Renewable Heat Incentive – have you considered the benefits?

Have you considered the benefits of the Renewable Heat Incentive?

Renewable heat is an emerging area, and it is important that we make the most of the opportunities that it provides for reducing energy bills and carbon emissions.

The Renewable Heat Incentive (RHI) was launched by the Department of Energy and Climate Change (DECC) in November 2011 to provide financial support for renewable heat technologies. It is similar to the Feed in Tariff (FiT) for renewable electricity, and pays a premium for every kWh of useful renewable heat generated. Administered by Ofgem, it is the first payment scheme of its kind in the world for renewable heat, and perhaps because of its novelty it is has been a little slower to take off than FiT schemes. But with good design and planning it can be very beneficial to those organisations considering replacing heating equipment with renewable energy technologies. So what are the issues for the Renewable Heat Incentive?

Technologies that are eligible include biomass boilers, ground source heat pumps, solar thermal and biogas (except landfill). The price paid for each kWh of heat varies depending on technology and size of installation, but ranges from 1 p/kWh for large biomass to 8.9 p/kWh for solar thermal. Full details can be found on the Ofgem website . The important fact is that payment is made against metered heat. This means that all installations must have correctly installed heat meters located such that they only record eligible heat supply, and eligible loads (for example outdoor swimming pools, and system parasitic loads are not allowed). Where systems have a mix of renewable and fossil fuel heat sources, and may have ineligible loads, this can lead to a need for multiple heat meter arrangements, and clearly defined reporting methods.

It has become apparent in the early stages of the scheme that heat metering is presenting a significant challenge to installations being accredited for RHI payments. Poor design and installation of heat meters is largely a result of lack of experience with the technologies – the UK has rarely used heat meters for billing purposes – and it has become clear that better guidance is needed for all parties (designers, specifiers, installers and owners) to ensure good quality assured data is passed to Ofgem. Sites can be audited and inspected to ensure heat metering is fully fit for purpose, and the potential for fraud is minimised.

TEAM is assisting the Building and Engineering Services Association (B&ES) to produce a general guide on the application of heat metering for the RHI, to be published in July 2012. This guide will supplement existing guidance from Ofgem about metering strategies for simple and complex installation arrangements. It is worth noting that definitions of eligibility, system complexity and levels of heat metering may evolve over time as experience under the scheme improves. DECC is keen to simplify the scheme so as not to overly burden owners with costly metering. However, it must balance this with a need to avoid fraud, and protect the tax payer from paying for wasted heat.

At the time of writing (June 2012) across England, Scotland and Wales there were 88 biomass schemes, 8 ground and water source heat pumps, and 1 solar thermal system accredited for RHI – a total of around 45 MW of installed capacity. Ofgem published regular updates on the numbers of accreditations, complete with heat generated and amount of payments made.

In order to get the most from a renewable heat technology, and maximise the benefits under the RHI, it is important to ensure the system is appropriately selected and designed for the particular application. Some technologies may be complementary to each other (for example heat pumps and solar thermal), but others may conflict (for example solar thermal and biomass CHP), which requires careful consideration at the design stage. It is also essential that the owners of systems fully understand how they work and what their maintenance requirements are. The need for heat meters for the Renewable Heat Incentive can greatly help with ensuring systems are well maintained and are operating correctly. Rather than simply using the meters to send quarterly readings to Ofgem, it is possible to use them to set up on-going performance monitoring that can show if the system output drops below expectations. Given that renewable energy technologies are expensive, it makes sense to ensure you get maximum returns from any RHI payments, and to provide real carbon reductions from your site. Renewable heat is an emerging area, and it is important that we make the most of the opportunities that it provides for reducing energy bills and carbon emissions.

TEAM can help in all aspects of renewable energy technologies, from feasibility studies, system design and heat metering strategies, through to full measurement and verification of system performance. Find out more here.

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