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A recent speech by former Environment Secretary Owen Paterson followed by an article from Telegraph columnist Christopher Booker, urged an increased role for demand management and combined heat and power to more cost-effectively deliver a low-carbon, secure energy system, while lower business energy costs.

CHP's value arises from it capturing and using heat that is otherwise wasted in cooling towers and demand response by moving demand away from times of high demand (and higher pollution) to times of lower demand.

What was curious was that the support for these technologies was linked with scrapping the Climate Change Act. But it is not the Climate Change Act that prevents us using more cost effective emissions reductions tools like CHP and demand response. It is the way we make energy policy.

In fact, the Climate Change Act should drive uptake of efficiency measures and more cost-effective carbon abatement. But instead, time and time again, the most cost-effective options for more secure, lower carbon energy are missed in favour of old, simple approaches: More centralised plant, more generation. In fact, a DECC research paper this year found a number of ways that the most cost-effective demand-side options are often missed in policy making.

And this waste of money continues to occur. Despite DECC’s analysis showing that supporting CHP would reduce consumer and taxpayer costs by millions of pounds, there is a very real risk they will not support the policy, despite a commitment to do so in the 2013 Heat Strategy.

And despite demand side response providing the most cost-effective way to provide the flexible capacity the grid needs, DECC’s designed their Capacity Market scheme around building new, expensive power plants.

Consumers are looking to Government to ensure we are achieving our goals in the most cost-effective way. We need to decarbonise and, if we are to retain the support of voters, we must do so at lowest cost.

In order to change this broken record and a long history of doing things more expensively than we need to, a new Government should rebuild taxpayer and consumer trust by committing to meet our energy policy aims for a secure, decarbonised system at best value. At the CHPA, we call this commitment a ‘Consumer Value Guarantee’.

Under the Consumer Value Guarantee, Ministers would be required to test all energy policies, as part of their Impact Assessments, against alternative demand side options. If a proposal is to build more of a particular generation technology, Ministers would have to compare the cost and benefits of doing something different, such as investing in better building efficiency, and force ministers to ask “Is this the most cost-effective way for us to meet our commitments?”

By taking a new approach, opportunities like demand response, demand reduction, heat networks, waste heat recovery and yes, CHP, will be able to compete on their respective merits and against the only metric which should matter: How we meet our commitments in the Climate Change Act for least cost.

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At Labour’s party conference in Manchester last week, the Labour Shadow Energy Secretary’s announced it would, if elected, refocus the Energy Company Obligation (ECO), ensuring at least 200,000 homes a year to benefit from whole house retrofits over the next Parliament. 

And, in support of empowering local level activity in energy, she promised to “put local authorities and communities in the driving seat” in delivering this ambition of the ECO scheme. Many welcomed this announcement as local authorities are uniquely well placed to draw together their understanding of their local communities, such as the location of the most vulnerable, planning developments and local economic strategies. 

Flint also said a Labour government would ‘make saving energy a national infrastructure priority’. This followed from an almost identical promise from the Liberal Democrats a few weeks previously. This is a key change, considering local action as part of the infrastructure debate, rather than simply large plant and power lines. Well designed, such a policy could allow energy efficiency investments to compete head-to-head with large-scale energy generation for infrastructure funding. 

The risk with the policy is too narrow a definition. Local energy infrastructure goes far beyond insulating homes, which is where ECO is focussed. We need to look both at homes and industry but at end users as part of the whole energy system, not individual islands. If we miss the system-wide perspective there are major energy-saving opportunities that may get overlooked. 

Local authorities are today investing in more efficient local generation, installing innovative heating solutions and balancing local demand to make sure we get the most out of the energy we have. By focussing locally and on the energy needs of their residents, local authorities are able to coordinate a full range of local energy efficiency measures. 

Worryingly, Labour said they will fund interest-free loans for homeowners by using £300m already earmarked for other energy efficiency programmes between 2015 and 2017. Cutting other innovative schemes to fund domestic efficiency investments is a case of robbing Peter to pay Paul. 

Instead, we should be requiring energy generation projects to prove they provide equal or greater benefits to the economy than other energy investments– be it reducing demand, efficient local generation and heat supply, or helping users to manage their power demand actively. 

The three main political parties will need to ensure ‘energy efficiency infrastructure’ includes all of these different energy saving mechanisms if we are going to most cost-effectively reduce demand and the cost of energy bills, for homes and businesses alike.

