LONDON (Dow Jones)--The U.K. government Thursday introduced the world's first renewable heat incentive, or RHI, as part of its broader plan to stimulate investments in low-carbon technologies and move the country to green growth and increased energy independence.
The GBP860 million government scheme is expected to increase green capital investment by GBP4.5 billion up to 2020 and stimulate a new market in renewable heat technologies, much like the government's feed-in tariff for small-scale renewables has already started to do with solar energy.
The incentive is expected to increase the number of industrial, commercial and public sector installations by seven times to 2020.
"Renewable heat is a largely untapped resource and an important new green industry of the future. It'll help the U.K. shift away from fossil fuels, reducing carbon emissions and encouraging innovation, jobs and growth in new advanced technologies," Energy and Climate Change Secretary Chris Huhne said.
Currently, around half of the U.K.'s carbon dioxide emissions come from the energy used to produce heat--more than is produced from generating electricity. The RHI will reduce emissions by 44 million metric tons of carbon to 2020, equivalent to the annual carbon emitted by 20 typical new gas power stations, the statement said.
The government is also keen to reduce U.K. dependence on natural gas imports as domestic North Sea oil and gas production declines.
The RHI tariff scheme will initially apply to eligible technologies in industry and the commercial and public sector and then be fully rolled out to households from October 2012. It will include systems installed since July 15, 2009.
Technologies will include biomass, ground source heat pumps, deep geothermal, solar thermal and biomethane.
By 2020, the government expects the renewable heat sector will grow to include around 13,000 installations in industry and 110,000 installations in the commercial and public sector, supplying around a quarter of the heat demand in these sectors.
The tariffs will be paid for 20 years to eligible technologies that have been installed since July 15, 2009, with payments being made for each kilowatt-hour of renewable heat produced.
Companies involved in deploying renewable heat technologies welcomed the announcement and said the industry was poised for rapid growth.
"The government's RHI announcement shifts renewable heat into the mainstream," said Gearoid Lane, managing director of new markets at British Gas, the energy retail arm of Centrica PLC (CNA.LN), and leading provider of renewable heating technologie.
British Gas would now be moving ahead with plans to install a wood chip boiler to provide around half of the heat required for 1,200 homes in Wolverhampton as a result of the announcement, Lane said.
Source: The Wall Street Journal
http://online.wsj.com
The GBP860 million government scheme is expected to increase green capital investment by GBP4.5 billion up to 2020 and stimulate a new market in renewable heat technologies, much like the government's feed-in tariff for small-scale renewables has already started to do with solar energy.
The incentive is expected to increase the number of industrial, commercial and public sector installations by seven times to 2020.
"Renewable heat is a largely untapped resource and an important new green industry of the future. It'll help the U.K. shift away from fossil fuels, reducing carbon emissions and encouraging innovation, jobs and growth in new advanced technologies," Energy and Climate Change Secretary Chris Huhne said.
Currently, around half of the U.K.'s carbon dioxide emissions come from the energy used to produce heat--more than is produced from generating electricity. The RHI will reduce emissions by 44 million metric tons of carbon to 2020, equivalent to the annual carbon emitted by 20 typical new gas power stations, the statement said.
The government is also keen to reduce U.K. dependence on natural gas imports as domestic North Sea oil and gas production declines.
The RHI tariff scheme will initially apply to eligible technologies in industry and the commercial and public sector and then be fully rolled out to households from October 2012. It will include systems installed since July 15, 2009.
Technologies will include biomass, ground source heat pumps, deep geothermal, solar thermal and biomethane.
By 2020, the government expects the renewable heat sector will grow to include around 13,000 installations in industry and 110,000 installations in the commercial and public sector, supplying around a quarter of the heat demand in these sectors.
The tariffs will be paid for 20 years to eligible technologies that have been installed since July 15, 2009, with payments being made for each kilowatt-hour of renewable heat produced.
Companies involved in deploying renewable heat technologies welcomed the announcement and said the industry was poised for rapid growth.
"The government's RHI announcement shifts renewable heat into the mainstream," said Gearoid Lane, managing director of new markets at British Gas, the energy retail arm of Centrica PLC (CNA.LN), and leading provider of renewable heating technologie.
British Gas would now be moving ahead with plans to install a wood chip boiler to provide around half of the heat required for 1,200 homes in Wolverhampton as a result of the announcement, Lane said.
Source: The Wall Street Journal
http://online.wsj.com
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