back 2 business week - green deal: Nick Tune of BRE

The ‘new’ - micro renewable energy and

refurbishment incentive schemesGreen Deal

Renewable Heat Incentive

Feed in Tariff

Nick Tune, Director BRE Wales

It’s not easy being green!

Introduction

• The UK Government have developed 3

schemes for micro renewable energy

and low energy refurbishment

– The Feed in Tariff – finance scheme

for electricity generating renewable

energyenergy

– The Renewable Heat Incentive –

finance scheme for heat generating

renewable energy

– The Green Deal – ‘pay as you save’

scheme for building refurbishment

Feed in Tariff

• Started April 1st 2010 Tariff is RPI linked and guaranteed for 25 yrs

• Highest generation rate available until 2012, then decreases for new entrants

• Tariffs paid by a utility company, administered by Ofgem

• Electricity not used can be exported

• You do not need to be the building owner to claim the generation tariff• You do not need to be the building owner to claim the generation tariff

• Significant alterations in market conditions since introduction

Installations to November 2010

Simple Payback Example

• Solar PV

• 10 kW on roof

• Installed price £35k

• Generation 8,500kWh/yr

• Generation tariff 36.1p/kWhr• Generation tariff 36.1p/kWhr

• Simple payback 11 years

• Gross earnings £79,900

FITs in Practice – domestic example

Generation Tariffs - originally

Technology Scale Generation Tariff

2010 (p/kWhr)

Tariff Lifetime

(years)

PV ≤ 4kW (new build) 36.1 25

PV ≤ 4kW (retrofit) 41.3 25

PV > 4-10kW 36.1 25

PV > 10-100kW 31.4 25

PV > 100kW-5MW 29.3 25PV > 100kW-5MW 29.3 25

PV Stand alone system 29.3 25

Wind ≤ 1.5kW 34.5 20

Wind > 1.5-15kW 26.7 20

Wind > 15kW-100kW 24.1 20

Wind > 100-500kW 18.8 20

Wind > 500kW-1.5MW 9.4 20

Wind > 1.5MW-5MW 4.5 20

Generation Tariffs following First Review

Technology Scale Generation Tariff

2010 (p/kWhr)

Tariff Lifetime

(years)

PV ≤ 4kW (new build) 36.1 25

PV ≤ 4kW (retrofit) 41.3 25

PV > 4- ≤ 10kW 36.1 25

PV > 10 - ≤ 50kW 31.4 25

PV > 50 - ≤150kW 19.0 25PV > 50 - ≤150kW 19.0 25

PV > 150 - ≤ 250kW 15.0 25

PV >250kW - ≤ 5MW 8.5 25

Wind ≤ 1.5kW 34.5 20

Wind > 1.5-15kW 26.7 20

Wind > 15kW-100kW 24.1 20

Wind > 100-500kW 18.8 20

Wind > 500kW-1.5MW 9.4 20

Wind > 1.5MW-5MW 4.5 20

Some important issues to consider

• Site orientation and shading

• System specification

• Financial assumptions on technical performance

• Pre-payment meters and metering

• Replacement of components over time • Replacement of components over time

• Output drop over time

• Fixing methods

• Resident engagement

• Financial Models and Insurance

Importance of solar data

Feed in Tariff for PV – Site and Shading

Site Selection:

• South facing

• Essential to consider over-shading to calculate generation yields

3D – Shading Analysis

Example: variation in output with pitch and orientation [CIBSE]

Shading Analysis

2D – Shading Analysis

Feed in Tariff for PV

Consultancy for PV

•Identifying the most suitable sites

•Accurate predictions of energy generation

•Modelling of shading

•Modelling Module/Inverter configurations•Modelling Module/Inverter configurations

•Support tender evaluation

•Confirm specifications

• Support investment case

The Renewable Heat Incentive

• Payments for renewable heat generation similar to FIT for

electricity

• An incentive based mechanism with intention of creating a

bigger market for renewable heat

• RHI will be funded from general Government spending,

not through the previously proposed RHI levy

• Due to go live from ‘Summer 2011’