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DECC have released their energy trends special feature on combined heat and power. Here's an overview of the headlines from the year (2012-2013). 

There was a net increase of 59 schemes, taking the total to more than 2000 in the UK

Capacity remained stable with a tiny decrease of 5MWe in good quality CHP.

However the percentage of renewable fuel rose from 7% to 10% with West Midlands leading the way with a staggering 34% of total fuel used being from renewable sources! 

Natural gas now makes up 67% of fuel use (a 4% decrease.) 

The North West also had a good year with a 'noticeable growth' in combined heat and power thanks to additional capacity being built in the paper sector. The North West also lead the way in heat generation, with their share of 22%! 

Yorkshire and Humber continued to lead the pack, making up 24% of total electricity generation.



Download the full report including graphs and tables here. 

 

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The CHPA were delighted to play host to the Danish District Heating Association last week as they toured Europe to learn from some of the most innovative district heating projects. The delegates heard presentations from DECC who provided an overview of the policy landscape and from the CHPA who discussed their work on district heating and the Independent Heat Customer Protection Scheme.   

Islington Council provided a background on the Bunhill district heat network before taking the delegates on a tour of the site. 

 

 

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Guest blogger Ian Hopkins, Sales and Marketing Director for ENER-G Combined Power tells us how recent changes to the way in which BREEAM awards credits impacts CHP and how NOx emissions should be calculated. 


The internationally renowned Building Research Establishment Environmental Assessment Method for non-domestic and new constructions (BREEAM) was reviewed this year with significant changes in the energy category. The changes have implications for combined heat and power (CHP) says Ian Hopkins, Sales and Marketing Director for ENER-G Combined Power.

  

A high BREEAM assessment score gives you, the developers, designers and building managers, a credible demonstration of the environmental performance of your commercial or industrial buildings.

The new BREEAM assessment no longer specifies a level of renewable energy sources because that is addressed specifically in the latest building regulations. Reflecting this, the number of available BREEAM credits under carbon reduction has been reduced from 15 to 12 - shifting the weighting of energy impacts in BREEAM from 19% of the entire rating to 15%.

Credit where it’s due

A building’s energy performance rating under BREEAM is now calculated using the building regulations of the country where the building is located. This replaces the notional baseline used previously regardless of the building’s UK location.

BREEAM energy performance credits are based on a building’s heating and cooling energy demand, primary energy consumption and total carbon dioxide emissions – all areas where CHP can have an impact. These are compared with the relevant national building regulations baseline to give an Energy Performance Ratio (EPR). The calculation should be determined by an accredited energy assessor using software approved under the National Calculation Methodology for the relevant country:

      Wales

       Scotland

      Northern Ireland

      England

Down to zero

BREEAM assessment credits for conducting feasibility studies for low and zero carbon (LZC) measures – which include CHP - fall under a new category: low carbon design. This is to ensure that a thorough review of LZC informs the building design at an early stage.

Where CHP is involved, an LZC study should include:

    Energy from the CHP.

    CHP carbon dioxide savings.

    CHP cost accounting for payback.               

    Planning criteria, including land use and noise.

    Feasibility of exporting heat/electricity.

    Any available grants.       

    All appropriate, optional energy technologies.        

    Reasons for excluding other technologies.

    Where appropriate, connecting the proposed building to an existing local community source of heat or power.

    Specifying the CHP with the potential to export excess heat or power.

A heat map for the UK is available for this. More detailed maps are often available locally.

Pollution (Pol 02) - NOx Emissions Calculation Methodology

NOx emissions are pollutant gases which are formed by the combustion fossil fuels. These gases are considered hazardous to human health and the ecosystem. For the purpose of BREEAM, NOx emissions levels are required in units -mg/kWh and measured at 0% oxygen levels on a dry basis.

For CHP technology, it is only necessary to consider the heat-related nitrogen oxide (NOx) emissions towards the BREEAM pollution abatement score. The methodology determines the net NOx emissions from the CHP’s electricity generation compared with electricity generation from the grid and allocates this amount to the heat generation of the CHP, which is then compared with the benchmark scale.

