Wednesday, 30 April 2014

New biomass sustainability requirements for the Renewable Heat Incentive

Ofgem has revealed more detail on how it intends to roll out and implement sustainability requirements for biomass fuels.

This is particularly important as it not only affects the owners and operators of RHI accredited biomass boilers but also producers and traders of biomass fuels.

The guidance applies to both the non-domestic (commercial) and domestic RHI and participants will need to comply with requirements from date they come into force (although the precise dates are not stated).

All participants are strongly encouraged to start sourcing from a supplier on the forthcoming Biomass Suppliers List (BSL) supplier in advance of the criteria coming into force later this year.

The new requirements also take into account participants who self-supply, for example an estate that processes wood chip from its own woodland.  Details on this can be found below.

From Autumn 2014 (no earlier than 1st October 2014)

Biomass fuel used by RHI participants must meet a lifecycle greenhouse gas (GHG) emissions target of 34.8g CO2 equivalent per MJ of heat.

Don't panic!  All this means is that the fuel (chip, logs, pellets) must achieve a 60% GHG saving against the EU fossil fuel average.  And it is the supplier of the fuel that has to demonstrate the GHG saving and not the end user (although the end user will have new reporting responsibilities if they are participating in the RHI).

From Spring 2015 (subject to the Parliamentary process)

Ofgem plans for biomass fuel to meet land criteria, which will differ for different types of biomass:
For woodfuel the criteria are outlined in the UK Timber Standard for Heat and Electricity.
How do non-domestic RHI participants comply?

This is rather simple actually.  A new Biomass Suppliers List (BSL) is currently being set up.  This is being managed by the good people at Woodsure who have been appointed by Ofgem to manage the BSL.  The alternative option is to self-report directly to Ofgem.

Participants can switch between these methods.  Of the two the BSL route sounds more straightforward to us.
  • Sourcing woodfuel from the Biomass Suppliers List (BSL)
    • Participants may still need to also provide Ofgem with a quarterly declaration that the biomass fuel they have used was sourced from a supplier registered on the BSL and marked as sustainable.
  • Self-reporting to Ofgem on the sustainability of their fuel
    • This will involve making a quarterly declaration to Ofgem of the lifecycle GHG emissions associated with each consignment of fuel used in that quarter, and provide an annual independent audit of the lifecycle GHG emissions associated with biomass used in that reporting year.
For the domestic RHI all fuel used from the date the criteria come into force must be sourced from a supplier registered on the BSL at the time the fuel was purchased. Participants are required to make an annual declaration to Ofgem that the biomass fuel used meets this requirement.

Self-suppliers (domestic and non-domestic) < 1 MW

Participants self-supplying woodfuel from the same estate as the installation will be able to register on the BSL as a self-supplier without undertaking an assessment against the sustainability criteria if the boiler is less than 1MW capacity

Ofgem recommendeds:
  • Self-suppliers provide some evidence of their ability to self-supply, such as a Forestry Commission approved management plan
  • Self-suppliers should register on the BSL before the sustainability criteria come into force in Autumn 2014.
Self-supplying participants who cannot meet all of their needs from their own woodland will be able to top up with fuel purchased from a BSL supplier.

Tuesday, 22 April 2014

Updated commercial RHI tariffs announced

Ofgem has recently released the updated tariffs for the commercial RHI scheme.  These changes have taken place primarily due to the annual inflation of the RHI, the third increase since the scheme was launched.  However, changes have also taken place in response to increasing uptake of the scheme, particularly in the small and medium biomass projects.

The inflation of the tariff, this year by 2.7%, affects those already in receipt of payments from Ofgem as well as installations that will become accredited after April 1st 2014.

The following table focuses on the biomass tariff.  For example, for boilers sized up to 199 kW the Tier 1 tariff has increased from 8.6 p/kWh to 8.8 kWh (the Tier 2 tariff from 2.2 to 2.3 p/kWh).  The last column in the following table shows the updated tariff (from 01/04/2014).

