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BLOG: The heat of the moment

Posted on 11/04/2018 by Laura Russell

It’s a statistic which you’ll hear often from Scottish Renewables, but it’s one that bears repeating.

More than half of the energy used in Scotland is in the form of heat.

And while huge progress has been made in the decarbonisation of electricity, heat is still taking its first steps towards a cleaner future.

There are two ways of looking at the heat issue.

One is through the lens of climate change – the threat of which requires us to reduce the amount of damaging carbon emitted into the atmosphere.

The other is as a huge opportunity  industry can capitalise on the roll-out of renewable heat which is necessary to meet our climate and green energy targets.

Doing so would bring sustainable jobs, investment, warmer homes and a consequent reduction in fuel poverty.

But with industry frustrated by a continued lack of clarity on the Renewable Heat Incentive post 2019, it’s time to take stock of recent policy changes, look ahead to key decisions such as a successor scheme for the RHI, and explore solutions to the variety of barriers facing projects on the ground.

These issues will be discussed in more detail at Scottish Renewables’ Low-Carbon Heat Conference on April 24.

Ahead of that event, this blog looks at the RHI scheme in more detail and asks "Where did it all go wrong?".

The University of Exeter’s Richard Lowes specialises in heat and its associated governance and "situates [his] research in the wide field of policy analysis, but also considers wider approaches to the transformation of large socio-technical systems".

In advance of Scottish Renewables’ Low-Carbon Heat Conference, at which he’s speaking, Richard writes:

“Decarbonising the UK’s heat sector requires two things to happen simultaneously. Firstly, demand needs to be reduced.

“The second piece of the puzzle requires all the UK’s heat to come from low-carbon sources. No emissions from fossil oil or fossil gas.

“Let’s ignore the fact that the UK has a very inefficient housing stock and has the highest proportion of people who say they can’t afford their energy bills compared to some of our closest neighbours. And let’s also ignore the fact that between 2012 and 2013 the energy saved from central Government schemes dropped by 89%.

“So, when it comes to renewable heat delivery, is the UK Government doing any better?”

The non-domestic RHI opened in November 2011 and the domestic scheme opened in April 2014.

Richard continues:

“In terms of overall delivery, the scheme is expected by 2020 to have delivered only 35% of the total level of renewable heat it had originally been expected to.

"So, the RHI will under-deliver on renewable heat – its key goal.”

But what has the scheme delivered?

Richard continues:

“Based on data for December 2017, 98% of the heat delivered under the non-domestic scheme was bioenergy – 73% of the total scheme was biomass combustion and 25% was biogas/biomethane.

Between them, CHP, geothermal, air, water and ground source heat pumps make up less than 2% of the total heat delivered. This compares to a modelled uptake by DECC which suggested 49% of the heat under the scheme would be biomass, 7% biogas, 21% ground source heat pumps, 9% CHP and 14% heat pumps.

“While the over delivery of biomass isn’t necessarily a bad thing, there are of course questions around the sustainability of harvesting bio-resources, the availability and import issue and true carbon savings.

“Bioenergy can be very good, but it can also be very bad.

“The over-delivery of biomass also means that other technologies have under-delivered. In particular, heat pumps have struggled under the RHI, with the national market ‘flatlining’ since the introduction of the RHI.

“Yes, you read it right: the policy to support heat pumps hasn’t delivered any extra heat pumps.

While the heat delivered by the domestic RHI scheme has had a slightly more even split of technologies - with 35% of the heat coming from air source and ground source heat pumps - biomass has still contributed to 53% of the renewable heat under the domestic scheme. Further still, because the domestic scheme is roughly only a tenth the size of the non-domestic scheme, actual delivery has been very limited.

In 2018, the domestic RHI delivered 8,298 domestic renewable heat systems, meanwhile around 60,000 homes were connected to the gas network.

“The UK is therefore in reverse gear when it comes to heat decarbonisation of homes.”

Richard claims there are a number of policy and governance issues which have caused the RHI to end up so out of kilter, including, but not limited to:

  • The domestic scheme being delayed and beginning almost six years after the original legislation was passed in 2008.
  • The original biomass tariff in the non-domestic scheme being too high. Why would anyone install a heat pump when the return on investment for biomass was so great?
  • The budget for biomass being increased in 2013, maintaining the high tariffs.
  • The RHI budget, set by the Treasury, being cut in 2015, reducing deployment expectations.

He says:

“These issues have all been exacerbated by a slow and relaxed attitude from policy makers despite the clear issues with the scheme. BEIS has got to be more nimble on these issues.

“So, while the RHI was originally set up with the best intentions, it is clearly not delivering what is needed to decarbonise the UK’s heat system.

“While the Government has recognised that heat needs to be decarbonised, only a more direct and large scale programme will deliver the levels of renewable and low-carbon heat required by our climate change targets. Let’s see what the post 2020 heat decarbonisation policy brings.”

Richard will be speaking in more detail during the ‘Levelling the playing field’ session at Scottish Renewables’ Low-Carbon Heat Conference in Glasgow on April 24.

Also speaking at the event are:

  • Richard Leyland, Deputy Director - Heat Programme, Department for Business, Energy and Industrial Strategy, UK Government
  • Eoghan Maguire, Senior Strategic Advisor, Vattenfall
  • Andrew Yuill, Senior Renewable Heat Manager, Natural Power
  • Jackie Sayer, Engineer (Energy & Sustainability), The Highland Council
  • Dr Daniel Friedrich, Chancellor's Fellow, University of Edinburgh

Use this link to buy tickets for the conference, to read the full programme or to exhibit.

To read Richard’s full submission to the Public Accounts Committee into the RHI scheme, click here. To hear more from Richard on energy policies, visit his blog.

To join this conversation, tag Scottish Renewables @ScotRenew and Richard Lowes @heatpolicyrich on twitter, using #SRHEAT18

Photography credit: HWEnergy

Laura Russell

Communications Officer