September 2010

DECC is hoping to make an announcement about the RHI in the Autumn!

Senior policy advisors in the renewables industry have claimed the Treasury is to blame for the hold-up on an announcement on the Renewable Heat Incentive (RHI), while it grapples with how the scheme will be financed.

Speaking to NewEnergyFocus.com, the former chair of the Renewable Energy Association (REA), the serving head of policy at the REA and the policy advisor at the Micropower Council cited issues over the proposed method of levying the scheme as the stumbling block.

The RHI was originally drafted by the former Labour government (see this NewEnergyFocus.com story), which proposed introducing a levy on fossil fuel suppliers who “supply fossil fuel to consumers for the purpose of generating heat”. This will be used to provide a financial incentive for those who generate renewable heat.

However, Philip Wolfe, former REA chair and current chair of Ownergy, and Paul Thompson, head of policy at the REA, both claim that implementing such a levy will not be as easy as it was for electricity suppliers in relation to the Feed-in Tariff (FiT).

According to Mr Thompson, the current legislation, which sets out the RHI proposals, was prepared at the last minute and, as such, was not properly thought through.

He said: “Government initially didn’t want the RHI, but it was too much trouble not to do so it changed its mind last minute and introduced amendments to make it happen and when you get things done last minute you are more likely to have stuff that isn’t as well thought out.”

On the implementation of a levy, he added that it would not be so easy to implement as there was a smaller number of fossil fuel heat suppliers compared to players in the electricity market, meaning less companies would have to cover the costs.

“The previous government ducked that decision, but the current government has got to get to a decision on how the money will be raised and figure out how it will answer the accusation that it is unfair.”

Mr Wolfe reaffirmed that the issue the government was “grappling” with was how it funds the scheme, claiming that it seemed broadly happy otherwise with the proposed model.

Mechanism

Explaining why the levy was causing such problems, he said: “In the case of FiTs, it was relatively easy to organise the levy of the electricity on the electricity users as they have that in place already with the Renewables Obligation (RO).

“What they didn’t think hard enough about at the time is you can’t readily do the same for other energy sources. The intention is the RHI would do the same but by raising a levy on fossil fuel supplies. The trouble is gas and heating oil is not sold to consumers as electricity is – there is not the same mechanism in place.”

The former chairman of the REA said that one way to improve the situation would be to levy the fund much higher up the chain, by doing it at the wholesale point rather than the retail point. However, the government would need to introduce new legislation to enable them to do that.

Cost reduction

The issue of the levy and how the RHI will be financed appears to be the primary reason for the delay in getting an announcement about the future of the scheme, however the renewables industry notes that once a scheme goes back to government, there is a danger that the whole thing could be reviewed.

The Micropower Council, which has been lobbying for the renewable heat subsidy scheme, suggests that one way in which the scheme could be changed is for it to be firstly targeted at the fuel poor to keep costs down.

Grace Bennett, policy manager at the Micropower Council, said: “It is a question of money and concerns within government about the nature of the original proposal to finance it through a levy on fuel bills.

“We accept there is not a great deal we can do about the costs without reducing the impact of the scheme, but it could be targeted firstly to those on lower incomes.”

She added that given the Treasury is looking to cut costs, there is always a risk of cuts being made to tariffs or eligible technologies, but she claimed it would be detrimental to the policy measure.

Efficiency

On this issue, both Mr Wolfe and Mr Thompson agreed that there was a risk of further changes being made to the RHI, but they added that the Department of Energy and Climate Change (DECC) “gets” the scheme and should hopefully only tinker with the tariffs rather than making any severe changes.

Mr Wolfe said: “There is a good chance they will stick with the RHI as planned but raise the funds by users of gas and heating oil higher up the chain.

“Once it has been held up there is no knowing what they might decide to tinker with but everyone seemed pretty happy with the design of it so I am hoping they won’t change it.”

Mr Thompson explained that the REA was not expecting drastic changes at this stage because the heat incentive was “pretty good value”. He explained that making the RHI less effective, for example by cutting eligible technologies, would be more expensive in the long run as you would have to “make it up from somewhere else to meet the targets”.