Whilst these changes are not earth shattering the increases help to further enhance the economics of RHI accredited biomass boilers.  For example, the annual RHI payment for a 199 kW boiler serving a 280,000 kWh heat load would increase by around £500 per year.

The only downside to these changes is the reduction in the tariff for medium-scale biomass boilers that were accredited after July 1st 2013 (Tier 1 down to 5.1 p/kWh and Tier 2 remains at 2.2 p/kWh).  This change indicates that degression has taken place in the medium category due to rising uptake of the RHI in this category.

Whilst the overall expenditure for the RHI is proceeding according to forecast it is clear that the small biomass category has seen the largest increase in expenditure.

Ofgem states that:

"Forecast spend over the next 12 months for small commercial biomass is £44.4m. This means that estimated spend for this technology is already £10.4m above its 30 April 2014 individual technology trigger point of £34.0m. This increases the possibility of a reduction to this tariff in the next quarter. However, this would only occur if next quarter’s 50% trigger for the scheme as a whole of £96.4m was also exceeded, which would require a £10.1m increase in total expenditure over March and April."

Other developments include:

  • Forecast spend over the next 12 months for medium & large commercial biomass has increased by 4% and 6% respectively.
  • Forecast spend for small heat pumps has seen a significant increase of 25% in the last month.
  • Forecast spend for all other tariff categories have seen little to no activity this month and remain considerably below their individual tariff triggers for the next quarter.

The future risk of degression is summarised by Ofgem as follows:

"Whether any reductions occur next quarter depends on how well the scheme overall, and each technology tariff, performs during March and April and whether total scheme spend grows by £10.1 million in that time. An increase of this size would occur if the scheme was to continue to grow at the rate we have seen this month which would cause the 50% total scheme trigger of £96.4m to be hit. DECC will receive the data needed to make this forecast in May, and will publish the next quarterly degression announcement by 1 June 2014, following which, any reduced tariffs would come into effect from 1 July 2014."

Thursday, 3 April 2014

Kent’s tree experts lead on new guidance for Ash dieback

Britain’s trees are under unprecedented threat from new pests and diseases, including Chalara dieback of ash, a serious disease caused by the Chalara fraxinea fungus. 

Kent is among the first areas of England to be badly affected by Chalara Ash dieback. Since 2012 woodland managers have witnessed a well-established infection in East Kent and have subsequently found more infection further west. 

Today, natural regeneration in heavily infected woodlands is highly compromised and mature ash trees are showing susceptibility to secondary infection.

Ash is the most common tree in Kent (almost a fifth of all trees).  This, combined with the observed rate of spread and the high level of infection already present, make eradication of Chalara impossible.

The Kent Downs AONB Unit has worked closely with partners in the Arboriculture Association, Forestry Commission and Kent County Council to produce a guide which offers practical advice for local councils, highway authorities, private tree and woodland owners, and contractors in Kent. 

The main aim was to provide practical advice that might help slow the spread of Ash dieback, particularly from woods in high infection areas in the east of Kent to other locations in the west of Kent, and beyond, where infection rates are currently low.  

Other objectives were to provide advice that minimise impacts on biodiversity, protects economic return from timber production and safeguards the public.

The guide provides a general overview of the disease and its current status before providing specific guidance for woodland managers and those managing tress in urban and sub-urban environments.  

It includes summary advice on how to manage infected ash trees in conservation areas and development sites, trees with preservation orders and ancient, veteran and heritage trees.  The guide also considers ash trees adjacent to highways, public open spaces and private property.

The guide was co-written by Jonathan Harding from the Forestry Commission, Dan Docker from Tunbridge Wells Borough Council, Mike Sankus from the Arboriculture Association and Tony Harwood from Kent County Council. 

The project was managed by the Kent Downs AONB Unit as part of the ADAFOR Interreg project, a cross-border forestry initiative that seeks to integrate knowledge and expertise to facilitate enhanced forest management and adaptation.

The guide is available to download for free our Google Docs folder.

For more information please contact:

Matthew Morris (Woodfuel Development Manager)
01303 815 171