In UK since April, 2014 has been operating subsidy program for the local population under the name "The Domestic Renewable Heat Incentive (RHI)". The program is expected to support energy consumption and heat production from renewable sources. The RHI aims to achieve UK’s energy goals on getting 15% of energy from renewable sources by 2020. As a result it is expected growth in demand for wood pellets on the domestic market. For the first time UK is going to by heat materials from Canada and North America in the coming years.
The scheme that is the first similar long-term program in UK offers regular financial rewards for owners who are ready to switch gas on biofuels. Thus, according to the scheme the government undertakes to pay households for each kWh of renewable energy within the first 7 years after the renewable energy equipment has been installed.
For the nondomestic sector the program was implemented in November 2011. The scheme for domestic consumers was opened in April of the current year. It is planed that every fourth house will be equipped with solar heating technologies by 2020.
Analysts of Ukrainian Biofuel Portal pellets-wood.com has already pointed out that UK use approximately 150 thousand of residential wood pellets per year. The government plans to increase the amount of biofuels used within the country. Currently the use of fossil fuels to generate domestic heating and hot water accounts for about 15% of the UK’s total carbon emissions in comparison to only 2% of heat and hot water generation from renewable technologies. Using the scheme the government expects to reduce the total amount of carbon emissions to nearly zero.
However, the program needs further completions. For instance, such requirements as the transportation of boilers and pellets to the final customer still are not fulfilled. Many of those that use the domestic RHI will be off the gas grid and reside in areas far from major transportation or commercial hubs. However, there are a certain amount of biofuel resources in places already that is going to be used until the supply chain will not be completely adjusted.
There is another problem that has a negative impact on fast and effective implementation of the program – gas prices for the population are much lower than the cost of solid biofuel. Therefore, transfer of residential buildings on wood granules requires considerable public funds.
Although, delivery distances are high, but if wood pellet consumption increase on the domestic market such UK firms as Verdo Renewables, CPL Renewables, Hoval and Land Energy will deliver boifuels and renewable equipment to customers. UK biomass boiler supplier Hoval has focused on commercial installations but has entered the residential market as well.
Thus, the RHI program is an important step towards UK’s renewable energy targets. It is hoped that the scheme will develop the renewable heat market by making renewable technologies an affordable option that makes economic as well as environmental sense.
Author: Ivan Prokhorov
