Non Domestic RHI: Biogas 17 th June 2014

Overview 2 General RHI 1.Key eligibility criteria 2.Eligible Heat Uses 3.Metering and payments 4.Ongoing obligations 5.Preliminary accreditation 6.Additional capacity 7.Degression Biogas specific RHI 8.Key eligibility criteria 9.Determining capacity 10.Commissioning and CHP conversion 11.What comprises an installation 12.Heat provided to biogas production 13.Payment calculation – worked example 14.Sustainability

Key Eligibility Criteria Installed/first commissioned on or after: – Biogas capacity <200kWth- 15 July 2009 – Biogas capacity ≥200kWth- 4 December 2013 Equipment new at time of installation Grant funding from a public body towards the eligible installation must be – Repaid to the grant making body, or – Value of grant funding is deducted from payments Medium of heat transfer must be liquid or steam - no direct air heating 3

Eligible Heat Uses 4 In a building – Space heating – Water heating – Carrying out a process Other than in a building – Commercial cleaning – Commercial drying

5 Defining a building “any permanent or long-lasting building or structure of whatever kind and whether fixed or moveable which, except for doors and windows, is wholly enclosed on all sides with a roof or ceiling and walls” 5 Typically includes: Silos Distillation columns Anaerobic digesters Typically excludes: Tents Polytunnels Open sided barns or sheds

Metering 6 Liquid or steam Meter standards – MID Conformity, Class 2 Accuracy Appropriately calibrated and installed Heat loss assessments Proxy measurements – (natural) gas and electricity – assumed 100% conversion to heat

Payment = Meters must positioned in order to determine the relevant quantities: – B - the kWhth of heat generated by that plant which is used for eligible purposes – C - the heat in kWhth directed from the installation or delivered from any other source to the biogas production plant which produced the biogas combusted in the relevant quarterly period (other than heat contained in feedstock to produce biogas by anaerobic digestion). 7

Periodic data and payments Installation capacity ≥1MWth - submit meter readings monthly 8 Installation capacity <1MWth - submit meter readings quarterly Periodic data: Heat output data Supporting meter readings Fuel data (depending on installation type) Payments: Based on quarterly data E.g. ‘date of accreditation’ on 1 st July 2014, – first payment for period 1 st July – 1 st Oct; –Second for 1 st Oct– 1 st Jan...

Ongoing Obligations Feedstock records – Anaerobic digestion: solid biomass, solid waste, liquid waste – Gasification or pyrolysis: solid biomass, waste Metering – Continuously operating, properly maintained, re-calibrated every 10 years – Supporting invoices, receipts, certificates. Must not generate heat for the predominant purpose of increasing payments. – Should supply a heat use that would otherwise be met by other means – Installations will be audited 9

Preliminary accreditation Available for all biogas installations not yet commissioned ‘In principle’ agreement giving assurance that, once built, full accreditation will be granted provided: – The installation was built in line with the details originally submitted – No Regulatory changes have been made such that if the preliminary application had been made after the regulatory changes, it would have been refused. Need to demonstrate genuine intent: – Planning permission, – Evidence showing planning permission is not required Does not guarantee tariff 10

Additional capacity Available to plant: First commissioned after the date on which the original RHI installation was commissioned Uses the same source of energy and technology Forms part of the same heating system Date of accreditation Date first commissioned CapacityInitial tariffNew tariffTariff lifetime Biogas boiler 1 (original capacity) 1 st June st April kW7.5p/kWh (small biogas tariff as of 1 st June 2014) 5.9p/kWh (medium biogas tariff as of 1 st June 2014) 20 years from 1 st June 2014 Biogas boiler 2 (additional capacity) 1 st September st August kW5.9p/kWh (medium biogas tariff as of 1 st September 2014) 20 years from 1 st September 2014 Date of accreditation Date first commissioned CapacityInitial tariffNew tariffTariff lifetime Biogas boiler 1 (original capacity) 1 st June st April kW7.5p/kWh (small biogas tariff as of 1 st June 2014) 20 years from 1 st June 2014 Biogas boiler 2 (additional capacity) 1 st July st May kW5.9p/kWh (medium biogas tariff as of 1 st July 2014) 20 years from 1 st July 2015 n.b. Illustrative purposes only, future tariffs may not be as shown Additional capacity first commissioned within 12 months of original installation being commissioned Additional capacity first commissioned more than 12 months after the original installation was commissioned

