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01/07/2013
The Renewable Heat Incentive (RHI) is accelerating demand for biomass, but the road to tariff payment success has many pitfalls, says Jeff House, Marketing and Applications Manager at Baxi Commercial Division.
Prospects for biomass heating are increasingly bright thanks to the availability of generous Renewable Heat Incentive (RHI) payments and because it has a number of advantages over other renewables. In particular, it is not weather dependent like wind, solar and tidal power and, to an extent, air source heat pumps so is more predictable.
It is, therefore, much easier for heating engineers to calculate the likely performance and capacity of a biomass installation as the calorific value of the fuel source is known and the running hours for the plant can be accurately estimated. This also has advantages when it comes to sizing the plant for optimum performance making it ideal for packaged and prefabricated systems.
Consistency of performance makes it comparatively easy to calculate the payments due to plant owners under the Renewable Heat Incentive (RHI), thereby informing the business case for installation, as a result biomass has so far accounted for over 95% of all RHI applications.
The Government consultation about RHI tariffs, which ended on June 28, was designed to improve the take up of other types of renewable heat, but the revised payments expected to be introduced this autumn should not have a detrimental effect on the biomass market.
Tariffs for biomass boilers over 1MW capacity are expected to double alongside generous improvements for ground source heat pumps and solar thermal projects. Mid-scale biomass projects between 200kW and 1MW will see a downgrading of tariffs as this size tier has reached the scheme degression trigger point, however they still pose a very strong financial proposition.
The revised tariff for mid-range biomass systems will be just 5% lower for new applicants to the scheme from July 1 and still represents a very attractive support level.
However, applications for RHI funding are not going as smoothly as they should be. The process is not straightforward and the scheme administrator, Ofegem, is in the process of simplifying it, but there are problems with measuring and monitoring installations that are not helping our industry's cause.
Ofgem has revealed that 96% of the RHI applications it receives have to be returned to the applicant because of missing or inaccurate information. There have been over 2,000 applications so far, but only £9m of the £860m fund has so far been spent.
Only four applications have actually been rejected, but the majority are taking a long time to work their way through the accreditation system much to the annoyance of end users. 70% of those that fall at the first hurdle have neglected to include the system capacity in their application; 50% need to provide better information about their heat meters; and almost 30% fail to include an accurate schematic. Within these statistics, however, there must be an underlying question regarding the complexity of providing some 80 pieces of information.
Nevertheless, our industry is not entirely blameless. Even when they have been accredited nearly half of those subsequently audited have their payments suspended because they have failed to keep records of fuel consumption; 30% are found to have meter components not installed correctly; and some show inconsistencies between the meter data on site and the information sent to Ofgem.
Jacqueline Balian, head of operations for the RHI, says this is hugely frustrating. "I am an evangelist for the scheme because I know it can make a huge difference in moving people across to renewable heat to help reduce our looming security of supply problems," she said. However, she said quite basic calculations are being bodged by the installation teams - and it is the system owner who loses out. "Some engineers even confuse kilowatts and megawatts... We are not encountering fraud just tonnes of incompetence," said Ms Balian, who also remarked on inefficiencies in heat meter installations.
It is not being suggested that these deficiencies are representative of our industry as a whole, but they are reminders that the greatest care that must be taken over the
application and installation processes. The meters are the key link in the chain as they measure the amount of renewable heat generated and so determine how much the owner will receive in RHI payments. If the meter is missing or incorrectly installed it becomes the Achilles' heel of the whole system.
The industry has a responsibility to get this right for the sake of our clients and the long-term development of the renewable heating market. It is absolutely fundamental to establish the capacity of a system; install and commission metering; and produce accurate readings and records.
More training would clearly help; and as the industry gains more experience of biomass systems and becomes more familiar with metering technology the situation will
undoubtedly improve. However, we do need to heed these warnings - it is the least clients should expect.