He added: “DECC really does get it. Some people will be worrying if this lack of an announcement means it is just dead, but they are very, very seriously working on it. The people involved are very committed, but the next couple of months will be crucial.”

Mr Thompson claimed one solution to the problem with the levy system could be that DECC introduces some kind of fix for the first year, by maybe doing it under general taxation or a one off levy on some of the larger energy companies, while it works on a longer term fix.

DECC

Commenting on the current position on the RHI, a spokeswoman from DECC provided the following statement: “The government is committed to increasing the amount of renewable heat in the UK; this is a crucial part of ensuring we meet our renewable targets, cutting carbon and ensuring energy security.

“We are currently looking at the Renewable Heat Incentive (RHI) proposals. We will look to make an announcement on the future of the proposed scheme as soon as possible, likely to be in the autumn.”

This was reaffirmed by the Treasury, which pointed to DECC’s Annual Energy Statement: “This government is fully committed to taking action on renewable heat. The government is considering responses to the Renewable Heat Incentive consultation and will set out detailed proposals on how to take forward action on renewable heat through the Spending Review.”

“Golden egg”

While there are clearly problems to be solved before the RHI can be put in place, the renewables industry has offered some insight into the cause of the hold-up and provided some reassurance that the government is seriously considering the scheme.

August 2010

Less than half of eligible UK firms register for CRC scheme

With only 50 days left to the deadline of the mandatory CRC Energy Efficiency Scheme, only 1229 of the estimated 4000 eligible UK companies have signed up to cut their carbon emissions.

New figures published today by the Environment Agency show that between them these organisations have reported over half of the electricity consumption expected to be included within the scheme.

Large businesses and public sector organisations have just 50 days left to register for the mandatory scheme and the Environment Agency is now expecting an increase in registrations as the remaining organisations rush to sign up before the September 30 deadline.

Early projections estimated a maximum of 5,000 organisations were obliged to make a full registration for the CRC scheme. Revised figures show that the number of organisations required to participate is between 3-4000, as many businesses that qualify for the CRC are owned by larger conglomerates, that incorporate multiple businesses.

Under CRC, more than 20,000 organisations have to register with the Environment Agency by the end of September this year. As well as the organisations that have to make a full registration, a further 15,000 lower energy users have to make an information disclosure.

Consultancy firm WSP Environment & Energy forecasts that, even with a late upsurge in registrations, around 7,500 of those 20,000 obligated businesses will miss the deadline. 1,500 of these will be full registrants.

David Symons, Director at WSP Environment & Energy, comments: "Despite the initial clamour around CRC, many companies remain unsure about the extent of their obligations, and our forecasts show that there will be a significant shortfall in registrations.

"Those businesses which are well-organised are finding that CRC registration is not a complicated exercise. However, our findings indicate that a lack of awareness and engagement among participants could prevent thousands of companies from complying with the scheme on time.

"The Environment Agency is committed to supporting companies who make an effort. But with fines of £5000 for missing the registration deadline, and further penalties of up to £500 per day, the costs of non-compliance could be significant."

Although M&C Energy Group, the UK’s largest energy consultancy, has criticised the progress made in connecting with CRC participants and questioned the government’s effectiveness in communicating impending deadlines.

The advisers warn that many UK businesses and public sector organisations are unaware of the obligations placed on them and are therefore in danger of failing to properly register by the deadline date.

Chris Davenport, Director, from M&C Energy Group, said: “UK Energy and Climate Change Minister, Greg Barker, has admitted that the complexity of the scheme may have deterred some organisations in registering. There is simply no ‘may’ about it. M&C Energy Group, which represents businesses consuming £4bn of energy, has seen first hand how this legislation is leaving businesses cold.

“The simple fact of the matter is that many organisations don’t know whether CRC applies to them and therefore run the risk of missing the deadline and incurring significant fines.

“Additionally many will not have established the full extent of their organisational structure, a requirement necessary for full compliance with the scheme as set out by the regulations, and therefore at risk of failing to collect the necessary energy data in time in order to accurately complete their registration."

“Unfortunately, due to the complex nature of the scheme, an organisation cannot predict with accuracy where they will be in the league table of all participating organisations. This unknown makes investment criteria for capital to spend on efficiency improvements, as well as budgeting for the cost of the scheme,extremely difficult.”

