Non Domestic RHI: Biogas

17th June 2014

Overview

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General RHI

1. Key eligibility criteria

2. Eligible Heat Uses

3. Metering and payments

4. Ongoing obligations

5. Preliminary accreditation

6. Additional capacity

7. Degression

Biogas specific RHI

8. Key eligibility criteria

9. Determining capacity

10. Commissioning and CHP conversion

11. What comprises an installation

12. Heat provided to biogas production

13. Payment calculation – worked example

14. Sustainability

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Key Eligibility Criteria•Installed/first commissioned on or after:

–Biogas capacity <200kWth- 15 July 2009–Biogas capacity ≥200kWth- 4 December 2013

•Equipment new at time of installation

•Grant funding from a public body towards the eligible installation must be–Repaid to the grant making body, or–Value of grant funding is deducted from payments

• Medium of heat transfer must be liquid or steam - no direct air heating

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Eligible Heat Uses

• In a building– Space heating– Water heating– Carrying out a process

• Other than in a building– Commercial cleaning– Commercial drying

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Defining a building“any permanent or long-lasting building or structure of whatever kind and whether fixed or moveable which, except for doors and windows, is wholly enclosed on all sides with a roof or ceiling and walls”

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Typically includes:•Silos•Distillation columns•Anaerobic digesters

Typically excludes:•Tents•Polytunnels•Open sided barns or sheds

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Metering • Liquid or steam

• Meter standards – MID Conformity, Class 2 Accuracy

• Appropriately calibrated and installed

• Heat loss assessments

• Proxy measurements– (natural) gas and electricity– assumed 100% conversion to heat

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Payment =• Meters must positioned in order to determine the relevant

quantities:

– B - the kWhth of heat generated by that plant which is used for eligible purposes

– C - the heat in kWhth directed from the installation or delivered from any other source to the biogas production plant which produced the biogas combusted in the relevant quarterly period (other than heat contained in feedstock to produce biogas by anaerobic digestion).

)( CBA

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Periodic data and payments

• Installation capacity ≥1MWth - submit meter readings monthly

• Installation capacity <1MWth - submit meter readings quarterly

Periodic data:

•Heat output data•Supporting meter readings•Fuel data (depending on installation type)

Payments:

•Based on quarterly data•E.g. ‘date of accreditation’ on 1st July 2014,

– first payment for period 1st July – 1st Oct;

– Second for 1st Oct– 1st Jan...

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Ongoing Obligations• Feedstock records

– Anaerobic digestion: solid biomass, solid waste, liquid waste– Gasification or pyrolysis: solid biomass, waste

• Metering– Continuously operating, properly maintained, re-calibrated every 10

years– Supporting invoices, receipts, certificates.

• Must not generate heat for the predominant purpose of increasing payments.– Should supply a heat use that would otherwise be met by other means– Installations will be audited

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Preliminary accreditation• Available for all biogas installations not yet commissioned

• ‘In principle’ agreement giving assurance that, once built, full accreditation will be granted provided:

– The installation was built in line with the details originally submitted– No Regulatory changes have been made such that if the preliminary application had been made after

the regulatory changes, it would have been refused.

• Need to demonstrate genuine intent:– Planning permission,– Evidence showing planning permission is not required

• Does not guarantee tariff

Additional capacityAvailable to plant:•First commissioned after the date on which the original RHI installation was commissioned•Uses the same source of energy and technology•Forms part of the same heating system

Date of accreditation

Date first commissioned

Capacity Initial tariff New tariff Tariff lifetime

Biogas boiler 1 (original capacity)

1st June 2014 1st April 2014 150kW 7.5p/kWh (small biogas tariff as of 1st June 2014)

5.9p/kWh (medium biogas tariff as of 1st June 2014)

20 years from 1st June 2014

Biogas boiler 2 (additional capacity)

1st September 2014

1st August 2014 100kW 5.9p/kWh (medium biogas tariff as of 1st September 2014)

20 years from 1st September 2014

Date of accreditation

Date first commissioned

Capacity Initial tariff New tariff Tariff lifetime

Biogas boiler 1 (original capacity)

1st June 2014 1st April 2014 150kW 7.5p/kWh (small biogas tariff as of 1st June 2014)

7.5p/kWh (small biogas tariff as of 1st June 2014)

20 years from 1st June 2014

Biogas boiler 2 (additional capacity)

1st July 2015 1st May 2015 100kW 5.9p/kWh (medium biogas tariff as of 1st July 2014)

20 years from 1st July 2015

n.b. Illustrative purposes only, future tariffs may not be as shown

Additional capacity first commissioned within 12 months of original installation being commissioned

Additional capacity first commissioned more than 12 months after the original installation was commissioned

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DegressionDegression is a long term budget control mechanism where reductions can be applied to an individual tariff, or tariffs if certain financial triggers are met at each quarterly review period relating to:

• Overall spend on the scheme• Individual technology spend on the scheme

• Tariff reductions only impact new applicants or those participants installing additional capacity. Changes will be made to the calculation methodology.

