November 23 2011

United Kingdom Government Incentive Schemes: Renewable Heat Incentives (RHI)

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.

StatisticsCurrently, 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

Industrial Tarrif Rates

  • Residential Tariff Rate

Residential Tarrif rates

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?

Credits: Images and documents linked to sources.

Ubaid Khan

Ubaid Khan has over six years of operational, development, technical and environmental experience in the Waste Management and the Environmental Industry sectors in the Middle East and United Kingdom. During his career he liaised with various municipalities and undertaken a variety of environmental projects including planning waste management schemes for urban regions, design and construction of engineered landfills, landfill gas recovery systems, and material recovery facilities. Ubaid has completed his MSc in Energy and Environmental Management from University of Abertay Dundee, with distinction.In response of his academic achievements during the course university had awarded “University of Abertay Dundee Excellence Scholarship award for year 2010-11.”

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This entry was posted on Wednesday, November 23rd, 2011 at 11:06 am and is filed under Energy, Environment, Government/Politics, Housing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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