Heat-related NOx in mg/kWhheat can be obtained by using the following formula:(X) = (A - B) / C

Where:

X = NOx emissions per unit of heat supplied (mg/kWhheat)

A = NOx emissions per unit of electricity generated (mg/kWhelec) by the CHP Unit

B = NOx if the full load was emissions per unit of electricity supplied from the grid - 617 (mg/kWhelec)

(Note: The Grid Electricity figure under the previous BREEAM-2011 Guide was 750 mg/kWhelec)

C = Ratio of heat to electricity output of the CHP unit

Note: Where the value of ‘X’ is calculated to be negative, it should be assumed to be zero.

The heat-related component is then compared with the scale to determine the credit score.

 

Calculating NOx emission levels where CHP is operating is conjunction with other heating systems, an average NOx emission rate is to be used on the ratio or power output from each of the heating source, i.e. simply multiply the emissions of each system by the percentage of heat demand it supplies and then total these values. This is usually the case at most of the sites where the CHP system has been sized to meet the base energy (electricity/heating) demand and therefore a secondary system (usually boilers) is required. The following formula can be used for such cases:

Average NOx Emission Rate = (N1 x (H1/HT)) + (N2 x (H2/HT)) +  …… + (Nn x (Hn/HT))

Where:

N1 = NOx emission rate for heat source 1

N2 = NOx emission rate for heat source 2

Nn = NOx emission rate for heat source n

HT = Total heat output from all sources

H1 = Heat Output from Source 1

H2 = Heat Output from Source 2

Hn = Heat Output from Source n

Assessment Criteria and Credit Allocations

Building Types

NOx Emissions for heating and hot water (mg/kWhheat)

Credits

Industrial (offices)

≤70

1

Industrial (operational)

≤70

1

Non-industrial (all building types)

≤100

1

Non-industrial (all building types)

≤70

2

Non-industrial (all building types)

≤40

3

 

 

Discover more about preparing for CHP with your free eGuide: CHP project planning: Assessing planning and regulatory issues

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We learned from the Telegraph this week that 10 wind farms have each been paid ‘constraint payments’ of more than £3million over the past three years to shut down their turbines, with one alone receiving £11 million.

The reason for these payments is that generation and demand on an electricity network must be balanced from second to second. When demand is not sufficient to take up this generation, National Grid has to find a cost-effective way to reduce the electricity generated. They do this through constraint payments. As variable renewable generation such as wind and solar penetration increases from 18%, the need for these capacity services grows. 

In order for National Grid to successfully persuade generators to shut off, it needs to offer a price that is greater than the price those generators would have gotten for selling their electricity in the market. Renewable generators, like wind turbines, also receive a subsidy for every megawatt hour they generate, so National Grid has to pay more.

In future, the aim is to store this wind energy using batteries for when we need it. But battery technology, while progressing, is still not ready for cost-effective storage. 

But there is another way to better balance intermittent renewables that is already being successfully used today, across the North Sea in Denmark.

Denmark has seen a major expansion in wind electrical generation capacity to already more than 30% of capacity. But thanks to with 60% of household heating provided by heat networks, with large thermal stores, Denmark is able to manage this variable demand in a more cost effective way.

Thermal stores are a large version of a household hot water tank, and heat is very cheap to store. Using thermal stores not only reduces the cost of balancing the electricity system, and therefore the cost to electricity consumers’ bills. It reduces consumers’ heating bills too.

When the electricity grid has too much power, instead of using constraint payments, heat networks can turn on electric boilers or heat pumps and store the heat for when customers need it. So, we spend less money on constraint payments and have fewer charges on our electricity bills. And because the heat networks are buying electricity when it’s at its cheapest, thanks to the excess supply, the heat network customers can lower the cost of their heating.

When the electricity grid does not have enough power, a heat network can use highly-efficient combined heat and power to generate high-value electricity and store the heat for when they need it. Once again, the value can be used to lower heat network customers’ heating bills.

And this integrated energy opportunity does not just apply to heat networks. Electric boilers and heat pumps in homes can provide the same service when there is excess demand, storing the excess heat in hot water tanks. An innovative project on the Sheltand Islands run by SSE is doing this already. Household-sized combined heat and power can help to generate electricity when the grid needs it and store heat as well.

These are great examples of how a system approach to how we deliver energy can help to reduce costs for consumers. We just need start thinking about our heat and electricity as cohesive whole, instead of as two separate silos. 

Above, we see how in Denmark, electric boilers (shown here in orange) turn on when the electricity spot price falls. 

