Renewable Heat Incentive launch set for next Spring

Solar thermal is one of the most affordable renewable technologies and the Solar Trade Association is looking forward to boom time.

Details of the domestic Renewable Heat Incentive (RHI) and related tariff levels have been announced by the Department of Energy and Climate Change (DECC), but anticipated news about the future of the non-domestic RHI has been postponed.

The domestic RHI will launch next Spring. As has always been promised, anyone who has installed a system since 15 July 2009 can claim retrospectively, as long as they meet the Microgeneration Certification Scheme (MCS) standards that applied at the time of installation.

DECC has confirmed the tariff levels for all four eligible technologies. These will be:

• Flat plate and evacuated tube solar thermal panels: at least 19.2p/kWh


• Ground (and water) source heat pumps: 18.8p/kWh


• Air to water heat pumps : 7.3p/kWh


• Biomass-only boilers and biomass pellet stoves with back boilers: 12.2p/kWh.

Payments will be made on a quarterly basis over a period of seven years. Householders who have already received vouchers under the Renewable Heat Premium Payment scheme will be transferred to the RHI and have their value deducted from their RHI payments.

Applicants will need to complete a Green Deal assessment to reduce their energy demand to a certain level in order to qualify for the payments.

Private landlords and providers of social housing will be able to apply for a property or properties that they own (provided they own the heating system). The landlord will receive the RHI payments.

For Local Authorities who use Arm’s Length Managed Organisations (ALMOs) to manage their properties, the application must come from the owner of the heating system.

New build properties will not be eligible for the scheme. The Renewable Energy Association said this "reinforces the need for the government to set demanding carbon compliance standards in the 2013 revision of the Building Regulations Part L, due for imminent release by DCLG".

People will not be able to claim for more than one space heating renewable heating system in the same property, with the exception of installations of solar thermal and another eligible technology.

Climate change minister, Greg Barker, said: “Investing for the long term in new renewable heat technologies will mean cleaner energy and cheaper bills. So this package of measures is a big step forward in our drive to get innovative renewable heating kit in our homes.

“Householders can now invest in a range of exciting heating technologies knowing how much the tariff will be for different renewable heat technologies and benefit from the clean green heat produced. We are also sending a clear signal to industry that the coalition is 110% committed to boosting and sustaining growth in this sector.”

DECC gives an example of what an installer might receive, in the case of a biomass boiler which might cost, say, £8,000 to install. In a year, the estimated heat use could be around 15,000kWh, which, at a 12.2p/kWh tariff, would result in a payment of £1,830. This would mean it might pay for itself in around five years.

New installations of biomass systems will need to meet air quality standards in relation to particulate matter (PM) and oxides of nitrogen (NOx).

Ofgem will be responsible for administering the scheme when it launches.

The RHI is funded directly from Government spending and has been given annual budgets. There are worries that, as with the payments for Feed-in Tarriff PV systems, they might unexpectedly decrease in the future. DECC will make an announcement on this around the time of the launch.

The news was welcomed by trade body the Heating & Hotwater Industry Council, whose director, Roger Webb, said: “it gives the industry confidence to invest in renewable heating products helping to protect and create jobs. We would of course like the tariffs to be higher but we understand the difficulty of introducing a government funded scheme in the current economic climate," he added.

"We will also be urging DECC to monitor uptake and if necessary to increase tariffs if they are not driving up product sales.”

Stuart Elmes, Chair of the Solar Trade Association's solar thermal working group, called the announcement “a massive boost for the solar thermal market. The value of this incentive is on a whole new level, there’s nothing like it anywhere in the world. From now on people can install solar heating with confidence that their system will be able to join the RHI scheme, and knowing what their payments will be worth.”

Solar thermal is one of the most affordable renewable technologies for homeowners, with a typical system costing around £4,500. This includes the replacement of an old hot water cylinder with a well-insulated solar cylinder.

Solar thermal systems are relatively small and appropriate for partially shaded roofs or those with limited space. A typical system will provide over half the hot water needs of the average home.

Paul Barwell, Chief Executive of the STA, said: “This announcement today is a major success for the STA. Our team has worked very closely with DECC over an extended period in an effort to ensure that the benefits of solar thermal are adequately recognised in the domestic RHI.

