Renewable Heat Incentive

How to apply

GSHPA, 22 October 2012

Barney MerrettManager – Small & Medium Generation

RHI, Ofgem E-Serve

www.ofgem.gov.uk

• Renewable Heat Incentive (RHI) – what is it?• Levels of support provided by the RHI • Technology options• Eligible heat uses & metering• How to apply

• What to be aware of• How to get through the accreditation process

www.ofgem.gov.uk

• A world-first financial incentive to promote the generation of renewable heat

• £860m for RHI over four years confirmed spend

• Scheme funded through taxation, not a levy• Payments made quarterly over 20 year period on basis of metered heat

generation (p/kWh)

• Non-domestics only at present domestics to be included later• Estimated 1m participants by 2020• Went live November 2011• Ofgem responsible for administration – DECC responsible for

policy

The RHI

• The RHI is a DECC initiative (£860M)• Ofgem E-Serve is the Administrator• Our role includes:

Handling enquiries Evaluating eligibility and processing applications Holding data Making payments Fraud and compliance Auditing

Technologies currently supported

www.ofgem.gov.uk

• Solar thermal (below 200kWth)• Solid biomass, e.g. wood chip• Municipal Solid Waste• Biogas (below 200kWth)• Ground/water source heat pumps (not air)• Geothermal• Biomethane injection to the gas grid

Generation Technology Scale (installation capacity) RHI tariff payment/kWh (p)

Biomass Small commercial (< 200kWth) 8.3/2.1Medium commercial (200kWth < 1MWth) 5.1/2.1Large commercial (>= 1MWth) 1

Heat pumps/deep geothermal

Small commercial (< 100kWth) 4.7Large commercial (> 100kWth) 3.4

Solar collectors < 200kWth 8.9Biomethane and biogas combustion < 200kWth 7.1

RHI tariff rates

Ofgem E-Serve’s role in the RHI

• The RHI is a DECC initiative (£860M)• Ofgem E-Serve is the Administrator• Our role includes:

Handling enquiriesEvaluating eligibility and processing applicationsHolding dataMaking paymentsFraud and compliance, including audits

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One OffOne Off RepeatedRepeated

RHI Process

Key eligibility criteria

• Installed/first commissioned on or after 15 July 2009• Equipment new at time of installation • Grants not received for purchase/installation of equipment• Medium of heat transfer must be liquid or steam - i.e. no direct air heating• No single domestics at present (but RHPP may be an option)

•Definition of domestics: “single self contained premises used wholly or mainly as a private residential dwelling where the fabric of the building has not been significantly adapted for non-residential use”

• MCS or equivalent EN45011• Requirement under 45kWth for solid biomass, heat pumps, solar thermal• Certification required for both the installer (at time of installation) and plant

Eligible heat uses

Heat Uses

• In a building for…• Space heating, hot water or carrying out a process (not electricity)• Definition of building• “permanent or long-lasting building or structure of whatever kind and whether

fixed or moveable which, except for doors and windows is wholly enclosed on all sides with a roof or ceiling and walls”

• NB: must not generate heat for predominant purpose of increasing payments

Compliance and enforcement

• One of Ofgem’s functions is to monitor and enforce compliance with upfront and ongoing requirements

• We aim to be helpful and avoid being unnecessarily onerous but…• WE WILL AUDIT• In deciding whether to take enforcement action, we will take into

consideration circumstances including:• Seriousness of the non-compliance• Whether the participant voluntarily reported the non-compliance• Reasons why the non-compliance occurred and any mitigating circumstances• Whether there is a history of non-compliance by the participant• Whether the participant has gained financially through the non-compliance

Other documentation you may need to apply…

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• Receipts and/or invoices relating to the installation of the equipment

• Commissioning certificate• Commissioning report• Photograph of the installation clearly showing the serial

number of the equipment, and output capacity• Evidence that any grant has been surrendered or repaid in full• Copy of meter Class 2 Measuring Instruments Directive (MID)

certificate• Manufacturer’s technical specification for heat pump units to

support COP claims

Documentation you may need…

Metering

• Metering issues:Types of meters

In pipe (mechanical, pressure)Ultrasonic/electromagnetic

EligibilityEvidence

• At least one meter – heat or steam

• Meter standards – MID Conformity, Class 2 Accuracy

• Appropriately calibrated and installed• Meter placement• Schematic diagrams should be clear• Independent report on metering arrangements• Heat loss calculation – only where metering is unduly

burdensome

Metering eligibility

• Measuring Instruments Directive (MID) Conformity Evidence – “Certificates of Conformity” NB: “Type Examination (‘B’) Certificate” is not enough...

• Evidence of Accuracy Class 2

Photo (integrated/packaged heat meter) Technical specifications or testing certificates for each component

(separate components)

• Independent Report on Metering Arrangements Should be complete – and sufficiently detailed that we can rely on this

as evidence

Metering Evidence

Do any of following apply?

- Heat delivered by steam- CHP - Heat used in more than one building- Ineligible heat uses on heating system

COMPLEX

Need to meter all of:- Heat generated by eligible installation- Total eligible use of heat on system- Heat generated by all plants on heating

system

SIMPLE

Only need to meter:- Heat generated by eligible installation

No – none applyYes – one or more apply

Simple or Complex Metering?Simple or complex metering?

