The Energyst

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06

Big stick: Ofgem takes action on supplier’s unfair practices

December / January 2016

10

Long view: Calls for an independent energy system architect grow

22

Volatile times: Energy brokers on how to manage the spikier year ahead

The new name for Water, Energy & Environment

Switch on to the power of DSR. See page 14

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19/06/2015 11:52

INSIDE THIS ISSUE

46

51

Compressed Air

COP 21

Calderdale Engineering Services replaced its existing fixed-speed compressor with a VSD installation that has since reduced energy costs by 50%

Why should COP 21 succeed where previous climate change agreements failed and what does this mean for UK businesses?

32 Green ICT

There is much that can be done to make data centres more energy efficient

28

34

NHS Tayside has secured funding for a multimillion-pound energy efficiency programme, including a £7.7m indirect investment from the UK Green Investment Bank

The Energy Awards 2015

Finance

Find out who took the trophies on the night

“Balancing the system was ‘always difficult’, we must make sure we have the right balancing services”

6

News

12

The government’s proposal to protect energy-intensive industries from the costs of decarbonising the power system has been approved by the EU

Policy & Legislation

National Grid plays down fear of a power capacity shortfall next winter.

However, it admitted balancing the system will be challenging and that it will require at least as much back-up power, if not more, than this winter

theenergyst.com

Big stick: Ofgem takes action on supplier’s unfair practices

December 2015 / January 2016

10

Long view: Calls for an independent energy system architect grow

22

Volatile times: Energy brokers on how to manage the spikier year ahead

The new name for Water, Energy & Environment

14

Cover Story

Looking back, looking forward – what 2016 has in store for energy professionals

4

Demand Response

06

Policy & Legislation

News & Comment

20

National Grid is urging firms to use demand side response for cash and carbon

Switch on to the power of DSR. See page 14

Green ICT

32

Compressed Air

46

12

The Energy Awards

34

Water Management

52

Gas & Electricity

20

HVAC

38

Q&A

58

Finance

28

Lighting

44

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December/January 2016

3

COMMENT

Energy will be constrained December saw an historic global agreement made to restrict rising global average temperatures to below 2°C, with an aim of achieving 1.5°C if possible, at the COP 21 meeting in Paris. There are no explicit legal implications for countries to actually adhere to these commitments but it is thought that this public pledge will be enough to inspire commitment. However, government’s have been inept at achieving much since the first meeting in Rio in the early 1990s and many of the cuts that have been achieved have been by businesses and through technological innovation.

The cost of that kWh is the same as a hydrocarbon kWh. But it doesn’t come at night, it doesn’t come after the sun hasn’t shone, so the fact that in that one moment you reach parity, so what?

Bill Gates has kick started the Breakthrough Energy Coalition, a collaboration of 30 wealthy businessmen who will invest money in technologies that will reduce demand for fossil fuels. Their aim is to use their influence to help spur demand for and availability of green energy sources.

that, they underestimate how hard this thing is. So false solutions like divestment or “Oh, it’s easy to do” hurt our ability to fix the problems. Distinguishing a real solution from a false solution is actually very complicated.”

Carbon taxes could be one of the most effective ways to tackle climate change. Currently when a business or individual takes an economic action with some fossil-fuel energy content they weight the benefits against the costs, however, when it comes to carbon this isn’t factored into it so it effectively comes to nothing. Polluters do not pay for the emissions their actions necessitate. A carbon tax can change all that. Yet imposing one on a global scale is almost certainly politically impossible. Yet this is the way that things will go even if not uniformly in all places.

Businesses can prepare for this by having a grip on their energy profile and managing energy risk while reducing consumption where possible. It is not going to get easier so the more prepared you are the better.

Everyone at Energyst Media wishes you a happy and prosperous 2016.

In an interview with The Atlantic Magazine, Mr Gates said: “They have this statement that the cost of solar photovoltaic is the same as hydrocarbon’s. And that’s one of those misleadingly meaningless statements. What they mean is that at noon in Arizona, the cost of that kilowatthour is the same as a hydrocarbon kilowatt-hour. But it doesn’t come at night, it doesn’t come after the sun hasn’t shone, so the fact that in that one moment you reach parity, so what? The reading public, when they see things like

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NEWS & COMMENT

Business energy firm BES hit with £1m penalty for bad practices Small business energy supplier BES has been hit with a penalty just shy of £1m by energy watchdog Ofgem.

The regulator’s investigation found the supplier was treating customers unfairly by not telling them about important contract details.

As most of its customers were on multiyear contracts, BES’ failure to explain possible termination fees to customers if they ended their contract early, to properly explain price reviews during their contract, and that they faced increased standing charges for not using a minimum amount of energy were particularly serious, said Ofgem.

Some customers on deemed contracts were also blocked from switching supplier, so ended up paying over the odds for their energy.

BES will now compensate those affected. Make good measures include repaying termination fees as well as standing charges.

BES will also get in touch with customers who have previously contacted them about their contracts and will allow them the option to end their contracts without paying termination fees.

Pygram: BES failed to treat its customers fairly

Of the £980,000 BES has agreed to pay, £310,000 will be returned to customers, with the remainder going to the Business Debtline.

Ofgem said BES had cooperated with its investigation and since improved its processes.

“BES failed to treat its customers fairly and did not provide them with key information when signing up for contracts,” said Ofgem’s head of enforcement Anthony Pygram.

“BES’ customers were unable to make fully informed choices about their energy supply and many were signed up to four or five year contracts without realistic ways to exit. This

was unacceptable, and is why the supplier has agreed to pay £980,000 to compensate customers directly affected and to benefit consumers through Business Debtline.”

Ofgem pointed out that about 10% of micro businesses are on deemed contracts, taken up when firms move into new premises and start using energy without agreeing a contract.

The regulator said that on average, those on deemed contracts paid 80% more than rates charged in a negotiated contract.

In a statement, BES said the issues had now been rectified.

Joel Chapman, head of regulation and compliance at BES, said: “BES takes customer service and compliance extremely seriously and we apologise sincerely to the customers affected by these issues.

“We have engaged openly with Ofgem, both in the years prior to and throughout the course of this investigation, and we are pleased that the regulator agrees that we have improved our processes.

“Over the last 18 months we have invested heavily in additional staff, processes and IT systems to ensure

Ofgem said that on average, those on deemed contracts paid 80% more than rates charged in a negotiated contract we not only remain compliant, but deliver a first class level of service.

“This is the first and only investigation by the regulator in BES’s 10-year history and we have learned a number of vital lessons, which will allow us to continue working with Ofgem in an open and transparent manner in the future, while also ensuring that treating customers fairly remains central to our business.

“BES has agreed to repay more than £310,000 to customers directly affected by these problems and will also be paying £670,000 to support Business Debtline’s vital work with small businesses facing financial difficulty.”

EU approves state aid for energy-intensive users The government’s proposal to protect energy-intensive industries from the costs of decarbonising the power system has been approved by the EU. The move was first flagged by the prime minister in October, with the chancellor confirming that the UK’s most energy intensive industries would not be liable

6 December/January 2016

for renewable subsidies in his autumn statement.

The Department for Business, Innovation & Skills said it would publish further guidance in January with payments to be backdated to the date that state aid clearance comes through (17 December).

The news was welcomed by manufacturing groups.

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Scrapping support for onshore wind developments could hit energy customers Government proposals to block onshore wind farms could cost energy consumers at least £500m, a new report has warned. Citizens Advice says a pledge to end new subsidies for onshore wind farms could stifle crucial attempts to lower bills and reduce emissions.

The report, Generating Value?, from the national charity says excluding onshore wind from auctions for future subsidies could drive up electricity bills.

The absence of onshore wind from the auctions could result in more expensive technologies being purchased instead. Researchers suggest it could add as much as £500m to bills over the 15-year duration of subsidy contracts, or the equivalent of about £30m a year.

Those costs relate to a single auction round for new low carbon generation, but

there may be a number of auctions over several years, so the total cost to consumers may be higher still.

The report welcomes efforts by the government to rein in the costs of deploying low carbon generation, but says the policies on onshore wind could be counter-productive.

The government has already closed the Renewables Obligation, the main form of financial support for projects,

4,000 firms hit Esos deadline Some 4,000 firms made the 5 December Esos deadline, according to the Environment Agency.

A further 2,500 notified the agency that they intend to comply by 29 January, avoiding the risk of enforcement action should they complete and submit audits by then.

Up to 14000 firms are covered by the scheme, which means that only about a third of companies are currently compliant.

The agency indicated it was pleased with progress, given the initial slow uptake, and will now issue reminder notices to non-compliant firms.

While the scheme administrator has the power to impose punitive

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fines, it has made clear companies that make efforts to comply will not normally be penalised. The agency recently updated its guidance to encourage companies to submit paperwork even if they miss the deadline Part of the EU energy efficiency directive, Esos is likely to become a central plank of UK business energy tax policy, currently under review by the Treasury.

Firms are not obliged to act upon audit findings.

However, given that many companies could easily shave about 10% off their energy costs through low or no cost measures, the audit can provide the necessary impetus at board level to take action.

to onshore wind development from April 2016. It will set out this autumn how the alternative Contract for Difference (CfD) scheme will be changed so that it no longer subsidises onshore wind farms.

Unless solar power sees further dramatic cost reductions and can be widely developed to fill a potential gap created by blocking onshore wind, Citizens Advice fears customers could lose out.

The charity recommends that onshore wind remains eligible for ‘subsidy free’ contracts, by lowering the cap on the price they receive to a level equivalent to the cost of new-build gas generation.

Changes to the planning system already underway will block onshore wind in parts of the country where communities do not welcome them, making a blanket ban unnecessary. The report adds

that local communities should be able to have their say if they support developments.

Gillian Guy, chief executive of Citizens Advice, said: “Many of the government’s proposed policy changes to clean energy subsidies are necessary given the overspend in the low carbon budget.

But moves to block onshore wind could make it more difficult to keep bills low while keeping the lights on and reducing emissions.”

Consumers could see a further £1bn in savings if support for less mature technologies, such as offshore wind, were scaled back, and cheaper low carbon options such as solar and onshore wind were instead allowed to bid for the entire subsidy budget. This figure also relates to a single auction round, so eventual consumer savings could be higher than this.

We won’t leave keeping the lights on to free market economy Energy minister Andrea Leadsom says supply security is “too important to leave to free market’.

Leadsom denied that the government is micromanaging the UK energy industry.

However, she said that the government would not leave the UK’s energy infrastructure entirely to the free market.

Speaking at the Energy Live News conference in London, Leadsom was asked by former Energy UK boss David Porter whether setting a European price for carbon under which industry could make its own decisions might not be a better policy than “almost micromanaging” power sector investment.

Leadsom responded

that the government was “committed to the reform of the EU ETS”, which has so far failed to provide sufficient market signals to decarbonise power generation.

“We hope [the reformed trading scheme] will play a part in creating a level playing field,” she added.

As for micromanaging the market, Leadsom said it was “National Grid and Ofgem” that managed the market “so we [Decc] are not micromanaging electricity supply”.

However, she was unapologetic about what is perceived as a largely interventionist energy policy, albeit one that the Conservative government has inherited.

December/January 2016

7

NEWS & COMMENT

National Grid buys 3.6GW of back-up power to meet winter demand, DSR tender to follow National Grid has procured some 3.58GW of backup power for next winter at a cost of £122.4m.

The system operator ran the supplemental balancing reserve tender in November.

It proposes to issue contracts to 12 power stations, paying them to be available if needed between November 2016 and February 2017.

The plant that stands to provide the single biggest chunk of power is the Eggborough coal-fired station.

The plant’s owners said in September that they plan to close the station in March 2016.

However, it will provide 681MW derated capacity over next winter, according to National Grid’s tender document. Should any of the plants be called upon to generate, they will be paid a premium to prevent the National Grid having to take more drastic measures

From NISMs to blackouts explained

Eggborough will provide 681MW derated capacity

to maintain supply.

National Grid plans to run a similar auction for demand-side response providers in spring.

The system operator is paying power stations to be on standby and companies to load shift because the UK has little spare capacity, with tightness already felt this winter in the form of a Notice of Insufficient Supply Margin last month.

National Grid has predicted that it may issue seven to 10 such notices this winter.

Next winter is expected to be even tighter.

While MPs recently

UK firms plan efficiency push ahead of price spikes More than nine out of 10 (93%) company directors plan to implement energy efficiency or demand response measures in 2016. Surveyed by The Energyst ahead of the 2016 Directors’ Report, almost eight out of 10 (79%) said that energy had become more of a strategic focus for their organisation over the past 12 months. About two thirds of those surveyed to date (68%) said they had a plan in place to reduce exposure to energy supply or price shocks.

While some industry commentators have predicted extreme supply shocks in the coming months, others believe the UK power system is robust enough to avoid blackouts despite thin generation margins. National Grid has consistently reiterated that it has the tools to cope.

However, such slim margins, as well as changes to the UK’s balancing and settlement regime, will make the power market more volatile in 2016, brokers have warned. That means spikier prices.

As wholesale power costs now make up only around half of the total power bill, firms that can reduce demand permanently or dynamically in response to price signals will therefore save or earn more money.

8 December/January 2016

Some industry commentators continue to warn that the UK faces imminent blackouts. Others are not worried about this winter but are less keen to speculate on winter 2016/17.

National Grid’s Duncan Burt, however, said Grid has the tools to manage system tightness. He recently explained the steps to blackouts to MPs following a tight margin call in November.

First comes the Notice of Insufficient Supply Margin (NISM).

If things continue to get tight and generators and demand response providers do not bring forward enough reserve, National Grid issues a High Risk of Demand Reduction (HRDR) warning. “Then we would look at market response and ongoing reliability,” said Burt.

“Most of the time that will be adequate. If we continue to have difficulties or further losses we would move into emergency measures, such as calling on generators for assistance.”

Burt said National Grid could also use ‘Max Gen’, where generators are called on “to open all the stops” and generate above their normal load for a short time. After that, Grid asks the distribution network operators to reduce voltage (brownouts).

“Typically that would be enough to achieve balance,” said Burt. If not, it tells the DNOs to start disconnecting customers. questioned National Grid about system security following the last NISM (which spawned reports that suggested some generators had taken advantage of capacity shortfalls to make windfall

gains), the system operator reiterated its confidence in managing the system.

However, director Cordi O’Hara admitted “no system operator in the world” would guarantee 100% system security.

Osborne pulls plug on carbon capture storage funding George Osborne has pulled the plug on the £1bn carbon capture and storage fund, lengthening the odds of the technology and associated infrastructure reaching maturity in the UK. The news was not contained in the autumn statement.

Instead the government notified the stock exchange.

It was not a move the CCS industry had seen coming.

The statement held some good news for energy intensive users, which will be exempt from the cost of environmental policies going forward, as the government had already indicated.

Renewable heat budgets avoided the axe, with funding

set to increase to £1.15bn in 2021. However, the chancellor also announced that the scheme would be reformed to save £700m. How that might work remains to be seen.

Osborne said Dece’s innovation budget would be doubled to £500m. Half of that will be spent on small nuclear reactors research, some will go to shale gas.

Meanwhile, the government also announced a £1bn shale fund for communities in which fracking goes ahead. Earlier this year Decc and and DCLG moved to change the planning process after rejections by local authorities of Cuadrilla’s applications in Lancashire.

Sponsored column

40% of firms say they could shift energy use times Some 40% of UK company directors say their business could be more flexible in its shift patterns or when it consumes energy, according to a survey

by The Energyst magazine.

However, only 13% of directors surveyed say they participate in demand response schemes.

Of those that do participate, Triad is the most popular scheme, followed by frequency response and short term operating reserve (STOR) programmes.

The findings arrive as National Grid outlines how its demand turn-up (DTU) programme will operate from May 2016.

The Demand Turn Up service aims to procure negative reserve from demand-side providers who can either turn up their demand, or reduce a level of

embedded generation when called upon by the system operator. According to the document, initial contracts will run for five months as part of a soft launch of the demand turn-up service ahead of launch proper in 2017.

In May and September, participants may be called upon to increase overnight power use between 11.30pm and 8.30am and during the day time – on weekends and bank holidays only – between 1pm and 4pm. The same periods apply in June, July and August, except that the overnight period will run to 9am.

Providers will be paid both for utilisation and availability but will be penalised for not delivering what they have promised. National Grid has mooted a three strikes and out approach to delivery failure.

Policy reset confirms security and affordability top priorities Amber Rudd’s policy reset has underlined the government’s plans to forge ahead with new nuclear and replace coal with gas.

Other than the announcement that unabated coal would be culled by 2025, and a that there is a “strong case” for a more independent system operator, the energy secretary’s ‘reset’ speech was light on detail. But it signalled at least intent to limit interventionist policies.

The government has long made clear its commitment to gas (shale or otherwise) and nuclear. Its moves to curtail subsidies for onshore wind and solar have not been subtle.

The energy secretary said that meeting decarbonisation goals remained an ambition, and that “no government

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should take a risk” on climate change, but stated that a global issue required global action.

Rudd said offshore wind would continue to be supported – at the right cost – and confirmed the next round of subsidy allocation, under the contracts for difference scheme, would take place next year.

She hinted at further bad news for onshore renewables.

“We want intermittent generators to be responsible for the pressures they add to the system when the wind does not blow or the sun does not shine,” said Rudd.

In a speech that reiterated the need for competitive markets, Rudd said energy policy “should be boring” and that the market should be less constrained.

