Carbon Plan brings heat decarbonisation in from the cold

The Secretary of State, Rt. Hon. Chris Huhne MP, today announced the Government’s Carbon Plan, setting out the plans for achieving the emissions reductions committed to in the first four ‘Carbon Budgets’ covering the period to 2027.

Graham Meeks, Director of low-carbon heating industry body CHPA, welcomed the publication of the Plan:

“This is hopefully the start of a real commitment by Government to bring low-carbon heating back in from the cold and should be welcomed as such.

“The Plan reveals, probably for the first time, an enduring role for combined heat and power in homes, buildings and industry – starting today and reaching through to 2050.This approach is vital when it comes to the question of heat, which accounts for half our emissions and which for many is the greater part of the energy bill The Plan also highlights the central role of district heating, integrating a diversity of low-carbon energy sources to achieve an effective decarbonisation pathway for our urban centres.

“The challenge now is to ensure that we have the policies in place today to begin to realise that Plan, sustaining and expanding the benefits that CHP and district heating already bring to the UK economy. The industry today faces some major policy pitfalls which must be addressed if it is to deliver its full potential in the next decade and beyond.”

Proposals to reform the Climate Change Levy, adjust the Small-Scale Feed-In Tariff and reform renewables incentives have left many CHP operators and equipment suppliers facing considerable uncertainty.

The CHPA is calling for the Government to act in four key areas:

• Exempting CHP fuel used for heat production from the Carbon Price Support levy and retaining Climate Change Levy Exemption Certificates (LECs) for CHP until the introduction of an effective, alternative Feed-in Tariff incentive.
• Introduction of a 15p/kWh tariff for microCHP under the Government’s existing Small-Scale Feed-In Tariff regime, and extension of this scheme to include plant up to 50 kWe capacity.
• Review of renewable CHP incentives, including extended eligibility for the Renewables Obligation until 2017, a dedicated CHP band in the Renewable Heat Incentive and retention of the single ROC band for Energy-from-Waste CHP.

The industry is also looking towards the publication of the Government’s Heat Strategy in the New Year to establish the investment and regulatory framework needed to expand the nation’s district heating infrastructure.