Wednesday, 11 March 2015

RHI subsidy for biomass boilers reduced - why are they so popular and is this sustainable?

The Renewable Heat Incentive for domestic biomass boilers is reduced as of April this year because the scheme has proved so popular [1]. The subsidy for heat pumps is unchanged. The RHI subsidy encourages us to convert from using fossil fuels for our heating to renewable energy. It covers three kinds of low carbon space heating: biomass boilers using wood chip or pellets, air source heat pumps and ground source heat pumps. Heat pumps use electricity but in a super-efficient way so that you get about 2.5 times as much heat as the electricity you use - the extra 1.5 units comes from the air or the ground and is replenished by the sun so it is renewable.(My recent post about heat pumps Do Heat Pumps Deliver? explains a bit more about how they work and installation pitfalls to avoid.) So why are biomass heating systems more popular than heat pumps?

In fact they are not. The three space heating technologies in the domestic RHI all have the same budget [2] and it is the financial cost that has triggered the reduction in subsidy. Only 30% of the RHI installations for space heating (ignoring solar hot water panels) were for biomass, but nearly 50% of the heat supplied [3]. Also, the subsidy for biomass is higher than for heat pumps (10.98p/kWh for biomass now, will be 8.93p/kWh, compared to 7.3p/kWh for air source heat pumps, so with a combination of larger installations and higher subsidy it is not surprising that biomass is the first to hit its budget limit.
Comparing RHI applications for biomass boilers and heat pumps, there are fewer installations of biomass but more of them are off the gas grid and more of them are from homes previously using oil or LPG. Also biomass boilers provide 66% more renewable energy per installation than average. (This quantity is not measured. It is deemed according to the heat demand of the dwelling.) Data from [3].

The reason that biomass installations are larger is probably because heat pumps systems are less suitable for homes with a high heat demand. As I have explained in Do Heat Pumps Deliver? this is mainly because of the radiator setup rather than the heat pump itself. If you live in a draughty cottage with solid walls and a converted loft that is hard to insulate you probably need a lot of heat. Installing a new heat pump would mean new radiators whereas a biomass boiler will work perfectly well with your existing ones.

The downside to buying a biomass boiler is that you are locking yourself into a particular fuel supply. 89% of the biomass RHI applications are from people who are off the mains gas network and 70% of them are replacing a system based on oil or LPG, so they are switching from one high cost fuel to another, hopefully not so high cost. Heat pumps use electricity which is supplied by a whole range of generating technologies so the price could be more stable.

Currently, the price of biomass pellets is about the same as oil in terms of heat supplied [4] but oil prices have been much higher in the very recent past. Biomass pellets could come down in price as demand increases because larger production plants can operate more efficiently. On the other hand, higher demand could bring higher prices if supply can't keep up. Power stations are increasingly importing biomass from abroad [5] and there is concern about the sustainability of these imports.

As of this autumn, RHI claimants will have to show that their fuel comes from sustainable sources. For most people this will mean buying from the approved biomass supplier list. The criteria for sustainability include greenhouse gas emissions (from harvesting, processing and transport) and land use. Greenhouse gas emissions must be below 60% of the EU fossil fuel average. This is not a very tight target - it works out at about 125 g CO2/kWh [6]. For comparison, emissions from natural gas are about 190 g CO2/kWh. Even imported fuel from US forests easily meets this criteria. Using the carbon calculator supplied I found that pellets imported from the US were about 60 gCO2/kWh, double that from the UK, the extra mainly due to transport. (For these calculations I assumed the wood came from conifer forest and the drying process was done efficiently using biomass fuels.)

Assuming simplistically that as the forest regrows over 70 years it accumulates carbon at a steady rate, the average carbon deficit over 70 years is half that from initial felling. Over a shorter time frame the deficit is higher.
However, these calculations do not take into account the change in carbon stores due to felling and burning the wood. Forests store carbon in wood and soils and the way they are managed can make a huge difference. In any case, clear felling a forest and burning the wood obviously generates a lot of carbon emissions immediately that takes time to replace as the forest grows. Considering a 10 year timeframe clear felling is disastrous whereas in 70 years the forest will have regrown. Assuming the carbon accumulates at a steady rate between felling (rather a simplification, but just to give you the idea), the average carbon stored over the 70 years is half that of the mature forest. So when an area of forest is brought under management for energy, even if this is done in a sustainable way, there is a one-off reduction in carbon storage of about half.
Pellets made from agricultural waste
 from Bio global Industries Ltd,
as shown at Ecobuild

Biomass pellets can be made from other stuff than wood. At Ecobuild this year I found a company that can burn pellets from a huge range of agricultural wastes, from horse dung to corn cobs or sugar beet molasses. These fuels aren't yet approved for the RHI but hopefully they will be.

In conclusion then, biomass boilers may be an easy switch to cheaper, low carbon heating for many homes, especially ones that are hard to heat using heat pumps for various reasons. However, they are still taking a bit of a risk in terms of future biomass prices. Also, if increasing demand for biomass means more forest comes under management by clear felling there will be inevitably be an initial release of stored carbon, but we could also make better use of other sorts of agricultural waste. Using biomass for heating makes a lot of sense as long as we don't go mad and use it everywhere.

[1] Tariffs and payment for the Renewable Heat Incentive (OFGEM)
[2] Domestic Renewable Heat Incentive factsheet degression mechanism (pdf) (DECC)
[3] Renewable Heat Incentive and Renewable Heat Premium Payment Statistics (DECC)
[4] 6.8p/kWh for pellets compared to 6.4p/kWh for heating oil according to Nottingham Energy Partnership Energy Cost Comparison
[5] How much biomass is currently being burned for electricity generation (Biofuel watch)
[6] New biomass sustainability requirements for the Renewable Heat Incentive (DECC)

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