ESOS – What happens now?

After the hiatus of activity leading up to the ESOS deadline, what lasting effect has ESOS delivered?

By Martin Jaehme, Director, TEBS

Consultant's Casebook...

As we all breathe a sigh of relief now that the long hours worked to deliver ESOS assessments for our clients and ensuring they are all registered before the 5 December deadline is over (albeit now a slightly blurred deadline according to the Environment Agency), I am left wondering if all the fuss was worth it. What lasting benefit has been achieved by the government’s imposition of ESOS on large businesses? Has it done any good in the long term?

I confess I’m a bit of a sceptic when it comes to energy legislation which seems to emanate at regular intervals from Brussels or the UK government and has a major impact on the work of all energy consultants.

A bit like the Carbon Reduction Commitment (CRC) which has seen huge change since its introduction in April 2010 and now appears in its true colours as no more than a Carbon tax. But let’s be positive: If the intention of ESOS was to raise the profile of energy in the boardroom of large businesses, then it might have had some effect. If the intention was to highlight benefits from investment in energy schemes, then yes, it has achieved that too. But are there any lasting effects or has this been a momentary blip until ESOS comes around again in four years’ time?

Well interestingly, a number of our clients are giving serious consideration as to how and

when energy saving measures can be implemented. Some of our clients with a more sophisticated approach to managing their energy plant are looking to co-ordinate energy investments with their life cycle replacement programme.

This approach requires financial justification only for the extra cost of highly energy efficient equipment when compared with the cost of like for like replacement. The result of this approach is a very cost effective return on investment, sometimes within one to two years but often only a matter of months!

Some organisations that lack the funds to invest now but recognise the benefits of investing in energy savings schemes are looking to third parties to finance and deliver projects for them. Whatever financing route is chosen by clients, it seems one of the key objectives of the ESOS legislation is indeed being achieved when firms proceed to install recommended energy saving measures.

A further spin off from ESOS that we did not expect, is that a number of firms have asked us to help them attain certification for ISO 50001 – Energy Management Systems. Our qualified assessors have been busy explaining the benefits from ISO 50001 have a lasting effect and not least, it avoids the need for new ESOS surveys in four years’ time.

Martin Jaehme, Director Teamwork Energy Bureau Services Ltd Web: www.tebs.uk.com E: martin.jaehme@tebs.uk.com T: 01275 859100

INSIGHT

Why a systems architect is the solution to the post-coal era The government has ruled out coal-fired power generation ahead of the COP21 meeting in Paris. The UK’s energy strategy needs to be created with a long-term vision, not one that lasts little longer than a parliament, says Phil Taylor

T

he government’s announcement that all coal-powered stations are to be phased out during the coming decade will come as no surprise to most.

Years of under-investment in ageing and inefficient power plants inevitably meant their time was up. Add to this the pressure on energy companies to provide a more sustainable energy mix, and it is clear where the money should be spent.

We all know coal is one of the most environmentally damaging fossil fuels used today. It’s an inefficient and expensive way to meet our energy needs.

Fossil fuels like coal are simply unsustainable when it comes to keeping the lights on in Britain. And yet 25% of the UK’s electricity still comes from coal-burning power stations.

This is now set to change, but in order to do so our infrastructure needs a complete overhaul.

A shift i thinking So what should this look like? It is not just practical transformations in supply, storage and security that are needed but a fundamental shift in thinking. The age of coal is over. As an industry, we must focus on, and invest in, secure and integrated infrastructure to give us a modern, sustainable energy system.

The ‘plan’, as detailed by secretary of state for energy and climate change Amber Rudd in her recent speech to the Institution of Engineers, is to rely on market forces to

10 December/January 2016

The essential piece of the puzzle needed to make these changes a success is a systems architect, a body to lead the transition from a coal driven energy system to something more diverse and sustainable

bring about the change, with government intervention if and when necessary. But large energy companies have, to date, been slow in innovating and developing new technologies, doing so only when subsidies or financial incentives are presented.

How quick or successful the move towards an energy mix built on gas and nuclear will be remains to be seen.

Equally, questions still exist as to whether this approach will be enough to take us forward to an effective, efficient and sustainable energy mix. Carbon capture and storage is still far behind where we need it to be, and we risk falling behind not just as a leader in energy technology but as a global economic player altogether.

Secure energy supply needed Recently government announced axing £1bn in funding for carbon capture and storage technology bringing into question its practical application and economic viability. What we need to do now is integrate more renewable generation into the grid.

Energy storage and smart grids are crucial to making this a reality. Without a secure energy supply, we are stifling our future economic growth.

Investors, as the World Energy Council (WEC) recently pointed out when downgrading the UK’s energy rating, are becoming reluctant to commit to a country with outdated and expensive energy infrastructure. Large

multinationals may decide to relocate elsewhere, where the energy supply is more secure and new efficiencies and technologies are emerging.

Skills and training are also factors here: we are not teaching the engineers, technicians and architects of the future the right skills for a post-coal industry, particularly in renewable energy technology. We need to make sure workers affected by these shutdowns can get the transferrable skills and jobs they deserve. The UK boasts some of the best and brightest minds in the world. We must put these to good use through academic and vocational training at all levels throughout the industry, both for seasoned workers and new recruits, passing on the latest knowledge around low-carbon energy and sustainable systems.

But the essential piece of the puzzle needed to make these changes a success is a systems architect, a body to lead the transition from a coal driven energy system to something more diverse and sustainable.

A systems architect would be responsible for planning and financing, considering the low-carbon challenge and providing real balance in the power system, bringing a holistic view to energy strategy.

This goes beyond the shorttermism that’s dominated the industry so far. We currently don’t have a long-term, lowcarbon energy transition plan linked to real-world energy policy and markets. This must change, and quickly.

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a way forward for a better energy infrastructure. The UK is already leading research in grid scale EES, but our energy regulatory policies are in need of a serious rethink if we are going to realise our potential as a global energy leader.

EES is projected to provide the UK with £10bn in economic benefits by 2020 and Estimated benefit to over £120bn the UK by 2020 of by 2050.

Government The UK is commitment electrical energy demonstrating The government storage how energy storage has committed to systems interact with 15% of the UK’s energy the grid, which is vital to its demand being supplied by successful deployment and renewables by 2020. Much reaping both its economic and of this demand could be met, environmental benefits. The if not exceeded, by storing energy generated by wind, solar, renewable energy. In the UK, biomass and other renewables energy generation follows could be stored using EES unrestrained demand patterns, systems, then sold back to the which presents a problem for energy market during peak the variability of renewable demand. Thus energy storage energy. However, with electrical can enable renewables to be energy storage (EES), the valued appropriately, which is issue of intermittency is no essential to the UK’s low carbon longer a concern and the price transition. This is one example of low-carbon energy can be of a wide range of benefits that significantly reduced as a result.

EES can provide for the future Researching, investing in of the UK’s energy economy. and innovating with EES is

Each decommissioned plant will still, initially, have its part to play. The grid will be particularly strong at the sites of former coal plants, and the connection will remain robust even after a station is decommissioned. We need to make the best use of this existing infrastructure, and a systems architect could help do this.

£10b

But there are clear regulatory obstacles that must be overcome before grid-scale energy storage becomes ubiquitous.

A complicated market The UK energy market is overly complicated. It separates transmission from supply, and classifies energy storage as generation, which severely limits its services to the grid.

A potential solution would be to give energy storage its own ‘asset class’ including rules for appropriate regulatory treatment. If this were done it could offer significant benefits to the UK’s energy network such as balancing supply with demand, reducing greenhouse gas emissions and hedging against fluctuating energy prices. It should also be used in combination with other ‘smart’ techniques and tools to distribute energy such as demand side response and real-time thermal rating.

We also need to take greater responsibility as individuals if we are to end our over-reliance on fossil fuels. To reduce carbon emissions by 80% by 2050 we simply can’t continue to generate energy at current levels. Each individual must

reduce their carbon footprint by a fifth of what it was in 1990.

We can’t underestimate this challenge but it is achievable, if there is a systems architect ensuring decisions about energy policy and investment are driven by long-term realities not short-term objectives. What we need to do now is integrate more renewable generation into the grid. Energy storage and smart grids are crucial to making this a reality.

We need a joined-up, well-considered, long-term energy strategy, but instead we are seeing a number of independent players with different shareholders making their decisions based on market forces. If we change this approach, we can become more attractive to industry, because we would not only have an excellent low-carbon track record, but also a secure and sustainable energy supply. If the UK is to realise its rightful place as a global leader in secure, sustainable and balanced energy policy, we must look to a systems architect to get the ball rolling now. te Professor Phil Taylor is director of the Institute for Sustainability and Professor of Electrical Power Systems at Newcastle University

T: 0333 7000 250 E: enquiries@pulsebusinessenergy.co.uk

www.pulsebusinessenergy.co.uk

Energy Buyer of the Year 2015

theenergyst.com

December/January 2016

11

POLICY

Looking back, looking forward Experts from t-mac Technologies and Utilitywise give an overview of the 2015 energy market and outline what 2016 is set to bring

D

emand response and a stronger focus on efficiency using load shedding have been key developments throughout 2015.

Jon Ferris, strategy director at Utilitywise, highlights that 2015 has been uncertain for many businesses. With the introduction of half hourly (HH) settlement due to P272 and more market volatility due to the Electricity Balancing Significant Code Review, small businesses will face increasing uncertainty.

He explains: “At this stage it is still unclear as to how the

12 December/January 2016

energy market will evolve over the course of 2016.

However we do know that this year will set the direction of what is to come over the next decade.

Prepare for P272 “We anticipate that P272 will have the biggest impact on small businesses; it is an amendment to the Balancing and Settlement Code, the rules which define the balancing of electricity in the UK market. P272 requires that meters in profile classes 05 to 08 [commonly called max demand meters] that have

automated meter reading [AMR] are billed using HH consumption by 1 April 2017.

This means that energy bills will be based on what a business actually uses at different times of the day and will reflect the costs associated with supplying power to the business at that time.

“It is important to note that a number of other factors will influence how 2016 will develop. The COP21 conference in Paris in December 2015, the EU review of the Energy Efficiency Directive, as well as the policy reset and spending review by

the UK government will all make an impact. It will also be interesting to see whether the government will extend subsidy support to renewables, electric cars, demand reduction and efficiency.”

Shift demand or pay Lisa Gingell, director at t-mac Technologies, explains what this means for business: “Demand reduction through load shedding and shifting, has been the top topic on everyone’s lips throughout the latter part of 2015.

“This winter, the National Grid is calling on large energy

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users to shed and shift load to balance the grid and ensure that demand doesn’t exceed supply. But it’s not just the large consumers that can assist, through BeMS controls all consumers have an opportunity to get on board and shift load at high peak times to not only help the National Grid by reducing their demand, but also benefit financially as a result.

“A kWh shed at these times is worth twice that of any other time of the day.

“For HH billed consumers, load shedding and shifting during the DUoS time bands reaps significant rewards for businesses, as a kWh reduced at these times is worth twice that of any kWh at any other time of day.

“Add to this the winter Triads (the three highest

The EU review of the Energy Efficiency Directive, as well as the policy reset and spending review by the UK government will all make an impact

peaks of electricity demand between November and February used to calculate transmission charges for HH metered consumers) the kWh saved during winter evenings is worth substantially more to businesses.

“It is actually so simple, cut load at peak times to reduce costs and help the National Grid – you can even get paid for that. So why aren’t more businesses jumping on the bandwagon and implementing load shifting and shedding activities into their energy management campaign?”

Ferris agrees that businesses need to prepare themselves for the impact half hourly settlement will have on their bills. They can turn a cost into revenue, he explains: “In light of the increasing

benefits from demand shifting we are urging businesses to continue to consider demand response through load shedding and moving demand out of the red band [typically weekday consumption from 5-7.30pm].

“The switch to HH settlement is a great opportunity for businesses to take control of their energy use and acts as a spur to lower energy consumption.

“However, it is imperative that businesses understand policy in order to control energy consumption and facilities.

“For businesses 2016 is about getting controls installed and changing behaviour to make P272 work for their business.” te t-mac.co.uk utilitywise.com

Ten-point guide to load shedding in 2016…

1

Load shedding and shifting: The benefit from load shedding and shifting is maximised from reducing consumption at times of peak prices.

TNUoS / DUoS: Peak prices are driven by charges for the transmission and distribution networks that deliver electricity from generators to wherever it is consumed.

equipment during peak periods and switched back on afterwards. In reality doing this would affect the building performance and comfort levels would be adversely affected. By controlling the HVAC equipment in a more sophisticated way, such as pre-cooling a building, the electrical load can be shifted affectively without disrupting the comfort levels in the building.

3

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2

Triads: Transmission network costs are charged to HH settled consumers based on their consumption during Triads (the three highest peaks of electricity demand between November and February). These costs can be reduced if demand is decreased during a Triad. These half-hourly periods normally occur between 4pm and 6pm on weekdays and there must be at least 10 days between individual Triads, so the actual Triads are not known until after the end of winter.

4

Peak: Businesses need to reduce, if they can, peak consumption, which will allow them to make considerable savings on capacity charges.

5

Switching off: In its most simplistic form load shedding ‘could’ be switching off a piece of electrical HVAC

theenergyst.com

Energy management software: The most up-to-date software allows for the implementation of load shedding/shifting activities thereby reducing costs at the high-peak DUoS and TNUoS times and helps accommodate reduced load/demand.

7

Control strategy: Any good energy management sytems will have a DUoS control strategy integrated into its set-up, allowing for load shedding or shifting activities to take place around the DUoS time bands. This will achieve greater energy cost savings for customers while maintaining a watchful eye on the internal conditions to ensure business functions are not affected.

8

is a direct feed from Utlitywise (its parent company) energy markets team to allow the devices to receive Triad warnings and in turn, quickly implement pre-agreed load-shedding activities thereby reducing Triad costs without affecting business operations.

9

Savings: By implementing load shedding over the winter months and reducing Triad charges, many businesses can expect to save in the region of £150k via a good BeMS control strategy and up to 20% off their energy bills due to higher kWh costs in these times.

10

Demand response ready: Management of consumption in DUoS and Triad times is a key component in using BeMS to benefit from the P272 changes to 05-08 meters. An ability to receive and respond to a Triad warning and communicate to multiple sites in a matter of minutes means that those with a more sophisticated BeMS can make their business estate demand response ready.

Warnings: Incorporated into the t-mac system, for example,

December/January 2016

13

COVER STORY

Switch on to the power of DSR System operator National Grid is urging more businesses to capitalise on the opportunities that exist in the fast-developing demand side response (DSR) market. By using energy more flexibly, businesses of all shapes and sizes could earn solid financial returns and reduce their carbon footprint

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s electricity system operator, it’s National Grid’s job to balance the network, ensuring supply and demand are constantly matched. It’s a crucial balancing act that ensures Britain’s businesses have the power they need to run their processes and thrive in their sectors.

But the electricity system is in a state of flux. It’s a rapidly changing landscape, where more renewable generation is coming online and older, traditional power stations are closing.

As a result, available power is declining and there’s greater uncertainty in the system.

While this creates new challenges for National Grid and the wider energy industry, it presents some exciting opportunities for energy users.

For a while now, the system operator has offered financial incentives to businesses who have the ability to use energy more flexibly – called balancing services. The reality of tomorrow’s low-carbon world means there

are now more opportunities than ever, particularly on the demand side, to get involved.

Demand side services are simply those that involve businesses turning up, turning down or shifting their electricity

use, in response to a signal, to help balance the grid. In return, they receive strong financial incentives, while also reducing their carbon footprint, which is great for any business that is serious about CSR. National Grid believes DSR can play a significant role in the future energy system and, through a campaign called Power Responsive, has been working on a vigorous expansion of the demand side market.

National Grid launched Power Responsive last summer, setting ambitious targets to grow the participation of DSR in balancing markets by 2020.

Since then, it has been working closely with energy market actors and large energy users to simplify existing products, develop new ones and break down the barriers that have, up

How to make money – simply by shifting demand National Grid provides a number of opportunities for energy users to get involved in demand side management and earn revenue for their business.

Here’s a brief overview of the opportunities that exist today Balancing services: Frequency Response n Firm Frequency Response (FFR) – a monthly electronically tendered service through which National Grid procures energy. Providers must be able to provide a minimum of 10MW to the grid within 30 seconds of a frequency event. n FFR Bridging – for businesses that are unable to meet the 10MW threshold for FFR, an FFR Bridging service

14 December/January 2016

exists that allows them to build up their DSR volume over a set term of one or two years. n Frequency Control by Demand Management (FCDM) – a bilateral agreement for businesses to interrupt a minimum volume of 3MW of their electricity supply with two seconds notice for a period of 30 minutes.

Balancing services: Reserve n Short Term Operating Reserve (STOR) – STOR is an important source of reserve energy for National Grid. It can be viewed as the most accessible service to new providers, with a 3MW entry capacity and extended response time of 20 minutes. n STOR runway – if a business

doesn’t have the ability to provide 3MW through STOR, National Grid offers a growth contract called STOR Runway. n Fast Reserve – a monthly tendered market designed to procure large chunks of reserve energy quickly. Providers must be able to start delivering the service within two minutes of instruction and reach a minimum of 50MW within four minutes of instruction. n Demand Side Balancing Reserve (DSBR) – a service aimed at major energy users that are willing to reduce their electricity use between 4pm and 8pm on winter weekdays in return for payment.

