back 2 business week - green deal: Nick Tune of BRE


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Feed-in tariff/renewable heat incentive – generate your own energy and heat and get paid for it

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back 2 business week - green deal: Nick Tune of BRE

  1. 1. The ‘new’ - micro renewable energy andrefurbishment incentive schemesGreen DealRenewable Heat IncentiveFeed in TariffNick Tune, Director BRE Wales
  2. 2. It’s not easy being green!
  3. 3. Introduction• The UK Government have developed 3 schemes for micro renewable energy and low energy refurbishment – The Feed in Tariff – finance scheme for electricity generating renewable energy – The Renewable Heat Incentive – finance scheme for heat generating renewable energy – The Green Deal – ‘pay as you save’ scheme for building refurbishment
  4. 4. Feed in Tariff • Started April 1st 2010 Tariff is RPI linked and guaranteed for 25 yrs • Highest generation rate available until 2012, then decreases for new entrants • Tariffs paid by a utility company, administered by Ofgem • Electricity not used can be exported • You do not need to be the building owner to claim the generation tariff • Significant alterations in market conditions since introduction
  5. 5. Installations to November 2010
  6. 6. Simple Payback Example • Solar PV • 10 kW on roof • Installed price £35k • Generation 8,500kWh/yr • Generation tariff 36.1p/kWhr • Simple payback 11 years • Gross earnings £79,900
  7. 7. FITs in Practice – domestic example
  8. 8. Generation Tariffs - originallyTechnology Scale Generation Tariff Tariff Lifetime 2010 (p/kWhr) (years)PV ≤ 4kW (new build) 36.1 25PV ≤ 4kW (retrofit) 41.3 25PV > 4-10kW 36.1 25PV > 10-100kW 31.4 25PV > 100kW-5MW 29.3 25PV Stand alone system 29.3 25Wind ≤ 1.5kW 34.5 20Wind > 1.5-15kW 26.7 20Wind > 15kW-100kW 24.1 20Wind > 100-500kW 18.8 20Wind > 500kW-1.5MW 9.4 20Wind > 1.5MW-5MW 4.5 20
  9. 9. Generation Tariffs following First ReviewTechnology Scale Generation Tariff Tariff Lifetime 2010 (p/kWhr) (years)PV ≤ 4kW (new build) 36.1 25PV ≤ 4kW (retrofit) 41.3 25PV > 4- ≤ 10kW 36.1 25PV > 10 - ≤ 50kW 31.4 25PV > 50 - ≤150kW 19.0 25PV > 150 - ≤ 250kW 15.0 25PV >250kW - ≤ 5MW 8.5 25Wind ≤ 1.5kW 34.5 20Wind > 1.5-15kW 26.7 20Wind > 15kW-100kW 24.1 20Wind > 100-500kW 18.8 20Wind > 500kW-1.5MW 9.4 20Wind > 1.5MW-5MW 4.5 20
  10. 10. Some important issues to consider • Site orientation and shading • System specification • Financial assumptions on technical performance • Pre-payment meters and metering • Replacement of components over time • Output drop over time • Fixing methods • Resident engagement • Financial Models and Insurance
  11. 11. Importance of solar data
  12. 12. Feed in Tariff for PV – Site and Shading Site Selection: • South facing • Essential to consider over-shading to calculate generation yields 3D – Shading Analysis
  13. 13. Example: variation in output with pitch and orientation [CIBSE]
  14. 14. Shading Analysis 2D – Shading Analysis
  15. 15. Feed in Tariff for PV Consultancy for PV •Identifying the most suitable sites •Accurate predictions of energy generation •Modelling of shading •Modelling Module/Inverter configurations •Support tender evaluation •Confirm specifications • Support investment case
  16. 16. The Renewable Heat Incentive• Payments for renewable heat generation similar to FIT for electricity• An incentive based mechanism with intention of creating a bigger market for renewable heat• RHI will be funded from general Government spending, not through the previously proposed RHI levy• Due to go live from ‘Summer 2011’• Two phases of implementation
  17. 17. Two-Phase Approach• Phase 1: Non-Domestic Sector » Targeting large energy users » Businesses, industrial, public sector » Communal systems included, e.g. sheltered housing• Phase 2: Domestic » Long-term support aligned with Green Deal (i.e. will support ‘whole house approach’) » October 2012 for implementation
