Welcome to Better Energy Blog, the leading conversation on how the UK should deliver a consumer focused, secure, low carbon and affordable energy system.
By The Association for Decentralised Energy director, Dr Tim Rotheray
The way we have developed the UK energy system is based on a centralised view.
Power is generated far from its users. Production is managed up or down to follow changes in demand. The energy user, by and large, is a passive recipient. The producer has no relationship with the user, and the user has little control over their energy.
Energy for heat is also by and large centralised - gas (the major source of heat in the UK) is procured and delivered in GB wide network to broadly passive users.
But the system is changing. In fact, the system has been changing for a long time. The change is driven by users wanting to take greater control of their energy, principally to manage their costs. These local actions – be they investing in decentralised generation, efficiency measures or actively shifting energy demand – are individual decisions, hidden from view.
A new report published by the renamed Association for Decentralised Energy seeks to quantify the cumulative value of all of these discrete, individual actions. The report examines what energy demand would have been if we used as much energy for every pound generated in the economy as we did in 1980.
The results are staggering. The collective impact of all those individual decisions and investments is worth £37bn in avoided business energy costs every single year. Our annual gas imports would have been three times what they are today. That is 771 supertankers of avoided gas imports. The UK would also have needed to build 14 additional large power stations and Our annual CO2 emissions would be higher by nearly half a billion tonnes.
These demand side investments have made the UK leaner, greener and more secure. It is only by seeing the enormous total value that we can fully understand the case for doing more at the local level.
Our energy system struggles to encourage local solutions. Heat networks to capture local waste heat, lifting the vulnerable from fuel poverty. Combined heat and power to make business more competitive and cut the vast amount of energy wasted from our power stations. Businesses’ investment in energy management and demand side services, allowing them to reliably keep our lights on for less cost, and allowing participation in our energy system right across the country.
This is not about pitting one system against another. There are no silver bullets. It is about creating a system that can accommodate and value all options. Centralised and decentralised, supply and demand.
To achieve this end, we require a new way of thinking about the UK energy system. Not thinking of a system which dictates to the user, but thinking of one in which the user and producer are in partnership. By exploring all options equally we can find the best way to meet the UK’s energy needs by managing both production and demand, and crucially, by cutting waste first.
Using Government's own estimates, the Invisible Energy report shows that there are many more 'demand side' opportunities. By 2020, we could cut business energy cost by a further £5bn and save enough power to run the London Underground for 30 years.
We see the role of the newly renamed Association for Decentralised Energy as helping bring together the policies necessary to support that opportunity, and help create a more local, user-led, efficient energy system.
Our focus will remain on shaping policy and regulation to ensure the UK is seizing upon its decentralised generation, demand response and demand reduction opportunities. Currently, demand side policy is fragmented, with little integration to ensure that it works for the user. Our vision is for the energy system to be designed around the user, enabling them to take control. If we are to make the successful transition to a low carbon economy, we must capture the opportunities to make business and industry more efficient and competitive, heat homes and businesses with technologies and infrastructure suited to their location, and ensure our transition to a low carbon economy is done as cost effectively as possible.
A competitive, secure and low carbon energy economy is achievable, but only if we explore the options at all scales to help us get there.
A quick snap taken by our Communications Officer as she cycled to work through the Olympic Park. As you can see, on this frosty morning the biomass boiler in King's Yard was firing to provide heating and hot water through the heat network to the residents and businesses on the site.
Ian Hopkins, Director at ENER-G takes us through what you should consider when sizing your combined heat and power plant so that it runs just as well in half an hour, as it does in ten years time. Key questions include whether the site is heat led or electricity led, what the demand profile looks like hour to hour, week to week and month to month, and if the site's load will stay the same over time.
CHP won't deliver for every development and detailed analysis and modelling is required to assess feasibility and then to ensure that it is sized and specified accurately to provide maximum efficiency - both in the short and long term, where energy demand patterns might change.
In conventional power and heating applications, plant capacity is usually dictated by maximum demand, resulting in the system operating predominantly at part load. To gain the efficiency and economic viability of CHP plants, high utilisation is required; hence it is essential to understand the minimum energy demands during the running period, as well as the maximum demands.
