the uk renewable heat incentive and renewable heat premium payment schemes
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The UK Renewable Heat Incentive and Renewable Heat Premium Payment Schemes. Reading Borough Council Gabriel Berry. Agenda. 1. Context 2. The Renewable Heat Premium Payments Scheme & the Renewable Heat Incentive How the schemes work Tariff and grant rates Eligibility & standards - PowerPoint PPT PresentationTRANSCRIPT
1 Ferrara (IT), 29 September 2011
EUROPEAN REGIONALDEVELOPMENT FUND
> GEO.POWER 1st D-LAB
The UK Renewable Heat Incentive and
Renewable Heat Premium Payment Schemes
Reading Borough CouncilGabriel Berry
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Agenda
1. Context
2. The Renewable Heat Premium Payments Scheme & the Renewable Heat Incentive
How the schemes work Tariff and grant rates Eligibility & standards
3. Impact predictions
4. Criticism & issues
5. RHI case study
6. Summary
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Summary
Renewable Heat Incentive + Premium Payments
WHAT? 2 schemes providing financial support to domestic and non-domestic renewable heat generators
WHERE? England, Scotland and Wales (RHI: off gas network)
WHEN? RHI launched tomorrow; RHPP since 1st August 2011
WHO? Owners of eligible heaters recently/soon installed: ground & water source heat pumps, biomass, solar thermal, RHI: deep geothermal, biogas, municipal waste, biomethane injection
HOW? 955m€ central Government funding, paid per unit of metered eligible heat for 20 years (RHI), plus capital grants (RHPP)
WHY? UK RES target is 15% of energy - currently 1.5% (11% of heat - currently 1%). + Avoid carbon emissions up to 44 MtCO2
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Context – 15% Target
UK Renewables Strategy & RoadmapRenewable heat:
2010 20201%, or 7 TWhth 11% or 57-72 TWhth
“Heat pumps could also play a more important role than previously estimated”
of which GSHPs to provide 14 TWhth
“...requires an annual growth rate of up to 41%”
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UK vs EU - Ground energy
Heat pumps
709 GWhth, 2010
135 MWth, 2008 (11th in EU)
10,350* no., 2008 (9th in EU)
Deep geothermal
9 GWhth, 2010
1 MWth, 2010
1 no., 2010
*2010: 12-22,000 no.
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Context - GSHPs in UK RE Strategy
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Context – Government’s strategy
• How? “Use incentives, address barriers”
Renewables Roadmap priority areas
Technology costs RHI heat payments
RHPP grants
Planning and licensing processes
-
Availability of quality installers/ engineers
RHPP standards
(RHI in future?)
Demands on the electricity grid
-
Performance and technical issues
RHI CoP standards
RHPP borehole standards
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Context - Existing incentives
• Reduced VAT rate (5%) on small-scale RE
• Revenue from govt incentives exempt from tax
• New zero-carbon homes get relief on duty
• Annual investment allowance• Enhanced Capital Allowance for Energy Technology List products incl. GSHPs (plant only)
Domestic
Business
• £5m Deep Geothermal Challenge Fund 2009-11= grants for major projects (>2 MWe or >5 MWth)
Industry
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Context – Energy prices
UK commercial fossil prices €c/kWh
Natural gas 2.3
Heating oil 5.4
Electricity 10.1
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• Mar 2009 – UK RE Strategy & Targets• Feb 2010 – Public consultation• May 2010 – Change of govt• Oct 2010 – Spending review
confirmed RHI & set budget• Mar 2011 – Details published• Aug 2011 – RHPP launch• Oct 2011 – RHI scheme launch• Aug 2011 – RHPP ends • Oct 2012 – RHI domestic launch
RHI & RHPP – Timeline
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Intro 1 - Renewable Heat Premium Payments
• Phase 1, August 2011 – March 2012 Grants for eligible heat generators…• Phase 2, from October 2012
…+ RHI payments for metered heat
• Selected EU RES (e.g. not stoves/cooling)
• Government domestic renewable heat grant
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RHPP – How it works
Owner must agree to heat metering & attitude surveys if randomly selected
The householder:• Applies to EST* for grant ‘voucher’• Installs biomass boiler/solar collector/heat pump• Registers heater via the installer• Redeems voucher & receives grant• (probably) Joins RHI in Oct 2012
* Energy Saving Trust = government’s consumer energy advisory agency
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RHPP – Grant amounts
330 €950 €
1,060 €
1,390 €
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RHPP – Eligibility & standards
• Domestic (social housing – special conditions)• Must be owner’s main home • Off gas network (except solar)• Must be main heating (except solar)• Cavity wall insulation + 250mm loft insulation
• Product & installer registered with MCS• Hence capacity below 45 kWth
• Installed by end Mar 2012 or voucher expiry date
“We will continue to monitor and review the performance of heat pumps in situ.”
