CHPQA guidance note 61: Reporting of fiscal benefits gained from CHPQA certification

Responsible persons ( RPs ) must provide annual information on the monetary (or fiscal) benefits received as a result of being certified under CHPQA . CHPQA Guidance Note 61 v2 Page 1 © Crown Copyright 2026 GUIDANCE NOTE 61 REPORTING OF FISCAL BENEFITS GAINED FROM CHPQA CERTIFICATION INTRODUCTION GN 61.1 This Guidance Note relates to the provision by Responsible Persons (RPs) of annual information on the monetary (or fiscal) benefits received as a result of being certified under CHPQA. As government policy develops in response to climate change and the UK's target of reaching net-zero by 2050, the information requested will assist government in developing its policies for CHP. GN 61.2 The information is sought via an additional question in the submission journey for Existing Schemes. GN 61.3 The annual benefits received by operators of CHPQA certified CHP Schemes can comprise one or more of the following: • Climate Change Levy Main Rate (CCL) exemption on a proportion (up to 100%) of the fuel consumed and of the electricity generated by the CHP Scheme during the year in question. • Reduction in liability for the Carbon Price Support (CPS) rates of CCL for CHP Schemes with an electrical capacity greater than 2 MWe. • Under the Non-Domestic Renewable Heat Incentive (NDRHI) scheme, receipt of the higher solid biomass CHP tariff for defined quantities of renewable heat compared with the solid biomass boiler tariff that would be received in the absence of CHPQA certification. • Receipt of the Renewables Obligation Certificate (ROC) uplift for certain types of renewable CHP Schemes. • Contracts for Difference for specified 'with CHP' renewable generating stations. • Exemption from Business Rating for CHP Plant and Machinery. NDRHI and ROC uplifts are closed to new schemes. Existing schemes already benefiting from these will continue to do so until the end of their contracts. Decisions on relief from the Main and CPS rates of CCL and Business Rates are for the Chancellor. The Government will continue to keep these taxes under review, as part of the standard policy making process. ABBREVIATIONS GN 61.4 This Guidance Note uses the following abbreviations, full definitions of which can be found in the CHPQA Standard1. TPC Total Power Capacity 1 https://www.gov.uk/government/publications/chpqa-standard CHPQA Guidance Note 61 v2 Page 2 © Crown Copyright 2026 TFI Total Fuel Input TPO Total Power Output ηpower Power Efficiency ηheat Heat Efficiency QFI Qualifying Fuel Input QPO Qualifying Power Output QHO Qualifying Heat Output QI Quality Index The abbreviation 'ES' is also used in the context of the CPS to mean the