non-domestic rhi scheme information & upcoming sustainability requirements nicola percival...
TRANSCRIPT
Non-Domestic RHIScheme information & upcoming
sustainability requirements
Nicola Percival08/07/2015
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• The RHI scheme• What is it?• How can you benefit from it?
• Summary of sustainability requirements• Coming into force 5th October 2015
• Q&A
Agenda
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The Non-Domestic RHI-
An Overview
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Heat is an issue for the UK• 47% of UK energy use is for heat, and the UK spends around £32bn on heat
• Around 1/3 of UK’s carbon emissions come from energy used to produce heat
• Binding commitment to increase renewable energy use to 15% by 2020
Prepare for mass rollout in 2020s
Build sustainable supply chains
Improve performance Reduce costs Reduce barriers to
uptake
Legally binding targets from EU Renewable Energy Directive 2009 mean that the scheme is here – once in the scheme full payment is guaranteed
Incentivise roll out of renewable heat systems
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Technologies• Biomass
• Biogas
• Biomethane injection
• CHP
• Deep geothermal
• Ground/Water/Air Source heat pumps
• Solar Thermal
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Customer satisfaction
93% would recommend their renewable heat technology to others
92% believe their renewable
heating system is reliable
90% are satisfied with
their new installation
Data from Non-domestic RHI Evaluation, published August 2014
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Scheme Performance
ND J FMAMJ J A SOND J FMAMJ J A SOND J FMAMJ J A SOND0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2.2 TWh of renewable heat now generated
Small Biomass752
Medium Biomass
345
Large Biomass104
Other15
Over 1,200 MW of Installed Capacity
2011 2012 2013 2014
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Uptake by Industry
Accommodati
on
Farm
ing
Educa
tion
Office admin
Sports
& re
creati
onReta
il
Wood m
anufac
ture
Fores
try &
loggin
g
Residen
tial ca
re activiti
es
Food m
anufac
ture
Other
0
500
1,000
1,500
2,000
2,500
3,000
Capacity of accredited installations by SIC Code, November 2011 to December 2014
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Budget Management - Degression
Established methodology
Triggers set in legislation
Monthly updates & quarterly statements
• Gradual reduction of tariffs to control spend
• If forecast spend on a technology exceeds trigger – risk of tariff reduction
• Overall scheme spend must also exceed 50% of budget
• Reductions of 5% to 20%, with extra 5% added if total scheme trigger hit
• Last announcement for July 2015 – small biomass and biomethane tariffs degressed
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Anaerobic digester has been producing heat since 2009 and electricity since 2011
Produces enough energy for all buildings on the farm and more
Waste output from digester is rich fertilizer
Benefits from energy savings and incentives of £37,000 per annum
“Installing the new plant was without doubt a worthwhile undertaking. It wasn’t only about the financial return, but also protecting our environment.”
Norfolk dairy and grain farm turns waste into heat and power with biogas plant
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Companies House slashes gas billsin pioneering move
• Gas boiler replaced by 500kW biomass boiler plus silo to store its fuel – locally-sourced sawdust pellets
• The biomass boiler has helped reduce carbon footprint by 25% - ahead of schedule
• Gas heating bills down from around £55,000 year to £10,000 a year
• 250 tonnes of carbon saved each year
“The organisation has been impressed with the performance of the system and it provides clear evidence that effective environmental management is also good business management.”
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For those intending to applyOnly the owner of an eligible heating system can apply. Requirements are:
Rules of scheme complex – always check with Ofgem regarding eligibility
Equipment must be new at time of purchase
Heat transfer must be by water or steam (i.e. - not direct air heating)
MCS or equivalent EN45011 if ≤45kW, for biomass, heat pumps and solar thermal
Biomass boilers must meet air quality requirements & designed as primary fuel source
Metering – must have the right type of meters calibrated and in correct locations
Cannot ‘double fund’ system though public grants – may be able to repay grant to be eligible
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The application processApplications are subject to the detailed scheme rules: www.ofgem.gov.uk
Prepare in advance – check guidance material before starting application process – be ready for technical questions and evidence that’s required
Owner decides to install renewable heating system
Owner & installer understand RHI eligibility requirements
Owner & installer plan for requirements as part of design /
installation process
Owner uses guides to prepare for application and gathers
evidence
Owner completes online application form on Ofgem
website & provides necessary evidence
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What happens then?Once you are accredited onto the scheme:
Owner regularly submits meter readings and periodic data
Ofgem makes regular financial incentive payments
Owner is aware of their responsibilities to remain compliant with scheme & signs
annual declarationOfgem selects installations for audits and
inspections on an ongoing basis
Submit meter
readings &
periodic data to receive paymen
ts
Maintain &
service equipm
ent – keep a log &
receipts
If biomass installation, start
a fuel log and
keep fuel
receipts
Inform Ofgem of any
changes to your
installation
Sign an annual
declaration
Submit meter
readings &
periodic data to receive paymen
ts
Maintain &
service equipm
ent – keep a log &
receipts
If biomass installation, start
a fuel log and
keep fuel
receipts
Inform Ofgem of any
changes to your
installation
Sign an annual
declaration
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Is there anything else I can do?