Sizing a future-proof CHP unit requires accurate measurements today and a measure of how the balance between heat and power baseloads might shift. It is important to ask careful questions about what the CHP system will need to do in both the next half hour and in the next ten years.
The process should start with an audit of current and future demands of heat and power.
Site demand information will show how demand profiles peak and fall with:
- Time of day
- Day of the week
- Season of the year
When a CHP system has been sized against the building’s normal patterns of consumption, it is always wise to compare the economics and environmental benefits with those of a larger and smaller plant.
Theory says a well-designed CHP system will use all the heat and power produced, but a larger CHP plant generating surplus heat may show greater economy and environmental benefits in future. The chief considerations are:
- Planned energy efficiency measures that would reduce the current demand for heat and/or power.
- Planned changes to the business, the building or the occupancy that will increase or reduce energy demand.
For example, in a sports centre, is a swimming pool planned? In a hotel, will the fabric of the building be insulated, or will double-glazing be installed? For any business, will the staff numbers grow?
Many CHP installations are oversized because the energy demand profile has not been assessed properly. To get the full benefits of CHP, the unit needs to run all day every day, and all the power and heat produced has to be fully utilised.
Ideally, the demand information would be based on heat and power consumption measured every hour for one year. Annual or monthly electricity and gas meter make no allowance for seasonal variations, particularly in heat. As such, it is important to get as close as possible to hourly or even half-hourly consumption figures.
Electricity usage profiles can be obtained by looking at half-hour meter data from your electricity supplier. Heat usage profiles are more difficult to assess, so you may need to utilise some temporary metering. Monthly fuel bills will indicate some degree of seasonal variation. For weekly and daily profiles it is important to understand the operating pattern of the building and to add to that a short-term monitoring exercise or audit.
Once you have established the demand profiles you can calculate the electricity and building's heat baseloads.
The useful output from a CHP gas engine is typically about 40% electricity, 45% heat. From the current and projected demands of the building and the business, you need to establish whether the CHP sizing will be based on the electricity or heat demand.
A heat-led sizing will meet the site’s heat demands. It may produce surplus electricity that can be exported or leave a need for top-up power. The economics of exporting power then becomes a priority issue. A power-led sizing could produce excess wasted heat, so it may be worth considering a smaller unit.
Once a CHP unit has been sized on a current heat-to-power ratio, future considerations need to include an assessment of how the heat-to-power ratio of the building’s demand might change over time and to incorporate these scenarios into your planning..
Download the ENER-G guide: CHP project planning: How to determine site heat and power demands
Ian Hopkins is a Director of ENER-G Combined Power Ltd. He is a technical sales and marketing professional and business leader with more than 15 years’ experience in delivering energy efficiency projects and strategy in Europe and the United States.
Further information: www.energ.co.uk/chp
Thomas Briault and Stuart Allison from Arup explore our tendency to over-simplify how we think about the price of heat, and show some findings from recent work which shed light on the facts behind the figures.
We have been working with a number of clients recently to look at the price customers pay to keep warm using individual gas boiler systems.
Our first finding: most people do not make a distinction between heat and gas.
What we pay for gas is around 4p/kWh with an £80 per year standing charge (source: uSwitch for a dual fuel energy bill from the six largest suppliers).
But the supply of gas alone does not get customers heat. To calculate the true costs of heating – with a guaranteed heat supply, all year round - we need to take into account their boiler efficiency, maintenance of that boiler and the replacements costs when it comes to the end of its useful life, typically every ten years or so.
In terms of maintenance, the cost of gas boiler maintenance cover, with zero excess, is typically £150-£200 per year. The consumer rights group Which? has carried out research suggesting that a boiler maintenance package with zero excess is not the cheapest solution for householders, who could save money by using their local plumber to fix repairs whenever needed. However, this means that the resident does not have a guaranteed supply of heat, since a plumber could take days to arrive with the correct parts and would not pay you a penalty charge for any delay in arrival.
Although all residents hope they will not have to replace their boiler while in their property, on average boilers need replacing once every 11 years, often at a high capital cost. Even a social housing provider ordering in bulk would struggle to keep the installed cost below £1500, meaning the annualised cost of boiler replacement is likely to be between £110-£220, depending on size and complexity.
