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The Coalition Government has after much delay published details of its Renewable Heat Incentive (RHI) and it offers significant benefits for high energy businesses, says sustainability and energy infrastructure planning consultancy Turley Associates.
The RHI details were announced on 10 March in a consultation document and sets out a number of measures to encourage the businesses and home owners to adopt more sustainable ways of generating heat.
Colin Morrison, head of sustainability at Turley Associates, said: “The RHI is a world first and will apply to England, Scotland and Wales. It essentially guarantees financial incentives over a 20 year period for the generation of renewable heat, helping bridge the financial gap between the higher initial costs of the technology against the benefits in terms of a reduction on fossil fuel use. With heating estimated to account for 47 per cent of total UK energy consumption the RHI is an important part of the Government’s strategy to reduce our total CO2 emissions.
“The document launched earlier this month is positioned as a consultation, but with it closing for comments on 5 April and, following Parliamentary approval, operational by July, it can be assumed this is pretty close to the final scheme.”
The RHI is being introduced in two phases. Phase one is geared towards the large heat users, such as industry and the public sector, particularly schools, hospitals and charities. Phase one also sees the introduction of a £15 million fund to provide grants to home owners willing to install and monitor the performance of renewable heating technology. Phase two, which will come into effect in 2012, provides the long-term support to the domestic sector.
Colin adds: “It is clear that by targeting these sectors first the Government hopes to achieve the greatest value for money in terms of carbon saving.
“Industries that can generate heat from production waste, such as brewers, or those who generate biogas from food waste, such as supermarkets and food producers, could see significant benefits.
“Phase one will also support community heating systems, although notably not gas fired combined heat and power (CHP) schemes. This should help stimulate community anaerobic digestion and biomass heating schemes. Heat converted to cooling will also be supported.”
The Government has earmarked £860 million under the RHI between 2011 and 2014, with a total of £5.4 billion to 2020.
“This scheme has some serious financial backing from the Government, but its longer term strategy is that by helping to stimulate market demand for renewable heating it will create economies of scale and the cost of these technologies will fall,” said Colin.
Colin concludes: “The RHI is likely to lead to an increase in demand for locally sourced biomass. Questions will no doubt be asked where the biomass fuel is coming from although the RHI policy includes for measures to ensure that it is sourced sustainably and ethically.”