Mr Davenport added: “There is no doubt that some organisations are at a disadvantage, particularly those which have historically made strides to reduce energy consumption. M&C Energy Group’s expertise will help clarify what clients need to do to operate efficiently and within the law, as well as understanding the financial implications of this legislation.”

Tony Grayling, head of climate change and sustainable development at the Environment Agency said: “Around a third of organisations that we expect to register for the CRC scheme have registered well in advance of the deadline.

“We would urge the remaining businesses to sign up now, and not leave registration to the last minute. Our dedicated CRC helpdesk is available to help businesses through the registrations process.”

Greg Barker, Energy and Climate Change Minister, added: “This new Coalition Government wants to boost energy efficiency in business because we know that saving energy saves money. The CRC will encourage significant savings through greater energy efficiency and importantly will make carbon a boardroom issue for many large organisations.

“My message to businesses today is to register now. I understand the original complexity of the scheme may have deterred some organisations and I want to hear suggestions as to how we can make the scheme simpler in the future.”

The London Fire Brigade is one organisation that has registered for the CRC. Energy efficiency projects put in place by the Brigade have led to savings of £260,000 in 2009/10 and over £1 million since the Brigade started focusing on the need to be greener. Despite the organisation growing overall carbon emissions on their buildings are down by over 18% on 1990s levels.

Greg Barker visited Westminster Fire Station this month to meet fire fighters and see some of the measures recently installed to improve the station’s energy efficiency. Chairman and Leader of London Fire and Emergency Planning Authority Councillor Brian Coleman, said: “This isn’t just about protecting the environment, it makes excellent business sense. Last year we saved the taxpayer over a quarter of a million pounds by making our fire stations greener and reducing our energy bills.”

The CRC Energy Efficiency Scheme is administered across the UK by the Environment Agency. The scheme is regulated by the Environment Agency in England and Wales, the Northern Ireland Environment Agency in Northern Ireland, and the Scottish Environment Protection Agency in Scotland.

July 2010

Annual Energy Statement Delivered to Parliament by Energy Secretary Chris Huhne

Oral Statement to Parliament

The Secretary of State for Energy and Climate Change (Chris Huhne):

With permission, Mr Speaker, I wish to make a statement on energy policy. This statement and the departmental memorandum that I am placing in the Libraries of both Houses fulfils our commitment to present an annual energy statement to Parliament. In making this statement within three months of coming into office we are signalling the importance of this policy. We are setting out a clear strategy for creating the 21st-century energy system that this country urgently needs if we are to have affordable, secure and low-carbon energy in future.

We face short-term challenges as a result of the legacy inherited from the previous Government. We have the third lowest share of renewable energy of all 27 states in the European Union, which is the same ranking as in 1997. In the longer term, we must meet the challenges of a volatile oil market and increased energy imports. We are taking three big steps forward: we are creating a market for energy savings through the green deal; we are ensuring a properly functioning electricity market; and we will strengthen the carbon price.

Our actions must be informed by the best information about the future. That is why I am publishing our work on 2050 energy pathways, which has been worked up in consultation with industry, scientists, engineers and economists. We are making the data and analysis available and we are inviting comments over the summer. We want to start a grown-up debate about what a low-carbon future will look like and the best way of achieving it. These are possible pathways; we are not claiming to be able to see the future with certainty, but we cannot continue on the current pathway, which is high carbon and highly dependent on imports, with highly volatile prices.

Like the other industrial revolutions, the low-carbon revolution will be driven by entrepreneurs, the private sector, local communities, individuals, businesses, scientists and engineers-not by government. However, industry needs stable policy and functioning markets. The role of government is to provide the policy framework and to act as a catalyst for private sector investment. As the 2050 pathways work demonstrates, we need to apply those principles to the challenge of changing fundamentally the way we produce and consume energy.

The cheapest way of closing the gap between energy demand and supply is to cut energy use. We need to address the state of our buildings-we have some of the oldest housing stock in Europe. Our green deal will transform finance for improving the energy efficiency of Britain's homes. It will get its legal underpinning from measures in the first-Session energy Bill. We are also accelerating the roll-out of smart meters, which provide consumers and suppliers with the information to take control of their energy management. Alongside this statement, the Government and Ofgem are publishing a prospectus for smart meters, which sets out how we will do this.

