The Renewable Heat Incentive for Woodfuelled Heating

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Presentation given at the CLA's Woodfuel Conference at Doddington Hall on Wednesday 30 October by Tom Beeley, CLA Renewable Energy Adviser.

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The Renewable Heat Incentive for Woodfuelled Heating

  1. 1. CLA East Woodfuel Event 30th October 2013 The Renewable Heat Incentive for Biomass Heating Tom Beeley, CLA Renewable Energy Adviser
  2. 2. What is the RHI? • Introduced in November 2011 • Supports use of heat from renewable energy sources - biomass, GSHP, solar thermal • Designed to overcome barriers to renewable heating • Aims to provide a 12% return on investment • Allocated budget of £860 million • Quarterly, index linked payments over 20 years based on metered heat • Administered by Ofgem
  3. 3. RHI Progress to date – July 2013 As of July 2013 there were 1789 accreditations to the RHI 93% of which were biomass
  4. 4. Who is eligible? • Any eligible system installed since 15th July 2009 • All non domestic buildings can qualify • Systems heating multiple buildings • Includes system heating multiple domestic buildings • Must use liquid or steam as heat delivery medium • Must not have received a grant • Applicants must be the owner of the installation • Installations under 45kWth need to be MCS certified
  5. 5. Eligibility in more detail “Installations serving a single private residential premises are currently not eligible for the RHI” Are premises considered “separate and self-contained premises for Council Tax banding purposes.”? Farm Offices? • Renewable Heat Incentive Guidance Volume One: Eligibility and how to apply http://www.ofgem.gov.uk/eserve/RHI/howtoapply/Documents1/RHI_Guidance_Doc ument_Vol_One.pdf
  6. 6. Eligible uses of heat Space Heating Hot Water in a building Carrying out a process (not electricity) Definition Of Building: “Permanent or long-lasting building or structure of whatever kind and whether fixed or moveable which, except for doors and windows is wholly enclosed on all sides with a roof or ceiling and walls”
  7. 7. Biomass Tariffs Tariff name Eligible technology Small biomass Medium biomass Large biomass Eligible sizes Less than 200 kWth Solid biomass including solid biomass contained in municipal solid waste (incl. CHP) Tariff level (p/kWh) from 01/07/13 8.6 (tier 1) 2.2 (tier 2) 5.0 (tier 1) 200 kWth and above; less than 1,000 kWth 1,000 kWth and above 2.1 (tier 2) 1.0
  8. 8. RHI for biomass Example: Boiler with an output of 150 kWth • Operates at peak load for 7 hours/day in winter and 3 hours/day in summer i.e. 1825 hours annually • Total Annual output therefore approx = 150 x 1825hrs = 273,750 kWth • Tier 1 Payments: 1314 hrs x 150kW = 197,100 kWth x 8.6p/kWth = £16,950 • Tier 2 Payments: 273,750kWth – 197,100kWth= 76,650 kWth x 2.2p/kWth = £1686 • Total RHI income = £18,636 per year
  9. 9. Fuel Cost Savings Fuel p/kWh (after Cost to supply boiler efficiency) 273,750 kWh Wood Chip 4.35 £11,908 Oil 6.85 £18,751 Kerosene 6.94 £18,998 LPG 8.08 £22,119 Pellets 6.8 £18,615 Logs 5.2 £14,235
  10. 10. Accreditation • Administered by Ofgem via RHI register Owner Creates account Enters information on heat use, metering arrangements etc on system Provide relevant supporting documentation Ofgem reviews application Ofgem requests additional information for owner Owner provides information as requested to Ofgem Ofgem accredits or rejects application providing detail of further ongoing obligations or reason for rejection Ongoing obligations fulfilled and RHI payments made quarterly
  11. 11. Metering Every installation requires at least one heat meter • Definition of “simple” or “complex” determines meter requirements • Standards – Heat meter must meet Class 2 Measuring Instruments Directive (MID) • Requirements on placement of meters • Schematic diagram showing meters required • Complex systems require Independent Report on Metering Requirements Extensive guidance available from Ofgem website
  12. 12. Metering- Simple or Complex? Do any of the following apply? Heat delivered by Steam CHP Heat used in more than one Ineligible heat uses on system building None apply – Simple and only need to meter heat generated Yes one or more apply. Complex installation need to: Meter all heat generated by eligible installation Total eligible use of heat Heat generated by all heating plant on system
  13. 13. Ongoing Obligations • Submission of periodic data • Maintenance of equipment • Calibration of meters • Notification of any major changes to installation or heating system – including ownership • Keeping of records • Annual declaration • Compliance with any document audit / site inspection request
  14. 14. Changes to the Scheme • Tariff degression introduced June 2013 • Sustainability criteria for non-waste biomass from April 2014 for new and existing installations • Air quality standards from 24th September Proposed changes • Introducing new technologies • Minimum Energy Efficiency standards • Review of tariffs for large scale biomass (and other technologies) – Tariff to be doubled
  15. 15. Tariff degression
  16. 16. Tariff Degression calculation • Tariff degression based on level of deployment • Looks at overall deployment, technology deployment & change in rate of deployment • If triggers points exceeded then tariff reduction will take place • Can be applied across the scheme as a whole or to individual technologies • So far degression of medium scale biomass only in July
  17. 17. Sustainability Criteria • Sustainability been an area of discussion • New requirements introduced from April 2014 • Apply to existing and new accreditations • Fuel will need to be supplied from an accredited member of Biomass supplier list • Includes self supply although process will be simplified • Accreditation process not yet set up so little detail available
  18. 18. Domestic RHI – Key points • Open for applications in spring 2014 –early application for existing systems • Owner-occupiers, Private landlords, Registered Providers of Social Housing, Self-builders, Third-party owners of a heating system and owners of systems installed since 15th July 2009 (legacy applicants) all included • MCS certified biomass boilers up to 45kWth • Minimum energy efficiency requirements will apply • Payments will be made quarterly in arrears for 7 years, based on deemed heat usage
  19. 19. Domestic RHI -Tariffs • Biomass tariff has been set at 12.2 p/kWh • RHI income based on deemed heat demand of your property from an EPC • By way of an example, a home with a heat demand of 15,000 kWh per year would receive £1,830 p.a. in payments if heated with a biomass boiler or £12,810 over the 7 years. • Renewable Heating Premium Payment (RHPP) currently available
  20. 20. RHI an opportunity for CLA members • Best opportunity for those off gas grid • Index linked income for 20 years • Reduced fuel costs • Carbon savings • Opportunity for landlords with tenanted properties, businesses and farms • Opportunity for woodland owners as wood fuel suppliers • Get in under the non domestic scheme if you can • Domestic customers to benefit in future

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