The product is solely for the winter period.

Capacity Market n Capacity Mechanism – the capacity mechanism is a catch-all term for the auctions for the Capacity Market that National Grid runs to guarantee capacity for any given year. n Transitional Arrangements – auctions that are in place to help demand side providers enter the Capacity Market; working in exactly the same way as the main Capacity Market auction, but for a much shorter term.

What new opportunities are emerging?

National Grid has used customers’ feedback from a series of Power Responsive webinars to simplify existing services and design two

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to now, prevented businesses from entering the market.

So if you’re one of the many energy managers who’s considered participating in DSR, but never acted on it, here’s a taste of how the market is moving, how you can participate and why it could be worth your while to tap into its potential.

What is Power Responsive?

Power Responsive is a collaborative programme of work, launched by National Grid to grow participation in demand side response in Great Britain by 2020. It strives to bring businesses, suppliers, policy makers and other stakeholders together in order to maximise opportunities and shape the growth of the market in a collaborative way.

The goal of Power Responsive is for businesses to become more intelligent energy users, saving on total energy costs and securing the UK’s energy long into the future. National Grid believes that every business can participate and benefit from this fast-growing market.

What has been achieved in the campaign so far?

The campaign’s first strides

were to identify four key areas that would help remove barriers to participation in DSR. Some important progress has already been made on each of them.

1. Co-ordinated approach – To deliver a properly coordinated, cross-industry approach, National Grid has set up a Steering Group for the campaign, which is made up of stakeholders from the energy industry, policy makers and large demand customers.

They’re working together to address barriers and increase awareness and participation in the demand side market.

2. Customer outreach – A priority for the campaign is to improve engagement with business customers and help them see the potential for making savings on their energy bills by participating in DSR. Activities so far include the development of a product map, which clarifies all the demand side opportunities that are available. This can be found on the Power Responsive website. A training booklet for large demand users is also in production, in conjunction

National Grid has been working closely with energy suppliers and large energy users to simplify existing products, develop new ones and break down the barriers that have, up to now, prevented businesses from entering the market with the Major Energy Users’ Council, which explains how to participate, and this will be available from February 2016.

3. Customer-led products – A notable success of the campaign has been the development of two new products, Enhanced Frequency Response and Demand Turn Up, which are explained in more detail later in the article.

4. Certainty and stability – A future balancing services statement has been published

on the Power Responsive website to provide an outlook on the future for balancing services.

Work is ongoing to develop a more rigorous, numbersbased perspective, and this is expected in early 2016.

What’s coming next in the campaign?

In line with the priorities of the steering group, the campaign will continue to engage and reach out to business customers.

It will begin to focus on sectorspecific engagement and will be arranging workshops to deliver this. Work will also begin on looking at the future product set and news on this activity will start to emerge later in 2016.

How do I get involved?

Businesses that are interested in demand side response should visit National Grid’s Power Responsive website at www.powerresponsive. com, where they can sign up to the distribution list and receive all the latest updates on new products and campaign developments. Energy users can also ask specific questions by emailing powerresponsive@ nationalgrid.com

or turning on your back-up generation new products that are well suited to businesses with big energy demands: n Demand Turn Up – this offers a route to market for businesses that have the flexibility to turn up their demand. The aim is to sign contracts by March 2016 for a May 2016 delivery. n Enhanced Frequency Response – a new, superfast way of balancing the grid. Businesses will need to provide full frequency response within one second (or less) of a frequency deviation, which is considerably faster than existing services.

Will DSR opportunities continue into the future?

Businesses that are considering developing flexible demand

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measures in order to participate in DSR, such as delaying a particular industrial process or running back-up generation to supply their own energy need, will be looking for assurances that there will be an extended need for these services.

National Grid provided evidence of the market’s future stability in the future balancing services statement that we touched on before.

According to the statement, National Grid spends around £850m each year on balancing services and the system operator expects the underlying requirement for these services, both frequency response and reserve, to grow incrementally over the next decade.

Other barriers to participation To encourage DSR providers to participate in the balancing market, a flexible, reliable and accessible IT system is key. It is something that National Grid is working on, and it will have more to say in the near future.

Who should I contact to explore my DSR options?

Businesses that are considering providing

balancing services have two main avenues for entering the market. If they’re able to meet a product’s requirements on their own, they can provide services directly to National Grid. If the volume they’re able to provide is too small, they can work with one of a growing number of Demand Aggregators or other third parties who will accumulate lots of sites to reach the minimum threshold.

To contact National Grid directly about Balancing Services, contact commercial.operation@nationalgrid.com or call +44 (0)1926 654611.

National Grid also provides a list of aggregators and third parties on its website, www2.nationalgrid.com/UK/ Services/Balancing-services/Demand-Side-Aggregators

December/January 2016

15

VIEWPOINT

Beware of the bull: Upside risk, geopolitics and trading strategy LG Energy’s Serge Mazodila and UKAEE vice-president Raymond Yeng discuss the ever-changing landscape of energy procurement strategies

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Demand destuction – peak winter demands 60000

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54000 MW 51000

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England, Wales and Scotland

BM reports data – Triad dates starting from 1997

When bears destroy demand via improved energy consumption efficiencies: Demand destruction, the ongoing structural Fall in the UK’s decline energy demand of energy consumption levels in the past levels, has decade altered the industry’s landscape, altering the previously accepted procurement industry notion of ever rising consumption forecasts (economic growth equating to higher energy demand levels).

The bearish impact of nationwide demand reduction,

10%

16 December/January 2016

1998

45000 1997

he UK’s energy procurement industry has faced numerous changes over the years, both in regulatory terms and in its market environment, only to morph from its primitive state of poor end-user market access with limited available hedging tools offered, to a more sophisticated space with fully flexible contracts and quantitative risk management (QRM) expertise.

From demand destruction to geopolitical risk, energy commodity prices have become even more complex to manage over the years, while the development of effective QRM systems has meant a more scientific approach is possible.

based on government initiatives for efficient energy consumption, has resulted in some of the most drastic changes in the country’s annual energy demand since the recession.

Based on the most recent three consecutive mild winters and 10 years of declining consumption levels, UK energy demand levels have fallen by about 10% – an event reflected in the country’s peak demand levels through the winter Triad season.

Effectively, the country’s destroyed demand can be said to equal Scotland’s entire annual power consumption.

Back to back mild winters (the weather angle) With recent winters being characterised by some extremely mild trading months,

UK energy market participants have greatly benefited from sliding wholesale energy prices and healthy supply flows (including Rough storage levels) of recent months.

December 2010 out-turned as the coldest December in more than 100 years, while in 2013 the nation saw the coldest March in more than 50 years.

In 2014, we also saw the UK’s warmest trading year on record, with an average temperature of 9.9C coming in 1.1C above the country’s historic running average – breaking a record set only eight years earlier.

When upside risk comes from all angles – beware of sharp bull horns Generally, UK energy markets have faced a bearish market environment for three consecutive winters. The

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November 4, 2015 Notification of Insufficient Margin (NISM), the first in four winters, drove home a stark reminder that supply margins – which have suffered due to the EU Large Combustion Plant Directive – can also result in market volatility even in some of the mildest winter trading environments.

Due to a combination of unplanned outages and nearzero wind generation levels, the UK’s power network manager (National Grid) tapped its emergency purchase services.

It was able to use Irish power and a South-West power station to avoid any disruption by paying up to £2,500/MWh for peak generation output – circa 50 times the prevailing market rate on 4 November.

The geopolitical angle By looking at risk, whether price or threats to physical supplies, from a geopolitical angle, one must fully appreciate the complex relationship between globally connected energy markets and their influence on domestic natural gas and power prices. During the past decade our awareness and perception of risk has evolved significantly.

As a result of globalisation, the level of interconnectedness in the world has grown, resulting in a series of historical processes (economic, political,

and cultural) through which the world has become compressed into a smaller place.

Consequently, due to the greater availability of freely flowing information, commodity prices have become ever more volatile in response to geopolitical risk from around the globe – eg gas market volatility during the Crimea crisis.

Operating a cap in a bearish market environment Energy prices have been on the decline in recent years and therefore prompted a re-evaluation of standard procurement services offered to manage price risk.

As the hedging of volume against upside risk remains the industry norm, a TPI’s ability to also effectively manage downside market opportunities with sophisticated trading strategies via beneficial use of flexible contract functions is key. Unlocks/ sellbacks should be used to improve on previously hedged volumes (achieved prices) on a continuous basis. As a result, end users are demanding ever more sophisticated trading strategies as non-commodity costs remain on the uptrend and outside of the client’s sphere of influence or control. te ukaee.org.uk

Authored by Raymond Yeng, vice-president of the UKAEE and Serge Mazodila, LG Energy Group. UKAEE covers a range of expertise in the energy management/energy efficiency sector with board member and membership expertise across the range of disciplines. UKAEE delivers a range of technical focussed seminars in the sector with networking opportunities for energy and sustainability professionals through its multi-disciplinary board and membership base. UKAEE membership is currently free.

UKAEE is the UK chapter of the global energy management organisation, the Association of Energy Engineers (AEE), with its HQ in the USA. For more information see: ukaee.org.uk Articles published by AEE members earn two CPD points towards their required 10 CPD points over three years to remain registered as a globally recognised Certified Energy Manager, Certified Energy Auditor, Certified Measurement and Verification Professional etc.

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Optimising heating health With sustained pressure to drive down operating costs and reduce carbon emissions, the healthcare sector continues to explore new ways to improve its energy efficiency. Two NHS Trusts have recently taken advantage of boiler load optimisation control to achieve significant savings in gas consumption.

As NHS Tayside’s energy coordinator John Ruddy explained: “Delivering cost savings is a key area of focus for NHS Tayside. Reducing heating costs is always paramount due to the high heating demand within the healthcare sector.

In order to reduce its heating costs NHS Tayside installed Sabien M2G boiler load optimisation controls on Hamworthy Wessex 200HE, Hoval UltraGas 500 and Hamworthy Purewell Classic boilers at Kings Cross Hospital in Dundee.

Sabien’s M1G was also installed to the hospital’s direct fired hot water heaters.

Energy consumption was then measured, compared to previous consumption using Degree Day data to allow for weather variation.

Following a detailed measurement and verification project, average fuel savings of 7% were delivered with a payback of 1.8 years and an annual reduction in CO2 emissions of 45 tonnes.

“There are additional benefits over and above the cost savings,” Ruddy continued. “The installation has no impact on clinical practices – enabling all areas of the hospital to be functioning as business as usual, while the installations are being completed. Furthermore, with varied building stock, boiler plant and building management systems across the estate, M2G can be deployed regardless, ensuring estate wide savings are captured,” he added.

A similar approach was adopted

by Northumbria Healthcare NHS

Foundation Trust, where Sabien was installed on seven boilers in three buildings – Northumbria House, Alnwick Infirmary and Blyth Community Hospital – providing a representative sample of the buildings within the Trust’s estate.

The energy consumption of the boilers was then measured for a period of one month and adjusted in line with Degree Day data from the local weather station. Analysis of the data, carried out in line with the International Performance Measurement & Verification Protocol (IPMVP), showed that savings in gas consumption ranged from 4% to 9% with an average of 5% across all of the boilers – delivering a projected payback of 3.7 years. The boilers ranged in size and included newly installed Viessmann Vitocrossal 300 and Remeha P420 boilers.

Mike Blades, energy and sustainability officer for Northumbria Healthcare NHS Foundation Trust, said: “I am very pleased with the results of the project. What surprised me most was the level of savings achieved on our modern high efficiency boilers.”

Crucially, the M2G was operating alongside, and in harmony with, the existing controls so that the savings were in addition to those already being achieved.

During the Measurement & Verification (M&V) period the M2G is configured to toggle between ‘save’ mode and ‘bypass’ mode. In save mode the M2G is operational and makes savings, in bypass mode the M2G is bypassed and makes no savings. This then provides a comparison between save and bypass days, with adjustment using standard degree day calculations to take account of variations in outside temperature.

Further information: www.sabientech.co.uk

GAS & ELECTRICITY

Supermarket sweep: Is the transitional capacity market good news for major users?

As one large energy supplier attempts to turn retailers on to demand response provision, an aggregator warns the transitional capacity auction will return poor value. Brendan Coyne reports

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power is trying to drum up more interest from retailers in demand response provision ahead of January’s transitional capacity auction. The problem is, most retailers aren’t interested enough to take action Meanwhile, one of the largest commercial aggregators of demand response has warned that the transitional arrangements will return poor value to those that take part in them.

Demand response involves companies changing their energy consumption patterns in return for payment from National Grid to help balance the UK’s power system. It will play an increasingly important role in balancing the grid in the years ahead.

Limiting factor A survey commissioned by the Npower found less than half (46%) of retailers that could take part in the auction planned to do so.

Three quarters of retailers surveyed said they did not know enough about demand response to make an informed decision about it.

The findings echo more extensive research by The Energyst’s publisher Energyst Media in June, which found that about 80% of firms had not been contacted or informed about demand side response opportunities by their energy

18 December/January 2016

Will the transitional capacity auction make a connection with consumers?

Tesco is in the business of running shops. Alarm bells go off when you talk about turning fridges and freezers on and off. They have frozen turkeys to worry about.

supplier or by aggregators.

Yet the same percentage said they would provide balancing services if it did not affect their ability to do business.

Most of those surveyed by Energyst Media said they could shift up to 10% of their loads upon request. Almost a third (29%) believe up to 25% of their power usage could be made flexible. That statistic suggests National Grid can meet its ambitious target of delivering between 30% and 50% of system balancing from demand side response by 2020.

Nervous energy While some retailers do participate in demand response schemes, Npower and other suppliers and aggregators have their work cut out in signing them up.

James Summerbell, formerly head of energy at Tesco turned consultant at JES Advisory, says many retailers are reluctant to look beyond their core business priorities.

Tesco has some 300MW baseload consumption, rising to roughly 360MW at peak, according to Summerbell.

About 100MW is HVAC with a further 100MW of refrigeration “so there is a lot of kit that can be turned up or down, which represents significant potential”, he delegates at the launch of the 2015 Demand Side Response report in autumn.

However, while Tesco actively managed peak prices via Triad, Summerbell said it was less involved in the active demand side response programmes National Grid wants to scale.

“We looked at frequency

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response [a fast form of grid balancing], and every source of revenue for short term demand management,” said Summerbell.

“What we found was that it was very difficult to unlock.”

Tesco, he said, “is in the business of running shops, it is not an energy company, so alarm bells ring when you start to talk about turning fridges and freezers on and off. They have frozen turkeys to think about. Therefore the risks and perceived risks are quite big barriers.”

Those risks can be overcome with set point controls, he said, but there is a cost involved and “certainty of income is an issue”.

Summerbell agreed that National Grid must make future programmes “simple, accessible and provide certainty” if it is to reach its stated goal.

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Bad for business?

Speaking about its own survey, Npower’s Wayne Mitchell said it was down to industry and government to push the benefits of demand side response to businesses.

He said the lack of knowledge about the January capacity auction was “very disappointing”.

However, the transitional auction is by no means flavour of the month.

Dr Alastair Martin, founder of aggregator Flexitricity, which has a portfolio north of 300MW, recently told The Energyst the firm was reluctant to take part in the transitional auction.

“The transitional arrangement superficially looks attractive, but I firmly hold the view that the transitional arrangements are not good for demand side response,” he said.

Download our free DSR report Want to know more about demand side response? Download our free report, co-sponsored by aggregator Open Energi and National Grid. It contains a survey on how Energyst readers perceive demand response, alongside views from market participants, National Grid, aggregators and energy experts on how the market must evolve in order to scale. theenergyst.com/dsr

“They are essentially a poor choice.”

Flexitricity instead plumped for the main capacity auction and Martin said it will not put customers into the transitional auction “unless there is a very good reason related to their [specific] site to do so”.

Heavy messing Involved in the development of the capacity market with the Department of Energy and Climate Change,

Martin described the process as “heavy going”.

“It is by no means a perfect mechanism but we found ways to make it work,” he said, “which is why we took such a strong position in the first capacity auction.”

However, Martin warned that there was “very poor certainty in the transitional arrangements… and there is good reason for expecting the long-term value to be significantly poorer [than the main capacity auction]”. te

December/January 2016

19

DEMAND RESPONSE

Grid plays down blackout fears but balancing act now tougher National Grid has disputed figures that suggest the UK will face a significant power capacity shortfall next winter. However, it admitted balancing the system will be challenging and that it will require at least as much back-up power, if not more, than this winter. Brendan Coyne reports

Balancing the system was ‘always difficult [hence] we must make sure we have access to the right balancing services, and that is why we have taken early action’

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acing questions from the Energy and Climate Change Committee in late November, system operator National Grid reiterated that winter margins would get tighter but expressed faith in its ability to prevent blackouts.

Director Cordi O’Hara admitted that no system operator could give guarantees of 100% system reliability.

However, she said that National Grid had procured the right “insurance policy”

20 December/January 2016

to meet the government-set security of supply standard of three hours loss of load.

Nobody’s perfect National Grid faced questions about potential system failures following the Notice of Insufficient Supply Margin (NISM) issued 4 November.

That tool led the market to respond and ensure no disruption to supplies.

NISMs are the first in a set of tools the system operator is mandated to use before

asking distribution networks to turn off customers should everything else fail.

O’Hara said Grid’s own models suggest that between seven and 10 further NISMs may occur over winter, but that other variables could lead to more or fewer market alerts.

