‘World’s first’ incentive for renewable heat supplies The laun ...

‘World’s first’ incentive for renewable heat supplies The launch,by Energy Secretary Chris Huhne,of the world’s first financial incentive of its kind intended to revolutionise the way heat is generated and used in buildings,the Renewable Heat Incentive (RHI),has been broadly welcomed. The RHI will introduce a new tariff scheme for industry,the commercial and public sectors that will stand alongside the Renewables Obligation and (electricity) Feed-in Tariff (FIT) scheme to send a strong signal of support to the renewables sector. The government will shortly be asking Parliament to approve the scheme. Anything from a pub to a public library, a school to a power plant will be eligible under the RHI to install technologies like biomass boilers,heat pumps and solar thermal,says the Department of Energy and Climate Change (DECC). The tariffs will be paid for 20 years to eligible technologies that have installed since July 2009,wi th payments being made for each kWh of renewable heat which is produced. Tariff payments range from 1.9 p/kWh for some biomass plants,to 8.5 p/kWh for solar thermal installations under 200 kWth in size. Once in the scheme,the level of support an installation will receive is fixed and will be adjusted annually with inflation. However,as with FITs, DECC expect the levels of support available for new entrants to the RHI scheme will decrease over time, as the costs of the equipment and installation reduce through economies of scale. By 2020,DECC estimate that the renewable heat sector will have grown to include around 13,000 installations in industry and 110,000 installations in the commercial and public sector,supplying 25% of the heat demand in these sectors. Less simply,RHI tariff payments will start for homes alongside the Green Deal from 2012. In the meantime,up to 25,000 installations from July this year will be supported by an ‘RHI Premium Payment’ to help people cover the purchase price of green heating systems. Those taking up the Premium will then be eligible for a RHI tariff from October next year when the Green Deal begins,says DECC, as will anyone else who has had eligible equipment installed from July 2009. For new-build homes,an RHI tariff will be considered for the 2012 phase. The RHI Premium Payment will be worth around £15mn and will,adds DECC, ensure there is a fair spread of technologies across all regions of Great Britain. The installed technologies will be monitored to enable government,m anufacturers, installers and consumers to better understand how to make sure householders get the most out of them. A key focus of this initial phase will be on people living off the gas grid. DECC says it plans to publish details of the RHI Premium Payment in May,and will consult on the RHI tariffs to apply from October 2012 later in the year. Currently,around half of the UK’s carbon emissions come from the energy used to produce heat - more than emissions from generating electricity,says DECC. The RHI will reduce emissions by 44 mn tonnes of carbon to 2020,an amount equivalent to the annual carbon emitted by 20 typical new gas power stations. The new financial incentive will encourage installation of equipment like renewable heat pumps, biomass boilers and solar thermal panels to reduce emissions and support the existing 150,000 jobs in the heating industry, adds DECC. The Chief Executive of the Renewable Energy Association,Gaynor Hartnell,was enthusiastic: ‘This novel policy should be much more effective than capital grants, as it rewards the production of renewable heat not just the installation of equipment. It is a revolutionary approach,but absolutely the right one. We don’t expect the scheme to be 100% perfect from the outset,but we will work with government to iron out any teething problems. However it is essential that the support levels published are sufficient to drive rapid expansion when the scheme goes live in July.’ Further details,inclu ding the tariff rates, are available at: www.decc.gov.uk/rhi