The Energyst by The Energyst

theenergyst.com

Aggregator crunch: Consolidation ahead as revenues fluctuate

April/May 2017

Local authorities: Councils eye energy market entry

Trouble in store: Rough storage outage hits gas prices

â&#x20AC;&#x153;The consequences for those who generate their own power could be devastating Triad cutsâ&#x20AC;? p16

INSIDE THIS ISSUE

Technology – blockchain

Because information is visible to every participant in the chain, every change, disruption, delay and movement is transparent

18 Policy & Legislation Analysis by the Climate Change Committee suggests that decarbonisation costs are ‘minimal’ for most firms – but they are set to double

Gas & Electricity

Why organisations such as aggregators, local authorities and renewable generators are obtaining electricity supply licences

Demand-side response

Energy Finance

Will aggregators without a supply licence struggle to survive as demand response revenues are commoditised?

Will the finance director buy into your energy business case, asks ESTA

06 News & Comment

Tidal power is ‘the most important renewable power source to be supported’

Engineers tell government to pay for efficiency, storage and tidal power

theenergyst.com

Water Management

Aggregator crunch: Consolidation ahead as revenues fluctuate

April/May 2017

Local authorities: Councils eye energy market entry

Trouble in store: Rough storage outage hits gas prices

“The consequences for those who generate their own power could be devastating Triad cuts” p16

Insight

ND Metering Solutions’ Kris Szajdzicki provides evidence that smart meters can indeed give gross errors, particularly in I&C applications

Accessing your water consumption in one place will make it easier to make informed decisions to reduce usage and cut costs

Front Cover

Kinect Energy Group talks about transforming uncertainty into opportunity

Gas & Electricity

Compressed Air

Insight

Energy Finance

Water Management

Policy & Legislation

HVAC

Product News

Demand-side Response

Lighting

Q&A

News & Comment

To subscribe please visit: theenergyst.com/subscribe theenergyst.com

April/May 2017

COMMENT

Utilities eye land grab as reality bites Buying energy used to be all about wholesale market timing and hedging. This is no longer the case, at least for electricity, where the wholesale proportion is now only half of the bill, due to rising non-commodity costs such as transmission and distribution, green initiatives and taxes. In fact Dieter Helm, Professor of Energy Policy and Official Fellow in Economics, New College, Oxford, recently commented that “the wholesale market will largely wither away. The economics of supply are gradually migrating to the economics of broadband – a capacity not an energy market.” Helm thinks that development will fundamentally change what it is to be an energy retailer. It also opens up the possibility to new entrants such as TV companies, telcos, supermarkets and online retailers.

Some utilities are looking seriously at diversification – not just within their current sectors Paul Fitzgerald, sales and marketing director at billing firm Junifer Systems, believes “it will be a multi-utility environment in the next 5-10 years. Companies like Sky already provide TV, broadband and telephony – energy is a natural progression for companies like that. Telcos many years ago moved from a single product and that is the nature of how things progress. I see the same thing happening in energy.” Helm, meanwhile, floats the idea of a company like Amazon entering the fray. If energy firms worry about their margins now, they will have a serious

Editor Tim McManan-Smith tim@energystmedia.com t: 020 3714 4450 m: 07818 574308

Sales director Steve Swaine steve@energystmedia.com t: 020 3714 4451 m: 07818 574300

Contributing editor Brendan Coyne brendan@energystmedia.com t: 020 3771 1267 m: 07557 109724

Commercial manager Daniel Coyne daniel@energystmedia.com t: 020 3751 7863 m: 07557 109476

Production Paul Lindsell production@energystmedia.com m: 07790 434813

Circulation enquiries circulation@energystmedia.com

4 April/May 2017

challenge on their hands should that scenario comes to pass. From their perspective, there is already something of a landgrab taking place. Some utilities are looking seriously at diversification – not just within their current sectors. Water market competition raises the possibility of energy suppliers bundling water. That may make sense: our recent Directors’ Report found almost nine in 10 firms would buy energy and water from a single provider if it saved money. It is already happening. Regent Water, a subsidiary of Regent Gas, was granted its water supply and sewerage licence by Ofwat in February. It may well be that water companies are looking at energy supply licences too. Water suppliers have heavyweight billing and back office systems in place – and, crucially, customer relationships. Given the energy intensity of their operations, they are also highly skilled energy buyers. Meanwhile, demand-side response aggregators are looking at supply licences and suppliers – and DNOs – are becoming aggregators. Competition is usually good news for consumers. But it appears the market and its players are on the cusp of fundamental change. It will be interesting to see which utilities move fastest, and which are left standing.

Energyst Media Ltd, PO BOX 420, Reigate, Surrey RH2 2DU Registered in England & Wales – 8667229 Registered at Stationers Hall – ISSN 0964 8321 Printed by Warners (Midlands) plc No part of this publication may be reproduced without the written permission of the publishers. The opinions expressed in this publication are not necessarily those of the publishers. The Energyst is a controlled circulation magazine available to selected professionals interested in energy, who fall within the publisher’s terms of control. For those outside of these terms, annual subscriptions is £60 including postage in the UK. For all subscriptions outside the UK the annual subscription is £120 including postage.

theenergyst.com

NEWS & COMMENT

Engineers tell government to pay for energy efficiency, storage and tidal power A survey of the UK’s main engineering bodies has urged government to provide energy efficiency payments or tax breaks to businesses, communities and households that can demonstrate proven reductions in demand. The Energy Saving Incentive scheme is one of many recommendations based on the views of 1,300 engineers from 35 engineering bodies in response to the government’s Industrial Strategy consultation. The engineers also urged government to give teeth to existing energy efficiency regulations. Esos, notes the report, could unlock more than £31bn of savings over the next 13 years – if companies were required to act upon mandatory energy audits. Focusing on energy efficiency and productivity will be the cheapest way of decarbonising the economy and increasing

Grid confirms Triad dates National Grid has confirmed that last winter’s Triad periods fell at 5-5.30pm on Monday 5 December, Thursday 5 January and Monday 23 January. Businesses will now find out how well their Triad alerts provider performed. No provider wants to miss a Triad, or risk their credibility. Equally, sending out too many Triad alerts risks annoying customers, because they will then ramp down equipment or ramp up onsite generation, often generators, at a loss. For some businesses, the costs of missing a Triad period are such that they are moving to cut consumption altogether during the 4-7pm winter peak.

6 April/May 2017

Tidal power is ‘the most important renewable power source to be supported’ Siemen’s SeaGen has achieved 5GWh of tidal power generation since starting operation at Strangford Lough in Northern Ireland

UK competitiveness the report suggests. It urged policymakers to take a systemwide approach to energy with particular focus on heat. Lamenting the scrapping of carbon capture and storage support, the report reiterated views that CCS would be “critical” for meeting carbon budgets after 2023 and likely “essential” in decarbonising heat. The engineers also backed

support for small nuclear reactors, heat networks and hydrogen trials. According to survey respondents, tidal power is “the most important renewable power source to be supported” as it is “reliable and does not require back-up, and has huge potential in the UK”. While the UK is a leader in offshore wind, the report also highlighted the fact that the value of its supply chain

is mainly heading offshore. Meanwhile, three quarters (74%) of respondents said that government should prioritise support for clean energy technologies and storage via the £1bn Industrial Strategy Challenge Fund, a view government appears to share. The report also recommends public procurement should focus on best value over lowest cost, and to enable smaller firms to participate in tenders.

Broker Pulse acquired by telecom firm Arrow Energy Broker Pulse has been acquired by business communications firm Arrow for an undisclosed sum. Pulse, owned by Ben Dhesi and wife Purdeep Kang, made a profit after tax of £577,982 in the year to 30 September 2015, according to Companies House filings, up 220% on the previous year. The company has notched up significant growth in recent years. It was founded in 2009 by Dhesi and Dorian Nineberg, with Dhesi acquiring Nineberg’s shareholding in August 2015. That year the firm won The Energy Buyer of the Year award at the UK Energy Awards and followed up in 2016 with the the Technology,

Internet & Controls Innovation of the Year at the UK Energy Awards for its POD digital energy management platform. The deal is Arrow’s eighth acquisition in the past seven years and, according to the firm, makes Arrow one of few companies in the UK able to provide a full energy, telecoms and IT consultancy. The company, which last year, received investment from private equity company Growth Capital Partners, looks set to continue that buy-build strategy, with the deal including a “significant” acquisition fund. “We identified the energy market as a strategic opportunity a while ago but

wanted to partner with a company whose ethos and values were similar to Arrow’s,” said CEO Chris Russell. “Pulse provides a unique level of service and consultancy and this is reflected in their loyal customer base.” Pulse will operate as a separate business unit and its employees will continue to look after their customers. “We are excited by the opportunities that working with Arrow will bring,” said Dhesi. “Both companies seek to differentiate themselves by providing sound advice and quality products and a service that customers can rely on.” Arrow has some 4,000 customers that it can now target to sell energy services.

theenergyst.com

Sponsored column

National Grid procures 138.6MW to balance grid in summer National Grid has procured 138.6MW of fixed demand turn-up (DTU) provision, one of the ways it manages excess generation over spring and summer. Six companies were successful of nine firms that tendered a total of 262MW. While the headline procurement is less than last year’s tender round of 309 MW, the DTU service has evolved so that companies can also bid in their flexibility on a fortnightly basis. Simec Lochaber Hydropower secured contracts for 30MW; SSE secured contracts for 29.4MW; Engie won 15MW; MVV Environment Ridham won 20MW; Restore won 25MW; Alkane energy won 19.2MW. Those successful bidders will in the main be paid an

availability fee of £1.50 (though Engie has an availability fee of £1.75/MWh for 2MW of capacity). Their utilisation rates range from £60/MWh to £97/ MWh, with prices submitted, speed of response, duration of response and location key factors in assessing bids, according to National Grid. Around 54MW of fixed DTU procured will come from load response; 37MW from standby/ back up generation with the remainder coming from balancing support generation. While companies including Centrica, Enernoc and Flexitricity were unsuccessful in the fixed bidding round, it is likely that they will reenter assets into the fortnightly tender, with the DTU service running from 27 March to 28 October in 2017.

Former Npower CEO joins blockchain energy firm Former Npower CEO Paul Massara (left) has joined blockchain energy startup Electron as a director. The firm, backed by Innovate UK as well as private funding, is building a demand-side response platform as well as a switching system for meter supply points that it believes could make the switching process 20 times faster. Electron’s focus is on enabling the energy system to operate on a peer-to-peer basis wherever possible. The firm believes that blockchain, a system of validating and recording direct transactions between peers, could transform the energy system from one that revolves around a central intermediary, to a

theenergyst.com theenergyst.com

fully decentralised model. In terms of demand-side response, blockchain could, in theory, deliver a trading platform that enables flexibility to be traded collaboratively without handing the levers of power to any single entity, ie, National Grid. Electron believes that could enable a more liquid, transparent and competitive market. However, while the energy system is already decentralising in terms of generation, moving to a blockchain model would represent a seismic structural shift, given the critical role the system operator currently performs. Nevertheless, Electron is trying to prove that model could work and recently told The Energyst it will have “fully scaled prototypes” in market by next summer.

Incoming volatility: Act now to turn risk into reward A volatile energy market requires large businesses and organisations to rethink their energy strategy and take a longer-term view. Do it now, advises Mike Chessum (pictured), sales director, Industrial & Commercial Energy and Services at British Gas Business. As a former energy manager, with more than 20 years’ experience in the sector, Mike Chessum understands the challenges of persuading the board to take a long-term view on energy. But the lines are blurring between energy procurement, management and flexibility. As prices become more volatile, that creates an opportunity both to cut cost and to generate revenue. Maximising those opportunities, he says, requires a more sophisticated approach to procurement. Focus less on 1-2% price efficiencies, advises Chessum, and instead unlock double-digit savings by recognising that procurement, energy efficiency and flexibility are now intrinsically linked. In that regard, organisations that employ energy managers will find them increasingly valuable over the next few years, Chessum believes. Even those without dedicated resource can manage consumption via a plethora of user-friendly apps and software, and by harnessing the expertise available from service-focused suppliers. But devising a robust, longer-term and agile energy strategy is now paramount. “Many mid-sized companies don’t take a long-term view on energy. They move from year to year almost on a burning platform, depending on the level of volatility in the

market,” says Chessum. “But now more than ever, they need to take a strategic look at the opportunities and risks, because so many things are changing,” he says. “With the changes in the UK energy generation mix, prices have become more volatile and non-commodity costs continue to rise.” “By taking that strategic review and mapping out the influences on their business, companies will be in a much stronger place to manage incoming change,” he adds. Non-commodity costs, such as network charges and policy costs, now make up more than half of the power bill. That may be well known, says Chessum, but avoidance strategies take time to action. The same applies to generating revenue from assets by selling flexibility back to various markets. “Assets are an under-utilised resource,” says Chessum. “Start now and it may be possible to bring some online by this winter. But, for sure,” he warns, “If you don’t connect assets over the next five years, as the market becomes more flexible, you will be left behind.” Even with network charges such as Triad under review, Chessum thinks those with connected assets will gain financially, regardless of how the revenue is allocated. “Act now and you will be in a position to rapidly adapt your strategy to stay ahead of the competition.” To find out how British Gas Business can help save you money through your energy procurement strategy, data insights or operational flexibility, call us on: 0845 070 3720. For further information on managing your business’ energy more generally, visit britishgas.co.uk/business

NEWS & COMMENT

UK gas and power prices hit two-year highs but soften as system copes with winter UK power prices in the first three months of 2017 averaged almost a third higher than the same period a year earlier, according to latest analysis from pricing firm ICIS. Gas prices for delivery over the next year were up 42%. However, longer term prices began to fall from February as market fears over winter capacity and gas storage issues receded. Concerns over generation capacity had driven up power prices across 2016, according to ICIS. That trend continued into 2017 with the ICIS Power Index (IPI) average over Q1 2017 up 32% year on year to £46.192 per megawatt hour (MWh) – the highest quarterly average since Q4 2014. Meanwhile, ongoing technical issues at Rough, the UK’s biggest

Event to address core energy issues The Energyst Event will equip energy users with fit-for-purpose knowledge, insight and solutions in an exhibition and conference that is focussed solely on energy. It takes place 17-18 April 2018 at the National Motorcycle Museum, Birmingham. The event will explore and prepare the visitor for the coming of a truly integrated energy management system. The core areas of procurement, efficiency and flexibility linked by data analytics and AMR will form the backbone of the event. If you are looking at ways to mitgate rising costs by reducing and shifiting consumptions patterns and effective procurement, find out more at theenergystevent.com

8 April/May 2017

Generation capacity concerns drive up prices gas storage facility, influenced gas prices, driving them to average 46.071 pence per therm (p/th) over Q1, the highest since Q2 2015, according to ICIS. However, the firm said

both the power and gas systems’ ability to cope had reassured markets with longer term contract prices softening from February. Furthermore, the French

Small firms growing tired of constant broker calls Small businesses appear to be tiring of constant calls from energy brokers, new research by Ofgem suggests. Yet at least a quarter are still paying over the odds for their energy. A survey of 1,254 small businesses found brokers reached fewer small business in 2016 than in 2015 (down to 50% of those surveyed from 64%). Despite that, they influenced the same percentage of overall contracts (28%) as the previous year. “However,” states the report, “brokers appear to have worked harder to maintain their level of influence”; the perceived number of calls from brokers has increased significantly (14% recalled 50+ calls in 2014, increasing to 19% in 2015 and 22% in 2016). While those that used

brokers were satisfied with them, negative feelings in the broader small business market have intensified in the past few years. Some 50% cited very or quite negative perceptions of brokers in 2016 versus 46% in 2015 and 44% in 2014. The report mooted a correlation between increase in negativity and perceived increase in calls from brokers. About four in 10 small firms (39%) renegotiated contracts with their current supplier compared to holding a first-time contract with a new supplier (31%). However, one in four businesses (26%) remain on a rollover contract, which means they are likely paying well over the odds for energy. The smallest firms (fewer than five employees) were most likely to let that happen.

nuclear fleet is now back online, and two damaged interconnectors have been returned to full capacity, adding system headroom and dampening prices. The final Q1 power value, on 31 March, was £45.283/ MWh, a rise of 33% from 31 December 2016. Meanwhile the value of gas delivered over the next calendar year rose by 36% to finish at 43.175 p/th. For next winter, ICIS suggested the low clearing price of the early capacity auction, at £6.95/ kW, might have implications for wholesale power prices as it may be too low to incentivise old coal plant operators, already struggling with spreads. The firm said longer term gas price forecasts remain bearish.