Openness is important to us, as it is to business and the public. Alongside this statement, I am also publishing analysis of the impact of energy and climate change policies on both household and business energy bills up to 2020, and I will continue to do so on an annual basis.

At the moment, the UK economy is reliant on fossil fuels. As UK oil and gas production decline, this leaves us more exposed to volatile prices and increasing global competition for the resource. The challenge is to spur the capital investment required for new energy infrastructure. The volatility of fossil fuel prices and continuing uncertainty about the carbon price makes such investment high risk, pushing up costs and slowing development, so the first step is to support the carbon price.

In addition, I can announce that we are carrying out a comprehensive review of the electricity market and I will issue a consultation document in the autumn. This will include a review of the role of the independent regulator Ofgem. The Government will also put forward detailed proposals on the creation of a green investment bank. The coalition agreement is clear that new nuclear can go ahead so long as there is no public subsidy. The Government are committed to removing any unnecessary obstacles to investment in new nuclear power. In the memorandum, I have outlined some clear actions to aid this. As a result, I believe that new nuclear will play a part in meeting our energy needs. In the heating sector, I can confirm our strong commitment to action on renewable heat. The Government are considering responses to the renewable heat incentive consultation and will set out detailed options following the spending review.

The UK is blessed with a wealth of renewable energy resources, both onshore and offshore. We are committed to overcoming the real challenges in harnessing those resources. We will implement the connect-and-manage regime, and I am today giving the go-ahead to a transitional regime for offshore wind farms. Both those measures will help to speed up the connection of new generation to the grid. We remain committed to developing generation from marine energy, biomass and anaerobic digestion. Biomass investors that were promised help under the renewables obligation will continue to benefit.

We also need incentives for small-scale and community action. We are consulting on a new microgeneration strategy, and I am today laying an order to allow local authorities to sell renewable electricity to the grid.

Fossil fuels can also have their place in a low-carbon future, provided that we can capture and store most of their carbon emissions. We will introduce an emissions performance standard and we intend to launch a formal call for future carbon capture and storage demonstration projects by the end of the year.

This is a bold vision. We will not be able to deliver it without a 21st-century network that can support 21st-century infrastructure. The statement sets out practical measures that we are taking to improve network access and begin the building of a truly smart grid. However, the vision needs to be grounded in reality. The low-carbon economy must happen, but it will not happen tomorrow. There are potentially 20 billion barrels of oil equivalent remaining in the UK continental shelf, but we must maximise economic production while applying effective environmental and safety regulations. We are doubling the inspections of offshore oil and gas rigs, and we will undertake a full review of the oil and gas environmental regime.

We must also be mindful of our inherited responsibilities. My Department is responsible for managing the country's nuclear legacy. I am committed to ensuring that those essential duties are carried out with the utmost care and consideration for public safety.

The UK does not stand alone. The Government will work together with our international partners in efforts to promote action on climate change and energy security across the world. We are working hard to put Europe at the front of the race for low-carbon technology. This will help to refresh the appetite for action across the world after the disappointment of Copenhagen.

In conclusion, the statement is about planning ahead and providing clarity and confidence in the policy framework. That is why I am also publishing today my Department's structural reform plan to show how we are carrying out our priorities. Once we have completed the spending review, we will publish a full business plan. At last we can have an energy policy with real direction and purpose, and a Government who are willing to take the bold steps necessary. I commend the statement to the House.

-End-

June 2010

Closure of the Low Carbon Buildings Programme to new Applications

Effective from (06.00 am) Monday 24th May 2010

* Government has announced that it is committed to delivering £6bn of departmental spending cuts in 2010/11.

* The Department of Energy and Climate Change (DECC) is contributing £85m to this total. The sum reflects the fact that DECC operates with relatively small admin costs but still delivers against a big and challenging agenda.

* Cuts of this level are never going to be easy. They come from two sources:

* About half come from efficiencies and other savings across our central spending and that of our arm’s length bodies. We have focused on making efficiencies in our back office functions first but some efficiencies in our programmes of work are also possible. This will amount to approximately £42 million.

