Northern Ireland Renewable Heat Incentive (RHI) Consultation Launched

The Department for Enterprise, Trade and Investment of Northern Ireland (DETI NI) have recently launched a consultation on the proposed introduction of a ‘Renewable Heat Incentive’ (or RHI) for Northern Ireland. This scheme will be similar in operation to the RHI in Great Britain, introduced earlier this year.

Heating energy accounts for around half of all total energy consumed within Northern Ireland however over 98% of our heating fuels come from imported fossil fuels. Increasing the level of renewable heat to 10% by 2020 is in line with Northern Ireland’s expected contribution to the United Kingdom’s obligations under the EU Renewable Energy Directive as well as wider NI energy policy goals of increased security of supply, reduced emissions and potential for ‘green jobs’ and skills.

In advance of the NI RHI, DETI proposes to provide ‘Renewable Heat Premium Payments’ to domestic households wishing to install eligible renewable heat technologies. It is proposed that these payments will assist in the capital cost of installing renewable heat and will be available until a longer term approach is developed for the domestic market, expected in October 2012. Funding of £2m is available until 31 March 2012 for these payments with further funding available until October 2012, as required.

The key principles of the proposed NI RHI are as follows;

• The NI RHI will be available to all those in the non-domestic sector (with specific eligibility standards for large industrial sites) and will support new renewable heat installations, commissioned after the 1 September 2010;
• The NI RHI will be in place, pending consideration of responses to public consultation, for 1 April 2012;
• The RHI will be open to new applicants until 31 March 2020;
• Payments will be made on a quarterly basis over 20 years, tariff levels will be grandfathered and payments guaranteed for 20 years;
• DETI will undertake a formal review of the NI RHI (starting in January 2014) with any amendments to the scheme in place for 1 April 2015;
• A long term support scheme for the domestic sector will be available from October 2012. In advance of this, Renewable Heat Premium Payments will be available to domestic installations commissioned after 1 September 2010. Existing gas customers will not be eligible for Renewable Heat Premium Payments. Those who are awarded support under this scheme would remain eligible for a NI RHI (expected in October 2012), at a reduced rate (to avoid double incentivisation);
• There will be support for a range of technologies and fuel uses. Eligible technologies include solid and gaseous biomass, bioliquids, solar thermal, ground and air source heat-pumps, on site biogas, geothermal, energy from waste and injection of biomethane into the grid;
• Payments may be claimed by, and paid to, the owner of the heat installation or the producer of biomethane, this includes Energy Service Companies (ESCos);
• Payments will be made quarterly over a 20 year period for all installations following accreditation;
• For small and medium-sized installations (up to and including 45kWth), the installers and the equipment must be certified under the Microgeneration Certification Scheme (MCS), to ensure quality assurance and consumer protection;
• Tariff levels in Northern Ireland have been calculated to bridge the financial gap between conventional heating systems (oil, gas and coal) and renewable heating technologies. Tariffs have been designed to address capital costs, ongoing operating costs as well as non-financial ‘hassle’ costs;
• A Renewable Heat Strategy Group will be established to consider wider policy issues that will contribute to the success of the RHI;
• It is proposed that the Gas and Electricity Market Authority (OFGEM) in GB will administer the NI RHI. This will include dealing with applications, accrediting installations, making incentive payments and monitoring compliance with the rules and conditions of the scheme; and
• The NI RHI will be funded from general Government spending.

In addition to the incentive measures outlined, as part of this consultation DETI is seeking evidence on the costs of deploying deep geothermal technologies in Northern Ireland, the non-financial barriers to development and the potential deep geothermal resource that could be utilised by 2020. This call for evidence will inform the need for a specific tariff for deep geothermal.

The NI RHI presents a long term approach to developing the renewable heat market in Northern Ireland as consistent, secure, long-term payments are made for renewable heat generation.

The NI RHI will help Northern Ireland move to a more secure, diverse and sustainable heat market and represents funding of up to £25m in this industry over the next 4 years and beyond (depending on take-up rates).