decc.gsi.gov.uk or 0300 068 6192

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Key information and contacts • Ofgem website: how to apply page with links to all guidance including easy

guides

• Guidance Volume 1: eligibility requirements and how to apply

• Guidance Volume 2: ongoing obligations

• Metering Placement Examples: very useful to determine whether standard or multiple

• Heat loss assessment guidance: instructions on how to complete the heat loss assessment spreadsheet for external pipework

• RHI Emissions Certificate (version 2.1)

• DECC website for non-domestic RHI developments and consultations

• Please email rhi.enquiry@ofgem.gov.uk to be added to the non-domestic RHI emailing list for updates

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