TRANSPORT AND ENVIRONMENT
Tom Vosper of Creative Environmental Networks praises the Government’s Renewable Heat Incentive.
O
n March 10, the Government in- troduced the first phase of the
Renewable Heat Incentive (RHI) scheme, worth £860m over the next three years, in an effort to increase the level of heat gen- erated from renewable energy sources.
Currently heat generated from renewable sources is about 1%; the UK’s 2020 renew- able energy target stipulates that 12% of the UK’s heat needs to be generated from renewable sources. Are we up to the chal- lenge?
The highest emitting sectors have been targeted primarily; these have been iden- tified as industry, business and the public sector, which collectively contribute 38% of the UK’s carbon emissions. However improvements here will not be achieved easily; not only is there an up-front capital investment required but an education pro- gramme too, to promote this step change and shift in culture.
It seems the Government has recognised this in the new tariffs, which deliver a higher rate of return than the Feed-In Tariffs scheme.
This RHI is good news for local authorities and local communities, as it not only offers a new funding stream, it also meets with other agenda items such as fuel poverty al- leviation and carbon reduction. However, planned public sector cuts may lead local authorities to hold off starting the plan- ning process; so who will be left to drive this change?
In an era where cost efficiencies dominate most boardroom strategy decisions, con- sultancy services are often ruled out as an expense. However, this is not always the best decision, as it is in fact often more straightforward to measure value from consultancy projects than it is through internal processes. It is easier to manage than it is to implement without expert knowledge and experience.
Therefore expert advice can help reduce risks, assess stock, and identify the most suitable type of renewable technologies,
as well as gaining an understanding of the tariff levels to ensure optimisation of in- vestment.
Creative Environmental Networks (CEN) has a long history of delivering detailed renewable heat appraisals for community and commercial clients as well as for hous- ing stock. In 2006 we conducted detailed biomass appraisals for 50 schools in Kent. In 2008 we studied Hampshire County Council’s building stock with a focus on their ‘Top 40 Carbon Emitters’ to see what the biomass and other renewable energy potential would be. In 2009 we replicated this approach in West Sussex. In each case, technical viability relied heavily upon as- sessing heat loads, space and access – key criteria for wood fuel systems. The finan- cial viability depended upon the age and efficiency of the boilers that needed replac- ing, the type of fuel to be displaced and the annual heat-load of the site.
Support has historically been in the form of grants and under this model, we gener- ally found that the financial case was fairly weak for all but the largest oil-using sites. Since the release of the RHI tariff levels a few weeks ago, CEN has updated its finan- cial assessment tools and, after re-analys- ing sites with RHI support, we find that far more sites are achieving economic viability than with grant support.
The structure of the tariffs means that boilers rated just below 200kW and 1MW achieve the best returns but a significant heat-load is still vital. The scheme in gen-
eral appears sensible and well thought through. The two tier approach, in par- ticular, is a good way of avoiding wasted heat. However, we worry that the large tariff band (200kW to 1,000kW is quite a jump), could lead to some boilers being significantly undersized as people target the higher payments.
CEN has developed a basic financial ap- praisal tool for biomass that is available free of charge to interested parties, but there is no replacement to having an ex- pert complete a full feasibility study con- sidering all technical, financial and legisla- tive issues. CEN has extensive experience completing renewable energy options ap- praisals and detailed feasibility studies for all technologies including biomass, heat pumps and solar-thermal.
Authorities wishing to improve their knowledge of biomass technology in par- ticular may be interested to know that the ‘London Biomass Guide’, written by CEN and published by the London Energy Partnership, is available for free on the LEP website.
For further information about CEN’s expe- rience delivering renewable heat projects, or to request a free copy of our biomass financial viability tool, see the contact de- tails below.
FOR MORE INFORMATION
Tom Vosper T: 020 8683 6661 E:
Tomvosper@cen.org.uk
public sector executive Mar/Apr 11 | 35
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