New awards for energy marketing The launch of the Energy Marketing Awards, will see energy marketers recognised for their contribution to motivating people to make better energy choices. The awards take place on Tuesday 6 February 2018, at the Banking Hall, London. Entries need to be submitted by 8 September 2017. While the energy system is rapidly changing, the big challenge is the need to convince consumers – at home and in business – to take an active interest in a topic they’ve long taken for granted. The new Energy Marketing Awards have been created to: • recognise companies creating marketing that motivates people towards solving our energy challenges • show others what’s possible with engaging marketing For further information visit energymarketingawards.com

theenergyst.com

Energy intensives exempted from low carbon support costs, smaller firms to pick up tab Energy intensive industries will be exempted from contributing towards subsidies for low carbon and renewable generation via the Contracts for Difference (CfD) scheme. The Department For Business, Energy & Industrial Strategy said this will save 130 eligible companies around £100m a year. Other businesses will pick up the tab. According to government figures, the measure will add £900/year to an average medium business electricity bill in 2017/18, rising to £1,600 the following year. By 2021 that will have risen to £3,200 per annum, based on a business using 11GWh per year. The CfD scheme replaces the renewables obligation (RO) and pays generators with contracts a guaranteed price for producing power. The so-called strike price varies by technology. While

CfD costs currently make up small fraction of the overall power bill, they are set to rise

New chief executive for Eon UK as Tony Cocker moves on Eon Climate & Renewables boss Michael Lewis has replaced Tony Cocker at the helm of the energy company’s UK business. Cocker, who took charge of Eon UK in 2011 following three years at the head of its energy trading arm in Düsseldorf, will leave the firm in July. He joined what was then Powergen in 1997 as head of corporate strategy. He has a doctorate from Lincoln College, Oxford, for which he researched the shape of water droplets, which may or may not have helped his early career at the Bass brewery. Lewis, an expert in engineering, carbon and finance, has been with the firm for almost 25 years, playing a key role in

theenergyst.com

growing its renewables business. Eon group CEO Johannes Teyssen thanked Cocker for his “outstanding contribution, not only to our UK business but also to our company as a whole. During his time leading our UK business, Tony helped make customer focus part of our DNA.” Cocker said it was time to take on new challenges and stated he will now pursue “a portfolio career”. “I am personally delighted that Michael is to succeed me,” said Cocker. Eon board member Karsten Wildberger said Lewis’s “wealth of experience will help to continue to accelerate our company’s transformation in the UK.”

significantly over coming years as low carbon plant is constructed and commissioned.

Government announced the plan to protect energy intensive industries from rising policy costs in 2011. It consulted again on those plans last year. With legislation now laid for the CfD element, BEIS said it was negotiating potential exemptions for other support levies, the feed in tariff and the RO, and would make an announcement ‘in due course’. While some business groups will complain that they are being burdened with more policy costs, energy minister Jesse Norman said that government needed to support heavy industry and its contribution to UK GDP. “These industries are worth £52bn to the UK economy, support 600,000 jobs and produce essential products that people use every day,” said Norman. “That is why we have taken this action to support them.”

Energy Services Group acquires Utiligroup US firm Energy Services Group has acquired UK-based Utiligroup for a reported £100m. The Lancashire firm provides data management and software to energy companies around billing and wholesale services as well as sales and pricing. Its ‘supplier in a box’ solutions have helped a number of small energy suppliers enter the market, and it is involved with several local authority energy companies. Energy Services Group is backed by US private equity group Accel-KKR, which is beefing up its energy technology holdings. Last year it acquired US energy data firm Latitude Technologies. The Utiligroup acquisition gives the operation a more global footprint, with operations in the US, Japan and the UK, which ESG said gives energy suppliers and resellers greater geographical opportunities. The UK entity will continue operations as Utiligroup, and CEO Matthew Hirst (left) will remain at the helm of the UK business, reporting to ESG CEO Phil Galati. Hirst will also join the board of directors of ESG.

April/May 2017

INSIGHT

Can you trust your smart meter readings? NDMetering Solutions’ founder and director Kris Szajdzicki provides evidence that smart meters can indeed give gross errors, sometimes six times too high True or false? Potential for gross metering error in I&C applications

ecent press reports suggest that some types of electricity meter (including so-called ‘smart’ meters) are susceptible to gross errors when feeding low-energy lamps, variable-speed drives and other equipment that generates electromagnetic interference. This review concludes that measurement errors do occur; that their magnitude depends upon the current-sensing technology used by the meter; and that the effect may be negligible in normal situations in the domestic market. However, potential for gross error remains in unfavourable circumstances, particularly in industrial or commercial installations or where there is deliberate intent to fool the meter. For quite some time now, rumours have been rife

10 April/May 2017

about electronic energy meters giving incorrect readings, usually excessively high readings; in Holland, Germany, Sweden and other countries. In some cases, it appears that legal action is even being considered. Professor Leferink of the University of Twente in Holland decided to investigate whether such meters can indeed give false readings. Tests were carried using various loads such as CFL lamps, heaters, LED lamps and dimmers. Nine different static meters, made between 2004 and 2014, were used. As I understand, some were purchased in the UK and some were MID approved. Five of these meters gave readings that were much higher than the actual consumption, up to 582% high. However, two of the meters read 30% low. All the

For quite some time now, rumours have been rife about electronic energy meters giving incorrect readings… In some cases, it appears that legal action is even being considered

readings were reproducible. The greatest errors were seen with energy saving light bulbs and LED bulbs controlled by a dimmer. The errors resulted from the meter’s design. If a Rogowski sensor (air cored coil) was used to measure the current, the meters read high; Hall Effect sensors caused the meter sensors to read low. Another example was where a VSD controlled fan was being used; the VSD generated a fast common mode voltage and current, which lead to a 60% reduction in the reading of an adjacent meter. Replacing the VSD by another make solved the problem. The errors were caused by conducted and radiated emissions in the range below 150KHz. There are several different factors behind this problem; the use of electronic equipment directed connected to the mains, mains communications and a discrepancy between standards. Discrepancy between standards Permissible EMC levels vary between standards, depending on the industry promoting the standard. Manufacturers of VSD would prefer for a relatively high emissions levels to be acceptable; manufacturers of PLC equipment would like the mains environment to be as quite as possible – apart from their signals. Other manufacturers of electronic equipment that connect »

theenergyst.com

INSIGHT utilities are fully aware of to the mains, particularly these potential errors. Thus measuring equipment, would smart meters installed in the prefer that EMC levels – both UK should not be affected. conducted and radiated – were kept to a minimum. Mains communications (PLC) IEC TC77 (and CENELEC PLC uses a frequency uses SC205A) are responsible frequencies in the range for ‘Basic and Generic from 110Hz to 148.5kHz. Standards for Electromagnetic This frequency band is Compatibility’. These are currently not fully covered numbered “IEC 61xxx”. by product EMC standards Rather than using the generic (such as for meters). Several 61xxx series of standards, product committees are IEC product committees investigating EMC problems can write their own EMC in the range between 2kHz standards, which will apply and 150kHz and we can expect to their products; any amendments to be published. such standard needs to be reviewed by TC77. IEC TC22, Electronic equipment which develops standards and metering covering ‘Power Electronic The major source of EMC is Systems and Equipment’, electronic equipment power decided to develop an EMC supplies. These require a large standard for its industry (IEC inrush current and have a high 61800-3:2017 ‘Adjustable Crest Factor (the ratio of Speed Electrical Power peak to rms value of a Drive Systems – current waveform. Part 3: EMC The crest factor Requirements for a sinusoidal and Specific current Test waveform is Methods’). Times higher readings 1.414). For However, were recorded than dimmable it did not correct data LED lights, the properly Crest Factor can consult with be as high 25 or other committees. 50, depending on the Without this full method of dimming and the consultation, lack of quality of the LED lamp. The compatibility has led to dimming process, combined problems for other users. with the electronic power For electronic energy supplies in each LED or CFL meters, IEC 62053-22 does lamp, results in high levels of not have any accuracy harmonics and fast transients. requirements for radiated RF In pure measurement fields below 30kHz and for terms and assuming that the conducted emissions below meter design allows for such 150kHz. EN 50470-3, for operation, errors are likely to MID Meters, has the same be small and immaterial; the limits. In both cases, there meter will need to be overis a test for accuracy in the rated to cope with such high presence of imported 5th current levels. This approach harmonics. All accuracy tests has cost implications and only apply to true energy could limit the minimum measurement (kWh); no other current at which the meter parameters are covered. can measure accurately. Where utilities are In practice, the Crest Factor purchasing meters, or limit of meters is likely to be specifying meters to be used, in the order of 2 at maximum they may require additional current (and rising as the performance requirements. current reduces). However, I understand that the UK

12 April/May 2017

Figure 1: Measured Crest Factor of 46 LEDs with leading edge dimming (Shuttle Lighting)

Figure 2: Voltage and current, for heater, CFL and LED load, dimmer at 450 (Frank Leferink)

Figure 3: Voltage and current, for heater, CFL and LED as load, dimmer at 1350 (Frank Leferink) since the energy content of these peaks is small, the effect on the accuracy of kWh Meters of not measuring the energy in such peaks is likely to be minimal. This presumes good design and the use of correctly designed anti-alias filters. Cause of errors The cause of these large errors arises from the choice of the sensor used to measure the current and its associated

theenergyst.com

electronics. There are four options for sensors: • A shunt (or resistor) in the current path. The voltage drop across the shunt is measured. The sensor itself is unlikely to be affected by high crest factors • A Current Transformer (CT). Short-term transients with a frequency up to about 10kHz will be accurately passed through the CT; higher frequencies will be subject to errors. Additional errors can be added by the electronics if not designed to fully deal with the amplitude and frequency components of the transients • A Hall-Effect sensor. From the tests carried out, this type of sensor will give a low reading. At this stage, I have not identified any explanation for the errors • A Rogowski device. This is an air cored coil which surrounds the current carrying cable. These devices can be used to accurately measure high frequency transients, but the associated circuitry must be suitably designed. As the output from a Rogowski sensor is proportional

theenergyst.com

to the rate of change of the current, namely di/ dt, this signal has to be integrated to provide a signal proportional to the current. Where this integrator is designed for power frequency signals and the lower harmonics, fast transients saturate the integrator causing errors. If the integrator is designed for such transients, the output will be a much reduced signal level. This can be amplified, but the increased noise levels will affect accuracy, particularly where the measured current is small Other problems Extensive use of electronic equipment such as VFDs, LED lights, etc can be a problem where standby generators are used or new buildings are designed for maximum energy efficiency. Standby generators need to be overrated to allow for the initial surge (say 50% instead of 44%). For new buildings, to prevent overheating and distorted voltages, supply transformers need a MVA rating possibly twice the power rating.

Conclusions ESMIG in its position paper states that the smart meters being installed in the UK and Europe will be unaffected by such signals. It confidently says that: • The electromagnetic interference phenomena created in the tests of the University of Twente grossly exceed emissions limits allowable under EU regulation for equipment typically used in households. • These conditions would not be found in any imaginable normal household scenario. • There is no reason to question smart metering technology ESMIG may be right but it is rare for a householder to be aware of EMC regulations. I can also well imagine a situation where 10 or more LED lamps may be connected to a dimmer to create the right ambience. As to dimmable or otherwise, ESMIG assures us that non-dimmable lamps were used in the tests – and they dimmed. Clearly if electrical engineers try to dim non-dimmable LED lamps, what is to stop a householder

doing the same? I agree that the emissions generated in the tests are higher than normally found, but such cases may well occur. If such interference affects certified smart meters, it will ultimately be a problem for the utilities and further reduce public confidence. As to sub metering, there is no such fall-back. As a manufacturer, ND is replicating the test system used in Holland to check the effect of such transients on its meters. However, since all meters manufactured by ND use current transformers as sensors; the tests so far have shewn that, with this type of sensor, errors are relatively small. As to other manufacturers, it is a case of ‘Caveat Emptor’. te This article is based on work done at the University of Twente in Holland as reported on the BBC’s Money Box programme on Saturday 4 March – about 17 minutes into the programme. In preparing this document, the opinion of various metering experts was sought

April/May 2017

COVER STORY

ne of the major threats to the growth and success of any business is the uncertain, often volatile, cost of fuel and energy. Whether it is the cost of electricity, gas, carbon, water or fuel, commodity markets are complex and unpredictable. Companies of all sizes often struggle to stabilise their operating budget and align their overall strategy with these fluctuations. Even though energy is often a large portion of a company’s operating budget, procurement departments seldom have inhouse price risk management resources or expertise to manage this expense. Controlling energy costs in the midst of global volatility can be incredibly complex and timeconsuming, requiring market expertise and constant diligence. It’s hard to stay on top of the latest market information, price swings, geopolitical and economic impacts, and more. With these challenges, the most diligent procurement professionals are still often hesitant to hedge energy purchases. My organisation is incredibly vast and complex – how could I possibly put together a hedging strategy that spans our many geographies and lines of business? What if I make the ‘wrong move’ with the timing or tool and lose the organisation thousands? Last time I hedged my purchase, I actually reduced the organisations margins – what if that happens again? I don’t see anyone else in my organisation (or in any others) hedging their energy purchases so why should I take on this added responsibility? Organisations that have never hedged their future fuel consumption, always paying spot/index prices, often prefer to remain in this comfort zone of ‘how we’ve always done it’ to avoid any potential misalignments or loss. Furthermore, procurement departments are not always closely aligned with company profits so it’s easier to simply fly under the radar and purchase fuel at current market prices. Even those organisations that attempt to manage costs by hedging their energy purchases often make common mistakes. They may not fully understand the intricacies of hedging and instead, attempt to ‘call’ the market. This ‘guessing’ approach tends to encourage an overly-optimistic (or pessimistic) view, leading to risky speculation. Furthermore, the limited resources available for market analysis result in insufficient data and therefore poor decision-making. Often in these cases of poor hedging results, senior management questions why last year’s hedge was too large or too small (in

14 April/May 2017

Transform uncertainty into opportunity Kinect Energy Group can help businesses to stay in control of their energy decisions, writes sales director James Williams volume) or why the team didn’t do a better job predicting market trends. Procurement is challenged on the timing of the hedge and tasked with identifying the ‘just right’ moment for their next hedge/budget cycle period. It is highly likely that your organisation invests significant sums of money and time analysing data on sales figures, rationalising product lines, optimising inventories and improving production efficiency for relatively small commercial gains. The lack of this same analytical diligence applied to energy and commodity spend (in particular fuel) is truly a lost opportunity, especially considering that this cost has fluctuated between $150 per barrel (bbl) and $30 bbl over a relatively short period of time. As management guru Peter Drucker once stated: “You can’t manage what you can’t measure.” In the case of fuel prices,

they can be measured and managed. The extreme fluctuations in the oil markets did not happen overnight; rather they took more than 180 days to reach their extremes. These 180 days represent 180 opportunities for your organisation to have taken action and managed the situation. Consider the potential benefits if your organisation applied the same level of thoughtful, informed analysis to your fuel and energy procurement programme as you do to the rest of your business. Hindsight is 20/20. Get ahead of volatility with a personalised price risk management solution that monitors, measures and evaluates market risks so you can mitigate volatility of your fuel costs and provide more budget certainty. But before hedging your fuel purchases in-house, ask yourself if your team is well-equipped for the challenge:

theenergyst.com

• Do you have the in-house resources to develop an effective risk management strategy? • Do you have access to market intelligence to inform decision-making? • Do you understand the various financial and physical hedging options available? • Have you constructed a strategic view of energy management as part of your overall strategic plan or governance? If the answer is no, then you may want to consider partnering with an energy management firm. An energy management firm can give you access to market intelligence, informed analysis and a team of experts to guide every purchase decision. They can develop an end-to-end risk management strategy tailored to your company needs. And you can save valuable money, time and focus on what you do best. Kinect Energy Group’s certified consultants empower businesses and utilities to stay in control of their energy decisions. For more than two decades, they have delivered a unique combination of services and technology with their “one stop shop” approach for fuel and energy solutions. For more information, visit kinectenergy.com

How to choose an energy management partner Not all energy management firms are created equal so choose carefully. Here are four things to consider to ensure you get the best value, a trusted ongoing partnership and effective outcomes: 1. Find an energy management partner who is experienced in working with the products you procure – and has the credentials to back it up. Trusted partnership comes from experience. At Kinect Energy Group, we offer decades of expertise in procurement, consulting, and risk management from a team of advisors based in Europe and North America. We develop custom hedging programmes for electricity, natural gas, as well as traditional fuel products. In Europe, we are MiFID regulated and we operate as an accredited and audited service provider. In the US, we hold a Series 3 FTC Certification with the National Futures Association and are registered commodities trading advisors, which ensure proficiency in options, price limits, futures settlements, delivery, orders, price analysis and hedging. 2. Ensure your risk management strategy includes regular reviews and allows you to revise based on the latest market information. You need to be aware of the latest market news. Kinect Energy Group offers a robust market intelligence platform with daily and weekly natural gas, power and oil update reports, and expert insights on current market conditions. We start with market data and make personalised recommendations for hedging opportunities based on your risk tolerance. Our fluid, dynamic process adapts to changing market conditions and changing business requirements over time. Every strategy can be

theenergyst.com

transformed into a “management-by-exception” process to ensure that the precise amount of resources are focused on timely, critical issues, and then adjust to be lower maintenance at other times – so you can be more efficient. 3. Quantify your business objectives into measurable goals and ensure your energy management partner provides metrics to track your success. Make sure you know if your programme is successful – or not. Kinect Energy Group consultants offer trusted analyses of pre-determined metrics so you can make informed decisions on whether to stay the course or adapt – empowering you to control your strategy. We transform your business objectives into a quantitative parameter that translates into a metric that our risk management team can optimise against. We use a variety of metrics to guide you but we always start with the most important one: your objectives. We also factor in budget; current positions; market prices; past, present and future projections of market conditions; historical data; seasonality; risk tolerance; and technical price analysis. 4. Customise your strategy to your business objectives and risk tolerances. There is no ‘one size fits all’ approach to effective price risk management. Personalisation is the key. At Kinect Energy Group we first identify your goals and then create a strategy to meet them. Every risk plan we create is aligned to your risk tolerance and objectives. We continually measure results with daily market monitoring and allocation of hedge-cost against volumes. Risk management strategies can also be integrated with physical procurement strategies including customised credit terms.

