Long-awaited Renewable Heat Incentive unveiled

The subsidy involves a guaranteed payment being paid per kilowatt hour of renewable heat generated over a period of 20 years to operators of facilities such as AD plants, facilities burning waste wood and energy-from-waste plants.

It is being introduced with 860 million of government support, which DECC today claimed would increase capital investment in the sector by 4.5 billion by 2020 by stimulating new markets for renewable heat.

After the regulations underpinning the RHI are laid this summer, the first phase of the subsidys introduction will apply to installations in the commercial sector, which DECC said contribute 38% of the UKs carbon emissions. Todays tariff levels apply to this phase of the roll-out.

This will be followed in October 2012 by tariffs being made available for domestic properties. A separate RHI Premium Payment will be made available for up to 25,000 domestic installations from July 2011 to help cover the cost of buying renewable heating systems. The tariffs for phase two are set to be consulted on later this year.

Commenting on the aims of the incentive, energy secretary Chris Huhne said: Renewable heat is a largely untapped resource and an important new green industry of the future.

This incentive is the first of its kind in the world. Itll help the UK shift away from fossil fuel, reducing carbon emissions and encouraging innovation, jobs and growth in new advanced technologies.

Anaerobic digestion

One of the key waste-to-energy technologies expected to benefit from the Renewable Heat Incentive (RHI) is anaerobic digestion, through the tariff level set for biomethane injection into the gas grid and also for small scale – below 200 kilowatt thermal (kWth) combustion of the biogas produced by AD (AD).

The tariff for this method of renewable heat generation has been set at 6.5 pence per kilowatt hour of heat generated, which was welcomed by the Anaerobic Digestion and Biogas Association (ADBA).

Lord Redesdale, ADBA chairman, said today: After months of work on the RHI, the Governments decision is very welcome. It will allow the huge increase in AD promised in the Coalition Agreement to be realised – the level of the RHI is a huge vote of confidence in this new and growing industry.

The decision underlines Ministers commitment to AD, and has obviously involved a lot of complex work from civil servants to bring it to fruition so Id like to take this opportunity to thank them all.

Other waste technologies

Other waste-to-energy technologies are set to qualify under the tariffs available for biomass. These are set at varying levels, with a higher tariff available for smaller facilities. Plants producing less than 200 kWth could receive 7.6 pence per kilowatt hour (kWh), but this will fall to 1.9 pence once they generate a certain amount of heat.

A similar tiered system is in place for medium sized biomass plants with a capacity between 200 kWth and 1,000 kWth, which could receive 4.7 pence per kWth at first, falling to 1.9 pence per kWth. Larger facilities those above 1,000 kWth, can receive a flat 2.6 pence per kWh.

In a document outlining how the tariff will apply to different waste technologies, DECC explains that the biomass tariff will apply to solid biomass from municipal solid waste (MSW) sent for combustion, gasification and pyrolysis. This includes solid recovered fuel from MSW.

Waste wood

It adds: In addition, other wastes where at least 90 per cent of their energy content is comprised of solid biomass will receive support. Examples of such wastes include waste wood and residues from the paper manufacturing industry.

However, it notes that as with the ROC subsidy for renewable electricity generation the tariff can only be claimed against 50% of MSW, using a process known as deeming the renewable content of the material, unless operators can prove a higher degree of biomass content in their waste.

DECC acknowledges the work is ongoing to make it easier to measure the renewable content of waste (see letsrecycle.com story) explaining that: We have noted industrys concerns regarding the need for a more reliable and cost-effective methodology for establishing the renewable content of mixed wastes and work is underway to address this issue.

It also said it was looking into whether a specific, dedicated tariff for MSW could be introduced from 2012, as long as sufficient evidence is available.