“No system operator in the world will give you 100% guarantee [against blackouts],” said O’Hara.

“I can assure you that we have done extensive and robust analysis overseen by

an independent regulator [Ofgem]. The standard is set by government and we were well within that standard at 1.1 hours loss of load.”

Head of commercial operations Duncan Burt said the transmission network itself was “99.9999% reliable” while Ro Quinn, head of energy strategy and policy, said that even scenarios such as the winter of 1963 and the hurricane of 1987 were “baked in” to National Grid’s scenario planning.

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Supply crunching National Grid disputed a question from Conservative MP James Heappey about a Centre for Policy Research analysis that suggests a capacity shortfall of several gigawatts next winter due to retiring thermal plant.

Burt said that analysis did not take into account “at least several gigawatts” of embedded generation – or generation connected to the distribution network – that would help to counteract retiring plant.

Quinn added National Grid was aware of “suggested [thermal plant] closures of the order of around 4-5GW … But some are still making final decisions as to whether or not they will close, so it is too early to confirm what that answer will be”.

More demand side response Regardless of plant closures, O’Hara said National Grid was “taking early action” to ensure sufficient balancing reserve is procured for next winter, where Grid’s own figures suggest a margin of virtually nothing.

Heappey suggested that would make system balancing

next year increasingly difficult.

O’Hara admitted that balancing the system was “always difficult [hence] we must make sure we have access to the right balancing services, and that is why we have taken early action”.

She added that National Grid will “need to buy at least what we bought this winter,” reiterating that system operator was tendering for more balancing services. That tender closed 30 November, though more rounds may follow.

Gaming the system?

Questioned about system gaming, in light of reports that suggest some generators may be taking advantage of capacity shortfalls to make windfall gains, National Grid said it was Ofgem’s job to investigate any such activity and take action if appropriate.

Enough gas?

Asked about UK winter gas supplies, Quinn responded that the UK may have to call on gas storage for “one or two” evening peaks, but that “we are confident this winter” that the UK would not fall short of gas. te

From NISMs to blackouts explained National Grid’s Duncan Burt explained the steps leading from a tight margin call to disconnections.

First comes the Notice of Insufficient Supply Margin (NISM). If things continue to get tight and generators and demand response providers do not bring forward enough reserve, National Grid issues a High Risk of Demand Reduction (HRDR) warning. “Then we would look at market response and ongoing reliability,” said Burt. “Most of the time that will be adequate. If we continue to have difficulties or further losses we would move into emergency measures, such as calling on generators for assistance.”

Burt said National Grid could also use ‘Max Gen’, where generators are called on “to open all the stops” and generate above their normal load for a short time.

After that, Grid asks the distribution network operators to reduce voltage (brownouts). “Typically that would be enough to achieve balance,” said Burt. If not, it tells the DNOs to start disconnecting customers (blackouts).

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How and why we’re bringing transparency to renewable electricity Businesses are expected to play a key role in achieving the ambitions of the Paris Agreement on climate change. Mike Shirley explains why SmartestEnergy developed a new renewable electricity supply offering to support them in the shift to a lowcarbon economy.

The growing number of businesses purchasing renewable energy and wanting to highlight their energy buying choices is leading to greater demand for transparency and traceability from suppliers.

Recent updates to Greenhouse Gas Protocol Scope 2 Guidance also means businesses can now get recognition for their energy procurement decisions provided certain reporting conditions are met.

Against this backdrop of increasing complexity, we wanted to support customers looking to commit to renewable energy and help them communicate their energy purchasing choices to customers, staff and investors.

Every megawatt hour supplied to customers on our new renewable electricity products is from renewable sources and backed by an origin certificate.

Customers also receive an annual Energy Label which shows the source and carbon emissions of their supply.

We have worked with The Carbon Trust to develop the allocation model which underpins these new products.

We believe what we have developed is very much at the leading edge of the industry This enables us to effectively allocate origin certificates to our products and avoids the risk of double counting – providing the transparency and rigour needed for carbon reporting.

We believe what we have developed is very much at the leading edge of the industry but as the new Scope 2 guidelines become more consistently adopted by businesses, the level of transparency and confidence we are providing will increasingly be expected as standard.

Helping businesses realise more tangible value from purchasing renewable electricity will also hopefully stimulate greater demand for low carbon energy in the future.

GAS & ELECTRICITY

Power is only half your power bill – and the other half is rising Wholesale power prices declined in 2015 with further softening anticipated into 2016. Yet bills are expected to rise and the market to become increasingly volatile. What does that mean for energy procurement strategies?

Brendan Coyne reports

A

verage wholesale prices are currently at multiyear lows.

But tighter system margins, more intermittent renewable power and changes to the way the energy industry has to balance supply and demand will make half hourly prices much more volatile in 2016, says Jon Ferris, head of markets at Utilitywise.

That is something significant energy users will be watching carefully: if it is more expensive for suppliers to balance their portfolios they will inevitably pass on the cost to customers.

Then there are rising noncommodity costs, which make up about half of the bill.

The non-energy bill Transmission and distribution elements make about a fifth to a quarter of the total – and

they are on the rise. Charges to subsidise renewable energy make up a similar proportion and are also rising. During the next couple of years other government policies such as the capacity mechanism – which pays generators to be available when needed – will kick in, adding percentage point increases to the total bill.

The government has agreed to protect energy-intensive industries from the impact of rising policy costs. But that means everybody else will pick up the tab, adding more cost to the equation.

The net result is more expense. For major energy users, where energy costs are often the single biggest overhead, energy management will therefore become at least as important as energy procurement.

Procurement: fix or flex?

It is tempting for some businesses to lock in current low wholesale prices. But Utilitywise’s Ferris says energy buyers should stay flexible. He thinks the market may fall further.

“We recommend large consumers employ a longterm flexible framework that allows you to buy and sell in response to the changing markets,” says Ferris.

“If there is an opportunity to buy, you don’t have to go through a lengthy tendering process – because you have already been through it.”

Deeper and down Germany provides an example of the impact renewable generation can have on power prices and why fixed contracts may prove expensive.

“Increased renewables on

We recommend large consumers employ a long-term flexible framework that allows you to buy and sell in response to the changing markets Jon Ferris, head of markets at Utilitywise

Why will energy prices get spikier in 2016?

Prices will be volatile for several reasons.

Over winter, prices will spike within 24-hour periods because energy supply margins are thin.

National Grid has used conservative methodology to calculate excess power versus expected consumption – and 5% tolerance is lean. Power generators will be paid more to generate in periods of scarcity.

The recent Notice of Insufficient Supply Margin (NISM) was the first in years. It saw power prices soar for a short period of time.

National Grid anticipates 7-10 more NISMs over winter. Next winter will be even tighter.

Meanwhile, changes to industry rules, called ‘cash out’ arrangements, mean

22 December/January 2016

suppliers must pay more if they generate or consume more or less power then they contracted.

Regulator Ofgem made those changes to create sharper price signals – that is, make it more expensive – for suppliers failing to accurately forecast customers usage.

Suppliers will pass increased costs both for balancing and more volatile within-day prices to customers. Major energy users may find themselves either exposed or in the black, according to energy strategies.

As well, transmission and distribution costs are expected to rise 8-10% (see Table 1).

Additionally, more companies will be moved to half hourly metering under P272.

theenergyst.com

£s

%

Forecast

Energy (incl. losses)

4,638,102

51.2

➔

Supplier costs (incl. margin & risk)

180,000

2.0

➔

Transmission charges (TNUoS)

736,458

8.1

➔

Distribution charges (DUoS)

897,116

9.9

Balancing use of system charges (BSUoS)

165,329

1.8

Renewables obligation

1,285,600

14.2

Feed-in-Tariff charge

405,000

4.5

Climate Change Levy

554,000

6.1

Contracts for Difference (CfD)

161,112

1.8

Capacity Mechanism (CM)

1,046

0.0

➔

Other charges (BSC, AAHEDC, metering)

30,014

0.3

TOTAL ESTIMATED COST

9,053,776

100.0

➔

➔

➔

➔

➔

➔

Description

➔

TABLE 1: BREAKDOWN OF AN ELECTRICITY BILL

Costs are scaled to 100GWh | 55-60% load factor | Customer in London | Source: Noveus Energy the grid have reduced German wholesale prices for 10 years. It is certainly not a given that we will see a bounce in wholesale prices next year,” Ferris says.

“With a flexible framework, if you see a bounce in prices, you are in a good position to respond however the market reacts.”

However, he says firms must mull their contract tariff structure and whether they want to fix the policy plus other rising non-commodity costs. To do so carries a premium, says Ferris.

“So it may be preferable to fix [non commodity costs] year by year when there is more certainty about what the absolute total will be.”

Shape up Then come choices about the tariff structure. There are ‘baseload and shape’

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options where for a fee consumption is flattened so that firms do not have to worry about spikes in prices.

Or buyers can choose exposure to the real time cost of consumption, explains Ferris. “But for that you need an understanding of how consumption can be managed and feed that into control project evaluation.”

And there lies the rub: many businesses cannot easily change consumption patterns. Even those that can may see insufficient incentive to do so. However, that may change as power becomes the smallest element of the bill.

Demand response Ferris thinks the demand response market is “at a turning point”.

“If you can shift your consumption the rewards are

increasing,” he says. “If you can’t the costs are going to grow.” But he feels that the incentives may be insufficient.

“The problem is that there are so many beneficiaries of demand response that the costs are centralised,” says Ferris.

“If organisations bearing the full cost don’t receive the full benefit, it is hard to make a business case for it.

The supplier may benefit, the distribution company may benefit, National Grid may benefit and consumers may benefit from less spiky prices… But [for the business investing], in many situations, the cost benefit doesn’t really stack up.”

That may change next year, as more businesses are moved onto half-hourly metering and settlement. Firms that fail to manage consumption may find power bills far higher. But other policies, such as the capacity market, may end up dampening price signals, which would further fragment signals for demand response, according to Ferris.

Fixing for landlords?

People that pass energy costs to tenants, such as large commercial buildings or data centres, like fixed contracts because they can lock-in low prices, says Bobby Collinson, managing director of consultancy Noveus Energy.

“With wholesale prices at such a low level, fixed priced deals that are passing through costs will be very attractive,” says Collinson. “They may not get the best price for their energy, but it is low risk.”

But he says “more progressive” operators will consider how to lower operating costs while planning for growth. Fixed contracts may not cater for big energy increases. » Growing pains “Volume growth is a big issue for data centres, for example.

The majority are not fully

With wholesale prices at such a low level, fixed priced deals for data centres that are passing through costs will be very attractive Bobby Collinson, managing director of consultancy Noveus Energy

December/January 2016

23

GAS & ELECTRICITY

Utilitywise’s forecast model for electricity costs

occupied and are still growing.

If they take on clients and double their volume, their [contract] is not going to allow them to do it,” says Collinson.

“Those contracts usually contain a ‘shape clause’, which says if your volume or shape materially affects the commerciality of the contract, they have the right to revisit it – that is their get out.”

For many, “buying a fixed price contract exposes them to a risk they are not even aware of ”, says Collinson. “So volume management within a fixed price contract is a risk.

Flexible contracts allow them to manage that dynamically”.

Risk and reward Collinson agrees that the energy market will be increasingly volatile, but says that’s no bad thing. “At the moment, volatility is the name of the game. But volatility is good, because it creates opportunity for people who are actively managing their energy,” he says. “Overall in the energy market, the active buyer generally gets better results.”

For the past three years, Collinson says the day ahead market has outturned monthly purchasing by

24 December/January 2016

about 5-6%, which has outturned seasonal (annual) pricing by around 10%.

That is even before risk premiums are factored in and premiums for longterm contracts will rise as the market becomes spikier, says Collinson. “In a volatile world, the risk premium becomes quite expensive, even disproportionate,” he warns.

“To optimise your position you are better off buying flexibly – buying short with a strong risk management policy on when to lock out,” says Collinson. “Take advantage of the market falling but protect yourself from the market rising.”

Matt Osborne, trading risk manager at energy procurement firm Inenco, agrees the wholesale market looks depressed and that opportunity exists for smarter purchasing and risk management.

Enjoy the lows “There is still potential for prices to come off, so we are not necessarily saying that customers should fix out their energy cost,” he says. “If the market should bounce, then they should start locking

out. But for now they should enjoy the low [prices].”

Energy ‘promanagement’ Osborne agrees that procurement and energy management can no longer be separate given pass through charges will soon be the largest bill element.

He thinks between 15-20% of the bill is controllable.

Such a significant chunk – along with enabling technology – is largely why big power users users than can shift consumption are waking up to market mechanisms such as demand response, says Osborne.

“The big driver is cost and revenue. Once consumers start to see the market is a lot peakier and NISMs are having a material impact on their costs, they are going to respond,” he says.

When firms see competitors using the balancing mechanisms to generate additional revenues, says Osborne, the incentive to “step up and start thinking actively about how they manage consumption, reduce costs and increase revenue” will be plain. te

The big driver is cost and revenue. Once consumers start to see the market is a lot peakier and NISMs are having a material impact on their costs, they are going to respond Matt Osborne, trading risk manager at energy procurement firm Inenco

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»

ENERGY MANAGEMENT

Poor power factor: a mechanical analogue Vilnis Vesma has been tinkering in his shed again…

T

his apparatus illustrates the concept of power factor. It consists of a floating bar (1) constrained to move vertically when pulled down by a cord (2) against a spring (3). A wire (4) transmits the bar’s vertical motion to a pointer (5) rotating about a pivot (6).

Tension in the spring is therefore transmitted to the pointer, which moves across a graduated scale.

The tension in the cord is indicated in the spring balance visible in figures 2 to 4.

The tension in the cord is analogous to the electric current in a supply cable, and the curved scale at the top right is analogous to power in kW. In figure 2 the cord is in line with the string and a ‘current’ of 370A results in ‘power’ of 270kW. Pulling at an angle, however, more tension is needed in the cord, as we see in figure 3, where a current of 500A is now necessary to achieve the same power output. This represents the situation where AC voltage and current are out of phase.

The ratio (in this example) of 370/500 is the power factor and the demonstration shows how poor power factor results in higher-than-necessary current flowing in the supply cables, limiting the real power that can be delivered, and incurring tariff penalties.

Where poor power factor is an issue, correction capacitors can be fitted to counteract the effect of the inductive loads – such as

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Where poor power factor is an issue, correction capacitors can be fitted to counteract the effect of the inductive loads

lightly loaded motors – which cause the problem. The capacitors bring current and voltage back into phase with each other: the mechanical analogue, shown in figure 4, is a strategically placed pulley. Like a capacitor, it is a passive component. It does not generate any effort, but merely counteracts the sideways

pull on the cord. With the cord once more aligned with the spring, the “current” returns to 370A regardless of the angle you pull at. te Vilnis Vesma (Vilnis@VESMA. COM) is a former energy manager who specialises in energy training. Details of his courses can be found online. vesma.com/training

December/January 2016

25

POLICY & LEGISLATION

Will 2016 mark the start of a reporting revolution?

Inenco chief commercial officer Dave Cockshott considers what the outcome of the business energy efficiency review could mean for business energy users

T

he announcement in summer 2015 that there was to be a review of the business energy tax and reporting regime was met with some cynicism: another parliament, another new scheme to comprehend and comply with before change comes around again?

However, the joint proposals from Decc, the Department for Business, Innovation & Skills and the Treasury gave genuine reason to be hopeful that 2016 could be the year that policy changes for the better.

Inenco invited more than 100 businesses to have their say on the proposed reforms to the current schemes, and more than three quarters agreed that change was needed to move away from overlapping schemes and an excessive administrative burden.

However, there was not always consensus on the best way to reform the current arrangements; like any policy change, there will be winners and losers depending on the outcome of the consultation, particularly as a revenue neutral review will ensure that any costs removed from one area will be incurred elsewhere.

A single tax preferred The vast majority of respondents agreed that a single energy tax would be preferable, but views on scrapping the CRC were mixed: 40% of businesses we spoke to were unsure whether a CCL-type tax would be the most effective solution, mainly because it was perceived to be less effective as a stick to

26 December/January 2016

reduce carbon or consumption and likely to simply be written off as an obligation. (It could be said however the cost of any single tax would surely be significant enough to warrant action from organisations.)

Energy-intensive industries could well find themselves impacted by a shift in the regime: although government has vowed to help them remain competitive, a review into whether current CCA exemptions were still fit for purpose could have negative repercussions.

71% of businesses agreed that a single reporting scheme would be preferable, and 90% felt that the public sector should also be captured by any such scheme

While most agreed that exemptions were fair, half of all respondents felt that neither energy intensives nor smaller users should pay less tax than other commercial users.

Opinions were also split between a move to rebalance taxes across gas and electricity rates, although 40% did at least agree that were they to change, the lion’s share should remain with electricity.

Reporting revolution The proposal to create one single reporting framework was popular: 71% of businesses agreed that a single reporting scheme would be preferable, and 90% felt that the public sector should also be captured by any such scheme.

However, a consensus was not reached on whether an Esos-style scheme was the right solution – possibly because the survey was conducted around the same time that thousands of professionals were struggling to get their audit data in order in time for the December deadline!

Most respondents agreed that mandatory reporting

was important, with boardlevel approval required to guarantee senior management engagement in energy reduction. Above all, almost everyone agreed that the best unit to report upon is kWh and not carbon.

