1. DECC PRESS RELEASE ON RHI

    September 24, 2012

    Progress on support for renewable heat hots up today with the publication of three consultations on the Coalition’s Renewable Heat Incentive scheme (RHI). The RHI, the first of its kind in the world, was launched for the non domestic sector in November last year, with a scheme for householders intended to open in Summer 2013.

    Renewable Heat Incentive for householders

    Proposals on long term support for householders who install renewable heating kit such as biomass boilers, heat pumps and solar thermal in their homes across the nation have been published for consultation today. The RHI for householders, to be managed by Ofgem, is aimed at any householder looking to replace their current heating with renewable heating kit or householders who have installed any such technology since 15 July 2009. It is intended that householders will get paid for the heat expected to be produced by their installed technology.

    Key proposals in the consultation include:

    • Indicative tariff ranges for air source heat pumps (6.9-11.5p/kWh), biomass boilers (5.2-8.7p/kWh), ground source heat pumps (12.5-17.3p/kWh) and solar thermal technologies (17.3p/kWh) that are MCS certified and meet relevant required standards
    • Payments for householders over seven years for each kWh of heat produced for the expected lifetime of the renewable technology and based on deemed heat usage
    • Tariff levels set to provide a better return for householders living off the gas grid
    • Budget management system similar to one introduced for the Feed-in Tariffs scheme
    • Minimum energy efficiency requirements based on Green Deal assessments

    Energy and Climate Change Minister Greg Barker said:

    “We need to revolutionise the way we heat our homes and businesses and move away from expensive fossil fuels, not only to cut carbon but to help meet our renewables targets and save money on bills.
    “Our proposals aim to encourage even more uptake of clean green heating in industry and in our businesses. We have also set out our views on long term support for those who invest in low carbon kit in their homes and we look forward to hearing your thoughts.”

    The closing date for this consultation is 7 December 2012.

    There is already cash available for renewable heat for householders under the Renewable Heat Premium Payment (RHPP) scheme, set to run until March 2013. The Department for Energy and Climate Change (DECC) has recently announced the winners of the RHPP Social Landlord Phase 2 ‘Top up’ competition and confirmed the list of community groups through to the next stage of the RHPP communities competition.

    Renewable Heat Incentive for commercial, industrial and community customers

    DECC has today published two consultations on expanding the RHI scheme for commercial, industrial and community customers to increase uptake of renewable heating kit in this sector.

    The first consultation looks at the broader expansion of the scheme and closes on 7 December 2012. The second consultation focuses on air to water heat pumps and energy from waste and closes on 18 October 2012.

    Key proposals to expand the scheme include:

    • Inclusion of heating only Air to Air heat pumps with a proposed tariff of 0.97p/kWh for all sizes of installation
    • Inclusion of Air to Water heat pumps with a proposed tariff of 1.7p/kWh for all sizes of installation
    • Inclusion of biomass direct air heaters with a proposed tariff of 2.1p/kWh under 1MW and 1p/kWh over 1MW
    • Extension of biogas combustion tariffs to installations over 200kW
    • Introduction of a specific tariff for heat from biomass CHP of a proposed 4.1pkWh
    • Introduction of bioliquid CHP tariff of 4.1p/kWh
    • Increased tariff for deep geothermal installations from 3.4 p/kWh to 5p/kWh
    • Increased range of waste feedstocks eligible for support
    • Minimum energy efficiency requirements for district heating, commercial and industrial space and water heating
    • Continuation of exclusion of reversible Air to Air heat pumps from the scheme

    DECC will be running a number of events across the country to provide opportunities to ask questions about the consultations and feed in ideas. Further details on these events, including how to register, will be published on the DECC website shortly.

    Category: News

  2. RHI LATEST NEWS FROM DECC – NON DOMESTIC

    September 24, 2012

    Non-domestic RHI

    The Non-Domestic RHI Scheme supports renewable heat installations in business, industry and the public sector as well as district heating schemes. It has been open for applications since November 2011.

