Ofgem has published its quarterly report on the Non-Domestic Renewable Heat Incentive (NDRHI), showing that the cumulative total payments made to NDRHI installations reached £6.48 billion by the end of September 2024.
The NDHRI offered financial incentives to businesses, non-profits, and the public sector to install renewable heating systems, paid in quarterly instalments over 20 years according to the amount of eligible heat generated.
The scheme, launched in 2011, closed to most new applicants in March 2021 and completely in March 2023. Ofgem will continue reporting on the NDRHI for the foreseeable future or until all applications under the scheme have been processed.
Solid biomass boilers have remained by far the most common heat source under the scheme, making up 76.55% of all installations. Air source and ground source heat pumps make up 4.18% and 12.26% respectively.
Those figures are despite a 2016 decision to reduce the tariffs available to small and medium-sized biomass boilers, at the time estimated to result in a 98% drop in installations. When the Department for Business, Energy and Industrial Strategy (BEIS) came to its decision, it also kept solar thermal heating included in the scheme, despite some indicators the technology would be dropped.
Solar thermal installations under the scheme to date take up 1.49% of the total. Under the NDRHI, 6,161MW capacity has been approved for payments.
Decarbonising heat across the UK
For domestic properties, heat pumps have been the key technology used to replace gas boilers. The equivalent to the NDRHI, the Domestic Renewable Heat Incentive, was replaced by the Clean Heat Grant after it closed in March 2022.
The Clean Heat Grant became the widely delivered Boiler Upgrade Scheme (BUS). In September, the secretary of state for energy security and net zero, Ed Miliband, officially permitted Ofgem to over-allocate vouchers for the BUS by up to £50 million in this financial year, to a total of £200 million.
The move was intended to provide certainty that vouchers will continue to be available for the remainder of the financial year. However, the government has dragged its heels on the Clean Heat Market Mechanism that would require heat pump installations to make up 4% of boiler manufacturer sales in the first year, increasing to 6% in the mechanism’s second year.
The scheme’s implementation was initially scheduled for April 2024 but pushed back to April 2025—the scheme was markedly absent from the chancellor’s budget announcement on 30 October, despite a spending focus on domestic decarbonisation.
For industrial use, where typically much higher temperatures are required, novel technologies are being turned to. Recently, deep-tech climate investor Zero Carbon Capital led a £1 million pre-seed funding round for Exergy3, which was spun out from the University of Edinburgh last year and offers modular thermal energy storage systems that convert green electricity into heat.
Meanwhile, the Hepworth Brewery in Sussex is trialling a novel heat pump that its developer claims can reduce carbon emissions by up to 90%.
Current± recently spoke to James Macnaghten, co-founder and CEO of Caldera, a company using porous rock and recycled aluminium to store heat generated using renewable energy, about innovative routes to decarbonising heat.