Potential incentives for investment in energy efficiency and carbon reduction could be timely, with thousands of businesses now in receipt of a raft of energy saving recommendations from their ESOS audits.

Seventy per cent of the energy professionals surveyed agreed that incentives could help drive additional investment, with grants being the preferred route over other options being considered in the review.

Reasons to be hopeful?

The outcome of the business energy efficiency review is expected by the time the Chancellor steps up to the dispatch box to deliver his Budget this spring There are plenty of reasons to be hopeful that government has finally heard businesses’ cries for a more streamlined, simplified approach to tax regimes and regulations.

However, the lack of agreement about anything from how to consolidate reporting schemes to who should pay for it means that the Treasury will have a difficult job on its hands convincing all businesses that this is change for the better. te To read the full report, visit: inenco.com/haveyoursay

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ENERGY TRADING

Managing complex portfolios Exxeta’s portfolio manager allows energy traders to keep track of complex energy portfolios

E

nergy portfolio management is a tough and often complex task having to review and analyse your entire portfolio in real time in order to hedge risks and optimise contract management. For this all key figures for risk management and portfolio optimisation should be collected automatically using a clearly defined process yet this is often not the case.

EXXETA’s and ECG’s software and expertise supports traders in the complex and often nontransparent environment of today’s energy markets. The ongoing liberalisation of European energy markets is developing with rapid speed. Consequently, market participants are challenged constantly with the improvement of market visibility and cost effectively trading. EXXETA’s and ECG’s

answer to this is via solutions such as its Portfolio Manager.

Continuous monitoring of the market, analysing all available data and applying the resulting strategies are all decisive for the success of a market participant. EXXETA’s and ECG’s quantitative models support companies with pricing, risk assessments and the determination of exposure for complex portfolios.

Portfolio evaluation instead of roulette The Portfolio Manager is a product that enables automated evaluation of complex portfolios for the energy industry. The system is a joint development between EXXETA and ECG. The Portfolio Manager enables market-oriented portfolio management.

It consists of: • Reliable modelling of

complex portfolios and correlations between commodities • Calculations based on real market dynamics (indices) • Fast exposure calculation enables quick response to market changes • End-to-end portfolio management process in a single solution (without extra calculations in external tools such as Excel) • Seamless integration into the system landscape through flexible input / output interfaces for master and transaction data Portfolio Manager enables portfolio management that follows the market. This allows users to gain transparency of complex portfolios through secure mapping while taking important correlations into consideration. Benefit from the automated assessment of your multi-commodity

Meter data management The German utility market is facing a historical change; new participants are entering the market and existing business models come under scrutiny.

Supply and demand are becoming increasingly volatile, regulatory requirements are becoming increasingly complex. Digitalisation and new IT-based business models grow into the role of being an enabler for creating added value. Addressing these new needs, EXXETA and Ferranti will combine forces to provide the MECOMS Solution.

EXXETA brings business and IT together and helps transform business requirements into IT solutions. In the area of the utility market, EXXETA combines industry-specific expertise with profound knowledge of Microsoft technologies such as Dynamics AX, Dynamics CRM and SharePoint. The focus is on helping companies increase their efficiency, become even more successful, limit risks and promote innovation.

MECOMS is a configurable Meter Data Management (MDM) and Customer Information System (CIS) that enables energy and utility providers to improve and automate their business processes with ease and efficiency, and is built on proven Microsoft technology.

MECOMS is developed by Ferranti Computer Systems NV, a specialist supplier of solutions to the utilities sector. Ferranti provide utility companies with MECOMS, a solution to their billing and CIS needs that will: • Be flexible to their changing needs • Be intuitive and simple to use • Maximises efficiency and standardization when implementing their business processes • Lowers the cost to serve

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portfolio by linking it to real market indices. Shorten the time needed to react to market changes through fast exposure calculations. Increase portfolio potential and exploit the findings gained for closing open portfolio positions in a cost-optimum manner. Use the Portfolio Manager to manage your portfolio efficiently with a single component and rely on seamless integration into your system landscape through flexible input/output interfaces for master and transaction data, assessment results and key risk figures.

With the Portfolio Manager you can: • Create transparency: the Portfolio Manager reliably makes market risks and chances transparent, even in complex multicommodity portfolios • Minimise costs: minimise transaction and hedge costs through optimised trading strategies • Increase returns: the income contribution of different trading strategies can fluctuate significantly.

With Portfolio Manager you can find profit-optimal strategies for your portfolio • Efficient management: thanks to the end-2-end mapping of the portfolio management process in Portfolio Manager, your experts can focus on profit optimisation.

EXXETA AG has its headquarters in Karlsruhe, Germany. It employs more than 300 staff at five locations in Germany, a subsidiary in Switzerland and a new subsidiary in Bratislava. te exxeta.com

December/January 2016

27

FINANCE

Funding for NHS upgade NHS Tayside has secured funding from Aviva Investors for a multimillion-pound energy efficiency programme, including a £7.7m indirect investment from the UK Green Investment Bank

A

viva Investors, the global asset management business of Aviva, is to provide funding for a programme of energy efficiency measures for NHS Tayside.

The £15.4m project will include the construction of an energy centre at Ninewells Hospital and medical school in Dundee.

Aviva Investors has made the investment through its REaLM Expected energy infrastructure saving the project funds on with Vital will deliver to behalf of Energi, which NHS Tayside clients including was procured the UK Green under the Carbon Investment Bank Energy Fund (CEF) (GIB), which is indirectly framework. Vital will be investing £7.7m in the project. responsible for the design, The energy centre will construction, installation provide 90% of the power and ongoing operation and 100% of the heat for and maintenance of the Ninewells, which also technology for the duration houses Tayside Children’s of that agreement.

Hospital and Maggie’s UK Green Investment Cancer Centre Dundee.

Bank chair Lord Smith LED lighting and insulation of Kelvin said: “This will be installed at Perth Royal investment will make three Infirmary and Stracathro NHS Tayside hospitals Hospital near Brechin much more energy efficient, as part of the project. cutting costs and reducing The programme, which greenhouse gas emissions. is due for completion in Of those hospitals, Ninewells December 2016, is expected is already internationally to cut energy costs at recognised for developing NHS Tayside by 10%. innovative technology in NHS Tayside, one of the its operating theatres and 14 regions of NHS Scotland, we are encouraged that the provides health services for a health board is also taking population of approximately a pioneering approach to 410,000 people in the local the way it produces and government areas of Dundee, consumes energy.”

Angus, and Perth & Kinross.

Aviva Investors head of A 25-year performance infrastructure Ian Berry said: contract has been signed “This project continues our

The £15.4m project will include the construction of an energy centre at Ninewells Hospital

10%

28 December/January 2016

long-term commitment to bring institutional investors to finance UK infrastructure projects. It is a fantastic development that will provide a range of benefits for the three hospitals.

Aviva Investors’ proposition in infrastructure has been designed to respond to our clients’ need for outcomeoriented solutions, offering long-term, secure, inflationlinked income and attractive risk-adjusted returns.”

Vital Energi project development director Ashley Main said: “This project is exceptionally exciting for us as it shows that financial savings and carbon reduction can be achieved by the public sector working in collaboration with the private sector on these innovative energy projects.

The combination of energy generation and energy management initiatives have been proven to be an effective approach for health boards that are committed to lowering their carbon emissions.” te greeninvestmentbank.com

This project continues our longterm commitment to bring institutional investors to finance UK infrastructure projects

theenergyst.com

POLICY & LEGISLATION

Turning ‘red tape’ into a business benefit Nick Blyth, policy and engagement lead, IEMA, explains how energy taxation changes could be good for business – provided they are properly conceived

I

f there is one business overhead that stings the most, it is taxation. Taxes can feel like a burden, and the business regulatory landscape can appear littered with complex and competing taxes, schemes, policies and reporting requirements.

Complying with this range of legislation can be timeconsuming but it can pay off.

Moving beyond compliance offers opportunities to save money, reduce carbon emissions and can be a real driver for improved business performance.

Energy taxation – the case for change The UK government – specifically the Treasury and the Department for Energy & Climate Change – is currently reviewing the full range of energy taxes to reduce the regulatory burden and increase their effectiveness.

Hundreds of larger companies have to report carbon emissions under mandatory GHG reporting requirements and simultaneously must report a similarly calculated footprint and purchase equivalent carbon allowances in complying with the CRC Energy Efficiency Scheme.

These companies will now also have to comply with the most recent Energy Savings Opportunity Scheme and some will be caught by other schemes, such as Climate Change Agreements and EU Emissions Trading.

This consultation is aiming

30 December/January 2016

This ‘constant policy journey’ can be disruptive and reduce focus from the business of tackling and achieving energy transformations

to eliminate overlap and reduce the burden.

The review offers potential to set a new policy landscape where businesses and energy professionals can better plan investments in energy savings.

Financial savings available to businesses from energy investments are becoming increasingly material.

Businesses of all sizes and sectors can benefit, with examples ranging from larger companies systematically auditing and reviewing their energy saving opportunities and investing in measures like onsite renewables, through to SMEs training their fleet drivers in fuelefficient driving techniques.

Sustainability professionals agree that financial returns on investment are increasingly viable and indicate current policies could be improved to further support these investments. A common

request is to see energy and carbon taxes set or projected over longer periods, to help provide greater confidence to financial business cases – e.g. energy investments planned over a medium-term three- to five-year period.

Government is currently reviewing the consultation outcomes, as well as the success and impact of the current range of energy tax schemes. Energy, environment and sustainability professionals have indicated that individually the various schemes work, although many say that additional unnecessary burden is falling on those largest companies caught by multiple schemes. Central to this future policy landscape will be careful planning of how policy drivers will work together to support energy efficiency and energy saving investments.

One option will be for a form of mandatory carbon

Rolls-Royce Global engineering giant Rolls-Royce employs more than 12,000 people and occupies multiple sites in the UK alone.

Given the scale of its business it is subject to almost every UK energy tax (including the climate change agreement, EU emissions trading system, Esos, mandatory Greenhouse Gas reporting, the carbon reduction commitment and the climate change levy). While this costs the business £3m this year (rising to £5m by 2020), it has made the system work for it, driving efficiencies and savings.

Using taxation as a partial driver (a heavily embedded ambition to improve its environmental impact is also central to its work) Rolls-Royce has invested in long-term energy reduction solutions such as photovoltaic installations and LED lighting. This has resulted in tens of millions of pounds in direct cost savings, enabling the organisation to invest heavily into research and development to increase its future energy and environmental performance.

Park House Healthcare Bradford-based healthcare provider Park House was – until recently – an SME that had made notable energy savings by significantly reducing the fuel its fleet uses. After being taken over by Drive Medical in April this year, it is now classed as a large organisation and therefore will be affected by the Energy Savings Opportunity Scheme in period two. It also pays the climate change levy direct with its utility bills and has achieved some savings by switching from quarterly billing to monthly at some of their sites.

Park House is also subject to paying the standard stamp duty payable on fuel, which became a key driver to reduce its overall fuel usage. In 2012 its fleet was costing £333,000 in fuel alone. By 2014, the annual mileage had increased but thanks to the introduction of a fleet of better performing vehicles its spend actually reduced to £326,000.

(GHG) reporting to be extended out to all large companies. This is widely regarded as an important part of the policy toolkit, acting as a reputational and information driver and raising the profile of energy management across business.

A further key decision will hinge around Treasury revenues that are currently raised by the carbon price for allowances purchased under the Energy Efficiency CRC Scheme. Some propose widening the reach of this ‘tax’ to all large companies (extending from currently about 2,000 to more than 9,000 companies).

Extending this fiscal policy driver to complement an extension in mandatory reporting could be a powerful policy mix to incentivise business energy transformations, with incentives such as discounts also considered.

However, this will only be effective if the ‘tax’ remains visible to the business and key decision makers.

Tax visibility exists in the current CRC approach but could be a challenge within any future more ‘light touch’ policy landscape.

Sustainability professionals are critical of the disruption caused by frequent changes to the energy policy landscape.

This is often referenced as the

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largest ‘business burden’, with businesses finding that by the time they have implemented change to meet one new policy, another new regulation appears. This constant policy journey can be disruptive and reduce focus from the business of tackling and achieving energy transformations.

Many will be hoping that a new effective policy mix will emerge and, if successful, will run uninterrupted to achieve energy reductions and financial savings.

Whatever the shape of the eventual policy landscape, professionals say it must have a clear carbon reduction goal at its heart. Ninety per cent of IEMA members want the review to maintain or even exceed the same ambitious levels of carbon reductions sought by earlier policies. These carbon reductions are vital to delivering on the UK’s longer term targets and commitments.

They will be hoping to see a coherent and suitably ambitious policy mix emerge that will combine an effective reporting scheme along with a medium term tax or ‘carbon price’.

Future energy and carbon taxation provides an opportunity to support UK businesses to evolve into competitive and dynamic low carbon organisations that are fit for the future and can compete globally. te iema.net

GREEN ICT

Greening data centres There is much that can be done to make data centres more energy efficient, explains Ameresco director Karthik Suresh

R

unning 24/7, for 365 days a year, there is no doubting that modern data centres provide a real challenge for businesses in terms of energy efficiency.

The 21st century has seen an unprecedented increase in reliance on digital technology, meaning IT departments and data centres are having to come up with ever more complex systems.

Dealing with customer and corporate demand has its own pressures, but those tasked with operating and maintaining data centres must also be wary of the potential for rising energy costs.

New build data centres can benefit from the latest, state-of-the-art technology which is in part driven by the need for energy efficiency. In our experience, a typical data centre, cooling and processor demand could account for up to 90% of energy use.

While larger bluechips can afford to invest in new centres, smaller businesses and public sector organisations may have to look at retrofitting or adapting existing systems.

It is important to remember that whichever applies to you, there are a range of energy and cost-saving opportunities.

Hot and cold Hot and cold aisle containment is a particularly useful tip for retrofitting and can be implemented with minimal disruption.

Systems that cool down a whole data centre are likely wasting energy and money.

Creating aisles essentially prevents any hot air from

32 December/January 2016

It is important to look at the location, structure, and existing and potential sources of power and cooling water

mixing with the cold air that is being produced to cool the servers. This containment can significantly reduce the amount of cold air that is being used.

Managing the airflow in this way can be achieved by creating rudimentary ‘enclosures’ for each aisle – this is the easier and less costly retrofit option.

More advanced options feature fully monitored servers positioned in selfcontained hubs. These are more suited to new build and complex operations.

New servers with smaller form factors and improved semiconductor process technologies also help to reduce a data centre’s energy demand. This means improved performance with less microprocessor leakage power, thus reducing energy demand of servers and subsequently the heat rejection of the servers as well as cooling demand.

Depending on the size and

complexity of the system, payback on hot and cold aisle containment could reasonably be achieved within two to three years.

Retrofitting or new build Whether retrofitting or designing a new data centre, it is important to look at the location, structure, and existing and potential sources of power and cooling water.

Your data centre may be able to use free cooling instead of chillers for example, if it is located in a cold region or near to sea water.

Digging further into the opportunities, businesses should look at the potential to generate their own power.

The clearest option here is for heat reclaim – in larger data centres it can be recovered for space heating for your own building or for those in close proximity, whether it be commercial, industrial or housing. By installing a heat and power (CHP) system, a business can

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a small percentage of the generate its own electricity required energy, make it a less and heat which can then be favourable green option in sold to offset production costs. the UK. However, there could CHP can lower your still be a business case and carbon emissions and be solar should not be discounted used alongside fossil fuels as part of the energy mix. and the grid, adding an extra layer of energy infrastructure The right technology and acting as a back-up Data centre powering is of should there be any local or course a global issue and national utility shortages (or will vary from country to indeed failures). There are country – a key variable also an increasing number of being the climate. Those examples in Europe of waste situated in the Nordic region heat from data centres being will need much less cooling used for district heating. generated than a centre in An IT company in Finland Malaysia or Singapore for has installed a data centre example. However, with in an empty bomb shelter, the right technology the which uses water – warmed location should not matter. while cooling the servers – to When Capgemini launched provide heat for up to 1,000 its Merlin data centre in homes. The cold water is then Swindon in 2010, it recycled back into was hailed as one the system to cool of the most the servers. energy efficient A similar in the world. project in Five years Stockholm, of UK’s heat demand move very Sweden, set to come from quickly in has been the world of running since district heating data centres January 2014, by 2030 and IT but the with a data technology used centre housed in a at the Merlin centre disused nuclear bunker. still holds up strongly.

As well as reduced CO2 Designed as a modular emissions the system’s return centre with the ambitious aim on investment is estimated of a power usage effectiveness at less than three years.

(PUE) of under 1.1, it uses With district heating free air cooling as well as expected to meet 20% of minimising energy waste by the UK’s heat demand ensuring no leaks between by 2030, data centre the hot and cold aisles. operators would be wise to Technology never stands consider the possibilities. still and is always improving.

Another simple measure Although data centre would be to apply LED operators are rightly cautious lighting as LEDs are much about guarding their R&D, more energy efficient than we expect that they (and the conventional lighting. They likes of Microsoft and Intel) also generate less heat than are developing more efficient conventional lighting, thus microprocessors which we reduce cooling capacity, and believe would reduce the work better in cold ambient. usage of data centres. With Buying solar power or less usage, we would expect installing solar PV as an data centre sites to decrease energy source is becoming in size, resulting in less heat more common in the US. loss and further improvement Uncertainty over tariffs, in energy efficiency. te combined with the fact that uk.ameresco.com solar would only produce

20%

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Supercapacitor UPS for short run times Eaton says it is the first manufacturer of uninterruptible power supplies to deliver a complete backup power solution that uses in-house manufactured supercapacitors instead of batteries Eaton claims its new supercapacitors, when combined with an Eaton UPS, provides an affordable alternative in applications where only short-term power protection is required or battery backed solutions cannot be used.

