Baseload, Bioenergy, Geothermal

UK Forecast to Miss Renewable Heating Target

A report published by the UK Energy and Climate Change Committee (ECCC) forecasts that “on its current course, the UK will fail to achieve its 2020 renewable energy targets.”

The targets in question are those set through the European Union’s 2009 Renewable Energy Directive, stipulating that by 2020 the UK achieves an overarching 15 percent renewable energy (RE) in total energy consumption via RE providing 30 percent of electricity, 12 percent of heat, and 10 percent of transport fuels.

The report concluded that by the end of 2015 the UK had reached only 5.64 percent of its 12 percent heat sub-target; and had experienced regression on its transport sub-target, with the share of renewables used in the sector falling from 4.93 percent in 2014 to 4.23 percent last year.

In contrast to these shortcomings, RE provided 22 percent of UK power last year — securing a forecast for meeting the electricity sub-target.

Although the expectation is for the electricity sub-target to be surpassed, this alone won’t be enough to pull total energy consumption up to 15 percent by 2020. Altogether, RE made up 8.31 percent of all UK energy consumption through 2015.

Lack of progress in RE heating and transport sectors are highlighted as contributing to the forecast. It’s worth noting that heat represents close to half of the UK’s energy consumption.

The report has prompted industry and political calls for renewable heating support to be restructured and efforts reformed.

Angus MacNeil MP, ECCC Chair, stated: “The experts we spoke to were clear: the UK will miss its 2020 renewable energy targets without major policy improvements…The government must take urgent action on heat and transport to renew its efforts on decarbonisation.”

Shortcomings in Renewable Heating

Frank Aaskov, policy analyst at the UK-based Renewable Energy Association (REA) told Renewable Energy World: “REA are pleased to see an increase in the proportion of heat from renewable sources from less than one percent, at the time the targets were set in 2009, to over five percent today. Despite this being a good achievement, we’re still remarkably dependent on fossil heating in the UK.”

Central to lack of progression, according to Aaskov and the ECCC report, is the Renewable Heat Incentive (RHI) — the primary mechanism operated by the UK to support renewable heating.

RHI functions similarly to electricity feed-in tariffs, with operators of eligible renewable heat systems receiving payment per kilowatt thermal hour generated.

“We take several issues with the RHI,” Aaskov said. “A primary concern is with lack of a level playing field between technologies and a fair choice for consumers to choose the technology that’s right for them. The scheme supports a wide array of systems, but tariff levels vary between them.”

Aaskov highlighted the case of heat pumps being ineffectively prioritized over biomass alternatives: “As the report states, RHI over-emphasized deployment of heat pumps — the government has clearly favored them and increased their tariffs, despite their deploying fairly well at the moment.”

Aaskov also expressed concern over a control mechanism in RHI that automatically reduces the tariff for a particular technology if its deployment level exceeds expectation.

“The result is that a particular technology may experience a tariff reduction, without any capital cost reductions, and therefore becomes less appealing to install,” he said. “This is what’s happened with small-scale tariffs [systems <200 kW], which have been reduced by over 60 percent since July 2014.”

As a result of reductions in support for biomass at small commercial and domestic scales to the extent that it’s infeasible to deploy, Aaskov said, “in part that’s why we’re seeing deployment below 10 percent of 18 months ago in that same sector.”

A Call for Reform

The ECCC has set forth several recommendations geared towards ensuring RE targets are met; they echo REA’s suggestions submitted to government consultations on RHI reform earlier this year.

“In regard to non-domestics, we argued that the system needed to provide tariff guarantees for larger projects that would bring more certainty to stakeholders concerned with reductions in tariffs,” Aaskov said. “This is particularly important to increasing deployment of biomass CHP and biomethane plants. We also want to see a reset of the biomethane tariff, which has been reduced to below a level that’s commercially viable.”

According to Aaskov, REA has recommended that the tariff be reset to a previous tariff level to create incentive in the market.

“Due to the low oil price, the reduced tariff isn’t attractive enough to stimulate a market,” he said. “We have furthermore recommended more consumer information should be made available from the government.”

More broadly, Aaskov attributes slow progress to something larger than mechanisms or regulation of RHI: “We think that there’s been an over-emphasis on electrification of heating by the government, i.e., through heat pumps. That’s been a political decision rather than letting the market decide.”

In mainland Europe, he added, about 89 percent of all renewable heating is bioenergy-based; but the UK government expects 80 percent of heating through electricity. This requirement would place considerable new demands on the electricity grid, and incur huge costs in terms of transitioning to appropriate technologies and systems, he said.

“What we want to see is a more diversified energy model, with a combination of technologies in play,” Aaskov said. “There should be electrification of certain households, but alongside district heating, biomass boilers, decarbonization of the gas grid through biomethane and biogas and geothermal where it’s possible.”

While the government is still conducting its evaluation of RHI, outcomes are slated for implementation next year. Underlining the urgency of the matter, Aaskov said REA hopes that ECCC’s report encourages publication as soon as possible.