* The other half comes from cutting or slowing down planned expenditure. This will amount to approximately £43 million.

It is therefore with regret that we announce that as of 06.00 am Monday 24th May 2010, the Low Carbon Building Programme (LCBP) will close to all new applications.

Low Carbon Buildings Programme

How much has been ‘cut’ from the programme?

* £3 million of savings will be taken from the programme resulting in its immediate closure to new applications.

Why is the LCBP building programme being cut when we are hoping to encourage a low carbon economy?

* The LCBP programme has been successful in increasing the uptake of low carbon buildings technology in the UK and developing the assembly, supplier and installer base in the UK, especially for electrical Microgeneration.

* The LCBP grant programme has provided approximately 20,000 grants for the capital and installation costs of Microgeneration equipment of which, to date 11,000 have been for thermal technology (33% by value, 58% by number of installations). These have produced lifetime carbon savings of 300,000 tonnes of CO2.

* Support mechanisms, in the form of a Feed-In-Tariff for renewable electricity, introduced on 1 April 2010, means that LCBP is no longer required for electrical microgeneration.

* It was anticipated that support for the proposed Renewable Heat Incentive for heat under LCBP would continue up until its proposed introduction in April 2011 however demand for grants has been unprecedented and we had very little unallocated funding remaining. It has been decided that by closing the programme now, these unallocated funds will contribute towards DECC’s overall savings.

* Applications worth £63 million for payment in 2010-11 are not affected by the cuts and where grant offer letters have been issued they will be processed to provide continuity and continuing market development (investment, innovation and jobs).

* Applications that were received before the programme was closed and which are currently considered by our programme contractor BRE will also not be effected by the closure. If they pass the standard due diligence test applied to all applications they will be honoured.

Why has there been no notice that the LCBP programme will close?

* Since the election, Government have moved very quickly to identify necessary areas of savings in line with public announcements. LCBP has not been ‘singled out’ for cost savings, it is one of a number of areas where savings have been identified during a thorough review of expenditure.

* To make sure that savings could be maximised, it was decided that closure of LCBP (and other areas) should be made immediately to prevent a run on remaining funds.

* We appreciate that this is not ideal but our experience of offering a short period of notice prior to closure of LCBP to electrical Microgeneration in February 2010 indicated the extent to which resources could be quickly taken up.

I have a valid Grant Offer Letter – will that still be honoured?

* Yes, as long as the terms and conditions are adhered to, if you have a valid grant offer letter (GOL) LCBP will pay the agreed amount. The closure is for new applications only.

I have submitted an application for LCBP2 but not received a grant offer letter – will my application still be considered?

* Yes. Applications that were received before the programme was closed and which are currently considered by our programme contractor BRE will also not be affected by the closure. If they pass the standard due diligence test applied to all applications they will be honoured.

Are you now offering zero support for renewable heat until the Renewable Heat Incentive kicks in?

* Applications worth £63 million for payment in 2010-11 for installation of heating renewable heating technologies are not affected by the cuts and where grant offer letters have been issued they will be processed to provide continuity and continuing market development (investment, innovation and jobs).

* The Government is committed to meeting the UK’s share of the EU renewable target and to reducing carbon emissions to meet our 2050 targets. Both targets will require developing renewable heat and decarbonising the heating sector. The Government will be considering further the role that financial incentives can play in helping us to meet our renewable and carbon targets.

* The Government is also clear that decentralised energy including Microgeneration technologies have a role to play in meeting these targets.

May 2010

Under Labour’s manifesto, entitled A Green Future Fair For All, secretary of state for energy and climate change Ed Miliband pledged to create 5,000 apprenticeships in low carbon sectors and to support low carbon businesses through its planned £4 billion UK Finance for Growth fund.

He reaffirmed 15 per cent of UK energy would be from renewable sources, including local heat and power, by 2020.

Mr Miliband said Labour would insulate every loft and cavity wall where practical by 2015, ensure every home had a smart meter by 2020 and introduce Pay As You Save schemes for green energy measures at home.

