UK introduces changes to renewable heat scheme

By Erin Voegele | February 28, 2013

The U.K. Department of Energy and Climate Change has released a long-term plan, aimed at ensuring the government’s renewable heat scheme for commercial, industrial and community organizations stays within budget.

The scheme, knows as the Renewable Heat Incentive, was launched in the non-domestic sector in November 2011. The goal is to help the U.K. cut carbon while meeting its legally binding renewables targets. According to the DECC, the non-domestic RHI scheme supports heat from sources defined as renewable under the E.U.’s Renewable Energy Directive. This includes biomass boilers, combined-heat-and-power (CHP) biomass boilers, biomethane and biogas, ground source heat pumps, water source heat pumps, deep geothermal heat pumps, and all solar thermal collectors.

Since the program’s launch in the non-domestic sector, more than 1,300 applications have been received, with approximately £24 million ($36 million) in RHI payments expected to be paid out in 2013.

According to the DECC, there is a fixed annual budget for the RHI, and it is essential to ensure the scheme remains financially sustainable. As a result, the department said it intends to introduce a digression-based approach, which will involve tariffs available to new applicants being gradually reduced if uptake of the eligible technologies is greater than forecast. As a result, uptake will be monitored on a quarterly basis against a series of triggers, with monthly updates published online. According to the DECC, one month’s notice will be given before any reductions to the tariffs are made.

The DECC’s announcement also noted sustainability requirements will be introduced for all existing and new installations that take in solid biomass as a feedstock. Starting April 2014, biomass installations will be required to demonstrate, through either reporting or sourcing form an approved supplier, that their biomass meets greenhouse gas emissions limit targets in order to be eligible for the RHI. Air quality requirements will also be put in place, applying to new installations only.

“I am fully committed to ensuring our Renewable Heat Incentive helps as many organizations as possible get on board with a range of exciting sources of renewable heat, and at the same time stays within its means. That’s why we are introducing a new, flexible way to control spending, alongside some further improvements to the scheme,” said Energy and Climate Change Minister Greg Barker.

The government response to the non-domestic consultation is available on the DECC website.