Renewable Heat Incentive for Biomass (Wood Fuelled) Heating
RHI Phase 1 – Commercial
Renewable Heat Incentive (RHI) enquiries: 0845 200 2122
Email: rhi.enquiry@ofgem.gov.uk Website: www.ofgem.gov.uk/rhi
Applications for Phase 1 started 28th November 2011: RHI payments for non-domestic biomass heating installations for industry, business and large organizations. Ofgem, who administer the scheme, will produce guidance setting out all the eligibility criteria. Please see the Ofgem website for more information and application forms.
| Level of support | |||||
| Tariff name | Eligible Technology | Eligible sizes | Tariff rate (pence/kWh) | Tariff duration (Years) | Support calculation |
| Small biomass | Solid biomass; Municipal Solid Waste (incl.CHP) | Less than 200 kWth | Tier 1: 8.3 Tier 2:2.1 | 20 | Metering Tier 1 applies annually up to the Tier Break, Tier 2 above theTier Break. |
| Medium biomass | Solid biomass; Municipal Solid Waste (incl.CHP) | 200 kWth and above; less than 1,000 kWth | Tier 1: 5.1 Tier 2: 2.1 | 20 | Metering Tier 1 applies annually up to the Tier Break, Tier 2 above theTier Break. |
| Large biomass 1,000 kWth and above | Solid biomass; Municipal Solid Waste (incl.CHP) | 1.0 | 20 | Metering |
The Tier Break is installed capacity x 1,314 x peak load hours. i.e. kWth x 1,314
Notes: kWh stands for kilowatt hours (used in relation to heat output) and kWth stands for kilowatt thermal (used in relation to equipment capacity).
Payments will be made quarterly.
For a 150kW biomass boiler running at an annual load factor of 30%, the annual RHI payment received will be calculated as follows:-
Actual peak load hours = 30% x 8,760 hrs per year = 2,628 hours
Total annual kWh of heat = 2,628hrs x 150 kW = 394,200 kWhs
Total Tier 1 kWhs = 1314hr x 150kW = 197,100 kWhs
Tier 1 annual RHI cash = 197,100 kWh x 8.3p/kWh / 100 = £16,359
Tier 2 annual RHI cash = (394,200 – 197,100) kWhs x 2.1p/kWh / 100 = £4,139
Total annual RHI cash = £16,359 + £4,139 = £20,498
Average RHI payment = £20,498 x 100 / 394,200kWhs = 5.2 pence / kWh
The following table summaries this calculation and compares various boiler sizes and load factors. Note how the average RHI rate varies substantially with load factor (see examples at150kW and 500kW).
Boiler rating (kW) 40 150 150 500 500 750 1200
Tier 1 rate 8.30 8.30 8.30 5.1 5.1 5.1 1.0
Tier 2 rate 2.1 2.1 2.1 2.1 2.1 2.1 N/A
Load factor actual 20% 15% 30% 15% 40% 40% 40%
Actual peak load hours: 1752 1314 2628 1314 3504 3504 3504
Total annual kWh of heat: 70,080 197,100 394,200 657,000 1,752,000 2,628,000 4,204,800
Tier 1 break (peak load hours): 1314 1314 1314 1314 1314 1314 N/A
Max kWhs at tier 1 rate: 52,560 197,100 197,100 657,000 657,000 985,500 N/A
Tier 1 annual RHI cash: £4,362 £16,359 £16,359 £33,507 £32,850 £50,260 N/A
Tier 2 annual RHI cash: £368 £0 £4,139 £0 £22,995 £34,492 N/A
Total annual RHI payment £4,730 £16,359 £20,498 £33,507 £55,845 £84,752 £42,048
Average RHI rate (p/kWh): 6.75 8.30 5.20 5.10 3.19 3.22 1.00
A Summary of the RHI terms as published by DECC on 10/03/2011
Warning: Bioenergy disclaim any liability incurred with the use of this data or specific details. Prior to making any decisions or
financial commitments, the reader should consult the official documentation available on www.decc.gov.uk.
Non-Domestic Installations: Eligibility & Other Term
- Eligible sectors include: private industrial and commercial, the public sector, not for profit organisations and communities.
- Installations must provide useful heat for space, water or process heating (includes heat for cooling via absorption chillers).
- The owner is the person with exclusive rights and liabilities for the installation (the legal aspects need careful consideration for any financing offering).
- Installation capacity (kW) is the total new installed peak biomass boiler heat output connected to a single distribution system (for multiple boilers).
- Peak load and stand-by fossil fuel boilers will be permitted.
- Ongoing obligations: Participants to provide evidence of regular maintenance, sign a detailed annual return and to permit inspections.
- Installations of 45 kW or less must be certified under the Microgeneration Certification Scheme (the installer and the product).
- An approved heat meter must be used to measure the heat (kWh) out of the biomass boiler(s) (Class 2 requirements as listed in Annex MI-004 of the EU measuring Instruments Directive (MID) 2004). The meter must be installed and calibrated / recalibrated according to manufacturers’ instructions.
- Additional Air Quality limits will not be imposed in the first year. It is planned that emissions limits of 30 g/GJ for particulates and 150 g/GJ for NOX will be imposed in 2012, once the measurement and certification process has been defined.
- Fuel sustainability reporting will be mandatory for all plant of 1MW and over from July 2011.
- Fuel sustainability criteria are expected to be mandatory from 2013 onwards.
- Overlap with Grants: It will not be possible to receive the RHI if the installation has been parted funded by any public sector grants (national, regional, European). For installations prior to July 2011, grants must be paid back.
- Replacement of biomass boilers commissioned prior to 15th July 2009 is currently permissible, but this is not the intent of the scheme as these boilers may be relatively new, so this may be reviewed in future. We recommend careful consideration of detailed rules if planning to replace an existing biomass boiler.
- Preliminary accreditation will be permitted for larger schemes to give reassurance prior to commencing construction. Final accreditation will only be given following completion and this will be the date from which financial support is given.
Administration
- Scheme administration will be by OFGEM (www.ofgem.gov.uk) via on-line applications. Administration to include: applications, scheme accreditation, making RHI payments and ensuring compliance.
- Only installations accredited by OFGEM will be able to receive RHI payments.
- OFGEM will have a number of measures to tackle non-compliance including random inspections.
- Enforcement will be through compliance notices, payment withholding or reduction, xclusion of participants or more severe civil or criminal prosecution for willful fraudulent activities.
- OFGEM will collect important data on each scheme.
- The RHI will be funded by central government funding.
Further Consultations or Actions Planned
- Domestic Boilers: Further detail to be announced in May 2011. Introduction of RHI planned in October 2012 alongside the Green Deal (insulation scheme).
- Air Quality limits and certification in 2012 (consultation planned in 2011).
- Biomass sustainability criteria from 2013 (consultation in 2012).
- A potential uplift for community or district heating will be considered for introduction in 2012 (subject to consultation).
- Digression (future reduction in tariffs for future installations) will be introduced in 2012. A consultation will be published on this prior to introduction.
- The Draft Regulations which will be laid before parliament are available on the DECC website now with consultation until mid April 2011.
- It is intended that the RHI will be open to new applications until at least 2020. Scheduled Reviews of the scheme will occur every 4 years starting in 2014 for implementation in April 2015. Early reviews have not been ruled out and will be consulted on at the same time as potential additions to them scheme in 2012.
