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KDWfP: Renewable Heat Incentive - overview and examples
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Transcript of KDWfP: Renewable Heat Incentive - overview and examples
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8/6/2019 KDWfP: Renewable Heat Incentive - overview and examples
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Costs and Implications of the RHI and
Modern Wood HeatingLenham, 27th July
Costs and Implications of the RHI and
Modern Wood HeatingLenham, 27th July
Stewart Boyle
Senior Associate
South East Wood Fuels (SEWF)
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Main Points To Cover
SEWF
The Importance of Renewable Heat
The RHI introduction
Tariffs and Income Stream for Wood HeatingSystems
3 worked examples
Key Check List
Summary Conclusions Next Steps
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South East Wood Fuels (SEWF) Formed 2004 Producer Group
Now more than 7,000 tonnes wood chip fuelunder contract including Pembury Hospital
Expanding rapidly and working closely with a range
of Producers Range of Contracts available multiple year,
rolling, p/kWh on heat meter
Looking at ESCOs and O&M with partners
Boyle Consulting experience with more than 70biomass systems from domestic to 3MW steam athospitals
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Renewable Heat Market
the Sleeping GiantRHI is designed to put the UK on a path to achieving Renewable Energy
Targets
15% of UKs energy has to come from renewable sources by 2020 - EUDirective
11-12% of heating from renewable sources by 2020 including:
110,000 commercial and public sector installations by 2020 (25% ofdemand in these sectors)
13,000 industrial installations
< 1% of heat today from renewable sources
Heating accounts for 47% of UKs CO2 emissions
69% gas, 10% oil, 14% electricity 2 million homes on oil - a key target segment for renewable heat
Modern wood heating likely to be at least 50% of renewable heat target &could be a lot more
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New RE Heat policy
Feed-In Tariffs for Renewable Heat
Value for money is key
Two phase approach second phase of the scheme from
2012
September 30th 2011 commercial/industrial, publicsector, not for profit, domestic district heating
Domestic included from August 2012initial support
through Renewable Heat Premium Payments c.950 via
Energy Savings Trust
Two-tier tariff for biomass
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RHI Scheme Details for Modern Wood
Heating Fuels Include
forest residue, pellets, logs (in boilers not stoves), waste woodeven if contaminated
RHI paid to owner of boiler system for 20 years (15 years fordomestic)
For eligible installations commissioned after 15/7/2009 publicgrants must be paid back
Paid based on metered heat output
Domestic and below 45kW must be MCS registered
Installations >1MW need to report on sustainability
Administration by OFGEM - payments, auditing, enforcement payments quarterly based on meter readings
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Non-Domestic Tariffs for Biomass Heating
Tariff Name EligibleTechnology
Eligible Sizes
Tariff
Rate(pence/
kWh)
Tariff
Duration
(Years)
Support Calculation
Small
Biomass
Solid biomass;
Municiple Solid
Waste (inc.
CHP)
Less than
200kWth
Tier 1:
7.9
20
Metering Tier 1 applies
annually up to the Tier
Break, Tier 2 above theTier Break. The Tier
Break is installed
capacity x 1,314 peak
load hours, i.e.: kWth x
1,134
Tier 2:2.0
Medium
Biomass
200 kWth and
above; less than
1000 kWth
Tier 1:
4.9
Tier 2:
2.0
Large
Biomass
1000 kWth and
above2.7 Metering
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A biomass boiler rated at 250kW(th) operates for 7
hours/day in winter and 3 hours/day in summer, i.e.1,825 hours in total over the year.
This size of boiler is classified as 'Medium Biomass'.
It therefore receives the Tier 1 tariff of 4.9p per kWhfor the first 1,314 hours and the Tier 2 tariff of 2p per
kWh for the other 511 hours
1314 x 250 x 0.049 = 16,096.50
+ 511 x 250 x 0.02 = 2,555.00
Making a total of 18,651.50 per annum
NON DOMESTIC RHI TWO TIER TARIFF A SIMPLE EXAMPLE
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Fuel Price per unit kWh per unit pence per kWh
Wood chips (30%
MC)90 per tonne 3,500 kWh/t 2.6p/kWh
Wood pellets 185 per tonne 4,800 kWh/t 3.9p/kWh
Natural gas 4.1p/kWh 1 4.1p/kWh
Heating oil 56p per litre 10 kWh/ltr 5.6p/kWh
LPG (bulk) 54p per litre 6.6 kWh/ltr 8.2p/kWh
Electricity 13.0p/kWh 1 13.0p/kWh
Information sourced from www.biomassenergycentre.org.uk 16.07.11
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Versatile set of Renewable Technologies
Can provide 24/7 365 days a year low
carbon heating
Chip, pellet and log fuels
Efficiency has increased dramatically as
modern chip and pellet boilers and stoves
have come into the market Automatic pellet room heaters and back
boiler 4kW to 26kW
Domestic scale pellet and chip boilers
Commercial scale chip and pellet boilers
from 75kW up to 10MW
CHP systems multi-MW
Smaller scale CHP (below 1MW (e)) not
currently commercial but this may change
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Boiler Sizing Strategies Winter demand Supplying maximum amount of peak demand
Optimum relationship of boiler size, thermal store andproportion of heat supplied by biomass
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18 0
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Ti m e (hou rs)
Therma
lrate(k
Biom ass bo i le r re -charg ing the rma l s to re
Auxi l iary boi ler supplying peak load
Therma l s to re s e rving dem and
Biom ass bo i le r se rving demand
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RHI Case Studies for Modern Wood
Heating
Three Case Studies
150kW pellet container system (pellet
or chip)
500kW district heating system (chip)
Domestic System (pellet)
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1. Small Off-gas grid: An example RHI Calculation
150kW packaged pellet boiler & integration
98,000 Current: old oil boiler
38,000 l /yr at 55 p/l
5 p/kWh
19,600 oil cost pa
Future: Hargassner pellet boiler
85 tonne/yr at 200/tonne
4.1 p/kWh
17,000 pellet cost
16,100 RHI payment
Net benefit (fuel + RHI)
18,600 = < 6 yr payback
If domestic gas similar payback
If public sector gas prices 3p/kWhpayback = >10 years
If wood chip system Capex higher(+25%) but fuel costs 40% lower so
payback similar 13
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2. District Heating Project on Gas Grid.
