Ensuring that you get those RHI payments
Renewable heat is installed to make a green statement, isn’t it? Or is a key motivator those RHI payments. John Field of TEAM explains how to ensure you get those payments and what is on offer.
The heat generated by a renewable-heating system and used as measured by heat meters forms the basis of the quarterly payments to the applicant for installation approved for the Renewable Heat Incentive (RHI). Payments are often many tens of thousands of pounds annually (Box 1), and the calculation of the repayment sums follows directly from the metered heat (Box 2).
Applications to the RHI scheme for biomass must provide evidence of heat metering that is properly designed, installed and commissioned. and meet the following requirements.
• Be designed to meter the biomass heat generated (excluding heat for back end protection) and also any gas or oil boiler heat and any ineligible uses of heat such as heat loss from external pipe runs. All meters must be approved under the MID Class 2 meter accuracy standard.
• Be installed in line with good practice as set down in published standards and manufacturer's instructions.
• Be commissioned and showing evidence of working as expected recording appropriate metered heat flows.
This evidence of appropriate metering can sometimes be provided by the applicant, if they have the capability, but often an Independent Report on Heat Metering Arrangements (IRMA) must be provided with the application. An IRMA report is required for any scheme over 45 kWth which is classified as ‘complex’ — such as if there is more than one building, or if there is CHP, steam distribution, or any ineligible uses or external heating pipework.
Box 1: How much payment do you get?
The level of RHI payments that you will receive can be surprising. Consider renewable installations which provide all their building's heating and hot water needs by operating for a fairly conservative 2000 hours a year, as summarised below.
Note how payments are dramatically lower if you are the wrong side of the 200 kWth and 1000 kWth thresholds — and those payments are for 20 years. Note the dramatic effect of adding just 2 kWth to capacity.
Output 199 kWth 201 kWth 999 kWth 1001 kWth
RHI pymt £23 400 £15 700 £78 000 £20 000
The ‘more-than-one-building’ criterion means that an IRMA is required in any packaged installation over 45 kWth which is dropped in and connected to the existing hot-water heating systems by external pipework runs, even if insulated. In principle this set-up also requires heat losses from the external pipework to be metered, but Ofgem has accepted that such extra meters can be omitted in favour of a calculation demonstrating that the pipework heat loss is less than the accuracy of the heat meters measuring — taken to be a level of 6% of the total heat produced. This can simplify the required metering and save significant initial costs for the extra meters.
Ofgem specifies what must be in an IRMA report and who can produce one; this must be a suitably qualified and experienced engineer who has no contractual or financial link to the applicant other than for producing the IRMA report. In the early stages of the RHI the Ofgem approval rate was very low because of issues with metering and the quality of information provided. Approval rates have been higher following the publication by the Building & Engineering Systems Association of the ‘B&ES guide to good practice: heat metering for the RHI’, which was developed by Justine Grant of TEAM Energy Auditing Agency.
The range of systems being assessed for IRMA reports by TEAM extends from a 990 kWth residential biomass, a large programme of 500 kWth packaged biomass and ground-source heat pump systems, and down to a 70 kWth office boiler. While many of the schemes now provide few design and installation issues, the large residential scheme demonstrated aspects that commonly give trouble and which must be correctly addressed to achieve approval, such as the following.
• Moving heat meter equipment to exclude back-end protection heat losses,
• Re-installing temperature-sensor pockets to avoid dead-legs; they also needed re-labelling and measures to ensure they are not removable.
For a potential RHI scheme applicant, the metering aspects should take account of the following steps to avoid abortive costs and maximise the chance of first-time approval by Ofgem.
1. Assess if you need support to ensure the metering is suitable and that you can provide the required information: if the scheme is ’complex’ and over 45 kWth you will definitely need an IRMA report by an independent provider.
2. Obtain early confirmation that the proposed metering arrangements will be suitable in terms of the Ofgem requirements summarised above. This will greatly help avoid approval delay and costly works to completed installations.
3. Ensure that the required information for the application is produced and, for multiple installation programmes, made available as a matter of course. Key items include the schematics of the RHI heat installation and of the existing hot-water heating (LTHW) system, showing the heat metering and establishing any ineligible heat generation or heat uses and their metering for the formula in Box 2.
4. While a metering site visit is required after completion and commissioning of the renewable installation, it is possible to provide the required metering information as far as possible in advance of this visit. This brings down the time to complete an IRMA report from one or two weeks to potentially two days following a visit if the commissioning certificates are quickly produced and delivered to the metering assessors.
Box 2: How is the payment calculated?
Not many people have a good feel for this, but it is important as it determines what the metering is being used for.
Step 1 is to calculate the eligible heat output: For a ‘simple’ system, this is the metered heat output from the renewable heat system. For a ‘complex’ system, it is calculated as the heat use for eligible purposes x (heat generated by the RHI installation / heat generated by all plants supplying heat to the heating system).
Step 2 is to divide this eligible heat output by the renewable thermal capacity (kWth) to obtain the effective eligible number of hours of operation at full load.
Step 3 is to calculate the annual payment as the sum of payments under the tier 1 and tier 2 tariffs. • Tier 1 tariff x the capacity of the renewable system x hours run (up to 1314 h) • Tier 2 tariff x the capacity of the renewable system x any hours over 1314 h
Note that even if your renewable heat output matches your eligible use, any non-renewable heat generated will reduce the payment because it reduces the renewable fraction in Step 1.
The RHI scheme continues to develop, with DECC publishing on 27 February its response to the RHI Consultation with proposals which include the following.
• Redefining 'complex' and 'simple' to increase the proportion of 'simple' installations.
• Reducing the payment tariffs if approvals exceed the Government target; this process is termed ‘regression’.
DECC has a separate consultation on the IRMA report process which is looking at strengthening requirements for the independence of IRMA authors and increasing their knowledge of the standards and guidance.
Getting the RHI installation metering right and also reporting on it is clearly a vital part of getting Ofgem approval and ensuring that your savings are achieved in practice. The relatively simple considerations and steps described can greatly improve the chance of this process being efficiently and quickly progressed.
John Field is energy services director with TEAM (Energy Auditing Agency Ltd)