U.K. Incentive Scheme Entices Smaller Renewable Energy Plants to Develop CHP Capability

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Researched by Industrial Info Resources Europe (Galway, Ireland)--The Renewable Heat Incentive Scheme (RHI), which was announced by the U.K.'s Department for Energy and Climate Change (DECC) on March 10, 2011, details further incentives for renewable energy production, as part of an effort by the government to reach its legally binding target of generating 15% of energy from renewable sources by 2020.

The RHI will be implemented in phases, with the first being introduced in July 2011 and the second following in 2012. The first phase will introduce long-term tariff support for the non-domestic sector, with incentive payments made quarterly over a 20-year period. The non-domestic sector covers the industrial commercial sector, the public sector, not-for-profit organisations, and communities.

The RHI will support a range of technologies and fuel uses, and only will support technologies that are considered renewable under Europe's Renewable Heat Directive. It will support installations across England, Wales and Scotland. Phase I of the RHI scheme will include biomass, solar thermal, heat-pumps, on-site biogas, deep geothermal, energy from waste, and the injection of biomethane into the gas grid. However, the RHI scheme will not support the co-firing of biomass with fossil fuel; exhaust air heat pumps; transpired solar thermal panels (unglazed ambient heat collection units mounted in building walls); and fossil fuel-fired CHP or waste heat from fossil fuels.

In order to qualify for support under the RHI scheme, heat produced by installations must be usable and useful. DECC has indicated a number of principles covering what will be deemed useful, including heat used for "space, water or process heating, where the heat is used in fully enclosed structures." Certain uses of renewable heat have been specifically excluded from the RHI, including heat used for electricity generation.

Industrial Info Resources Europe is tracking more than 80 renewable CHP projects that are under development in the U.K. Many of these plants, such as the 4-MW Stillington Biomass CHP and 4.7-MW Binn Farm Waste-to-Energy plants, are designed to function as CHP, despite having no contracts with heat or steam host clients, in the hope that they can sell the waste heat and available RHI incentives in the future.

CHP installations of more than 5 MW that are benefitting from the renewable obligation (RO) heat uplift are not eligible for RHI support and will not be able to switch from RO to RHI. However, the two schemes will be considered during the 2013 RO Branding Review. CHPs that are less than 5 MW and are availing of the feed-in-tariff scheme are eligible to avail of the RHI tariffs for heat production from renewable sources.

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