Renewable Heat Incentives are the most recently launched incentive scheme, so far announced by the United Kingdom Government in March 2011. The Renewable Heat Incentive (RHI) is designed to provide financial support, and encourage investments from individuals and communities.
This is all in order to switch from fossil fuel heating to renewable energy. The Energy Saving Trust will be administrating the Renewable Heat Premium Payment (RHPP) scheme as a part of the RHI. The RHPP has announced an initial budget of £12m, available from August 1, 2011 for countrywide projects in the UK (Energy Saving Trust 2001). Over a period of four years the UK government is planning to spend around £860m on this particular scheme alone. According to the experts, this scheme is first of its kind in the world.
Currently, overall United Kingdom heat demand is primarily covered by fossil fuel or electrical heaters. The renewable energy share for countrywide production of heat is just 1.5%, causing substantial GHG emissions, as shown in the figure shown at left.
According to the experts, this scheme is expected to attract private investments up to £4.5bn by year 2020, stimulating a new market in renewable heat. This will create an energy reform with long lasting impacts.
The main benefit of the RHI is the generation tariff, which is paid for every kilowatt-hour of energy produced. The level of payment varies depending on the technology and the system size. Tariff rates for residential and industrial installations are shown in below figures.
- Industrial Tariff Rate
- Residential Tariff Rate
Do you think keeping comparatively higher tariff rates for residential and micro-generation projects rather than large scale industrial projects, will help RHI reform in the UK; considering the fact that industrial investments are key measure of reform progression in any region?
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