Council officers call for heat incentive certainty

The body, which represents council recycling officers, said that, while it supported government plans for an early review of the incentive after its planned introduction in April 2011, the subsidy available for large projects needed to remain the same or even increase if it was to “de-ri

LARAC's comments are made in its response to the Department of Energy and Climate Change's consultation, which closed this week (April 26), on the proposed Renewable Heat Incentive (RHI) – a subsidy which the government hopes will increase the proportion of heat generated from renewable sources from 1% to 12% by 2020 (see letsrecycle.com story).

Under the tariffs proposed for the RHI, large biomass installations – producing 500kW of energy or more – would receive between 1.6 and 2.5 pence for every kilowatt hour of heat they produce, though the amount of their feedstock that energy from waste facilities can claim is dependent on the proportion of fossil fuels and biomass it contains.

LARAC claimed in its response that the RHI would represent a “very important element” in funding both projects that use combined heat and power (CHP) technology to deal with waste and waste-derived fuels and the networks needed to distribute that heat.

Early review

The body said it supported DECC's plans for an early review of the RHI – the department has said it will begin a review in 2013 – due to the scale of the plans and the technologies involved and resulting “unintended consequences and market distortions” that were “bound to appear”.

But, it said it did not back any reduction in the tariffs for large facilities during this review, explaining that: “For (large) projects that have long lead-in times and long time horizons, degression should not be a possibility for a very long time – at least 5-10 years.

“The risk (of unnecessarily generous subsidy) is far less far-reaching and significant than the risk of projects not going ahead because of insufficient subsidy,” it added.

Outlining exactly what impact reducing the tariff at an early stage could have on councils, LARAC said: “It would not be helpful to develop a partnership, agree on a delivery body, embark on design, carry out environmental assessments, pursue funding options, obtain planning permission, get agreement on an outline business case – and then have the goalposts changed before funding was secured.”

Anaerobic digestion

In terms of anaerobic digestion (AD), LARAC calls for action to be taken to reflect the fact that using the biogas produced by the AD process to generate heat is a more efficient use of the gas than using it to produce electricity.

The body notes that, while the subsidy available for electricity from AD under the government's Feed-in Tariff system is 11.5 pence per kilowatt hour (p/kWh)over 20 years, the proposed subsidy for heat generated under the RHI would be 5.5p/kWh over 10 years for on site combustion and 4p/kWh for biomethane injection.

“This would encourage electricity generation from AD, which is a less efficient use of biogas than heat production (whether by local distributed heat systems of biomethane injection into the grid),” it claimed.

Adding that AD also offered “considerable potential” as a transport fuel, it concluded that: “The financial incentives developed for AD in particular should reflect the highest/most efficient utilisation of the fuel.”