• Two phases of implementation

Two-Phase Approach

• Phase 1: Non-Domestic Sector

» Targeting large energy users

» Businesses, industrial, public sector

» Communal systems included, e.g. sheltered

housing

• Phase 2: Domestic

» Long-term support aligned with Green Deal

(i.e. will support ‘whole house approach’)

» October 2012 for implementation

Confirmed original proposals

• Installations between 15 July 2009 & introduction of

scheme eligible for tariffs

• Long term support (adjusted for inflation) to compensate

for:– Capex and opex of renewable heating compared to a gas fossil fuel – Capex and opex of renewable heating compared to a gas fossil fuel

alternative

– Additional barrier and financial cost (assuming a 12% rate of return for a

reference installation, apart from solar thermal);

• Support for technologies classed as renewable

• MCS for installations <45kW

• Ofgem E-Serve will administer the scheme

New policy

• Value for money is key

• Two phase approach –second phase of the scheme from 2012

• Domestic included from 2012 –initial support through Renewable Heat

Premium Payments

• Fewer technologies supported in phase 1 to allow further evidence

gathering

• Two-tier tariff for biomass <1MW

• Funded from Government spending

HeatHeat

PumpPump

Natural temperature at >1 metre below surface is a constant +10 Natural temperature at >1 metre below surface is a constant +10 C.C.

Plenty of heat energy Plenty of heat energy –– but at too low a temperature but at too low a temperature

low grade heatlow grade heat useful heatuseful heat

Resource costs per MWh of key renewable

energy technologies

Source: (DECC Impact Assessment March 2011)

Phase 1 – Eligible technologies

• Ground and water source heat pumps (one tariff)

• Biomass

• Biogas combustion <200kW (incl gasification & pyrolysis)

• Biomethane injection

• Solar thermal <200kW

• Geothermal (GSHP tariff)

• Energy from municipal solid waste (adjusted biomass tariff)

• CHP (support on the basis of heat only technology)

Tariff levelsEligible technology Eligible size Tariff

(p/kWh)

Tariff

duration

(years)

Support

calculation

Solid biomass; municipal solid

waste (inc CHP)

< 200kWth7.6 (Tier 1)

1.9 (Tier 2)20

MeteringTier 1 applies annually to the

tier break,

Tier 2 above tier break

200-1,000 kWth4.7 (Tier 1)

1.9 (Tier 2)20

> 1,000kWth 2.6 20Metering

Tier break is

installed capacity x > 1,000kWth 2.6 20Metering

Ground source heat pumps;

water sourced heat pumps;

deep geothermal

< 100kWth 4.3 20Metering

> 100kWth 3 20Metering

Solar thermal < 200kWth 8.5 20Metering

Biomethane injection and

biogas combustion, except from

landfill gas

Biomethane all scales

Biogas combustion

< 200kWth

6.5 20Metering

installed capacity x

1,314 peak load

hours, i.e.

kWth x 1,314

RHI Biomass Example

• A 30kW biomass installation (e.g. a pellet boiler in a small school) generates 45 MWh (or 45,000 kWh) of heat in a particular year.

• Approximate capex = £15,000

– Its "Tier Break" can be determined by multiplying 30kW x 1,314h = 39,420 kWh. S It will receive:

• The Tier 1 tariff for first 39,420kWh,

i.e. 39,420kWh x 7.6p/kWh = £2,995.92

• The Tier 2 tariff for the remaining 5,580kWh,

i.e. 5,580kWh x 1.9p/kWh = £106.02

Total RHI payment = £3102 /yr

Administration

• Ofgem E-Serve– Manage applications

– Assess whether applications meet eligibility criteria

– Make incentive payments

– Ensure compliance with rules of scheme (may require inspection)

– Will produce guidance on the scheme

• DECC

• MCS Certifying bodies

Phase 1 – Eligible requirements

• All non-domestic or

single installations

heating multiple domestic

premises

• Metering of all

installations –heat has to installations –heat has to

be delivered through

water or steam

• Useful heat in buildings

(space, water or process)

