Good thinking

But this consultation routine 'with all stakeholders (widely defined)' is something quite new in government, isn't it? Raises interesting possibilities of an alternative to the longstanding 'elected to make partisan policies' practice.

Part of the reason it's so hard to get the RHI budget right is that it's a prescriptive technology-specific scheme, rather than a generic market-based one. Any attempt at setting specific benefits for specific technologies at specific rates distorts the market in favour of those technologies, and against all the others. Now of course this is how FITs and RHI are intended to work, but it has the problems bgp outlines _and_ it prevents someone coming along with a really good new idea and it taking over rapdily because oit solves the problem much more cost-effectively.

To put it another way, these schemes specify specific solutions rather than outcomes. If the incentives were specified in terms of the desired effect 'reducing CO2 emissions', 'generating electricity with low CO2 emissions', then we'd get proper market effects.

To be fair I beleive the ROCs scheme was properly market-based in this way and take-up was relatively low until it was revised to have technology-specific fudge-factors added. And the FIT has greatly increased take-up, illustrating that the most economicially-efficient models are not the most popular, or even the most effective at getting RE on the ground.

I'd be much happier if they were paying large sums for insulation-based savings, rather than(or as well as) generation. That area seems to have gone rather quiet too.

I am not certain that Greg Barker MP has the first idea about the fundamental flaw of the RHI!

If he doesn't, he could have a very brief ministerial career because although the Coalition inherited the FiT, they cannot blame labour for the detail of the RHI.

Quite simply, the existing tariff calculator rewards the least efficient and least durable technologies!!! Yes, hard to believe but 100% true. Very very perverse logic and no suggestion anywhere that carbon is important. DECC's argument is that because less efficient technologies will deliver very modest running cost savings against the couter factual fuel (mains gas), there has to be a more generous tariff to prompt action. So, we could see a scenario where a gas condensing boiler, installed last year with a boiler scrappage grant, will be torn out and replaced with an air source heat pump resulting in a) higher carbon emissions (for many many years until the grid intensity declines) b) and a generous RHI payment.

Does Mr Barker think he can defend this?

The questionable source data for the consultation, the weak analysis, the odd use of a single reference installation, and the absence of any sensitivity analysis suggest that the RHI may be a very flawed tool.

I am quite certain that DECC wishes it had another twelve months to figure things out! Wait and see.

I had this sent to me today:


Government announces immediate feed in tarrif scheme review

7 February, 2011 | By Tom Fitzpatrick

The government has announced it is to set up a review of the feed in tariff scheme for small-scale low carbon electricity generation as it fears large solar farms are flooding the market.

The government also revealed today that details of the long-awaited renewable heat incentive scheme will be confirmed as part of next month’s budget.

Energy and Climate Change secretary Chris Huhne said the FITs review will be completed by the end of the year and will see fast track consideration introduced for large scale solar projects over 50kW along with assessment of tariff levels, administration and eligibility of technologies.

Mr Huhne said the renewable industry was a “vital piece in the green growth jigsaw” and that the review would provide greater certainty for homes, communities and small firms to generate their own electricity.

He added: “Large scale solar installations weren’t anticipated under the FITs scheme we inherited and I’m concerned this could mean that money meant for people who want to produce their own green electricity has the potential to be directed towards large scale commercial solar projects.”

The government spending review committed to improving the efficiency of FITs and finding savings of £40 million, or 10 per cent, in 2014 – 2015.

Mr Huhne confirmed that the government was concerned with a proliferation of large-scale solar schemes with many having received planning permission and more awaiting planning decisions.

Changes to the FITs scheme are not expected to be applied retrospectively.

Mr Huhne also confirmed the review would be examining farm-based anaerobic digestion plants, of which he said there had been a disappointing uptake with just two accredited schemes confirmed when at least six had been expected.



Terrier.

Re: Nadhim -- he seems all knotted up with too many "not"s in his question!

I can solve their budgeting problems at a stroke.

no RHI for heat pumps other than for houses where there is no access to mains gas.

that way the RHI would not be providing huge subsidies for houses where there was no net carbon benefit to having heatpumps installed, and target it at the technologies and locations where there would be the biggest net carbon benefit.

could also be applied to biomass, boilers as the biggest net carbon benefit is to be found from replacing oil boilers, and this will have the least impact on air quality.

job done, can we have the RHI scheme now please?

