Mitsubishi Electric Guide to the Non-Domestic Renewable Heat Incentive Information

Mitsubishi Electric Guide to the Non-Domestic Renewable Heat Incentive Information
Mitsubishi Electric Guide to
the Non-Domestic Renewable
Heat Incentive
Information Guide
50
Information Guide
Mitsubishi Electric Guide to the
Non-Domestic Renewable Heat Incentive
This is an independent guide produced by Mitsubishi Electric
to enhance the knowledge of its customers and provide a
view of the key issues facing our industry today.
This guide accompanies a series of seminars,
all of which are CPD certified.
Contents
Background and essentials
Page Four
Criteria for eligibility and registration
Page Six
How payments work for the non-domestic RHI
Page Eight
RHI technologies and techniques
Page Ten
Page Three
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Mitsubishi Electric Guide to the Non-Domestic RHI
Background and essentials
The non-domestic Renewable Heat Incentive is a financial support mechanism
for renewable heat targeted predominantly at the commercial and industrial
sectors. Launched in November 2011, it provides payments to industry,
businesses and public sector organisations that generate on-site and use
renewable energy to heat their buildings.
The Renewable Heat Incentive (RHI) is described by the Government
as the world’s first long-term financial support programme for
renewable heat.
Essentially, the RHI scheme offers a subsidy for each kWh (kilowatt hour) of eligible renewable heat generated from
accredited installations and also by registered producers of biomethane. The objective of the RHI is to significantly
increase the proportion of the UK‘s heat that is generated from renewable sources, driving change in a heating
sector that is currently dominated by fossil fuel technologies such as oil and gas.
The non-domestic RHI aims to encourage the uptake of renewable heat technologies by compensating for barriers
to their adoption, including the current higher capital costs and in some cases higher operational expenditure for
these technologies compared to those using traditional fossil fuels.
The heat generated must be used for space, water or process heating to be eligible for RHI support and participants
in the scheme will be required to meet a number of ongoing obligations, including maintaining equipment, providing
information to Ofgem (which administers the scheme) and allowing installations to be inspected.
Page Four
Information Guide
Because of the wide range of technologies and fuel uses that could potentially
be included within the RHI, the Government decided to take a phased approach
to its implementation. Phase 1 - the non-domestic RHI - was introduced in
November 2011. Phase 2 - the domestic RHI scheme - is due to be launched
in spring 2014 subject to State aid and Parliamentary approval.
The non-domestic scheme covers several types of heating including:
■ Biomass
■ Heat pumps including air-to-water (ATW) and ground-to-water (GTW)
■ Geothermal
■ Solar thermal collectors
■ Biomethane and biogas
Focus on heating
Heating uses the largest proportion of energy for buildings in the UK. According
to the Government, the UK uses more energy for heating than for transport or even
the generation of electricity. Last year, the UK spent around £33 billion on heat across
the economy. Almost half of the final energy consumed in the UK is in the form
of heat and its generation is reckoned to account for 47% of UK CO2 emissions.
Today, most of our heat is produced by burning fossil fuels (around 80% from gas
alone). As a result, heat is responsible for around a third of the UK’s greenhouse
gas emissions. This is regarded as unsustainable. By increasing heat generation
from renewable energy sources rather than fossil fuels, the RHI is designed to help
meet European legislation asking for 12% of heat to be generated by renewables
whilst helping the UK cut greenhouse gas emissions so that it can meet targets for
reducing the effects of climate change. To play its part in the global effort to combat
climate change, buildings in the UK will need to be virtually zero carbon by 2050.
Like its counterpart, the domestic RHI scheme, the non-domestic scheme is
designed to contribute to a reduction in carbon emissions to help achieve this.
Introducing the scheme, Minister of State for Energy and Climate Change
Greg Barker, said:
“
“
Taking action now to switch from fossil fuels to cleaner and more
sustainable green sources of heat will reduce the impact that our heat
requirements have on the environment and help ensure the UK has an
energy supply that is safe, secure and reliable. It is for this reason that
we are introducing the Renewable Heat Incentive, making renewable
heat not just an environmentally sound decision, but also a financially
attractive one. This support can help drive take-up of renewables now,
stimulate the renewables industry, encourage further innovation and
ultimately, bring down the cost of renewable heating.