QPO used on- site, where 'used on-site' means it is self-supplied or supplied to a consumer by an exempt unlicensed electricity supplier2. DETERMINING THE BENEFITS GN 61.5 The following sections A to E provide guidance on how the values requested during the submission journey can be derived. Whilst accurate values for the benefits are preferred, best estimates will be acceptable. SECTION A: CCL MAIN AND CPS RATES GN 61.6 For any particular CHP Scheme, the operating organisation should already have the information requested during the submission journey regarding the CCL Main and CPS rates since the operator will have had to complete and submit a number of HMRC forms: • PP11 Climate Change Levy supplier certificate and PP10 Climate Change Levy: relief supporting analysis3. The PP11 is submitted to the operator's energy supplier(s) to ensure that CCL exemptions or reduced rates are applied by the suppliers. The PP10 is submitted to HMRC and shows how the figures in the PP11 have been derived. • Where the operator is liable to pay CCL on electricity generated by the CHP plant and/or is liable for CPS (i.e., is making taxable supplies – including taxable self-supplies), the organisation must register for the Climate Change Levy with HMRC4. The registered organisation must then submit to HMRC form CCL100: Climate Change Levy return typically every three months. GN 61.7 To determine the benefits Responsible Persons (RPs) will probably find it easiest to contact the department or person in the organisation responsible for completing and submitting these forms. Since these are tax matters, this is most likely to be the finance department. GN 61.8 Should the RP prefer, it is possible to make an estimation of the CCL/CPS benefits received based on CHPQA performance data. This is illustrated via the following worked 2 HMRC Excise Notice CCL1/6: a guide to carbon price floor, https://www.gov.uk/government/publications/excise- notice-ccl16-a-guide-to-carbon-price-floor/excise-notice-ccl16-a-guide-to-carbon-price-floor 3 HMRC Excise Notice CCL1/6: a guide to carbon price floor, https://www.gov.uk/government/publications/excise- notice-ccl13-climate-change-levy-reliefs-and-special-treatments-for-taxable-commodities 4 https://www.gov.uk/guidance/register-for-climate-change-levy CHPQA Guidance Note 61 v2 Page 3 © Crown Copyright 2026 examples. EXAMPLE 1: CCL AND CPS BENEFITS – FULLY QUALIFYING CHP GN 61.9 A large natural gas fired CHP installation fully qualifies as Good Quality CHP and has the following characteristics for the relevant year: Parameter Value TPC 150 MWe TFI 1,234 GWh TPO 439 GWh QHO 420 GWh ηpower 35.6% QI 102.87 QI threshold 100 QFI 1,234 GWh QPO 439 GWh Electricity exported to licensed