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Moving to Renewable Heat Technologies: the Renewable Heat Incentive

Dependent as we are on fossil fuels to power our homes, streets and businesses, they are a finite resource. It’s therefore been a strategy over the last few years for the government to incentivise domestic home owners and businesses to find alternative sources of energy to depend upon.

The Renewable Heat Incentive (RHI) goes some way to helping us cut the dependency ties with fossil fuels. This is a scheme that makes payments back to you based on the output of your renewable heat system.

What is the Renewable Heat Incentive (RHI)?

126113b9-756b-4964-8a72-93dbc69f4f7f There are two RHI incentives available: one for residential homes and another for the non-domestic sector (industrial, commercial, public sector and not-for-profit organisations). The overall goal for the RHI scheme is to help the UK achieve its target of generating 12% of renewable heat by 2020.

For those in the non-domestic sector, the RHI acts as a subsidy. Should your UK-based organisation fulfil the criteria of becoming a non-domestic renewable heat generator or producer of biomethane for injection, then the subsidy payments will be made to you over a 20-year period.

For more information on the detail behind the scheme’s criteria and how to meet the requirements to receive payments, see our website information page here.

What Type of Renewable Heating Can You Claim For?

Within the scope of the Renewable Heat Incentive scheme, there are several different types of heating that you can claim for:

  • biomass
  • heat pumps (ground source, water source and air source)
  • deep geothermal
  • solar thermal collectors
  • biomethane and biogas
  • combined heat and power (CHP) systems.

Eligible outputs of your renewable heating system include space heating, hot water, and numerous commercial, industrial and agricultural processes.

How are Payments Received?

b2adc9b7-de09-4beb-b660-600b7420a204Implemented and administered by Ofgem on behalf of the Department of Energy and Climate Change, once you have had a renewable heat system installed and accredited, payments are then made once a quarter. At this stage, you will be put onto a tariff level dependent on your individual circumstances. The type of tariff level awarded is affected by the renewable heat technology you’re using, its scale and volume. A more in-depth look at payment scales can be found on Ofgem’s Non-Domestic RHI website.

Why Should You Take Advantage of the Renewable Heat Incentive?

The RHI is aimed at everyone, both domestic and commercial. Whether the renewable heat system is just intended for a single residential home’s heating supply or used and shared across whole communities, businesses or public buildings, it’s a way of coming together to invest in a renewable, long-term scheme. Equally importantly, it’s a way not only of sharing heat usage but also of sharing the income generated.

For commercial users of the RHI, whether installing a system in an existing building or in a new-build project, the benefits can be substantial when looking to the longer term; in particular, for grid-connected energy reductions, the payments you receive for heat generated and, for larger organisations, exposure to the government’s CRC Energy Efficiency Scheme.

The RHI essentially offers a financial reward for reducing your carbon emissions over the twenty-year life of the renewable heating technology installed. The RHI tariffs have been calculated to offer a rate of return of 12% on the initial investment across the tariff bands. This impacts positively on the business case for delivering on-site renewable heat, not only in reducing your energy bills and carbon emissions, but also in delivering energy-related cash flow into your building.

Latest Developments

Since the government’s RHI scheme for non-domestic users was first launched in November 2011, it has undergone a number of reforms. The chancellor announced reductions in the Autumn 2015 Spending Review, however March 2016 saw a consultation document published, constituting more fundamental changes to the scheme.

Following warnings from the Committee on Climate Change that more effort is required on renewable heat, it’s calculated that less than 5% of the UK’s heat is currently generated from renewable resources.

The Department of Energy & Climate Change, through this recent consultation document, is proposing to reduce RHI tariffs for biomass systems by up to 61%, resulting in an estimated drop of nearly 98% in deployment in the installation of non-domestic biomass boilers. This, along with the removal of support for solar thermal hot water heating from 2017, is intended to increase and maximise the contribution the RHI will make to the UK’s 2020 renewable heat sources target, currently in danger of not being achieved.

If you would like to find out more about how your organisation can benefit from applying for the non-domestic RHI, please talk to one of our experienced consultants on 01344 874446.

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In The Restaurant Starting Blocks with McDonald’s: New Consultancy Project

To receive a word-of-mouth recommendation is to be trusted to do a good job. This was certainly the case when professional construction consultancy Ward Williams Associates (WWA) opened the door to an opportunity for us to work with McDonald’s UK.