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Mitsubishi Electric Guide to the Non-Domestic RHI
Criteria for eligibility and registration
The definition of a non-domestic property eligible for the RHI is that it must not
be a single dwelling. Examples of eligible properties include commercial office,
school or community/district heating scheme. This type of building will attract
the non-domestic RHI tariff whether the heating load is 5kW or 1MW.
Only installations of 45kWth or less must be installed by a company registered on the Microgeneration Certification
Scheme (MCS) and with equipment also registered on the MCS. The MCS is an industry-led, internationally recognised
quality assurance scheme supported by the Department of Energy & Climate Change (DECC). MCS certifies microgeneration
technologies used to produce electricity and heat from renewable sources. It also certifies installation companies to
ensure the microgeneration products have been installed and commissioned to the highest standard.
RHI payments are only made to the ‘owner’ of the installation used or intended to be used for the renewable generation
of heat or a producer of biomethane, in accordance with the legislation underpinning the scheme. The owner of an
installation is the person with exclusive rights and liabilities in respect of that installation. The owner will therefore usually
be the person who purchased and paid for the installation of the equipment.
To be eligible for the non-domestic RHI scheme:
If the installed capacity is 45kW or less then installers must have MCS certification
Equipment must be new at the time of purchase
The system must be metered using the correct type of meters which are located correctly.
The meters must be maintained and recalibrated at least every ten years, or according to
manufacturer recommendations
Equipment must use liquid or steam to deliver the heat (no direct air heating)
Equipment must be used to heat a space or water, or for carrying out a process where the heat is
used within a building. It can also be used outside for commercial cleaning or drying
Equipment cannot be used to heat a single home (though a combination of homes sharing a
heating installation might be eligible - e.g. community heating for a block of flats)
A public grant cannot be used to buy or install the equipment
Organisations that have received National Lottery funding are ineligible for the scheme unless they received it
between July 2009 and November 2011 and have repaid the funding.
Page Six
Information Guide
Applications for RHI funding for non-domestic schemes are made through
the Ofgem website. There are five steps to take:
■ Gather appropriate documentation
■ Create an account on the RHI Register - You need to be the authorised
signatory for your organisation, which means you are the owner or
authorised representative of your organisation
■ Complete the application form
■ Upload evidence
■ Verify identity and bank details
Biomethane producers are treated differently from other participants in the
RHI. This is because the Government has decided that the regulations and
standards currently in place for biomethane injection are sufficient to ensure
that the RHI requirements are met, so no further RHI-specific accreditation
standards are necessary. As a result the Regulations describe the process for
biomethane producers as ‘registration’ rather than ‘accreditation’.
Once accredited, you must send a report to Ofgem every year to confirm you’re
still eligible. You will need to confirm the installation company details and
show evidence of the date of installation and the installation serial number.
Each application will be different, but evidence could include:
■ Commissioning certificate or commissioning report for the installation
■ Schematic diagram of the installation
■ Photo of meter(s), electrical and/or heat, clearly showing the serial
number and MID/Class 2 markings
■ Letter of authorisation that confirms your organisation’s Authorised
Signatory for its RHI account. Evidence of non-single domestic status
such as multiple council tax bills or a business rates bill
■ Independent report on Metering Arrangements if your installation
has a capacity of 1MW or above, or is classed as “multiple” for
RHI metering purposes
■ Evidence of Coefficient of Performance CoP and seasonal CoP.
This is required for heat pumps
■ Photo of the nameplate of the installation clearly showing the capacity
and serial number
It is important to note that Ofgem’s own website highlights of having the
correct information to hand when making an application, particularly technical
data. When delays to applications happen, it is largely because the correct
information has not been supplied.
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Mitsubishi Electric Guide to the Non-Domestic RHI
How payments work for
the non-domestic RHI
Financial support from the non-domestic RHI will be paid at a set rate per unit
of renewable heat generated. Payments will be made quarterly for twenty years.