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Two weeks ago, the Government reported progress on a part of its flagship Green Deal scheme - the catchily entitled Green Deal Home Improvement Fund (or GDHIF for short). The Government reported that of the total £120m budget, £43m had been spent in the first six weeks and over £50m worth of vouchers had been applied for[i]. The government said it would pay attention to budget uptake and continue to report. Just one week later, the Government announced that the GDHIF was closed with immediate effect. The reason - the entire remainder of the budget, some £60 million, had been spent in just two days[ii]. That is an astonishing 29 fold increase in uptake.

So what happened? It seems that a large number of applications for funds were made speculatively by companies on behalf of unknowing householders.  All a Green Deal installer needs is their reference number and an Energy Performance Certificate number which can be obtained from the Landmark register. There is no need for the homeowner's approval.

It looks like companies have speculative applications so that they can approach a homeowner and say that they already have a grant of £6,000 to help them improve their home. Of course, the homeowner can refuse and so there is a real likelihood that all the money that has been claimed will not get spent.

The criticism that has been levelled at the government for creating a stopstart policy preventing the establishment of  a stable, sustainable industry may be vey misplaced. The trigger of the stop-start seems to be that some companies figured out a clever way to block book the budget for themselves. Whilst they may feel very pleased with their ingenuity these companies are fuelling a growing problem: The erosion of trust between government and industry.

When the intent of a policy gets abused as seems to be the case with the GDHIF, the inevitable result is that Government will become more wary of industry and seek to design policy with ever increasing safeguards. Those safeguards translate into administrative bureaucracy and cost for industry, Government and taxpayers, with more checks and more evidence. The result? Less investment is made for greater cost.

Of course, those  that took advantage of the loophole may say 'we have done nothing wrong, we have acted within the law'. But, it feels rather similar to the companies who say they pay the legally required amount of tax. Those who seek to squeeze the most out of policy risk are doing their own industry a disservice. It is all too easy to point the finger of blame at government but as we increasingly rely on policy solutions to correct market failures, especially for energy efficiency investments, perhaps on this occasion the industry needs to look at itself.

 


 

 
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In the news this week Boris Johnson, Mayor of London warned that population growth in London could cause blackouts in the not too distant future. His solution? A £210m investment in substations.

The Mayor’s new London Infrastructure Plan outlined that unprecedented growth in certain areas of London had pushed substations to their capacity and that there is now an urgent need to upgrade so that potential investment can be unlocked for these development areas.

It is clear that this investment is needed, but is there more that we can be doing to keep the cost of the transformation of our energy system to a minimum?

In a live interview with BBC London Radio’s Breakfast Show, CHPA Director Tim Rotheray explains;

“When people talk about energy they often think about electricity but, electricity is only part of the energy we use. Half of our energy demand is heat, we need to think about the energy we use holistically so we can find the most cost effective way of meeting consumers’ needs.”  

He suggests that by creating more user participation in the system we can reduce the amount that needs to be invested in infrastructure and have a more secure energy supply.

Rotheray highlighted the recent case study from Royal Festival Hall who engaged with National Grid in an experiment to see if at times of peak system demand the Hall could control its own demand to reduce stress on the system. When needed the Hall turned off its air conditioning units, with very limit impact on the ambient temperature or performances. The trial was deemed a success.

Boris plans for 25% of London’s energy needs to be produced locally by 2025, what we need to consider now is how heat can form part of the solution to the electricity capacity crunch. 

One way in which heat production can support electricity capacity is through the use of combined heat and power. The supply can be tailored to the consumer, it does not require billions of pounds of investment upfront, unlike the cost of building new nuclear and gas fired power stations, and it can support the grid in times of stress by allowing companies to switch from taking electricity from the grid, to using CHP, or by switching on to supply extra capacity to the grid.

There are intelligent ways that we can tackle the capacity crunch that could be far cheaper and put more power into the hands of the consumer; substations are not the only option.  

 

 

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Guest blogger Ian Hopkins, Sales and Marketing Director for ENER-G Combined Power tells us why CHP remains on the front line as a way to boost environmental performance scores under BREEAM despite 'major change' to the energy category of the assessment. 

 


 

A revised environmental scorecard for buildings still values CHP, despite lower weighting for energy efficiency.

