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The CHPA with Arup recently held a one day district heating conference entitled ‘Re-thinking District Heating: Removing the barriers for successful projects’ which featured some great speakers covering a breadth of topical issues of concern to the industry and users. Check out the Storify for a collection of 140 character thoughts from the day.
I’ve attended a good number of similar events over the past few years, but it’s clear that there now exists a real sense of momentum amongst local authorities, along with a recognition that their ambition to take greater control over the provision of energy to their communities is finally being supported by government.
There were a number of interesting points raised on the day – here’s five that I picked up on:
1. With over 50% of the audience representing local authorities, it’s clear that there is a huge level of interest by local government in taking forward district energy projects.
Over the past few years a number of initiatives from organisations such as Carbon Trust, Scottish government, the District Heating Vanguards, Combined Heat and Power Association, London government and pioneering local authorities have paved the way for the successful launch of the Heat Networks Delivery Unit (HNDU).
In just a few short months, HNDU has successful financed 76 local authority projects in the first two rounds of funding applications which a further 50 local authorities having expressed interest in applying for the third funding round, which recently closed.
2. Though there has been lots of district energy feasibility, economic and commercial analysis commissioned over the past few years, it’s not always been easy to identify or locate, which is disappointing, as it would be great to share this knowledge across the local government sector (I should say, the London Heat Map does however make a good attempt at doing this). Hence it’s good to hear that DECC have made it a requirement that research funded by HNDU must be made widely accessible. It’s not clear where all this information will be held – but hopefully that will become apparent soon!
3. With the heightened level of interest in district energy – and an injection of funding by government – it’s perhaps not surprising that all this activity is leading to significant demands for district energy expertise. With the government’s Heat Strategy pointing to as much as 20% of heating coming from heat networks by 2020 or 40% by 2050, there is a real issue of a potential skills shortage in the sector which needs to be addressed by government and industry.
4. A great presentation by Metropolitan, the ESCO operator of the Kings Cross CHP and district heating network highlighted that new build heat density is not always the determining factor in deciding the financial viability for district heating. If trenches being constructed to hold district heating pipes also handle other utility services such as water, electricity and telecommunications, the costs can be easily spread.
5. Finally – and perhaps most importantly – a message that came through was policy clarity and stability are a huge deciding factor in helping both industry and users decide on strategies to invest in district energy.
The government’s original zero carbon target sent out a clear message about how developments would need to be designed to incorporate low carbon solutions.
However, each subsequent announcement by Department for Communities and Local Government (DCLG) Ministers has weakened the policy, effectively diluting the original zero carbon intention by nearly two-thirds.
This contrasts with London government, where a much clearer policy intent in the London Plan on the use of decentralised energy systems has now led to a renaissance in the use of district heating in the capital.
Some business and manufacturing organisations have come out swinging against a new National Grid service which pays businesses to reduce their power demand during peak periods. They shouldn’t. Businesses and consumers who are worried about energy bills will be big winners.
National Grid announced last week they would develop a Demand Side Balancing Reserve, a new service which will pay large energy users to voluntarily reduce their demand during specific, high-demand winter weekday evenings between 4 and 8 pm.
The CHPA’s Claire Wych explained demand side response, and the cost-effective value it can provide the energy system during high-demand periods.
But the service is not just good value for the electricity system, but also good value for large energy users. And yet, instead of welcoming this service, business organisations came out against it.
The CBI said it “underlines the need for us to get the investment we need into our energy infrastructure to keep the lights on”. EEF said “we should never have found ourselves in the dire situation of having to bring forward last minute solutions to avoid blackouts”.
The FT also came out swinging, calling the measures “an indictment of Britain’s politicians”. A column by Jonathan Guthrie described it as householders paying “workers to down tools when manufacturing should be staging a recovery”.
These responses fail to recognise the financial opportunity which demand side response can provide large energy users like manufacturers, data centres, and industrial sites.
As it considers tightening capacity margins, National Grid has a choice in how it should spend its revenue to ensure electricity security. This is revenue collected from all business and household consumers through the network charges added to our electricity bills.
National Grid can take this money, collected from all electricity users, and pay energy companies for them to build and maintain power plants. Or National Grid can instead pay businesses, manufacturers, and other large energy users to provide a valuable, voluntary service.
And these are not small amounts of money. It will be about £10/KW just to participate, and between 25p-£15/KWh for power demand reduced during the peak demand periods. For an industrial site with 20 MW of on-site power demand, just by turning down their demand by 5%, such as adjusting their work schedules around peak demand periods, they could receive thousands of pounds.
Not only that, because turning things off through demand side response is usually cheaper than building and maintaining a power plant to run for just a few high-demand hours a year, network charges for all consumers, businesses and householders, would be lower.
The preference for manufacturing sites should be clear. But it is going to take time to change expectations that we are passive recipients of energy, produced somewhere else and in control of someone else.
The energy system is changing. There are going to be increasing opportunities for energy users to participate in the energy system. Schemes like the Demand Side Balancing Reserve ensure energy users will receive value for this participation. We can all benefit, whether you are a manufacturer, a small businesses, or a bill payer.
