Renewable heat subsidies ‘wasting money’ by ruling out waste heat


whitehallAs the government mulls changes to renewable heat subsidies and Brussels plots a renewed push on heating efficiency, public and private sector organisations have voiced frustration at the UK’s flagship scheme.

Surveyed by Energyst Media for a forthcoming heat report, around 57% of respondents across local authorities, large industrial companies and smaller independent firms said they thought the renewable heat incentive (RHI) was an effective tool for encouraging investment in low carbon heat.

However, 43% said the scheme was ineffective.

Asked why, many cited the scheme’s administrative complexity and stated that the returns were too small for all but the largest plant. Others suggested that the incentive was only sufficient for biomass, and then only with secure access to fuels on the approved list.

Wasted heat

Several respondents noted that the scheme failed to recognise waste heat from non-renewable sources, creating perverse incentives.

As one respondent stated: “It is open to abuse, favours large consumers, and encourages unsustainable practice.”

The view on waste heat exclusion is shared by Association for Decentralised Energy chief executive, Dr Tim Rotheray.

Rotheray, who will outline the heat landscape at a breakfast briefing to launch the report on 5 April, believes ruling out waste heat is one of the Renewables Directive’s biggest failings. He says it is driving up the cost of decarbonisation.

By way of example, Rotheray explains that under the Directive, a heat pump facing a waste heat source, while much more efficient, cannot be classified as renewable. If that rule was changed, “you would get a higher system efficiency and lower carbon result,” says Rotheray. “Importantly it would be lower cost for the user. Cost for the user is king.”

Whether the UK could loosen its interpretation of the EU Directive remains to be seen, although it may be that Brussels will rewrite the rules as it reviews the rules and incentives for heat and energy efficiency. Either way, Rotheray thinks something has to give.

For now, “the least efficient solution is the renewable one,” he says. “That has a massive perverse impact on [decarbonising] heat.

To add your views to the report, take the short survey here. If you would like to attend the heat breakfast briefing, held 5 April from 8.15am at the Capital Club, London, click here. Places are limited and allocated first come, first served.

Related stories:

European Commission turns focus to energy efficient heat

75p/kWh subsidies for district heating?

Decentralisation the key to heat networks?

Tim Rotheray: Put users at heart of energy policy or watch it fail

CHP behind 6% of UK electricity, could do more

Councils step up heat network plans

Firms with CHP generators could be paid to stop exporting power

Local Authorities say finance and public procurement biggest barrier to heat networks

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