• Sustainability reporting

for biomass above 1MW

• MCS products and

installers where

applicable up to 45kW

Phase 2

• Inclusion of domestic

• Automatic degression to control cost

• Consideration of further technologies

– Direct air heating (furnaces, kilns,

ovens etc)

– Air source heat pumps –key

technology

– Bioliquids

• Possible dedicated tariffs for

– CHP

– Geothermal

– Solar thermal and biogas

combustion >200kW

• Emissions limits for biomass boilers

Measuring the Heat

• Support paid on basis of multiplying the kWhth of metered

renewable heat by the relevant tariff

• Heat meter must meet the Class 2 requirements of EU

Measuring Instruments Directive (MID) 2004

• Heat Pumps: Must ensure metering does not count any

cooling element

• More details to follow from DECCS

What to look out for

• Check for RHI eligibility

• Make sure project management team

is in place

• Carry out options appraisal

• Select technology / ies

• Get quotes – from MCS installers for

45kW and below45kW and below

• Identify other eligible funding

• Check project can be delivered within

RHI review timetable (Apr ‘15)

• Complete Ofgem accreditation

99all of the above takes time!!!

Renewable Heat Incentive

Consultancy Offering:

• Identification of suitable buildings

• Assessment of revenues and running costs

• System specification

• Accurate predictions of energy generation and income• Accurate predictions of energy generation and income

• Modelling of supply and demand profiles

• Support tender evaluation

• Technical support for investment cases

• Impact on building users

Green Deal

• Pay as you save scheme

• Whole House Approach

• Companies e.g. British Gas, B&Q, M&S,

Tesco etc will pay for and install energy saving

measures

• No upfront cost

• A percent e.g. 80% of energy savings made

by the measures will be used to pay off the

cost of the measures (must within 25 years)

• Measures must provide greater energy

savings than the repayments over the 25 yr

period

What measures will be funded?

• Phase 1 - energy saving measures

– Solid Wall insulation,

– Double glazing

– Cavity wall

– Loft

• 2ND Phase - Micro renewables

– PV

– SHW

Who will implement Green Deal?

• Licensed Assessors – energy model the house (similar to

the EPC certificate) suggest measures

• Home owner signs up to scheme and pay back period

• Registered companies install measures to set standards

e.g. MCS etce.g. MCS etc

• The loan is against the house not the individual i.e. the

repayment is passed onto the new home owner

Green Deal – Seamless Customer Journey

Marketing DeliveryPre-Assessment Post -Assessment Monitoring

BRE

Green Deal Process

2) BRE markets

Green Deal to

consumers

through extensive

assessor network

1) Marketing of

Green Deal

5) Accredited Green

Deal Advisors drawn

from DEAs NDEAs

DECs & EHS

surveyors

Software: SAP,

RdSAP, BREEAM in

Use, Refurb Portal

Training by BRE

6) Product

Standard - PAS

Product

Certification

MCS

Green Book Live,

Redbook

SAP Appendix Q

7) Installation

MCS installers

Green Book Live

Red Book

Voluntary training for

installers & specifiers

16) BRE to develop

Operational Rating

software tool to

monitor future

performance –

service could be

provided by web-

based tool

4) Initial Survey 8) Green Deal

Finance

11) Green Deal

Retro-fit

Installation

12) Post installation

survey15) Maintain

relationship with

Technical feedback loop – uploads results into refurbishment portal

13) Accredited Green

Deal Advisors drawn

from DEAs NDEAs

DECs & EHS

surveyors

Software: SAP,

RdSAP, BREEAM in

Use, Refurb Portal

Training by BRE

Green Deal Provider

Via: web tool

(e.g.T-Zero),

network of

installers (SMEs)

9) Product

Customer Finance

Plan options for

products through

web-tool

Supply of products

(such as insulation

etc)

10) Installation

Installation of

products through

network of

installers (SMEs)

14) Results of post

installation assessment

used to enable

activation of finance

plan.

Assessment should

include an Operational

Rating

17) Operational Rating

software feeds back

energy performance

data to BRE and

Green Deal Provider

via Smart Meter

system

Assessment of

property to determine

Asset Rating (EPC).

This could include

Operational Rating.

