UK Geothermal heat providers would need higher renewable heat incentives

Alexander Richter 8 Feb 2010

Ryan Law of Geothermal Engineering in the UK says that the Renewable Heat Incentive in the UK needs to be refined to encourage a wide mix of renewable heat.

In a recent opinion piece in the UK, “Ryan Law, managing director of Geothermal Engineering, which is planning the UK’s first commercial-scale geothermal power plant, says that the Renewable Heat Incentive – released for consultation last week – needs to be refined to encourage a wide mix of renewable heat.

The government scheme to create renewable heat incentives (RHIs) has been hailed by DECC as an international first; and it’s certainly a scheme we welcome.

Renewable heat is currently a much underfunded sector that the UK needs to develop; the more diverse the UK’s energy portfolio, the more chance we stand of meeting the 2020 renewable energy targets.

Renewable heat sources can provide enough thermal energy to heat whole communities, and generation on this scale dramatically reduces the amount of wasted energy by keeping supply and distribution localised.

However, we do feel that the economics of the scheme need refining if it is going to produce a well-balanced portfolio of renewable power for the UK.
In March 2009 the Renewable Energy Association proposed that government classify 12 primary heat classifications as suitable for RHIs, and it is disappointing to see that this list has been almost halved in the official DECC documents.

Different methods of generating heat have different business models and we would urge the government to recognise this.

Deep geothermal heat production has high initial investment costs and is being commercially pioneered in the UK. To encourage these sorts of developments the RHI needs to be sufficiently tailored to make a project viable.

As it stands, geothermal heat has been categorized alongside large scale Ground Source Heat Pump (GSHP) technology, despite their very different investment requirements, and the fact that GSHPs use electricity from the national grid to supply the heat.

Geothermal heat providers need RHIs to be set at a higher level to attract more investment for both the power plants and the distribution networks required to connect consumers to the heat.

The RHI consultation closes on April 26.