The UK is the first major economy in the world to set a legally binding target to achieve net zero greenhouse gas emissions by 2050. Progress has already been made towards this goal with emissions from buildings falling by 20% between 1990 and 2017 however, to meet the zero target there is much more that needs to be done.
Currently, heating homes, businesses and industry is responsible for a third of the UK’s greenhouse gas emissions. Decarbonisation of heat is recognised as one of the biggest challenges facing the UK in meeting its climate targets. The government will publish a Heat and Buildings Strategy later this year, which will set out the immediate actions for reducing emissions from buildings. These include the deployment of energy efficiency measures and low carbon heating as part of an ambitious programme to enable key strategic decisions on how the mass transition to low carbon heat is achieved.
The government is considering a range of measures and has pledged over £9bn of support over the next ten years in pursuit of this. The consultation sets out plans for successor arrangements to the current Renewable Heat Incentive (RHI) scheme, which is closing to new participants in 2021, to complement the wider range of measures.
This consultation sets out proposals to increase the proportion of green gas in the grid. The scheme for biomethane injection is expected to begin in Autumn 2021 and will be available to eligible new applicants for four years. The Government intends to appoint Ofgem as the administrator for the scheme. It also proposes to provide targeted support to heat pumps and, in limited circumstances, biomass, through an upfront capital grant. This support will begin in April 2022, following an extension to the Domestic RHI scheme for one year. Capital grant funding will be available for two years.
The Government is inviting views on proposals and key elements of policy design, including:
Green Gas Support scheme
- The structure of the tariff mechanism to best incentivise continued deployment.
- Waste feedstock and sustainability criteria.
- Views on green gas support in the longer-term, including future mechanisms and support for other types of green gas such as hydrogen.
Clean Heat Grant scheme
- Delivering support through an upfront grant scheme.
- A voucher system for grant delivery, designed to target the upfront cost barrier.
- Supporting domestic and non-domestic installations up to a capacity of 45kW.
- Providing a flat-rate grant across different technology types.
- A recommended support level of £4,000.
- The criteria for ensuring biomass is only installed in properties deemed not suitable for a heat pump.
Financial management of funding delivery
- An overall annual budget cap for biomethane.
- A degression mechanism to reduce tariffs as costs reduce.
- Tariff tiers to reflect the cost of producing biomethane at different scales.
- A tariff guarantee budget cap to temporarily halt new tariff guarantee approvals if the cap is reached.
For the support for buildings-level technologies:
- To limit the amount of grants against a pre-agreed budget cap.
- To allocate grants through quarterly windows to smooth deployment.
Technologies and uses which will not be supported through this policy
- Process heating
- Biogas combustion
- Solar thermal
- Hybrid heat pump systems
- Heat networks
Compliance
- The expected roles of the administrator.
- Delivering a robust audit and compliance framework for the Green Gas Support Scheme and Clean Heat Grant.
The government is seeking views on the proposals outlined in the consultation. Many questions relate to specific technologies supported by the scheme and are aimed at participants. We are gathering views to include in our response to these proposals from all interested parties. We are particularly focussing feedback on the following questions:
- Has the Government selected the right technologies and uses to support at this time?
- What support is needed, in particular for green gas, to deliver a financially viable and sustainable scheme?
- What are your views with regard to the decision not to support those identified technologies with new policies?
The consultation closes on 7th July 2020. To have your say, please email the compliance team at compliance@carbonxgen.com or to discuss this further please call Melanie Kendall-Reid on 01252 87 87 22.