"In particular we have helped to drive a deeming calculation based on true occupancy that better reflects hot water usage in the home. The exceptional technical expertise of Stuart Elmes has been invaluable to our efforts.”

Ground source heat pump manufacturer Kensa's Managing Director, and Chairman of the Ground Source Heat Pump Association, Simon Lomax, said that the "Domestic RHI announcement made today, three and a half years after the initial consultation, is disappointingly short on detail."

Tim Minett, chief executive of CPL Industries, a supplier of biomass systems and wood pellet distributor, said he was “surprised the Government is offering more for other technologies but still expect biomass systems will be the most popular by far.

"They are the easiest to retrofit to properties, simple to use and work in all weather conditions – a big factor in the UK – while 12.2p/kWh will cover the cost of installation, lower people’s fuel bills and provide regular income for years to come. What’s not to like about that? “The domestic RHI should be hugely popular as a fifth of the UK’s housing stock is not connected to the gas grid," but he added, "the chief stumbling block is lack of awareness among the public so what we desperately need now is for the Government to step up and promote the scheme vigorously.”

Brian Smithers, European Director, Rexel, agreed, adding: "it is also in the industry’s interest to drive awareness by educating consumers".

Non-domestic RHI decision postponement

At the same time as making the announcement about the domestic RHI, the Government said it was delaying a decision on expanding the non-domestic RHI scheme, which has been operating for over two years, until the autumn, a full year after the proposals were originally released in September 2012.

Industry response was to express disappointment. The Combined Heat and Power Association said the continuing lack of clarity and certainty is "unhelpful for the hundreds of millions of pounds of renewable heat projects currently under development".

Last year the CHP industry welcomed the proposals to expand the RHI scheme to include tailored support for heat produced from biomass and bioliquid CHP. The proposals highlighted recognition within Government that biomass CHP is the most optimal use for limited biomass resources.

Dr Tim Rotheray, Head of Policy and Communications at the CHPA said: "It is absolutely crucial that the Government now provide clarity and certainty. The Government’s proposals for a CHP-specific rate under the RHI is driving renewable heat projects around the country, and a clear, quick decision will help lock in these investments, lock in the jobs these investments will provide, and lock in our ability to meet our renewable heat targets with highly efficient renewable CHP.”

He did, however, welcome the boost to investor confidence given by the Government's decision, also just announced, to grandfather existing renewable CHP schemes from changes to its quality assurance programme.

The biofuel-industry trade body, the Renewable Energy Association, called the delay "disappointing", but welcomed the announcement on the domestic RHI.

The same response came from the Anaerobic Digestion and Biogas Association's chief executive, Charlotte Morton, who called it "very disappointing for AD developers and operators. Making good use of heat from AD plants makes sense for operators, and will help the government deliver renewable energy targets," she added.

"The (non-domestic) RHI is currently well below its projected budget and another delay will simply make it harder for our members to deliver the projects government wants to see.

"DECC could help resolve this by giving developers clarity over the eligibility date, which would allow projects to start generating and using renewable heat if they have commissioned their plant within a set period," she concluded.

Scandal of the unclaimed renewable heat grants

Only one solar thermal installation has so far been completed under the Renewable Heat Incentive.

Only half of the grants offered by Government to businesses and councils to install renewable heating schemes are being claimed.

One of the main reasons appears to be lack of publicity, but the grant conditions also are claimed to be too tight.

Under the Renewable Heat Incentive, businesses and public sector bodies can claim a subsidy for every unit of power generated from technologies such as solar water heating panels, biomass boilers and heat pumps, in the same way as can be claimed for renewable electricity under the feed-in tariff scheme.

The first tranche of the scheme, launched last year by the Department of Energy and Climate Change (DECC), was underspent by 50%: £5.5 million of the £10.8 million budget was unclaimed. According to Ofgem, just 176 schemes are receiving payment, a pitifully small number.

The second stage, worth £7 million was launched in March, and the latest figures show a total of only £817,250 claimed. The vast majority of these are for solid biomass boilers.

If this rate of uptake continues until the scheme closes in March 2013, just £3.9 million will be spent.