Tariffs are set for each type of RHI-eligible technology, and the Government
expects to update these tariffs on a regular basis.
They will be kept in line with the Retail Prices Index (RPI) and will also be linked to uptake levels for each eligible
technology. The aim is to ensure that the RHI scheme stays within its budget, so tariffs could be altered to account
for particularly high uptake that exceeds the Government’s predictions. This process of tariff smoothing is known
as ‘degression’.
The basic tariff levels are based on the technology used, and when it was accredited. The amount of payment received
also depends on the Eligible Heat Output (EHO). The tariff levels for the different technology have been calculated to
support the RHI technologies and encourage a move away from non-sustainable methods of heating buildings.
The EHO figure will be calculated by Ofgem, which will use data, supplied by owners, hence the importance of correct
metering. The table below shows tariffs available for installations from now and paid from spring 2014. The different
tiers of tariff refer to amounts paid for the first 15% of heat energy generated (tier 1), followed by a slightly lower
payment for all further heat
output (tier 2).
Tariff Name
Tier
Tariffs
Air to water heat pump
N/A
2.5
Ground to water
heat pumps
Tier 1
8.7
Tier 2
2.6
Tier 1
8.6
Tier 2
2.2
Tier 1
5.0
Tier 2
2.1
1 MWth and above
N/A
2
Small commercial biomass
Eligible Technology
Solid biomass including solid
biomass contained in municipal
solid waste (including CHP)
Eligible Sizes
Less than
200 Kwth
200 Kwth and above;
less than 1MWth
Medium commercial biomass
Large commercial biomass
(p/kWh)
All solar collectors
Solar collectors
Less than 200 kWth
N/A
10 – 11.3
Biomass direct air heating
Small and medium
Less than 1MW
N/A
2.5
Large
Greater than 1MW
N/A
2.0
Page Eight
Information Guide
Obligations to stay compliant
In order to remain compliant with the RHI scheme’s rules and
to continue receiving payments, owners of the equipment
must ensure that they adhere to Ofgem’s ‘ongoing obligations’.
These are:
■ Submit meter readings regularly to receive RHI payments.
Installations of under 1MWth require quarterly readings;
those with greater capacity must submit monthly readings
■ Those with biomass installations need to keep a careful
record of fuel use
■ Maintain and service the equipment and retain evidence of this
■ Inform Ofgem of any changes to the installation and sign an
annual declaration
Page Nine
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Mitsubishi Electric Guide to the Non-Domestic RHI
RHI technologies and techniques
The RHI has been set up to encourage take-up of a range of technologies so
that users and specifiers can use the most appropriate technology for their
site. There are particular rules for certain heating types under the RHI so these
should always be carefully examined when making a choice of technologies,
as eligibility will depend on strict adherence to the appropriate requirements.
For example, air-to-water (ATW) heat pumps were added to the list of eligible technologies in December 2013.
Installations from that date will be able to claim the new tariff from spring 2014. The tariffs on these technologies
are paid on the total energy delivered, rather than the renewable energy delivered. But there is now a requirement
for heat ATW and ground-to-water (GTW) heat pumps to achieve a minimum seasonal efficiency of Seasonal
Performance Factor (SPF) of 2.5.
The intended calculation methodology for seasonal performance for heating will be BS EN 14825:2013 (air conditioners,
liquid chilling packages and heat pumps with electrically driven compressors, for space heating and cooling. Testing
and rating at part load conditions and calculation of seasonal performance). Evidence will be required during the application
process to show compliance to this standard. Heat pumps used to generate hot water will be measured against BS EN 16147
(Heat pumps with electrically driven compressors. Testing and requirements for marking of domestic hot water units).
The new policy intention is for all ATW installations to be heating-only, in order to ensure they are used and applied
to buildings that would have otherwise used a fossil fuel boiler. However, reversible (cooling-capable) GTW systems
will be allowed under the scheme. Heat put into the ground from solar, waste heat from cooling or waste heat from
an industrial process will also be permissible. Under these circumstances a heat meter will be required on the ground
loop as well as the heating circuit. This will be used to measure the proportion of heat from the ground versus the
proportion of heat delivered. Where this ratio drops below 3/5th of heat from the ground, the system will not be classed
as renewable and therefore would not continue to receive the incentive.
