Renewables
Karl Drage, director of business
development, Kensa Group
www.heatingandventilating.net
Future support for low carbon heat
Director of business development at the Kensa Group, Karl Drage, separates fact from fiction in the future plans for renewables heat schemes
T
he Domestic Renewable Heat Incentive (DRHI) scheme will finish in March 2022, having fallen short of its initial aims. The government has stated its ongoing support to facilitate change in the energy sector and, among a number of promised offerings, has shared proposals of a “Clean Heat Grant”, a scheme which it has stated will be available for two years beginning in April 2022. In two recent consultations with industry the Department for Business, Energy & Industrial Strategy (BEIS) has proposed a narrow range of options for low carbon heat support beyond the Renewable Heat Incentive and it is seeking views on its proposals in a consultation that is due to close on 7 July 2020. A follow-on scheme to the RHI is an opportunity to ensure that the transition to renewable heat is appropriate, cost effective and achieves the aims of getting closer to net zero across the building stock. Government led schemes, to date, have failed to make significant progress, and this is a critical time on the path to 2050. All stakeholders in the heat sector are looking towards the transition to low carbon, renewable heat which will entail the large-scale replacement of fossil fuel burning boilers by heat pumps powered by an electricity grid with a low carbon factor.
RHI finishing
The Renewable Heat Incentive (RHI) was originally due to finish on 31 March 2021. The Domestic RHI has been extended until 31 March 2022, to “provide for a smooth transition to future support schemes for low carbon heat.”
The Non Domestic RHI (NDRHI) has not been extended. An additional allocation
of Tariff Guarantees (TG3) has been opened up. Any applicant wishing to start or complete a heat pump project in excess of 100kW capacity that relies on the non- domestic RHI should secure a Tariff Guarantee for the project before 31 March 2021 next year. That would earn the applicant one extra year – until 31 March 2022 – in which to get the installation work completed. Payments are also capped, with no payments to be made beyond 2041. The application for Tariff Guarantees is lengthy, and there is a risk of further “degression” of tariffs on large heat pump installations beyond the 28% degressions already announced. This financial uncertainty does not work towards the Government’s intended aim. The majority of Social Housing projects applicable to the NDRHI are below the TG level of 100kW and are therefore not eligible for an extension to March 2022. The Government has therefore created a gap between the close of the NDRHI on 31March 2021 and any future scheme, of at least one year. A gap which is likely to be detrimental to the development of a steady flow of projects.
Government objectives
One third of the UK’s greenhouse gas emissions are generated by heating homes, businesses and industry. The UK government is legally bound to have zero emissions from buildings by 2050, which means we have 30 years to eliminate all emissions from heat within the built environment. The Government’s overriding
!" August 2020
www.heatingandventilating.net
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