Despite a lack of incentives, the small-scale renewable heat sector – particularly biomass heat – is quietly growing, but there are calls for more to be done.
Earlier this month, the
Renewable Energy Association (REA) published its latest ‘
Renewable Heat Map’ of the UK. The map, pinpoints 1800 installations of
biomass, solar heating and heat pump systems across Britain in 2008 – a five-fold increase on two years ago, when the REA last collected data on renewable heat.
The data suggests healthy growth in a market that now has the combined capacity of 110MWth, without even including
domestic renewable heat installations. And there are plenty of stories out there to suggest the small-scale renewable heat sector – particularly
biomass – is booming, despite a lack of incentives.
The appetite for wood fuel among consumers looking for a cheaper form of heating is soaring, according to the
Solid Fuel Association, which has seen a 40 per cent jump in sales among its members this year. At the same time, anecdotal reports suggest installers of renewable heat systems for consumers and businesses, are rushed off their feet, with a backlog of installations. There are many investment schemes, meanwhile, going into improving the local supply of biomass – particularly wood – in rural parts of the UK. The last few weeks alone, has seen a number of funding projects to improve the supply of
small-scale biomass heat.
“There is considerable demand from consumers in all sectors – individuals, businesses, communities and the public sector – for renewable heat energy to reduce carbon emissions, reduce fuel costs and tackle energy security,” says Rebecca Carr of the Forestry Commission in Scotland.
The Scottish Government, which launched its
Renewable Energy Framework consultation on October 3, announced a further £2 million for the Scottish Biomass Support Scheme (SBSS), targeting biomass heat projects in small to medium-sized enterprises.
The first round of the SBSS gave grants of around £7 million in 2007/08, to a large number of biomass heating installations and supply chains. Over the year, it supported around 17 MWth installed heat capacity at over 50 locations across Scotland, and 21 supply chain projects at a range of scales.
In England, a major
biomass heat project targeting landowners and micro-enterprises is set to launch next month in the East of England, with £4.3 million of funding from the EU and UK Government.
David Sillett, Rural Development manager at the East of England Development Agency, which is distributing the funding, says the project is good news for biodiversity, landowners and the local economy. “It will encourage a co-ordinated supply chain, from landowners through to the marketplace for wood chips. With new markets, come new opportunities which will be of particular benefit to the rural economy.”
Similar programmes are running in other parts of the UK. The
South West Bioheat Programme aims to stimulate the biomass heat industry in that region through increasing the number of systems on the ground, supporting fuel suppliers, and providing recognised training programmes across the region, 'handholding' 30 potential wood fuel installation projects for sites, including schools, dairies, hospitals, housing and other schemes.
“We have been able to obtain £3 million from a Defra under-spend for capital grants for some of the projects,” says Mark Prior, WoodFuel Partnership Officer at the Forestry Commission.
In Wales, the
Wood Energy Business Scheme (WEBS) has just come to an end, but work is underway to develop a successor scheme, subject to the required funding being available. Its aim will be to provide support to the emerging wood-fuel sector and will be broader in its scope than the original scheme.
On the Isle of Wight, meanwhile, the local authority, has just announced it has been awarded £6,500 from the South East Woodland and Timber Fund to conduct a wood fuel assessment and strategy. It says the money will be used to assess the amount of wood fuel that is available from the island’s woodlands as well as clean, waste wood and how this can be supplied to market. Initial estimations indicate that the supply is enough to generate between seven and 10 MWth of heat through use of biomass boilers.
But while there is much evidence that small-scale biomass heat is growing, serious challenges to the development of the sector remain.
Carr notes the increased demand for the resource in Scotland is putting pressure on supplies. “The amount of wood fuel, specifically – as opposed to all types of biomass used in Scotland – has nearly trebled from 2005 to 2008, though this includes imported pellets for co-firing in large power plants. Looking only at the use of domestically produced wood fuel in small to medium-sized commercial and industrial projects, wood fuel usage has increased four-fold since 2005,” she says.
The Wood Fuel Task Force was set up last year in Scotland, to look at the resource issue, and identified a range of additional sources, including forestry material such as brash and stumps, wood processing and short rotation coppice and short rotation forestry.
This year, the Forestry Commission Scotland and Defra in England, are both funding R&D projects into short rotation forestry, which means planting fast-growing crops felled on a rotation of 10-20 years.
There are other challenges too, facing the sector. Prior says there is “a real need to increase the installed capacity to ensure an effective and profitable supply chain, which makes it cost effective to utilise the existing woodland resource and provide wider benefits to our woodlands at the same time as providing a renewable fuel.”
Edwin van Ek of Woodfuel East, the
biomass project just about to launch in the East of England, says businesses and domestic users can save “significant amounts” on fuel costs by switching from fossil fuels to wood, but he notes that the price of wood “shadows” oil and is going up. He warns that if it gets too high the biomass heat industry could be hit as the demand to install wood-chip boilers falls.
Van Ek also notes the Government system of grant schemes is too disparate and haphazard, leading to confusion about where to go for funding and applicants being put off by the complexity of the schemes and the short window in which to apply for them. “There are many blockages in the system,” he says. “We need all the grants schemes for biomass to be in one place and continuous schemes running.”
Most of all, though, is an industry-wide consensus about the need for a renewable heat tariff incentive system to attract higher levels of investment and really kick-start renewable heat in the UK. The
Renewables Obligation incentives scheme has tripled supply in the last five years of large-scale renewable projects.
Earlier this month, Ed Miliband, the Secretary of State for the new Department of Energy and Climate Change, told Parliament he planned to bring an amendment to the Energy Bill, currently before the House, to introduce a 'feed in tariff' to support small-scale renewables, and said he would be making a further announcement on encouraging renewable heat before the end of the year.
“Having heard the debate on this issue, including from many colleagues in this House, I believe that complementing the renewables obligation for large-scale projects, guaranteed prices for small-scale electricity generation, feed-in tariffs, have the potential to play an important role, as they do in other countries.”
The industry has welcomed the move, but is concerned that implementation will take too long as the Government prepares for another consultation period.
“At least 14 per cent of our heat needs must come from renewables by 2020,” says Gaynor Hartnell, deputy director at the REA. “That’s what we need to aim for. A sure fire way of finding out whether the industry can deliver is to get a renewable heat tariff up and running – and the sooner the better. We haven’t got time for – and nor do we need – more consultation on this.”
And Hartnell maintains that many of the supply chain issues currently facing the industry should resolve themselves, if the tariff is attractive enough. “Dedicated action to address other specific barriers will, no doubt, be required. But there is no need to delay action to conduct research on what the potential barriers might be and how they might be resolved. That can be done once the tariff is in place,” she says.
It remains to be seen if the Government will take action soon enough to really kick-start the small-scale renewable heat sector.
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