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Biogas specific criteria• Tariff banding applies:

– Small installations (<200kW) will receive 7.5p/kWh. – Medium installations (200-599kW) will receive a tariff of 5.9p/kWh. – Large installations (600kW and above) will receive a tariff of 2.2p/kWh.

• Installations 200kW and above must be installed and first commissioned from 4th December 2013 to take advantage of this support

• The provisions and tariffs will apply to heat only installations as well as biogas CHP installations. CHPQA accreditation is not necessary.

• Installations over 200kWth will be able to apply for preliminary accreditation in the same way as existing biogas installations.

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Capacity

• Defined in Regulations as :“total installed peak heat output capacity of the plant”

• For CHP this relates to the total heat output of the equipment in the form of usable hot liquid or steam

– E.g. Installation comprised of a CHP engine with 150kW water jacket and 150kW exhaust flue heat exchanger would be considered 300kW.

• Where a water jacket is used for cooling of the engine, we would generally consider this to be included as part of capacity, unless we are satisfied that any heat associated with this water jacket could not be used on the heating system.

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Commissioning• Installations must be installed and first commissioned on or after:

– 15th July 2009 (for <200kW)– 4th December 2013 (for 200kW and above)

• CHP installations :– Where a plant converts from electricity only to CHP, we will take the conversion date to be the

commissioning date.• 15th July 2009 (for <200kW)• DECC have stated the policy intention is that first commissioning as a CHP system >200kW must

also be on or after 4th December 2013. The Regulations make reference to 2009 but please note this is a drafting error and will be corrected at the earliest opportunity.

– Plant cannot be considered ‘first commissioned as a CHP system’ if heat is already being recovered and used, e.g. to heat a digester.

• Combustion units:– A CHP installation can add a new ‘combustion unit’ to an existing system and receive support on heat

produced by the combustion unit. This is allowed even if the rest of the installation is ineligible. – Must be commissioned as part of a CHP system on or after 4th December 2013

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Combustion units

CHP Turbine

Fossil fuel plant

Fossil fuel plant

New biogas plant

Electricity

Heat Eligible plant

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Installation 2boundary

Installation 1 boundary

Anaerobic digester

Biogas Boiler 2

Eligible heat use

Biogas Boiler 1

Eligible heat use

Biogas CHP 1Eligible

heat use

Biogas CHP 2

Eligible heat use

Installation boundary

Anaerobic digester

Biogas Boiler 2

Biogas Boiler 1

Eligible heat use

Biogas Boiler 3

Eligible heat use

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Heat provided to biogas production plant

• Can be considered an eligible heat use

• Any heat demand prior to combustion that may result in an increase in potential heat output of a given installation will be considered as ‘heat provided to the biogas production plant’.

– Generally, this would include:• Thermal hydrolysis• Desulphurisation

– and exclude• Pasteurisation

– Will be assessed case-by-case

• In discussion with DECC regarding ‘apportioning’ of this heat.

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A -tariff

B - the kWhth of heat generated by that plant which is used for eligible purposes

C - the heat in kWhth directed from the installation or delivered from any other source to the biogas production plant which produced the biogas combusted in the relevant quarterly period (other than heat contained in feedstock to produce biogas by anaerobic digestion).

)( CBA

Anaerobic digester

Eligible heat use

Eligible heat use

Ineligible generation

Eligible generationHM5

HM1 HM2HM3 HM4

Eligible heat use/heat supplied to biogas production

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)( CBA

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1 HMHMHMHMHM

HM

5HMC

Anaerobic digester

Eligible heat use

Eligible heat use

Ineligible generation

Eligible generationHM5

HM1 HM2HM3 HM4

Eligible heat use/heat supplied to biogas production

Heat generated by eligible installationHeat generated by all plant x Heat used for eligible purposeB =

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Sustainability• Sustainability requirements are now due to take effect from Autumn 2014 and will apply to all participants (old and new) generating heat from biomass or biogas

• From Autumn 2014 participants will need to demonstrate that their fuel meets a greenhouse gas (GHG) lifecycle emissions savings (of 60% compared with the EU fossil heat average)

• Land criteria requirements are expected to be introduced by April 2015

• The Biomass Suppliers List is intended to be open for applications from biomass suppliers in Spring 2014

• Participants will be able to demonstrate compliance in one of three ways:- Self-reporting- Sourcing from a supplier registered on the Biomass Suppliers List (BSL) (or equivalent)- Register with the BSL (or equivalent) as a self-supplier (source woody biomass from their own estates)