Renewable heat incentive - the latest news
Posted by Howard Johns on 30 November 2010 at 1:05 pm
A policy document on the renewable heat incentive should be out by the end of the year. Room for negotiation around design and tariff levels is pretty much over and DECC will be seeking technical standards approval for the renewable heat incentive in January.
The good response to the consultation by industry means that some cost and other technical assumptions have changed (eg. efficiency of equipment and lifetimes) in calculating the tariffs.
The announced level of spend of £860m represents a 20% cut in the total level of subsidy and covers the period up to 2014/15. It was the result of lots of hard work on behalf of ministers and the DECC team, and is very pleasing considering the challenging fiscal climate.
The renewable heat incentive seeks to meet two key objectives: it is primarily designed to meet the renewables target (heat is to contribute roughly 73TWhs by 2020, which is around 12% of all heat), as well as making a significant contribution towards our carbon targets.
It is also very important that the public are supportive of the renewable heat incentive and there is a good level of consumer engagement.
Air source heat pumps (ASHP) – there will be a tariff for the domestic sector. Non-domestic air source heat pumps will not be included in 2011. Air to water and air to air heat pumps (which are difficult to meter) will not be included initially. Hopefully this will change in 2012 when the metering issue can be worked out – or a suitable deeming measure can be formulated.
Solar thermal – in terms of £/MWh this is the most expensive heat technology. However, DECC has pushed for solar thermal to be included. Now the questions are at what level and how many installations will be supported. Greg Barker is supportive of the technology being included.
Standards – the technologies will be governed by MCS (for below 45kW) or equivalent (which includes solar keymark). Deeming will be carried out through Energy Performance Certificates (EPC). MCS governing bodies are aware that there are limitations with SAP (the procedure for energy rating buildings), and this will need to be worked on. However, a review may not happen before the scheme launch. The EPC will have some extra information on insulation and renewable heat.
DECC is aware that solar thermal is not related to building efficiency and that the minimum required building envelope standards may not apply. Minimum building efficiency standards will apply before you can receive the RHI for heating technologies.
DECC will try to avoid a stop-start situation (for all technologies) in the management of what is a limited fund. It is considering how best to control costs across the funding period to ensure that they do not experience runaway costs for any technology. It may be that this will be a degression method similar to the feed-in tariff.
They are keen to give installations of a technology that generates both heating and hot water a 12% ROI – to cover the risk being taken by the householder in adopting the new technology. However, this decision will be taken by Ministers.
The regulations underpinning the scheme will have to be approved in both Houses of Parliament as well as Scotland before launch and the scheme will be managed by Ofgem E-Serve (the delivery arm of Ofgem).
So, there we go. Progress is being made, and we should know where it is going in time for Christmas. Marvellous! Announcements on the 24th perhaps......!
This report is based on a policy meeting the author had with DECC.
If you have a question about anything in the above blog, please ask it in the comments section below.
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