Industry Backs New UK Low-Carbon Heat Support
Author: Gerard Wynn
Britain confirmed on Thursday overall funding for low-carbon heating of 860 million pounds ($1.39 billion) through 2014, a move welcomed by industry groups.
Incentives would be likely to drop in line with falling costs as technologies matured, the department for energy and climate change said.
The renewable heat incentive (RHI) is the world's first to support low-carbon heating. Many governments already pay a premium for renewable electricity, such as solar and wind power.
The scheme is meant to help businesses and homeowners emit less carbon dioxide than burning fossil fuels, for example by installing ground source heat pumps, solar thermal heating or biomass boilers.
"This scheme marks a world-first, long-term, commitment to a rapid growth in renewable heating," said Dave Sowden, chief executive of the Micropower Council. Annual investment returns would be about 12 percent, he added.
Around half Britian's carbon emissions come from the energy used to produce heat, more than from generating electricity.
The new incentives would make super-efficient district heating networks competitive, where houses are heated from the surplus heat produced by power plants or factories, provided the government put down the necessary piping infrastructure, said the Combined Heat and Power Association.
"By placing an explicit value on renewable heat supplies, we hope to see an end to the wasteful practices that see much of our precious bio-energy resources dumped into the atmosphere through cooling towers," said Graham Meeks from the CHPA.
The scheme would start payments to homeowners from July, under a 15 million pounds transition scheme, and the full program from October 2012. Industrial users would launch straight into the full incentives later this year.
In both cases, eligibility would be back-dated to equipment installed after July 15 2009.
Payments would be made on a quarterly basis for 20 years from the date of approval, a government statement said.
Support levels would fall over time as technologies matured, it added, mirroring plans already to cut incentives for solar power launched only last April.
(Editing by Keiron Henderson)