renewable heat incentive (rhi) - · pdf filerenewable heat incentive (rhi) oli coe –...

© 2015 Farm Energy Centre

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Renewable Heat Incentive (RHI)

Oli Coe – Farm Energy Centre


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International Pressure

Kyoto Protocol

Climate Change Act in 2008

- 2050 Target - Carbon Budgets - The Committee on Climate Change - A National Adaptation Plan

- Europe surpassed it with ease, but…

- So did the US without even trying


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Climate Change Performance Index (CCPI) 2015


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FIT & RHI

Feed-in Tariff (FIT) Renewable Heat Incentive (RHI)

• Wind

• Solar Photovoltaic (PV)

• Hydro

• Anaerobic Digesters (AD)

• Micro Combined Heat and

Power (CHP)

• Biomass Boilers

• Ground, air and water

source Heat Pumps

• Solar thermal

• Biogas combustion

• Biomethane injection to the

grid

• Solid biomass CHP

• Deep geothermal

• Waste


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What is the Renewable Heat Incentive?

- It pays participants that generate and use renewable energy

- Attempts to reduce dependency on fossil fuel use

- The aim is to reduce greenhouse gas emissions

- Domestic and non-domestic schemes

Non-Domestic Scheme

- Administered by Ofgem

- Introduced in November 2011

- Payable to eligible installations on heat used

- 20 year index linked subsidy

- A number of eligible technologies


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Uptake of RHI (MW)

Solid Biomass Boiler, 995.836, 99%

Biogas, 2.077, 0%

Deep Geothermal, 0, 0%

Ground Source Heat Pump (GSHP), 7.8, 1%

Solar Thermal, 2.247, 0%

Water Source Heat Pump (WSHP), 1.285, 0%

Solid Biomass CHP, 0, 0%

Air Source Heat Pump (ASHP), 0.145, 0%

Waste, 0, 0%

Other, 13.546, 1%


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Who is making use of the RHI?


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What size is best for the RHI?

Key Points

• There have been a couple of rate drops

on small biomass systems

• Very little movement on medium biomass

rates

• An increase in the rates for large biomass


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Biomass Rates

Small Commercial Biomass (<200kW)

Medium Commercial Biomass (200-1000kW)

Large Commercial Biomass (<1000kW)


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Example – 199kW Boiler

Key Stats

199kW boiler providing an eligible use with 300,000 kWh annual heat

demand.

Tier 1 (kWh) = 1,314 hours x 199 kW = 261,486 kWh

Tier 2 (kWh) = anything over 261,486 kWh in the year

Why 1,314 hours?

- Ofgem expect biomass boilers to have a utilisation factor of

at least 15%

Tier 1 = 261,486 kWh x 6.8 p/kWh = £19,141.05

Tier 2 = 38,514 kWh x 1.8 p/kWh = £693.25

Total RHI Payments = £19,834.30


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Example – 990kW Boiler

Key Stats

1.5 Ha Nursery is using a 990kW Biomass Boiler for 50% of site heat. The heating requirement is 500 kWh/m2/year.

Total heat from biomass is 3,750,000 kWh.

Tier 1 (kWh) = 1,314 hours x 990 kW = 1,300,860kWh

Tier 2 (kWh) = anything over 1,300,860 kWh in the year

Tier 1 = 1,300,860 kWh x 5.1 p/kWh = £66,343.86

Tier 2 = 2,449,140 kWh x 2.2 p/kWh = £53,881.08

Total RHI Payments = £120,224.94

One Step Further

RHI Payments = £120,224.94

Biomass Fuel Cost = £151,260.50

Net Cost = £31,035.56

Gas Cost = £93,750.00

Net Cost = £93,750.00


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Degression Mechanism

0

20

40

60

80

100

120

£ m

illio

n

Small biomass plants forecast expenditure, as at 31.12.2014

Forecast expenditure (£m) -Accreditations receiving payment

Forecast expenditure (£m) -Accreditations that have not yetreceived payment as at 31.12.2014

Forecast expenditure (£m) - Fullapplications

Forecast expenditure (£m) -Preliminary applications andpreliminary accreditations

Expenditure threshold (Totalexpenditure anticipated forsubsequent year) (£m)

Expenditure threshold (or scaledtrigger) (£m)

5% Tariff Reduction

Announced

10% Tariff Reduction

Announced

10% Tariff

Reduction

Announced


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Degression Mechanism

0

10

20

30

40

50

60

70

80

90

£ m

illio

n

Medium biomass plants forecast expenditure, as at 31.12.2014

Forecast expenditure (£m) -Accreditations receiving payment

Forecast expenditure (£m) -Accreditations that have not yetreceived payment as at31.12.2014

Forecast expenditure (£m) - Fullapplications

Forecast expenditure (£m) -Preliminary applications andpreliminary accreditations

Expenditure threshold (Totalexpenditure anticipated forsubsequent year) (£m)

Expenditure threshold (or scaledtrigger) (£m)


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Batch burner

• Does what it says on the tin – Manual loading

– Will ‘burn out’

– Can be kept topped up, but only if people are around to do so

– Needs accumulator

– Cheaper to buy

– High operational cost

– Low maintenance costs


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Automated System

• Gives continuous heat supply – Load fuel feed once/day

– Can be modulated

– Typically higher efficiency

– More expensive

– Less operation cost but maybe higher maintenance?