Labour has also promised to push for 30 per cent cuts in EU emissions by 2020 and to shift the EU budget towards low carbon infrastructure and technology.

The Liberal Democrats proposals included a £3.1bn green economic stimulus package.

Leader Nick Clegg said the party would focus on insulation programmes and on boosting renewable energy industries, which also included plans for a major apprenticeship scheme.

April 2010

Vent-Axia prepares to enter the heat pump market

06 Apr 2010

 

Ventilation firm Vent-Axia is set to launch a heat pump division to compete in the renewables market.

From May this year, the firm will offer both ground source and air source heat pumps aimed at the domestic and light commercial markets.

Richard Paine, who has joined the new division as product marketing manager, said: “Against
the backdrop of tackling climate change and maintaining secure energy supplies, it is imperative that we embrace renewable energy technology as part of a solution to reduce the demand for fossil fuels and in turn reducing the levels of CO2 emitted in the UK.”

Previously, the firm has concentrated on its energy efficient ventilation products, but the firm hopes that its heat pump ranges will complement these and lead to increased specification of its products as part of a whole-house solution.

Cliff Arnold, who has spent the past five years in the renewables installation sector, has been appointed sales manager of the new division.

He said: “With the launch of the Renewable Heat Incentive in April 2011, renewables will become an increasingly attractive option for homeowners, specifiers and landlords.

Heat pumps in combination with low-carbon ventilation will make a valuable contribution to reducing the carbon produced by UK homes.”

See www.renewableinstaller.com for Vent-Axia Training Courses as they become available!

April 2010

Rhiannon Hoyle – H & V News www.hvnplus.co.uk

29 Mar 2010Tories give backing to RHI & MCS Accreditation

 Tories give backing to RHI & MCS Accreditation

The Tories have committed to the introduction of feed-in tariffs (MCS Accreditation) to promote small-scale renewables and the capture of waste heat in a move the industry says could have a “transformational effect” on combined heat and power technology.

The Conservatives made the commitment as part of a package of measures to tackle the UK energy crisis, outlined in their new policy paper entitled Rebuilding Security.

The long-awaited green paper, which has been billed as the biggest shake-up of energy policy in a generation, also proposed the introduction of a carbon floor price and a green infrastructure bank.

The proposed bank would consolidate the existing sources of public investment, such as the
Carbon Trust and the Marine Renewables Deployment Fund, within a single institution.

Shadow energy and climate change secretary Greg Clark claimed it would provide a clearer focus for prospective investors as to where to go for help, as well as leverage in external investment, and would ensure that public funds deployed are focused and efficiently managed.

But energy and climate change secretary Ed Miliband described the Tory policy as “simplistic and not thought through”. “Their muchtouted ‘green’ bank would be the first bank ever to be set up without any new money in it,” he claimed.

Chancellor Alistair Darling this week announced Labour would set up a similar fund, which  would control an initial £2 billion worth of equity. The bank would be half-funded by public sector asset sales, including the Channel Tunnel rail link, with the remaining cash to be put forward by private investors.

Mr Darling added: “The fund will focus first on investing in green transport and sustainable energy, in particular offshore wind power, where Britain is already the world
leader.”

Meanwhile the Tories have also pointed to decentralised energy – including CHP, waste heat capture, biomass, biogas, geothermal and microgeneration technologies – as potentially making an increased contribution to Britain’s production of both electricity and heat.

Mr Clark said: “We are committed to the introduction of feed-in tariffs to promote small-scale renewables and the capture of waste heat.

“We will give local councils the power to identify areas that would be suitable for district energy schemes – such as those adjacent to heat-generating industrial facilities – and allow them to use the planning framework to promote integrated district heating schemes
for those areas.”

Combined Heat and Power Association director Graham Meeks described the green paper as “a
progressive and pragmatic agenda, which we could work with if the Conservatives come to power”.

He said: “The Conservative’s specific commitment to use a feed-in tariff to promote the capture of waste heat could have a transformational effect for CHP and is very welcome.
“The proposals to create a Green Investment Bank could also be instrumental in driving development of integrated district heating infrastructure.

“Taken together these two policy strands are likely to deliver substantial cost, efficiency and environmental benefits for the UK.”