Generation of “Green

Deal Report”

Finance Plan to be

generated for

consumer (must

meet “golden rule”)

Installation

Installation of

products

recommended in

initial assessment /

survey

Following installation a

second survey (EPC)

is undertaken to

produce post

installation Asset

Rating

customer

Monitoring of future

energy consumption

through a web-based

tool providing

feedback to Green

Deal provider

3) Opportunity for

provider and BRE

to work together

on dual branded

marketing

campaign

Loyalty feedback loop - driving repeat business through rewards system

Green Deal – a seamless Customer Journey

Assessment: Green Deal will require initial EPC for property in

order to initiate Process:

• Customer tracking through initial EPC report reference number

(RRN) enables customer to track progress of their Green Deal

throughout the process

EPC – report

reference

number

EHS Data Collection Pre 2008

Developing Scenarios for Future

Energy Use and Carbon Emissions

Market penetration of home energy efficiency measures

70%

80%

90%

100%

Perc

en

tag

e o

f p

ote

nti

al

Hot water tank insulation

Central heating

Double glazingDraught proofing

0%

10%

20%

30%

40%

50%

60%

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Year

Perc

en

tag

e o

f p

ote

nti

al

Condensing boilers

Cavity wall insulation

Loft

insulation

(any)

Step 1. Carbon Map

identify regional CO2 hotspots

Key points

• We will visually map dwelling

CO2 by Census Output Area

• This provides a clear

indication where poorly-indication where poorly-

performing stock is located

• Allows effort to be targeted

towards the most effective

locations

• Provides visually compelling

material aiding communication

with stakeholders

PV survey through dataS


Installation: Second element of delivery phase is installation

of products supplied under Green Deal framework:

• Technical: Development of installation standard / code of

practice

• Training: Opportunity for BRE Training to provide

voluntary installer training – providing confidence to

consumerconsumer

• Certification: BRE Global operate an approved MCS

installer scheme, all MCS installers are listed on the

www.greenbooklive.com. This could be extended to cover

Green Deal Registered Installers

• Commercial opportunities: BRE Training - provision of

installer training, opportunities for Green Deal Provider –

revenue through installation service (partnership with

SMEs)


Finance: Green Deal Framework will include need for finance package to

be extended to home/building owner to enable recommendations to be

implemented:

• Technical: BRE developed T-Zero which enables home owners to

review options for improvements, this could be extended to cover

Green Deal – indicating options for product selection. Capability on

cost-benefit and Green Deal finance modellingcost-benefit and Green Deal finance modelling

• Commercial opportunities: Further development of web-based tool

for consumers to model finance options – analysis of payback


Post-Installation Assessment: Green Deal process will require

post installation EPC for property in order to confirm that

recommendations have been implemented:

• Technical: BRE developed software such as: SAP, RdSAP,

SBEM, BREEAM in Use and BREEAM Domestic

Refurbishment. Where issues occur BRE could help resolve

with advice.

• Training: BRE Training is able to provide top-up training for

DEAs and NDEAs enabling them to deliver Green Deal Advisor

services

• Certification: BRE Global well placed with 1,609 Accredited

Assessors who have lodged 762,822 EPCs, DECs and Home

Condition Reports

• Commercial opportunities: Training of Green Deal Advisors,

delivery of accreditation scheme (increased volume of EPCs)


Maintaining the relationship with the customer – Monitoring:

• Green Deal process provides invaluable access to customers, which if

maintained could help to drive repeat business – monitoring energy

consumption will be key to developing future repeat business

• BRE to develop web based operational rating software which helps

the customer monitor post Green Deal energy consumption

• Energy data fed directly back to BRE and Green Deal Provider via

smart meter system installed during retro fit. Data used to inform and

refine software tools used for Green Deal Advice


Maintaining the relationship with the customer – Feedback:

• Generate case study from pre and post assessment together with

monitored performance into NRC Refurbishment Portal

• Provide expanded database to be used by future customers

EPC – report

reference

number

back 2 business week - green deal: Nick Tune of BRE

Business

Transcript of back 2 business week - green deal: Nick Tune of BRE