April/May 2017

POLICY

Deep cuts to Triad payments Ofgem is set to implement deep cuts to the revenues earned by small power generators. The regulator plans to reduce the Triad benefit, currently £45/kW, to £2/kW over three years, starting in 2018

hile Ofgem suggests the Triad component of so-called embedded benefits is spiralling out of control, over-rewarding small generators and distorting the outcome of the capacity market, small generators are aghast at the proposal. “The consequences for industrial manufacturers, hospitals and local authorities who generate their own power could be devastating,” says Tim Rotheray, head of the Association for Decentralised Energy (ADE). Rotheray suggested that Ofgem was wrong to “depend on a rushed industry review, led by large coal and gas generation interests” and had ignored independent analysis by Cornwall Energy about the level of benefits accrued by small generators. He repeated

calls for the regulator to take a full review of network charging. Until that review was undertaken, Rotheray urged Ofgem to make softer cuts to the payments. Embedded benefits – what’s the issue? The regulator is trying to stop generation that is connected to the distribution network from receiving what it sees as too much money for helping suppliers avoid transmission network charges by effectively acting as negative demand during peak periods. The Transmission Network Use of System (TNUoS) demand residual payment, known broadly as the Triad payment, currently stands at around £45/kW, according to Ofgem. It predicts that will rise to £72/kW by 2020. Both regulator and the government think that is too

The consequences for industrial manufacturers, hospitals and local authorities who generate their own power could be devastating

much – and is distorting the capacity market, because small generators, with £45/kW Triad benefit in their pockets, can bid low, undercutting the larger new generators that government wants to incentivise. As it stands, the capacity market has failed to encourage investment in large scale new build combined cycle gas power stations. Ofgem, which was accused of effectively kicking the can down the road on embedded benefits for many years by Cornwall Energy, appears keen to make a quick fix. That leaves smaller generators facing a pincer movement, as government is also moving to cut their revenues in a bid to achieve different outcomes from the capacity market. BEIS outlined plans last October to change the rules

A third more buildings ‘could be unlettable’

third of commercial buildings thought to meet minimum energy efficiency requirements so that landlords may continue to let them may actually fall foul of incoming legislation, modelling of 3,500 “well managed” buildings suggests. Arbnco (previously CO2 Estates) analysed the data via the latest version of its EPC platform, which contains more than 3,500 EPC models all produced within the past five years. It found that 33% of buildings previously carrying a D or E rating, sufficient to meet

16 April/May 2017

More commercial buildings could fall foul of legislation Minimum Energy Efficiency Standards (MEES) that come into force in April 2018, dropped into an F or G rating. The new laws mean public and private sector nondomestic landlords may not grant a tenancy to new or existing tenants if their

property has an EPC rating of band F or G. From 2023, landlords will not be able to lease buildings with an energy efficiency rating lower than E. While landlords can selfcertify exemptions from the scheme as of next month, Arbnco says its modelling

serves as a warning that many building energy ratings may be inaccurate, and that more commercial buildings than thought could theoretically be taken off the market under the new laws. The firm pointed out that its modelling looked at “well managed” building stock, suggesting that if even this stock was not up to scratch, many more properties could fare worse under proper scrutiny. “With MEES just over a year away, landlords, property managers and their advisors need to be acting now to

theenergyst.com

so that the capacity market supplier charge is collected based on gross, instead of net demand. That will remove a large chunk of revenue from embedded generators with capacity market contracts. Currently, those generators receive an income stream both from the capacity market contract itself, and the money suppliers pay them for helping them to reduce their use of the transmission system. By changing the charging methodology, government will remove the latter element, which it suggests is worth about £15/kW – almost as much as capacity market payments.

Clark: collaborate on storage The Secretary of State for Business, Energy & Industrial Strategy has encouraged closer collaboration between the energy industry and car manufacturers to better decarbonise both energy and transport, and also urged all UK firms to help shape future national industrial policy

What next Ofgem has issued a consultation on its ‘minded to’ position on embedded benefits. If the regulator proceeds with its plans, generators under 100MW will see their Triad benefit reduced by around a third each year for three years from 2018. However, Ofgem could face legal challenges from smaller generators, according to specialist energy developer and generator website, New Power. te

reg Clark has outlined how the UK could maximise long-term impacts of policy decisions that will affect national welfare. Speaking at a Policy Exchange event in March, the BEIS secretary said decentralised decision making will be key to ensuring industrial strategy benefits all workers, according to the former communities and local government department chief. “We need to increase productivity in aggregate and inclusively across all sectors of the country and economy,” said Clark, pointing out that while “decades of centralised policy” had revived London’s fortunes, “that has taken its toll” on regional UK. In my view, investment decisions for too long taken in London, will be much better taken by local economies,” he said.

ensure buildings do not pose a risk. The analysis was conducted on well-managed building stock, so there is potential to observe a greater percentage drop in EPC ratings in poorer performing portfolios,” said Simon West, co-founder of Arbnco. “Not everyone involved in the management of a building has a background in engineering, but the impacts of poor energy performance and forthcoming MEES legislation will affect all, and informed decisions need to be made.” Under MEES, landlords can face fines of up to £160,000 per property, as well as leasing restrictions. te

Unlock energy storage Clark’s decentralisation agenda mirrors structural change occurring in the energy sector. He reiterated his belief in energy storage solving renewable generation’s intermittency as well as decarbonising transport, progress on which has stalled and said cross-industry collaboration on storage could unlock higher value for the UK as a whole. “The green economy is one of the most exciting areas of our future planning and organisation and in many ways is a good example of why we need to bring policy together,” said Clark. “We now have some of the highest levels of investment in renewable technologies in Europe … but one of the challenges of renewable [generation]

theenergyst.com

Clark said the two sectors were becoming intrinsically linked. “If you can create jobs in both sectors and simultaneously address problems that do not respect boundaries… that is a huge opportunity.”

technology is intermittency.” However, intermittency “can be accommodated through storing energy and making the grid much more interactive, both of which require a policy response,” said Clark. “[The UK storage sector] is undertaking some of the best R&D in the world, which is of intense interest not only to the green economy but to the automotive sector,” he said. “So the ability to marry energy and automotive [goals] is a wonderful opportunity that would be crazy to separate and dilute.” The BEIS Committee will examine that opportunity via a new inquiry, also launched yesterday, into the role electric vehicles (EVs) can play in decarbonising the economy as part of the industrial strategy.

The ability to marry energy and automotive [ goals] is a wonderful opportunity that would be crazy to separate and dilute

Environmental policy ‘not a tradeoff’ The business and energy secretary added that while energy security is “foundational” to the economy, “my view is not to see these things as tradeoffs: that you can only either be green or low cost, either have security of supply or be environmentally progressive; these need to be pursued simultaneously.” With an agile, digitised grid and sufficient energy storage, said Clark, “the energy you produce can be clean and low cost. A forward-looking strategy enables you to make … simultaneous equations rather than tradeoffs.” UK firms: help set policy Clark called for businesses to engage in the industrial strategy to ensure their voices are heard in creating policy. Doing so is in the national interest, he suggested, quoting Bank of England governor Mark Carney: “Every technological revolution mercilessly destroys jobs and livelihoods – and therefore identities – well before the new ones emerge”. “While the robot revolution may seem some way off,” said Clark, “automation will have a big impact on all of our lives. So if we want people to have satisfying, well paid jobs, we have to prepare – and that is precisely the purpose of the industrial strategy.” te

April/May 2017

POLICY

Why have Building Regs if they are not enforced? Energy efficiency campaigner Peter Thom, founder of Cambridge-based Green Heat, is becoming increasingly concerned that Building Regulations are being regularly flouted in the growing market for replacing gas boilers with electric heating appliances.

n a letter to communities and local government secretary Sajid Javid, energy efficiency campaigner Peter Thom points out that the trend of replacing gas boilers with electric heating appliances is blatantly disregarding the increase in carbon emissions and lowering of energy ratings, which will be critical in meeting the new minimum energy efficiency standards (MEES) for conserving fuel and power. He explains: “I used to sit on the Industry Advisory Panels for Parts L and J of the Building Regulations and helped to produce the first Domestic Heating Compliance Guide, which is now the Domestic Building Services Compliance Guide. This guide provides the procedures to be followed when replacing a heating appliance,

18 April/May 2017

which must be within 2% points of efficiency or the carbon equivalent. I believe this procedure is not widely known and is being ignored. This will have a considerable impact on the claimed carbon savings via Building Regulations and the consequence of non-compliance. “Although there is a defined procedure for installing a noncondensing boiler, there is no such procedure for replacing a gas boiler with an electric flow boiler; only a comment in

Section 1.8 of the guide referring to ‘no possible alternative’ would provide ‘reasonable provision’. “I would suggest that this lack of proper procedure is allowing a growing number of these electric boilers to be installed without any consideration for the increase in carbon emissions and currently no requirement to produce a new Energy Performance Certificate (EPC).” Blatant mismarketing Thom adds: “More alarming is the blatant marketing of electric

Installing these panels will not only contravene Building Regulations, but this noncompliance should also prevent any property being rented out under the MEES regulations

panel heaters as a replacement for gas heating – which is clearly not even permissible. This is again a growing market. I’ve seen an increasing number of advertisements for such in the national press and even on televised football matches. Installing these panels will not only contravene Building Regulations, but this noncompliance should also prevent any property being rented out under the MEES regulations. I believe action is required by the Department for Communities and Local Government to highlight this to building inspectors, property agents, solicitors and homeowners as a matter of urgency.” Thom has the figures to prove his point from a recent project in Cambridge: “We replaced an old G-rated gas boiler with

theenergyst.com

a new, high efficiency A-rated gas condensing combination boiler with a smart controller in a 1930s semi-detached house. The SAP rating before work was started was 42 (E) and the carbon dioxide emissions were 5.95 tonnes per year. After the replacements were installed, the SAP rating was 61 (D) and the reduced carbon dioxide emissions are 4.14 tonnes per year – a reduction of 30%. “However, using approved SAP software, I also calculated the impact of installing an electric boiler or electric panel heaters in the same house. The results are frightening. The SAP rating with an electric boiler would be 12 (G) and the carbon dioxide emissions 8.56 tonnes per year. The SAP rating with an electric panel heater would be 17 (G) and the carbon dioxide emissions 7.8 tonnes per year. As from 1 April next year, there will be a requirement for any properties rented out in the private rented sector to normally have a minimum energy performance rating of E on an EPC. “This situation needs to be addressed now, otherwise it makes a nonsense of having a carbon compliance calculation in the Building Regulations, which can then be ignored when heating appliances are replaced. “It seems there’s a clear lack of joined-up thinking on energy efficiency policy,” adds Thom. “The aim of the recent Bonfield Review was to provide

Thom: “There’s a clear lack of joined-up thinking on energy efficiency policy”

theenergyst.com

more consumer protection, but the report’s recommendations for further registration and accreditation processes will put yet more red tape on installers. And by continuing to allow this blatant abuse of Building Regulations by less scrupulous manufacturers and installers who are undermining and undercutting the bona fide installer, the government is failing to protect professional heating engineers who do follow all the rules and regulations. “Consumers are also left unprotected with the MEES scheme preventing them from renting out any property which has an F or G rating. Furthermore, non-compliance with the Building Regulations may prevent them from being able to sell their properties with an illegal heating system. “The government needs to act now by ensuring that a new or updated EPC is provided with these installations and that the public is informed of the consequences of noncompliance. Otherwise what is the point of having these regulations in the first place?” In a reply to Thom’s concerns, the DCLG has agreed to look into the guidance for Building Control when inspecting gasfired boiler replacements under Part L of Building Regulations when it is next reviewed. “The letter from the DCLG does not really address my concerns,” adds Thom. “There is a serious issue regarding non-compliance of Building Regulations and it is a shame that the government department responsible for this is unable to take any immediate action. “I welcome any initiative that will improve the energy efficiency of homes in this country but regulations designed to do this must close up any loopholes and have to be enforced if we are to reduce fuel poverty and meet our commitment to reducing carbon emissions by at least 80% by 2050.” te

POLICY A significant and growing proportion of the amount business pay is towards green taxes or subsidies

Decarbonisation cost ‘minimal’ but set to double Analysis by the Climate Change Committee suggests that decarbonisation costs are ‘minimal’ for most firms but they are set to double. Brendan Coyne reports

he cost of low carbon policies for most commercial and industrial companies is currently a fraction of 1% of operating costs, according to detailed analysis by the Committee on Climate Change. Using government data as its source, the CCC found that the costs of low carbon policies in 2016 were around 0.2% of operating costs for the commercial sector, 0.4% for manufacturing and 0.7% for the more energy-intensive sectors. While it projects these costs will increase by about 50% by 2020 and double by 2030, the committee said that equated to about 3p on a £10 basket of

20 April/May 2017

goods or services for all but the most energy-intensive sectors. In 2030, its central case modelling suggested that would rise to about 6p, or broadly double. The squeezed middle However, as well as percentage of overall operating costs, the report provides a detailed picture of how much low carbon policies are adding to energy bills themselves. Table 1 shows energy costs and the percentage of the bill represented by low carbon policies across all sectors in 2016, and estimates those costs based on the CCC’s central case modelling out to 2030. In terms of electricity bills, the CCC’s data shows a significant

and growing proportion of the amount business pay is towards green taxes or subsidies. Medium-sized commercial firms are the hardest hit, according to CCC analysis. Some 33% of their power bill goes towards low carbon policies. For medium-sized manufacturers, green levies are 30% of the power bill. Small commercial firms spend 24% of their bill on low carbon policies; large manufacturers 15% and for the largest energy users (mainly metal and mineral industries) which are given some compensation for policy costs, it is 9%. Gas carries less of the policy costs but bills include charges

for EU ETS, CRC and CCL. Medium-sized commercial firms again take the biggest proportional hit, largely due to the CRC, with those levies making up 19% of their gas bill. For small commercial firms it is 7%. For large firms captured by the EU ETS, it is 11% and for large firms in metal and mineral manufacturing it is 7%. The CCC notes that the reduced burden on gas costs compared to electricity could have negative consequences for decarbonisation goals. “Overall, this implies a significantly lower impact of low-carbon policies on gas prices compared to electricity, which risks incentivising a shift

theenergyst.com

Table 1: Energy cost change from 2016 and proportion of bill that is low-carbon policy cost for commercial, manufacturing and energy-intensive sectors (2016, 2020, 2030) Commercial sector (58% of UK GVA)

Manufacturing sector (10% of UK GVA)

Energy-intensive sectors (2% of UK GVA)

Energy cost change

% lowcarbon

Energy cost change

% lowcarbon

Energy cost change

% lowcarbon

2016

26%

21%

18%

2020

14%

30%

14%

26%

12%

23%

2030

53%

34%

63%

30%

60%

27%

Source: CCC analysis based on BEIS (2016) Digest of UK Energy Statistics, BEIS (September 2016) Quarterly Energy Prices And ONS (2016) Input-Output supply and use tables. Available at: gov.uk

in fuel from electricity to gas. This is contrary to the direction set out in our decarbonisation scenarios, which, involves a shift in demand from hydrocarbon energy to low-carbon electricity for most non-energy intensive industries,” the report states.