supplier, % export 10% The relevant CCL main and CPS rates from 1 April 2025 are: Natural gas CCL main rate 0.775 p/kWh Natural gas CPS rate 0.331 p/kWh Electricity CCL main rate 0.775 p/kWh Updated rates can be obtained here: Climate Change Levy rates - GOV.UK FUEL SUPPLY TO THE CHP SCHEME GN 61.10 For supplies of CCL taxable commodities (fuels) to a CHPQA certified CHP Scheme, if the power efficiency of the Scheme is 20% or more then all of the TFI is exempt from the CCL; i.e., the Qualifying Fuel Input QFI = TFI. Where the power efficiency is less than 20% the QFI will be proportionally less than the TFI. In general: 𝐶𝐶𝐿 𝑚𝑎𝑖𝑛 𝑟𝑎𝑡𝑒 𝑏𝑒𝑛𝑒𝑓𝑖𝑡 𝑜𝑛 𝑓𝑢𝑒𝑙 = 𝐶𝐶𝐿 𝑀𝑎𝑖𝑛 𝑅𝑎𝑡𝑒 × 𝑄𝐹𝐼 In this case since the electrical efficiency is at least 20%, the QFI = TFI and the benefit to the operator regarding the main rate of CCL on the input natural gas is: 𝐶𝐶𝐿 𝑚𝑎𝑖𝑛 𝑟𝑎𝑡𝑒 𝑏𝑒𝑛𝑒𝑓𝑖𝑡 𝑜𝑛 𝑓𝑢𝑒𝑙 = 7.75 £ 𝑀𝑊ℎ× 1,234 × 103 𝑀𝑊ℎ = £9. 564 𝒎𝒊𝒍𝒍𝒊𝒐𝒏 GN 61.11 CPS is payable on what is referred to as the 'deemed supply' for use in the production of electricity where the generating capacity is at least 2 MWe. Since the example Scheme is certified under CHPQA, the deemed supply comprises only the fuel referable to CHPQA Guidance Note 61 v2 Page 4 © Crown Copyright 2026 electricity generation that is not QPO used 'on-site'5, i.e.: 𝐶𝑃𝑆 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦, 𝐶𝐻𝑃𝑄𝐴 𝑐𝑒𝑟𝑡𝑖𝑓𝑖𝑒𝑑 = 𝐶𝑃𝑆 𝑅𝑎𝑡𝑒 × 𝐷𝑒𝑒𝑚𝑒𝑑 𝑆𝑢𝑝𝑝𝑙𝑦 = 𝐶𝑃𝑆 𝑅𝑎𝑡𝑒× (𝑇𝐹𝐼−𝑄𝐻𝑂 81%) × (1 −𝐸𝑆 𝑇𝑃𝑂) = (3.31 £ 𝑀𝑊ℎ) × (1,234 103 𝑀𝑊ℎ−420 103 𝑀𝑊ℎ 81% ) × (1 −439 × 103 𝑀𝑊ℎ× 90% 439 × 103 𝑀𝑊ℎ ) = £ 𝟎. 𝟐37 𝒎𝒊𝒍𝒍𝒊𝒐𝒏 (Where ES is the QPO used on site as defined at GN 61.4). GN 61.12 If the CHP plant was not certified under CHPQA then the deemed supply would comprise all of the CPS commodities supplied to the generating plant, i.e., the input fuel. Thus: 𝐶𝑃𝑆 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦, 𝑢𝑛𝑐𝑒𝑟𝑡𝑖𝑓𝑖𝑒𝑑 = 𝐶𝑃𝑆 𝑅𝑎𝑡𝑒 × 𝑇𝐹𝐼 = 3.31 £ 𝑀𝑊ℎ× 1,234 × 103 𝑀𝑊ℎ = £ 𝟒. 𝟎𝟖5 𝒎𝒊𝒍𝒍𝒊𝒐𝒏 ∴ 𝐶𝑃𝑆 𝑏𝑒𝑛𝑒𝑓𝑖𝑡 𝑜𝑓 𝐶𝐻𝑃𝑄𝐴 𝑐𝑒𝑟𝑡𝑖𝑓𝑖𝑐𝑎𝑡𝑖𝑜𝑛 = £ 4.085 − 0.237 𝑚𝑖𝑙𝑙𝑖𝑜𝑛 = £ 𝟑. 𝟖𝟒8 𝒎𝒊𝒍𝒍𝒊𝒐𝒏 ELECTRICITY GENERATED GN 61.13 With respect to electricity generated, since the QI achieved is equal to or greater than the QI threshold of 100, the QPO = TPO. Thus, there is no liability for CCL on the power used on-site. Furthermore, for any power exported to licensed electricity suppliers the CCL will ultimately be charged to the consumer. Therefore, there is no liability for the CCL on any of the electricity generated in this example. OVERALL BENEFIT OF CHPQA CERTIFICATION GN 61.14 ∴ 𝑇ℎ𝑒 𝑜𝑣𝑒𝑟𝑎𝑙𝑙 𝑏𝑒𝑛𝑒𝑓𝑖𝑡 𝑜𝑓 𝐶𝐻𝑃𝑄𝐴 𝑐𝑒𝑟𝑡𝑖𝑓𝑖𝑐𝑎𝑡𝑖𝑜𝑛 = £ 9.564 + £3.848 𝑚𝑖𝑙𝑙𝑖𝑜𝑛 = £ 13.412 𝒎𝒊𝒍𝒍𝒊𝒐𝒏 EXAMPLE 1A: IMPACT OF CLIMATE CHANGE AGREEMENTS GN 61.15 Facilities covered by a Climate Change Agreement (CCA) benefit through being liable for reduced rates of the main rates of CCL on taxable commodities. The table below shows the reduced CCL main rates for natural gas and electricity from 1 April 20256. 