CBI wants better thinking on low-carbon heat

London – The UK’s policy for cutting carbon dioxide emissions from heat is too fragmented and complex, said the CBI, which has called on the Government to review the Renewable Heat Incentive (RHI) to subsidise the installation of low-carbon heat technologies.

In its current form the RHI will offer a subsidy to a range of renewable heat technologies, such as solar panels, air/ground source heat pumps and renewable CHP, warned the business group, which has drawn up a list of measures (see fact file below) to address these issues.

According to the CBI, as planned, the RHI runs three risks:

- Large amounts of subsidy could be directed towards expensive technologies in cases where cheaper alternative technologies could be used
- The cost of funding the RHI could fall disproportionately on industrial gas users
- The scheme will not encourage imaginative options to make better use of existing heat generation, such as district and community heating schemes that use surplus industrial heat to warm domestic homes and businesses.

“Heating for domestic homes and industry accounts for almost half of all energy used in the UK, and cutting emissions here could take us a long way towards reaching our carbon targets,” said Dr Neil Bentley, CBI director for business environment.

“There are lots of exciting technologies that can make a difference, but getting them off the ground needs investment, so the principle of an incentive scheme makes sense.”

According to Bentley, some renewable heat technologies such as solar panels won’t always offer good value for money, so the RHI must have inbuilt limits on how much can be spent on individual technologies.

“We also need to think ’outside the box’ more,” he concluded. “Linking surplus heat from industrial sites into local homes through district heating schemes could be an efficient and cost-effective way to reduce heat emissions, but existing Government policy won’t encourage this sort of innovation”

Welcoming the CBI’s stance, Graham Meeks, director of the Combined Heat & Power Association (CHPA) said policy on heat should be better integrated into long-term energy policy.

“Opportunities such as the capture of waste heat, CHP and district heating have been overlooked to for too long as energy priorities,” said Meeks.

“Re-using industrial heat and moving to decentralised CHP are highly-efficient approaches that are commonplace in many developed economies - and which can deliver progress here at least cost to UK plc.

“An increasing number of stakeholders are beginning to see that an approach that seeks to drive the most efficient generation of renewable and low-carbon heat is simply common sense.”