Page Ten
Information Guide
The importance of metering
All non-domestic installations must be metered using MID Class II approved
heat meters in order to measure actual heat output on site. These meters are
highly accurate, and clearly crucial for DECC to understand how much heat
has been delivered to each building in the scheme.
Again, careful consideration needs to be taken when positioning meters as
each technology has different metering requirements. Ofgem will offer advice
in this area during the design stage. For example, electrical consumption
meters will also need to be installed on all heat pumps. This is to enable accurate
feedback on each unit’s performance and seasonal efficiency. It will not affect
payments, but the information gathered is intended to be used for future
policy developments. However, where heat pump systems are not meeting
an SPF of 2.5, Ofgem will notify users and recommend changes to the system.
It is clear therefore that using properly accredited equipment and knowledgeable
installers is going to be an important part of ensuring that a project can receive
RHI payments, and continue to do so for the long-term.
Looking to the future
Like all Government schemes, the RHI scheme will be subject to change and
development over time. It will be important for end-users, installers and
contractors to stay aware of any future developments in areas such as
eligible technologies and rates of RHI payments.
Useful sources of information
Ofgem: www.ofgem.gov.uk email: rhi.enquiry@ofgem.gov.uk
or telephone: 0845 200 2122
The new Ecodan Selection Tool supplied by Mitsubishi Electric already has a
RHI calculator built in for non-domestic installations and can be used to help
with estimating RHI amounts and cost savings. Further updates to this tool
will be made to include different markets and building types. Please refer to
the following website:
www.heating.mitsubishielectric.co.uk/ecodanselectiontool
For additional information on renewable heat pumps and case studies of
product in situ, please also refer to the Mitsubishi Electric Heating website:
www.heating.mitsubishielectric.co.uk
Page Eleven
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To receive a CPD seminar on Non-Domestic RHI you
can call your Mitsubishi Electric Regional sales office to
arrange an in-house presentation of this information.
If you would like to receive invitations to future CPD events,
please email livingenvironmentalsystems@meuk.mee.com
Further information
Regional Sales Offices, please call one of the numbers below:
Birmingham
Tel: 0121 741 2800 Fax: 0121 741 2801
Manchester
Tel: 0161 866 6060 Fax: 0161 866 6081
Bristol
Tel: 01454 202050 Fax: 01454 202900
London South Region
Tel: 01737 387170 Fax: 01737 387189
Wakefield
Tel: 01924 207680 Fax: 01924 207699
London North Region and East Anglia
Tel: 01707 282480 Fax: 01707 2824810
Scotland
Tel: 01506 444960 Fax: 01506 444961
London Central Region
Tel: 0207 928 6810 Fax: 0207 928 6569
Telephone: 01707 282880
email: livingenvironmentalsystems@meuk.mee.com
web: livingenvironmentalsystems.mitsubishielectric.co.uk
UNITED KINGDOM Mitsubishi Electric Europe Living Environmental Systems Division
Travellers Lane, Hatfield, Hertfordshire, AL10 8XB, England
General Enquiries Telephone: 01707 282880 Fax: 01707 278881
IRELAND Mitsubishi Electric Europe Westgate Business Park, Ballymount, Dublin 24, Ireland
Telephone: Dublin (01) 419 8800 Fax: Dublin (01) 419 8890 International code: (003531)
Country of origin: United Kingdom – Japan – Thailand – Malaysia. ©Mitsubishi Electric Europe 2014. Mitsubishi and Mitsubishi Electric are trademarks of Mitsubishi Electric Europe B.V. The company reserves the right to make
any variation in technical specification to the equipment described, or to withdraw or replace products without prior notification or public announcement. Mitsubishi Electric is constantly developing and improving its products.
All descriptions, illustrations, drawings and specifications in this publication present only general particulars and shall not form part of any contract. All goods are supplied subject to the Company’s General Conditions of Sale,
a copy of which is available on request. Third-party product and brand names may be trademarks or registered trademarks of their respective owners.
Effective as of January 2014
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