5 See: HMRC Excise Notice CCL1/6: a guide to carbon price floor, https://www.gov.uk/government/publications/excise-notice-ccl16-a-guide-to-carbon-price-floor/excise-notice- ccl16-a- guide-to-carbon-price-floor 6 Source: https://www.gov.uk/guidance/climate-change-levy-rates CHPQA Guidance Note 61 v2 Page 5 © Crown Copyright 2026 Taxable commodity Full rate p/kWh CCA % discount Reduced rate p/kWh Natural Gas 0.775 89% 0.08525 Electricity 0.775 92% 0.06200 Liability for CPS is not affected by CCAs. GN 61.16 Where a certified CHP Scheme falls within a CCA Facility, determining the benefit of CHPQA certification must take into account the reduced CCL main rates arising from CCA. In such cases, the relief derived from CHPQA certification is 100% relief on the reduced rate of CCL GN 61.17 Assuming that the CHP Scheme described in Example 1 is within a CCA Facility, the benefit of CHPQA certification is calculated in the same way, using the reduced rather than full main rates of CCL. Thus: 𝐶𝐶𝐿 𝑚𝑎𝑖𝑛 𝑟𝑎𝑡𝑒 𝑏𝑒𝑛𝑒𝑓𝑖𝑡 𝑜𝑛 𝑓𝑢𝑒𝑙= (0.8525 £ 𝑀𝑊ℎ) × (1,234 103 𝑀𝑊ℎ) = £1.052 𝑚𝑖𝑙𝑙𝑖𝑜𝑛 The CPS benefit is unchanged, so with the CCA: 𝑇ℎ𝑒 𝑜𝑣𝑒𝑟𝑎𝑙𝑙 𝑏𝑒𝑛𝑒𝑓𝑖𝑡 𝑜𝑓 𝐶𝐻𝑃𝑄𝐴 𝑐𝑒𝑟𝑡𝑖𝑓𝑖𝑐𝑎𝑡𝑖𝑜𝑛 = £ 1.052 + 3.848 𝑚𝑖𝑙𝑙𝑖𝑜𝑛 = £ 𝟒. 9 𝒎𝒊𝒍𝒍𝒊𝒐𝒏 EXAMPLE 2: CCL AND CPS BENEFITS – PARTIALLY QUALIFYING CHP GN 61.18 A natural gas fired CHP installation achieves only partial qualification as Good Quality CHP and has the following characteristics for the relevant year: Parameter Value TPC 7.2 MWe TFI 57 GWh TPO 9.5 GWh QHO 21 GWh ηpower 16.6% QI 73.97 QI threshold 100 QFI 47.3 GWh QPO 5.8 GWh Electricity exported None The relevant CCL main and CPS rates from 1 April 2025 are: Natural gas CCL main rate 0.775 p/kWh Natural gas CPS rate 0.331 p/kWh Electricity CCL main rate 0.775 p/kWh CHPQA Guidance Note 61 v2 Page 6 © Crown Copyright 2026 FUEL SUPPLY TO THE CHP SCHEME GN 61.19 In this case the power efficiency is less than 20% and the QFI is proportionally less than the TFI: 𝐶𝐶𝐿 𝑚𝑎𝑖𝑛 𝑟𝑎𝑡𝑒 𝑏𝑒𝑛𝑒𝑓𝑖𝑡 𝑜𝑛 𝑓𝑢𝑒𝑙 = 𝐶𝐶𝐿 𝑀𝑎𝑖𝑛 𝑅𝑎𝑡𝑒 × 𝑄𝐹𝐼 = 𝐶𝐶𝐿 𝑀𝑎𝑖𝑛 𝑅𝑎𝑡𝑒× (ηpower 20% × 𝑇𝐹𝐼) = (7.75 £ 𝑀𝑊ℎ) × (16.6% 20% × 57 × 103 𝑀𝑊ℎ) = £ 366,653 GN 61.20 Since the example Scheme is certified under CHPQA, the deemed supply comprises only the fuel referable to electricity generation that is not QPO used 'on- site'7, i.e.: 𝐶𝑃𝑆 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦, 𝐶𝐻𝑃𝑄𝐴 𝑐𝑒𝑟𝑡𝑖𝑓𝑖𝑒𝑑= 𝐶𝑃𝑆 𝑅𝑎𝑡𝑒× 𝐷𝑒𝑒𝑚𝑒𝑑 𝑆𝑢𝑝𝑝𝑙𝑦 𝐶𝑃𝑆 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦= 𝐶𝑃𝑆 𝑅𝑎𝑡𝑒× [(𝑇𝐹𝐼−𝑄𝐻𝑂 81%) × (1 −𝐸𝑆 𝑇𝑃𝑂)] 𝐶𝑃𝑆 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦= [3.31 £ 𝑀𝑊ℎ] × [(57 × 103𝑀𝑊ℎ−21 × 103 81% 𝑀𝑊ℎ) × (1 −5.8 × 103 𝑀𝑊ℎ 9.5 × 103 𝑀𝑊ℎ)] = £ 𝟒𝟎, 𝟎59 (Where ES is the QPO used on site as defined at GN 61.4). GN 61.21 If the CHP plant was not certified under CHPQA then the deemed supply would comprise all of the CPS commodities supplied to the generating plant, i.e., all of the input fuel. Thus: 𝐶𝑃𝑆 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦, 𝑢𝑛𝑐𝑒𝑟𝑡𝑖𝑓𝑖𝑒𝑑 = 𝐶𝑃𝑆 𝑅𝑎𝑡𝑒 × 𝑇𝐹𝐼 = 3.31 £ 𝑀𝑊ℎ× 57 × 103 𝑀𝑊ℎ = £ 𝟏𝟖𝟖, 𝟔𝟕𝟎 ∴ 𝐶𝑃𝑆 𝑏𝑒𝑛𝑒𝑓𝑖𝑡 𝑜𝑓 𝐶𝐻𝑃𝑄𝐴 𝑐𝑒𝑟𝑡𝑖𝑓𝑖𝑐𝑎𝑡𝑖𝑜𝑛 = £ 188,670 − £40,059 = £ 𝟏𝟒𝟖, 𝟔11 ELECTRICITY GENERATED GN 61.22 With regard to electricity generated, the QI achieved (73.97) is less than the QI threshold of 100 and thus the QPO is less than the TPO. The balance of the TPO (which is all used on site) attracts the main rate of CCL, thus: 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦, 𝐶𝐶𝐿 𝑚𝑎𝑖𝑛 𝑟𝑎𝑡𝑒 𝑜𝑛 𝑒𝑙𝑒𝑐𝑡𝑟𝑖𝑐𝑖𝑡𝑦 = 𝐶𝐶𝐿 𝑀𝑎𝑖𝑛 𝑅𝑎𝑡𝑒 × (𝑇𝑃𝑂 − 𝑄𝑃𝑂) 7 See: HMRC Excise Notice CCL1/6: a guide to carbon price floor, https://www.gov.uk/government/publications/excise-notice-ccl16-a-guide-to-carbon-price-floor/excise-notice- ccl16-a- guide-to-carbon-price-floor CHPQA Guidance Note 61 v2 Page 7 © Crown Copyright 2026 = £7.75 £ 𝑀𝑊ℎ× (9.5 × 103 𝑀𝑊ℎ−5.8 × 103 𝑀𝑊ℎ) = £ 𝟐𝟖, 𝟔𝟕𝟓 OVERALL BENEFIT OF CHPQA CERTIFICATION GN 61.23 ∴ 𝑇ℎ𝑒 𝑜𝑣𝑒𝑟𝑎𝑙𝑙 𝑏𝑒𝑛𝑒𝑓𝑖𝑡 𝑜𝑓 𝐶𝐻𝑃𝑄𝐴 𝑐𝑒𝑟𝑡𝑖𝑓𝑖𝑐𝑎𝑡𝑖𝑜𝑛 = 𝐶𝐶𝐿 𝑚𝑎𝑖𝑛 𝑟𝑎𝑡𝑒 𝑓𝑢𝑒𝑙 𝑏𝑒𝑛𝑒𝑓𝑖𝑡 + 𝐶𝑃𝑆 𝑏𝑒𝑛𝑒𝑓𝑖𝑡 − 𝐶𝐶𝐿 𝑚𝑎𝑖𝑛 𝑟𝑎𝑡𝑒 𝑒𝑙𝑒𝑐𝑡𝑟𝑖𝑐𝑖𝑡𝑦 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦. = £ 366,653 + 148,611 − 28,675 = £ 486,589 SECTION B: NDRHI BENEFITS – SOLID BIOMASS CHP TARIFF. GN 61.24 Certain CHP Schemes certified under CHPQA and accredited under the NDRHI receive the RHI solid biomass CHP tariff for a proportion of the Eligible Heat Output (EHO). Without CHPQA certification this heat would receive the applicable lower solid biomass boiler tariff. Hence the financial benefit of CHPQA certification is the annual sum of the differences between the solid biomass CHP tariff and the solid biomass boiler tariff for each kWh of EHO in receipt of the solid biomass CHP tariff. Note: The NDRHI is now closed to new schemes (see- Non-Domestic Renewable Heat Incentive (RHI) - NDRHI Closure | Ofgem) . GN 61.25 The solid biomass CHP tariff for a particular installation depends on: 1. Whether the date of RHI accreditation is before 1 April 2016 or is on or after 1 April 2016; and 2. The financial year in question since RHI tariffs are index linked. The tariffs currently are8: NDRHI accreditation date Solid biomass CHP tariff rate 2025/26 (p/kWh of heat) before 01/04/2016 6.35 on or after 01/04/2016 5.71 GN 61.26 The corresponding solid biomass boiler tariffs are more complicated since they depend on a greater number of accreditation date ranges, the heat capacity (whether