The government have published their annual energy statement. Action 13 states: "We will set out detailed proposals for taking forward the Government’s commitment to renewable heat through the Spending Review."
They support this statement by their commitment to a 12% target for renewable heat by 2020
Stating "This Government is fully committed to taking action on renewable heat."
From a creative destruction perspective it is interesting to see how the market is responding.
The gas market clearly has most to loose from renewable heat. They are having to import more, prices are rising, and gas heating is by far the most popular form of heating.
"We've cut our boiler and standard installation prices by a third and if you call by the 31st July we'll also give you 12 months boiler and central heating care (2 years if you're a British Gas customer)."
Whilst the existing market is competitive, this seems to be getting commitment from potential customers in advance of any firm announcement.
In the heating market there is a "heating season". Not every boiler is sold during this time, but there are clearly people who turn their system on and find it does not work, or breaks down during Autumn. This makes September to Christmas a really busy time in this market.
Consumers are not well informed at the moment - not because they do not want to be - but because there is lots of conflicting information out there - most of which is wrong or misleading.
The present conservative (is it really a coalition?!) believe in markets. Markets are not just the city financial markets, but the markets that we see all around us. Consumer and business confidence is low at the moment and the job of government is surely to provide some leadership ie direction.
They are making cuts and reducing the size of the public sector purse. They expect that the private sector will "fill the void".
With what?
If you were a business person at the moment - what would you invest in? In the renewable heating market many companies have invested already. They are just sat there waiting. Other markets have been heavily hit by the cuts, or by the recession. e.g. Were you in construction you have had the double burden of the schools programme being cut whilst the housing market looks set to fall again.
Leadership is really important to the renewal process - there seem to be very few people willing to take a lead. Is the consequence further inactivity. Economists are very cautious that the growth estimates for the UK are too optimistic whilst we are in a space where there are cuts, drops in spending, and no leadership.
Search This Blog
Wednesday, July 28, 2010
Monday, July 05, 2010
Creative Destruction - The UK National Renewable Energy Plan 2010
The UK Government are required to submit their National Renewable Energy Plan by the end of June.
The published document is quite hard to find and 160 pages long. It has been published in association with a number of other documents:
"Unlocking investment to secure Britain's low carbon future" an independent report from the Green Investment Bank committee
http://www.theccc.org.uk/reports/progress-reports/2nd-progress-report An independent report from the Climate change committee
Zerocarbonbritain2030 from The Centre of Alternative Technology
I am particularly interested in biomass, and especially the domestic heating market.
Some initial observations:
In the National Renewable Energy Plan (NREP) there is a commitment to 12% of the UK heating being met from renewable sources.
In the plan the government comment that they are starting at a "very low" base with regard to renewable heating. They do have 2 strategies for heating:
1 - A green investment bank
"we are looking into the possibility of a Green Investment Bank (GIB) to help fund the introduction of renewable energy. As part of the creation of this bank, we will create financial products to provide individuals with opportunities to invest in the infrastructure needed to support the new green economy."
I have read this several times. Initially I thought it meant that individuals could get a loan for their biomass boiler and have it linked to the Renewable Heat Incentive. However the words clearly state "financial products" and not loans for heating. It also says infrastructure rather than heating equipment. Reading the Green Investment Committee report - it seems to be more about electricity and not about heat. The Renewable Heat Incentive is not mentioned once. The Renewable Heat target of 12% by 2020 is not mentioned once (other than they mention 12% by 2020. The "drill down" section (it talks about loans for energy efficiency rather than "simply decarbonising the supply chain".
(p32 "As the recent Green Deal recognises, we need to reduce energy demand by improving the energy efficiency of the UK’s housing stock rather than simply decarbonising an ever-increasing energy supply. It is the cheapest way of delivering carbon emission reductions and energy security.")
In section 4 of the NREP it clearly states that the GIB is linked to support "renewable generation" there is no direct reference to heat or the renewable heat incentive.
Summary: The Green Investment Bank may not have any direct link to the Renewable Heat Incentive or Renewable Heat. Whilst they (GIBC) are mandated to consider both electricity and heat they have made up the shortfall in heating requirement with heating from electricity (considerably more expensive for the tax payer in the form of much higher bills at present day prices)
Setting up a bank before the 11 April 2010 - is it realistic?