Commercial businesses paid 92% more for energy in 2016 than they did in 2004. Low carbon policies were responsible for two fifths, roughly 40% of that rise theenergyst.com

Price rises: Commercial Examining data from 2004 to 2016, the report notes that business energy prices, like the cost of many services, have risen at above the rate of inflation. Commercial businesses paid 92% more for energy in 2016 than they did in 2004. Low carbon policies were responsible for two fifths, roughly 40% of that rise, the report states. However, the CCC noted that despite strong growth (+30% output) in the commercial sector, its electricity use has remained broadly flat, suggesting that some cost increases have been offset by energy efficiency. Lighting and more efficient computers contributed to efficiency gains, but demand from air con and printers increased, wiping out some of those improvements, the CCC found. The total commercial lighting stock grew by 6% over the period while electricity consumption from lighting fell 26%. Electricity demand from air conditioning systems increased 33%, and demand from printers rose 43%, according to the report. Price rises: manufacturing On a like for like basis, manufacturers paid 58% more for energy in 2016 than in 2004, the report found, with green policies

responsible for nearly half of that rise. Overall energy consumption from the sector fell 30% over the period, driven largely by the decline in manufacturing over that period, through the CCC says it found some evidence to suggest energy efficiency improvement of around 7%. Business outlook: taxes The CCC predicts support levels for low carbon generators to triple by 2030, from 1.5p/ kWh in 2016, to 4.4p/kWh for all consumers accept for the most energy intensive sectors. It predicts that the carbon price support will remain flat out to 2020 and then increase by 50% over the decade to 2030 to reach 1.2 p/kWh. Meanwhile the CCL will probably rise to make up for the scrapping of the CRC, it suggests. Business outlook: electricity prices Energy bills for small commercial firms will rise by 17% out to 2020, the CCC believes. By 2030, they will be 51% higher. Of this, low carbon policy will be responsible for over two-thirds of the increase to 2020 and three-fifths of the total increase to 2030, mainly through support for low carbon generation and increased CCL costs. Medium-sized commercial firms face electricity rises of 13% by 2020 and 50% by 2030, with low carbon policy responsible for half of the increase, it suggests. According to the report, large manufacturers without compensation face the biggest short-term price hikes. Electricity

prices are projected to increase by 22% to 2020 and 73% to 2030, with low carbon policy behind three quarters of those rises to 2020 and three fifths to 2030. Carbon price support and low carbon generation subsidies are the key drivers. Large and intensive manufacturers with compensation will also see significant price rises out to 2030, but as an overall percentage, decarbonisation costs will be lower due to those compensation schemes. Business outlook: gas prices The outlook for gas price increases is less steep for commercial firms, but large manufacturers face significant cost increases due to low carbon policies, mainly the EU ETS and extra gas network costs, according to the CCC (see table below, figure 2.10). While some of the business energy bill hikes due to decarbonisation policy appear steep, the report suggests that “the government’s forthcoming plan for meeting the fourth and fifth carbon budgets should provide opportunities for energy efficiency improvements, which in our scenarios would cut energy costs by 7% on average”. It thinks many companies could make much greater energy efficiency savings to offset bills. The report, which also contains data for the domestic sector, as well as a comprehensive chapter on how the UK can remain competitive in a decarbonised environment, makes interesting reading. te

April/May 2017

DEMAND-SIDE RESPONSE

Aggregator market ‘faces significant consolidation’ Demand response aggregators believe increasing competition and volatile revenue streams make a market shake-up inevitable. Choose your partner wisely, they tell Brendan Coyne Difficult to build a business case if your eggs are in a basket with price volatility from £7k/MW to £45k/MW

he number of demand-side response aggregators active in the UK market will reduce significantly in the next 18 months, according to market participants. Louis Burford, Restore UK vice-president of sourcing and sales, believes only a third of operators will be in business. Endeco CEO Michael Phelan thinks about half of current aggregators are “sales engines” that may run out of steam. “I believe there will be a consolidation over the next 12-18 months. We will see the stronger companies survive and others move away and look at other areas,” Burford told The Energyst. “I think there will be no more than a handful of competent aggregators, with technology that works, that are still in the market in the next two years.” Aggregators heavily reliant on capacity market revenues could now be feeling pain from

22 April/May 2017

unpredictable revenue streams, Burford and Phelan agree. Eggs and baskets “We have seen a huge amount of volatility in the last couple of auctions, one clearing just under £7k/MW the other at £45k/ MW. That is a huge spectrum,” said Burford. “If you are putting your eggs into those baskets, it is very difficult to build a business plan and forecast when you have such uncertainty in your pricing model.” Endeco’s Phelan says £7k/MW is “almost at don’t care level” as far as end users are concerned. “It is not possible for an aggregator such as us to run a business on that level of income per megawatt and also not of interest to customers at that level of income,” he said. “So traditional aggregators in UK and Ireland that are mainly capacity-based, then I guess for them the market is probably dead.”

Shells and sells Meanwhile, energy suppliers, as well as distribution networks, are now starting to go after the same customers, increasing competitive pressure on aggregators. Phelan and Burford think competition, as well as commoditisation of revenues from system operator schemes, might also contribute to consolidation. “[Suppliers] are definitely going to be involved in the

market and I think if you are a marketing company just selling capacity, then they will overtake you fairly soon,” said Phelan. “If you are providing all the layered services that are as much about [your] technology as about, if you like, just a selling engine of a company, then I think it might be a slightly different proposition. I think [suppliers] might need the aggregator or the people doing that work to coexist with them to deliver the market.” Burford agrees suppliers “will struggle to build decent technology platforms” and may therefore need to partner with aggregators – at least those left standing. Of around 15 aggregators currently in business, Burford sees that “dropping to a third of that figure” within two years. “Some are swallowing money, they are marketing shells that are putting a huge amount of finance into marketing,” he said.” But they are not turning that into actual value for end consumers. So from a customer perspective, you have to make sure you back the right horse.” te

Take our DSR survey The Energyst seeks reader views on demand-side response and battery storage for our annual report and conference. End-users that take the survey will be given priority for free event tickets and will receive a copy of the report as soon as it is published. The short survey asks those that are involved in balancing services provision about their experiences, positive and negative. It also seeks views from companies that do not participate in DSR as to why not. The aim is to provide a snapshot of UK balancing services provision, alongside end-user appetite for battery storage. Please take the short survey at theenergyst.com

theenergyst.com

Sponsored column

‘Forget blackout Britain: Flexibility will solve capacity issue’

olicymakers should reject calls for the UK to return to double-digit margins of power capacity over demand and let flexible plant and agile companies deliver a leaner electricity system, a new report suggests. The Energy & Climate Intelligence Unit (ECIU), a non-profit thinktank funded by climate and environment bodies, suggests that National Grid’s Supplemental Balancing Reserve (SBR), put in place to shore up thin capacity margins ahead of launch of the capacity market, was a £180m waste of money. It argues that the fact SBR was not once called upon over three years underlines the reliability of the UK power system. Now the capacity market is up and running, “that should be the final nail in the coffin for blackout fears in the UK,” states the ECIU, pointing out that the chances of the grid totally failing are remote. “A reliability of 99.999993% corresponds to a less than one-in-ten-million chance of the grid failing to deliver power, roughly equal to the chance of winning the lottery in each UK draw,” states the ECIU. “It is also around a thousand times less likely than asteroid 2013 TV135 – which would cause an explosion

50 times more powerful than the most powerful nuclear bomb ever used – hitting the earth.” The thinktank believes storage, interconnectors, demand-side response and peaking plant can deliver a leaner, more responsive power system that will cope with ever thinner margins as older plant retires. “The new [decentralised] system would operate more like a traditional market, where demand can flex to supply as well as vice versa,” it suggests. That view appears to be gaining traction at both government and regulatory levels. BEIS and Ofgem recently issued a call for evidence on the shift towards a smarter power system, and the regulator’s most senior networks partner Andrew Wright has consistently stated that the value of flexible kilowatts will increase significantly over the coming years. Meanwhile, traditional utilities, rather than committing to large new power stations, are in the main developing smaller plant to capitalise on peak prices. However, to significantly scale demand-side response participation from UK companies, it may be that price signals will need to be sharpened. te

Three things you need to know before trusting a demand-side response aggregator Demand-side response is gaining momentum. Aggregator consolidation may be on the cards, increasing the importance of picking the right partner, says Louis Burford (pictured), VP Sourcing & Sales, REstore UK The competition to pay companies to harness their flexibility is heating up. Some traditional utilities are trying to catch up and are investing in aggregator-type business models or partnerships with aggregators. Meanwhile some aggregators are taking a degree of risk by bidding for contracts that they cannot guarantee to fulfil. At the same time, price uncertainty in schemes like the capacity market combined with policy and regulatory changes that will affect generation forms of demand-side response, could have a serious impact on revenues for some aggregators and their customers. All of which underlines the need for businesses to undertake robust due diligence when it comes to selecting a partner to monetise their flexibility. All aggregators are not equal, and it is likely that some will not be in business in the next 12-24 months. Remember the following three things before trusting a DSR aggregator: 1. The best-in-class technology Having the best technology is critical: firstly to identify flexibility within sites and most crucially to then maximise its value by enabling smart trading across all available markets. Restore describes itself as a technology company rather than an aggregator and that is why it developed the patented FlexTreo platform, to capture all existing market opportunities, as well as emerging revenue streams.

“All aggregators are not equal, and it is likely that some will not be in business in the next 12-24 months”

2. The longest proven track record Anybody can claim they have the best software and the optimal trading strategy. That is where a strong track record will separate the market. For example, Restore and those that are delivering the revenues they promise, versus those that are not. 3. The most result-driven You have to be able to give people comfort that they are backing the right horse and will receive the value they are promised. Otherwise it is bad for business, bad for demandside response and, ultimately, bad for consumers. Restore has consistently delivered those elements. As a result, the company is ranked 41st in Deloitte’s Technology Fastest Growing EMEA Companies 500-List. So while it appears to be a seller’s market for flexibility, choose carefully where you put it. Doing so will ensure maximum returns with minimum fuss.

For more information, visit restore.eu Fears about blackouts ‘should be a thing of the past’

theenergyst.com theenergyst.com

DEMAND-SIDE RESPONSE

We need to talk about Triad Smart Grid Consultancy director Gary Swandells believes heated debate around proposed cuts to Triad payments is fuelling fear and misunderstanding. He points out Triad avoidance will likely become even more valuable, and only those generators that receive a disproportionate benefit by exporting power in those periods will be affected There is a great deal of concern about the scope and impact of Ofgem’s proposed changes to Triad payments

here has been a great deal of discussion and in some cases quite heated views expressed since Ofgem published a less than snappily titled document, Minded to decision and draft Impact Assessment of industry’s proposals (CMP264 and CMP265) to change electricity transmission charging arrangements for Embedded Generators, on 1 March. Views across the industry have ranged from concern through to outrage and, unfortunately, this has been coupled with a great deal of misunderstanding about what the scope and impact of the change proposals will be. Firstly, the document is a consultation on the change proposal and has not yet been confirmed, although on this point at least it is highly likely that it will go ahead. The regulator’s proposal relates to the charging methodology that is used to fund the costs associated with the high-voltage transmission network, which is commonly known as Triad,

32 April/May 2017

although its real name is actually Transmission Network Use of System (TNUoS) charge. The mechanics of the methodology are somewhat convoluted but simplistically, there is a substantial premium levied on energy consumers during three half-hourly periods during the winter, when peak demand occurs. Disproportionate charge This disproportionate charge is then applied on a pro-rata basis so that, in theory, the costs are applied fairly to those who contributed to the peaks. This can amount to as much as £50,000-plus per MW based on geographic location, compared with the value of the electricity itself,which more likely to be in the range of £90-£150 per MWh. Triad charges can be avoided by consumers if they are able to predict high demand periods in advance and either shift load to another time or use an alternative supply such as embedded generation.

Many large consumers such as hospitals, water authorities or energy-intensive industries already do this, albeit with the help of their supplier or deman-response aggregator to predict when peaks are likely. This amounts to several hundred megawatts of energy that is shifted away from the peaks, and has helped to keep the lights on in recent years as operating margins have tightened significantly. This, however, is an indirect consequence and not the purpose of TNUoS. For generators that are connected to the distribution networks, this has been a very attractive opportunity, as they have been afforded this same disproportionality in terms on their income if they

were exporting power during the three triad periods. The report presents a case and evidence demonstrating that up to £350m per year goes to these generators from consumers. Furthermore this figure could reach £650m/year by 2021. It is also claimed that payments to these generators creates a distorting effect on other markets such as the capacity market, wholesale and ancillary services markets, by disproportionately incentivising such generators. In summary, Ofgem now proposes that payments will be gradually reduced by a third each year over a three-year period, starting in April 2018. The full embedded benefits consultation closed on 18 April. Unfortunately, in all the discussion and debate that this has triggered, it would appear many people have misunderstood the nature of the changes and are worried about the increased costs to the hospitals, etc. The proposed changes should not affect them unless they were also receiving income from exported energy. The charging methodology remains and therefore their ability to avoid them still holds the same potential. In fact the forecasts for TNUoS suggest that the costs associated with the transmission system will continue to increase with predictions of more than £70 per kW by 2020/21 being suggested. te

Payments to these generators creates a distorting effect on other markets such as the capacity market, wholesale and ancillary services markets theenergyst.com

DEMAND-SIDE RESPONSE

Battery storage ramps up Renewable energy partners to deliver 185MW of battery storage by the end of 2018

ggregator Limejump and renewable energy developer Anesco are teaming up to deliver 185MW of battery storage by the end of 2018. Limejump will operate the portfolio within balancing and flexibility markets, combining the granular speed of response of batteries with other distributed generation assets in order to maximise their flexibility. The deal is one of a number of partnerships being struck to deliver capacity market contracts. The agreement adds weight to market views that the UK is rapidly approaching a battery storage boom. Anesco has just completed its 20th utility scale battery unit,

generators look to benefit from the technology.” Limjump CEO Erik Nygard said the capacity market revenues were one piece of the puzzle for battery storage operators, who must stack revenues from Amount of renewable different grid generation technologies balancing services Anesco has deployed Anesco has just completed its 20th utility in order to deliver to date scale battery unit reasonable return on investment. He taking its storage portfolio to stability, energy said the partnership 18.9MW. By the end of next storage can help would “provide Anesco with year, that will have increased maximise the use of renewable access to the full breadth by an order of magnitude. power being generated, while of market opportunities”. Anesco executive chairman breeding a more resilient local Anesco has deployed Steve Shine said the move is grid. It’s an exciting time for about 1GW of renewable “further proof of the significant the sector and we predict generation technologies to growth of the sector”. momentum will continue date, of which roughly half “As well as aiding grid to grow, as more and more (480MW) is solar PV.

1GW

Enernoc takes big slice of £14m DSR auction

ggregator Enernoc was awarded contracts worth £3.9m in the capacity market auction specifically for turn down demand-side response (DSR). The aggregator took 86.88MW of 312MW derated capacity procured at £45/kW, roughly 28% of the total. Nine other firms were successful in their bids in the final Transitional Arrangements capacity auction for delivery next winter. Fellow aggregator Kiwi Power took the next biggest share with 60MW, worth £2.7m. Eon took 36MW, worth £1.6m; Tata Steel won 35MW (£1.58m); aggregator and licensed energy supplier Smartest Energy landed 34.752MW

theenergyst.com

(£1.56m); industrial gases firm BOC took 19MW (£855k); Limejump, another aggregator with a supply licence, won 17.508MW (£788k); UK Power Reserve was awarded 10MW (£450k); EDF was successful with 8.687MW (£390k); and Energy Pool UK won contracts for 4.344MW, worth £195k. Some 88% of the capacity (275MW) procured is for new capacity, classified as unproven DSR, with the remaining 37MW procured proven DSR. In total, 372.987MW derated capacity was prequalified for the auction, meaning that roughly 60MW failed to secure a contract. These were two capacity market units from Smartest Energy and one from Energy Pool UK.

