Renewable heat for Scotland(with thanks to SRF for this material)

INTRODUCTION

Heat currently accounts for 53% of all energy demand in Scotland yet to date the Scottish Executive's renewable energy policies have focused on electricity generation. The target to achieve 40% electricity generation from renewable by 2020 equates to only a 7% target in total energy terms. However, a sub-group of the Forum for Renewable Energy Development in Scotland (FREDS) is currently working to advise the Executive and a Renewable Heat Strategy is promised by the end of 2007. Scottish Renewables has long called fr the Executive and UK Government to establish a target and associated support mechanism to kick-start a heat market for renewables.

TECHNOLOGIES

Bioenergy, solar heating and heat pump storage are three heating technologies that would benefit from a heat target and support. These are generally smaller, domestic installations, although larger applications for district heating or in combination with electricity generation as combined heat and power (CHP) are also used. CHP relies on a market for the heat output, such as a major building, factory or heat distribution network.

Bioenergy technologies include wood fuel boilers, CHP and district heating systems. Experience shows that wood fuel heating creates 5-10 times more jobs than other generation technologies. Solar heating involves the installation of solar panels to pre-heat water either for space heating, cooking or washing. Scotland's long daylight hours in summer makes installation of solar thermal more cost-effective than in more southerly counties. Heat pump technologies provide heat by exploiting differences in temperature between an inside air mass and either the ground, a water body or another air mass. Examples of success in renewable heating include Fyne Homes' district heating scheme in Lochgilphead and the district heating scheme in Oban where 92 houses are supplied by one 720kW boiler.

ENERGY EFFICIENCY

There are close linkages between any heat market and energy efficiency and lessons can be learned from action that has been taken to support more efficient use of heat. It is anticipated that a large part of the heat market in Scotland will be the installation of small/medium sized individual wood fuel boilers. Ideally, these installations should be clustered to aid creation of a fuel supply chain linking fuel producers, distributors and users. Development is likely to be led from rural areas which tend to be outside the mains gas network and currently rely on more expensive, polluting forms of fuel. Yet, a significant proportion of this rural population live in homes that cannot easily be made heat efficient, which prompts consideration of how renewable heat technologies might assist fuel poverty.

SUPPORT FOR HEAT

The success of the Renewables Obligation Certification (ROC) mechanism for electricity has led for calls for a 'heat obligation'. However, Scottish Renewables has concerns about how this might work. Some form of support structure and target is desirable, but many commentators ignore the complexity of the issue. Simply replicating the electricity ROC market for heat will not work as it is difficult to see on whom a heat obligation should be placed.

Unlike electricity for which a mix of generation technologies provides a homogeneous product - in the heat market the different heat types are not 'mixed' and the consumer is required to buy different equipment to make use of each type. Thus a renewable heat obligation could only provide limited incentives to encourage change within the established heat market. Further, the ROC system tends to reward large-scale applications while the heat market is focused on smaller-scale operations with heating networks of installed applications. A grant system is easier to understand and acts as a clearer incentive.

It is Scottish Renewables' view that it is now time for direct government support to encourage installation of renewable heating technologies throughout Scotland. Further, government should lead with policies that promote the greater use of renewable sources of energy in public buildings.

Scottish Renewables would like to see how the current Energy Efficiency Committee (ECC) scheme, whereby utilities must fund installation of energy efficiency measures amongst their consumers, might be adapted to promote the uptake of renewable heating systems. Utilisation of EEC funds through incentives for installation of renewable heating measures would be particularly appropriate for homes which cannot be helped using standard efficiency measures, such as cavity wall installation or gas condensing boilers. It would also encourage supply companies to act on renewable heat in order to meet their EECs. CHP schemes which provide heat to households could also benefit through this system, while larger scale operations should receive direct capital grant support, primarily to help underwrite infrastructure costs.

In March 2007, the Executive's Scottish Biomass Support Scheme allocated £10.5 million to support 74 bioenergy projects, many of which are for heat generation. The Scheme focuses on addressing the market barriers presented by technology installation and supply chain issues. Scottish Renewables is keen to see such support for heat extended and expanded long-term.

Current estimates indicate that up to 3% of our heat needs already come from renewable sources, such as bioenergy, largely through use of log fires and wood-burning stoves. However, the European average level of renewable heat provision is 10%, with some countries reaching 50%. Wood fuel could provide between 5% and 10% of heating needs in Scotland by 2020. Together with other forms of bioenergy and micro-generation sources, it is therefore entirely reasonable to aim for a 10% heat target for Scotland by 2020.