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RHI uncertainty hits tenders

A heat pump specialist has announced its withdrawal from a multi-million pound tender because of uncertainty over RHI funding. Now it wants government assurances. Andrew Gaved reports

Star Renewable Energy director Dave Pearson has called on the government to ring-fence subsidies for the fledgling heat pump industry or else “the technology may die”.

The plea come in the wake of the large-scale heat pump specialist withdrawing from what it said could have been a flagship water-source heating tender.

Mr Pearson said the lack of clarity around the future of the RHI subsidies has been a factor in the company withdrawing from the north London project, which would have seen a potential £1m of support from government.

The project in Islington was developed to demonstrate the viability of harvesting heat from surface water while simultaneously selling cooling, and would have marked a new era of sustainability for homes and businesses around the Regents Canal area, the firm said.

The water-source heat pump was expected to supply cheaper, more eco-friendly heating locally. Drawing on heat from the nearby Regent’s Canal, the Islington project would have simultaneously warmed local homes and businesses, as well as cool a local data centre server room, Star said.

The company said it was on track to lead Phase 2 of the project, but with potential heat pump funding cuts on the horizon it said it has been forced to withdraw from the tender “as commissioning beyond March 2016 would have resulted in no RHI application”.

Mr Pearson said: “The teams at DECC and the Heat Network Delivery Unit should be commended, and the vision of the Borough of Islington recognised.

But we walked away from £1m in support and that was a bitter disappointment, especially given the hard work done by the team including specialist consultants Phil Jones and Chris Dunham, whose work had shown lower cost, lower carbon and zero local emissions.

Ultimately, we were unsure of the continuance of the RHI and this was a factor in our withdrawal.”

Subsidy extension

While the government has not yet confirmed that it will be targeting the Renewable Heat Incentive, through which the technology is supported, it has not as yet mentioned any plans to extend the subsidy beyond March 2016.

While the tender withdrawal is a major disappointment, Mr Pearson said, the incident has inspired the company to continue advocating for change.

“It highlights the need for the government to layout another four years of Renewable Heat Incentives as well as remove project risks such as the inability to pre-qualify for funding.”

Mr Pearson is now urging the government to ring-fence heat pump funding for heating technology, to allow the technology to be properly understood by customers and the public, in the wake of plans to abolish subsidies to the wind and solar electricity production sector.

Mr Pearson said he fears the technology “may die” if subsidies are withdrawn on the cusp of what he believes could still be a renewable heat revolution.

He said: “More than 50 per cent of the energy we use in the UK does not come from wind turbines and solar panels as electricity, but in the form of heat.

With only 1 per cent of the expected renewable heat uptake being achieved with heat pumps, funding is essential to promote the acceptance and introduction of large-scale heat pumps in the UK market.”

Star said it has delivered more than 30 MW of renewable heat around Europe and has been named among the companies putting Scotland at the forefront of low-carbon innovation in foreign markets, but the technology is still far from becoming understood in the UK customer base.

Paul Younger, professor of engineering at Glasgow University, joined the criticism of the slow progress towards heat pumps in the UK.

He said: “As is so often the case, other countries saw the light earlier than us, and heat-pump technology built on the Clyde is now heating other European cities by extracting thermal energy from rivers.

Meanwhile our rivers flow by, delivering their renewable thermal content to the open ocean unused while so many people in the UK cannot afford to heat their homes”.   

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