COMPLEX“We need to know the fraction of heat used that is coming from the RHI-eligible installation – we can only pay for that fraction of the heat used for eligible purposes”

SIMPLE

“Just meter the heat generated – we can pay for all of it”

Simple or Complex Metering?Simple or complex metering?

Heat generated by RHI installation

Heat generated by all plant on the heating system

Heat used for eligible purposes

x Heat generated by RHI installation

Must be produced by a ‘competent’ individual

Unbiased and impartial

With PI insurance of at least £1 million

No list as yet but HVCA looking to produce one – Others are likely to become available

Needed for all installations over one MW and all complex systems over 45kW

A report template has been produced and must be followed

Heat pumps of all scales that utilise heat sourced from naturally occurring solar energy stored within the ground or surface water are eligible for the RHI

Heat pumps with an installation capacity of up to and including 45kWth must be certified under the MCS or equivalent scheme

Eligible, providing they are not used solely for generating cooling

Only heat generating is eligible for RHI support

Cooling generated must not be included in meter readings submitted to us

We may ask participants to explain how they will account for any cooling generated

• What are the regulations?• Regulation 8 relates to Heat Pumps

– “Naturally occurring”– The “ground” (includes groundwater) or “surface water”.– COP of “at least 2.9”

• Application process examples for heat pumps:– Demonstration of COP– Heat pumps with integrated immersion heaters

• Other eligibility criteria in the wider regulations

Overview of the accreditation process

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Application Process

• Managed online via the RHI register

• Each applications has 3 Levels of checks before ‘Delegated Authority’ sign off

• Applies to all RHI applications

...even those with an MCS certificate?

• Application review process terminology

• Full and preliminary applications

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Timescales

• No decision can be made until a full review has been

conducted

• Approximate timescale from submission to accreditation approval or rejection notification

• Does not include time ‘with applicant’

• Good quality applications are accredited

more quickly!

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Application Process

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Level 1 Checks

• Quick ‘high level’ checko Sufficient detail in text based answerso All documents provided are what is required

• Any grant related issues raised at this point• Potential outcomes:

a) Everything present and correct. Assign onwards for Level 2 review.

b) Information missing. Place ‘With Applicant’ and make contact to request further information required. Once this is submitted process as per (a).

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Level 2 Checks

• Full eligibility check of an application. o Check on details of documentation. o Check answers provided.

• Full check on metering schematic to review suitability on metering.

• Potential outcomes:a) Everything present and correct. Assign onwards for

Level 3 review.b) Information missing. Place ‘With Applicant’ and

make contact via CRM system to request further information required. Once this is submitted process as per (a).

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Level 3 Checks

• Provides quality assurance and checks consistency of findings during the level 2 review.

• Review of any outstanding issues which could not be resolved at the Level 2 stage. o Any legal or technical expertise can be requested

here if necessary• Ensure any ‘additional’ conditions are communicated• Special focus on metering schematic• Recommendation made to the delegated authority

o Recommendation for approvalo Recommendation for rejection

www.ofgem.gov.uk

Ofgem Checks1. Evidence to show ‘Installation’ is new: Invoices submitted for all components

2. Heat meters MID & class 2: Specific evidence i.e. a Certificate or Photo

3. Letter of Authority: To be written as per template (Guidance Note 2 or webpage)

4. Schematic review: Correct & must include all necessary components

5. Meter readings within effective date: Must be within 3 days of submission date

6. Evidence of existence: Commissioning Report

7. IMR (Independent Metering Report): Must be done by someone competent & using the required template

8. Proof of Heat Pump COP >2.9 : Manufacturers information

9. Solar thermal meter suitable for Glycol: Metering manual details29

www.ofgem.gov.uk

How to Apply for Accreditation

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Top Tips:How to Ensure a Good Quality Application

• Utilise guidance resources available

...if something is still not clear, just ask!• Have required documentation available

o Missing (posted) documents cause delayso Detailed schematic containing all relevant information requiredo Illegible / confusing documents

• Simple / complex meteringo Complex metering requirements for CHP, heat by steam,

ineligible purposes and;o Heat generated and used in > 1 building

• Sufficient detail in text based questions• Remember your log in details / quote RHI number

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Direct RHI Register Link

• Select option to ‘Create a new RHI Account’

Please go to our website address: https://rhi.ofgem.gov.uk

The RHI team – Ready to help

Ofgem E-Serve: How we can help

• Enquiries:• 0845 200 2122, RHI.Enquiry@Ofgem.gov.uk

• Comprehensive published information;• Guidance on the Scheme

–Volume 1 (Eligibility)–Volume 2 (Ongoing Obligations)

• Supplementary fact sheets & FAQs• Online application process

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Metering Schematics

Figure 1.8: Illustration of possible metering arrangement for a complex installation where decentralised ineligible plants (in this example, fossil fuel boilers) are located on secondary heating circuits in separate buildings. Note that the flow meter can be placed in either the flow or return pipe. Red lines denote the hot flow pipes, and blue lines indicate the cool return pipes. This schematic has been annotated with a key, a table of meter specifications, and building names/boundaries, as discussed in Section 1.4 of Volume One’s appendix