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GSHPs and the Renewable Heat Incentive

GSHPs and the Renewable Heat Incentive. Market Context. Long term strategic role for heat pumps The 4 th carbon budget ascribes a prominent long-term role for heat pumps in achieving binding domestic emissions reductions. Market Context.

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GSHPs and the Renewable Heat Incentive

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  1. GSHPs and the Renewable Heat Incentive

  2. Market Context Long term strategic role for heat pumps • The 4th carbon budget ascribes a prominent long-term role for heat pumps in achieving binding domestic emissions reductions

  3. Market Context • UK Heat Strategy - “The Future of Heating, Meeting the Challenge” DECC, 2013 • Indicates a clear and strategic role for heat pump technology

  4. Market Context • 22m homes in the UK • >4m homes off the gas grid • Those heated by oil, lpg and electricity are the “low hanging fruit”

  5. GSHP’s & the Domestic RHI Domestic RHI • Aimed at domestic installations • Rewards generation of renewable heat, deemed • RHI pays on Renewable Heat contribution • GSHP will always provide more renewable kWh/yr than an ASHP due to higher efficiency • Higher efficiency also yields larger fuel cost savings

  6. GSHP’s & the Domestic RHI Target market • RHI will drive opportunities for larger, off gas grid properties • Private domestic retro fit • Oil or lpg heated • High fuel bills, bulk fuel purchases • Higher heat loads • >16kW, single phase electricity supplies • Existing heat distribution systems • Higher flow temperatures

  7. GSHP’s & the Domestic RHI • Benefit 1: Attractive GSHP Tariff /kWh: 18.8p • Benefit 2: RHI paid on Renewable Heat contribution. Higher intrinsic SPF for ground source means higher Star Rating and therefore more renewable kWh/yr • Benefit 3: Flat tariff rate structure means Domestic RHI will benefit larger properties By definition likely to have more land area KENSA HAS SINGLE PHASE OUTPUT UNITS UP TO 24kW!! • Benefit 4: No planning or noise (MCS022) issues to deal with! 3 bed semi: 8kW RHI: £11k / 7yrs 4 bed det: 12kW RHI: £17k / 7yrs 5 bed det: 15kW RHI: £20k / 7yrs 8 bed mansion: 24kW RHI: 37k / 7yrs

  8. GSHP RHI Example 5 bedroom house Domestic RHI example for Ground Source Heat Pumps • 5 bed property • 4-5 occupants • 180m2floor area • Circa 1960’s build • Basic insulation measures – cavity wall, loft, glazing • 15kW heat load • Heating via radiators (50°C – 3 Stars) • EPC: 21,000kWh/yr • Land area required (slinkies): 720m2

  9. GSHP RHI Example 5 bedroom house Domestic RHI example for Ground Source Heat Pumps • £1082 per year fuel cost saving vs oil • £2845 first year RHI income • £27,492combined benefit over 7 years • Before index linked tariff increases and fuel price inflation • Typical installation cost: £18,000 • Based on slinkies • Payback: 5 years • Rate of return: 11.5%

  10. Kensa On Line RHI Calculator Website based tool Calculates expected RHI and fuel saving benefit under domestic RHI Varies results based on geographical location Suggests likely land area required for slinkies Aimed at helping driving enquiries for installers

  11. Non Domestic RHI • Launched 2011 • Includes support for residential district heating systems • Recently uplifted tariffs for ground source heat pumps • Increased from 4.3p/kWh to 8.7p/kWh • Payments made over 20 years, based on metering • Includes support for new build • District residential schemes can be combined with ECO funding • More attractive long term rate of return than domestic scheme

  12. Kensa micro-district solution • Individual heat pump at each dwelling • Linked to a communal ground array • New build or retro fit • Capital subsidy provided by Energy Company Obligation (retro fit) • Supported by 20 year income stream through the Non Domestic Renewable Heat Incentive • Technically robust solution • Myriad of operational and tenant fuel cost benefits over other solutions

  13. Traditional district scheme problems • Traditional schemes featuring a central boiler plant are not popular • Difficult to implement as a retro fit solution • Inefficient • Heat losses as hot water circulated through the “district” • Burdensome • HA has to manage billing • Bulky • Requires considerable space • Expensive • Requires back up system to eliminate risk of catastrophic district-wide failure

  14. Kensa micro-district solution Energy saving Low cost, low carbon heating and hot water reducing energy bills Ground source heat pump Kensa high temperature units, installed externally Renewable Heat Incentive 20 year income stream for district schemes under the non domestic RHI Micro district heating Individual gshp per property linked to a shared ground array serving 2+ properties Energy Company Obligation (Retro fit) Attractive capital subsidy, especially when displacing electric heating New Build New build developments are eligible for the non-domestic RHI Technically robust Smaller number of deeper boreholes Flexibilty over borehole location No plant room or central pump Simple billing No centralised billing – each tenant has control over own heating system and energy bill Scaleable solution Can be applied to apartment blocks or clusters of terraced or semi detached houses/bungalows, sheltered accommodation, holiday lets and more…

  15. Micro-district costed example

  16. New Builld - Kensa Shoebox System architecture • Individual ground source heat pump and hot water cylinder in each apartment • Low temperature primary circuit • Communal Ground array • Eligible for RHI payments – considered as district heating Heat source for Shoebox heat pumps 3kW capacity Small & extremely quiet Multiple boreholes 100-150m deep Provides heating & hot water

  17. District Htg New Build Example Abbeydale Hall - Luxury new build apartments • 4 blocks of 3 apartments • Each shares a communal borehole field of 3 x 130m boreholes • 3kW Shoebox heat pump installed in each flat • Developer retains the non domestic RHI

  18. Reasons why GSHP’s win! Domestic RHI • Very attractive domestic RHI tariff rates and high renewable heat content • Compelling rates of return / payback, especially in larger properties • Kensa range >16kW single phase models – ideal for larger domestic properties District and Non Domestic RHI • District residential heating solutions possible using the Non Domestic RHI • “Decentralised” district systems possible by linking ground loops – not possible with any other technology • Opportunity to apply in new build • Opportunity to tap in to ECO funding (district retro fit) PLUS OF COURSE… • Planning exempt (permitted development rights) • No noise nuisance • Lowest possible running costs and long life expectancy

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