Common issues with applications to date
• Lack of fuel records
• Meter component installed incorrectly
• Heat losses not being measured appropriately
• Undeclared contaminated fuel
Proper installation, operation and maintenance can make all
the difference
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New sustainability requirements• Minimum 60% GHG emission
saving relative to EU fossil fuel heat average
October 2015
• Land criteria introduced: UK Timber Standard for woody biomass; RED for other types
October 2015
Biomass Suppliers List (BSL) provides an easy way for participants to comply
All existing & new applicants MUST comply with criteria, from 5 October 2015.This will impact any fuel purchased now but intended for use later
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The Non-Domestic RHI-
Upcoming sustainability requirements
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Policy vs Implementation
Policy examplesResponsibility: DECC
Implementation examplesResponsibility: Ofgem
Value of lifecycle greenhouse gas (GHG) emissions limit
Definition of consignments
Requirements for calculating lifecycle GHG emissions
Methodology of demonstrating consignment measurement
Eligibility requirements Evidence requirements for eligibilities
The BSL as an ‘approved suppliers list’ and how it works as an entity
Evidence requirements to demonstrate fuel is BSL approved
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• Due to come into force in October 2015 for both domestic and non-domestic RHI
• Applies to all new and existing participants generating heat (or heat and power) from biomass or biogas and to those producing biomethane for injection
• Will only apply from the date the regulations come into force - 5th October 2015
• Fuel being sustainable is based on lifecycle greenhouse gas (GHG) emissions and land criteria
•The Biomass Suppliers List (BSL) is open for registrations from suppliers. Most RHI participants will be able to demonstrate compliance with the sustainability requirements by sourcing their fuel from this list.
Summary of Sustainability
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Summary of GHG & Land CriteriaCompliance with the sustainability regulations is based on meeting the requirements for lifecycle GHG emissions and land criteria:
• The greenhouse gas (GHG) emissions limit is 34.8 gCO2(eq) per MJ of biomass heat generated. The methodology for calculating the GHG value is aligned with the RED.
• For woody biomass fuel the land criteria requirement is aligned with the Timber Standard.
• For non-woody fuels the land criteria requirement is aligned with the RED.
Further information can be found in our draft guidance (on our website soon) and the woodfuel advice note.
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• At application stage, applicants will need to confirm how they intend to comply with the biomass sustainability requirements
• Declaration or information requirements every quarter with periodic data
• Annual reporting requirements for some
• Payments dependent on the required information/declarations being provided
• Audits will include checks of sustainability information
• Enforcement powers can be used for non-compliances related to sustainability requirements not being met such as withholding or re-couping of payments
Non-Domestic RHI key points
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Delivering the requirements
Four routes of compliance:
• Buy fuel from a supplier listed on the Biomass Suppliers List
• Register as a self-supplier on the Biomass Suppliers List (installations under 1MW whose fuel is woody biomass)
• Self-report on the criteria
• CHP plant which is satisfying the sustainability criteria on the RO scheme
Each route involves a different process and requirements to demonstrate the criteria have been met
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Types of Supplier on the BSL
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Which type of supplier are you?
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BSL and Ongoing Obligations• The BSL is a scheme that enables suppliers to register fuels that will be checked to
ensure they meet the GHG and land criteria• Open to all traders, producers and self-suppliers of biomass which is wood or
wholly derived from wood, including waste-wood• Does not include energy crops or agricultural residues • Is managed through an electronic application process
Use fuel listed on the BSL
• Provide quarterly declaration• Provide BSL authorisation number
Submit with Periodic Data
• At audit, receipts will be checked to ensure fuel used is listed on the BSL, so all receipts would need to be retained for the duration of the scheme.
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Self-Supply
Register with
the BSL
• Provide quarterly declaration• Provide BSL authorisation
number
Submit with Periodic Data
• This is “self-supplied” according to the Regulations. If you supply your own fuel but not registered on the BSL, you must self-report and are not a self-supplier as defined in the Regulations.
• Installations <1MW only
• Log book recording fuel use must be kept for audits
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Compliance for self-reporting• To be used for those not either sourcing from the BSL, self-supplying, or RO compliant
• The UK Biomass and Biogas Carbon Calculator can be used to generate GHG emission figures which may be checked by Ofgem. Other tools can be used but must be independently verified as following the calculation methodology outlined in the RED
Self reporting <1MW
• Provide quarterly declaration • Provide annual sustainability audit
report
Self reporting over ≥1MW
• Provide quarterly declaration • Provide quarterly Schedule 2
information and GHG emission figure• Provide annual sustainability audit
report
Submit with Periodic Data
• Sustainability audit reports would need to be submitted no later than 3 months after fourth quarterly declaration
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Sustainability audit reports• Must be prepared by a person who is not the participant and is not a connected person.
