Renewable Heat Incentive Update

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Renewable Heat Incentive

Update www.ofgem.gov.uk

January 2013

Issue 4

This quarterly newsletter provides an update of the Renewable Heat Incentive (RHI) scheme between September and December 2012 as well as a year end review. The report presents the latest statistics and gives you an overview of recent activity and administration of the scheme.

Biomethane installation at the Duchy of Cornwall estate at Poundbury

The Renewable Heat Incentive (RHI) scheme • The RHI scheme supports uptake of renewable heat technologies by non-domestic organisations and is funded from general government spending.

• Ofgem is responsible for the administration of the scheme which includes accrediting installations and paying participants for eligible heat generated or biomethane produced. The Department of Energy and Climate Change (DECC) is responsible for policy and tariff setting.

Renewable Heat Incentive (RHI) – Key figures Quarterly results (October to December 2012) • 426 new applications were received between 1 October and 31 December, and 409 installations were accredited under the scheme – an 80% increase on the number of installations accredited in the previous quarter (227).

• 72 megawatts (MW) of additional capacity was added to the scheme (of which 1.9 MW came from preliminary accreditations) during the last quarter - a 47% increase on that added within the previous quarter (49.04 MW).

• £1.3 million in scheme payments were made - a 53% increase on those made within the previous quarter (£849,406).

• 1 installation was rejected as the applicant had received a grant from public funds.

• 1 biomethane plant was registered in the last quarter which is the first on the RHI scheme.

• The enquiries line is averaging over 2000 calls a month with an increase in recent months and a peak of approximately 3500 calls in November 2012.

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Renewable Heat Incentive Update

Overall results so far - November 2011 to December 2012 Chart 1 presents the status of RHI applications and accreditations at quarterly intervals since the scheme began.

• Ofgem is required to carry out a comprehensive assessment of plant eligibility, metering and identity before accrediting an installation to receive RHI payments. This, along with site audits, is performed to identify potential non compliance or fraud and take appropriate action.

• Applications in the last quarter generally showed improvements in quality, and the number of applications we accredited increased by 80% from September. In 22% of cases [purple area] are in

active review as we await clarification by applicants relating to incomplete or conflicting information about their installation.

• The graph shows that a further 16% of applicants [yellow area] have not responded to our requests for information for more than 12 weeks. We have written to ask them about any issues that they may be facing in establishing their eligibility.

• We are keen to help applicants achieve swift accreditation and have published guidance on applying for accreditation, and encouraged industry to provide support on metering installation. In particular, provision of a Report on Metering Arrangements from a trained, competent and independent provider has been shown to reduce the time taken to achieve accreditation.

Chart 1: RHI Application Processing

2000

230 with applicant >/= 12 weeks

1500

312 with applicant <12 weeks 108 being processed by Ofgem

1000

5 rejected

500 575 approved

0 Dec 11 Mar 12

Jun 12

Sep 12

Dec 12

Totals to end of quarter

Chart 2: RHI Installed Capacity and Payments - Cumulative RHI Payments Made / £millions RHI Installed Capacity / MW

300

3 £2.53m

250

2.5

200

2 171

150

1.5

100 50 0

0.5

49.4 0.03

Dec 11

2

1

98.4

5.25

Mar 12

0 Jun 12

Sep 12

Dec 12

RHI payments are made on quarterly heat data submitted by participants with the first payments to participants made in March 2012. The payments made during the last quarter were for the preceding summer period and it is expected that payments will grow considerably in the coming months.

January 2013 Issue 4

Chart 3: Proportion of RHI installations by technology type - cumulative 0.3% Biogas

0.3% Water Source Heat Pump (WSHP)

4.4% Solar Thermal

0.1% Bio-Methane

4.8% Ground Source Heat Pump (GSHP)

Solid Biomass Boiler Ground Source Heat Pump (GSHP) Solar Thermal Biogas Water Source Heat Pump (WSHP) Bio-Methane

90% Solid Biomas Boiler

Chart 4: Total capacity installed by country - cumulative

Chart 5: Proportion of installations by country - cumulative

22% Scotland

18% Scotland

9% Wales

76% England 6% Wales

69% England

Announcement on Ground Source Heat Pumps In December, we announced the adoption of an industry proposed approach to provide an additional method for Ground Source Heating and Cooling (GSHC) systems to be supported under the scheme. The changes offer a standard way of measuring how much heat output qualifies for RHI payments.

More details can be found on our website. www.ofgem.gov.uk

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Renewable Heat Incentive Update

January 2013 Issue 4

Highlights from the research • 55% of respondents agreed that the website is an informative and practical source of information about the RHI when they first visited it.

• Satisfaction levels decreased to 41% however when applicants tried to use the website and guidance material to help them begin their application.

You had your say We conducted a survey of applicants and participants in early January 2013, to get a clearer understanding of how the scheme was perceived in its first year and where future effort could be focussed. We asked about your experience using the RHI website and for your thoughts on the guidance material and the RHI Enquiry Helpline.

RHI Accredits Biomethane Plant With Royal Approval In December 2012, the RHI scheme accredited its first biomethane installation located at the Duchy of Cornwall estate at Poundbury (featured on page 1).

The Prince of Wales opened an Anaerobic Digester (AD) and biomethane to grid plant which will provide renewable gas direct to the local community. At maximum capacity the plant will provide enough renewable gas for 56,000 homes in the summer and 4,000 in the winter and is the first plant in the UK to inject renewable gas directly into the local gas distribution network under the RHI.

• The service provided by the RHI Enquiry Helpline performed very well with 67% of respondents agreeing that they were satisfied when calling it for information or advice on their application.

The RHI team has listened to the feedback and an updated website and guidance notes are planned for February 2013.

Consultation on Independent Reporting on Metering Arrangements (IRMA) We are proposing a range of adjustments to the criteria for IRMA authors and the IRMA Report Template to improve their usefulness to applicants and Ofgem. To inform this work we have launched a consultation to gain feedback on our proposals which builds on our experience in administering the scheme to date.

The IRMA consultation can be found on the RHI webpage.

It was launched on 7 January 2013 and responses are welcomed with the end date for responses by 4 March 2013. www.ofgem.gov.uk

Contact details Renewable Heat Incentive (RHI)

Press enquiries

For more information visit the Ofgem RHI webpage at www.ofgem.gov.uk/rhi or contact the RHI enquiry team on 0845 200 2122, or via email at RHI.Enquiry@ofgem.gov.uk.

For press enquiries please contact the Ofgem press office on 0207 901 3858

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