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Renewable Heat Incentives
Dave Pearson
Director of Innovation
Star Refrigeration
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Star Refrigeration
Largest in
UK Est. 1970
300+
employees
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Star Refrigeration
Total
solution
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Solutions
Capital
Operating
Maintenance
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Clients
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Awards
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RHI’s – WHY?
“This incentive is the first of its kind in the
world. It’ll help the UK shift away from fossil
fuel, reducing carbon emissions and
encouraging innovation, jobs and growth in
new advanced technologies.”
Secretary of State
Chris Huhne
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Renewable Heat Incentives – WHAT?
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Renewable Heat Incentives – WHAT?
Any heat that is generated using renewable technology or source
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Renewable Heat Incentives – ELIGIBILITY
Heat pumps of all scales that utilise heat sourced from naturally occurring solar
energy stored within the ground or surface water – must be subsequently
transferred by liquid or steam
Heat pumps generating heat from naturally occurring energy located and extracted
from at least 500m below the surface of solid earth are classed as geothermal
Heat pumps provided as a single unit with an integrated electrical immersion
heater are eligible for the RHI.
Both ground and water source heat pumps must have a COP of at least 2.9
Reversible ground and water source heat pumps are eligible for RHI, but only the
heating generated
Eligible Heat Spaces:
•Heating a space
•Heating water
•Carrying out a process (industrial cooking, drying)
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Renewable Heat Incentives – Useful Sites
www.ofgem.gov.uk/RHI
www.decc.gov.uk/RHI
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15 MW, 90°C, District heating
Working Example - District heating
Evaporating temp. 2 C
Sea water 8 to 4 C
Condensing temp. 89 C
District heating water 60 – 90 C
COPheating = 3.0
3 x 2 stage 5.0 MW Systems
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Capacities (Heating)
1-Stage 2-Stage
450 kW
to
5000 kW
1000 kW
to
8000 kW
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14 MW, 90°C, District heating
Heat Pump sales
600 kW, 68°C, District heating
2.4 MW, 65°C, Process heating
1.2 MW, 61°C, Process heating
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Heat Pump sales
R un D at e C ou nt r y M ode l
C as i n g
M at 'l
Qty
H ot w at er
f l ow
t em p erat ure
[ ºC ]
H eat i ng
C ap ac i t y
[ k W ]
M ay - 10 UK V S S - 60 1 CI 2 61 1. 2 M W
Jul - 10 Franc e V S S H - 34 1 NI 2 68 1. 2 M W
S ep - 10 N orw ay V S S H - 34 1 NI 1 68 600 k W
A ug - 11 N orw ay V S S H - 79 1 ST 3 90 14 M W
S ep - 11 N orw ay V S S H - 79 1 ST 2 72 7 M W
O ct - 11 N orw ay V S S H - 341 NI 1 68 1 M W
Fe b - 12 N orw ay V S S H - 341 NI 2 68 950 k W
M ar - 12 S w i t z erla n d V S S H - 291 ST 2 90 3. 4 M W
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Basic Opportunity
1000kW connected load
Costing 3p /kWh
= 1000 x 3
= £3/kWh BUT
Boiler efficiency = 0.8
= £3.75 p/h
If running hrs per year = 4000
= Annual Cost £150,000
£150,000 OPEX
1000kW heat from river source
250kW electricity COP 4.0
4kW heat = 1kW electricity
250kW x 9p / kWh = £22.5 /kWh
£22.5 x 4000 hrs = £90,000
£90,000 OPEX
£60,000 saving
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Incentive
1000kW connected load
£150,000
1000kW heat from river source
£90,000
£60,000
If eligible for RHI, then 3p/kWh is
due, so
1000kW x 4000hrs x 3p
=Annual incentive
=£120,000
Total saving =
£180,000
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Payback
Total saving
=£180,000
Capital Expenditure?
£400/kW
=£400,000
B.E.P.
Return on Investment?
Net present Value?
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Payback
Star Refrigeration
Heat pump ROI calculation With RHI Without RHI
Capital cost £400,000
Annual return £180,000 £60,000
Payback 2.22 Years 6.67
Annual ROI 45.0% 15.0%
NPV assuming 20 year life assumed discount rate 5% 5%
assumed life 20 20
NPV £1,843,197.86 £347,732.62
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2 Degrees????
GLOBAL WARMING!!!!!!!!
Boiler
1,000,000 kg/CO2 pa
Neatpump
500,000 kg/CO2 pa
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Professor David MacKay
'a crime to take a chemical
and set fire to it simply to
generate low temperature
heat'.
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14 MW, 90°C, District heating
Heat Pump sales
600 kW, 68°C, District heating
2.4 MW, 65°C, Process heating
1.2 MW, 61°C, Process heating