• Submitted annually, no later than 3 months after fourth quarterly declaration
• Who?• Biomass and biogas self-reporting and ≥ 1MWth (including waste)
• Biomethane producers
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Compliance for CHP and RO Interaction
• CHP installations are not permitted to demonstrate compliance by using listed sustainable fuel
• Biomass CHP installations ≥1MW which are accredited on the RO and meeting their sustainability requirements are deemed to be compliant with the RHI sustainability requirements
• A declaration of compliance must be submitted when and how Ofgem requests it
• Any heat generated by a CHP station that is accredited under the RO that did not meet the sustainability criteria on the RO must be able to evidence that the RHI sustainability criteria have been met instead
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Voluntary period
• We are currently running a pilot programme asking participants to complete a survey on how they intend to comply with the criteria come October
• The aim is to promote awareness of the sustainability criteria and to get a measure of how people will be reporting
• RHI payments will not depend on this survey being completed
• We intend to reach all 10,000 participants & applicants in four batches between April and August 2015
• 6931 sent already – have you received yours?
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Further Information
1. BSL Guidance, info and applications http://biomass-suppliers-list.service.gov.uk/
2. BSL Helpdesk: [email protected] 020 7090 7769
3. Ofgem Enquiries: [email protected] 0845 200 2122
4. DECC Renewables Delivery Team: [email protected] 0300 068 6184/6194
5. Draft guidance out for consultation in the coming days – this will be on our website: https://www.ofgem.gov.uk/environmental-programmes/non-domestic-renewable-heat-incentive-rhi/policy-and-regulations
6. The woodfuel advice note: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/390145/141222_Woodfuel_Advice_Note_-_Guidance_final.pdf
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Additional information-
Biogas & Biomethane-
Self-reporting
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Biogas and Biomethane• Biogas is a “sustainable biomass” if:
• it meets the GHG criteria and is made from feedstock which meets the land criteria
• it’s made from feedstock which is waste or excreta produced by animals• a combination of these
• “consignment” in relation to biogas means the quantity of biogas attributable to the consignment of feedstock from which that biogas was made
• All biomethane installations must provide quarterly declarations, quarterly schedule 2 information and GHG emission figures, and annual sustainability reports
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Waste and excreta• ‘Waste’ means any substance or object which the holder discards or intends or is required to discard (which will be consistent with the proposed 2014 amendment to the RO Order)
• Waste and “excreta produced by animals” is considered a sustainable biomass
• Waste wood can be registered on the BSL, but if self-supplied, the installation must be <1MWth
Waste or excreta ≥1MW• Provide quarterly declaration • Provide annual sustainability audit
report
Waste or excreta <1MW • Provide quarterly declaration
Submit with Periodic Data
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Demonstrating complianceSelf reporting (biogas installations <1MW)
• quarterly declaration that the sustainability criteria has been met and submission of the GHG emissions figure for each consignment
Self reporting (biogas installations ≥1MW and biomethane producers)
• quarterly declaration that the sustainability criteria has been met and submission of the GHG figure submission for each consignment
• required to provide annual sustainability audit report
Everyone will be required to retain evidence of land criteria compliance and the GHG emissions calculations for the annual audit or to submit to Ofgem upon request.
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Application stage• All biogas and biomethane applicants submit an FMS• Agree how each consignment will be determined
Periodically• Declaration of sustainability criteria compliance and submit GHG figure (per
consignment)• Retain GHG emissions calculations and land criteria compliance evidence• Annual (within 3 months of accreditation date anniversary) submission of an
independent audit report if biogas ≥1MW or biomethane
Demonstrating compliance
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Demonstrating compliance with GHG emissions criteria:
• ‘default value method’ or ‘actual value method’
• Actual value method will involve assessing the carbon intensity of each consignment of feedstock (if not exempt)
• Example from RO guidance of lifecycle considerations:
• The carbon calculator is available on our website
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Definition of Consignment
• Based on the definition used by the RO
• One consignment could be based on the sustainability characteristics of the material(s) if they are of the same:
• Feedstock type• Country of origin• Biomass form (solid biomass only);• Fuel classification (waste, residue, product, etc)• Compliance with the land criteria• Compliance with the GHG criteria
• A consignment of biogas is the quantity of biogas attributable to the consignment of feedstock from which that biogas was made
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Feedstock type: maizeCountry of origin: UKClassification: product
Feedstock type: strawCountry of origin: UKClassification: agricultural residue
Feedstock type: food wasteFrom Supplier 1Country of origin: UKClassification: waste
AD Plant
Biogas composed of:
Consignment A: biogas from maize
Consignment B:biogas from straw
Consignment C:biogas from food waste
In this example, each feedstock meets the land and GHG criteria
Feedstock type: food waste from Supplier 2Country of origin: UKClassification: waste
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Reporting per Consignment
• Quarterly declaration that the land criteria has been met and the GHG figure per consignment
• participant would be required to retain all evidence to show upon request
• Biomethane participants and biogas installations ≥ 1MWth wiill need to submit information in accordance with Schedule 2 every quarter
• A biogas apportioning tool for use with AD to apportion volumes of resultant biogas to the consignments of feedstock will be available
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Schedule 2 information - per consignment:
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Mixed consignments
Proportional mass balance Non-proportional mass balance
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