Haven signs Kiwi as preferred aggregator Drax-owned business energy supplier Haven Power has struck a deal with demand-side response firm Kiwi Power so that the aggregator will be recommended to the supplier’s customers seeking to monetise energy flexibility. The deal comes two weeks after Kiwi Power’s success in the Transitional Arrangements capacity auction. Haven said it selected Kiwi “following a rigorous selection process”. Haven Power COO Paul Sheffield, said the agreement would make DSR “more accessible and simpler for businesses to implement”. The move comes as many aggregators predict consolidation in the market. Speaking to The Energyst, Restore’s UK lead Louis Burford suggested the current market, whereby around 20 aggregators are currently trying to scale their portfolios, will be reduced to “a handful” over the next 12-24 months. Read more about demand-side response with insight from end users, energy suppliers and aggregators, via our 2016 Demand-side Response Report. End users interested in monetising flexibility should also register for a free ticket for our 2017 DSR Event, held in London on 7 September. See www.dsrevent.uk

April/May 2017

GAS & ELECTRICITY

Why more firms are obtaining electricity supply licences Consultant Jo Butlin believes a push to obtain electricity supply licences by aggregators, local authorities and renewable generators is set to continue as they try to maximise value and minimise reliance – and payments – to incumbents. Meanwhile those that fully exploit opportunities afforded to licence holders may actually deliver long-mooted business model innovation

he growth in the number of electricity supply companies has been well documented, with more than 50 players now active in the market and no sign of an apparent slowdown in new licences being granted by Ofgem. What is less well understood is the opportunity that a supply licence potentially offers its owner – and increasingly it is not just about access to end consumers. With the growth of competition, continual media bashing, a large proportion of consumers who have not yet had the appetite to switch supplier and a complex market to navigate, it is perhaps surprising that so many are still keen to enter the fray. However, look a bit closer and the emergence of new ‘non conventional’ models gives some clues as to why this is happening. 1. Local government Robin Hood Energy, Bristol Energy and many other local authorities are leading the way with new more localised models. Robin Hood is positioned as a not-for-profit organisation and Bristol is championing social equality, local renewables and stronger communities. As well as the emotional pull that is hoped will attract new customers, what these and other local authorities are realising, is that the ability to optimise council-owned and locally generated power supported by strong credit ratings potentially gives the new businesses a real competitive edge in an

34 April/May 2017

service offering, a supply licence provides a route to value creation. More complex than the historical channel, but potentially appealing for business sustainability, particularly if the market shifts towards energy as a service.

inherently low margin business. 2. Growth of demandside response (DSR) The growing need for demandside response actions in order to balance the UK system is driving the growth of a plethora of new market participants. These businesses are genuine disruptors as they are technology-led and agile. They can reposition quickly as new value pools emerge. However, what many of them are realising is that however clever the technology in reducing demand, the attributable value ultimately flows via the supply licence holder who inevitably want their cut. Increasingly, suppliers and DSR providers are becoming one – whether through partnership or in the recent case of Limejump by acquiring a supply licence. This trend is likely to continue. 3. Route to market for renewable generation With the slashing of Feed-in Tariffs (FiTs) and closure of the Renewables Obligation, many small-scale renewable developers, particularly in solar and onshore wind, are increasingly under pressure. Historically suppliers have been, and still are, the primary route to market for the power via FiTs or Power Purchase Agreements. However, inevitably value is lost via fees and charges by accessing the market this way. For those who have the appetite to build a trading/optimisation function and create an integrated

The trend towards the integration of supply, generation and demand management means that the world for customers is increasingly complex

Jo Butlin has recently set up EnergyBridge, a consultancy focused on helping businesses and investors navigate the UK energy market

4. Energy as a service ‘Energy as a service’ is a phrase being bandied more and more. The trend towards the integration of supply, generation and demand management means that the world for customers (and suppliers) is increasingly complex. Offering warm, lit offices, factories and ultimately homes at lowest cost is potentially a more attractive proposition to customers than having to work it out themselves. We are starting to see convergence of the relative parts of the value chain through acquisition, partnership and in-house development. In this new energy retail model, the supply licence, or more to the point, access to the market which an optimisation function can leverage, is the key to unlocking much of the value. Complex and increasingly competitive, straight energy retail is a hard market to play in. However, for those wishing to leverage the value that an electricity supply licence offers, there is an opportunity that will ultimately only result in innovation and more appealing choice for consumers – finally moving us on from price-focused products to proposition-led services. That represents an exciting phase in market development. te

theenergyst.com

GAS & ELECTRICITY

ocal authorities are taking a keen interest in Bristol Energy and Nottingham’s Robin Hood Energy, the UK’s first municipal energy companies to launch in the modern era. Many other councils are mulling whether to enter the fray and service providers working with them believe further launches will be under way within the next year. Wirral Council recently broke cover, stating in March that it is considering whether to go into a franchise or ‘white labelling’ arrangement with a company such as Robin Hood, or go the whole hog and acquire an energy supply licence. There is a third option, the ‘licence lite’ route, being pursued by the Greater London Authority but whether any other local authority will go down that path is debatable, given its complexity. White labelling White labelling is the most straightforward option for councils. It means they reduce their risk and required resources, effectively just handling marketing and engagement. However, it also means they cede control to a third party, which manages everything else. Then, when the third party puts up prices, they have to communicate that to their customers. Licenced supplier Becoming a licenced supplier gives councils full control, enabling them to set prices and packages, sign power purchase agreements with generators, and ultimately become a national supplier as well as white label partner. But it requires resources and no small commitment. “It’s not something you can do casually,” says Utiligroup strategy and marketing director, Mark Coyle, who is working with a number of local authorities. “You can get help from

36 April/May 2017

Councils enter the fray Local authorities are launching energy companies. Some now supply businesses, are signing power purchase agreements with local generators and seeking TPIs to scale their B2B rosters. What are the challenges they face and who’s next, asks Brendan Coyne third parties to enable efficient delivery at the right price point. But you have to become intimate with forecasting demand, the tariff you are setting and your trading partner.” The commitment to an energy business, he says, “is for life, not for Christmas”.

That makes it critical not only to secure the right blend of skills, resources and partners, he says, but also to “keep the politics out and the decision making clear”. Lower prices? Councils mulling energy supply believe they will be able to

Business energy supply Bristol Energy already supplies businesses that consume up to 3GWh per site per year and plans to supply larger firms in the coming months. Nottingham also quotes for business tariffs. Utiligroup’s Mark Coyle (right) thinks some councils might actually start supplying businesses before residential customers, especially those with large estates of their own.

offer better prices due to lower overheads, and in some cases, not-for-profit models. Can they actually beat the Big Six on price? “There is some truth [in those claims] but it needs validating every time,” says Coyle. “I don’t think they will ever be 20-30% cheaper [than the Big Six] but a 5% saving in this market can make a big difference. And some suppliers have taken it further than that,” he adds. “But leanness and good technology are most important, because then you don’t have the overheads that the Big Six carry.” Billing issues As well as hedging and pricing strategy, any council

theenergyst.com

Nottingham’s Robin Hood Energy is proactively entering white label agreements

that takes the licenced route has to get its billing right. Energy companies that get billing wrong tend to quickly lose customers and suffer reputational damage. It can also be costly: British Gas, Npower and Scottish Power have all been hit with multimillionpound penalties for billing failures by regulator Ofgem Utiligroup’s Coyle says there are numerous “good” billing systems and integrators in market to help local authorities choose the right technology. But he reiterates the importance of councils securing the right skills and experience in their founding teams. As well as local authorities, Paul Fitzgerald, sales and marketing director at billing firm Junifer Systems, works with a number of utilities that have entered the market from overseas. He says they soon realise the UK energy market is far more complex than their home territories. Aside from the regulatory aspects, there is vast data coming from multiple

theenergyst.com

What smart billing means for I&Cs TPI Inenco recently claimed that UK firms are owed £500m due to billing errors, and that only one in five businesses validate their bills. Junifer’s Paul Fitzgerald (right) suggests sheer complexity of data may be to blame, both in terms of the number of parties in the energy data supply chain and the nature of multisite business operations. “You might have a combination of half hourly and non-half hourly meters, with different pricing structures and different mechanisms to receive the data. So you can understand why commercial customers are not always able to analyse their bills and understand exactly how the energy is consumed,” he says. Equally, he claims many billing systems are not able to handle the increasing volumes of data that make up the bill, thereby relying on third party systems, creating another link in an already complex chain, increasing the potential for error. Fitzgerald says Junifer, which came from the telco industry, was set up to address that issue. It describes itself as a ‘smart billing’ company. “What we are trying to do is create a single location for customer and energy-centric data that enables that interrogation, so [suppliers] can pull the data out and show customers, enabling

I don’t think they will ever be 20-30% cheaper [than the Big Six], but a 5% saving in this market can make a big difference

them to do some proper bill analysis.” Fitzgerald thinks P272 and HH metering and settlement more broadly will enable customers to better understand consumption, and use the data both to validate bills and find contracts and prices that best suit their profiles. Demand-side response With about 160,000 business migrated to half hourly metering and settlement under P272, there is also potential for more firms to provide demand-side response (DSR). Fitzgerald says that presents even more challenges to the parties that manage industry data and process. “There are lots of issues around DSR and how it will operate,” he says. ”But key to a lot of incoming changes is the consumer first understanding their energy consumption on an hourly, daily, weekly and yearly basis. You just can’t do that with a dumb meter. “Once you have that understanding, you can work out how to manipulate data to the best effect, work out what assets you can better utilise and perhaps invest in some onsite generation. I think that is what needs to happen.”

parties that must be properly managed to ensure bills are as accurate as the data they are based upon. That creates “an interesting dilemma for local authorities deciding whether to get into the business or not”, he says. “It is very complex.” That said, there are many local authorities that are “extremely savvy” in terms of energy, says Fitzgerald. “Some have district energy or may be producing energy from waste, so there are a number of councils that are au fait with what needs to be done. For those that are not as comfortable, there is the option of white labelling.”

Calling all TPIs Councils as B2B suppliers presents an opportunity for third party intermediaries. Bristol Energy is calling for TPIs to help scale its business operation both locally and nationally. The company says it will deal with firms that “share our ethos to offer fair and transparent prices to businesses”, and “welcomes enquiries from those who comply with one of the recognised TPI Codes of Practice”.

Which councils might be next? Nottingham’s Robin Hood Energy is proactively entering white label agreements. It has signed deals with Leeds for White Rose Energy (which has soft launched), Liverpool, which has called its company ‘The Leccy’, and with Leicester. Several other councils are exploring the market. Cornwall Council is weighing its options, Birmingham has called for expressions of interest. Islington is also looking at white labelling. Indeed, there are so many local authorities looking at Bristol and Robin Hood that some consultants have warned prospective councils not to become time wasting ‘tire kickers’ that hamper their success. So how many will actually take the plunge? “None are going to do a Nottingham or Bristol in the coming weeks,” says Coyle. “I think we will see momentum through this year and a number launch at the back end of this year and early next year.” te

April/May 2017

GAS & ELECTRICITY

Gas storage issues hit prices Centrica’s storage arm has confirmed it ‘cannot safely recommence injections’ at its Rough facility off the East Yorkshire coast, impacting long-term gas prices

The future of the Rough gas field is uncertain

ough is responsible for the lion’s share of UK gas storage. But Centrica’s facility is ageing and has suffered technical issues for some time. As a result, there have been no injections (the term for putting gas into storage) at

the site since last summer. That left UK gas storage at historically low levels last winter but the system coped with extra gas imported via the Zeebrugge interconnector, plus supplies from Norway ramping up 22%, according to analysis

A Rough winter ahead? Gazprom Energy head of customer optimisation Phil Ivers comments on the recent developments at Rough For several months now events have been unfolding at the UK’s largest natural gas storage site, the Rough field 18 miles off the East Yorkshire coast. Gas stored at Rough is used to meet about 10% of the UK’s winter peak demand. In June 2016, it was reported that an issue was found with one of its wells following testing works, and although this was later resolved, the robustness of other wells was reported as uncertain. In April it was been announced that Rough is going to be unavailable for injection during the storage year 2017/18. This has had an instant impact on UK gas prices. Summer months (traditional injection months) had prices drop and winter months, particularly for delivery in the first quarter of next year, saw prices rise. An accurate picture of Rough’s long-term future remains to

38 April/May 2017

from pricing firm ICIS. However, the firm noted that gas prices for delivery during the year ahead hit two-year highs last winter, up 42% on average during the first quarter of 2017. With confirmation of Rough’s status, gas prices

increased marginally in April. Centrica Storage said it “has concluded that, as a reasonable and prudent operator, based upon the results well testing, Rough cannot safely recommence injection operations in the 2017/18 storage year. “CSL has made this decision based on the results of the well testing programme to date which, due to the age of the asset, have confirmed a number of different potential containment failure modes in a number of the wells.” The firm said it would now cease its current tests, having covered two thirds of the facility, but would carry out tests on some wells to plot Rough’s commercial future. CSL added that it will continue to provide withdrawal services in respect of the 2016/17 storage year. te

be seen but the media has been quick to point out how this could potentially affect gas supply and prices. It has been reported that the UK will need to import 1.75 billion cubic metres of additional gas this winter, most probably sourced from Norway or elsewhere in mainland Europe. This increased reliance on supply from outside the UK could mean competing with demand from the rest of Europe, in turn leading to a price premium. Sources have also likened the situation to early 2013, which saw gas prices swing to a high due to a combination of the temporary closure of a main import pipeline and a cold winter. If higher price premiums did become an impact of the Rough situation, business users would be wise to consider the potential implications, especially if they are buying gas on a flexible contract or planning to renew a fixed contract. The long-term future of Rough seems somewhat uncertain. Following the announcement that Rough cannot safely recommence injection this year, it could be perceived that a change in balance between domestically stored and imported gas is on the cards, but Rough’s operator Centrica Storage has given reassurance that this would have “minimal impact”, claiming that it has made preparations accordingly. The long-term implications of the situation at Rough are simply unknown at this stage but this winter could prove to be fundamental shift in the UK supply mix.

theenergyst.com

ENERGY FINANCE

Pilots can make projects fly DONG Energy Sales UK sales and marketing director Ashley Phillips discusses how to boost energy efficiency on a budget

t is a challenging time for those responsible for managing their companyâ&#x20AC;&#x2122;s energy. On the one hand, there is the ever-present pressure to keep a sharp eye on the bottom line. On the other, the desire to fulfil carbon reduction commitments remains a priority for many businesses, eager to do the right thing and operate in an ethical manner. Managing consumption effectively is therefore key for businesses wanting to act sustainably while also minimising energy expenditure. Making the most of energy budgets continues to be a top priority. Adopting a procurement strategy that works for businesses is vitally important but to really reduce costs the trick is to identify ways to reduce consumption and optimise existing assets. For the majority of organisations, the low and no-cost efficiency options are pretty well exhausted. So, to make a tangible difference, they must now invest in technologies Piloting and scenario modelling allows companies to test solutions and produce real, evidence-based savings

40 April/May 2017

and solutions that achieve that all-important reduction. The importance of piloting and scenario modelling Current conditions are placing emphasis on sourcing funding internally, although competing for capex budget is no mean feat. This puts focus on building a robust business case. Many companies are turning to pilots and scenario modelling because it allows them to test solutions and produce real, evidencebased savings. This means they can rule out any options that do not deliver on their savings promises but also proves the concept prior to investment. Several monitoring and targeting systems have included scenario modelling for a number of years now, and the sophistication of the process used has evolved considerably. Increased automation means that assessing different options is far less resource-heavy than it used to be, better supporting time-poor energy teams. For instance, our own Energy Vision platform combines historical data

wholesale market. Our solution with tariff structures, peak period took into account onsite usage premiums and wholesale prices, and equipment needs, as to produce a comprehensive well as pricing information. view of energy costs. Users can From these inputs, it created then simulate the cost and load bespoke run schedules for impact of changing their demand the plant, resulting in an 11% and, importantly, their demand reduction in energy costs. profile, enabling them to consider Many companies are a range of approaches to energy adopting a similar approach management with fully costed by trying out a solution outcomes. It also goes on to on one site or plant. also recommend the best times Once the results to consume from the grid or are known, export, helping they have a businesses to truly compelling make the most case to invest in of their onsite projects on other assets as well sites, enabling as build costed them to achieve investment Energy cost saving achieved the energy and cases. by Kodak Alaris using cost reductions Kodak DONGâ&#x20AC;&#x2122;s Energy Vision platform required. Alaris used this A better energy future approach to reduce energy There are various drivers for costs as well as operational reducing consumption, but planning time. The company we find that many of our felt that it was not able to drive customers choose to work with optimal efficiency from its us because they want to align manufacturing site because themselves with a company it did not have the in-team that has strong sustainability resource to plan, monitor values. With so many companies and respond to a fluctuating signing up to schemes such as RE100 (whereby organisations commit to sourcing 100% of their electricity from renewable generation), an ethical stance means a competitive edge, as well as a clear conscience. Reducing consumption makes an enormous difference to a companyâ&#x20AC;&#x2122;s carbon footprint. But where efficiency projects seem hard to come by, using renewable electricity is an equally important step. To drive the transition to lower-carbon options, we supply renewable electricity at no additional cost, proving that moving towards a sustainable energy future need not cost the earth. te

11%

theenergyst.com

VIEWPOINT

Will the finance director buy into your energy business case? One of the biggest challenges facing those charged with managing energy is the effective engagement of the key decision makers, particularly where capital investment is needed, says Jes Rutter, managing director JRP Solutions and chair of ESTA’s Independent Energy Consultants Group (IECG)

ne of the universal findings of the thousands of Esos audits recently completed was the lack of awareness within the board rooms of UK Plc of the opportunity that energy offers organisations. It often seems that the board is prepared to invest considerable resource in making small savings in material and production costs but is not prepared to consider that significantly more money could be added to the bottom line by an organisation becoming more energy efficient. Why is the message not getting through to the people who make

42 April/May 2017

the investment decisions? To stand the greatest chance of success, we have to know how to communicate with the purse holders and it is critical that any business case for energy efficiency is in the right language, is robust and is verifiable. Good quality, reliable, consistent, relevant management information is key. By this I do not mean endless reams of meaningless data written in a language alien to many board directors, most of whom don’t know, let alone care, what ‘kWh’ means. Firstly, energy consumption data has

Lack of trust of the level of savings being claimed is one of the commonly cited barriers to the uptake of energy efficiency projects

theenergyst.com

to be reported in a format and style that is easily understood. This should form the basis of an energy report that provides a clear picture of how energy is being used across a business, the levels of consumption and cost relative to the levels of activity and the impact of any implemented improvement measures. Monitoring integrity The quality, completeness and reliability of the energy data will very much depend upon the integrity of the installed metering and monitoring (aM&T) infrastructure, the scale and complexity of which will vary in accordance with not only the size and energy intensity of the site but also with its organisational structure. It is not uncommon to see organisations where the infrastructure exists but there is a lack of good quality energy data due to non-functioning meters, insufficient metering, poor data collation or simply from an inability to interpret the data into useful information. It is important to ensure the integrity of the aM&T, as a good system will provide senior managers with definitive proof of performance against energy targets and will evidence the actual return on investment where capital projects have been implemented. This will validate the investment and ease approval for future projects. One of the commonly cited barriers to the uptake of energy efficiency projects is the lack of trust of the level of savings being claimed. One way to overcome this barrier is by asking for proof of energy consumption savings from a third party that uses the protocol for performance measurement and verification (M&V) as outlined in the