S.T. - The response I have recd from DECC in reply to concerns raised regarding environmental and health impact of energy decisions points to total lack of due diligence and duty of care. They state priority is compliance with need for renewable energy. They are aware woodchip combustion emissions produce 60-80 times higher levels of hazardous pollution than gas but sadly this appears irrelevent in the scheme of things.
Interesting that the woodchip boilers for blocks of flats will be size of fridge but no reference to what comes out of fluestack.
This is outcome I anticipated so will now return to banging head against wall.
Keep smiling and enjoy your environment.
Brian

Posted By: seascape"possible reduction of 7% in generation tariff'.

Suspect the 'possible' is the key bit. I don't think anyone has a clue at all.

R4 News this morning, seems double counting of land has already started.

Zero -9 and counting.

Ted
You a 'fly on the wall' by any chance

Be interesting to see what the press make of it all, within a few hours there will probably be large holes in it and lots of alternative scenarios. Why don't they get the press involved in the beginning. What was it that a amours scientists said. 'Find ways to disprove it and see what is left standing'.

So households have to wait till 10/2012 then. Have I got that right?

Yes
I am wading through the text at the moment, think it will involve a large cup of coffee and a seaview.

These are the 'headline' items from my point of view:

RHI will be introduced in two phases.

Phase 1.

RHI initially targeted at the non-domestic sector.

Non-domestic
Support for a range of technologies and fuel uses including:
- solid and gaseous biomass,
- solar thermal,
- ground and water source heat-pumps,
- on-site biogas,
- deep geothermal,
- energy from waste
- injection of biomethane into the grid;

Note - no ASHP initially - but this may be added from 2012

Only new equipment will be eligible, conversion of existing plant will not. Considered for the future.

• Support for all non-domestic sectors including:
industrial and the commercial sector;
the public sector;
not-for-profit organisations;
communities;

• RHI payments to be claimed by, and paid to, the owner of the heat installation or the producer of biomethane;

• Payments will be made quarterly over a 20 year period;

• For plants up to and including 45kWth both installers and equipment to be certified under MCS (or equivalent)

• Tariff levels have been calculated to bridge the financial gap between the cost of conventional and renewable heat systems, with additional compensation for certain technologies for an element of the non-financial cost;

• Heat output to be metered and the support calculated from the amount of eligible heat, multiplied by the tariff level;

• Biomass installations of 1 MWth capacity and above will be required to report quarterly on the sustainability of their biomass feedstock for combustion and where they are used to produce biogas;

• Eligible non-domestic installations completed on or after 15th July 2009, but before the start of the RHI, will be eligible for support as if they had been installed on the date of its introduction;

• The Gas and Electricity Market Authority (Ofgem) will administer the RHI including:
dealing with applications; accrediting installations; making incentive payments to recipients;
and monitoring compliance with the rules and conditions of the scheme;

• The RHI will be funded from general Government spending, not through the previously proposed RHI levy.

All systems up to 45kWth must be MCS to be eligible. All eligible systems installed since 15th July 2009 can claim RHI.

Domestic
Will also introduce Renewable Heat Premium Payments (RHPP) for the domestic sector supported by a ring-fenced £15 million fund (to be spread across 25,000 households = average £600 per household)

"These direct payments will subsidise the cost of installing qualifying renewable heating systems. In return for the payments, participants will be asked to provide some feedback on how the equipment works in practice and suppliers will be asked to provide a follow up service on any issues that are raised. This will boost confidence in the technology and the information we receive will help enable Government, manufacturers, installers and consumers to better understand how to maximise performance of the various technologies. The Renewable Heat Premium Payments will support a spread of technologies across all regions of Great Britain and will cover households using gas and other fossil fuels. We may consider focusing support for primary heating systems, such as heat pumps and biomass boilers, on households off the gas grid, where fossil fuels like heating oil are both more expensive and have a higher carbon content. We aim to launch the Renewable Heat Premium Payments in July 2011 and will announce further details in May 2011."


Phase 2.

Full support for the domestic sector - to be introduced in 2012 to link in with the launch of Green Deal.

Domestic users from Phase 1 (under the RHPP) will get access to the long term tariffs once these are launched.

"we will also consider introducing support for a number of other technologies and fuels which are not supported from the outset."


The RHI will be open to new installs up to 2020. Scheduled review in 2014 and every 4 years.

Ok... so as I read it ,

If you have already installed domestic then you get nothing same as with the FiT.

If you were on the transition arrangements they don't know.

If you are contemplating installing and do so from May then you will get about £600 then uncertainty

Or wait till Oct 2012 when you might know how much support they are prepared to give. Though based on the slippage rate here it will probably be mid 2013 before any definitive numbers come out.

On the basis that I've been quoted about £20,000 to install a log gas boiler based heating system I don't think £600 then uncertainty is really going to cut it. Oh well back to the drawing board.