When all of these costs are factored in, we begin to get a picture for the price of heat, rather than simply the fuel utility costs.
The graph below shows the total bill for a two bedroom apartment using around 3,500kWh/yr (assuming design standards for a new Code for Sustainable Homes Level 4+ building). The actual cost of heat is not 4p but closer to 14p/kWh.
Some elements of these costs are fixed and do not vary between customers. These account for some £330 of the overall bill, regardless of how much heat the customer uses.
District Heating systems are another way to provide guaranteed, year round, uninterrupted heat, and they can do this at a discount to the figures shown above for individual gas boilers. Performance and prices are linked: if heat is down for more than 24 hours, the district heating operator will often pay a penalty charge to their customers.
In many cases, the discount on the price of heat is achieved with a developer contribution towards the capital cost of the district heating network and/or energy centre. Although communal gas boiler solutions are often cheaper when including the capital costs, they do not provide the necessary carbon reductions to enable developers to meet their planning and building regulation requirements without incurring additional capital investment in measures such as solar panels.
Currently gas fired CHP is the cheapest way to roll out technology-agnostic district heating, but it does inherently have a carbon impact and this will worsen as the grid decarbonises. We are therefore now working on is assessing the best option to replace the gas fired assets, and there are a wide variety of options being explored.
Chris Marsland, Technical Director for ENER-G Group explains how combined heat and power could play an integral part for more renewable energy to be brought onto the grid. But the added complexity of doing so is costly, so who should pay?
Strange as it may seem, the UK gas combined heat and power (CHP) fleet, in addition to reducing carbon emissions by generating our energy more efficiently, is also providing invaluable support for the growing renewables industry.
This is great, you might think, as we need to move to a new order of sustainable energy and reduced carbon emissions. But what extra cost burden will the increase in wind and solar supply add to CHP generation in the near future, and who should pay for it?
You might be familiar with the European Union's work on grid codes. New codes are being put in place and are designed to prepare and improve the EU wide electricity network for the future.
Several of these new codes deal with the need to provide certainty of supply and manage the grid, addressing the increasing penetration of intermittent renewable energy sources.
Firstly, most of the country's renewable energy supply (which accounted for 15% of total supply in 2013) is intermittent and dependent on wind or sunlight, and so dispatchable power supplies are necessary as back up.
A further little-known challenge of increasing renewable penetration is the concept of system inertia. Traditional power stations have large rotating lumps of copper - the generator. These have rotating momentum which helps stabilise the network when power output from other sources fluctuates. Renewable energy sources tend to connect to the grid using high tech electronics, which have no rotating mass and cannot provide this inertia.
So intermittency and loss of inertia require those in control of the system to request more and more capabilities from our CHPs, to help ensure a secure and stable network. It is a big responsibility for CHP, but our sector is more than capable of providing these essential system features to even out supply. Indeed, we have been doing so successfully for many years in response to market and system financial signals.
The big shift found in these new EU codes is the possible mandatory requirement for CHP to have significant technology features fitted before they are allowed to connect to the grid. These new requirements are potentially increasing the cost and complexity of CHP.
These technology requirements include improved control systems, larger/different generators and an ability to permit greater interaction with and control by the system operators. These aren't merely technology tweaks – they would require major capital costs, R&D, and engineering and manufacturing investment that could add large extra costs to CHP developments and threaten the competitiveness of the industry.
It is right and necessary that we move to a low carbon energy system, but we need all the tools in place to facilitate it. Energy users subsidise the wind and solar technologies that are necessary to meet our climate change commitments. However, the new EU proposals are recommending that the CHP industry pays for the challenges such a new system brings.
Without CHP (with their rotating mass), which provide the technical ability to manage grid stresses when faults occur in the system, the massive growth of wind and solar generation would not be possible.
CHP providers, owners and operators should be proud that we are playing our part in helping to bring about the rightful change to a sustainable energy system. But is it right that we, as a major contributor to carbon reduction, should pay the cost for problems that we solve? Surely the network owners and operators should instead be paying generators for the cost of helping them keep the system stable.