New figures, released yesterday, show that DECC's current estimated expenditure for 2012/13, based on the total number of RHI applications received to date, is £18 million. The cap on spending is £70 million. At this rate DECC estimates only £42 million will be spent.

As the figure is based on applications rather than fully accredited installations, the eventual figure is likely to be lower.

The Renewable Energy Association's head of policy, Paul Thompson, said the difficulty in giving away the grants is due to three factors, all decided by DECC: the time-limit, the lack of publicity, and the small amount of support on offer, which, he said was “not enough money to influence people's decisions".

He said: "You've got to have a bright idea that's pretty much developed to be in a position to be able to meet the deadlines".

He called upon DECC to use unspent funds to run a publicity campaign. The Department is currently deciding what to do with unspent funds from the social landlord's scheme.

DECC also launched an £8 million competition for community groups on 24 July, to install renewable heating. Grants up to £160,000 are available but applications must be in by 7 September, which is too early for some groups to manage. In addition, the completion schedule is tight: projects have to be completed by the end of the financial year.

EU targets dictate that 12% of the nation's heating needs to come from renewable sources by 2020, an increase of 2.2% on 2011 levels.

What is mystifying is the lack of installation of solar thermal. In the previous support system run by DECC, solar water heating was by far the most popular technology. It has proved to be very successful in this country, much more so than solar PV in terms of value for money.

In fact, renewable heat in general it is more cost-effective than renewable electricity, at a small scale.

Yet the Ofgem figures show that there has been just one solar thermal scheme supported under the RHI. The full figures are:

Technology Type	No of accredited installations / Registered biomethane producers	Installed Capacity (MW)
Biogas	1	0.113
Solid Biomass Boiler	162	6.02
Deep Geothermal	0	0.000
Ground Source Heat Pump (GSHP)	11	0.378
Municipal Solid Waste	0	0.000	Solar Thermal	1	0.008
Water Source Heat Pump (WSHP)	1	0.024
Bio-Methane	0	0.000

At the end of July DECC also published new regulations that introduce the stand-by mechanism for budget management to the RHI Scheme, part of the impact of which is to introduce an immediate change for biomethane producers who wish to register for the Scheme.

DECC's current consultation on the Renewable Heat Incentive long-term budget management has, as its preferred option, gradually reducing the tariff levels for new installations if deployment levels exceed forecasts.

On current trends, that is not likely to happen, and there could well be a third renewable heat underspend by the Department.

One would be forgiven for wondering if this is part of a deliberate pattern.

″All business should be green businesses″ says the Business Department

The head of a team at the Department for Business, Innovation & Skills, which leads Government work on how to develop the green economy, has said that "being green doesn't mean being anti-business, but pro-business".

Chris Pook, head of the new Green Economy Team at BIS, was addressing critics of Government policy who are concerned that the long term benefits of investment in the green economy are not worth the short term costs.

Speaking at the Low Carbon Communities for Future Growth conference at the QEII Centre in London today, Pook said that all business had a crucial role to play in the transition to a green economy, in developing jobs, skills and growth in environmental goods and services (EGS) and across the board.

Unusually, for nowadays, he quoted the Stern Review, commissioned by the Treasury under Gordon Brown but now archived on their web site, in which Nicholas Stern famously pronounced that the costs of doing nothing are far greater on the long term than investing now.

The Green Economy Team works with Local Enterprise Partnerships on low carbon/green innovation, green infrastructure, stimulation of supply chains and green low carbon clusters.

Over 80% of the 60,000+ companies identified as working in this sector are SMEs, and 30% are in manufacturing. BIS forecasts their growth rate as a staggering 45%.

"Sustainable growth is based on creating our energy and economic security," he said, "but the value of the environment is not often recognised by business or planning, meaning that we consume beyond the limits of resources."

The contradiction, he said, is that "a growing economy is the only way to secure the change".

But the impact will vary from sector to sector, and so "a strong sectoral perspective is required to understand how the impacts of investment fall across the economy".

There are some easy winners, and he quoted DECC's cost-benefit assessment MACC curve which shows, for example, that CERT, local travel and community energy saving are in this category but at the other end of the curve, the Renewable Heat Incentive (RHI), zero carbon homes and decarbonising car transport requires greater investment up front.

