CLA East Woodfuel Event

30th October 2013

The Renewable Heat

Incentive for Biomass

Heating

Tom Beeley,

CLA Renewable Energy Adviser

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

RHI Progress to date – July

2013

As of July 2013 there were 1789 accreditations to the

RHI 93% of which were biomass

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

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/e-

serve/RHI/howtoapply/Documents1/RHI_Guidance_Doc

ument_Vol_One.pdf

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”

Biomass Tariffs

Tariff

name

Eligible

technology

Eligible

sizes

Tariff level (p/kWh)

from 01/07/13

Small

biomass

Solid biomass

including solid

biomass

contained in

municipal solid

waste (incl.

CHP)

Less than

200 kWth

8.6

(tier 1)

2.2

(tier 2)

Medium

biomass

200 kWth

and above;

less than

1,000 kWth

5.0

(tier 1)

2.1

(tier 2)

Large

biomass

1,000 kWth

and above1.0

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

Fuel Cost Savings

Fuel p/kWh (after

boiler efficiency)

Cost to supply

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

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

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

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

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

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

Tariff degression

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

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

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

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

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