RHI- Renewable Heat Incentive

An Ofgem Presentation – October 2011

Time To Re-think Your Heat Generation Choices?

Plan of work

• Renewable Heat Incentive (RHI) – what is it?• Levels of support provided by the RHI• Which technologies qualify?• What heat uses are eligible?• What you need to know to apply• How has the Guidance changed in the light of

consultation

What is the RHI?

• A world-first financial incentive to promote the generation ofrenewable heat

• £860m for RHI over four years confirmed in CSR• Scheme funded through taxation, not a levy• Payments made quarterly over 20 year period on basis of metered

heat generation (p/kWh)• 2011: non-domestics only, with domestics included from 2012• Estimated 1m participants by 2020• Due to go live by 30th November 2011• Ofgem responsible for administration – DECC responsible for

policy

Why do we need the RHI?

Which technologies will be supported?

• Solar thermal (below 200kWth)• Solid biomass, e.g. wood chip• Municipal Solid Waste• Biogas (below 200kWth)• Ground/water source heat pumps (not air)• Geothermal• Biomethane injection to the gas grid

The RHI tariff rates

Generation Technology Scale (installation capacity) RHI tariff payment/kWh (p)Biomass

– Small commercial (< 200kWth) 7.9/2.0p/kWh– Medium commercial (200kWth < 1MWth) 4.9/2.0p/kWh– Large commercial (>= 1MWth) 1.0p/kWh

Heat pumps/deep geothermal– Small commercial (< 100kWth) 4.5p/kWh– Large commercial (> 100kWth) 3.2p/kWh

Solar collectors < 200kWth 8.5p/kWhBiomethane and biogas combustion < 200kWth

6.8p/kWh

Eligibility criteria• Installed/first commissioned on or after 15 July 2009• Equipment new at time of installation• Grants not received for purchase/installation of equipment• Medium of heat transfer must be liquid or steam – i.e. no direct air

heating• No single domestics in 2011 (but RHPP may be an option)

• Definition of domestics: “single self contained premises used wholly ormainly as a private residential dwelling where the fabric of the

building has not been significantly adapted for non-residential use”• MCS or equivalent EN45011

• requirement under 45kWth for solid biomass, heat pumps, solar thermal

• Certification required for both the installer (at time of installation) and plant

Eligible heat uses• In a building for…

• Space heating, hot water or carrying out a process (notelectricity)

• Definition of building• “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”

• Examples in Guidance: tents vs portacabins, distillation columns vs uncovered tanks• Chemical Plant – Parliamentary debate

• NB: must not generate heat for predominant purpose of increasing payments

Metering requirements

• Every installation requires at least one meter

• Regulations specify whether classed as “simple” or “complex”

• Standards for meters

• Requirements on placement

• All installations required to submit a schematic diagram showing metering

Simple or Complex Metering?

• Do any of following apply?

- Heat delivered by steam

- CHP

- Heat used in more than one building

- Ineligible heat uses on heating system

Yes – one or more apply

• COMPLEX

• Need to meter all of:- Heat generated by eligible installation

- Total eligible use of heat on system

- Heat generated by all plants on heating system

No – none apply

• SIMPLE

• Only need to meter:

- Heat generated by eligible installation

Schematics need to show

• All plants providing heat, whether eligible or ineligible• All uses, both eligible and ineligible• The pipework connections between all plants and heat

uses• An indication of building boundaries and names/types• The positions of relevant hot water and steam meters

and their associated components• Labelled with a key

Independent Metering Report

• Needed for all installations over one MW and all complex systems over 45kW

• Must be produced by a ‘competent’ individual• Unbiased and impartial• With PI insurance of at least £1 million• No list as yet but HVCA looking to produce one – Others

are likely to become available• A report template has been produced and must be

followed

Competence requirements

• Experienced and suitably qualified– (HND or equivalent at least)

• Experience and expertise in flow measurement and heat/steam measurement systems– (demonstrated by training and development records)

• Relevant background– (involved in energy, utilities, building services, heating

system design, operation or maintenance)

Other documentation you may need to apply…

• Receipts and/or invoices relating to the installation of theequipment

• Commissioning certificate• Commissioning report• Photograph of the installation clearly showing the serial

number of the equipment• Evidence that any grant has been surrendered or repaid in

full• Copy of meter Class 2 Measuring Instruments Directive

(MID) certificate• Manufacturer’s technical specification for heat pump units

to support COP claims

Key Ongoing Obligations

• Maintenance of equipment• Submission of periodic data• Calibration of meters• Notification of any major changes• Keeping of records• Annual declaration• Compliance with any document audit / site

inspection request

Compliance and enforcement• One of Ofgem’s functions is to monitor and enforce compliance with

upfront and ongoing requirements

• They will audit

• In deciding whether to take enforcement action, they will take intoconsideration circumstances including:• Seriousness of the non-compliance and the duration• Whether the participant voluntarily reported the non-compliance• Reasons why the non-compliance occurred and any mitigating

circumstances• Whether there is a history of non-compliance by the participant• Whether the participant has gained financially through the non-

compliance• The conduct of the participant after the non-compliance has been

discovered

Accreditation and payment timeframe

• For most applications, they will aim to reach a decision onaccreditation within 20 working days (i.e. 4 weeks)

• For complicated applications, the Ofgem team may need to seek more input, and so they will aim to reach a decision on accreditationwithin 30 working days (i.e. 6 weeks)

• This does not include any time where the accreditationapplication is with the applicant (eg when they are waiting for aresponse to a request for further information)

• Ofgem intends to be able to pay participants within 20 to 30working days of receiving valid periodic data (i.e. 4-6 weeks)

How to apply

• Accreditation

• Key process to apply for scheme and determine eligibility

• Online applications for majority

How to apply

On-line application form

RHI draft Guidance Consultation

• 74 responses received from 56 companies, 15 industryassociations or industry networks, two individuals and one government department

• Overall well received by industry, as providing substantial detail for stakeholders on a significant new scheme

• Several key areas where stakeholders sought greater detail or clarification

• Revised Guidance will be published shortly after revisedRegulations laid in Parliament

Key areas of change1. Definition of ‘installation’ – they will include a table specifying

the items of plant that we will generally consider to form partof an ‘eligible installation’ per technology

2. Definition of ‘insignificant heat loss’ – they have developed their approach to this concession

3. Metering arrangements for complex systems – clarityprovided on a range of issues more examples in Guidance

4. Requirements for the Independent Metering Report –competency criteria revised and broader range of

installationsrequired to submit the report

TYFYA

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• GB4N!!!!!!!!!