Under the Green Deal, for example, it will be the insulation and construction companies who will experience the greatest benefits, while the Energy Market Review and carbon price floor will help new renewable and nuclear generators, he said.

It is energy-intensive industries and tax and bill payers who have been complaining loudest about the cost of low carbon policy, but Pook said that the cost to them will still be less than the future cost of doing nothing at this point.

"In fact, the energy-intensive industries like steel and chemical sectors have a key role to play in the transition to a green economy, in, for example, providing the materials we need," he observed.

"If we were to source instead our raw materials abroad, it would result in a higher carbon footprint and it would be worse for the economy.

"The low carbon goods and services sector needs to capitalise on the growth opportunities presented."

BIS is fostering the Green Investment Bank and other government initiatives that will bolster the growth of the supply chain capability.

Pook said that BIS is talking to representatives of the different sectors and using economic levers such as the extra ￡1bn available under the Regional Growth Fund announced by the Deputy Prime Minister last week and the Catapult project to develop offshore renewables.

Pook acknowledged that setting out in greater clarity what materials and goods are to be required both from public procurement and as a result of legislation, helps industry to prepare for the future.

Green Deal

Also speaking at the conference, Phil Wynn Owen, Director General of International Climate Change and Energy Efficiency at the Department of Energy and Climate Change (DECC), said his department had been inundated with lobbying by manufacturers of energy efficiency equipment anxious to get on the approved list for funding under the Green Deal.

DECC officials are drawing up an eligibility list now.

Under the Green Deal, repayments of loans to investors ("like Kingfisher and supermarkets", Owen said) for energy efficiency work are "attached to the electricity meter" and must adhere to the 'Golden Rule'.

This rule is that costs of measures taken to save energy don't exceed the cost savings over time.

The worry is that the return on investment required will mean that many savings which ought to be made, won't be.

In response to questioning, Owen said that because of the Golden Rule, DECC "have to draw the line somewhere". which is tantamount to an admission that the eventual measures may not be up to what is required to limit carbon emissions and lift 2.5 million households out of fuel poverty.

Long payback measures like Solid Wall Insulation on hard-to-treat properties are intended to be covered and financed by the Energy Commitment Obligation, but the Association for the Conservation of Energy is convinced that this will leave thousands of homes missing out on measures that could reduce their bills.

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Fuel poor targeted by renewable heat trials

Social housing tenants across the country are to receive £4m in the start of a trial that will help prepare for next year's Renewable Heat Incentive (RHI).

The exercise involves installing sustainable heating systems such as biomass boilers, solar water heating panels, heat pumps (ground source, air-to-water and water-to-water), in solid walled properties managed by 24 social housing providers across Britain.

These types of properties are harder to heat and insulate than more modern, cavity-walled dwellings and are typically inhabited by those classified as living in fuel poverty.

The social landlords comprise the first winners to be announced under the £15m Renewable Heat Premium Payment (RHPP) scheme competition, which was launched in August.

Participants will each receive up to £175,000 in the form of the following support for each technology:
Solar thermal hot water: £300
Air source heat pump: £850
Ground source or water source heat pump: £1250
Biomass boiler: £950.

Most of the winners are in the south west; a total of 558. Scotland, which is of course a much colder part of the UK, gets just over 400 schemes, the south east about 370, the east of England 310, Wales 290, with London getting the lowest number, because it has proportionately fewer solid walled properties: 32.

Air source heat pumps will receive the most support; they are very easy to install. Solar thermal comes close second, followed by ground source heat pumps and biomass boilers, which are the heating source of choice north of the border.

Air source heat pumps are controversial since some experience has shown that poor installation and management can lead to minuscule or dubious fuel or carbon savings.

One householder has complained to BRE that his MCS-approved air source heat pump achieved savings of only 200 watts over a 24 hour period, because of the number of motors it uses.

The results of the monitoring are expected to clarify this, together with the cost-effectiveness of ground source heat pumps, which is reduced if a trench has to be specially dug for the installation.

They are more cost- and carbon-effective if a hole in the ground is already available due to other construction activity.

One of the conditions for taking part in the scheme is that, once installed, participants permit the measures to be monitored to gauge their effectiveness, to better design the full roll-out of the domestic RHI that is expected next autumn.

