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Boom and Bust?
The UK Pellet Boiler Market
European Pellet Conference
Wels, 25 February 2016
Neil Harrison

Scheme
Aspect
Bioenergy
Capital
Grant
Scheme
Low Carbon
Building
Programme
Phase 1
Low Carbon
Building
Programme
Phase 2
Scottish
Biomass
Support
Scheme
Scottish
Biomass
Heat
Scheme
Wood
Energy
Business
Scheme 1
Wood
Energy
Business
Scheme 2
Dates 2002-2011 2006-2010 2007-2010 2006-2008 2008-2010 2004-2008 2009-2013
Total Budget €66,3m €143m €11,7m €3,2m €13m €22,1m
For Bio-heat €4,9m €4,2m €6,5m* & ** €3,2m €13m** €0.8m***
Format
Framework
then “random
rounds”
Capped
monthly
rounds
Rolling programme Rounds Rounds Rolling Rolling
Bio-heat
Schemes
c. 350 752 55 64 90 c. 33
Availability UK-wide UK-wide Scotland Scotland Wales Wales
Funder
BERR/Defra
& Lottery
DECC
Scot. Exec./
FCS & EU
Scot.
Govt./ FCS
& EU
Welsh Assy.
& EU
Welsh Assy.
& EU
* Balance unallocated because of tight time constraints on applications from EU funding.
** Portion of funds also available for supply chain and soft support, but primarily boilers.
*** Arrival of RHI meant large underspend, but portion allocated to supply chain and soft support.
S U P P O R T M E C H A N I S M S P R E - R E N E W A B L E H E A T I N C E N T I V E
C a p i t a l G r a n t P r o g r a m m e s 2 0 0 2 - 2 0 1 3

Number of identified woodfuel heating installations in England by
2011 : 2,372*
Number of identified woodfuel heating installations in Scotland
2010 : c. 230**
Number of identified woodfuel heating installations in Wales by
2012 : <200 (estimate)
* FORESTRY COMMISSION BIOMASS ENERGY CENTRE, 2011
** FORESTRY COMMISSION SCOTLAND, 2010
Almost impossible to gauge exact spend on supporting biomass
heat between 2000 and 2011, but figure is at least €35m
W h e r e W e r e W e B y 2 0 1 1 ?

UK had seen cycles of grant aid, creating a “boom and bust” industry,
without the confidence to invest, or ability to grow and
professionalise;
11 years of public funding failed to create a coherent and properly
integrated biomass heat sector;
Public sector projects in particular had a history of poor performance
or total failure - confidence in the technology low;
Lack of information collation and transfer, little (if any) learning
from experience, and no sharing of knowledge between companies
or even government departments.
W h e r e W e r e W e B y 2 0 1 1 ?

Pre-RHI, the UK was (and still is) an immature market for biomass heat;
A world first, the non-domestic RHI went live in November 2011, domestic RHI
followed in April 2014;
Pays a fixed subsidy per kWh of heat produced for a 20 year period (7 for
domestic), to anyone installing eligible renewable heat equipment;
Supports solid biomass, biogas, deep geothermal, GSHP, EfW, solar thermal,
biomethane injection, ASHP, biomass CHP, on-site biogas combustion and
commercial and industrial waste combustion;
Budget to 31 March 2016 is €1.1bn, and €1.56bn from 1 April 2016 to 31
March 2021.
S U P P O R T M E C H A N I S M S - T H E R E N E W A B L E H E A T I N C E N T I V E
W h a t i s t h e R e n e w a b l e H e a t I n c e n t i v e ?

Non-Domestic RHI has delivered 2,016MW of installed biomass capacity to date,
most of which is classed as new;
95% of all RHI-registered installations are biomass boilers;
B I O M A S S H E A T U N D E R T H E R H I
N o n - D o m e s t i c R H I U p t a k e t o D a t e
Non-Domestic RHI is banded – 1-199kW “Small Biomass”, 200-999kW “Medium
Biomass” and >1,000kW “Large Biomass”;
93% of all biomass installations are <200kW in size;
The busiest month for registrations was December 2014, with 2,179
applications, while the quietest full month was December 2011.

Uptake of RHI is shows biomass boilers in the lead by a HUGE margin.
Technology
Biogas
Solid Biomass
Deep Geothermal
GSHP
Solar Thermal
WSHP
Biomethane
Solid Biomass CHP
ASHP
Waste
# England
56
9,109
0
329
166
29
32
7
114
0
# Scotland
7
2,476
0
38
22
2
5
1
5
0
# Wales
1
1,277
0
28
18
2
1
1
3
0
Total
64
12,862
0
395
206
33
38
9
122
0
15:1 ratio biomass : all other technologies combined.
OFGEM RHI INSTALLATIONS REPORT, 10 FEB 2016
N o n - D o m e s t i c R H I U p t a k e t o D a t e

WHA Freedom of Information Request, September 2015
N o n - D o m e s t i c I n s t a l l a t i o n s a n d C a p a c i t y

N o n - D o m e s t i c I n s t a l l a t i o n s a n d C a p a c i t y < 1 9 9 k W

N o n - D o m e s t i c I n s t a l l a t i o n s a n d C a p a c i t y 2 0 0 - 9 9 9 k W

N o n - D o m e s t i c I n s t a l l a t i o n s a n d C a p a c i t y < 1 9 9 k W

N o n - D o m e s t i c I n s t a l l a t i o n P r o f i l e M o n t h o n M o n t h
DECC RHI Quarterly Statistical Release, December 2015

0
2
4
6
8
10
12
Nov-11 Apr-12 Apr-13 Jul-13 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Mar-16
CENTS/KWH
SMALL BIOMASS Tier 1 SMALL BIOMASS Tier 2
N o n - D o m e s t i c R H I D e g r e s s i o n s t o D a t e
5% ↓
Predicted
11.33 Eur Cents/kWh
4.6 Eur Cents/kWh

€ -
€ 0.10
€ 0.20
€ 0.30
€ 0.40
€ 0.50
€ 0.60
€ 0.70
€ 0.80
€ 0.90
€ 1.00
H e a t i n g O i l P r i c e
ENPlus Pellets
Premium Chip
Standard Chip
Other Fuels

W h a t M i g h t t h e F u t u r e H o l d ?
Northern Ireland RHI closed earlier this month due to overspend
against budgets. UK introducing a budget cap in 2016;
UK RHI review consultation due imminently;
RHI secure through to 2021, but government wants “better
value for money”;
Considered highly likely that adjustments to the
RHI will favour larger equipment to deliver more
carbon savings per £ spent.
Virtually no uptake of biomass at large industrial
scale - arguably where it’s best suited;
Strong direction in policy terms towards
electrification of heat in the UK;

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