Yesterday, the UK government announced plans to introduce a Renewable Heat Incentive. This will be similar to a Feed-in Tariff for renewable electricity. The Department of Energy and Climate Change (DECC) says that this could “revolutionise the way heat is generated and used in buildings and homes” and they are correct (at least as far as generation is concerned). Far too often, people assume that ‘energy’ means electricity, but almost half of the UK’s energy use is in the form of heat and half its greenhouse gas emissions come from heat.
The Renewable Heat Incentive is the first such scheme anywhere in the world. On taking office, the Conservative-Lib Dem coalition promised to be “the greenest government ever” – a classic hostage to fortune for which they have been roundly mocked. However, by acting decisively and rapidly on renewable heat, they are taking the promise seriously.
The DECC press release states that:
“The scheme will be introduced in two phases. In the first phase, long-term tariff support will be targeted in the non-domestic sectors, at the big heat users – the industrial, business and public sector – which contribute 38% of the UK’s carbon emissions. Under this phase there will also be support of around £15 million for households through the Renewable Heat Premium Payment. The second phase of the RHI scheme will see households moved to the same form of long-term tariff support offered to the non-domestic sector in the first phase.”
The Renewable Heat Incentive will influence the way in which heat is generated, promoting the use of:
- Biomass (which the government says will have to be certified to ensure it is sustainable).
- Biogas from food waste, manure and sewage.
- Solar thermal technology.
- Heat pumps.
- Geothermal heat.
During the first phase, domestic property owners will be offered grants to instal renewable heat technology – £300 for solar thermal; £850 for air-source heat pumps; £1,250 for ground-source heat pumps; and £950 for biomass boilers.
Yesterday’s announcement was welcomed both by energy companies and by environmental NGOs (see Energy efficiency news: Building & Design: Warm response to UK government’s renewable heat incentive). It is pretty striking to find something that both E.ON and Friends of the Earth agree on.
DECC’s promised revolution in the way in which heat is used will have to await the Green Deal, which it is saying will be introduced in 2012. The Green Deal will make low-interest loans available to property owners, attached to the property rather than the individual, in case they move before they have recouped the investment through lower fuel bills. (The British, like Americans, tend to move home a lot.) Low-interest loans are good – the German bank KfW has used them very effectively (see Repowering Communities case study: Berlin Council’s energy efficiency programmes). But the German government has been prepared to use the stick as well as the carrot – energy efficiency standards have to be high whenever a property is renovated. The UK government, committed to deregulation, is in danger of relying too much on the carrot.