Currently half of the UK’s carbon emissions come from the energy used to generate heating in buildings.

The Government estimates that the total of the measures under the RHPP and the RHI (domestic and non-domestic) are going to save the equivalent of the power supplied and carbon emitted by two new gas power stations up to 2020; that is, an average of 4.4 million tonnes of carbon per year.

Energy and Climate Change Minister Greg Barker commented that the scheme "directly targets many of the people who could struggle to pay their heating bills in the winter. It will encourage an increase in the number of new heating technologies in social housing and help people deal with expensive fuel costs.”

Karen Lawrence, director of delivery for the Energy Saving Trust, said she was well aware of a great appetite for green technologies among social landlords, to "help tenants heat their homes more cheaply and efficiently".

"We also know councils and housing associations have become increasingly proactive and knowledgeable in the field of sustainability – and this was reflected in the standard of the bids for funding that were received," she added.

“Both this and the householder strand of the RHPP will also be great learning opportunities," she said. "Real data on performance in people’s homes is absolutely key in successfully boosting the market for renewable heat technologies.”

No doubt the Government also hopes it will help them avoid the costly and damaging mistakes associated with the mis-setting of the feed-in tariff levels for PV.

The vouchers are being issued on a first come first served basis. The scheme is still open to applicants, who can apply here or by phoning Energy Saving Trust on 0800 512 012.

RHI for businesses and organisations

Meanwhile, the non-domestic RHI will start at the end of this month.

It was originally scheduled to commence at the end of September, but required state aid approval. This has now been granted, subject to a small change in one tariff.

Businesses and organisations will be able to install sustainable heating systems and receive a favourable tariff for each unit of heating produced, over twenty years, in the same way that the feed-in tariff works for electricity.

This is expected to provide a huge boost to the heating industry.

The new rates are as follows:

Small biomass <200 kW: 7.6p/kWh (Tier 1) or 1.9p/kWh (Tier 2)
Medium biomass <1000 kW: 4.7p/kWh (Tier 1) or 1.9p/kWh (Tier 2)
Large biomass >1000 kW: 1p/kWh
Small ground-source heat pumps <100 kW: 4.3p/kWh
Large ground-source heat pumps >100 kW: 3p/kWh
Solar thermal <200 kW: 8.5p/kWh
Biomethane and biogas <200 kW: 6.5p/kWh.

No more PV subsidy for energy inefficient buildings - Barker

Greg Barker has told the domestic solar industry that all new domestic PV sites from April 2012 must meet minimum energy efficiency standards.

Speaking at the Solar Power UK conference yesterday in Birmingham to an audience of PV installers angry at the cut in Feed-in-Tariffs for PV that has thrown their business models onto the rubbish heap, he defended the cuts but then said that there will be "no more PV subsidy for energy inefficient buildings".

Barker admitted in his speech: "It cannot be right to encourage consumers to rush to install what are still expensive electricity generating systems in their homes before they have thoroughly explored all of the sensible options for reducing their energy consumption first".

This is an official acknowledgement that the Government's three key domestic energy policies have been implemented in the wrong order.
Since it is more economical to improve the energy efficiency of a property than to install generation capacity, the first policy should have been the Green Deal, followed by the Renewable Heat Incentive, then by the Feed-in-Tariffs for renewable electricity, a reversal of the actual order.
This is because renewable heat is more efficient and practical on the domestic scale in this country than renewable electricity.
Mr Barker drew back from announcing the widely expected cuts to the subsidies for PV electricity from 43p per kWh to around 20p per kWh, and refused to take questions from delegates, who fear that the cuts will kill their industry.

Instead, he told them that he expects the successful renewable energy companies of the future will be more like Energy Service Companies (ESCOs) in the sense that they will "diversify into new sectors and join the transformation of the energy efficiency market" with the same "gusto" as they have microgeneration.

ESCOs sell the service of energy supply, and so it is inherently in their interest to do so in the most efficient way in order to maximise profit and competitiveness.

Barker said that the forthcoming Comprehensive Review of the tariffs which DECC will soon hold, will seek ways to put FITs in the context of a "whole-house approach which prioritises energy efficiency and supports the right low-carbon heat and electricity technologies".