Degression 12 Degression is a long term budget control mechanism where reductions can be applied to an individual tariff, or tariffs if certain financial triggers are met at each quarterly review period relating to: Overall spend on the scheme Individual technology spend on the scheme Tariff reductions only impact new applicants or those participants installing additional capacity. Changes will be made to the calculation methodology.

Biogas specific criteria 13 Tariff banding applies: –Small installations (<200kW) will receive 7.5p/kWh. –Medium installations ( kW) will receive a tariff of 5.9p/kWh. –Large installations (600kW and above) will receive a tariff of 2.2p/kWh. Installations 200kW and above must be installed and first commissioned from 4th December 2013 to take advantage of this support The provisions and tariffs will apply to heat only installations as well as biogas CHP installations. CHPQA accreditation is not necessary. Installations over 200kWth will be able to apply for preliminary accreditation in the same way as existing biogas installations.

Capacity Defined in Regulations as : “total installed peak heat output capacity of the plant” For CHP this relates to the total heat output of the equipment in the form of usable hot liquid or steam – E.g. Installation comprised of a CHP engine with 150kW water jacket and 150kW exhaust flue heat exchanger would be considered 300kW. Where a water jacket is used for cooling of the engine, we would generally consider this to be included as part of capacity, unless we are satisfied that any heat associated with this water jacket could not be used on the heating system. 14

Commissioning Installations must be installed and first commissioned on or after: – 15 th July 2009 (for <200kW) – 4 th December 2013 (for 200kW and above) CHP installations : – Where a plant converts from electricity only to CHP, we will take the conversion date to be the commissioning date. 15 th July 2009 (for <200kW) DECC have stated the policy intention is that first commissioning as a CHP system >200kW must also be on or after 4 th December The Regulations make reference to 2009 but please note this is a drafting error and will be corrected at the earliest opportunity. DECC have stated – Plant cannot be considered ‘first commissioned as a CHP system’ if heat is already being recovered and used, e.g. to heat a digester. Combustion units: – A CHP installation can add a new ‘combustion unit’ to an existing system and receive support on heat produced by the combustion unit. This is allowed even if the rest of the installation is ineligible. – Must be commissioned as part of a CHP system on or after 4 th December

16 Combustion units CHP Turbine Fossil fuel plant New biogas plant Electricity Heat Eligible plant

17

Heat provided to biogas production plant Can be considered an eligible heat use Any heat demand prior to combustion that may result in an increase in potential heat output of a given installation will be considered as ‘heat provided to the biogas production plant’. – Generally, this would include: Thermal hydrolysis Desulphurisation – and exclude Pasteurisation – Will be assessed case-by-case In discussion with DECC regarding ‘apportioning’ of this heat. 18

A -tariff B - the kWhth of heat generated by that plant which is used for eligible purposes C - the heat in kWhth directed from the installation or delivered from any other source to the biogas production plant which produced the biogas combusted in the relevant quarterly period (other than heat contained in feedstock to produce biogas by anaerobic digestion). 19

20 Heat generated by eligible installation Heat generated by all plant x Heat used for eligible purpose B =

Sustainability 21 Sustainability requirements are now due to take effect from Autumn 2014 and will apply to all participants (old and new) generating heat from biomass or biogas From Autumn 2014 participants will need to demonstrate that their fuel meets a greenhouse gas (GHG) lifecycle emissions savings (of 60% compared with the EU fossil heat average) Land criteria requirements are expected to be introduced by April 2015 The Biomass Suppliers List is intended to be open for applications from biomass suppliers in Spring 2014 Participants will be able to demonstrate compliance in one of three ways: - Self-reporting - Sourcing from a supplier registered on the Biomass Suppliers List (BSL) (or equivalent) - Register with the BSL (or equivalent) as a self-supplier (source woody biomass from their own estates)