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OFTEC Left In The Cold As Domestic RHI Exclusion Looms
20th September 2012
The Department of Energy & Climate Change (DECC) today unveiled 3 consultations on the Coalition Government's Renewable Heat Incentive (RHI) Scheme. However, with OFTEC's B30K Bio Heating Oil likely to be excluded from the domestic scheme, the news was not what many in the oil heating industry had been hoping for.
The RHI pays customers to generate renewable energy, through a list of approved technologies. The first scheme of its type to be introduced anywhere in the world, the incentive for non-domestic customers was launched in November 2011, with a scheme for homeowners and householders set to open next Summer.
The RHI for householders, will be managed by Ofgem. It is aimed at householders replacing their current heating system with renewable technologies, as well as households who have installed such technology since 15 July 2009. The Government intends that all such householders will get paid for the heat expected to be produced by their heating system.
Key proposals contained within the consultation document include the publication of indicative tariff ranges for renewable technologies which are MCS certified and meet relevant required standard:
- Air Source Heat Pumps 6.9-11.5p/kWh;
- Biomass Boilers 5.2-8.7p/kWh;
- Ground Source Heat Pumps 12.5-17.3p/kWh;
- Solar Thermal Technologies 17.3p/kWh.
Additionally, the document also contains proposals for:
- Payments over 7 years for each kWh of heat produced for the expected lifetime of the renewable technology, based on deemed heat usage;
- Tariff levels set to provide a better return for householders living in traditionally 'oil rich' off mains areas;
- The introduction of budget management system similar to the one introduced for the Feed-in Tariffs scheme;
- Minimum energy efficiency requirements based on Green Deal assessments.
DECC's proposals rule out Bioliquid fuels such as B30K in their entirety at domestic installations. Instead, they demonstrate a preference for wholly renewable, domestic heating systems, to maximise renewable heat generation and carbon savings. The consultation claims that incentivising part renewable solutions could undermine that objective within a domestic context.
Developed by OFTEC and strongly promoted by Director General, Jeremy Hawksley, B30K comprises a mix of 30% fatty acid methyl ester (FAME) and 70% kerosene. OFTEC's apparent failure to secure RHI inclusion for Bioliquids at domestic installations and to secure a major growth opportunity for the industry it claims to represent, comes as a bitter blow to the oil heating industry. Recently, Fuel Oil News reported that oil fired boiler sales during the first half of this year, were running at a 5 year low.
However, despite its exclusion at domestic premises, it is proposed that Bioliquid will be eligible for inclusion at larger commercial, industrial and community installations with a proposed tariff of 4.1p/kWh - the same rate as for approved, solid biomass fuels.
Speaking at the launch of the consultation documents, Energy and Climate Change Minister Greg Barker said, "We need to revolutionise the way we heat our homes and businesses and move away from expensive fossil fuels, not only to cut carbon but to help meet our renewables targets and save money on bills. Our proposals aim to encourage even more uptake of clean green heating in industry and in our businesses. We have also set out our views on long term support for those who invest in low carbon kit in their homes and we look forward to hearing your thoughts."
