My RHI response (don't get too excited)

The Renewable Heat Incentive Consultation closes today. Thanks to Kate de Selincourt who alerted me to this. I spent 40 minutes replying to some of the many questions and thought I would share my responses with blog readers. If you want to put your five pence worth in, be quick. It's here: RHI Consultation


1. What are your views about the proposed approach of a universally available tariff scheme? Is a tariff scheme the most efficient way to drive down technology costs, increase innovation and value for money, together with developing a homegrown supply chain? Please include reasoning for your response.

No, I think a tariff scheme, especially a deemed tariff scheme is not the way to go here. It seems to be modelled on FITs which have themselves been copied from Germany. FITs have been successful because they have been generous, but an installation-based subsidy has the potential to be just as successful and would be easier to comprehend from the consumer's standpoint and to administer for government agencies.

2. Do you think that there would be advantages in phasing or piloting roll out of the scheme? On what basis do you think it might make sense to phase or pilot the scheme?

Not really. FITS have been around long enough for us to know what is likely to happen. RHI has already been delayed. "Phasing" sounds like a polite way of adding further delay.

3. Do you think that there may be alternative or additional approaches to incentivising renewable heat deployment that we should pursue? What approaches do you think might add most value?

Yes. If there is to be any subsidy, it should be towards the installation costs. As with almost all non-fossil fuelled power sources, the running costs are generally much lower. It's the capital costs which are the barrier to uptake. Consequently, it makes little sense to incentivise the running costs, which is what the RHI is planning to do. The entry barriers remain just as large as ever, and only the rich or well connected will be able to take advantage of the RHI. This makes it regressive.

10. Do you agree with the proposed eligible technologies set out above? Are there others that should be considered for inclusion?

No, I don't. I am critical of the inclusion of biomass for reasons already made known to DECC. It is quite wrong-headed of us to be subsidising the burning of carbon-intensive fuels, and biomass is carbon-intensive. The inclusion of biomass in the RHI seems to be all about meeting 2020 EU targets for renewable usage, but that doesn't stop it being bad science.

If we must subsidise here, let's encourage the use of timber and other biomass materials in construction, where the carbon will be locked up for the critical years ahead when we have to reduce CO2 emissions.

11. Do you agree that an approved suppliers scheme is the best option for domestic biomass heat installations to demonstrate their use of sustainable fuel? Please provide reasoning with your response.

Hard to answer as I don't agree that biomass is a sustainable fuel. I guess some sort of auditing on the supply side is preferable to none at all, but I fear if biomass really takes off as a fuel source, that it will be sourced from further and further afield and that the auditing is likely to be compromised.

12. Do you agree that as part of the approved biomass supplier list we should assume a level of boiler efficiency?

Yes, if biomass is to be burnt, then at least control the boiler efficiencies. Insist on condensing biomass boilers at the very least.

23. What is the risk of switchback after the period over which tariff payments are made? Do you think this applies solely to biomass?

If you provide a mechanism for people to harvest a subsidy for their fuel bills, then of course there is a risk they will find another way of providing heating after the subsidy is withdrawn. That is yet another reason why capital cost subsidy is preferable.

39. Do you agree that deeming, as opposed to metering, is the most appropriate approach on which to base the calculation of RHI payments? If not, why not?

I can see why deeming is the preferred method, but I don't like it. It seems to highlight yet another problem with subsidising running costs, and not installation costs.