My Response to the Latest Renewable Heat Incentive Consultation

The United Kingdom’s Department of Energy & Climate Change has been pussy-footing around with the Renewable Heat Incentive. there is another short consultation which closes on 23rd April 2012. You can get the web link to the consultation at http://www.decc.gov.uk/en/content/cms/meeting_energy/Renewable_ener/incentive/incentive.aspx

I have replied to the consultation on behalf of Genersys Plc. I set out my response below:-

Dear Ms Treacher

 

  1. I am responding to the consultation on the Renewable Heat Incentive on interim cost control presented to parliament by the Secretary of State for Energy & Climate Change.
  2. Nothing in this response is confidential.
  3. I shall be publishing this response at http://robertkyriakides.wordpress.com/
  4. I am astonished to read that Mr Barker, Minister of State Department of Energy & Climate Change writes in the consultation document how proud DECC is of the Renewable Heat Incentive. The full launch of the RHI has been consistently delayed by all governments since it was first announced. In that time the solar thermal industry in theUnited Kingdomhas shrunk by two thirds; two thirds of those employed in the solar thermal industry have lost their jobs; two of the fourUKmanufacturers of solar thermal panels have gone into liquidation. This decimation goes far beyond the reduction in business that has occurred generally as a result of the economic conditions. It is very hard to see of what Mr Barker has to be proud. It taxes my imagination to understand what would make him and his colleagues at DECC ashamed.
  5. It is right that the government should seek to manage the RHI within budgets. It is important to avoid waste that is endemic in government – such as the excessive largesse of subsidies for photovoltaic systems and wind turbines which simply have rewarded the rich and done little for climate change protection.
  6. The consultation seeks assurance from those in the renewable thermal industry that the RHI will not exceed its budgets, small that they are. Ultimately, government spending is within the control of government, not those in the renewable heat industry. The damage that the government has already done by delaying the full implementation of the RHI has been grave and serious. No consultation was issued when DECC decided to postpone the implementation of the RHI for a year. No consultation has been offered on the decision to delay the full implementation of the domestic RHI from October 2012 to some indeterminate date possibly in 2013.
  7. The point I am making is that the uncertainties as to when the domestic RHI will be implemented, the constant postponement of its start date, the uncertainties surrounding the amount of the feed in tariff are all doing greater damage to the industry than any kind of “stop start” problem that might arise to prevent budgets being exceeded. The consultation, with typical DECC incompetence, asks the wrong question.
  8. In my view the issue resolves around ensuring that the feed in tariff is not too generous and ensuring that the tariff nevertheless provides an incentive that encourages take up. In this respect it is important to design the tariff so that it is simple. Unlike electricity renewable heat may be stored; there will be no actual “feed in” of energy in domestic installations.
  9. Control of the tariff is best achieved in domestic situations by having a deemed feed in tariff. With solar water heating this is simple to calculate and can be done by reference to the area of the panels on the roof and the size of the storage cylinder. There is not need to meter heat. Compliance can be guaranteed by random audits, which will prove significantly less costly than heat meters.
  10. Once a deemed tariff is set, that tariff should apply to all installations where people accept that deemed tariff for the life of the subsidy. If the deemed tariff is too generous DECC can monitor the take up and make an adjustment, giving say 30 days notice of the tariff change. If the deemed tariff is not sufficiently generous, a change can be made quickly.
  11. Those installations that have taken up the Renewable Heat Premium can receive a tariff which might not necessarily be the same tariff as the tariff offered for non RHP installations.
  12. By adjusting a deemed FIT, DECC will be able to (a) manage their budgets (b) provide the householder with certainty (c) make adjustments to avoid a debacle as happened with the PV FIT and (d) make adjustments that might be needed in relation to fuel prices.
  13. My suggestion will not avoid the damage that may be caused by “stop start” but will provide a greater degree of certainty for industry which will be able to manage more successfully than with any of the DECC current proposals. It will also enable DECC to fully implement domestic RHI within its originally promised time frame of October 2012 which is critical not only for the industry by also to help compliance with legally binding targets for renewable heat.
  14. I have not directly answered the question that DECC asked, because it was the wrong question. I have, I hope, answered the right question.

 

Yours sincerely

 

Robert Kyriakides

Chief Executive

Genersys Plc

 

2 Responses

  1. I think the delay in the RHI is a disgrace and it is a kick in the balls for all installers who have paid out for MCS, no RHI no work, so been MCS accredited has no benefit, but has cost installers thousands of pounds, this dealy will put a lot of businesses out of business in my opinion

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