    The Non-Domestic RHI Scheme currently supports the following technologies:

    • biomass
    • heat pumps – ground source, water source and deep geothermal
    • all solar thermal collectors
    • bio-methane and biogas

    RHI payments are made to the owner of the heat installation over a 20 year period and tariff levels have been calculated to bridge the financial gap between the cost of conventional and renewable heat systems. The scheme is administered by Ofgem. More information is on the Ofgem: Renewable Heat Incentive (RHI)[External link] web page. The current tariffs for the Non-Domestic RHI technologies are in the table below:

    Tariff name Eligible technology Eligible sizes Tariff level (p/kWh)
    Small biomass Solid biomass including solid biomass contained in municipal solid waste (incl. CHP) Less than 200 kWth 8.3
    (tier 1)
    2.1
    (tier 2)
    Medium biomass 200 kWth and above; less than 1,000 kWth 5.1
    (tier 1)
    2.1
    (tier 2)
    Large biomass 1,000 kWth and above 1.0
    Small heat pumps Ground-source heat pumps; water source heat pumps; deep geothermal 100 kWth and above Less than 100 kWth 4.7
    Heat pumps 100 kWth and above 3.4
    All solar thermal collectors Solar thermal collectors Less than 200 kWth 8.9
    Biomethane and biogas combustion Biomethane injection and biogas combustion, except from landfill gas Biomethane all scales, biogas combustion, except from landfill gas 7.1

    Since the scheme opened in 2011 DECC has run two consultations on changes to the scheme in relation to integrating budget management into the scheme, introducing new air quality and biomass sustainability standards and making improvements to respons to the initial months of the scheme being operational. They can be found in the Consultations area of this site.

    We will be consulting on proposals for expanding the existing scheme to include additional technologies, later in September 2012.

    The timetable for delivering the changes to the Non-domestic scheme can be found on the Delivery timeline web page.

    Budget management for the RHI

    It is essential that the RHI is financially sustainable and that deployment of renewable heat continues to be good value for money to the taxpayer. The RHI is funded directly from Government spend and has been assigned annual budgets for the four years of this Spending Review period. Budgets were set based on the estimated trajectory of growth needed to achieve 2020 renewables targets. Further information on what we are doing to ensure we stay within budgets for the non-domestic RHI can be found on the Budget management web page.

    In June 2012 we announced a stand-by mechanism for budget management that would suspend the RHI to new entrants until the next financial year should estimated spending reach a level where the budget could be breached. This will be in place until March 2013 when it will be replaced by a more sophisticated, long term mechanism.

    Non-Domestic Scheme uptake and spend

    To provide greater transparency and certainty for potential scheme applicants, members and investors, we committed to provide a weekly forecast of estimated spend for the 2012/13 financial year (based on applications received to date). This information will enable everyone with an interest to monitor the progress towards the trigger point which would activate the Stand-by Mechanism.

    Category: News

  3. RHI – LATEST NEWS FROM DECC

    September 24, 2012

    Renewable Heat Incentive: proposals for a domestic scheme

    We are consulting on proposals for a subsidy scheme aimed at helping households replace their existing fossil fuel-based heating systems with renewable-based ones. Broadly speaking, we are proposing to support the installation of Microgeneration Certification Scheme (or equivalent) certified ground and air source heat pumps, biomass boilers and solar thermal panels.  Our lead proposal is that the subsidy would be provided through tariff based payments over a seven year period. Payments would be made on the basis of deemed amount of renewable heat generated, taking into account the circumstances of the property, with the rate paid varying according to the type of renewable technology installed.  We are inviting views on what alternatives approaches to support might also be appropriate and on our current methodology and assumptions that form the basis of the indicative tariff ranges that we are presenting.

    As part of our core proposal, RHI payments would start after the renewable heating system had been installed.  Householders would therefore need to finance the upfront installation costs themselves through personal funds or a loan. The tariffs we propose take into account the additional costs of installation and running the renewable system and non-financial barriers (such as disruption in the home). They also build in compensation on the additional upfront installation costs of 7.5% to cover the cost of financing.

    The scheme will be for individual domestic properties and is open to all.  We are proposing that, provided their properties meet certain energy efficiency criteria (meaning a key interaction with the Green Deal), owner-occupiers and private landlords would be eligible, together with householders who have installed renewable heating systems since 15 July 2009 , including those who received the Renewable Heat Premium Payment.  We are also considering having bespoke tariffs for the registered social landlord and new build sectors, recognising their potential contribution to the roll-out of renewable heat, but taking into account the possible lower installation-related and other costs they might benefit from.

    We propose introducing the domestic RHI scheme in the summer of 2013 and for it to be run initially by Ofgem with a view to offering the role on competitive tender for the long-term. 

    Category: News