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More industry reactions to UK renewable heat incentive

Following yesterday’s announcement of the UK renewable heat incentive (RHI), comments from across the industry has been flooding in – most of them positive.

By Renewable Energy Focus staff

We have compiled some of the comments on yesterday’s renewable heat incentive announcement below:

BEAMA Domestic Heat and Pump Association

BEAMA welcomes the renewable heat incentive, but it calls for “’quick announcement’ of 2012 tariffs”.

The association says more clarity on the detail of eligibility and tariffs into the future is needed and that there is a question mark over the impact it will have on the domestic market short term.

BEAMA also expresses disappointment regarding the absence of commercial air to water heat pumps.

BEAMA Marketing Director Kelly Butler, says: “In principle, a Year One premium payment is an excellent theoretical bridge until the tariffs have been fully determined for domestic applications, but will customers see it as enough or will they need to know the tariff levels applicable from 2012?

“Anyone selling heat pumps now has to sell a premium payment (more or less the level of grants available until 2009) with an unspecified tariff return from 2012. The projected market in the coming year for heat pumps is around 20,000 installations and with Government planning to fund all technologies up to around 25,000 homes we need to keep a level head about what the market uptake will be. The industry needed a ‘game changer’ for domestic renewable heat and the setting of the tariffs from 2012 is now absolutely critical to pull customer demand.

“There must be no delay in setting, and communicating, the tariffs from 2012. The May target date to set domestic eligibility has to be achieved. We will be pushing hard for firm tariff levels to be set for the domestic sector by July 2011.”

He adds: “The October 2012 date is a crucial one and we are delighted with the signalled links to the Green Deal. Bringing together the RHI with adequate tariff levels and the Green Deal may just be the action required to achieve that ‘game change’. The new announcements will undoubtedly raise the profile for domestic renewable heat, and for heat pumps the focus on off gas customers is an important step.

“We particularly welcome the emphasis on energy efficiency limits for eligibility, and it is now up to industry and Government to quickly nail down the detail and build the market.”

CBI

Rhian Kelly, CBI Director for the Business Environment, says: “Our research shows that three quarters of people don’t consider energy efficiency when they buy a home, so the success of this scheme rests on simplicity and capturing the public’s imagination.

“The Government should also consider other cost-effective ways of reducing heat emissions, including through district heating schemes.”

Inenco

John Dodds, Head of Renewables at the energy and environment analyst Inenco, describes the announcement as a much-needed catalyst for the renewable heat sector.

“The changes will make many of these projects much more viable as an investment,” he says. “The grandfathering over 20 years will give investors the reassurance they’ve been looking for to embark on a renewables project, secure in the knowledge that the subsidy will now be available over the long term.

“However, it’s still disappointing to see that the RHI doesn’t encourage AD [anaerobic digestion] plants to recover more heat from their gas engines for local heating projects. Ironically, it will probably be more economical to provide the heat from an on-site boiler by burning biogas, whilst the ‘waste’ heat from the engine is vented to the atmosphere.”

Renewable Energy Foundation (REF)

The Renewable Energy Foundation (REF) says it welcomes the revised renewable heat incentive as “a major improvement on earlier versions published for consultation.”

Dr Lee Moroney, one of REF's Analysts, says: "The Government's emphasis on market learning, and on value for money, is a major improvement on previous designs, which were overly expensive and risk prone. There is now a real chance that public support in the overwhelmingly important heat sector will result in a future industry that is self-supporting not subsidy dependent."

Good Energy

Juliet Davenport, CEO of renewable energy supplier Good Energy, comments: “We are pleased to see that the policy announced […] applies to a wide range of technologies, and includes commercial and community as well as domestic schemes. However, we are concerned that the full scheme won’t start until October 2012, a lengthy gap which may spook potential investors, especially given the latest uncertainty around the feed-in-tariff.

“Successful delivery will be essential to providing the certainty required to encourage households and communities to invest. We are concerned that excluding agents from supporting RHI customers will increase the volume of enquiries Ofgem will face, which may result in delays and confusion similar to those currently experienced by feed-in tariff customers. Also, we don’t understand why Ofgem cannot pay customers monthly – which is in the best interests of consumers.”

Friends of the Earth

Sustainable Energy Advisor to Friends of the Earth Alan Simpson, adds: "An ambitious Renewable Heat Incentive will allow people to earn and save money by heating their homes and workplaces using clean energy.

"But there are serious concerns about the surge in the use of unsustainable biomass and incineration these proposals could encourage – the scheme must only promote genuinely green and sustainable sources of heat.

"Energy Minister Greg Barker has done well to resist pressure to delay the scheme for another year - this would have had a devastating effect on the renewable energy industry.

"The Government must now stop dithering over feed-in tariffs and kick-start the UK's green energy revolution – this will slash emissions and create tens of thousands of new jobs."

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Comments

Chris Moore said

16 March 2011
The policy still requires, in my view, some clarification - now that the tem "biogas" is to include gas from the thermal treatment of biomass, does this mean that ACT (pyrolysis and gasification) projects, which genrate syngas, with an output of more than 200kWth are not eligible? A large-scale biomass boiler + ST plant will, however, qualify - if this is the case, the government will be incentivising lower-efficiency generation technology and disincentivising projects which can convert waste derived fuels and biomass........

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