small, medium, or large) and the financial year in question. Most of the solid biomass boiler tariffs are also divided into Tier 1 and Tier 2 rates where Tier 1 applies for the first 1,314 or 3,066 hours of full load equivalent operation and a lower Tier 2 rate for any subsequent operating hours during each 12-month period from the accreditation date. GN 61.27 Solid biomass CHP installations with a date of accreditation before 1 August 2016 receive 8 Non-Domestic RHI tariff table 2025 to 2026.xlsx CHPQA Guidance Note 61 v2 Page 8 © Crown Copyright 2026 the relevant solid biomass CHP tariff on all of the EHO provided via the CHP plant. For those with a later accreditation date, payments are adjusted where the power efficiency on their CHPQA certificate is below either 10% or 20% depending on the date of accreditation as described in Chapter 14 of the NDRHI Guidance Volume 2: Ongoing obligations and payments9. GN 61.28 One way of estimating the NDRHI benefit of the installation being certified under CHPQA is for the operator to refer to the records for the installation held in the Ofgem online NDRHI Register to determine for the RHI 12-month period closest to the CHPQA year in question: 1. The number of kWh of heat that have attracted the solid biomass CHP tariff (HeatCHP) 2. The associated total value of the payments received (PayCHP). 3. The number of kWh of heat that have attracted the solid biomass boiler tier 1 tariff (HeatT1). 4. The associated total value of the payments received (PayT1). 5. The number of kWh of heat that have attracted the solid biomass boiler tier 2 tariff (HeatT2). 6. The associated total value of the payments received (PayT2). The following is also needed: 7. The Tier 1 to Tier 2 threshold number of hours, as applicable (HeatThres). You may need to refer to Chapter 6 of the NDRHI Guidance Volume 2: Ongoing obligations and payments as necessary. 8. The RHI installation capacity (in kW of heat). GN 61.29 To determine the benefit of the CHP certification, HeatCHP should first be split and assigned to HeatT1 and HeatT2 such that the revised HeatT1 is equal to HeatThres unless the total EHO (i.e., HeatT1+HeatT2+HeatCHP) is less than HeatThres. The remainder of HeatCHP is assigned to HeatT2. The sum of the revised HeatT1 and revised HeatT2 should then equal the EHO. The RHI payment that would have been received without CHP certification can then be calculated as: Subtracting this from the total of PayCHP + PayT1 + PayT2 will give the benefit attributable to CHP certification. GN 61.30 An alternative method to estimate the benefit is set out as Example 3 below. EXAMPLE 3: NDRHI SOLID BIOMASS CHP TARIFF GN 61.31 A CHP installation running on wood fuel comprises a steam boiler with