REA FOCUS FEATURE
| Renewable Heat Incentive
The long and winding road
The Renewable Heat Incentive (RHI) isn’t perfect, but the renewable energy sector has plenty of growth potential and there are many ways in which the policy could be improved under the new government
S
ometimes it’s easy to get so lost in day-to-day concerns that you forget how far you’ve already come. Here we are with a Renewable Heat Incentive
(RHI) that is strongly stimulating the market and, at the same time, living with a complex bundle of hopes and fears of how it might change in future. But step back a few years and all the talk from REA members was of disappointment and stoic attempts to hang on in the hope that things would improve. It had been such a long road since 2008, when the REA led the campaign to get the legal powers for the RHI, with so many struggles and delays along the way. Last year, plenty of people doubted the domestic scheme would ever happen, even when the regulations had been approved by Parliament. We fielded plenty of press calls asking if this was going to be ‘another green deal’.
Cost control Since 2011 we’ve had several tariffs added, while existing tariffs have been increased, reduced or restructured. We have air quality rules for biomass boilers, and binding sustainability criteria for all bioenergy will finally be introduced in October 2015. We’ve also seen a cost control mechanism introduced, which reduces tariffs for technologies deploying faster than intended. Some technologies have done extremely
well. Biomass boilers have deployed strongly, particularly at the smaller scale, and have also flourished in the domestic RHI. Biomethane is the other big success, creating a thriving UK industry from scratch. This brings in the cost control mechanism, and the risk that tariffs will end up being cut too far. As we’ve seen elsewhere, the first thing everyone does when they think a cut is imminent is to
28 REview Renewable Energy View 2015
redouble their efforts to sell as much as they can as quickly as they can, and let tomorrow look after itself.
Other technologies have the opposite
problem – all other technologies combined make up less than five percent of the RHI. The most obvious under-performance here is with heat pumps, which the Department of Energy and Climate Change (DECC) has always anticipated would have a major role to play. There’s a real danger that this leads to taking sides and partisans of one technology talking the other down. On a bad day, the renewables industry can resemble Monty Python’s People’s Liberation Front of Judea. Perhaps this is part of the journey from being a maverick lifestyle choice to a mainstream one.
2020 targets Quite apart from the fact that we’re not going to impress anyone by squabbling amongst ourselves, whether it’s the media, politicians or our customers, there’s another pressing reason to make common cause - we’re going to need a major contribution from all the viable options in the years ahead. Based on March 2015 data, the UK has
furthest to go to hit its 2020 targets of any EU member state. We need a growth rate greater than 16 per cent across all renewables. As we report elsewhere, renewable electricity is on course, but transport has been deliberately neglected for six years and counting. On renewable heat, the government estimated we need around 12 per cent of heat in 2020 to be renewable. The most recent data available – 2013, admittedly – put us on 2.8 per cent. It bears repeating that, although people talk a lot about electricity (and sometimes
use the words ‘energy’ and ‘electricity’ interchangeably), the amount of energy involved in the power sector is far less than for heat. Heat accounts for just under half of both the UK’s energy demand and greenhouse gas emissions, so it’s pretty obvious we need to tackle it.
What next There’s a number of supporting measures that can and should be put in place now and in the longer term. Built environment policy has been a lot weaker than it should have been, and there’s a general need across the sectors to send a stronger, more consistent signal on carbon prices. For now though,
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