A good aM&T system will provide senior managers with definitive proof of performance against energy targets and the actual return on investment

theenergyst.com

International Performance Measurement & Verification Protocol (IPMVP) Guidelines. The guidelines, built with the help of organisations from 16 countries and hundreds of individual experts from 25 nations, provides a consistent, reliable approach to M&V around the world. Esta’s Energy Performance Contracting Group (EPCG) considers the finer details of efficiency projects and Esta also provides the UK’s Certified Measurement & Verification Professional (CMVP) training on a quarterly basis. A further barrier is the cost of implementing improvement projects, but often improvements can be made with little or no investment. We have delivered energy behaviour training programmes, for example, that have delivered the same energy savings as capital investment programmes but at a fraction of the cost. The effectiveness of behaviour training projects can be more difficult to predict and verify but it is possible and trainers should be able to provide robust case studies of previous success to support any business case. Gaining trust Another way of gaining trust and credibility is to be able to produce reliable, timely reports on the energy improvement project pipeline as effective project tracking and reporting helps engage stakeholders, prioritise resources and ease decision making. Many organisations use Excel spread sheets to manage improvement projects. This is a useful tool that works well for small organisations or for those with only a handful of projects but spreadsheets become cumbersome and unwieldy for bigger, multi-site organisations with a large number of improvement projects. There are now energy improvement project management systems available that provide up-to-date information in the format and frequency demanded by senior managers to give them the assurance that time, resources and money is being focused upon the projects offering the best ROI. With good data in the right language, verified evidence to build trust and effective project management, capital investment for energy projects is likely to be more forthcoming. te To find out more about how Esta’s IECG members can help your organisation visit esta.org.uk or come along to one of Esta’s regional ‘understand | manage | reduce – energy’ events in May and October

TECHNOLOGY

Chain reaction Eka’s chief technology officer Rajeev Warrier discusses the power of blockchain in commodity markets

ngage in any conversation in the FinTech community and it is not long before the subject turns to blockchain – the much talkedabout technology that will, according to its advocates, revolutionise not just financial services but any area of business with a substantial supply chain behind it. Everything from ensuring payment of parking tickets to protecting sales of energy have been linked in some way to blockchain. As Ginni Rometty, CEO of IBM and high-profile blockchain proponent, said last November: “Today, blockchain – the technology behind the digital currency bitcoin – might seem like a trinket for computer geeks. But once widely adopted, it will transform the world.” And she’s not alone in her belief in the power of blockchain. In the last nine months of 2016, $1.4bn was invested globally in blockchain start-ups. So what is blockchain, and why is it garnering so much attention? As Rometty pointed out, it hails from the world of bitcoin and unregulated cryptocurrencies. Because bitcoin and its competitors have no physical presence and have no physical store of value behind them, they need a universally recognised method of

44 April/May 2017

preventing people from moving the same digital coin more than once – known as ‘double spend’ – or from fraudulently introducing counterfeit ‘coins’ to the network. In the world of crypto-currency there is no central arbitrating authority, and this is where blockchain comes in. It records and publishes every single bitcoin transaction to the entire community of users. Once a transaction is recorded and timestamped, it cannot be altered. In this way, blockchain creates a virtual, distributed ledger, and anyone who joins the blockchain network – anyone who holds or spends a bitcoin – can contribute to this process of continuous monitoring and arbitration. Participants can also create rules for the ledger, and enforce contracts and transactions based on predefined conditions that all parties agree to upfront. The result is a watertight, irrefutable and mutually agreed record of all transactions. And it is this ledger that is getting financial services – and more recently commodities business – excited, since similar ledgers could be deployed to record series of transactions in other sectors.

This is how it would work: assured of complete data transparency, commodity market participants could form a blockchain and then register the transfer of goods on the ledger, including information on all the parties involved, the price, date, location, quality, current condition of the goods or products, and any other information relevant to managing the value chain. Because this information is visible to every participant in the chain at all times, every change, disruption, delay and movement is completely transparent to everyone. All updates are logged and immediately visible to all participants – so there are no nasty surprises or hidden costs waiting for the unwary. Blockchain enables transactions to be automated and contracts to be enforced without third-party oversight. All this automatic compliance saves time and money on each transaction, as well as reducing fraud, disputes and litigation – significantly improving efficiency and decreasing costs in the value chain. There are plenty of specific examples where blockchain could provide transformative

benefits to commodity supply chains. For example: 1) Smart tendering The RFID tags attached to pallets can transmit data directly to the blockchain, indicating to the supply chain network when they should be moved from point A to point B. Carriers can then use blockchain mining applications to place bids to win the transport job. The blockchain then records the transaction and tracks the shipment as it moves through the supply chain. Since all these steps are automated, cumbersome negotiations and inter-party information exchanges can be eliminated. 2) Vessel cargo management The value chain for crude oil or refined products can span hundreds of stages and dozens of geographic locations. Oil shipments are usually tracked manually using bills of lading, a pen-and-paper system developed more than 500 years ago. Each time ownership of the cargo is transferred – from buyer to trader to seller – the ship’s captain has to acknowledge receipt by stamping the bill of lading before dispatching it to customs

Because this information is visible to every participant in the chain at all times, every change, disruption, delay and movement is completely transparent to everyone theenergyst.com

officials, surveyors, agents and others to review. However, a single distributed ledger created using blockchain would enable the buyer, shipper and seller to track the product without going through laborious and time-consuming paper-based processes. Information about the shipment remains available to all participants to eliminate inconsistencies or confusion. 3)Farm-to-forkmonitoring Blockchain technology has the potential to take agricultural supply chains to the next level by allowing market participants to track products through their entire lifecycle. Thanks to RFID tags, barcodes and the sensors that form part of an Internet of Things (IoT) deployment, a blockchain has a rich repository of information about individual products and their movement through the value chain. Farmers providing information to the blockchain would give manufacturers visibility into their supply crops before they are harvested and shipped. Those manufacturers would also be able to prepare for disruptions and supply complications thanks to updated information from logistics providers. As well-informed purchasers, they can take steps to work around these issues before they become serious problems. The common theme in all these

theenergyst.com

scenarios is blockchain’s ability to provide commodity market participants with unprecedented visibility into transactions – eliminating conflict, confusion, and manipulation of data while significantly decreasing costs and improving efficiency. Not surprisingly, IBM’s latest estimates put the potential annual savings from applying blockchain technology to global supply chains at more than $100bn, with a substantial proportion coming from more efficient commodity movements. That data can be fed into advanced analytics solutions – such as Eka Analytics’ platform – to enable commodity market participants to make better, fact-based decisions based on real-time information. Eka Analytics’ intelligence engine uses blockchain to manage smart contracts, produce origin traceability, commodity-backed financing, warehouse receipt financing, commodity logistics, delivery and settlements. Blockchain technology could revolutionise transaction management, especially when combined with artificial intelligence and machine learning, improving efficiency, decreasing costs and eliminating fraud. Perhaps blockchain’s greatest value is that it ensures the integrity of data, enabling better decision making. te

HVAC

Optimising heating efficiency The efficiency and reliability of a space heating system are influenced strongly by the effectiveness of the water treatment regime, which may include innovative additives to improve heat transfer. Tony Willis of Sabien Technology explains

Sabien is the exclusive UK distributor of EndoTherm. It is said to reduce energy consumption between 10%-15%

pace heating systems make a significant contribution to a building’s energy consumption and carbon emissions, so it makes sense to ensure they operate efficiently. Very often, the main focus is on the heating plant – which is clearly important – but the distribution system also influences efficiency and reliability. For example, the performance of a wet heating system is dependent on three key mechanisms of heat transfer to heat emitters such as radiators – conduction, convection and radiation. Consequently, the distribution system’s ability to transfer heat efficiently to heat emitters is critical. To that end, an effective water treatment regime is essential and there are two aspects to this. The first of these is a water treatment strategy that protects the system, underpins its reliability and

46 April/May 2017

improves efficiency. The second is a relatively new water treatment additive that further improves the efficiency of heat transfer, resulting in added energy savings. From the moment a system is installed it is at risk from corrosion due to the reactions between the water and the metal components of the system. Left unchecked this can cause a range of problems, including blockages, cold spots, damage to pumps and valves and, in some cases, premature boiler failure. Over time, the system will also suffer from reduced efficiency, higher energy costs and CO2 emissions and, potentially, higher capital investment on replacement parts such as boilers. These risks are mitigated through the application of well-established anti-corrosion and anti-scale water treatment programmes. However, there are also other factors that lead to heating

Microscopic crevices and imperfections on the internal heat exchange surfaces lead to heating system inefficiencies due to reduced heat transfer from the water to the surface of the heat emitters

system inefficiencies due to reduced heat transfer from the water in the system to the surface of the heat emitters. Improving heat transfer Even in the cleanest, scale-free wet heating system there will be microscopic crevices and imperfections on the internal heat exchange surfaces. These effectively create gaps between the heating fluid and the heat exchange surface – gaps that the heating fluid is normally unable to enter because of its natural water surface tension. This means that the heated water is not always in perfect contact with the inner surfaces of the heat emitters. To address this issue, a heating system additive – Endotherm – reduces surface tension within the fluid, enabling closer contact with the heat exchange surface to enhance conduction of heat from the water to the heat emitter. This product was the recipient of CIBSE’s 2016 Energy Efficiency Award. The system additive is organic based and fully compatible with existing heating inhibitors and heating system water treatment. Typical dosage to the system would be 1% of the total system volume, and will not require further dosing for five years under normal system conditions. Independent ‘in field’ verification on more than 50 projects has demonstrated energy savings of between 10% and 15% and paybacks typically within two years. These projects involved many different building types, ranging from schools and leisure centres

theenergyst.com

Figure 1: How Endotherm works â&#x20AC;&#x201C; water only (left) compared with Endotherm (right)

to offices and care homes. Boiler load optimisation It is common industry practice to size boilers for the worstcase scenario of very cold winters, so for much of the year boilers often operate

theenergyst.com

under part-load conditions, which may lead to boiler dry cycling and short cycling, both of which waste energy. Moreover, when the overall efficiency of a heating system is improved by installing the additive described above, this

leads to temperature setpoints being achieved more quickly, so that the boilers may be further under-utilised. There is therefore a strong argument for using boiler load optimisation control alongside such additives to prevent the

energy wasted by boiler dry cycling and short cycling. Using the right type of boiler load optimisation controls has been shown to reduce the energy consumption of commercial and industrial boilers by between 10% and 25%. te

April/May 2017

HVAC HVAC pumps claimed energy savings of more than 30%

The perfect complement to actuators and valves? Belimo has launched new HVAC sensors to complement its actuators and valves, optimising system performance and improving energy efficiency. The sensors can be seamlessly integrated into all major building automation and control systems (BACS) and are extremely reliable, guaranteeing high quality. Belimo’s sensors have a compact enclosure design, intuitive tool-less snapon cover and detachable mounting plate, which make installation and commissioning easy. BACnet and Modbus communication protocols

48 April/May 2017

provide application data access. The highly resistant sensors also carry a five-year warranty, conform to NEMA 4X / IP65 requirements and are UL compliant. Belimo offers sensors for measuring temperature, humidity, pressure, CO2, and VOC (volatile organic compounds) for pipe, duct and outdoor applications. “Sensors from Belimo not only deliver reliable and accurate readings,” states David Alliband, product manager, “but the sensor enclosure design also features a modular conduit fitting and a plug-in terminal.”

The new Tango range of pump solutions from Armstrong Fluid Technology offers built-in parallel sensorless pump control, motor efficiency exceeding IE4, embedded intelligence and connectivity, and is designed for ease of maintenance. These capabilities, when combined, deliver energy savings of more than 30%. The Tango pump solutions are the latest addition to the Armstrong Design Envelope portfolio of fluid management systems for HVAC applications. Designed for all variable speed operation in the 1hp to 10hp range, the Tango solutions are fully integrated parallel pumping modules offering significant reductions in size and weight, and improved efficiency, with particular advantages for applications where full duty standby would traditionally be installed. Each Tango solution

features two pump heads with built-in parallel sensorless pump control integrated as standard. The actual capacity of a single pump is greater than expected (2 x 5hp motors with one motor operating and one shut down, for example, delivers 82.5% of capacity rather than 50%). Wireless connectivity and on-board web services are provided as standard across the full product line.

theenergyst.com

LIGHTING

Time to wise up Smarter lighting is a key component of smart buildings.Achieving it requires the latest technologies and a more user-focused approach,says Zumtobel Group senior vice-president Paul Coggins Using the lighting system to control other infrastructure makes sense

e have seen a transformation in the way lighting is controlled – and in the opportunities for doing more than simply controlling the lighting. In particular, there is now a strong trend towards using ‘plug and play’ connectivity to integrate the lighting control network with other networks and control the lighting through a PC. However, this does not mean lighting control can become the domain of general networking companies; considerable lighting expertise is still required to achieve acceptable results. The key advantage is that these developments give lighting specialists the tools to provide a better solution – ensuring the right lighting in the right place at the right time. Achieving this also requires a change in focus from ‘how to control’ to ‘why to control’. Software used as a gateway between the internet protocol (IP) on the general network and the Dali protocol on the lighting control system has increased. All users need do

50 April/May 2017

is type in the appropriate IP address and they are able to control individual lights, change lighting scenes and manage every aspect of the system. A further benefit is that the lighting can be reconfigured easily without the need for expensive control specialists. For this potential to be fully exploited, though, it is essential to recognise that the lighting control interface will be used by non-specialists, so simplicity is the key. Simplifying infrastructure Smarter lighting provides an opportunity to take advantage of the communication functionality that has become known as the ‘Internet of Things’. For instance, a modern office will often contain a range of sensors scattered across the ceiling, which some architects refer to as ‘ceiling acne’. These may be used for smoke detection, temperature detection, lighting control, security and perhaps to control the window blinds. Not only does this lack aesthetic appeal, it also requires considerable duplication of

sensor technology and the cabling that powers it – a far from ‘smart’ solution. Making better use of the infrastructure that is already present in the majority of these buildings, namely the lighting system, is the obvious way to provide much needed simplification. In this ‘Internet of Lighting’ the data captured by, say, occupancy sensors for controlling the lighting can also be used for other purposes. A single, discreetly located occupancy sensor can forward its data to the HVAC systems, window blinds and security management system, as well as the lighting control system. It may also become possible for a single sensor to control all of the requirements of a space. One obvious example is an occupancy sensor in a toilet that controls both the lighting and the solenoids responsible for urinal flushing. Such sensors can be installed discreetly in luminaires, and if a number of luminaire-based sensors are used, the data can be evaluated in much finer detail, perhaps to optimise

the lighting and temperature control for a single workstation. The luminaires can also be used to discreetly ‘host’ other technologies such as Bluetooth transmitters, enabling people to navigate a space via their smart phones. Again, a key advantage is that no extra power supply or separate batteries are required to run these devices. Managing space Occupancy data can also be used to assess how each space is being used without resorting to traditional, time-consuming space utilisation studies. Harvesting current data from lighting occupancy sensors enables spaces to be managed more effectively, based on more timely and meaningful data. To that end, our company is already trialling a dashboard that pulls in information from lighting occupancy sensors to provide a graphical overview of occupancy patterns. In addition to the usual parameters that are monitored by lighting systems, such as daylight and occupancy, there are sensors that can also measure colour temperature. When linked to tuneable white lighting this means that the colour temperature can be adjusted to suit changing conditions. Taking this principle slightly further, there are now sensors using charge coupled device (CCD) technology to detect contrast and ‘understand’ activity in the space, adjusting the lighting accordingly. Technology now allows the lighting infrastructure to not only control the lighting in better ways but also contribute more broadly to the management of the building. te

theenergyst.com

COMPRESSED AIR

Take your marks Vilnis Vesma, a specialist in the analysis of energy consumption data, has been experimenting with advanced benchmarking methods

n energy-intensive manufacturing processes, just as with buildings, there is a need to benchmark production units against each other and against yardstick figures. Conventional wisdom has it that you should compare specific energy ratios (SER), of which kWh per gross tonne is one common example. It seems simple and obvious but, as anybody who has tried it will know, it does not really work because a simple SER varies with output, and this clouds the picture. To illustrate the problem and to suggest a solution, this article picks some of the highlights from a recent pilot exercise to benchmark air compressors. These are the perfect thing for the purpose not least because they are universally used and obey fairly straightforward physical laws. Furthermore, because they are all making a similar product from the same raw material, they should in principle be highly comparable with each other. Various conventions are used for expressing compressors’ SERs but I will use kWh per cubic metre of free air. From the literature on the subject

