AHDB News December 2016

Look inside... 03 04 Duis aute irure dolor in reprehenderit » » Lorem ipsum dolor sit amet, consectetur » » Duis aute irure dorepre » » Lorem ipsum dolor sit amet » » Ros augiam, velesed dolorer si » » Ut alissit alit iure feu faccum nul lutatie » » Lenismod magna alisi eraese » » Heat Ne works… will they have a role in the greenhouse sector? o yo have suffici nt heat meters? POLITICAL CHANGE brings uncertainty to energy prices N xt Gener tion Growing FOR THE HORTICULTURAL INDUSTRY NOVEMBER 2016 EnergyNews for the horticultural industry December Reprieve for biomass CHP? In October, we reported on the sudden and drastic change in RHI policy and tariffs for biomass Combined Heat and Power (CHP), which came into effect on 1st August 2016 and seriously threatened the commercial viability. However, strenuous lobbying by the NFU, Wood Heat Association, FEC Energy and other industry bodies has since resulted in a Government rethink. The Department for Business, Energy and Industrial Strategy (BEIS) had intended to close a perceived loophole, by adding a new requirement on biomass CHP to produce a minimum electrical power generation level of 20%, in order to claim the full CHP tariff on the heat they produce. Systems with generation levels below 20% would only receive the CHP tariff for a proportion of the heat, greatly reducing the available support. The balance would then be made up with biomass boiler rate (which is lower); this affected nearly all the projects already committed or being considered. The short notice left insufficient time for already heavily committed projects to complete commissioning before the tariff reductions came into effect, leaving many in a difficult financial position. Following representations from industry, and the launch of a Judicial Review into the way the decisions were made, the Government has now relented slightly and announced a reduced 10% threshold, for a ‘transitional period’, until 31st March 2017. This is designed to allow sufficient time for projects in progress to complete before the revised deadline. During the transitional period, only installations demonstrating power generation of less than 10% will be subject to a reduction in their payments. Additionally, the threshold changes mean that the proportional deductions will be smaller. The Government intends to revert to the 20% power efficiency standard in April 2017 for new installations. Biomass CHP systems Not all biomass CHP systems are equally affected by the change in rules. In respect of these changes, biomass CHP mostly means a boiler coupled with a turbine which translates heat into electricity. These can produce a high proportion of electricity to heat. However, this depends on the temperature of the boiler and temperature of the water after the turbine. These are typically either: A• Steam turbine – Has a generation level between 7 - 15%. An • ORC Turbine (Organic Rankine Cycle) - Has a generation level between 5 - 12%. Gasification CHP is unaffected by these changes because it is not categorised as biomass CHP. However, rates are already low for these systems having been subjected to degression over the last few months. The Government has now relented and announced a reduced 10% threshold until 31st March 2017.

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