The consultation will also ask how business premises and non-domestic sites should be treated in the future.

Barker promised that the scheme will also be streamlined to make sure it works with the minimum of bureaucracy.

In an attempt at contrition, he did confess the need for "much greater coherence right across the green agenda" to synergise the Green Deal and energy efficiency measures, Feed in Tariffs for Microgeneration and the RHI.

He said he hopes to put an end to "stop start reviews". "We owe you that much," he told the sceptical PV industry representatives listening and thinking about their job security.

He said that the lower tariffs would mean "uptake" of the FITs "could continue to grow in a sustainable way" - sustainable to the Treasury budget, that is.

"The future of solar PV in the UK needs to be one based not on subsidy but on sound underlying economics," he explained.

Solar thermal

He therefore emphasised that he wants solar thermal water heating to have an important role.

In most parts of the country this can cut gas or electric water heating requirements by around 40% over the year, and so have a much bigger impact than solar electricity on bills and carbon reduction.

Barker said he is "keen to see a much greater integration of solar thermal and PV offerings in the marketplace – providing consumers with the best advice and the right technologies for their situation".

He also said that he will shortly be announcing support for 34 renewable heat projects from social housing providers, valued at over £4m, which represents "an increase of 33% on the original budget set aside for this competition".

Reclaiming the green agenda

Both Barker and Chris Huhne have been keen this week to try and undo the perception of damage to the Government's green image caused by George Osborne's recent pronouncements.

This subject was debated in the House of Commons yesterday, where MPs discussed a composite motion suggesting that most of the Government's avowedly green policies were failing.

These include the attempts to attract global investment in environmental technologies; the Waste Review, the planning regime changes, and the 27% cut in flood defence investment. It also called on the Government to "ensure mandatory carbon emissions reporting for all large UK companies to kick-start green jobs and growth".

Defra minister Richard Benyon hotly defended the Government's record against Labour and Green Party criticism.

Voting was split exactly on party lines with the 302 Tories and LibDems voting against and the remaining 222 voting for the motion.

New source of company advice

Outside of all this political jockeying, the Carbon Trust continues its steadfast work to make it as easy as possible for companies to save energy and money.

It latest wheeze, launched yesterday, is a new limited company, Carbon Trust Implementation, which will help UK companies reduce their energy costs and install greener, more efficient technology.

It is to provide independent, objective evaluation of the most effective energy efficiency and renewable energy technologies for a company; and help them choose "trusted, accredited suppliers" to carry out the work, as well as helping customers to run competitive tenders for their projects.

In order to make up for the cuts in public funding to the Trust, the service is funded by a flat rate commission from suppliers. This also means there is no cost to the company itself in obtaining this support.

Tom Delay, chief executive at the Carbon Trust said the new business "will help unlock £9 billion of investment into energy efficient equipment".

"We are confident that our new business will catalyse organisations to take action and in turn benefit from implementing cost effective energy efficiency and renewable energy projects and help the UK capitalise on green growth,” he said.

This is because it dovetails with the flexible Energy Efficiency Financing scheme that the Carbon Trust and Siemens Financial Services Ltd (SFS) launched in April 2011.

Huhne blasts critics of renewable energy as RHI gets go-ahead

Chris Huhne and Greg Barker on Monday reiterated the Government's commitment to renewable energy, highlighting especially how many jobs it is helping to create.

Energy Secretary Chris Huhne addressed the Renewable UK annual conference in Manchester, where WWF has launched a report which demonstrates how Britain could meet between 60 and 90% of its electricity demand from renewable sources by 2030.

And in London, Energy Minister Greg Barker announced that state aid approval has been granted by the European Commission for the Renewable Heat Incentive (RHI), enabling it to be launched for commercial purposes.

The E.C. had expressed concern that the large biomass tariff was set too high.

It has now been reduced from 2.7p per KWh to 1p per KWh.

Revised regulations have been re-laid in Parliament and it's hoped the scheme will be open to applications by the end of November 2011, subject to Parliamentary approval.

9,000 new jobs in one year

Chris Huhne, in his speech, countered critics of renewable energy (members of his audience will no doubt have their own ideas on whom he means) by saying that its technologies will deliver a third industrial revolution "every bit as profound as the first two".

