At last - some good news!

 

December 4, 2013
After weeks of unedifying politicking over energy prices and green subsidies, the government has shown that it can – once in a while – make a sensible decision about energy by reinforcing its support for the Renewable Heat Incentive (RHI).
The tinkering with ECO and the shambles that is the Green Deal prompted many of us to fear the worst when a review of the RHI was announced. Thankfully the government is expanding the non-domestic scheme to take in some more technologies and the domestic version will kick off in the Spring.
Currently just 2% of the UK’s heat is generated by renewables and uptake of the non-domestic RHI has been disappointing, since its introduction in 2011, something the government admitted in its response to the consultation.
‘We have seen strong uptake in certain renewable heat technologies and a 7% rise in renewable heat in 2012. However we have not, so far, seen the levels of uptake that were anticipated when the scheme was launched.
Expectations
‘Whilst applications of biomass installations smaller than 1MWth have exceeded our expectations, uptake for the other technologies offered support has been lower than was originally anticipated. Based on current applications we estimate the total heat generated in 2013/14 will be about 1.2 TWh. This is just over a third of what was originally expected.’
The improvements announced should drive up renewables share of the heat market to around 12% by 2020, according to the Department for Energy and Climate Change (DECC).
Including air-to-water heat pumps is a really welcome move and the 2.5p/kWh tariff should give that market the lift it has been looking for since all the bad publicity received earlier this year. This incentive is dependent on an installation achieving a minimum seasonal performance factor of at least 2.5, which is clearly doable and will provide a worthwhile energy saving.
Heat pumps clearly have a part to play and so does CHP, which is also getting increased support with an increased tariff for biomass and biogas systems.
In the domestic scheme, the government has confirmed the tariff for solar thermal at 19.2p/kWh, which should help to revitalise a good technology that fell back dramatically in the face of rapid PV expansion taking up much of the available roof tops.
However, the RHI remains far from perfect. One disappointment is that the industry’s call for a method of rewarding good system design has been ducked.
Underpinning
In our response to the consultation, B&ES called for minimum energy efficiency standards to be adopted as an underpinning requirement for RHI funding. That way only the most efficient systems would be supported. The current scheme, rather perversely, pays out less to the most efficient systems because they generate less heat.
In its response, DECC said: ‘Energy efficiency is at the heart of the Government’s approach…and Government plans over time to unlock this potential through existing policies, such as the RHI. However, we will not be introducing explicit energy efficiency criteria for non-domestic RHI applicants at this time.
‘The mixed views from consultation respondents made it clear that more work needs to be done to establish a range of effective, but not unduly burdensome energy efficiency measures that could be introduced.’
That means the industry has a bit more work to do on presenting the case for energy efficiency as the underpinning driver for all such schemes.
It is troubling that politicians and government officials continue to struggle with the concept of energy efficiency. They are far more comfortable with the idea of increasing generation of energy than using what we already have more efficiently. Hence their obvious confusion over how to support energy efficiency schemes like ECO and the Green Deal.
However, let’s not be churlish. We can return to that theme another day. Today is a day for welcoming a positive step in the right direction and the government showing it can think long-term, when it wants to.