A busy 2013 saw a number of developments in the world of biomass; in May medium-scale biomass was the first technology to be degressed in the non-domestic RHI; in July the long awaited details on the domestic RHI scheme arrived offering 12.2p/kWh for biomass; and in the autumn the outcome of the non-domestic scheme early tariff review were announced including a tariff increase to 2p/kWh for large scale biomass.
With all this behind us 2014 is still set to be a busy year, including the launch of the domestic RHI scheme, due in spring, and the first scheduled review of the non-domestic scheme. Also on every biomass suppliers mind will be the RHI biomass suppliers list (previously known as the approved suppliers list).
Originally it was expected that biomass sustainability criteria would apply to the RHI scheme (domestic and non-domestic) from spring 2014. However, in the announcements made at the end of 2013 it was confirmed that this had been delayed until autumn of 2014. The delay is intended to allow industry and participants to monitor their processes in light of the sustainability criteria and build the audit trail necessary to demonstrate compliance.
The sustainability criteria are: 1) Greenhouse gas emissions criteria – 60% saving on the EU fossil fuel average and 2) Land criteria – expected to be based on UK Timber Procurement Policy (in force no later than April 2015, in line with similar standards being introduced to the Renewables Obligation for electricity generation).
Participants in the non-domestic scheme have two main options to demonstrate sustainability criteria – either by reporting to Ofgem or by sourcing the fuel from an approved suppliers list. In the domestic RHI scheme all participants will be required to source their biomass from suppliers on the list.
The RHI Biomass Suppliers List will consist of suppliers of solid biomass fuel who have demonstrated that their stock complies with the RHI sustainability criteria. The list of suppliers will be set up and managed by a contractor and a notice to tender was issued in August 2013. Although the chosen contractor is yet to be announced, DECC have said that the tenders submitted were of a high standard and that a shortlist was interviewed in January 2014.
The chosen contractor is required to the meet the following Project sub-objectives:
- Create a simple, practical yet robust method of demonstrating that the supplier has met the RHI sustainability requirements
- Create a low cost way of domestic and non-domestic RHI participants, including self-suppliers of woody biomass, to demonstrate that they meet the biomass sustainability standards
- To embed evaluation of biomass suppliers, supply chains and the wider environmental impact of the RHI Biomass Supplier List into the RHI end-to-end journey, through reporting to the DECC evaluation team.
All of this may seem like a significant challenge but achieving high sustainability standards and providing peace of mind for consumers is important for the long-term credibility of heating from wood pellets. Biomass is one of the most efficient methods of providing renewable heating but can only remain so if strict standards are met.
One concern for industry is the risk that the scheme becomes overly complex. Too great an administration burden could provide a barrier to compliance and also increase the risk of mistakes being made. Hearing from DECC that the selection of tenders were of a high standard is reassuring news. Once the contractor has been announced, suppliers will be required to submit relevant data for audit by the list manager and once successfully registered will be permitted to label their compliant products with a statement to illustrate that this fuel complies with RHI sustainability criteria.
CPL Industries are engaged with sustainability developments under the RHI and we will provide further information regarding the Biomass Suppliers List via this blog as the scheme progresses.
Equity's mission is to make sustainable energy mainstream by using our unique strategic insight to connect the commercial day to day reality of running a business and the political challenges of sustainable energy policy.