The Government has set out plans aimed at generating £4.5bn of green investment by 2020 through its Renewable Heat Incentive.
The Department of Energy and Climate Change (DECC) says it will grant subsidies worth £860m for geothermal heat pumps, solar thermal plants and biomass boilers. The measures will first be targeted at 25,000 households by July, and the full program will be in place by October 2012.
The program is part of Prime Minister David Cameron’s efforts to stimulate “green economy” jobs and curb fossil fuel emissions blamed for damaging the climate. Heating accounts for 47 percent of U.K. energy demand and 46 percent of the nation’s output of carbon dioxide.
“Renewable heat is a largely untapped resource and an important new green industry of the future,” said Energy Minister Chris Huhne. “It’ll help the U.K. shift away from fossil fuels, reducing emissions and encouraging innovation, jobs and growth.”
In October 2010, Green MP for Brighton Pavillion Caroline Lucas (pictured) pledged her support for the renewable heating incentive. “Heating our homes and businesses shouldn’t heat the planet – encouraging clean, green heat is essential if we’re to cut climate-changing carbon emissions.”
Utilities E.ON AG (EOAN) and British Gas, part of Centrica Group Plc, welcomed the news. Gaynor Hartnell, chief executive officer of the Renewable Energy Association, said “thousands” of companies will benefit.
“It’s absolutely vital that we start weaning ourselves off an over-reliance on gas boilers,” Graham Bartlett, managing director of energy solutions at E.ON, said. E.ON U.K., which owns five gas-fired power plants in Britain, has installed more than 2,000 heat pumps to date.
The incentive will shift renewable heat into the mainstream, said Gearoid Lane, managing director of British Gas New Markets. “People across Britain will benefit from cheaper and greener sources of heat,” he said.
Large ground-source heat pumps for thermal capacity of 100 kilowatts or more will receive 3 pence per kilowatt hour. Large biomass installations of 1,000 kilowatts or more will receive 2.6 pence per kilowatt hour, DECC said.
Details of the program
Program Details
The Renewable Heat Incentive will include a tariff paying a fixed amount per kilowatt-hour of heat produced over a 20-year period. It will apply to heating systems installed by homes, industry and government since July 15, 2009, DECC said.
Following parliamentary approval for the rules due in July, £15m will be made available to help cover the price of renewable heating systems for consumers. The rest of the incentives will be phased in over the following 1 1/2 years.
Solar thermal installations of less than 200 kilowatt thermal in size for industry, businesses and large organizations will receive 8.5 pence per kilowatt-hour, according to DECC.
Large ground-source heat pumps for thermal capacity of 100 kilowatts or more will receive 3 pence per kilowatt hour. Large biomass installations of 1,000 kilowatts or more will receive 2.6 pence per kilowatt hour, DECC said.