Synergy has previously collaborated closely with WWA on building services consultancy for other client organisations. When asked if they knew of a reliable and experienced company who could consult on delivering on-site services for pre-fabricated restaurant buildings to newly designated sites, Synergy was who they recommended.

What the Project Entails

Having been commissioned with the work in December 2015, Synergy director Simon Hunt and his team began work on the consultancy project in January 2016.

McDonald’s had pinpointed six new UK restaurant sites in total, five across southern England, and one in Wales. The sites are all designated to be ‘drive-thru’ restaurants, and located on a combination of existing established and newly developed retail parks.

The building construction that McDonald’s uses for their restaurants are of a modular, pre-determined type. These are so designed that the building ‘kits’ can then be delivered efficiently to site so that further construction work is kept to a minimum.

Smoothing the Path for Site Success

Synergy’s role for the client is carry out a thorough investigation into building services connections required across all six sites, followed by the production of detailed site drawings for implementation. Unlike some projects we carry out for clients, we were not required to deliver a full design-scale implementation.

To help deliver the best value to all the stakeholders involved in the scoping out of services needed for the McDonald’s restaurant sites, we build in expectations to the project that multiple landowners will required to be consulted for the project to be completed.

Ironing out issues arising out of which landowner is responsible for the delivery of which service to the site, is where Synergy’s expertise comes to the fore. Where there are multiple landowners involved, projects can sometimes be delayed by six months to a year, so it is necessary that we liaise with all parties to smooth out this path.

We are currently in the initial stages of the work for McDonald’s, with completion expected within 12 months. It is hoped that this building services scoping work will lead on to further projects for the client.

If you would like more information on this or similar consultancy projects, please call Simon Hunt on 01344 874 446 or email him here.

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Helping Organisations To Become ESOS Compliant By December Deadline

ESOS logoThe December 2015 deadline for the government’s compulsory Energy Savings Opportunity Scheme (ESOS) provided Synergy with the opportunity to resolve this requirement for both existing and new clients.

In order to highlight energy savings for large organisations and thereby reduce energy consumption across the EU by 2020, ESOS stipulates that regular energy audits need to be carried out. Read our previous blog post to find out more about ESOS or head to the government’s ESOS page.

Planning is Key

With the requirement for organisations to become ESOS compliant by the end of last year, we were asked by one of our long term major clients to plan, assess and work closely with them to hit the Environment Agency’s deadline of 5 December 2015.

We ensured that there was a project plan in place and assessed the most effective method for carrying out ESOS compliance. Resources were then allocated from both sides to carry out the project.

What did ESOS Compliance Entail?

Many of our existing clients operate many hundreds of different sites across the UK. Our primary ESOS compliance project entailed us recording the energy use for all UK locations and for many different building types, including stores, supermarkets, petrol stations & distribution centres.

We also assessed the fuel bills (electricity, gas, oil and biomass) for all of the locations and captured the amount of fuel used by transportation vehicles. This meant looking at the petrol and diesel usage of trucks, company cars as well as for employees who used their own cars for company business.

Energy scale

Having looked at various scenarios for the most effective method of compliance, stores were then benchmarked into different categories to see which of them were out of the benchmarking range. Those which were categorised as ‘out of range’ were then visited by the Synergy ESOS assessment team, and supported by our client’s maintenance team when on site. In total, around 60 site locations were surveyed, comprising approximately 10% of total property stock.

A Successful Result

Synergy’s chief assessor, Paul Cownley, completed the ESOS compliance project for our client by the 5 December 2015 deadline. Paul and his team carried out assessments and compiled comprehensive reports as to where significant energy could be saved, how much capital they could save and carried out a cost analysis of the recommendations. There is no legal requirement, though, for organisations to follow through on recommendations, only that the compliance process had to be completed before the December deadline.

As the organisation’s official energy assessors, Synergy is contracted to carry out energy performance assessments on all the client’s new and refurbished sites. High standards in environmental consciousness are very much part of our client’s ethos and this shines through when we carry out these regular energy assessments for them. On average, we can attest that their sites are 30% more efficient than standard regulations state they need to be.

To find out more, call Paul Cownley on 01344 874 446 or click here to email him.

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