The firm talks-up a wide range of benefits compared with traditional batteries: they are much lighter; have working lives of up to 20 years at 25°C; require no maintenance and, as they produce almost no heat, their cooling requirements are minimal. The supercapacitors are also suitable for applications where harsh operating conditions and high ambient temperatures mean that the use of batteries is not feasible.

“Our complete UPS plus supercapacitor solution delivers a compelling alternative for short-term back-up requirements,” says Eaton product manager Jussi Vihersalo.

“The solution is competitively priced when compared to flywheel-based solutions, which means lower capital expenditure for a given size of system. The long lives and lower operating costs of the supercapacitors mean that they substantially reduce the total cost of ownership (TCO).”

As the Eaton supercapacitors are scalable, especially when combined with

an Eaton UPS, they can be accurately matched to the power and autonomy demand of almost any application,claims the firm. They can also be expanded, if necessary, to accommodate future growth.

Unlike batteries, supercapacitors generate no hydrogen during their operation, so provisions for hydrogen removal are not needed.

A typical application for supercapacitor UPS solutions is use in conjunction with standby generators to maintain power while the generator starts. Another example is for protection against short power interruptions resulting from the operation of upstream power distribution systems, such as auto transfers and auto reclose events. They are also useful as peak buffers in conjunction with equipment that has short repetitive peak power requirements, such as MRI scanners. eaton.eu/powerquality

December/January 2016

33

2

THE ENERGY AWARDS 2015

1

4 3

6

5

The winners

T

he 2015 Energy Awards winners were announced on 2 December in front of more than 500 of the industry’s finest at a glamorous awards ceremony at London Hilton on Park Lane.

Energy Awards host Andrew Gaved said: “It is fitting that in the week of the Paris global climate talks, we can celebrate projects, technology and services that make a real difference to our energy use. The winners here demonstrate that innovation in energy can help save the planet and often save money at the same time – and that should provide inspiration for both for businesses and governments alike.”

Congratulations to all our winners and finalists and many thanks to our judges and sponsors who helped to make the event possible.

Register your interest for next year’s awards at theenergyawards.com

34 December/January 2016

1. Outstanding Contribution to the Industry – Jeremy Nicholson, director, Energy Intensive Users Group 2. Behavioural Change/Employee Engagement – npower. Project: The EASY Campaign 3. Energy Buyer of the Year – Pulse Business Energy 4. Supplier of the Year – Gazprom Energy 5. Energy Data Collection and Analysis – IMServ, Project: Sub Metering Energy Savings for Worcestershire Health and Care NHS Trust 6. Excellence in Demand Reduction – Virgin Media & Partners, Project: Screw It, Let’s Do It! 7. Water Efficient Project of the Year – Spirit Pub Company, Project: Water Strategy collaboration with Waterscan 8. Energy Efficient Product of the Year HVAC&R – Danfoss, Project: FC 103 Variable Speed Drive

9. Energy Efficient Product of the Year Lighting – Olivewood Data Technology, Project: Chil-LED Lighting System 10. Third Party Intermediary of the Year (Broker of the Year) – Under 50 Employees – Beond 11. Third Party Intermediary of the Year (Broker of the Year) – More Than 50 Employees – Inenco Group 12. Innovation of the Year – Processes and Projects – GENeco, Project: Gas to Grid and Bio-Bus 13. Innovation of the Year – Technology – SGN, Project: CISBOT & Robotics 14. Energy Efficient Partnership of the Year – Costa and Hammerson, Project: UK’s First Zero Energy Retail Building 15. Energy Efficient Building Project of the Year – Skanska, Project: Redevelopment of Bentley Works 16. Judges’ Supreme Award – Costa and Hammerson

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8 7

9 10

12 11

13 14

8

16 15

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December/January 2016

35

THE ENERGY AWARDS 2015

A finger on the energy pulse Pulse Business Energy was crowned Best Energy Buyer thanks to its transparent and an open approach. Freelance journalist Daniela Latini reports

I

t was refreshing to see a new entrant – and a modest-sized one at that – take centre stage at the 2015 Energy Awards. In a category that included Npower and Utilitywise, Pulse Business Energy won the Best Buyer Award (in the retail market), surprisingly making it the first time a broker has won the award, let alone by a privately owned, 15-person company established only six years ago.

Its winning formula was simple – transparency and openness, according to Tim McManan-Smith, who was one of the judges assigned to the Best Buyer Award.

The Energyst editor explained that: “Pulse won for various reasons but one main one was the openness and quality of the information that it provides to customers. Some TPIs make it a bit of a dark art and the market mechanisms a black box.”

McManan-Smith highlighted how some companies adopt an opaque approach, offering little clarity for their customers; “A don’t worry we’ll look after it for you” mentality.

Sharing expertise “This is worrying especially in light of Ofgem investigations into transparency. Pulse has expertise and seems willing to share it and create trust,” the judge explained.

Energy suppliers and brokers face constant criticism by the public and government alike for failing to be open with their customers, and the lack of transparency in their pricing structures and trading portfolios.

36 December/January 2016

Pulse’s energy purchasing strategy is primary designed to “Beat the Market” and is predicated on the basis that the UK energy supply system is designed to comfortably meet peak demand. In such a situation, delaying purchasing decisions will tend to lead to lower prices as the spot delivery month is approached.

Pulse’s achieved prices were approximately 10% lower for both gas and power compared with its 2014 weighted average price with an annual fixed (period) price agreed at the outset of the contractual arrangement.

Furthermore, at no time did the full upfront annual period contract trade below the price achieved by Pulse.

The counter factor to the strategy of delaying purchases is that volatility increases as delivery approaches, therefore providing a tradeoff between potential lower prices but increased risk of prices moving against the strategy with time.

Pulse appears to have considered this by occasionally making purchases early when risk levels are increasing, judging it is better to forego potentially lower prices in

Pulse won for various reasons but one main one was the openness and quality of the information that it provides to customers

order to avoid the increasing risk of higher prices.

According to managing director Ben Dhesi: “Having focused from the outset on I&C customers and on quality not quantity we have been able to focus on customer by customer solutions... no doubt in 2014 the recruitment of Dr Tony West as energy trading consultant has allowed us to implement our energy strategies with greater oversight and confidence.”

Former winners of the title include end-users such as Debenhams and Npower (2014), Mace Construction Group (2013) and Anchor Housing Trust (2012).

Aim for 2016 In future years, assuming the UK energy market supply/ demand balance doesn’t significantly change to be fundamentally short, Pulse proposes to maintain the principles of its existing strategy. However, it also highlights the need to monitor volatility (and trading ranges) in relation to time left to contract expiry, while opting for a slightly more phased approach to buying each contract month if volatility increases.

“Over recent years the forward market structure (generally contango) has helped Pulse’s buying strategy, when prices tended to fall away as delivery approaches.

Regular monitoring of this would be advised and the strategy suitably modified if the forward curve reflects a ‘hockey-stick’ or backwardated curve,” said Tony West. te pulsebusinessenergy.co.uk

theenergyst.com

HVAC Hybrid chiller beats F-Gas regs Mitsubishi Electric says its new air conditioning system delivers comfort levels normally associated with chiller technology, while providing the flexibility and efficiencies of traditional variable refrigerant flow (VRF).

The City Multi Hybrid VRF system operates without using refrigerant in occupied spaces. That means no need for leak detection equipment and anticipates the impact of F-Gas legislation.

“There is a lot of legislation impacting on the use of energy in the built environment and at the same time, there is a drive to look for new refrigerants to mitigate any harm to the environment”, explains product marketing manager, Sebastien Desmottes.

“This will have a major impact on the industry over the next 15 years but in the meantime, we have to deliver

systems that provide customers with a comprehensive choice to help them reduce emissions and running costs whilst meeting current and future legislation.

“BS EN378 in particular will restrict the amount of refrigerant that can be used in occupied spaces and we believe there is now a growing market for this type of system”, adds Desmottes.

At the heart of the new system is a Hybrid Branch Controller (HBC) box, connected to an outdoor City Multi unit via traditional refrigerant piping.

Daiken one step ahead of new air handling laws EU energy efficiency rules for air handling equipment come into force on 1 January 2016. Daiken Applied UK says all of its new units meet the new directive.

Ecodesign Directive EU1253/2014 sets requirements for fan performance, use of multispeed or variable speed drives as well as the inclusion of heat recovery devices.

The regulation mainly tackles two key aspects for energy unit consumption, first is thermal efficiency and second is aeraulic efficiency.

In effect, it means: • All ventilation units, except dual use units (unit used for more than one purpose), shall be equipped with a multi-speed drive or a

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variable speed drive.

• All ventilation with two fans (supply and extract are called BVU) shall have a heat recovery system (HRS) with thermal by-pass.

• The minimum thermal efficiency of all HRS (except run-around HRS in BVUs) shall be a minimum of 67% in 2016 and 73% in 2018.

• The minimum thermal efficiency of run-around HRS in BVUs shall be 63 % in 2016 and 68% in 2018.

• Setting the maximum internal specific fan power of ventilation components in W/(m3/s) for BVU and for UVU (unidirectional ventilation units) See the full Ecodesign Lot 6 (1253/2014) document at http://eur-lex.europa.eu/

Between the HBC and the indoor fan coils, the system uses water piping but is still able to deliver mild air-off temperatures and a great stability of temperature all year round, supplying chiller levels of comfort to occupants.

Each individual HBC can supply heating and cooling to 16 individual indoor units – using City Multi’s two-pipe system and including options for ducted, cassette and floorstanding models. Two main HBC’s and two sub units can be connected to the same City Multi outdoor unit to deliver simultaneous heating and cooling to up to 50 individual rooms or areas.

“We still see significant scope for VRF and chiller technologies but pressure on refrigerants in occupied spaces, and the need for increased levels of efficiency and performance make Hybrid VRF the ideal choice for a growing part of the sector,” adds Desmottes. airconditioning. mitsubishielectric.co.uk

New heat pumps with make your own ErP labels Panasonic has a new heat pump brochure. Besides a lot of products and technical information, it contains full details on the latest Energy related Products (ErP) regulations, which stipulate that all heating systems must now have an energy efficiency rating which covers the entire system – not just individual components.

Panasonic has come up with a handy online ErP label generator. It means installers can enter the details of products they are using in the system and the label generator accurately reflects the energy consumption of the heating system, according to the company.

The brochure is available from the company direct, or as a free download for installers. panasonicProClub.com

December/January 2016

37

HVAC

Efficient control of valves Electronic pressure-independent valve optimises HVAC system at leisure facility

I

n 2013 the operator of ‘Happyland’ in Klosterneuburg, Austria, a leisure centre that includes an indoor wellness pool, a large outdoor sports pool, various playing fields and a large sauna area, decided to undertake major renovation, extension and modification work.

To renovate the heating distribution and complex ventilation system particular importance was attached to the right control technology.

Belimo’s electronic pressureindependent valve solutions (EPIV) which dynamically regulates hydraulic balancing were a key part of this project.

Renovation projects don’t always get off to a smooth start. Once the current situation has been evaluated and the system documentation put together, work to configure the individual components normally gets under way. Just like the pipework, the control valve also has to be sized. Such lengthy Kvs calculations often involve system parameters that are hard to gauge, such as valve authority.

Customer benefits • Minimised efforts for hydraulic balancing • Easy to integrate in measuring, control and regulation technology • Cost-efficient than conventional systems • Feedback signal provided for amount of water measured • Constant, dynamic hydraulic balancing of entire system • Five-year product warranty

45 EPIV were fitted on eight distributors that dynamically regulate hydraulic balancing

An additional challenge in planning this project was that all renovation work had to undertaken during ongoing operation in order to prevent loss of revenue.

Belimo attaches great importance to providing planners with extensive support and working closely

with engineering companies.

Helmut Doblhofer from the technical office GBT Planung was quickly convinced of the benefits of EPIV. He recognised the EPIV was able to assist in areas such as reduced planning work and simple valve design because he had already planned the function principle in zone control for air-handling systems (VAV). The costs of a conventional solution (fitting a line-type regulator and manual hydraulic balancing) were compared with those of the EPIV solution. The EPIV solution was shown to be cheaper and that the system can be operated with higher energy efficiency.

Thomas Pfeiffer, overall project manager at supplier

Bacon Gebäudetechnik, commented: “This solution was able to fast and smoothly complete the challenge of modifying and starting up each of the eight distributors during operation.”

Pfeiffer was also very pleasantly surprised about practical suitablity, how easy it is to handle and the commercial advantages.

He added: “The EPIV solution is based on state-ofthe-art technology. It reduces manufacturing costs and the five-year product warranty provides good investment protection. The system also ensures sustainable and optimum system operation for years to come.” te belimo.co.uk

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38 December/January 2016

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STOKVIS Econo-Air Jan 2014_Layout 1 21/01/2014 17:07 Page 1

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VIEWPOINT

How to mind the gap in generation capacity Energy Managers Association (EMA) CEO Lord Redesdale discusses how we should try and plug the energy generation gap that is looming

T

he energy gap, the difference between generating capacity and demand, should not come as a surprise; it has been predicted for years. The surprise is that nothing has been done to fill the gap.

Britain’s energy security rating has been downgraded by the World Energy Council from AAA to AAB due to concerns over supply. This is not a short-term problem; power generation cannot be just built overnight.

The issue is that it is really difficult for governments to make massive 40-year investments decisions on planning, financing, building and decommissioning of a power plant. While in power only for five years, government becomes preoccupied by explaining the investment decisions to the press operating on a 24-hour news cycle, who in turn are explaining it to customers who are worried about their last month’s bill. It is not a vote winner to say that bills will rise sharply to pay for renewing the generating capacity system.

Ignore the problem The solution is to ignore the problem. If no one is raising the problem there cannot be one, and instead why not play around the edges by focusing on switching? There is almost no real debate on this issue in Parliament; an issue that is of such major national importance is ignored. The reason behind this idleness is that there has not been a

40 December/January 2016

power blackout in the country for the past 30 years. National Grid has done a fantastic job of managing the supply, but even the Grid will find supplying power that does not exists a real conundrum. A recent report said the gap between energy supply and demand had reached 1970s’ levels of energy crisis period caused by significant petroleum shortages.

How much worse will it get when 10% of available power will be gone in March 2016 when Eggborough and Longannet are shut?

Filling the gap What will fill the gap? Wind was in reality oversold; it is a major scale and a relatively new technology that can potentially produce vast amount of power, but is unfortunately intermittent. It is also expensive sticking it in one of the harshest environments around, the North Sea. Large-scale onshore wind has been ruled out in the short term. Although 80% of those living near windfarms like or ignore them, there is a very vocal campaign against them.

Wind is coming down in price but the Tory funding policy has destroyed any hope that future investment will be forthcoming in the next five years. The same has happened for solar. This has a knock-on effect, the investors who have taken a beating on wind and solar are not going to fund the obvious answer – gas plant. The price of gas in the past two years means gas is not even a breakeven investment. Add to that the risk that the government will not stick to long-term funding policies and it is not surprising that two major gas

plant developments have been left on the drawing board.

This leaves us with nuclear.

The funding of Hinckley Point C is, according to the City, insane.

It is meant to be the first of eight plants to be built, but the difficulty in securing funding means that like Sizewell B – the first of 13 proposed plants that were never built – it might be the first and last.

Lack of generating capacity will really hit at peak times; there has already been a call by National Grid to reduce power usage due to power stations breaking down. How much worse will it get when 10% of available power will be gone in March 2016 when Eggborough and Longannet are shut?

Interconnectors could be the solution but the present pricing strategy often means that they are not used. Also how sensible is it to rely on other countries to be responsible for British energy security? Twenty per cent of our power could well come from France, the Netherlands and Norway, but I am doubtful if in a very cold winter much power will be coming our way.

There are solutions to this bleak energy scenario one of which is a large-scale implementation of demand response. However, to make this work the country needs a vast number of trained energy managers. The Energy Managers Association is helping to train energy managers and believes that the energy shortage will be a fantastic boost to the profession. te theema.org.uk

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Collect your data on the go With READy mobile reading, you can easily read the Individual metering of utility’s meters directly from your car. All you need is an Android smartphone, small converter unit and a energy andawater PC program.

The reading takes place automatically while you drive. A road map on your smartphone shows your meters nearby, the ones being read or about to be read. It’s that simple.

For more information or advice on which of Kamstrup’s products and metering solutions best suits your requirements, please call 01787 319081 or info@kamstrup.co.uk Kamstrup has moved to a new office - new address is: Unit 5, Stour Valley Business Centre, Brundon Lane, Sudbury, Suffolk, CO70 7GB

VIEWPOINT

Changing behaviour – a good place to start for efficiency Energy efficiency is key to achieving a healthier economy, a cleaner environment and improving energy security – but it can be a challenge to engage your team and gain company-wide commitment to reducing energy demand and wastage, says Energy Institute chief executive Louise Kingham

M

ost organisations could save 10% of their energy bills through no-cost or low-cost measures so, by increasing staff awareness of your energy use, you can significant annual savings, making the investment well worthwhile.