For further information on MCS Accreditation for Installers & The Renewable Heat Incentive (RHI)/ Feed in Tariffs please see www.mcsaccredited.com

April 2010

* Feed-in tariff for small scale low carbon electricity finalised for 1 April introduction

* Power from solar panel could earn £900, on top of £140 reduction on household energy bill

* Blueprint published for world first incentive scheme for renewable heat

* Tariff levels index linked

* Micro combined heat and power piloted in the scheme to kickstart the industry in the UK

Households and communities who install generating technologies such as small wind turbines and solar panels will from April be entitled to claim payments for the low carbon electricity they produce.

Energy and Climate Change Secretary Ed Miliband today announced the feed-in tariff (FITs) levels and also published a blueprint for a similar scheme to be introduced in April 2011 to incentivise low carbon heating technologies. The renewable heat incentive (RHI) will be a world first.

The schemes are designed to bring about a significant increase in the amount of locally produced green energy, as a contribution to the wider shift of the energy mix to low carbon.

From 1 April 2010 householders and communities who install low carbon electricity technology such as solar photovoltaic (pv) panels and wind turbines up to 5 megawatts will be paid for the electricity they generate, even if they use it themselves. The level of payment depends on the technology and is linked to inflation.

They will get a further payment for any electricity they feed into the grid. These payments will be in addition to benefiting from reduced bills as they reduce the need to buy electricity. The scheme will also apply to installations commissioned since July 2008 when the policy was announced.

A typical 2.5kW well sited solar pv installation could offer a homeowner a reward of up to £900 and save them £140 a year on their electricity bill.

Mr Miliband was speaking as he visited low income homes in Dagenham being helped by eaga’s Clean Energy for Social Housing project to make the move to microgeneration. The scheme offers free clean energy technology to tenants in social housing which will lower their electricity bills and carbon emissions. 

The Department of Energy and Climate Change also published today plans for a scheme to incentivise renewable heat generation at all scales. This will come into effect in April 2011 and guarantee payments for those who install technologies such as ground source heat pumps, biomass boilers and air source heat pumps.

Under the proposed tariffs the installation of a ground source heat pump in an average semi-detached house with adequate insulation levels could be rewarded with £1,000 a year and lead to savings of £200 per year if used instead of heating oil.

The heat incentive could help thousands of consumers who are off the gas network lower their fuel bills and gain a cash reward for greening their heating supply.

Details of funding for the scheme will be published in the Budget 2010. 

Notes for editors

Tariff levels for different technologies:

The tariff levels for the electricity financial incentives (pence), calculated to offer between 5-8% return on initial investment in the technology are:

 

 *NB This tariff is available only for 30,000 microCHP installations. A review will take place when 12,000 units have been installed.

Tariff levels for Renewable Heat Incentives

 Ofgem will administer the feed-in tariff scheme and suppliers will be responsible to paying the reward to their customers.

 The renewable heat incentive will start operating in April 2011. Ofgem will be responsible for making payments direct to large heat generators.

Householders and communities can apply for the feed-in tariff from their electricity supplier from April 2010. 

Current figures for renewables: 

The UK currently gets around 5.5% of electricity from renewable sources and that will need to increase to around 30% to meet the 15% 2020 target for all energy.

Modelling show that small scale renewable installations could meet 2% of electricity demand in 2020.

The UK currently gets less than 1% of heat from renewable sources. This this will need to rise to around 12% in order to meet the 15% 2020 target for all energy.

The eaga project:

The eaga Clean Energy for Social Housing programme attracts funding from private sector investors, who will receive a return from the feed-in tariff element. There is no cost to the tenant and no investment required from the social landlord.

March 2010

New information on selling extra renewable electricity from www.sellmyelectricity.co.uk

  

 

The UK's only website dedicated to selling your surplus renewable electricity back to the grid. Our price comparison guide offers a quick and easy way to find the best tariff and the right supplier for you. Extensive industry research has revealed much confusion over export tariffs. We aim to unravel this and provide you with the information you need to find and switch suppliers, as well as the ins and outs of generating your own electricity.