steam turbine. The installation is CHPQA certified and accredited under the NDRHI. Relevant 9 https://www.ofgem.gov.uk/sites/default/files/docs/2021/04/ndrhi_guidance_vol2._final_2021_0.pdf CHPQA Guidance Note 61 v2 Page 9 © Crown Copyright 2026 characteristics are as follows: Parameter Value TPC 200 kWe RHI thermal capacity 1 MWth Power efficiency, ηpower 12.0% Power efficiency threshold, ηpowerTH 20.0% RHI Eligible Heat Output (EHO)* 6,000 MWh RHI solid biomass CHP tariff 5.71 p/kWh RHI solid biomass boiler Tier 1 tariff 3.94 p/kWh RHI solid biomass boiler Tier 2 tariff 2.76 p/kWh Tier 1 to Tier 2 tariff threshold 3,066 FLE hours (3,066 MWh) * N.B. The RHI EHO may or may not be the same as the CHPQA QHO GN 61.32 To calculate the RHI benefit from CHPQA certification, the RHI annual payment must be calculated with and without CHPQA certification. WITHOUT CHPQA CERTIFICATION GN 61.33 Without CHPQA certification the CHP operator can only claim the relevant biomass boiler tariff, which is tiered with a threshold between Tier 1 and Tier 2 of 3,066 MWh (3,066 hours operation at the full thermal capacity). In this case, the EHO is greater than the tier threshold so: 𝐻𝑒𝑎𝑡 𝑜𝑢𝑡𝑝𝑢𝑡 𝑎𝑡 𝑡ℎ𝑒 𝑏𝑜𝑖𝑙𝑒𝑟 𝑇𝑖𝑒𝑟 1 𝑡𝑎𝑟𝑖𝑓𝑓 = 𝑇𝑖𝑒𝑟 𝑇ℎ𝑟𝑒𝑠ℎ𝑜𝑙𝑑 = 3,066 𝑀𝑊ℎ and: 𝐻𝑒𝑎𝑡 𝑜𝑢𝑡𝑝𝑢𝑡 𝑎𝑡 𝑡ℎ𝑒 𝑏𝑜𝑖𝑙𝑒𝑟 𝑇𝑖𝑒𝑟 2 𝑡𝑎𝑟𝑖𝑓𝑓 = 𝐸𝐻𝑂 − 𝑇𝑖𝑒𝑟 𝑇ℎ𝑟𝑒𝑠ℎ𝑜𝑙𝑑 = 6,000 MWh− 3,066 𝑀𝑊ℎ = 2,934 𝑀𝑊ℎ ∴ 𝑅𝐻𝐼 𝑃𝑎𝑦𝑚𝑒𝑛𝑡 = (𝑇𝑖𝑒𝑟1 ℎ𝑒𝑎𝑡 × 𝑇𝑖𝑒𝑟1 𝑡𝑎𝑟𝑖𝑓𝑓) + (𝑇𝑖𝑒𝑟2 ℎ𝑒𝑎𝑡 × 𝑇𝑖𝑒𝑟2 𝑡𝑎𝑟𝑖𝑓𝑓) = (3,066 𝑀𝑊ℎ× 39.4 £ 𝑀𝑊ℎ) + (2,934 𝑀𝑊ℎ× 27.6 £ 𝑀𝑊ℎ) = £ 201,779 WITH CHPQA CERTIFICATION GN 61.34 Since the actual power efficiency is below the threshold, only a proportional amount of the EHO can attract the solid biomass CHP tariff: 𝐻𝑒𝑎𝑡 𝑂𝑢𝑡𝑝𝑢𝑡 𝑎𝑡 𝐶𝐻𝑃 𝑡𝑎𝑟𝑖𝑓𝑓= 𝐸𝐻𝑂× 𝐴𝑐𝑡𝑢𝑎𝑙 𝑃𝑜𝑤𝑒𝑟 𝐸𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 𝑇ℎ𝑟𝑒𝑠ℎ𝑜𝑙𝑑 𝑃𝑜𝑤𝑒𝑟 𝐸𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 CHPQA Guidance Note 61 v2 Page 10 © Crown Copyright 2026 = 6,000 𝑀𝑊ℎ× 12% 20% = 3,600 𝑀𝑊ℎ The remaining 2,400 MWh of heat will attract the biomass boiler tariff at either the Tier 1 or Tier 2 rate. Assuming the ratio of heat at the two tiers is the same as in the case of no CHPQA certification, gives: 𝐻𝑒𝑎𝑡 𝑜𝑢𝑡𝑝𝑢𝑡 𝑎𝑡 𝑡ℎ𝑒 𝑏𝑜𝑖𝑙𝑒𝑟 𝑇𝑖𝑒𝑟 1 𝑡𝑎𝑟𝑖𝑓𝑓= 2,400 𝑀𝑊ℎ× 3,066 𝑀𝑊ℎ 6,000 𝑀𝑊ℎ = 1.266 MWh 𝐻𝑒𝑎𝑡 𝑜𝑢𝑡𝑝𝑢𝑡 𝑎𝑡 𝑡ℎ𝑒 𝑏𝑜𝑖𝑙𝑒𝑟 𝑇𝑖𝑒𝑟 1 𝑡𝑎𝑟𝑖𝑓𝑓= 2,400 𝑀𝑊ℎ× 2,934 𝑀𝑊ℎ 6,000 𝑀𝑊ℎ = 1,174 MWh ∴ 𝑅𝐻𝐼 𝑃𝑎𝑦𝑚𝑒𝑛𝑡 = (𝐶𝐻𝑃 ℎ𝑒𝑎𝑡 × 𝐶𝐻𝑃 𝑡𝑎𝑟𝑖𝑓𝑓) + (𝑇𝑖𝑒𝑟1 ℎ𝑒𝑎𝑡 × 𝑇𝑖𝑒𝑟1 𝑡𝑎𝑟𝑖𝑓𝑓) + (𝑇𝑖𝑒𝑟2 ℎ𝑒𝑎𝑡 × 𝑇𝑖𝑒𝑟2 𝑡𝑎𝑟𝑖𝑓𝑓) = (3,600 𝑀𝑊ℎ× 57.1 £ 𝑀𝑊ℎ)+(1,226 𝑀𝑊ℎ× 39.4 £ 𝑀𝑊ℎ) + (1,174 𝑀𝑊ℎ× 27.6 £ 𝑀𝑊ℎ) = £ 286,267 BENEFIT OF CHPQA CERTIFICATION GN 61.35 The benefit of CHP certification is the difference between the RHI payments with and without certification, i.e., = £286,267 −£201,779 = £84,488 SECTION C: ROC BENEFITS – CHP UPLIFT GN 61.36 Certification