Potential RHI scenario Retrofit existing gas community heating
scheme
132 bungalows, 40 flats
3.9m kWhs fuel@ 2.4p/kWh = 2.7m kWhsheat @ 3.4p/kWh
1.2 MW peak load
Econergy supply: replace central gas boiler withbiomass
Design Main contractor (inc CDM)
M&E supply
Froling 500KW chip boiler
400,000 capital
Biomass Heat
1.5 mkWhs heat @ 2.9p/kWh
510 Tonnes PA wood chip (30% mc)
RHI benefit (chip = gas price)
49,800 RHI payment pa
7-8 yr payback
If off gas-grid Payback down to 6 years
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Froling 500KW boiler delivery
into retrofit energy centre
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CASE STUDY 3 DOMESTIC RESIDENCE East Sussex Coast
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CASE STUDY 3 DOMESTIC RESIDENCE
DETACHED 4 BED CHALET STYLE HOUSE SOUTH COAST
Built 1960
Traditional Construction
Double Glazed, cavity & loft insulation
CAPITAL COST OF SCHEME = 12.5k
35Kw Biomass Pellet Boiler (WoodViking)
Higher cost if External Pellet Silo (15K)
Single Heat Interface Unit & Commissioning
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CASE STUDY 3 - DOMESTIC RESIDENCE
ANNUAL HEAT ENERGY FOR SITE
Annual Heat Energy Required : 27,280 kWh
Efficiency of Biomass Pellet System: 90% Annual Energy Consumption: 27,280/.9 = 30,310 kWh
OPERATING COST COMPARISON
Existing gas fired system running at 80% efficiency
27,280kWh / .8 = 34,100kWh @ 0.041p/kWh = 1,398 perannum
Biomass system running at 90% efficiency
27,280kWh/.9 = 30,310kWh @ 0.039p/kWh = 1,182 per
annum
Pre RHI saving of annual running cost of 216 which provides a
payback of just under 58 years.
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CASE STUDY 3 - DOMESTIC RESIDENCE
RHI ASSESMENT FOR THISSITE
35kW biomass pellet system 27,280 kWh per annum
Say RHI Allowance for system = 0.08/kWh No tiered system payment on metering only
27,280kWh x 0.08 = 2,182 RHI payment per annum
PAYBACK & INCOME STREAMAnnual Energy Cost Saving 216 + RHI Payment 2,182 = 2,398
Return of Capital Expenditure: 15,000/ 2,398 = 6.2 years. If Week
pellet hopper only payback down to 5 years
Income Stream following payback for remainder of RHI 20 year award
period :20yr 5 yrs = 15yr x 2,398 = 35,970
If this scenario was pitched against an existing oil fired heating system
at 70% efficiency the payback would be 3.8 years with a fuel saving of
1
,000 per annum
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Summary Conclusions
The RHI offers: Quarterly payments for 20 year
dramatically improved economics of renewable heat
10-12% ROI
Reduced payback by up to 90% (domestic) and 50% (commercial)
Limited window of opportunity (first come, first served)
Scheme opens via Ofgem on 30th September 2011 (1st August Domestic)
On-line application process
RHI will apply after the installation is commissioned
Some (large) schemes involving big can be pre-registered to help de-risk investment
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Next StepsMore information
www.decc.gov.uk/rhi to see:
Policy document, Draft regulations, Impact assessment and supporting
documentation, Frequently asked questions
For queries e-mail [email protected]
The REA web-site www.woodfuelheat.org.uk
Carbon Trust Biomass Heating Design Guide
www.carbontrust.co.uk
Environmental Protection UK: Biomass and Air Quality -
http://www.environmental-protection.org.uk/biomass/
Get good advice! An experienced consultant, e.g. Carbon Trust low
carbon consultants, or experienced wood heating company for
Design support avoid the Google Consultant!
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Thanks!
Stewart Boyle
07785 726 306
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Wood fuel sources and sustainability
Are there enough trees?
2020 UK Government Biomass Heat Target: 38TWh Requires 11 million tonnes per annum of wood fuel: > 1 billion
pa Wood fuel sources (1)
Forestry & sawmill residues, arboricultural arisings, undermanaged woodland, incl. domestic pellets: 3-4 m tpa possible by2020
Energy crops: short rotation forestry, willow, poplar etc: c.700,000hectares by 2020 possible (>9m tpa) Wood pellets:
Very substantial supply, not believed to be limited if importsincluded
eg. >6 billion of wood products are currently imported intothe UK
Recycled waste wood: > 4m tpa available now (industrial plantonly) Low carbon, sustainable sourcing is essential
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