News analysis Funding cuts
in just one part of the system.’ Ingram is now calling for a
complete reassessment of the roles of heat sources and heat emitters. However, the Heat Pump Association (HPA) has written to Energy and Climate Change Secretary Chris Huhne, expressing its disappointment at the closure of the LCBP. It describes the programme as providing an early stimulus to industries in the process of establishing credible alternatives to fossil fuel heating systems. Dimplex, a manufacturer of
energy efficient heating products, also describes the LCBP as key to developing the UK’s fledgling renewables industry. It
The LCBP provided upfront costs whereas feed-in tariffs only provide an income once the capital has been invested – Sam Archer, AECOM
says the programme helped to create demand for sustainable technologies such as heat pumps. Now it fears the sudden cancellation will lead to ‘market paralysis and ultimately to job losses in a sector which is widely viewed to be instrumental in reaching the UK’s demanding carbon emission reduction targets’. Sam Archer, associate director
at multi-disciplinary consultancy AECOM, questioned where the funding will now come from to buy and install micro-generation equipment. ‘The LCBP provided
Roll-call of schemes From LCBP to FiTs to RHIs
Low Carbon Buildings Programme (LCBP): A grant scheme that encouraged the uptake of low carbon buildings technology in the UK, and developing the assembly, supplier and installer base, especially for electrical micro-generation. It was closed to new applications as part of the coalition government’s first round of cuts on May 24, and because of the introduction of FiTs. During its operation it: • provided about 20,000 grants • produced lifetime carbon savings of 300,000 tonnes of CO2.
Feed-in Tariffs (FiTs) Provide cashback in return for the generation of clean energy. The scheme guarantees a minimum
upfront capital costs whereas FiTs only provide an income once the capital has been invested,’ he said. ‘Commercial projects are almost
never interested in lifecycle costs, and public projects only pay lip service to them, so it has to be questioned where the capital will come from to fund schemes.’ There is also mounting concern
about the RHI not yet being officially confirmed, he added: ‘It is now very unclear how heat technologies will be incentivised once the LCBP is withdrawn. No guarantee has been given either that the RHI will be retrospective (for projects funded this year) even if it is introduced.’ But John Alker, director of policy
and communications at the UK Green Building Council, believes that industry shouldn’t get the move out of perspective, although
payment for all electricity generated by the system. It covers the following electricity-generating technologies, up to an installation size of 5MW: • Solar electricity (PV) (roof mounted or stand alone)
• Wind turbine (building mounted or free standing)
• Hydroelectricity • Anaerobic digestion • Micro combined heat and power (mCHP) (limited to a pilot at this stage) greater than your monthly loan repayment (with a 25 year loan). The scheme operates three
benefits: • Generation tariff – a set rate paid by the energy supplier for each unit (or kWh) of electricity you generate;
he admits that manufacturers have a short-term issue in terms of demand until the RHI kicks in – something he thinks will go ahead. ‘No one is suggesting this is the
end of the renewable industry,’ he said. ‘This is just going to provide some short-term challenges. And it’s the FiTS and the RHI that are the key policies for providing that impetus to demand and level of certainty as these emerging industries gather in their FiTs over the next couple of years.’ A spokeswoman for DECC confirmed to the Journal that the RHI will still go ahead, but the detail of the policy is now in question following the change in government. A consultation on the issue closed earlier this year under the Labour administration. She said: ‘We know we have got
• Export tariff – you will receive a further 3p/kWh from your energy supplier for each unit you export back to the electricity grid; and
• Energy bill savings – you will be making savings on your electricity bills.
Renewable Heat Incentive (RHI) The idea for a renewable heat incentive was introduced under the previous Labour administration as a way of making renewable heat more affordable for people. It should also help government to reach up to 12% of the UK’s heat demand from renewable sources by 2020. A consultation ended in April, but the new coalition government hasn’t ruled out the possibility of holding another one.
Sources: Communities and Local Government/Energy and Climate Change departments; Energy Saving Trust
a target for renewable energy, we know we have got to have some renewable heat. The ministers are considering now about what that incentive might look like.’ The Journal asked DECC
whether this could lead to another consultation in the future, and the spokeswoman said it couldn’t be ruled out. DECC added that the LCBP
had not been ‘singled out’ for cost savings, and it was closed to new applications immediately to prevent a run on remaining funds. It said applications worth £63m due for payment in 2010-11 are not affected by the cuts, and where grant offer letters have been issued they will be processed to provide ‘continuity and continuing market development’. l
www.lowcarbonbuildings.org.uk
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July 2010 CIBSE Journal
21
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