Combined Heat and Power Quality Assurance (Temporary Modifications) Regulations 2021

Lord Bhatia Excerpts

Wednesday 19th May 2021 Grand Committee

[Lord Bhatia (Non-Afl) [V]]

My Lords, this instrument has been prepared by the Department for Business, Energy and Industrial Strategy. The CHPQA scheme, through the CHPQA standard, outlines the CHPQA methodology, definitions, thresholds and criteria for “good quality” certification of a CHP plant. The latest version of the CHPQA standard, Issue 8, was published by the department on 11 March 2021 to reflect the temporary easement for CHP plants impacted by measures implemented in response to the Covid-19 pandemic and to remove references to the energy efficiency directive.

The instrument modifies for a period of 12 months, beginning with the day on which it comes into force, the Renewable Heat Incentive Scheme Regulations 2018 to refer to the CHPQA standard as Issue 8. CHPQA certification enables access to incentives through multiple schemes legislated for by different departments and the devolved Administrations, which all intend to modify these schemes via separate instruments as soon as they can. Separate modification regulations for 2021 are also being laid by the department, the purpose of which is to make similar modifications to the Renewables Obligation Order 2015 and the Emissions Performance Standard Regulations 2015 via the affirmative procedure.

CHP is an energy-efficient technology that allows generation of both heat and power on-site, providing fuel and carbon savings compared with separate generation. The scheme was launched in 2000 as a voluntary programme to assess and certify CHPs. To encourage CHP installations and efficient use of the technology, certification through CHPQA enables operators to access multiple benefits, including exemptions from the climate change levy and carbon price support taxes and emissions performance standards limits and, for renewable-fuelled CHP, the renewable heat incentive and renewables obligation.

The CHPQA standard outlines the methodology, definitions and criteria for “good quality” certification. The CHPQA standard is referenced in the individual legislation for each scheme that CHPQA certification provides a benefit in relation to.

To certify, CHP operators submit operational performance data for the previous calendar year to claim taxes and benefits in the next calendar year. There are two key parameters for CHPQA certification: quality index and power efficiency. The QI calculation is based on the amount of useful heat, electricity output and fuel input. CHP schemes can achieve either full certification if they pass the thresholds or partial certification, with benefits deducted proportionally to the overall QI and power efficiency values.

Finally, a six-week consultation was held between 15 December 2020 and 29 January 2021. This consultation period was considered appropriate because of the straightforward nature of the changes, narrow stakeholder interest and timing pressures to confirm certification for 2021. This was paired with direct stakeholder engagement, including with all CHP plants certified in 2019.