2 The Renewable Heat Incentive (RHI)
The NREP makes significant mention of the RHI but also mentions that there is sign off needed from ministers.
It is not clear how to fund or administer this - and whilst the GIB may have facilitated - it is not proposed at the moment.
The report from the Climate Change Committee suggests that there needs to be a stronger link between housing efficiency and claiming the RHI. At the moment the monies paid out are "assuming" an efficient house - but it is up to the householder to make the improvements.
The low carbon buildings grant (now closed) was criticised due to the costs of administration often ending up with a low uptake of the grant opportunities. Clearly one of the dangers for the RHI is that it could be expensive to run and put up too many hurdles for the consumer.
Perhaps something is to be said for "responsibility" - the new coalition government's buzz word. Whilst in health they are suggesting that healthy eating is the responsibility of individuals - and not the education programmes that have been in place. Is there a need for one set of measures being about housing efficiency and another about renewable heat?
The published document is quite hard to find and 160 pages long. It has been published in association with a number of other documents:
"Unlocking investment to secure Britain's low carbon future" an independent report from the Green Investment Bank committee
http://www.theccc.org.uk/reports/progress-reports/2nd-progress-report An independent report from the Climate change committee
Zerocarbonbritain2030 from The Centre of Alternative Technology
I am particularly interested in biomass, and especially the domestic heating market.
Some initial observations:
In the National Renewable Energy Plan (NREP) there is a commitment to 12% of the UK heating being met from renewable sources.
In the plan the government comment that they are starting at a "very low" base with regard to renewable heating. They do have 2 strategies for heating:
1 - A green investment bank
"we are looking into the possibility of a Green Investment Bank (GIB) to help fund the introduction of renewable energy. As part of the creation of this bank, we will create financial products to provide individuals with opportunities to invest in the infrastructure needed to support the new green economy."
I have read this several times. Initially I thought it meant that individuals could get a loan for their biomass boiler and have it linked to the Renewable Heat Incentive. However the words clearly state "financial products" and not loans for heating. It also says infrastructure rather than heating equipment. Reading the Green Investment Committee report - it seems to be more about electricity and not about heat. The Renewable Heat Incentive is not mentioned once. The Renewable Heat target of 12% by 2020 is not mentioned once (other than they mention 12% by 2020. The "drill down" section (it talks about loans for energy efficiency rather than "simply decarbonising the supply chain".
(p32 "As the recent Green Deal recognises, we need to reduce energy demand by improving the energy efficiency of the UK’s housing stock rather than simply decarbonising an ever-increasing energy supply. It is the cheapest way of delivering carbon emission reductions and energy security.")
In section 4 of the NREP it clearly states that the GIB is linked to support "renewable generation" there is no direct reference to heat or the renewable heat incentive.
Summary: The Green Investment Bank may not have any direct link to the Renewable Heat Incentive or Renewable Heat. Whilst they (GIBC) are mandated to consider both electricity and heat they have made up the shortfall in heating requirement with heating from electricity (considerably more expensive for the tax payer in the form of much higher bills at present day prices)
Setting up a bank before the 11 April 2010 - is it realistic?
2 The Renewable Heat Incentive (RHI)
The NREP makes significant mention of the RHI but also mentions that there is sign off needed from ministers.
It is not clear how to fund or administer this - and whilst the GIB may have facilitated - it is not proposed at the moment.
The report from the Climate Change Committee suggests that there needs to be a stronger link between housing efficiency and claiming the RHI. At the moment the monies paid out are "assuming" an efficient house - but it is up to the householder to make the improvements.
The low carbon buildings grant (now closed) was criticised due to the costs of administration often ending up with a low uptake of the grant opportunities. Clearly one of the dangers for the RHI is that it could be expensive to run and put up too many hurdles for the consumer.
Perhaps something is to be said for "responsibility" - the new coalition government's buzz word. Whilst in health they are suggesting that healthy eating is the responsibility of individuals - and not the education programmes that have been in place. Is there a need for one set of measures being about housing efficiency and another about renewable heat?
Subscribe to:
Posts (Atom)