under CHPQA of certain types of ROC accredited generating station allows an uplift to the number of ROCs issued for each MWh of net electricity generated. The number of ROCs, for relevant technologies with and without CHP for post-2016 capacity, are shown below. The ROCs/MWh for earlier capacity differ slightly. Generation type ROCs/MWh net power output Non-CHP With qualifying CHP Co-firing of regular bioliquid 0.5 1.0 Low-range co-firing of relevant energy crops 1.0 1.5 Dedicated biomass 1.4 1.8 High-range co-firing 0.9 1.4 Mid-range co-firing 0.6 1.1 Low-range co-firing 0.5 1.0 Station/unit conversion 1.0 1.5 Energy from Waste 0.0 1.0 EXAMPLE 4: ROCS - CHP UPLIFT A dedicated biomass with CHP plant certified under CHPQA, with the following CHPQA Guidance Note 61 v2 Page 11 © Crown Copyright 2026 characteristics. Parameter Value Net annual power output 300 GWh TPO 320 GWh QPO 290 GWh Biomass content 95% ROC buyout price 2021/22 £67.06/ROC Note: Buy-out prices for future period can be found here: Renewables Obligation: buy-out price and mutualisation threshold and ceilings 2025 to 2026 | Ofgem 𝑃𝑜𝑤𝑒𝑟 𝑒𝑙𝑖𝑔𝑖𝑏𝑙𝑒 𝑓𝑜𝑟 𝐶𝐻𝑃 𝑅𝑂𝐶 𝑢𝑝𝑙𝑖𝑓𝑡 = 𝑁𝑒𝑡 𝑃𝑜𝑤𝑒𝑟 𝑂𝑢𝑡𝑝𝑢𝑡 × % 𝐵𝑖𝑜𝑚𝑎𝑠𝑠 𝐶𝑜𝑛𝑡𝑒𝑛𝑡 × QPO/TPO = 300 × 103 𝑀𝑊ℎ× 95% × 290 × 103 𝑀𝑊ℎ 320 × 103 𝑀𝑊ℎ = 258,281 𝑀𝑊ℎ The ROC uplift is 0.4 ROCs/MWh (1.8 - 1.4 ROCs/MWh), so: 𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑅𝑂𝐶 𝑢𝑝𝑙𝑖𝑓𝑡= 67.06 £ 𝑅𝑂𝐶× 258,281 𝑀𝑊ℎ× 0.4 𝑅𝑂𝐶 𝑀𝑊ℎ = £6. 928 𝒎𝒊𝒍𝒍𝒊𝒐𝒏 SECTION D: CONTRACTS FOR DIFFERENCE – 'WITH CHP' GENERATING STATIONS GN 61.37 There are two CHP generating station types eligible for Contracts for Difference: 1. dedicated biomass with CHP stations; 2. energy from waste with CHP stations. Since there are no equivalent 'without CHP' station types the entire annual value to the operator can be attributed to CHPQA since ongoing CHPQA certification is a requirement of these Contracts for Difference. Only the station operator can put a value on the CfD annually relative to the counterfactual of not being party to a CfD. Mathematically, this would be: 𝐴𝑛𝑛𝑢𝑎𝑙 𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝐶𝑓𝐷 𝐴𝑡𝑡𝑟𝑖𝑏𝑢𝑡𝑎𝑏𝑙𝑒 𝑡𝑜 𝐶𝐻𝑃𝑄𝐴= 𝐺𝑁44 (𝑄𝑃𝑂 𝑇𝑃𝑂) × 𝐸𝑥𝑝𝑜𝑟𝑡𝑒𝑑 𝐸𝑙𝑒𝑐𝑡𝑟𝑖𝑐𝑖𝑡𝑦 SECTION E: EXEMPTION FROM BUSINESS RATING FOR CHP PLANT AND MACHINERY (P&M) GN 61.38 The business rating exemption applies to specified plant and machinery contained within a CHP Scheme, which qualifies for, and is in possession of, either a full or partial Secretary of State (CHP) Exemption Certificate. If such an exemption has been applied for and granted, then the annual value of this to the CHP scheme operator should be known by the organisation's department responsible for dealing with business rates. More on business rate exemption can be found in GN45.