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RHPP – eligibility
ELECTRICITY HEAT COOLING AND UNMETERABLE HEAT
Solar PV
Small wind
Biogas
Hydro power
Wood boiler heat
Solar thermal hot water
Feed in tariff
or ROCs
Air to water source heat pumps
Wood boiler+chiller COOLING
Wood stove heatingBiogas heatDistrict heating
Air to air source heat pumps
Deep geothermal
Not eligible!
Ground / water source heat pumps
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Intro 2 - Renewable Heat Incentive
• Government payments for metered heat
• World first? Starts October 2011
• Paid over 20 years• Rate of return vs fossil fuel 12% (6%)
• Non-domestic until Oct 2012 • EU RES but not ASHP, stoves, cooling
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Renewable Heat Incentive – How it works
1. Install eligible heater & heat meters
2. Register with Ofgem for RHI
3. Read & report heat production
4. Receive quarterly payments (owner)
5. Continues for 20 years
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RHI – How it works
After the start of the scheme, tariff levels will be adjusted automatically each year in line
with the Retail Price Index (RPI). This adjustment will be applied both for new and
existing projects.
Tariff rates calculated to:
• compensate for cost of RE plant over fossil• cover both installation & running costs• provide return on additional capital invested • be incentive to overcome non-financial barriers
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RHI – Tariff rates
4.8 €c /kWh
3.3 €c /kWh
8.4 €c /kWh
2.1 €c /kWh
5.2 €c /kWh
2.1 €c /kWh
1.4 €c /kWh
9.4 €c /kWh
7.2 €c /kWh
< 200 kW
200 kW - 1 MW
> 1 MW
< 100 kW
> 100 kW
< 200 kW
Small biomass
Medium biomass
Large biomass
Solar thermal
Biomethane
Small ground source
Large ground source
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RHI – eligibility
ELECTRICITY
Solar PV
HEAT COOLING AND UNMETERABLE HEAT
Small wind
Biogas
Hydro power
Wood boiler heat
Solar thermal
Biogas heat
Feed in tariff
or ROCs
Wood boiler+chiller cooling
Wood stove heating
District heating (RE)Air source heat pumps: non-domestic
Ground / air source cooling
Not
eligible!
Air source heat pumps: domestic
Ground / water source heat pumps & deep geothermal
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RHI – Standards
All heat pumps• Required: CoP 2.9 or above (heat pump only)• May change when EC issues guidance
Heat pumps ≤ 45 kWth
• Must conform to UK Microgeneration Certification Scheme• MCS covers installer, product, design & installation standards
Heat pumps > 45 kWth • Ofgem will verify eligibility• No standards other than CoP (above)
“We will continue to monitor and review the performance of heat pumps in situ.”
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RHI – High temperature geothermal
• Same tariff as ground source heat pumps
“We intend to consider whether specific tariffs for deep geothermal heat can be introduced from 2012”
“There are no MCS or equivalent standards so, for the RHI, Ofgem will verify eligibility based on the documentation required”
• … i.e. no technical standards for deep geothermal
NB Cogeneration under the RHI• Heat element only is eligible for payments• No additional support for CHP - RHI deemed sufficient
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RHI & RHPP – Impact predictions
• 110,000 public/commercial installations• 13,000 industrial installations• ?? domestic installations
• contribute to 100,000 new RES jobs• directly stimulate 5.0 billion €
capital investment• generate 57 TWhth by 2020
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RHI & RHPP – Criticisms & issues
• Lack of installer/product/design standards >45kW• July 2009 cut-off – unfair, or practical?• Exclusion of log/pellet stoves & bio-liquid fuels• Exclusion of cooling and ‘waste heat’• No additional support for extra costs of district heat• Air source heat pumps – always sustainable?• Biomass fuels/emissions – always sustainable? • Some wanted payments assignable to 3rd parties• Some wanted fossil fuel suppliers to pay RHI
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RHI – Opportunity for ground energy
Reading Borough Council GEO.POWER team (UK)Tel. +44 118 937 2159
Email [email protected]
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RHI - GSHP case study
The Avenue Centre
Owner: Reading Borough CouncilFunction: New-build school + offices
• 2× 80 kWth grd loop HPs to underfloor heat • Generates 420 MWhth pa, uses 140 MWhe • Installed by Geothermal International
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RHI - GSHP case study
• GSHP: capital cost 142 k€ + electricity costs 14 k€ pa
• Gas boiler: capital saving 14 k€ + fuel saving 12 k€ pa
• RHI 20 k€ pa for 20 yrs PAYBACK RHI= 8 yrs…120 k€ income*
PAYBACK no RHI= never…180 k€ loss*
*assuming static fossil energy prices!