Posted on Feb 2, 2016
DECC has published the fifth quarterly forecast for the non-domestic scheme along with an updated version of their non-domestic degression factsheet in order to prepare for changes that are being introduced to degression. Crucially for Scottish Land & Estates’ members the small biomass tariff will be reduced by 5% from 1st July 2014.
The total forecast expenditure for the scheme is £106.6 million. The total estimated expenditure represents the amount DECC anticipate they will pay out between 30 April 2014 and 29 April 2015, based on current application data. The total forecast expenditure exceeds the 50% threshold which can and has triggered a tariff reduction (as set out in regulations):
- The “50% trigger” for the scheme as a whole as at 30 April is £96.4m
- The “100% trigger” for the scheme as a whole as at 30 April is £192.8m.
Since the last quarterly announcement (published 28 February 2014), the total forecast expenditure estimate has been increasing at a higher rate than previously seen, with the average monthly growth almost tripling. This is due to an increase in applications and load factors.
As at 30 April 2014, only one technology tariff has exceeded its individual trigger:
- Forecast spend over the next 12 months for small commercial biomass is £58.4m. This is £24.4m over its individual technology trigger.
- Forecast spend for all other tariff categories shows these are below their individual tariff triggers for this quarter.
As small biomass has exceeded its individual trigger and the 50% total scheme trigger has also now been breached.
Over £10bn could be paid in incentives for non-domestic biomass boilers despite a government study showing they are less efficient than thought and won’t help the UK meet clean energy targets.
The UK has pushed biomass boilers as a technology to help meet an EU target of getting at least 15% of its energy from renewable sources by 2020, incentivising businesses and individuals to switch to them in return for payments under the RHI.
But “under-performance appears widespread in the UK biomass heat sector,” the paper admits, adding that the efficiency shortfall “also means emissions will be higher than laboratory test results suggest”.
Just £128.9m had been paid through the RHI as of November 2014, but the final cost in public money could be over £10bn because those installing biomass boilers under the scheme receive annual payments for several years, Decc’s own impact assessment shows. So far, most RHI payments appear to have been banked by wealthy landowners.
To be promoted as a renewable source of energy, the biomass boilers need to have a 85% efficiency rate for converting fuel to energy – but the Decc study reveals the average efficiency rate of installed boilers was 66.5%.
The target rate may be unreachable, as the report found that the biomass heating systems surveyed “can only achieve levels around 76% (on average)”.
Yet no field studies of biomass boiler efficiency were carried out before the RHI’s introduction because Decc viewed biomass as an established and internationally successful technology.
US electric carmaker Tesla Motors aims to move into the energy sector as it launches batteries that can power homes and businesses as it attempts to expand beyond its vehicle business. D-ENERGi director Zico Ahmed said “This is really an exciting innovation within the energy sector, the battery device would allow consumers to get off the power grid or bring energy to remote areas that are not on a grid.” Tesla plans to start shipping the units to installers in the US by this summer, and plans are underway for a launch in the UK early next year. In a highly anticipated event near Los Angeles, Mr Musk said the move could help change the “entire energy infrastructure of the world”. “Tesla Energy is a critical step in this mission to enable zero emission power generation,” the company said in a statement. The rechargeable lithium-ion battery unit would be built using the same batteries Tesla produces for its electric vehicles, analysts said. The system is called Powerwall, and Tesla will sell the 7kWh unit for $3,000 (£1,954), while the 10kWh unit will retail for $3,500 (£2,275) to installers. Energy comparison firm USwitch estimates that one kWh can power two days of work on a laptop, a full washing machine cycle or be used to boil a kettle 10 times.