– More cost effective in the end?


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Considerations

• De-ashing

• Tube cleaning

• ‘Fettling’ controls

• Breakdowns

• Clinker removal

• 1 hour/day

• Plus 2-5 hours/week


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Batch Burner vs Automatic

Batch burn Automated

Capital cost - Boiler £70,000 – 100,000 £180,000 – 250,000

Capital cost - Buildings £20,000 – 40,000 £30,000 – 80,000

Installation cost £50,000 £100,000

Daily operation 3 hours/day 1 hour/day

Maintenance 2 hours/week 2 hours/week

RHI eligibility Yes if emissions certificate NOX and dust?

Yes if emissions certificate NOX and dust?

RHI rates Tier 1 – 5.1 p/kWh Tier 2 – 2.2 p/kWh

Tier 1 – 5.1 p/kWh Tier 2 – 2.2 p/kWh


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Case Study 1

Ornamental Grower

- 1.9 Ha and 3.0 Ha areas

- Two 4MW Existing Oil Boilers

- Installed two 990 kW woodchip boilers

- Capital Cost of £1,000,000

- Annual RHI Income of just over £180,000

- Annual cost of fuel of £50,000 where it

would have been <£350,000 on gas oil


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Case Study 2

Ornamental Grower

- 1.2 Ha area

- Two existing 950 kW Gas Oil burner

- Installed one 995 MW pellet boiler

- Capital Cost of £280,000

- Annual RHI Income of £120,000


would have been £80,000 on gas

They liked the system so much they bought another one


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Case Study 3

Edibles Grower (Cucumbers)

- 4.25 Ha area

- A 2.7 MW coal boiler, two 1.6 MW CHP

engines and 5.6MW Gas Boiler

- Installed one 2.8 MW cereal straw boilers

- Capital Cost of £600,000

- Annual RHI Income of £70,000


would have been £250,000 on coal and gas


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Eligibility Criteria

Providing heat for eligible purposes

Has to be new (Commissioned after July 2009)

Solely Biomass

Emissions

Installation & Metering is correct

No grants or public funding

Biomass Sustainability


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Emissions Criteria

- Boiler model needs to be tested to ISO 17025 standard

- Issued with an RHI-EC (Exemption Certificate)

Ensure this is the case BEFORE buying a boiler!

Pollutant NOx PM

Emission limit, g/GJ 150 30


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Metering

Essential for RHI Need at least 1

May need more if fossil fuel boilers in system

Must be MID compliant or equivalent

Mechanical flow meter

and digital integrator

Ultrasonic

flow meter

and digital

integrator


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Applying for the RHI

• Can be made online

• Documentation needed • Schematic

• Independent metering report

• Boiler warranty and commissioning

• Proof of eligible use

• Calibration certificates

• Emissions Certificate

• Bank account details

• Photographs

• Meter readings

• Etc.


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Ongoing Obligations

Meter Readings

- At least quarterly for <1MW

- Would recommend weekly or daily if possible

Fuel Records

- Amount burned, not just amount bought

- Moisture content on arrival


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Biomass Sustainability

• Land Criteria – sustainable source

• GHG Emissions

• Only wood fuels currently

• Soon to be a non-woody biomass list


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Ofgem Audits

Ofgem carry out two types of audit

- Desk based

- Site Audit

They publish results of audits, main non-compliances are:

“• participants have not been maintaining fuel records for biomass installations, particularly

where harvesting their own fuel. We would like to remind participants that records of the

quantity and type of fuel used and the date of supply to the boiler must be maintained.

• meters have not been installed in accordance with manufacturer’s instructions. Metering

equipment and meter installation manuals must be checked to ensure the meter has been

installed correctly.”


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Issues to Consider

• Fuel Storage

• CO2 Requirements

• Planning Permission

• Project Lead Time

• Impact on Energy Savings


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Alternatives


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• Feasibility

• Boiler sizing

• Design assistance — especially metering

• Independent metering report

• Application

• Ongoing meter reading submissions, support and audit advice

Seeking Advice


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Question Time

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