02 Jul 2010
Dear Sustainable Energy Colleague,
Our Parliamentary monitoring over the past few days has highlighted a fracture in the united front that the small scale renewable heating sector has been working hard to maintain as the RHI faces further delays and uncertainty. A clear, coherent message from a united microgeneration industry is vital if we are to achieve our objectives in this climate of budget cuts and political upheaval.
The arguments surrounding this market-changing proposed incentive scheme are far from black and white - we are aware that DECC and HM Treasury are actively wrestling with a difficult policy balance for the Renewable Heat Incentive – the pressure on public finances (and the RHI is part of the current spending review) coupled with the observation that smaller scale renewable heat technologies are, in some cases, a less cost effective option than some of the larger scale solutions. Against this background, and especially given the absence of any announcement at this stage on the RHI, it is more important than ever that the microgeneration industry pulls strongly together to get a good deal out of RHI.
In this context, a most unhelpful intervention was made by Sarah Newton, MP for Truro and Falmouth, in the Commons Energy and Climate Change debate on Wednesday, when she complained about the inclusion of Air source heat pumps in the RHI, clearly on the basis of briefings she had received from vested interests in Ground source heat pumps. The relevant extract from the debate is given below:
Sarah Newton: To return to my ground heat pump manufacturers-they will be able to provide ground heat for businesses, hospitals and schools, as they do at the moment. I should be grateful if Ministers would consider one other matter in the context of renewable heat, and that is the incentive. The renewable heat incentive, as hon. Members will know, was designed to support the installation of a wide range of renewable heat technologies by compensating owners for the increased capital costs of such systems. I think it is an extremely bold and good idea, and Ministers will be receiving replies to the consultation process that was started by the last Government. Having listened to manufacturers in my constituency, I believe that although it is a good idea, some unfortunate anomalies have crept into the calculation of the tariff.
The Carbon Trust and ground heat pump manufacturers have highlighted an inconsistency in the tariff calculations for the RHI that is having the unintended consequence of effectively doubling the rate of return for air source heat pump installations. It has been well proven that ground source heat pumps are a far more efficient way of producing energy over time than air source pumps. If the tariff continues as it stands in the proposals, it will severely disadvantage the ground source pump industry and other renewable technologies; indeed, it might, sadly, eliminate both of those technologies just when we need to be encouraging businesses to supply and manufacture such products in this country. I would be very grateful if Ministers would urgently review the consultation process and look at the tariff for small air source heat pumps
We believe it is extremely ill-advised at this critical stage in the campaign to secure the RHI and its application to the microgeneration sector for negative briefings to be put forward to MPs by one set of technology interests against another in this way. It is of course perfectly understandable for each company and technology to spell out the merits of their particular interests, but to do this simply by attacking other microgeneration technologies in this way completely undermines the consistency of message and good campaigning work done by many companies and organisations so far. This sort of behaviour gives officials the perfect excuse to “divide and rule” the industry, and risks placing the very application of the RHI to any microgeneration technology in jeopardy, an outcome in no-one’s interests, including those of any complainants.
We would therefore appeal for all companies with interests in a successful microgeneration sector to avoid jeopardising the whole industry’s prospects with the sort of negative campaigning activity seen this week, and instead to get behind our campaign on securing RHI for the microgeneration sector. If you have not already written to your MP asking them to sign EDM 143 and lobby Greg Barker, the relevant Minister, please do so along the lines we suggest in the campaign update we sent yesterday. Please contact Grace Bennett (firstname.lastname@example.org) if you would like a further copy of yesterday’s update, or a template letter to send to your MP.
With kind regards
The Micropower Council
1688 High Street