  18. 18. Confirmed original proposals• Installations between 15 July 2009 & introduction of scheme eligible for tariffs• Long term support (adjusted for inflation) to compensate for: – Capex and opex of renewable heating compared to a gas fossil fuel alternative – Additional barrier and financial cost (assuming a 12% rate of return for a reference installation, apart from solar thermal);• Support for technologies classed as renewable• MCS for installations <45kW• Ofgem E-Serve will administer the scheme
  19. 19. New policy• Value for money is key• Two phase approach –second phase of the scheme from 2012• Domestic included from 2012 –initial support through Renewable Heat Premium Payments• Fewer technologies supported in phase 1 to allow further evidence gathering• Two-tier tariff for biomass <1MW• Funded from Government spending Natural temperature at >1 metre below surface is a constant +10 C. Plenty of heat energy – but at too low a temperature low grade heat useful heat Heat Pump
  20. 20. Resource costs per MWh of key renewableenergy technologies Source: (DECC Impact Assessment March 2011)
  21. 21. Phase 1 – Eligible technologies• Ground and water source heat pumps (one tariff)• Biomass• Biogas combustion <200kW (incl gasification & pyrolysis)• Biomethane injection• Solar thermal <200kW• Geothermal (GSHP tariff)• Energy from municipal solid waste (adjusted biomass tariff)• CHP (support on the basis of heat only technology)
  22. 22. Tariff levelsEligible technology Eligible size Tariff Tariff Support (p/kWh) duration calculation (years) Metering 7.6 (Tier 1) Tier 1 applies annually to the < 200kWth 20 1.9 (Tier 2) tier break, Tier 2 above tier breakSolid biomass; municipal solid 4.7 (Tier 1)waste (inc CHP) 200-1,000 kWth 20 1.9 (Tier 2) Tier break is Metering > 1,000kWth 2.6 20 installed capacity x 1,314 peak load MeteringGround source heat pumps; < 100kWth 4.3 20 hours, i.e.water sourced heat pumps; kWth x 1,314deep geothermal Metering > 100kWth 3 20 MeteringSolar thermal < 200kWth 8.5 20 Biomethane all scalesBiomethane injection and Meteringbiogas combustion, except from 6.5 20 Biogas combustionlandfill gas < 200kWth
  23. 23. RHI Biomass Example• A 30kW biomass installation (e.g. a pellet boiler in a small school) generates 45 MWh (or 45,000 kWh) of heat in a particular year.• Approximate capex = £15,000 – Its "Tier Break" can be determined by multiplying 30kW x 1,314h = 39,420 kWh. It will receive:• The Tier 1 tariff for first 39,420kWh, i.e. 39,420kWh x 7.6p/kWh = £2,995.92• The Tier 2 tariff for the remaining 5,580kWh, i.e. 5,580kWh x 1.9p/kWh = £106.02 Total RHI payment = £3102 /yr
  24. 24. Administration• Ofgem E-Serve – Manage applications – Assess whether applications meet eligibility criteria – Make incentive payments – Ensure compliance with rules of scheme (may require inspection) – Will produce guidance on the scheme• DECC• MCS Certifying bodies
  25. 25. Phase 1 – Eligible requirements• All non-domestic or single installations heating multiple domestic premises• Metering of all installations –heat has to be delivered through water or steam• Useful heat in buildings (space, water or process)• Sustainability reporting for biomass above 1MW• MCS products and installers where applicable up to 45kW
  26. 26. Phase 2• Inclusion of domestic• Automatic degression to control cost• Consideration of further technologies – Direct air heating (furnaces, kilns, ovens etc) – Air source heat pumps –key technology – Bioliquids• Possible dedicated tariffs for – CHP – Geothermal – Solar thermal and biogas combustion >200kW• Emissions limits for biomass boilers
  27. 27. Measuring the Heat• Support paid on basis of multiplying the kWhth of metered renewable heat by the relevant tariff• Heat meter must meet the Class 2 requirements of EU Measuring Instruments Directive (MID) 2004• Heat Pumps: Must ensure metering does not count any cooling element• More details to follow from DECC
  28. 28. What to look out for • Check for RHI eligibility • Make sure project management team is in place • Carry out options appraisal • Select technology / ies • Get quotes – from MCS installers for 45kW and below • Identify other eligible funding • Check project can be delivered within RHI review timetable (Apr ‘15) • Complete Ofgem accreditation all of the above takes time!!!
