renewable heat technologies leads to challenges in creating robust estimates of the capacity being deployed (e.g. domestic wood use).
Total installed capacity of renewable heat is estimated to have reached c. 10GWin 2013, although approximately 5.9GWof this capacity was installed before 2010. Bioenergy technologies represent 90% of the capacity added between 2010-13, with the remaining capacity provided by heat pumps (5%) and solar thermal installations (5%).23 Capacity growth during 2013 was broadly consistent with historic technology splits.
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Figure 14: Cumulative deployment of renewable heat capacity and gap towards 2020 targets (GW)
FIGURE 15 CUMULATIVE DEPLOYMENT OF RENEWABLE HEAT CAPACITY AND GAP TOWARDS 2020 TARGETS (GW)
25 20 15 10.1 10 7.3 5 - 2010 2011 2012
Investors generally shy away from construction risk The report discusses the challenges faced by developers seeking an investor willing to assume construction risk, a challenge which is exacerbated by the pace of technical innovation. The recommendation is for increased activity from key equity investors, such as the European Investment Bank (EIB) and Green Investment Bank (GIB) who can attract new equity investors into construction phase projects.
Conclusions
Although set within the context of progress towards cost savings, the findings of the CRMF provide insights into the current areas of challenge for investment in renewable energy: the upcoming policy (and potentially Government) changes are proving harmful to overall investor confidence, as is the lack of long term capacity targets, while an industry striving to reach a more competitive LCOE increases the overall risk profile to investors.
4. INVESTMENTS IN RENEWABLE HEAT New investment in renewable heat has in part been driven by the Renewable Heat Incentive (RHI), a Government scheme designed to incentivise investment in renewable and low carbon heating systems such as solar thermal panels, biomass boilers and ground- or air-source heat pumps. The scheme, which sees participants receive a support payment for each kilowatt hour of heat produced, was launched in 2011 for the non-domestic sector, including industry, businesses and public sector organisations, with roll-out of
www.r-e-a.net
23 DECC DUKES includes the following technologies in the category ‘Bioenergy’: landfill gas, sewage sludge digestions, domestic & industrial wood combustion animal biomass, anaerobic digestion, plant biomass and energy fromwaste.
This report is solely for the use and benefit of Renewable Energy Association and should not be relied upon by any other party. State of the renewable industry - Investments in renewable electricity, heat and transport PwC
a domestic scheme commencing in spring 2014. Since 2011, the domestic sector has been supported through the Renewable Heat Premium Payment (RHPP), which offered home-owners a one-off grant towards the costs of installing renewable heat systems in their home, but ended in March 2014 with the launch of the domestic RHI. There is currently limited available data on the state of the UK’s renewable heat sector. Unlike for renewable electricity, the UK Government does not currently publish data on the capacity of renewable heat deployment. However, it does publish data on renewable heat generation (the latest data are for 2013; data for 2014 will be published in July 2015). The deployment of the installed capacity of renewable heat in this report has therefore been estimated using the available data on renewable heat generation. The unmetered nature of some renewable heat technologies leads to challenges in creating robust estimates of the capacity being deployed (e.g. domestic wood use). Total installed capacity of renewable heat is estimated to have reached c. 10GW in 2013, although approximately 5.9GW of this capacity was installed before 2010. Bioenergy technologies represent 90% of the capacity added between 2010-13, with the remaining capacity provided by heat pumps (5%) and solar thermal installations (5%).23
Capacity
growth during 2013 was broadly consistent with historic technology splits. Unlike with renewable electricity
generation, DECC does not currently provide updated annual projections of potential deployment scenarios of renewable heat capacity through to 2020 and beyond. Projections of potential required capacity
2013 2020F
Unlike with renewable electricity generation, DECC does not currently provide updated annual projections of potential deployment scenarios of renewable heat capacity through to 2020 and beyond. Projections of potential required capacity additions have therefore been estimated by referring to the UK’s 2010 National
additions have therefore been estimated by referring to the UK’s 2010 National Renewable Energy Plan (“NREAP”).24
On
the basis of the data contained in the NREAP, it is estimated that an additional 10GW of renewable heat capacity would be required (from 2013 capacity) to meet NREAP’s forecasts of renewable heat generation in 2020.
4.1. Historical investment 2010-2013 Based on the deployment of additional heat capacity over the period 2010-13, estimated total investment across different renewable heat technologies is summarised in Figure 16. Over the period 2010 to 2013, c. £3.6bn has been invested in UK renewable heat capacity: £3bn in bioenergy heat, £360m in solar thermal and £260m in heat pumps.26 Investment during 2013 showed strong growth on 2012 figures, equalling those seen in 2011.
24
As already noted, some technologies present challenges to accurate data collection and analysis, domestic wood combustion being one of the areas DECC considers to be ‘notoriously difficult to assess’.27
2011
DECC data showed a drop in the domestic wood combustion heat energy consumed, as reported in DUKES (2011: 402 ktoe, 2010: 458ktoe). This fall in energy consumption has been reflected in nil capacity investment for the technology in 2011, causing the bioenergy sector to register low investment in 2011. Similarly, solar thermal deployment figures used in this report are based only on RHI applicable systems, excluding solar thermal systems used to heat swimming pools. The estimated size of this market is unknown.
7.8 8.6
Solar thermal Heatpumps Bioenergy
Gap towards 2020NREAP targets: c. 10GW
20.1 RENEWABLE ENERGY VIEW 2015
REview Renewable Energy View 2015 89
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