1. GROWING THE RENEWABLE ENERGY ECONOMY The current state of play on biomass heat Frank Aaskov Policy Analyst, REA All-Energy, 7 th May 2015, SECC Glasgow

2. Outline of presentation Who is the REA? UK Renewable heat Non-domestic RHI Domestic RHI Degressions RHI Sustainability

3. Who is the REA? UK trade association for all renewables We are unique, in that: Over 750 members and rising Members of all sizes – from sole traders to multinationals One member one vote Not-for-profit REA covers all sectors and all renewable technologies: o Heat o Power generation o Transport fuels o Biomethane to grid Biomass heat covered through Wood Heat Association – a wholly owned subsidiary

4. UK renewable heating

5. Heating in the UK Around 70% of UK heat used comes from natural gas. Over 95% of UK homes are heated by a boiler >80% are connected to the gas grid UK average heating cost 50% higher with oil and 100% higher with LPG than with gas* 13/05/20145 Fuel use in domestic buildings for heating, 2011

6. Renewable Heating in the UK Little use of renewable heating technologies prior to 2011. <1% of UK heat was renewable Estimated: 12% renewable heat needed to reach 2020 aim Lack of knowledge Small consumer awareness of renewable heating technologies Heating is the largest single use of energy in the UK (44% of energy usage, 2011) and more than 33% CO 2e emissions from heating. 13/05/20146

8. Non-domestic RHI

9. Capacity of biomass installations

10. Non-domestic RHI heat generation

11. Fuel use in ND-RHI

12. ND-RHI small biomass

13. Domestic RHI

14. Domestic installations

16. Fuel displaced in Domestic RHI

18. Replacing off-grid installations?

19. Over-performing?

20. Degressions

23. Impact of degression: D-RHI 10% degression 20% degression

24. Impact of degression: ND-RHI (Small biomass) 5% 10% 15%

25. Challenges and opportunities Degression likely to go too far: o Non-domestic - merge the small/medium bands with a shared trigger o Domestic – would need to put tariffs back up Stability of tariffs: o Tariff guarantees for projects with longer lead times o General guarantee that no tariffs will go below a certain level (say 2p/kWh) Managing rapid growth – skills, quality

26. Sustainability

27. From 5 October, bioenergy will have to meet sustainability criteria in order to get RHI Applies to all, including projects already on scheme Main points: o land criteria (crops) or sustainable forest management (wood) o GHG saving of 60% required compared to EU fossil heat average o plant 1MWth and over (and all biomethane) must provide independent audit report o wastes and manures/slurries exempt Woody biomass can be registered at supplier level via Biomass Suppliers List Official GHG calculator available, although free to use own tool so long as use same methodology

28. Outstanding issues Delays in clarifying forest management requirements and how these will be implemented by biomass suppliers list Non-woody biomass not supported on BSL No grace period and no grandfathering Gold plating in the EU: BelgiumHungaryItalyNetherlandsGB GHG criteria Sustainable forest management Land criteria for agriculture biomass ILUC

29. WHA Seminar, London 18 th May Identifying and addressing the key quality, safety and training challenges surrounding the installation of biomass boilers in the UK. In the context of both small and large scale installations, planned sessions will cover the following: Why high quality installations matter Storage and handling of fuel Training and standards in the non-domestic renewable heat supply chain: where are we now? Standards and guidance for the biomass heat industry Training: how to accomplish higher installation quality WHA/REA Member £75 + VAT Non-WHA/REA Member £200 + VAT

30. GROWING THE RENEWABLE ENERGY ECONOMY Thank you