“We are not going to save our economy by turning our back on renewable energy," he said.

“At a time when closures and cuts dominate the news cycle, next-generation industries are providing jobs and sinking capital into Britain."

He promised that the UK "will be the largest market in Europe for offshore wind” and highlighted the £1.7billion investment in renewable energy and over 9,000 jobs created just this year.

Wind developers need to get their act together

RenewableUK yesterday published figures at the conference showing that over the first half of this year onshore wind output was up 64% from 2.97TWh to 4.86TWh, whilst offshore rose even further, up 87% from 1.13TWh to 2.11TWh.

On 30th June 2011, 5,560MW of wind capacity was operational in the UK, with 3,615MW under construction.

A further 5,437MW was consented, awaiting construction, giving a grand total of 14,612MW consented, under construction or operational.

A further 9,084MW remain in the planning system awaiting determination.

This figure is slightly down from 9,174MW in the system at the end of 2010 and 9,299MW at the end of 2009.

But whereas consents for new wind capacity is rising, that for onshore wind has almost flatlined in the last four years due to problems at the planning stage.

Approvals for projects have reached an all-time low of 42%. English planning authorities are the most restrictive, approving only 26% of applications.

Developers have been their own worst enemies in many cases, the research shows, with holdups being caused by them not ensuring the project's commercial viability (17%), not selling projects (14%), objections due to interference with civil radar (14%), and grid connection problems (14%).

Problems with projects already operational and in construction include selling the projects after consent (26%), supply line issues with sourcing turbines (21%), intractable planning conditions (13%) and access route difficulties.

All of this points to developers needing to engage communities and do their homework better.

Offshore, the figures show that the UK may struggle to fulfil new orders in four years' time as the yearly growth in UK offshore wind farms is expected to double between 2015 and 2016.

Annual offshore wind deployment will rise to 1.2 gigawatts (GW) in 2012 and exceed 2.5 GW in 2016, after a forecast drop in activity in 2013-14 due to a lack of consented projects.

Bloomberg New Energy Finance’s analysis of offshore finance suggests that a further 3.67GW of offshore wind will be commissioned over 2012-15, requiring £13.6bn in investment.

WWF's six low carbon futures

The WWF report, prepared by GL Garrad Hassan (GL GH), portrays six potential future scenarios about the sourcing of the UK’s electricity in 2030.

They all achieve the near decarbonisation of the power sector without new nuclear power but differ according to the level of electricity demand and the use of different methods for ensuring system security.

In all cases, there would be ambitious increases in electric vehicles (EVs) and electric heating.

The more ambitious scenarios require more substantial energy efficiency and behavioural change to reduce demand.

WWF says that the core scenarios show that it is perfectly feasible to develop a stable and secure electricity system where renewables deliver at least 60% of the UK’s electricity demand by 2030.

This percentage is much higher than the 40% share suggested by the Government's Committee on Climate Change in its May 2011 Renewable Energy Review, which assumes the need for new nuclear power.

Gas, including the use of carbon capture and storage (CCS), and greater interconnection provide the rest of the UK’s electricity under these core scenarios.

Reducing demand further in the more ambitious scenarios would actually make the transition cheaper by cutting the capital costs of building new generation capacity by around £40bn by 2030.

The report was welcomed by Siemens, whose director for Business Development, Sustainability and Government Affairs, Michael Rolls, said it "highlights the need for strong stable policies to drive investment, stimulating the green economy and bringing skilled manufacturing, construction and service jobs to the UK.”

Gavin Neath, Unilever's senior vice president of Sustainability, also praised the report, saying that "reaching such a goal will not just be good for business but it will be absolutely essential if we are to retard the speed of accelerating climate change".

Renewable heat incentive rewards solar water heating but will increase air pollution

Chris Huhne has finally announced much-awaited details of the Renewable Heat Incentive (RHI) scheme.

It covers such technologies as solar water heating, using wood, wood pellets and woodchips, air and ground source heat pumps, energy from waste, on-site biogas, deep geothermal and injection of biomethane into the grid.

36% of the UK’s overall energy is used for heat, creating 175 million tonnes of carbon emissions a year.