Table 1: Benchmarking pilot Case

Marginal SER

Standing kWh per day

0.085

115

0.090

0.092

3,062

0.097

161

0.105

0.124

0.161

698

Note: Case 4 gave irrational results and had to be excluded

you might expect a given compressor’s SER to fall in the range 0.09 to 0.14 kWh/ m3 (typically). Lower SER values are taken to represent better performance. Key drawback The drawback of the SER approach is that some compressor installations, like any energy-intensive process, have a certain fixed standing load independent of output. The compressor installation in Figure 1 has a standing load of 161 kWh per day for example, and this has a distorting effect: if you divide

kWh by output at an output of 9,000m3 you should find the SER is just under 0.12 kWh/m3 but at a low daily output, say 4,000m3 , you get 0.14 kWh/ m3. The fixed consumption makes performance look more variable than it really is and changes in throughput change the SER whereas in reality, with a small number of obvious exceptions, the performance of this particular compressor looks quite consistent. When I say it looks consistent I mean that consumption has a consistent straight-line relationship with output. The gradient of the best-fit straight line does not change across the normal operating range: it is said to be a ‘parameter’. In parametric benchmarking we compare compressors’ marginal SERs, that is, the gradients of their energy-versus-output scatter diagrams. The other parameter that we might be interested in is the standing load, that is, where the diagonal characteristic crosses the vertical (kWh) axis. The compressor installation in Figure 1 is one of eight that I compared in a pilot study (Table 1). As you can see, the marginal

SERs are mainly fairly comparable and may prove to be more so once we have taken proper account of inlet temperatures and delivery pressures. But their standing kWh per day are wildly different. It makes little sense to try comparing the standing loads. In part they are a function of the scale of the installation (Case 1 is huge) but also the metering may be such that unrelated constant-ish loads are contributing to the total. The variation in energy with variation in output is the key comparator. In order to conduct this

Figure 2: Compressor benchmarking – 7 kWh per day

Figure 1: Compressor benchmarking – 2 kWh per day 1,600

1,000 900

1,400

800

1,200

Consumption (kWh)

The drawback of the SER approach is that some compressor installations, like any energyintensive process, have a certain fixed standing load independent of output

1,000 800 600 400 200

700 600 500 400 200 200 100 -

2,000

4,000

6,000

Driving factor: Air

52 April/May 2017

10,000

12,000

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Driving factor: DailyAir

theenergyst.com

kind of analysis, one needs frequent meter readings, and the installations in the pilot study were analysed using either daily or weekly figures (although some participants provided minute-by-minute records). Rich data like this can be filtered using cusum analysis to identify inconsistencies, so for example in Case 3, although there is no space to go into the specific here, we found that performance tended to change dramatically from time to time and the marginal SER quoted in the table is the best that was consistently achieved. Case 7 was found to toggle between two different characteristics depending on its loading: see Figure 2. At higher outputs its marginal SER rose to 0.134kWh/m3, reflecting the relatively worse performance of the compressors brought into service to match higher loads. In Case 8, meanwhile, the compressor plant changed performance abruptly at the start of June, 2016. Figure 3 compares performance in May with that on working days in June and we obtained the following explanation. The plant consists of three compressors. Compressor one is a 37kW variable-speed machine which takes the lead while compressors two and three are identical fixedspeed machines also of 37kW rating. Normally, compressor two takes the load when demand is high but during June they had to use compressor three instead, and the result was a fixed additional consumption of 130

kWh per day. The only plausible explanation is that No. 3 leaks 63m3 per day before the meter, quite possibly internally because of defective seals or non-return vales. Enquiries with the owner revealed that they had indeed been skimping on maintenance and they have now had a quote to have the machines overhauled with an efficiency guarantee. Performance variations This last case is one of three where we found variations in performance through time on a given installation and were able to isolate the period of best performance. It improves a benchmarking exercise if one can focus on best achievable, rather than average, performance; this is impossible with the traditional SER approach, as is the elimination of rogue data. Nearly all the pilot cases were found to include clear outliers which would have contaminated a simple SER. Deliberately excluding fixed overhead consumption from the analysis has two significant benefits. It enables us to compare installations of vastly differing sizes, and it also means we can tolerate unrelated equipment sharing the meter as long as its contribution to demand is reasonably constant. A fuller account of the pilot study can be found at EnManReg.org/air-bm, and I would be interested to hear from users of compressed air who would like to participate in further benchmarking studies. te

Figure 3:Compressor benchmarking â&#x20AC;&#x201C; 8 kWh per day 1,000

Consumption (kWh)

900

Working days in June 2016

800 700 600 500 400 300

May 2016

200 100 0

1,000 2,000

3,000 4,000 5,000 6,000

Driving factor:DailyAir

theenergyst.com

7,000

8,000

VIEWPOINT

The appliance of science Karthik Suresh, committee member for UKAEE and director at Ameresco, highlights the growing development of science-based targets in reducing greenhouse gas emissions. Can this cause a ripple effect in driving wider emissions reductions in the supply chain?

he corporate sector is the world’s largest source of emissions, and larger companies are coming under pressure and scrutiny from customers, investors and employees to do more about their carbon footprint. As a result, an increasing number of companies are setting science-based targets to reduce greenhouse gas emissions,

signing up to the Science Based Targets initiative set up by the WWF, the World Resources Institute, the UN Global Compact and CDP. The term ‘science’ in the name of the initiative has a very precise meaning. The group defines science-based targets as targets adopted by companies to reduce greenhouse gas (GHG) emissions “that are in line with

the level of decarbonisation required to keep global temperature increase below 2°C compared to pre-industrial temperatures, as described in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC AR5)”. Some 230 companies have signed up to the initiative, with 41 having set targets so far covering Scope 1, Scope 2 and Scope 3 emissions. Scope

1 emissions result from sources controlled by the organisation, such as generation or process equipment. Scope 2 emissions result from indirect emissions, for example from purchased energy and Scope 3 emissions result from activities such as commuting that are related to the organisation but not directly controlled or owned by it. Companies participating in the initiative are required to »

Figure 1: Scope 1 greenhouse gas reduction commitments signed up to by a number of large companies to date

100% 90%

Verbund

80%

70%

60%

Konika Minolta EDP - Energias de Portugal

Coca-Cola Enterprises

50%

Dell Inc

Diego plc

Lundbeck A/S Thalys

40%

Capgemini

Kerring

Sony

Tetra Pak

Postnord

Land Securities

Ingersoll Rand Co

30%

Daiichi Sankyo

Husqvarna Group

Proctor & Gamble

Proximus

Eneco

20%

Pfizer

Kirin Holdings General Mills

Host Hotel & Resorts Enel

Kawasaki Kishen Kaisha

Hewlett Packard Enterprise AstraZeneca

AMD

Walmart Stores

Panalpina

Pepsico

International Post Corporation

Kellogg Company

10%

UBM plc

Nestle Swisscom

0% 2018

54 April/May 2017

2020

2022

2024

2026

2028

2030

2032

theenergyst.com

VIEWPOINT set a target for the percentage of emissions reduction they will make by a target year against a base year. Scope 1 emissions are those that companies have the greatest ability to influence by changing the way in which they operate or carry out their business. Figure 1 shows the commitments that some of the companies in the initiative have signed up to so far for reducing Scope 1 emissions. The bulk of companies have set targets for reductions in emissions ranging from 10% to 60% to be achieved between 2020 and 2030. One outlier, Verbund, has set itself a target of 90% reductions in Scope 1, 2 and 3 by 2021 but it is Austria’s largest electricity provider and generates 90% of its electricity from hydro power. Many companies have set targets that at first glance seem quite challenging. Reductions of 10-50% of direct emissions in three years are going to require taking a radical approach to every aspect of company operations. In particular, it will require implementing a number of energy conservation measures as soon as possible. Vilnis Vesma, a well-known figure in the energy industry, says “the challenge (and opportunity) relates to rational target-setting at the micro rather than macro level”, pointing out that the scientific approach needs to be followed through to the detail of implementation. The initiative, however, allows companies a little more flexibility as targets can be absolute or relative. For example, AMD has an absolute goal for suppliers’ wafer foundry scope 1 emissions to stay 30% below the Semiconductor Industry Association average while Thalys’ commitment is to reduce corporate Scope 1, 2 and 3 GHG emissions per passenger kilometre by 41.4% by 2020. Autodesk commits to

56 April/May 2017

reduce total Scope 1, 2, and 3 emissions 43% by 2020, while Ingersoll Rand commits to reduce scope 1 and 2 emissions (on a per unit revenue basis) 35% by 2020. The headline reduction figures cannot be compared directly as a result. Companies can choose a method that works for them and drives the right kind of emissions reductions in their business. To help them there are seven methods put forward by the sciencebased targets group so far: 1. The Sectoral Decarbonisation Approach (SDA) The SDA looks at how similar energy intensive companies can choose the lowest cost technology mix to meet their energy demand. The SDA looks at how sectors differ from each other, the potential for reductions and how quickly each sector grows over time. 2. The 3% solution Developed by McKinsey, WWF, CDP and Point 380, US corporates would cut emissions by 3% per year overall, while individual corporates would have tailored targets using a tool called the Carbon Target Profit Calculator. 3. BT – CSI BT has come up with a Carbon Stabilisation Intensity (CSI) target in 2008 that is calculated by comparing its emissions with how much it as a corporation contributes to GDP. The contribution to GDP is defined as “valueadded”, and the CSI is measured as the emissions per unit of value added. 4. C-FACT Corporate Finance Approach to Climate-Stabilising Targets (C-FACT) is a relative target that divides a company’s greenhouse gas emissions footprint by its GDP contribution (measured by gross profit) and

6. Greenhouse gas emissions per unit of value added (Geva) The Geva analysis suggests reducing greenhouse gases per unit of GDP by 5% a year to meet the two-degree target, which then translates into a corporate target of 5% reduction in Geva per year. This seems similar in form to the BT-CSI at first glance.

Implementation by some of the largest companies in the world will cause a ripple effect through their supply chains and reduce emissions far beyond their own companies calculates a carbon intensity reduction rate that takes into account growth rate. 5. CSO’s context-based carbon metric The Center for Sustainable Organisation’s (CSO) developed a context-based carbon metric along with Ben & Jerry’s in 2006. The metric compares emissions from an organisation to targets based on climate change mitigation scenarios. It works out an individual target that looks at how the organisation will grow and is updated based on what others are doing and the change in global emissions over time.

7. MARS Method The MARS method targets Scope 1 and Scope 2 emissions, where it has direct control and selects to “over-deliver” on targets on these emissions by targeting a reduction of 100% in 2040 rather than 80% in 2050. This takes pressure off Scope 3 emissions that cover agriculture and are harder to influence. The one method missing from the Science Based Targets initiative is the system of carbon budgets in the UK. The third carbon budget sets a target reduction of 35% by 2020. Companies operating in the UK should consider whether they should align their targets with UK policy or a global initiative – and to a large extent this will depend on whether their emissions are created in the UK or internationally. The Science Based Targets initiative is a significant step in the right direction with commitment from some major companies. Implementation by some of the largest companies in the world will cause a ripple effect through their supply chains and reduce emissions far beyond their own companies. te

UKAEE covers a range of expertise in the energy management and energy efficiency sectors. It delivers a range of technical-focused seminars and offers excellent networking opportunities for energy and sustainability professionals. It offers Continued Professional Development opportunities for AEE certifications such as Certified Energy Manager, Certified Measurement and Verification Professional and Certified Energy Auditor. Membership to the UKAEE is currently free. For more information on UKAEE or how to join, please visit ukaee.org.uk

theenergyst.com

The Directors' Energy Report 2017

Download your copy now at theenergyst.com/ directors

Directors Survey revised.indd 1

Produced by

Supported by

2/20/17 9:13 AM

RECRUITMENT

Smart cities and the job market As the world’s population becomes more urban, so cities are adapting to this by becoming smarter through the Internet of Things. How will this affect the future job market, asks McLean Ross’s Catherine Mclean

Global smart city technology will reach $408bn annually in the next three years

t’s full steam ahead for the smart cities movement. Cisco Systems has suggested that the world is being urbanised at a staggering rate of 10,000 people per hour. This means that by 2050, more than 60% of the world’s population will live in cities, so it is no wonder smart technology is gaining momentum at a phenomenal pace. This influx of people means that cities are now facing accumulative challenges – from transport congestion to sufficient supply of electricity. Times are changing Improving a city’s infrastructure to keep up with technological innovation is essential in order to maintain quality of life, manage carbon emissions and to maintain economic growth. By way of keeping ahead of the trend, entire cities are adopting IoT solutions to increase flexibility across areas such as transportation, water

58 April/May 2017

supplies, agriculture, healthcare. The integration of transformation technologies to accommodate the smart city movement is boundless but with these innovative concepts, how exactly is smart city technology impacting the global job market? Change brings opportunities While exact global market size is difficult to determine, it is expected that smart city technology will reach $408bn annually in the next three years. Of course, the sheer scale of market growth is incredible, with new sectors being thrown into the mix; so surely that’s good news for the global economy? Those with digital skills will see doors opening as IT infrastructure will be at the core of the new wave of IoT, bringing a number of new and interesting opportunities. Transformation technologies like machine learning, energy storage and smart metering have already opened up a number

of innovative job prospects. As the machine learning market is predicted to reach 52.65% CAGR over the next five years, it is unsurprising that machine learning scientist roles are becoming highly sought, particularly with regard to smart cities. Data , data everywhere We know that IoT devices and services are the future; the trillion-dollar industry is predicted to sky rocket by 2020, making way for a flood of data scientist and analyst roles. In addition to this, we can expect urban innovation and mechanics

A smart city can only exist when it is able to attract the right talent

occupations to sweep the globe, to ensure continual innovation to keep up or ahead of the trends. When it comes to smart technology in general, the threat of hackers is a big concern; on the back of this, cyber security is growing in importance. Last year, we saw a surge of attacks on smart home devices. While security companies are stepping up their game to keep hackers at bay by developing devices that scrutinise data as it flows throughout networks, security remains a big worry with the proliferation of devices. Cue the rise in demand for cyber security analysts. Without the right talent to implement these transformation technologies, communities will be unable to keep up with the trends and the ever-growing needs of their population. This risk is currently all too familiar; we are experiencing a global digital skills gap, which the House of Commons Science and Technology Committee says is costing the UK economy more than £63bn a year alone. These digital skills will be fundamental in the widespread adoption of smart city technology; a smart city can only exist when it is able to attract the right talent to continually update the economic infrastructure through innovative processes. Aside from employers ensuring that they have a strong employer and talent branding strategy in order to hire the most skilled and culturally suited employees, bridging the skills gap is clearly a necessity in the years to come. Inspiring people to choose a technology-based career path is an essential requirement for the future of smart cities. te

theenergyst.com

WATER MANAGEMENT

Further deregulation in England’s water market England’s water market for business customers underwent further deregulation in April, enabling companies of all sizes to benefit from more competition and lower costs. Nick Simpson, marketing director at SUEZ Water UK, highlights the benefits

usiness owners across England can benefit from lower bills and better service by switching water providers. The market for supplying water to businesses in England was further deregulated in April, bringing it in line with current arrangements in Scotland. Water deregulation is not new. Competition for water services was first introduced in England in 2003, and commercial customers using more than 5,000 cubic meters of water per year can already choose their supplier. In practice, however, the complexity of the overall market has meant continued high costs and low levels of customer satisfaction. Businesses in Scotland have fared better. The commercial water market there has been fully deregulated since 2008. More than 40% of businesses north of the border have renegotiated their arrangements for the supply of water and sewerage service. It is estimated the change has delivered overall savings of £43m and reduced water consumption by about 20 billion litres. The success in Scotland has encouraged the government to adapt a similar model in England. In 2009, the independent Cave Review of competition and innovation in water markets published its final report. The Water Bill was subsequently published by Defra in 2013 and passed by Act of Parliament in 2014. The Water Act is intended to allow all non-domestic business