But where do you begin?

For an effective staff awareness campaign, it is important to secure support from senior management and approach any staff members you may be asking to assist you in carrying out the work.

The first step is to assess your organisation’s current situation. After ensuring a good understanding of your energy consumption, walk around the site and identify opportunities to save energy by good housekeeping and improved actions of the staff in the organisation.

Speaking to staff, or conducting staff surveys, will also help to assess current level of knowledge among staff, as well as attitudes to energy use and current level of motivation to improve.

Energy efficiency goals should be outlined as both a high-level policy statement setting out the organisation’s commitment to efficiency and carbon management, and quantified outcomes expressed in terms of reduction in energy

42 December/January 2016

consumption, energy cost savings and/or reduction in carbon emissions. Essentially, these should be communicated across the staff team to disseminate the targets and help to identify where the staff team can contribute.

Some staff may not respond well to simply being told to save energy. The approach should be to motivate people by selling them the underlying reasons and benefits behind each action.

Another way of exemplifying the benefits of certain behaviour changes is to offer basic training on how they can save on energy costs at home. This can often generate a more personal investment in behaviour change that many organisations have used to successfully promote change in the workplace.

It is important to track progress towards the goals set for the campaign to be able to communicate updates to the staff team. If energy savings are the primary goal, this should be checked on a regular basis using standard monitoring and targeting techniques.

However, it is also beneficial to measure less tangible factors such as attitude and behaviour change through site visits and conversations with staff.

Having invested time and resources into conducting your campaign, maximise your

It is also beneficial to measure less tangible factors such as attitude and behaviour change through site visits and conversations with staff

efforts by ensuring continued momentum in improving organisational energy culture.

A crucial element of this is to communication progress and any particularly achievements to staff at stages throughout and following the campaign.

This can be highly motivational and encourage continued engagement with the activity.

For larger organisations, you may want to look at integrating energy awareness into existing policies and systems, such as incorporating energy awareness into staff induction materials or the consideration of energy efficiency in procurement policy for goods and services.

Changing behaviour is just one element of improving an organisation’s efficiency.

However, as one of the lowestcost measures to save energy, a staff awareness campaign done right is a good place to start.

In January, the Energy Institute will host its annual energy efficiency conference.

This will include a workshop, specifically to teach psychology techniques to understand the motivations of individuals at work, and to formulate strategies to create an environment that facilitates the behaviour you want to achieve. Find out more at: energyinst.org/energyefficiency-conference-2016 te energyinst.org

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LIGHTING

The future is wireless Helvar technology director Max BjĂśrkgren looks at the evolving opportunity for wireless lighting control

D

uring the past decade, the use of wireless connected devices has become more and more widespread.

Communication technologies, such as Wi-Fi and Bluetooth, are common in many devices, improving their ease-of-use, performance and capabilities.

Meantime, the rapid market adoption of smartphones and tablets has brought about a significant change in the way people control various devices.

This change is now also affecting the lighting business.

Retrofit opportunities The big opportunity for wireless is in the retrofit sector. More than 80% of the commercial and public buildings that will exist in 2030 are already built. Many of these feature no lighting control at all. In existing structures, the installation of the wiring typically needed for a control system is either too disruptive or expensive to achieve, or actually impossible due to cabling restrictions within the architecture.

So, what are the benefits that will drive the adoption of wireless lighting controls? The most important factor remains the drive towards reducing energy consumption and cost.

Energy usage can be reduced by 70-80% with LED lighting combined with effective control 44 December/January 2016

EnOcean

Zigbee

Bluetooth

Wi-Fi

Standard no

14543-3-10

802.15.4

802.15.1

802.11

Frequency (MHz)

868

868/2450

2450

2450

Range (m)

300

100

10

100

Network topology

star

mesh

p2p, star (mesh)

star

Energy consumption

very low

low

low

high

A snapshot of used standards for lighting control

For example, in Finland, the running cost for public buildings is huge (about ¤15bn annually) and a significant portion of that is energy. We know that energy usage associated with lighting can be reduced by 70-80% with LED lighting combined with effective control.

Simply lowering the total consumption by a few per cent can offer significant savings.

Another important driver is the flexibility and lower installation cost associated with wireless. Wireless control panels are often battery driven or operate through energy harvesting, which means they can be easily moved or reconfigured. This is especially useful when the layout of a building changes, or when the purpose of a room is altered.

We operate in a Bring Your Own Device (BYOD) world where we use smartphones and tablets at home and at work for the convenience and personalised control that brings. We are familiar with using smartphones to control remote devices at home and this makes the transition to controlling lighting from a phone very natural.

What standards are there to work from?

Lighting control standards are evolving to meet the

transition to wireless. We are seeing not just new wireless products entering the market but also new companies introducing exclusively wireless lighting control solutions.

Today, there are several standards for wireless lighting control (see table) but no single, dominant choice.

The differences between the current standards are the communication protocols, power consumptions, supported network topology, transmission range and data rate. Most of the various solutions use some of the non-licensed frequency bands (~2,4GHz, 868 MHz.) for communication.

These communication standards are by no means compatible with each other.

To be able to connect a Bluetooth device with a Zigbee device you need a gateway.

By adding gateways you add cost and complexity to the network, but for the time being gateways cannot be completely avoided to guarantee a fully functioning wireless system.

The Connected Lighting Alliance (TCLA) is an industry consortium where the lighting community is working together to create a unified solution.

While this is happening, many companies are using available technologies to

feed the market needs with plans to update the products later, when TCLA is ready.

It is important to ensure that in the design of any product we can adapt to changes to the evolution in wireless technology and protocols quickly and readily. Those who are not as agile will find that it can only be a matter of time before their products are outdated, if not obsolete.

Make use of capabilities Wireless lighting control offers significant benefits when it comes to energy savings and the ability to bring controls to buildings where wired control is simply not an option, for example, heritage buildings or rented spaces.

It is important we make use of the capabilities for wireless control especially as we move closer to the Internet of Things world. From a manufacturer’s perspective, developing a communication standard for such products will help clarify the right wireless solution for a particular project, ensure that benefits are delivered at an affordable price point for installation and also help us meet end user expectations for greater and easier system control. te helvar.co.uk

theenergyst.com

Picture LED nirvana Scheduling refurbishments at the National Portrait Gallery is major challenge. There are two million visitors to accommodate and the gallery has been overhauling its lighting to LEDs for the past six years. Helvar’s control kit is part of the upgrade. As well as reduced maintenance and operating costs, it means that even when lights are dimmed, visitors can still properly pick out the colours in the portraits.

An entire floor has now been converted to LED lighting, with approximately 450 lights installed. The energy savings are compounded by heat savings – which in turn has reduce the gallery’s cooling bill.

Helvar has also replaced the original router and integrated it with a bespoke BMS. It controls LED dimming, with 200 dimmer units installed throughout the gallery that operate via an automated time schedule. Meanwhile, via light sensors, the BMS also controls window blinds according

to natural light levels and the sun’s position.

“Thanks to Helvar, we were the first gallery to light historic works with LED lighting,” says National Portrait Gallery chief engineer Allan Tyrrell, who oversaw the project undertaken by the in-house team. “In Room 13, we wanted to have a like-for-like replacement of the lighting, so for the original 100W tungsten halogen light fittings, we exchanged them for a 13-watt LED.” Room 14 was used to trial Helvar’s colour rendering capabilities, specifically the light’s ability to accurately reveal reds in the paintings.

CPD course looks at the fundamentals RIDI Lighting is providing a new RIBA-verified Continuing Professional Development (CPD) course. LED Fundamentals covers core LED themes and examines the theory behind LED light sources, their benefits, some of their associated problems and the opportunities for product design that LED sources offer.

The one-hour seminar has been added to RIDI’s existing portfolio of CPD courses, designed to give a thorough grounding in lighting technology to architects and designers looking to broaden their lighting knowledge.

This series of CPD sessions provides a comprehensive overview of the basics of LED technology, lighting controls

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and how sound management can be integrated with lighting. RIDI claims they are invaluable for anyone looking to specify efficient and effective lighting in the built environment.

CPD is a business, professional and career tool which can lead to new opportunities, greater job satisfaction and a better chance of promotion.

From an organisational perspective it can improve staff motivation, assist succession planning and demonstrate a commitment to excellence and lifelong learning.

For more information on RIDI’s CPD courses, visit the RIDI website. ridi.co.uk

“There was much more detail than what had been visible previously, so a lot of previous worries about the colour rendering disappeared,” says Tyrrell. “In all of the time we have had the LEDs in place, we have had no complaints regarding the lighting from the public. The CRI is about the same – about 92 – but a large benefit is when you dim them; the colour doesn’t change.

If you dim the tungsten halogen bulbs there is a considerable change in colour.”

One of the primary benefits of the LED system is reduced maintenance. “A tungsten halogen lamp might last 500600 hours, whereas LEDs can last 50,000 hours. The difference is huge,” says Tyrrell.

Meanwhile, because the bulbs give off almost no UV, light damage to artwork is minimised.

Having seen the benefits of the new system, work is now under way on the floor below in the move towards a full LED gallery. helvar.com

The lighting firm the trade turns to The recently refurbished Twickenham branch of Edmundson Electrical is more energy efficient as a result of controls supplied

by CP Electronics.

Microwave and PIR presence detectors control the lighting at Edmundson Electrical, ensuring automatic adjustment of lighting, in turn, reducing wasted energy.

CP Electronics supplied Edmundson Electrical standalone detectors and its flexible Vitesse Modular lighting connection system to provide energy savings in the offices, canteen and rest rooms.

Edmundson Electrical chose two-channel switching options, which suit installations that have essential and nonessential supplies.

The EBDSPIR-PRM-2CH two-channel compatible compact ceiling mounted PIR detectors selected for the installation are compact and can be mounted either

flush into a ceiling tile or using a surface mounting box. The low-profile design means the unit can be mounted in a narrow ceiling void and no external control boxes are required as the unit is self-contained.

The MWS3A, CP’s ceiling mounted microwave detector, provides sensitive presence/absence detection in Edmundson Electrical’s warehouse, as the detector has a adjustable sensor head to allow for precise detection. By changing the angle of the head, different detection patterns can be achieved to suit the specific application. Integral sensitivity adjustment also allows the detector to be finetuned to its environment. cpelectronics.co.uk

December/Janaury 2016

45

COMPRESSED AIR

VSD saves energy and time Calderdale Engineering Services replaced its existing fixed-speed compressor with an Atlas Copco VSD installation that has since reduced energy costs by 50%, running time by 80% and occupies a smaller workshop footprint

W

to the reduction of worksite hen Calderdale noise levels and its more Engineering advanced design that provides Services (CES), significant efficiency savings.” a family run CES owner John Pateman, company specialising in commenting, on the system’s precision engineering, performance, said: “We have moved from its premises been logging the number of in Pellon, Halifax to a new running hours on the new base in Boothtown, the move machine since our move prompted a review of the in. For comparison, when operational efficiency of the we reached a figure of 300 existing existing 15-year-old hours, we estimated that compressor installation the equivalent running time which required on our old system, which continuous running operated constantly during in order to supply working hours, would have air for workshop Reduction in been in excess of 1,600 assembly tools, hours for the same period instrumentation energy costs by a – and would have been less train means the compressor and blowCopco. replacement VSD efficient in its operation. The runs as quietly as 62dB(A), down cleaning When compressor new system includes useful A further cost-saving feature procedures. combined features such as weekly is the system’s air ring main, The conclusion with the runtime scheduling for normal constructed from Atlas Copco’s was that it was no compressor’s, working hours together with AIRnet modular air piping longer fit for purpose and in-house designed iPM a useful one-button manual system. Readily adaptable, it is should be replaced with a permanent magnet motor, the override, and the system made from robust, lightweight, new compressor system and company claims this results comes up to pressure within powder-coated aluminium AIRnet pipework within the in an average 37% reduction minutes from standby.” tube and designed for easy, company’s new premises. in lifecycle costs compared PPS director Ian Harrison low-cost installation with a As a long-term customer with that of a conventional commented: “We have a large selection of engineered of Atlas Copco Compressors’ fixed-speed compressor. mutually beneficial and polymer fittings. AIRnet’s low distributor Pennine Pneumatic As an additional point of long-standing relationship friction, seamless pipework Services (PPS), also based in use benefit, instead of the with CES going back 15 years is corrosion free and thus Halifax, CES asked the firm conventional horizontal and we were glad to be able minimises pressure drop in to recommend the optimum design, the GA machine has to assist with this upgrade. the system and contributes to unit for the company’s specific an upright, vertical, low Our priority is introducing energy efficiency, says the firm. needs. As a result, a new Atlas footprint layout designed energy-saving initiatives According to CES technical Copco GA11VSD+ rotary screw to save floor and work that also save our customers director Chris Pateman: compressor was supplied and space while improving money and we look forward “The new compressor is a installed to provide greater maintenance access. Atlas to continuing to work closely considerable improvement efficiency and help make Copco says the silent motor with CES in the future.” te over our previous system due substantial energy savings. and fully-enclosed drive atlascopco.co.uk In contrast to the old, continuous running, fixedWe have been logging the number of running hours speed compressor, the GA on the new machine. When we reached a figure of 300 compressor’s variable speed drive matches compressed hours, we estimated that the equivalent running time air supply to demand thereby on our old system, which operated constantly during reducing run time and working hours, would have been in excess of 1,600 corresponding energy costs by as much as 50%, claims Atlas hours for the same period

50%

46 December/January 2016

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COMPRESSED AIR

It’ll all come out in the wash Mattei’s compressors have helped Faversham Linen Services achieve a reliable, efficient and low-maintenance solution

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hen Faversham Linen Services, a familyowned laundry business in Kent established more than 100 years ago, was devastated by fire, the owners seized the opportunity to build a greener, more efficient operation in its place.

Alongside investment in some of the most advanced laundry equipment in the world, Faversham Linen Services chose Mattei’s variable and fixed-speed compressors to provide a reliable, efficient and low-maintenance supply of compressed air.

Established in 1898, Faversham Linen Services provides clean, quality linen, towels and workwear to a diverse range of customers across Kent, Sussex, Surrey and south London, including hotels, restaurants, pubs, shops and care homes.

In June 2013, a huge fire tore through the business’ Victorian premises, destroying the building.

Opportunity to rebuild Owner Richard Cope saw the fire as an opportunity to rebuild a stronger business, and work began almost immediately on a brand new, state-of-the-art 23,000sq ft laundry, which would be built on the same site.

The very latest processing and cleaning equipment was commissioned and installed in the new facility – which opened just 12 months after the fire.

For the laundry business to operate at its optimum performance, Cope knew he also needed to invest in new compressors. Compressed air plays a pivotal role in

48 December/January 2016

keeping Faversham Linen Services’ operations running smoothly, with it being used in all its processes, including controlling the detergent dosing, washing, drying and ironing and shrink wrapping.

Even before the fire, the company was in the process of making improvements to the reliability and efficiency of the existing compressors. A data logging exercise and a leak detection survey had revealed the existing system was not performing efficiently and the full extent of the energy being wasted through leakage.

Armed with the research from the old compressed air equipment and the criteria he wanted for the new equipment, Cope approached Mattei to

The added reliability and reassurance was crucial; our work is time-critical, and we cannot afford unscheduled breakdowns

discuss its product portfolio.

Faversham Linen Services required a variable speed compressor for flexibility, as well as a fixed speed compressor as a standby to cope with additional load or to offload capacity during routine maintenance of the variable speed compressor.

Mattei specified an Optima22 variable speed compressor and an AC22L fixed speed machine, along with air treatment and storage equipment.

Cope said: “It is our mission to stay ahead of the market through innovation, and we have a long tradition of investment in the latest technology to achieve this objective. Every aspect of our operation – including compressed air – is considered important to the overall performance of the business and the service we offer our customers.

“One of the main selling points for us was Mattei’s warranties. We could see the compressors were great products and the performance and efficiency met the criteria we were looking for, but the 10-year unlimited hours air end and 100,000 hour blade

warranties, along with the reliable service Mattei offers, meant that we could keep our running costs low too. It felt like we would be installing a fit-and-forget product, as any issues would be taken care for us quickly and with as little downtime as possible.

“Understanding the cost implications of badly designed or poor quality pipework, we went for Mattei’s recommendation of Teseo pipework too. This was quick to install – which fitted in with our fast turnaround time required to reopen the facility in 12 months – and it also looks neat and tidy. Like the compressors, it comes with a long warranty for added peace of mind.

Cost savings “Overall, Mattei offered a competitively priced package, which had many long-term cost savings for us in terms of better efficiencies and lower maintenance costs. The added reliability and reassurance was crucial; our work is timecritical, and we cannot afford unscheduled breakdowns.”

Mattei business development manager Colin Young said: “In the laundry sector, compressed air is as important as water, so we understand that it’s essential to have reliable and efficient compressors.

“Following a data logging exercise, Faversham Linen Services had a very clear idea of the kind of compressed air technology they wanted in their new facility. We were able to provide them with a solution that met their needs, and that would support the advanced laundry equipment installed.” te mattei.co.uk

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VIEWPOINT

Energy management works It may seem to some that energy management is difficult, time consuming and expensive. Energy Services and Technology Association’s Bill Mahoney asks if this is really the case

A

fter a recent visit to a factory that employs about 900 staff, a report was produced highlighting the major areas of concern on energy efficiency.