  29. 29. Renewable Heat Incentive Consultancy Offering: • Identification of suitable buildings • Assessment of revenues and running costs • System specification • Accurate predictions of energy generation and income • Modelling of supply and demand profiles • Support tender evaluation • Technical support for investment cases • Impact on building users
  30. 30. Green Deal• Pay as you save scheme• Whole House Approach• Companies e.g. British Gas, B&Q, M&S, Tesco etc will pay for and install energy saving measures• No upfront cost• A percent e.g. 80% of energy savings made by the measures will be used to pay off the cost of the measures (must within 25 years)• Measures must provide greater energy savings than the repayments over the 25 yr period
  31. 31. What measures will be funded?• Phase 1 - energy saving measures – Solid Wall insulation, – Double glazing – Cavity wall – Loft• 2ND Phase - Micro renewables – PV – SHW
  32. 32. Who will implement Green Deal?• Licensed Assessors – energy model the house (similar to the EPC certificate) suggest measures• Home owner signs up to scheme and pay back period• Registered companies install measures to set standards e.g. MCS etc• The loan is against the house not the individual i.e. the repayment is passed onto the new home owner
  33. 33. Green Deal – Seamless Customer Journey Marketing Pre-Assessment Delivery Post -Assessment Monitoring Technical feedback loop – uploads results into refurbishment portal BRE 5) Accredited Green 13) Accredited Green 16) BRE to develop Deal Advisors drawn Deal Advisors drawn Operational Rating2) BRE markets from DEAs NDEAs 6) Product 7) Installation from DEAs NDEAs software tool toGreen Deal to DECs & EHS DECs & EHS monitor futureconsumers surveyors Standard - PAS MCS installers surveyors performance –through extensive Product Green Book Live service could beassessor network Software: SAP, Certification Red Book Software: SAP, provided by web- RdSAP, BREEAM in MCS Voluntary training for RdSAP, BREEAM in based tool Use, Refurb Portal Green Book Live, installers & specifiers Use, Refurb Portal Training by BRE Redbook Training by BRE SAP Appendix Q Green Deal Process1) Marketing of 4) Initial Survey 8) Green Deal 11) Green Deal 12) Post installation 15) MaintainGreen Deal Finance Retro-fit survey relationship with Assessment of Installation customerVia: web tool property to determine Finance Plan to be Following installation a(e.g.T-Zero), Asset Rating (EPC). generated for Installation of second survey (EPC) Monitoring of futurenetwork of This could include consumer (must products is undertaken to energy consumptioninstallers (SMEs) Operational Rating. meet “golden rule”) recommended in produce post through a web-based initial assessment / installation Asset tool providing Generation of “Green survey Rating feedback to Green Deal Report” Deal provider Green Deal Provider3) Opportunity for 14) Results of post 17) Operational Ratingprovider and BRE 9) Product 10) Installation installation assessment software feeds backto work together Customer Finance used to enable energy performanceon dual branded Plan options for Installation of activation of finance data to BRE andmarketing products through products through plan. Green Deal Providercampaign web-tool network of Assessment should via Smart Meter Supply of products installers (SMEs) include an Operational system (such as insulation Rating etc) Loyalty feedback loop - driving repeat business through rewards system
  34. 34. Green Deal – a seamless Customer JourneyAssessment: Green Deal will require initial EPC for property inorder to initiate Process:• Customer tracking through initial EPC report reference number (RRN) enables customer to track progress of their Green Deal throughout the process EPC – report reference number
  35. 35. EHS Data Collection Pre 2008
  36. 36. Developing Scenarios for Future Energy Use and Carbon Emissions Market penetration of home energy efficiency measures 100% 90% Hot water tank insulation Double glazing 80% Draught proofing 70% Central heatingPercentage of potential 60% Cavity wall insulation 50% 40% Condensing boilers 30% 20% Loft insulation (any) 10% 0% 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Year
  37. 37. Step 1. Carbon Mapidentify regional CO2 hotspotsKey points• We will visually map dwelling CO2 by Census Output Area• This provides a clear indication where poorly- performing stock is located• Allows effort to be targeted towards the most effective locations• Provides visually compelling material aiding communication with stakeholders
  38. 38. PV survey through data
  39. 39. Green Deal – a seamless Customer JourneyInstallation: Second element of delivery phase is installationof products supplied under Green Deal framework:• Technical: Development of installation standard / code of practice• Training: Opportunity for BRE Training to provide voluntary installer training – providing confidence to consumer• Certification: BRE Global operate an approved MCS installer scheme, all MCS installers are listed on the This could be extended to cover Green Deal Registered Installers• Commercial opportunities: BRE Training - provision of installer training, opportunities for Green Deal Provider – revenue through installation service (partnership with SMEs)
  40. 40. Green Deal – a seamless Customer JourneyFinance: Green Deal Framework will include need for finance package tobe extended to home/building owner to enable recommendations to beimplemented:• Technical: BRE developed T-Zero which enables home owners to review options for improvements, this could be extended to cover Green Deal – indicating options for product selection. Capability on cost-benefit and Green Deal finance modelling• Commercial opportunities: Further development of web-based tool for consumers to model finance options – analysis of payback
  41. 41. Green Deal – a seamless Customer JourneyPost-Installation Assessment: Green Deal process will requirepost installation EPC for property in order to confirm thatrecommendations have been implemented:• Technical: BRE developed software such as: SAP, RdSAP, SBEM, BREEAM in Use and BREEAM Domestic Refurbishment. Where issues occur BRE could help resolve with advice.• Training: BRE Training is able to provide top-up training for DEAs and NDEAs enabling them to deliver Green Deal Advisor services• Certification: BRE Global well placed with 1,609 Accredited Assessors who have lodged 762,822 EPCs, DECs and Home Condition Reports• Commercial opportunities: Training of Green Deal Advisors, delivery of accreditation scheme (increased volume of EPCs)
  42. 42. Green Deal – a seamless Customer JourneyMaintaining the relationship with the customer – Monitoring:• Green Deal process provides invaluable access to customers, which if maintained could help to drive repeat business – monitoring energy consumption will be key to developing future repeat business• BRE to develop web based operational rating software which helps the customer monitor post Green Deal energy consumption• Energy data fed directly back to BRE and Green Deal Provider via smart meter system installed during retro fit. Data used to inform and refine software tools used for Green Deal Advice
  43. 43. Green Deal – a seamless Customer JourneyMaintaining the relationship with the customer – Feedback:• Generate case study from pre and post assessment together with monitored performance into NRC Refurbishment Portal• Provide expanded database to be used by future customers EPC – report reference number