The World Cup is one of the most popular sporting events on the planet, but why does an intense penalty shoot out being played in Brazil mean that UK businesses may need to support the national power grid?
The solar eclipse of 1999 saw the strongest grid surge in British history. As the sun began to reappear, the cumulative effect of people going back to their daily tasks, all at the same time, saw an electricity demand surge of 3,000MW in the space of just a few minutes; the equivalent of an extra 4 million people demanding electricity from the system.
15 years later, the intricate forecasting of system stress events continue to play an unseen but integral role in keeping the lights on.
To understand what electricity demand on the system may be like during this summer's World Cup, National Grid have surveyed the population to see who will be watching, looked at data from other events like the Olympic Games and the Royal Wedding to see how the demand for electricity changed, and watched countless hours of football games; all to make sure Britain's lights – and televisions – will stay on.
Even small decisions and details, like how much extra time is awarded and the emotions that players express during the match, can change the way electricity is used in the home.
So what happens during a surge?
Electricity on the grid comes from various different sources, which all have varying flexibility, cost and carbon impact.
For power generation, hydro-electric power stations are by far the quickest to respond, taking about 10 seconds to ramp up, in comparison to nuclear, which can take 48 hours; that's a long time to wait for a cup of tea!
National Grid have the job of mixing and matching these different sources to ensure that there is enough supply to meet demand while you're watching the match.
But with about 20% of the UK's traditional power stations due to close by 2020, National Grid have sought out flexible, innovative ways to match supply and demand.
Businesses helping to keep the lights on
Demand side response (DSR) helps to do just that. Across the country, thousands of industrial and commercial electricity customers will soon be able to help keep the lights, and the television, on.
Businesses that have the flexibility to reduce the amount of electricity they need, by turning off equipment or by using back-up generators (like gas engines or combined heat and power) can now sign up to a scheme to help National Grid manage demand and keep the lights on.
At times when the power generation struggles to meet demand (so called system stress) for example during popular events, or on a very cold and dark, winter night, businesses signed up to the scheme will receive an alert from National Grid to reduce the electricity demand of their site; and in return, they will be paid for this reduction in demand. This demand shift can be immediate, providing very fast responses at times of a few seconds.
This kind of activity is often called smart grid energy because by reducing demand and using existing electricity generating equipment we can avoid building new power stations. All this means that the UK's lights stay on at a lower cost to the consumer.
So next time you and 1.1 million other people reach for the kettle after the match, just think what lengths National Grid and their team of analysts, power stations and now businesses are going to, for you to be able to flick that switch.
The EU calls on member countries to conduct stress tests before winter to work out how vulnerable they would be in the event the crisis over Ukraine leads to a major disruption of natural gas supplies from Russia. Russia is threatening to turn off Ukraine’s gas supply if they do not pay existing debts and pay in advance.
Ukraine acts as a key transit point for about half of European gas supplies from Russia and any restriction on supply will have a dramatic impact on prices. In the UK we rely on gas to meet about 70% of our heat and about 28% of our electricity, with over 45% of this gas imported, leaving us vulnerable to external forces if there was a sudden disruption to the European gas market.
EU member countries will meet in June to discuss what options are available to improve security of supply. The problem with the debate about how to improve the ‘security of our gas supply’ is in the word 'supply'. A new CHPA infographic shows that when these European leaders meet in a few weeks, if they want to address our security of supply, they need to equally think about the security of our demand.
In the UK, we are looking at squeezing more supply from its North Sea gas deposits, building liquefied natural gas terminals to import LNG tankers, and planning to drill hundreds of shale gas wells.
But each of these supply side measures has risks too. The North Sea deposits are in decline, LNG terminals often compete with high-priced Asian markets for LNG tanker deliveries, and shale gas drilling remains highly controversial.
The new CHPA infographic looks at how energy efficiency investments such as combined heat and power (CHP) vastly reduce gas import requirements equal to the production of many supply-side options.
Currently, our UK CHP capacity reduces our imports equal to eight LNG tankers or the annual production of 166 shale gas wells, while improving our balance of trade by more than £165m every year through reduced imports.
It is right to worry about how we will meet our gas demand at a time of increasing concern over gas security, and this infographic reminds us that by continuing to support energy efficiency investments like CHP, we strengthen the UK's energy security and stability.
We would like to welcome you to the CHPA’s new blog, Better Energy.
This blog is devoted to our vision of a more local and less wasteful energy system, an energy system that is dictated by the consumers’ needs rather than have their needs dictated to them.
The UK is at an important crossroads as it transitions to a low-carbon world, with increasing pressures on how we can do so in the most cost-effective way. If we are to deliver on our low-carbon vision, we will need to turn our existing centralised approach on its head, completely rethink how we deliver energy, and put the consumer at the heart of energy policy to create a sustainable and efficient energy system for the future. We hope this blog will help support and ferment new ideas to help us achieve this enormous challenge.
We welcome your participation and input. If you are interested in writing a guest blog, please do not hesitate to contact Claire Wych at Claire.email@example.com