February 2010

Below is the announcement from the The Renewables Financial Incentives Team - Department of Energy and Climate Change

Today sees the launch of a Consultation on the Renewable Heat Incentive (RHI) and the publication of the Government's response to the Feed-in Tariff (FIT) section of the summer 2009 consultation on Renewable Electricity Financial Incentives (REFI).  Links to these documents are listed below.

The UK Renewable Energy Strategy (RES), published in July 2009, set out a path towards achieving the UK's target of sourcing 15% of overall energy consumption from renewable sources by 2020.  The lead scenario set out in the RES suggests that over 30% of our electricity (including 2% from small scale generation) and 12% of heat demand could come from renewable sources. 

The RHI scheme will be the first of its kind for renewable heating anywhere in the world and we intend to implement this by April 2011. This consultation sets out our proposals on the design and operation of the scheme, including the proposed tariff levels, and seeks views on different aspects, such as:

* Accessing the RHI;

* Eligibility;

* Tariff setting;

* Reviews; and

* Interaction with other policies.

We consulted on the FITs as part of a wider consultation on the REFI in Summer of 2009 and intend to implement this scheme by April 2010. The Government's Response sets out our final decisions on the FITs scheme design including eligibility, tariff levels, registration and getting paid.  The  overall structure of the scheme, as set out in the Consultation, remains largely unchanged. Some of the key highlights include:

* FITs will be applicable to installations up to 5MW (2kW for non-renewable CHP );

* Wind, solar PV and hydro projects of 50kW or less, and microCHP projects supported through the pilot will be required to use the Microgeneration Certification Scheme (MCS) eligible products installed by MCS accredited installers to claim FITs support;

* All tariffs will be linked to the Retail Price Index (RPI);

* Electricity supply companies to make FITs payments to eligible generators;

* FITs income for domestic properties will be exempt from income tax;

* Ofgem will act as the FITs scheme administrator;

* A levelisation process, undertaken by Ofgem, to share the cost of the scheme across all licensed suppliers in proportion to their share of the UK electricity supply market; and

* Regular reviews of the scheme, the first one in 2013.

The scheme will be brought into effect through modifications to electricity suppliers licences, which we have also consulted on.  The FIT will be subject to Parliamentary clearances as required by the Energy Act 2008.

These measures take forward powers granted in the Energy Act 2008 to establish financial incentives schemes to facilitate and encourage small-scale low-carbon generation of electricity and renewable generation of heat.

We hope that you will take the time to read these documents and reply to the RHI consultation, helping us develop our policies going forward.

* The RHI consultation (which closes on 26 April) can be viewed by clicking here 

* The Government Response to the Consultation on Feed-in Tariffs can be viewed by clicking here

Regards,
The Renewables Financial Incentives Team
Department of Energy and Climate Change

January 2010

Closure of the Low Carbon Building Programme Phases 1 and 2 to new applications for electrical microgeneration technologies

The Low Carbon Buildings Programme (LCBP) Phase 1 and Phase 2 has closed to all new applications for grants for electrical microgeneration as of 5pm, Wednesday 3rd February, which follows the publication of the Government’s decision document on the Feed-In Tariffs (FIT).

The LCBP Programme has been running since 2006 and has provided a firm basis for the manufacture, assembly, supply and installation of microgeneration technology across the UK with over 14,500 grants provided to householders and 3,000 grants provided to schools, churches, communities and other not-for-profit organisations to date.

The publication of the of the FITs consultation on Monday 1st February in advance of the FITs tariff introduction scheduled for April 2010, will provide additional certainty for the industry to continue to develop and expand.

The total funding for LCBP is finite and the closure to applications for electrical microgeneration technologies will allow the remaining un-allocated funding to be focussed on thermal microgeneration in the run-up to the introduction of the Renewable Heat Incentives (RHI’s) scheduled for April 2011.

The Low Carbon Buildings Programme is the £131 million grants programme providing assistance for the purchase and installation of both electrical and thermal microgeneration technology for householders under Phase 1 and schools, churches, communities and other not-for-profit organisations under Phase 2.

LCBP has shown its commitment to electrical microgeneration and has committed, to date, over £62 million (64%) of funding to it of which £54 million has been committed to the buoyant Solar PV market.