10 June 2010
Within the next 12 months, new environmental legislation focusing on generating heat from renewable sources is likely to be introduced. B P Collins works with a number of clients with expertise in the "green" sector who will be aiming to take advantage of the new rules and incentives. Diane Gill, partner, corporate and commercial, considers this in more detail:
Billed by the Government as the first scheme of its kind, the Renewable Heat Incentive (RHI) is intended to address the fact that although heating accounts for some 47% of the UK's carbon dioxide emissions, little has been done so far to incentivise and encourage the generation of heat from renewable sources. Indeed, heat generated from renewable sources is estimated to account for only 1% of the UK's total heat demand.
Previous renewable energy support schemes have tended to encourage the production of electricity from non-fossil fuel sources. However, whilst the RHI sets out to provide financial assistance to those who generate heat from renewable sources or use renewable energy technologies.
The RHI will support heating at all levels, from households to industrial buildings. The following technologies will be eligible for support:
• Biomass (including the biomass element of waste)
• Biogas
• Bioliquids
• Ground source heat pumps
• Air source heat pumps
• Water source heat pumps
• Solar thermal
Building on the experience of the Renewables Obligation, it is proposed that there are differing levels of support available to the different technologies. Controversially, however, the RHI will only apply to the development of new renewable heat installations and will not benefit existing projects commissioned before 12 July 2009.
The world is clearly changing and there is already a move by businesses and individuals to look at new ways to utilise what was previously wasted or lost. Our clients in the renewables sector are already looking at ways in which they can use the technologies listed earlier to capture and make the most of bi-products from their core activities, whether using a form of combined heat and power technology or otherwise.
Our role involves helping them with the legal aspects of putting a project in place. If a client decides this is something it wants to pursue, we can help by looking at all the building blocks required to get the project off the ground and ensuring they are ready for when the new legislation is introduced.
When the RHI comes in and as technology develops, we expect to see an increase in clients looking at such projects.
For some clients, the RHI will present an opportunity to market their existing business activities. One such client is Ice Energy Heat Pumps Limited, the country's leading supplier of both ground and air source heat pump projects. Ground source heating is a form of renewable energy which utilises the solar heat naturally stored in the earth. Air source heat pumps work in a similar way utilising the ambient air temperature. Andrew Hillier, CEO of Ice Energy comments:
"The RHI is currently going through the Government's consultation stage and, if successful, will come into force from 1 April 2011. It has cross party support and is funded through a levy on traditional fossil fuels, so should be both election and government debt resilient.
With the possibility of generating a saving approximately £1,000 per annum for a three bedroom house, we expect to see a significant upturn in business. The RHI will open up significant opportunities for the ground and air source heat pumps in not only the private and social housing sectors, but also for commercial buildings as well."
For further information and advice on environmental matters affecting businesses please contact the corporate and commercial team on 01753 279075, complete the online enquiry form or email commercial@bpcollins.co.uk. |
