Renewable Heat Incentive scheme (RHI)
Introduction
Renewable heat incentive scheme (RHI) is key to the UK and world wide meeting its renewable energy targets.
Reducing carbon emissions, ensuring we meet our energy security demands for the future and help to build a low carbon economy.
With the Uk introducing the (RHI) Renewable Heat Incentive scheme for Commercial property like farms, council building, hospitals, golf courses and now the domestic properties.
The UK Government is intended to increase significantly the proportion of heat that is generated from renewable sources. By encouraging a switch from fossil fuels. This will contribute towards the UK’s wider carbon reduction goals.
The RHI is intended to compensate for the higher cost involved in the fitting of the new heating equipment, this will help make renewable heating an option for all.
Eligible biomass installations
In order to be eligible to claim the RHI, the equipment must be:
- a new installation; can be retrofitted along side other heating system (as backup)
- be first commissioned on or after 15 July 2009
- generating heat for an eligible use (see below); and be fitted with
- metered output.
Renewable Heat Boiler fitted into a shipping container with built-in fuel storage.
Biomass Boiler within a shipping container
Fuel storage and feed system for the Biomass Boiler
Eligible uses of heat
The RHI will only support ‘useful’ heat. This is defined as follows:
- Heat supplied to meet a justifiable heating requirement;
- This does not include swimming pools, hot tubs and alike;
- Load should be an existing or new heating requirement i.e. not created artificially, purely to claim the RHI; and
- Acceptable uses are space, water and process heating.
Payment
The RHI payment will:
- only be made to the ‘owner’ of the biomass installation through an application made directly to Ofgem;
- be calculated by multiplying the appropriate tariff by the amount of eligible heat; and
- be made over a period of 20 years on a quarterly basis following the submission of the required periodic information.
Tariff (based on OFGEM guidance, issued 1st July 2013)
| Tariff name | Eligible size | Tier 1 rate
(pence/kWh) | Tier2 rate
(pence/kWh) |
| Small biomass | Less than 200kWth | 8.6 | 2.2 |
| Medium biomass | 200 kWth and above; less than 1,000 kWth | 5.0 | 2.1 |
| Large biomass | 1,000 kWth + | 1.0 |
Tier 1 is on output below the Tier Break; Tier 2 is on output above the Tier Break
Tier Break (annually) = installed capacity x 1,314 peak load hours |
The next RHI quarterly tariff table will be published on 15 September 2013.
Example – Small biomass
A qualifying 180kW biomass installation in a school. Assumed operation – 10 hrs per day; five days per week; 35 weeks per year. Assumed generation of 315MWh of useful heat per annum from 70 tonnes of wood pellet. Approximate installed capital cost £75k:
RHI calculation:
Tier break = 180 x 1,314 = 236,520 kWth
Tier 1: 236,520 @ 8.3p = £19,631.16
Tier 2: 78,480 @ 2.1p = £ 1,648.08
315,000 £21,279.24
If generated evenly throughout the year, payments will be received of £5,319.81 per quarter
Fuel costs:
70 tonnes of pellet x £190 per tonne* = £13,300
Benefit:
Energy costs covered AND £7,979.24 cash benefit* AND, assuming no change in fuel price, every year for 20 years.
*based on typical fuel price at April 2012
The UK! British Gas has just hiked up its prices by an eye-watering 9.2 per cent, following SSE’s lead -which announced a crippling 8.2 per cent bill increase last week. October 2013
With our Partners Bio Green Tech Ltd is able to offer Biomass Boiler systems form small unit all the way up to a full custom designed unit to include fuel storage and delivery system.
Bio Green Tech Ltd is also able to offer our custom designed fuels by Bio Green Tech or from one of our partners. On a new installation BGT is also able to offer a fixed two year fuel price agreement based on BGT own fuel range.
