The UK Supply Curve for Renewable Heat

Wed Jul 15 16:24:38 EDT 2009
By Daniel Radov with AEA Technology

Over the past few years, the UK government has sought to better understand the opportunities and prospects for renewable heat and its potential contribution to the UK's 2020 15% renewable energy target. With this in mind, the UK Department of Energy and Climate Change commissioned a NERA team led by Associate Director Daniel Radov and AEA Technology to develop the UK supply curve for renewable heat, i.e., how much renewable heat may be achievable under different scenarios, and at what cost. NERA developed a detailed model of the market for heat in the UK up to 2020, representing hundreds of distinct consumer segments in the domestic, industrial, commercial, and public sectors. The research significantly improves the evidence base needed for the design of the government's proposed Renewable Heat Incentive subsidy program. The report finds that biomass boilers and heat pumps are likely to be the most significant contributors to renewable heat, and that "injecting" biogas into the gas grid also shows promise. Using renewable heat technology in the domestic sector is more expensive than in either the industrial or commercial and public sectors, but domestic uptake may be required to meet the government's overall renewable energy targets. Finally, the report identifies significant uncertainties about how quickly the supply of renewable heat technologies can grow from their relatively low current base.