The industry had originally hoped that the scheme would start at the same time as the Feed-In Tariffs for renewable electricity a year ago, then it was expected this April, but now payments won't be be available to households until October 2012.

The scheme has become a victim of government cuts and will be smaller in size than originally thought and introduced in phases.

Importantly, because of criticism of the potential impact on fuel bills, the RHI will not be funded by an RHI levy but from general Government spending.

As a result, it will be introduced in two phases. In phase 1, more than a quarter of the first year's budget, around £15 million, is to be guaranteed up to 25,000 household installations through a premium payment scheme.

Phase 1 will focus on people living off the gas grid, who typically spend more on their heating and whose fuels, like coal, have a higher carbon content.

Participants will then provide feedback on how the scheme works to help design the second phase.

In this phase, coinciding with the introduction of the Green Deal, the scheme will expand so that by 2020 there will be an estimated 13,000 installations in industry, 110,000 in the commercial and public sector supply 25% of this sector is demand, and creating 150,000 jobs.

Carbon savings and air pollution

It is hoped that the scheme will help deliver 44 million tonnes of carbon dioxide savings by 2020, though 8 million of these are already accounted for by the European Emissions Trading Scheme. Those emissions within the emissions trading scheme will cost £35/tCO2 and those outside the scheme a further £12 per tonne.

However, there are concerns about the impact on air quality of a lot of new biomass combustion, particularly from particulates such as PM10. The final RHI proposals could lead to 28TWh of biomass burned. and assessment by Defra of the proposals shows that this could lead to up to £2.6 billion of potential lifetime social cost.

This is a staggering amount.

The Tariffs

The highest tariffs will be paid to solar thermal water heating (8.5p/kWh) small biomass schemes (7.6p/kWh or 1.9p/kWh - see below why), and biomethane (6.5p/kWh). Small ground source heat pump schemes will receive 4.3p/kWh, and large schemes 3p/kWh.

Municipal solid waste schemes including Combined Heat and Power (CHP) will receive 4.7p/kWh or 1.9p/kWh, depending on which tier they are in, and large biomass schemes 2.6p/kWh.

Solar water heating was by far the most popular renewable energy technology under the previous renewable energy subsidy schemes like Clear Skies. It works very well in the UK and can supply between 40 and 50% of domestic hot water requirements, so it is good that it receives the most support.

Because of doubts about their efficiency air source heat pumps will not be eligible at the start of the RHI. Nor will heat pumps that deliver the heat to air as opposed to water. Some will consider this unfair, but it is to do with the difficulty of metering this kind of heat.

Heat meters will need to be installed at the point of generation and, where appropriate, at the point of usage in order to claim payments.

Bioliquids also will not be eligible from the start because of the complexity of the market and their uses in transport etc. They can also have a high energy density.

RHI support will only be available if the installation in question has not received (and will not receive) any other public funding.

The tariffs will be paid for 20 years to the eligible technologies that have been installed since July 15, 2009 with payments for each kilowatt of renewable heat produced.

Payments, which will be administered by Ofgem, are to be claimed by, and paid to, the owner of the heat installation or the producer.

These payments will be fixed for the lifetime of the scheme, once a measure is installed, adjusted in line with inflation. But the levels of support available for new entrants as time goes on may decrease.

Rewards linked to energy conservation

Following criticism that there might be no requirement that the building in question has an efficient fabric, by being introduced with the Green Deal, homes must be insulated to reduce demand, as with earlier schemes, such as the Low Carbon Building Programme, because everyone knows is more cost efficient to save energy than to generate it.

There has been a worry about what happens when some smart meters enter into the market. When buildings are metered on a half hourly basis energy the incentive will be to run your equipment as much as possible because the more your meter ticks over, the more money you make.

This has to some extent been met by introducing a two-tier tariff system for biomass boilers to reduce incentive to over-generate. Upon reaching a prescribed level of heat generation, the tariff drops to a lower tier 2 tariff. For solar thermal, once the equipment is installed, the amount of heat generated is not controlled by the owner.

The RHI has been a long time coming. There are many in the industry raring to get installing, and there is a huge potential market. But most will have to wait a good while yet before they can take advantage of the scheme.