TheBuilding Research Establishment Environmental Assessment Method(BREEAM) is a means devised by consultancy, the Building Research Establishment (BRE), to score the performance of non-domestic buildings under a range of environmental and sustainability criteria.

It covers nine areas, including building management, water use, transport issues and - crucially for combined heat and power considerations - energy and carbon emissions. Its aim is to go beyond regulatory obligations and keep in step with advances in technology and best practice.

Highly rated

BREEAM is highly rated by developers, designers and building managers as a way to demonstrate the environmental credentials of their buildings.

Its scoring system is “transparent, flexible, easy to understand and supported by evidence-based science and research,” according to its deviser BRE. BREEAM has been reviewed for a second time this year - the first time since 2008. Inevitably, there are significant changes to energy assessment.

Fundamentally the new scoring system has changed little. Credits are gained by outstripping a baseline building standard. Each section has an environmental weighting. The total of the weighted scores is translated into one of five ratings from “pass” to “outstanding.”

Change in climate

One area of “major change", according to BRE, is in the energy category.

The 2014 revision has ended the use of a single energy performance baseline throughout the UK. BREEAM will now use the national building regulations for Scotland, Wales and Northern Ireland to set a baseline for each of the devolved administrations. (Note - Previously, under BREEAM 2011 the Part L 2010 notional building was used as the baseline for all buildings assessed under BREEAM, regardless of their UK country location).

Another change is the end of a requirement - under the former low or zero carbon (LZC) technologies section (Ene04) - that some of the building’s energy was from renewable sources.

That obligation is now addressed in recently beefed up building regulations. Following on from those changes are:

       The weighting for energy under BREEAM has been reduced from 19% to 15%.

       The number of credits available under the reduction of energy use and carbon emission section (Ene01) has been cut from 15 to 12.          

       LZC credit has been replaced with a Low Carbon Design credit that favours energy conservation from the building’s fabric. But there remains credit for an LZC feasibility study for a proposed building and implementation of its findings. In further detail, the section Ene04- Low Carbon Design has a total of 3 credits. And the section is split into two parts – 1) Passive Design (2 Credits) 2) Low or Zero Carbon Technologies (1 Credit). LZC percentage carbon reduction targets (which were part of BREEAM-2011- Ene-04 LZC issue) have now been removed from the new version.

       The weighting for Pollution remains unchanged at 10% and NOx emissions were reviewed, but no changes in NOx levels or credits were made.        

Although each credit under ENE01 is now worth less, the criteria for acquiring them are basically unchanged, so achieving excellent is no more or less difficult.

Compliance considerations

For CHP compliance with the Low Carbon Design criteria it is necessary to consider:

       Annual energy generated from CHP

       Life cycle cost of the CHP including payback

       Local planning criteria, including land use and noise 

       Feasibility of exporting heat and electricity

       Available grants         

       All appropriate LZC technologies and reasons for excluding any of them

You should also consider possibilities for:

       Connecting the proposed building to an existing community CHP system or source of waste heat or power.

       Specifying a CHP system or source of heat or power waste, with the potential to export excess heat or power via a local community energy scheme.            


 

Ian Hopkins is the Sales and Marketing Director at ENER-G Combined Power. For more useful guidance, check out ENER-G Combined Power’s free e-magazine “Regenerate” is out. Click here to read it.

 

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-      The oldest district heating scheme dates back to the 1300s when a village in France set up a network of wooden pipes to distribute warm water from a geothermal source. 700 years later and the UK is just catching up with plans for the UK's first geothermal district heating scheme announced this year.

-      The more modern version of district heating was invented by Birdsill Holly in 1877. Holly designed a system that used a central boiler to generate steam that was then pumped to homes and commercial properties connected together by a pipe network running along several main streets in the US town of Lockport.

-      Here in the UK, district heating became a popular choice for use in high rise buildings and saw a boom during the 60s and 70s.

-      Now, the UK has around 2,000 heat networks that connected around 210,000 homes and 1,700 businesses – a little under 2% of all properties in the UK.

-      With support from the Government, the technology is set to make a comeback, with over 50 local authorities and counting looking into the feasibility of heat networks in their area.  

-      Stats from DECC show that there is a significant opportunity for district heating in the UK, with potential as big as 20% by 2030 and 40% by 2050

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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. 

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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. 

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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.

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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. 

CHPA-infographic_v2-02_20140523-094436_1.png

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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.wych@chpa.co.uk

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