The site uses electricity only and has consumption in excess of 28 million kWh per annum with a cost of about £3m. The site has no full-time energy manager. However, if we assume that one was employed, then given a target for savings of as little as 2% this would realise around £60,000. Wages and overheads for employment of an energy manager would be less than that while still achieving some savings over and above the costs.

Now, employment of an energy manager needs a commitment from the top. A standard like ISO 14001 goes some way towards this but a defined and separate energy policy signed off by the chief executive or board of directors would be the “licence” for the energy manager to practice within the organisation.

Finding out the sources of energy on any site, the consumption and then analysing it all goes a long way to deciding the route to take along the way to improving energy efficiency in the organisation.

Monitoring and target setting are now essential parts of this task. Having gathered the consumption data, it is then necessary to analyse it.

The simplest method is to use existing software such as Excel, which is contained within the packages on most PC’s these days. But

50 December/January 2016

Employment of an energy manager needs a commitment from the top

other, more sophisticated, software is available and is sometimes even integrated with installed energy or building management systems.

There are many industrial, commercial and public sector sites that warrant study as to their level of energy efficiency.

Most, if not all places use lighting whether they are offices, production facilities, warehousing, education establishments, etc. For example, a hotel’s underground car park that was lit all year round was costing £8,673 pa.

By fitting controls costing £260, the saving was £7,851 giving a payback of about 12 days.

That car park is fitted with fluorescent lamps in fireproof IP65 fittings. Now, with LED’s taking pole position, lighting is an area worthy of study with a view to improving not only the energy efficiency but the quality of lighting used.

These can account for large energy savings as well as reduced maintenance costs.

Compressed air is not free: it is so expensive that only about 5% of the energy at

the compressor does work at the point of use. Leaks can account for about 25% of the costs of producing the air in the first place and there are many ways checking for leakage in an air system.

A number of compressor manufacturers produce guides to help with system design, operation and maintenance.

The British Compressed Air Society has an excellent installation guide which will also help to highlight any discrepancies in the air system.

Motors are used in most buildings and processes. They can be the reason for a number of losses and increased costs.

If your buying policy for motors includes purchasing ones which comply with the energy efficient standards, then running costs over the life of the motor can be greatly reduced.

Although these points are only a few from the world of energy management, it is worth committing to energy efficiency whether or not Esos is going to affect your business.

Energy management doesn’t have to necessitate huge expense. The importance of a dedicated energy manager coupled with the energy standards that exist today both in management and technology coupled with guidance from manufacturers and trade associations should ensure that energy efficiency must become a way of life for businesses and the public sector. te Bill Mahoney is an energy Consultant and a member of ESTA’s Independent Energy Consultants Group. esta.org.uk

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VIEWPOINT

Will COP 21 prove the Goldilocks principle?

Kyoto, too strict; United Nations Framework Convention on Climate Change, too lenient; COP 21, just right? Why should COP 21 succeed where previous climate change agreements failed and what does this mean for UK businesses asks JRP Solutions managing director Jes Rutter

F

rom 30 November to 11 December 2015 world leaders from all 196 countries present came together to thrash out a climate change mitigation deal that has been termed “the best chance we have to save the one planet we have”

by US President Barrack Obama. This was COP 21 (the Conference of Parties 21).

The main aim of the Paris pact is to restrict rising global average temperatures to “well below” 2°C levels (with a more optimistic view of 1.5°C), when compared to pre-industrial levels, by the end of the century.

Long-term emissions reduction targets will be achieved by all countries having short-term commitments, called Intended Nationally Determined Contributions (INDCs). The INDCs will be reviewed every five years with progression achieved at every stage to ensure there is no backsliding.

It is important to note that there are no explicit legal implications for countries to actually adhere to these commitments as the drive to act is expected to come from the respect for the deal and the individual state’s desire to be perceived by the global community as “doing their bit”.

This is a bottom-up scheme, driven by the countries themselves and not by the UN imposing sanctions from the top-down. However, it has been agreed (again not as a legal requirement) that a minimum of $100bn per year shall (not

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Victoria Pendleton as goldilocks for Special K porridge

The rising price that power suppliers will have to pay for carbon emissions means an increase in their overheads, which will inevitably lead to these costs being passed on to consumers

should, a common theme of this agreement) be made available to aid developing countries in their INDCs. This generous attitude has already been exhibited by China, which has made $3bn available in climate finance for vulnerable countries. This may be in part due to its escalated levels of premature death linked to localised pollution, which rose to 1.6 million last year.

So, what is the difference between this particular summit that has been hailed as such a monumental success and all those that have come before? Mainly it is much more sympathetic to developing countries, allowing for increased contributions as and when they feel able to make them. Developed counties have also committed to pledging significant aid money to support the endeavours of the developing countries and have themselves accepted blanket

emissions reductions targets across their whole economies from the first INDC in 2020.

There is a feeling that COP 21 may have finally achieved the delicate balance of sanctions, incentives and ramifications.

After the United Nations Framework Convention on Climate Change in 1992, which stimulated little or no concrete commitment from participating countries and the Kyoto protocol, which imposed such harsh sanctions that it scared major countries off (notably the US), Paris seems to have found a happy middle ground that is just right.

Finally, what are the possible future implications for UK businesses? Most importantly this scheme will not replace the EU Emissions Trading Scheme and will run in parallel. The most likely outcome of this will be to increase the price of carbon emissions even further as countries strive to restrict their emissions. The rising price that power suppliers will have to pay for carbon emissions means an increase in their overheads which will inevitably lead to these costs being passed on to consumers.

There will undoubtedly be further ramifications once the UK releases its INDC, but this is not expected until next year at the earliest. Until then it is important that UK businesses do all they can to reduce energy consumption as COP 21 looks to be another mechanism that will lead to further increases in utility prices. te jrpsolutions.com

December/January 2016

51

WATER MANAGEMENT

All you need is concentration Veolia WaterTechnologies business development manager Kate Wild of looks at how increasing concentration factors can improve operational efficiency

I

t’s all about concentration.

Whether it’s a steam boiler or an evaporative cooling tower, the total dissolved solids (TDS) concentration is the most important control parameter.

Why? Because it’s measurement online and in real time (by electrical conductivity) is both simple and reliable.

When salts dissolve in water they split up into positively charged cations and negatively charged anions, which are free to move about, so they can conduct an electric current.

The greater the concentration of dissolved salts the more ions there are and the higher the current the water can carry.

A pair of submerged electrodes with a voltage between them gives a direct measure of the electrical conductivity of the solution in micro Siemens per centimetre (µS/cm).

Both steam boilers and evaporative cooling towers concentrate their make-up water because they generate steam or water vapour that is lost from the system and this leaves behind all the salts that were dissolved in the make-up water. So the boiler water (or circulating water in the case of a cooling tower) becomes steadily more concentrated leading to problems of scale and corrosion in cooling towers, and results in scale, corrosion, foaming and carryover in boilers.

To minimise these operational problems we use a wide variety of conditioning chemicals: oxygen scavengers, corrosion inhibitors, scale inhibitors, sludge conditioners and biocides.

Although the most important control technique we have is blowdown or bleed, which dumps some of the concentrated water to waste in order to limit the concentration factor, that is the TDS of the boiler or circulating water, typically 2500-3500mg/l, divided by the TDS of the make-up water.

The higher the concentration factor the lower the blowdown.

Blowdown water is treated make-up water treatment dosed with expensive conditioning chemicals and in the case of a boiler, heated to boiling

point. It is usually discharged to sewer, so, when you add up the cost of mains water, fuel, chemicals and sewer disposal it probably costs at the very least about £3 per m3 and that’s money down the drain.

So, how can you reduce blowdown and save money?

The first and most important water management tool is monitoring. Continuous measurement of conductivity in the concentrated water tells you what the concentration factor is and it can be used to control the blowdown automatically, simply by opening and closing the blowdown valve.

The second is to review the chemical conditioning regime. Adding chemicals to the system increases the conductivity as well as costing

How can you reduce blowdown and save money? The most important water management tool is monitoring.

The second is to review the chemical conditioning regime; it is important not to overdose

52 December/January 2016

money, so it is important to ensure that you are using the right chemicals and that they are not being overdosed.

Veolia has an extensive range of chemicals and can formulate blends to meet the specific demands of customers’ systems, together with automatic dosing control systems like AquaVista. Not only that but the results of regular service testing can be sent immediately to a customer’s laptop or smartphone using Veolia’s AQUAConnect service management system.

Edward McKnight, hospital engineer at Bristol Royal Infirmary, has taken out Veolia’s comprehensive AQUAService contract, which provides not only the supply of chemicals together with new chemical tanks to improve health and safety but also a fortnightly programme that includes chemical testing and full servicing of the water softener and RO plant.

Equally important is the treatment of the make-up water. Softening removes the hardness salts that cause scaling but does not reduce TDS. Reverse osmosis, on the other hand, softens the makeup water and also reduces the TDS by about 90% which means the concentration factor can be greatly increased, reducing blowdown and saving money. Of course, treating the make-up water to reduce TDS means a capital investment, that can often be repaid in under a year. te Veolia says the economic assessment is easy to do via its RecoSMART online calculator. recosolutions.co.uk

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PRODUCTS Veolia lands £50m biomass CHP deal Veolia has won another biomass contract in the form of a £50m deal with Equitix ESI CHP to operate the Sherwood Biomass Plant in Nottingham.

The 20-year contract takes the value of biomass energy managed by Veolia in the UK and Ireland to £500m.

Located in Widmerpool, the 6.55MWe biomass-fired combined heat and power station will power 10,000 homes and supply up to 4.5MWth of process heat for the adjacent sawmill operations.

The new plant will recycle about 52,000

tonnes of waste wood as a carbon neutral fuel and will annually save around 8,400 tonnes of CO2 emissions.

Veolia will provide operation and

New year, new IE3 premium efficiency range Nord Drivesystems will expand its IE3 premium efficiency motor range to also include smaller motor powers from January 2016.

Available as an alternative to its IE2 motor range, the smaller-sized IE3 portfolio has rated power from 0.12 kW to 0.75 kW. Nord Drivesystems says the range will make it easier to equip entire plants with eco-friendly, highly efficient drive systems.

The efficiency percentiles for this performance class have only been defined in the last stage of the European Union Ecodesign Directive, and they have only recently been introduced into the international standard IEC 60034-30-1.

Legally there is actually no immediate need to act on motors this small as IE3 requirements within the EU only apply to motors rated at 7.5 kW or higher. Even in 2017, when smaller performance

54 December/January 2016

ratings are due to be included, this will only extend to 0.75 kW or larger systems.

However, the European Council for an Energy Efficient Economy (ECEEE) has identified in its Lot 30 consultation forum that motors below 750 W should be included in a bid to have only one eco-design regulation on electric motors ranging from 0.12kW to 1000kW. So it’s coming down the track and Nord Drivesystems says users that want to get ahead of incoming legal stuff will find the range enables them to do so, as well as pursue ecological solutions throughout all drive applications.

The firm supplies the compact IE3 motors in IEC frame sizes and says changing the specifications to IE3 is a smooth process that will not require physical design changes to machinery and equipment. nord.com

maintenance plus monitoring, reporting and compliance services. The agreement also covers water treatment, emission monitoring, and ash disposal for the new plant that is due to start generating renewable electricity and heat in spring 2017.

The Sherwood plant will use a traditional steam cycle for generating electricity though the combustion of life expired wastewood from local sources.

The contract follows Veolia’s recent 15-year contract win to operate the 6.5MWe Holbrook Community Energy Centre in Sheffield. veolia.com

See the difference in HVAC control Distech Controls has launched an IP-based HVAC control and monitoring solution: the Eclypse Connected IP and Wi-Fi Product Series, and Envysion responsive, web-based design and visualisation interface.

BACnet Building Controller listed, the Eclypse controller series provides BACnet/ IP, wired and wireless IP connectivity. It includes a modular Connected System Controller, Connected VAV Controller, and Connected VAV Controller with PoE. Meanwhile, Distech Controls says Envysion delivers actionable visual knowledge and a powerful user experience. According to the firm, the combination provides consulting engineers with benefits including: convergence based on trusted, open standards, improved BMS performance, enhanced user experience, and advanced security.

With Eclypse, consulting engineers have access to products that are based on proven standards that they can rely on: BACnet/ IP, powered by Android, and IT standards including wired IP and Wi-Fi.

Distech claims the Eclypse Connected IP and Wi-Fi product series also provides improved BMS performance. Increased bandwidth means more data can be analysed and thereby presents increased opportunity for optimisation.

Consulting engineers are able to present relevant data, which can be accessed from anywhere and on any device, to all users within the building management system. This can be accomplished by using the web connection (offsite), direct IP connection or Wi-Fi hotspot (onsite), to easily connect to controllers and systems, using a PC or mobile device.

Security is also improved because the product is powered by Android OS and has built-in support for Transport Layer Security (TLS/SSL) communications.

They are also embedded with a HTTPS server, providing a WPA2 authentication for a secured Wi-Fi access. distech-controls.com/ SpecifyECLYPSE

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Product & Services Directory Contact Harry Powell Tel 020 3751 7863 Mob 07557 109476

Stylish air curtains minimise heat loss Nortek Global HVAC has introduced a new range of air curtains for applications where the aesthetic appearance of the system is particularly important to the end user and/ or space above the door is limited.

The Airbloc ACV Series minimises heat loss through open doors. The three models in the range have a heating capacity of 16.2kW to 34.6kW and deliver a powerful airflow (up to 5,100m3/h), yet are quiet to operate. They are suitable for mounting vertically either side of the door opening, where the doors are a maximum height of 2m, 2.5m or 3m.

Airbloc ACV air curtains retain up to 80% of heat and work equally as well during the

summer months, when there is more likely to be a requirement to maintain a cool environment. To achieve the best results, they should be mounted vertically as close as possible to the door on either side of the opening. However, for added flexibility, these new products can also be installed horizontally.

All models come with a choice of either ambient, three-phase electrical or low -pressure hot water (LPHW) connections, which can be through the top or bottom for a clean professional finish.

The air curtain is controlled via a wall programmer, which incorporates thermostat/time functions and, in advanced mode, can be controlled over a MODBUS protocol link. ambirad.co.uk

Identifying waste Birmingham Airport is the third largest airport outside London, and the UK’s seventh largest overall, handling more than nine million passengers a year.

During the past 10 years, it has invested more than £200m to develop its infrastructure, and has the capacity to service 36m passengers a year on its single runway.

A major part of identifying excess consumption has been the TEAM Sigma Software, which the airport uses to turn vast amounts of raw data into meaningful energy management data.

TEAM software is then used to produce weekly reports analysing fluctuations in energy consumption to detect where the organisations plant and equipment has gone out of their parameters.

In August 2013, electricity

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ENERGY METERING & MONITORING SYSTEMS

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consumption at Birmingham Airport peaked at 26.5m kWh. A degree day cooling analysis identified that the high consumption was largely down to running the cooling plant, which is a substantial cost to the business.

Geoff Brunt, engineering manager at the airport, said: “Sigma Software highlighted this. If a piece of equipment/a sensor is 1% out of its calibration it can add 10, 15 or even 20% to your overall energy bill. In 13 months we managed to reduce electricity consumption in the terminal alone by 2.6m kWh.” teamenergy.com/customerfocus-birmingham-airport

Fast turnaround times and competitive prices.

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Product & Services Directory Contact Harry Powell Tel 020 3751 7863 Mob 07557 109476 AIR CONDITIONING

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57

Q&A

Mark Trolley The Power Control Ltd (PCL) managing director talks about wanting the reactions of an F1 driver, preferring the future to the past and the Dark Knight trilogy Who would you least like to share a lift with? Why? Being a reasonably affable man I wouldn’t have any qualms about sharing a lift with anyone. After all, a lift journey is only likely to last a couple of minutes. However, if I were to be stuck in a lift I’d probably least like to be with be someone like Justin Bieber – I just don’t think we would see eye to eye.

If you could travel back in time to a period in history, what would it be and why?

I’m more focused on the future. Being surrounded by technology and those developing new technology it’s no surprise that I like all the mod cons of the modern world!

Who or what are you enjoying listening to?

Generally I have quite an eclectic taste in music and what I listen to largely depends on my mood.

I’m a big fan of Oasis and U2.

What unsolved mystery would you like the answers to?

Who was Jack the Ripper?

What’s your favourite film or book and why?

I don’t have any firm favourites but I am a big fan of the Dark Knight Trilogy. The way the films have been cast and produced is very impressive.

What would your super power be and why?

To heal. With so much illness in the world, I would feel privileged to be able to have the power to heal people.

What would you do with a million pounds?

That would be telling!

What’s your greatest extravagance?

Motorbikes and watches If you were blessed with

As a massive racing car fan, I would like to have the reactions and stamina of an F1 driver

any talent, what would your dream job be and why?

As a massive racing car fan, I would like to have the reactions and stamina of an F1 driver.

What is the best piece of advice you’ve ever been given?

Fight for what should be yours and never give up.

What irritates you the most in life?

People with a sense of entitlement – those who feel they don’t need to work hard.

What should the energy users be doing to help itself in the current climate?

Build a modestly efficient data centre infrastructure but utilise all computer and processing power deployed.

The Dark Knight trilogy

58 December/January 2016

What’s the best thing – work wise – that you did recently?

Following the company’s successful rebrand, I am enjoying leading a great team towards surpassing our annual target and building on our success for next year. te

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