60 April/May 2017

£43m The savings that water deregulation in Scotland has delivered since 2008

Initially, at least, capturing those benefits could be tricky. Amalgamating customer and supply records from all the existing water companies, for example, is a formidable task customers, plus public sector, charitable and not-for-profit organisations in England, to choose their supplier of water and sewage services, regardless of where they are in the country. This represents a dramatic shift in the scale of the deregulated water market. With around one million eligible companies, the English market is about eight times larger than in Scotland. In anticipation of these changes, many of the water

companies established licenced water retail supply businesses, either directly owned, jointowned or in partnership with specialised providers. In each case, contact was made with business customers to advise them of the changes. In principle, this further deregulation will help companies cut their water costs by eliminating inefficiencies, reducing the complexity of sourcing across multiple sites, and providing single billing rather than multiple billing from different regional suppliers. It isn’t all about price, however. Many customers will place equal or greater value on other factors, such as reduced administrative complexity, flow monitoring, security of supply, greater water efficiency, enhanced customer or water hygiene services or carbon reduction. Initially, at least, capturing those benefits could be tricky. There will inevitably be teething problems with the new market. Amalgamating customer and supply records from all the existing water companies is a

formidable task, for example. Customers will also have to wade through new, and potentially quite complex, offers and pricing structures from different providers to find the best option for them. That might feel like an unwelcome distraction. To take advantage of the potential savings, however, non-domestic water users in England do need to develop strategies for managing vital water and wastewater services. One answer may be to outsource responsibility for water and wastewater treatment – and factors such as cost negotiations – to an industry expert such as SUEZ Water UK. In many respects, this type of outsourcing is no different to that of many other non-core business services such as warehousing, IT or payroll. Ultimately, such an arrangement would help a company to remain focused on its core business, while reducing the cost, risk and complexity of managing its water and wastewater systems. te

theenergyst.com

WATER MANAGEMENT

The plunge into Open Water Much has been made of the benefits that are available to businesses from taking control of their water cost and consumption but what options are available to them, asks SES Business Water managing director Giuseppe Di Vita

he commercial water market is now open for business in England, meaning 1.2 million eligible businesses have the choice to move their water supply to a different retailer for the first time. The current wholesale price framework is in place until 2020, restricting the ability of retailers to make drastic price reductions immediately available. However, the average business should still be able to immediately reduce their water bills by up to 5% in the newly deregulated market from competitive pricing alone, and tariff savings could be more significant from 2020 onwards. Fix, flex or self-supply? There are different water procurement strategies available to businesses, from fixed tariffs to navigating the wholesale markets directly. Unlike in the volatile energy markets, where fixing a contract can guarantee budget certainty for those with a low risk appetite, fixed tariffs offer minimal benefits to businesses in the more stable water market. A fixed tariff should freeze the vast majority of costs within a businessâ&#x20AC;&#x2122; water supply, although wholesalers make annual price adjustments as laid out in the frameworks that will be passed through as part of the contract. There has been some talk in the market about self-supply to enable larger businesses to access wholesale prices. This is now possible in the open market and while this might work for some organisations, there are some hurdles to overcome, from

theenergyst.com

a large amount of administrative work to set up, to upfront working capital requirements. In short, businesses purchase a self-supply licence and go through a licence application process. Businesses are then required to set up supply agreements with wholesalers and pay upfront for their pre-estimate consumption. This can mean paying out significant levels of capital (and setting up individual agreements with multiple wholesalers where businesses have sites in different regions). Businesses would then need to set up meter reading contracts and manage the reconciliation of settlement volumes after consumption, and potentially allocate costs across internal sites. This could be managed internally where resource allows, or by

The ability to access and analyse your businessâ&#x20AC;&#x2122; consumption in one place will also make it far easier to make informed water decisions to reduce usage and cut costs

Businesses need to consider all their options carefully before pressing the button on changing their water supplier

a third party, meaning additional cost could be incurred. This option may work for some organisations but there are alternatives that negate the need for lengthy processes and capital requirements. One example is Wholesale Tracker Plus from SES Business Water, a tariff that tracks the annual wholesale rate, with one single charge based on the services taken. This still provides transparency and access to wholesale prices, without admin-intensive processes or taking on commercial risks. Consider contract terms too: as businesses get to grips with the water market, locking yourself in to a long-term contract with high exit fees may restrict your ability to adapt as you focus more on water costs and consumption. Securing the best deal for you Of course, price is only one factor to consider in water. Efficiencies from consolidating a portfolio under one national supplier also count, reducing resource and streamlining invoice management processes. The ability to access and analyse your businessâ&#x20AC;&#x2122; consumption in one place will also make it far easier to make informed water decisions to reduce usage and cut costs. However, choosing the right contract from the offset will be crucial in ensuring your business takes control of water costs and accesses the benefits of open water through a contract that meets your individual needs. The water market offers opportunity making the right decisions to secure the best deal for your business means that opportunity can be untapped. te

April/May 2017

PRODUCTS University saves £194,000 a year using drive technology The University of Leeds is saving £194,000 a year in energy costs and more than 809 tonnes in carbon emissions following the installation of 94 ABB variable speed drives ranging from 5.5 to 55kW. A payback of 1.2 years has been achieved on a capital outlay of £228,859. The project formed part of the university’s Carbon Management Plan, in which it identified ways to save energy and cut its carbon emissions.

This included installing VSDs on existing motors powering fans in air handling units and fume extraction equipment and water pumps. Most of the assessed

Higher luminous flux, less power Tridonic has given its sixth-generation SLE LED modules a chip upgrade as well as extending its colour palette range. The Art, Food And Fashion colours, each tailored to suit a specific application, have now been joined by ‘Tinge’ to make warm tones appear even more vibrant. All the versions benefit from greater efficiency in high-output mode and are now available with a 17mm light emission surface. The dimmable LED modules for spotlights and downlights have a greater efficiency of up to 30% and better colour

62 April/May 2017

rendering. The 50mm package is ZHAGA compliant. This allows for a more stable connection between the chip and improvement in thermal conductivity. New versions with a 17 mm light-emitting surface (LES 17) close the gap between 15mm (LES 15) and 19mm (LES 19) modules, which allows for a choice of different emission angles for spotlights. Less power is needed to produce the same luminous flux as the predecessor modules. The LED modules are also compatible with all the drivers in the standard portfolio.

motors had no speed control, being connected direct-on-line. Robert Douglass, energy project officer for the university, said: “Initially we used ABB’s

online DriveSize tool to identify which motors would be best for use with VSDs. This showed that any motor of 10kW or above would produce the greatest savings.” ABB-authorised value provider Halcyon Drives was chosen to supply the drives as it was able to meet all of the university’s technical specifications. Among its requests were harmonic mitigation, a fiveyear warranty and the ability to use one model of VSD across all installations. Halcyon Drives also had the ability to provide service for drives and had the stock availability.

LED lighting overhaul reduces costs by 70% Industrial air movement specialist Air Control Industries is experiencing lower electricity bills and an improvement in its warehouse’s working environment from a new LED lighting system. The system, which has been paid for in part by a Carbon Trust grant, is set to save the company almost £3,500 a year in electricity savings, while reducing it’s carbon emissions by 18,161kg of CO2 per year. Installed by SunGift Energy, which previously designed and installed the company’s 50kW rooftop solar system, the LED lighting is also making visibility in the warehouse much clearer. “It’s one of those improvements that makes sense from every angle,” said Nick Wilson, purchasing manager at Air Control Industries. “When SunGift reviewed our site and showed us the money we would save, the reduction in downtime for repairing broken standard lights, and the concentration benefits for our staff, switching from standard lighting to LED was the obvious choice. “Lighting is a huge overhead for us,” added Wilson, “but now our annual costs will reduce from approximately £5,000 per year to £1,500 per year. That’s a huge reduction – £42,000 over the expected lifespan of the lights.” The installation consists of 32 Fitzgerald ‘Lowbay’ LED lights and 15 JCC ‘Skypack Plus’ LED battens. The full system cost £15,000 but Air Control Industries received a financial contribution of almost £4,000 towards this from the Carbon Trust Green Business Fund. The grant had to be spent using one of the trust’s accredited suppliers, such as SunGift Energy. The savings mean that the system will have ‘paid for itself ’ in just over two-and-a-half years.

theenergyst.com

Lighting the way to greater energy savings Eaton has launched the Crompack LED+, a premium version of its Crompack LED batten. The company’s latest luminaire increases both performance and efficiency by offering 150 luminaire lumens per circuit watt (Llm/ cW) compared with the 114 Llm/cW of its predecessor. As a result, customers can expect greater energy savings and larger reductions in through-life costs. The latest development follows an announcement to apply a five-year

warranty to all mains lighting products, with no annual hours usage restrictions. “The Crompack LED was a leap forward in terms of energy efficiency but with the Crompack LED+ we’ve added an even greater level of efficiency where it is required,” said Ian Roberts, product line manager for mains lighting at Eaton. “The Enhanced Capital Allowance (ECA)

Scheme helps businesses to benefit from single-year capital allowances by using energy saving equipment, including lighting,” said Roberts.

Brick supplier to install heat recovery The Austrian Wienerberger Group, a leading brick supplier and a large European tile maker, has awarded a consortium led by CNIM a turnkey contract to manufacture and install a heat recovery system in a plant in the Linz region of Austria. This is a pilot project for the group, which is looking to optimise costs and improve its energy efficiency. Developed by CNIM in close collaboration with Wienerberger, this system, which is based on a heat absorption pump design, allows energy lost in the form of hot exhaust air from the dryer to be recovered. This will enable Wienerberger to save the equivalent of 500kW of gas to pre-heat the dryer. With 202 production

Sealing specialist’s annual energy consumption reduced by 62%

The Trelleborg Sealing Solutions manufacturing facility in Tewkesbury, in Gloucestershire, is one of Trelleborg Group’s prime European production and development facilities for standard and custom-made high pressure elastomer seals.

theenergyst.com

An essential requirement of the production processes at the site is a constant, large volume supply of compressed air. Within the 6,000 sq ft facility, the wide variety of applications for the air supply ranges from

actuating pneumatic doors on production machinery to the removal of processed products from moulding tools and the spraying of bonding agents on to metals. Based on an iiTrak system energy audit, Trelleborg Sealing Solutions decided

sites in 30 countries worldwide, Wienerberger had revenues of ¤2.9bn (£2.4bn) in 2015. CNIM’s cooling unit and heat pump offering, acquired through the purchase of INVEN’s activity in this area in 2014, has applications including oil and gas, petrochemicals, chemicals, energy generation and shipbuilding.

to install a full-feature Atlas Copco GA45VSD+FF rotary screw compressor with integrated refrigerant dryer as an ‘endurance machine’ on a six-month free trial basis. Running the plant at 6.2bar air system pressure rather than 7bar, combined with the VSD’s capability to vary output from 26 to 155l/s to match the facility’s compressed air demands, the new compressor’s performance results were impressive. It provided savings of 62% in energy consumption, down from 45 to 17kWh, which adds up to £11,400 in annual energy cost savings. In addition to the cost savings, the sealing specialist has also benefited from the compressor’s quiet operation. The company’s current production objective is to achieve a 3% improvement annually in energy consumption.

April/May 2017

Product & Services Directory Contact sales@energystmedia.com BOILERS

COMPRESSED AIR

Energy Efficient Air Compressors ● Energy Recovery Systems ● Compressed Air Leak Detection ● Air Compressor Servicing ● Energy Efficiency Audits ●

6 - 2000kg/hr outputs High efﬁciency (>98%) 3 Minute start up time Skid package units

Tel: 01789 450577 www.mattei.co.uk

BOILER CONTROLS

Providing Complete Steam Solutions for over 120 years

ENERGY MANAGEMENT SOFTWARE

CALIBRATION SERVICES

UKAS 0766/ ISO 17025 Calibration Services • • •

Temperature Humidity Dew point

Multipoint sensor calibration. Low measurement uncertainties. All manufacturers’ instruments. Rotronic purpose-built UKAS calibration laboratory. Fast turnaround times and competitive prices. ROTRONIC INSTRUMENTS LTD Tel: 01293 571000

Email: instruments@rotronic.co.uk www.rotronic.co.uk

§ Efficient and Reliable § High Performance Steam Boilers

METERING

§ Exceptional Customer Care

§ Design, Installation

The UK’s largest independent metering & controls specialists

REA IN G

www.steamboilers.co.uk 01255 224500

Full technical support

CU FTWAT FTPW MENT O T EN SOR ESC OP OJ GEM YM E TVSEL R P NA RGO ISE RE MA EST ARLE D A N I ECU ETCWA FTW SSPOF LOUSDOY C Y OG TTS G L N R E HNIOALOLPIMSENCY N E TECECEVE LTA SIPTE DCOLNOSUUD Y BS

Utility approved meter supplier Nationwide coverage Only distributor of Aichi & Common gas meters The UK’s largest distrubutor of Itron products

ENERGY MANAGEMENT For the best prices in the industry, give us call

+44 (0)121 327 7771

mwatechnology.com

Metering & controls supplier AIN BRIT

C OG T OL MEN HN LOP CY

§ Competitive Pricing

PTSING PPTSING P A S A S

Packages

E NT T RP LOPM EC EME J E O E E PR NAG OM EV MA ST RE D AR

M CR

§ Flexible Service

TECHNOLOGY mwa TECHNOLOGY mwa

M CR

and Maintenance

C E AN TE E DEV SULT

✔ Cloud based energy management software ✔ M&V project tracking in line with IPMVP ✔ Intelligent energy analysis and reporting ✔ Fully branded dashboards ✔ Energy App Market ✔ Works with all major hardware

Tel: 0207 8496947 uk@dexmatech.com www.dexmatech.com

64 April/May 2017

SIT

To feature your company’s products or services on these pages contact sales@energystmedia.com

N CO

email: info@redfishuk.com phone: 01536 527150 www.redfishuk.com email: info@redfishuk.com phone: 01536 527150 www.redfishuk.com

theenergyst.com

ENERGY METERING & MONITORING SYSTEMS

FLOWMETERS

ENERGY PROCUREMENT

VALVES

➡ Multi-Site Energy Software ➡ Energy Procurement ➡ Network/Levies/Commodity Budget Modelling ➡ Risk Management ➡ Energy Contracts Legal Analysis info@pulsebusinessenergy.co.uk T: 0333 7000 250 www.pulsebusinessenergy.co.uk

VEHICLES

RENEWABLE POWER SOLUTIONS

HUMIDITY, TEMPERATURE & CO2 MEASUREMENT

Swiss precision measurement instruments for all industries

TEMPERATURE SENSOR

• • • • • • • •

Temperature Humidity Moisture Low dew point CO2 indoor air quality Process pressure Differential pressure Airflow

Handhelds, loggers inc. wireless,probes for all applications,transmitters, ATEX, meteoproducts, accessories.

PUBLICATIONS

The Directors' Energy Report 2017

UKAS 0766 / ISO 17025 Calibration Services ROTRONIC INSTRUMENTS LTD Tel: 01293 571000

Email: instruments@rotronic.co.uk www.rotronic.co.uk Download your copy now at theenergyst.com/ directors

Produced by

Directors Survey revised.indd 1

theenergyst.com

Supported by

2/20/17 9:13 AM

April/May 2017

Q&A

Phil Ivers Gazprom Energy’s head of customer optimisation regrets missing out on the dot-com boom, dislikes lazy people and wants to know the real truth behind the Stephen Avery case Who would you least like to share a lift with? Why? Tom Cruise. After watching his TV interviews he looks very weird, talking about how “he becomes the characters he plays for his art”. You’re God for the day. What’s the first thing that you do? I’d like to be able to read my girlfriend’s mind about where she wants to go for dinner. After that, I’d explore other planets as I’ve always wondered what is out there – hopefully some little green people. If you could travel back in time to a period in history,what would it be and why? I’d like to go back to just before the dot-com boom so I could invest in Google and be a very rich man.

What would you take to a desert island and why? I’d need some way of accessing the internet... I really can’t live without Google and BBC Sport. I’d also like an endless supply of good rum and ice.

anywhere I wanted and always first class, but being able to fly would be pretty good as well.

What’s your favourite film or book and why? The Hurricane – I love Denzel Washington and this story of a long fight for justice, with a bit of violence.

What’s your greatest extravagance? I’m not that extravagant but I enjoy spending money on holidays and nice hotels. After years of staying in two-star holes I happily pay a premium now.

If you could perpetuate a myth about yourself,what would it be? My dog is not fat… he is just big boned. What would your super power be and why? I’d like to be Air Miles Man – I would basically have unlimited air miles so I could go

What would you do with a million pounds? Vegas with mates – that’s it.

If you were blessed with any talent,what would your dream job be and why? I think 10 years ago I would have said a pilot but now I get sick on rollercoasters, so probably a lawyer because it opens the doors to so many opportunities, including politics. What is the best piece

Who or what are you enjoying listening to? Normally I listen to Radio X except when Chris Moyles is on, but on a long drive I often flick between 5 Live and talkSPORT. What unsolved mystery would you like the answers to? Making a Murderer is the latest TV series I’ve been hooked on, and I’d like to know the real truth behind the Stephen Avery case.

66 April/May 2017

Did he or didn’t he? Making a Murderer’s Stephen Avery

of advice you’ve ever been given? Don’t stress about the things you can’t control. What irritates you the most in life? Laziness – if you want something to happen then you have to push for it. If you don’t ask you don’t get! What should the energy users be doing to help itself in the current climate? Don’t fear the market, read the reports suppliers send and understand what is happening to energy prices and how this will impact your bills. Some practical steps you should take are: • Form a buying strategy or work with people who will do that for you • Don’t fall into standard tender rounds every 12 and 24 months • Work with your supplier on a product that works for you. • Get smart meters or AMR and use that data wisely What’s the best thing – work wise – that you did recently? Part of my job is helping new, independent energy suppliers enter the market by providing strong pricing and products. It is risky entering a very competitive market and I recently saw two of these companies celebrate a full 12 months of business which is impressive; with Gazprom Energy’s help they made it through a very tough winter and still successfully grew. te

theenergyst.com

A BRAND NEW ENERGY EVENT FOR TODAYâ&#x20AC;&#x2122;S BUSINESS MARKET

17-18 APRIL 2018 â&#x20AC;&#x201C; National Motorcycle Museum, Birmingham The Energyst Event will provide you with essential information to cater for the changing needs of the modern energy professional. It will equip users with fit-for-purpose knowledge, insight and solutions in a conference and exhibition that is focussed solely on energy.