The Energyst March/April 2020 by The Energyst

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Coronavirus: What Covid-19 means for the energy industry

March/April 2020

Delivering net zero: Prepare now and lock-in a commercial advantage

Power play: Corporate PPAs ‘key to cutting carbon emissions’

“We need a sectoral business plan that uses existing technology to decarbonise as far and as fast as possible over the next decade.” – p28

Accelerating the UK’s shift to electric vehicles See page 12

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COMMENT

It’s life, but not as we know it… Since our last issue, coronavirus has changed daily life in the UK immeasurably. In light of most people working from home, The Energyst is being distributed as a digital issue, as opposed to mailing print copies to empty offices. National Grid says that peak UK electricity demand had fallen by more than 15% on normal levels. The ‘lockdown’ is expected to take that reduction nearer to 20%, with an increase in domestic demand throughout the day and a reduction in commercial and industrial loads.

The reduction in industrial activity has inadvertently been the largest experiment of emissions reduction ever undertaken Alastair Martin, founder of response provider Flexitricity, told our sister publication New Power that some of the priorities of the companies it dealt with had changed to remove flexibility: some, for example, are NHS suppliers and “we have always said that if you need to opt out [of response] your industrial process takes priority”. But he said the company had not seen a major withdrawal of capacity and “it’s a quantifiable and known issue”. The reduction in industrial activity caused by coronavirus has led to a huge reduction in air pollution. It has inadvertently been the largest experiment of emissions reduction ever undertaken and the resulting reduction has been rapid. Paul Monks, professor of air pollution at the University of Leicester, told The Guardian,: “Are we looking at what we might see in the future if we can move

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4 March/April 2020

to a low-carbon economy? Not to denigrate the loss of life, but this might give us some hope from something terrible. To see what can be achieved.” Others, however, fear a glut of low priced fossil fuel coupled with a desire to rapidly recommision the global economy may reverse any gains. We need to resist economic short termism. The road to net zero is a long, and costly in the medium term, but its effects are worth pursuing, if we want to survive as a species. Although the virus outbreak has understandably taken precedence, it is heartening to learn that a noticeable difference can be made with immediate health improvements. The lockdown has also made it possible to assess in a broad way how businesses can cope with employees working from home and meetings occurring virtually. If these habits remain after the lockdown, some good may emerge from the disaster. Due to coronavirus, our Energyst & EV Events, which were due to take place in April, have been rescheduled for 27/28 October. Our thoughts at Energyst Media are with readers infected and affected by COVID-19; we wish a speedy recovery to you and your family. Best wishes and stay safe. Tim McMananSmith, editor

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No part of this publication may be reproduced without the written permission of the publishers. The opinions expressed in this publication are not necessarily those of the publishers. The Energyst is a controlled circulation magazine available to selected professionals interested in energy, who fall within the publisher’s terms of control. For those outside of these terms, annual subscriptions is £60 including postage in the UK. For all subscriptions outside the UK the annual subscription is £120 including postage.

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INSIDE THIS ISSUE

Heating & Ventilation

How thinking differently about how heat is delivered to homes could help councils make major gains in carbon-emissions and running costs

Coronavirus

National Grid ESO, power networks and academia suggest there is little risk of the lights going out as the UK adjusts as a consequence of the global pandemic

Compressed Air

Atlas Copco generates massive energy savings and downtime reduction for world-leading brick maker

The UK’s commitment to net zero will necessitate fundamental changes to the way businesses operate. Shields Energy CEO Dan Shields outlines what is coming down the track

The Balancing Market reached a four-year high in March, with National Grid paying flexible generators upwards of £2,000 to match supply and demand. What caused it?

DSR & Storage

Delivering Net Zero

We know there will be focus on our financial health locally and we understand this.

Jeff Whittingham, Robin Hood Energy

News

Delivering Net Zero

The Institute of Physics’ new HQ won Commercial Project of the Year at the recent CIBSE Building Performance Awards. The CIBSE’s Sara Kassam outines the scheme and its innovative geothermal borehole heating and cooling system

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Coronavirus: What Covid-19 means for the energy industry

Delivering Net Zero Jim Gregory, European business development manager for alternative fuels at Luxfer Gas Cylinders, outlines some of the benefits of hydrogen as a fuel and how challenges can be overcome

March/April 2020

Delivering net zero: Prepare now and lock-in a commercial advantage

Power play: Corporate PPAs ‘key to cutting carbon emissions’

“We need a sectoral business plan that uses existing technology to decarbonise as far and as fast as possible over the next decade.” – p28

Accelerating the UK’s shift to electric vehicles See page 12

14 Cover Story

EDF Energy examines how to accelerate the shift to EVs

News & Comment

Roundtable

Power Purchase Aggreements 45

Coronavirus

Heating & Ventilation

Lighting

Renewable Energy

DSR & Storage

Compressed Air

Delivering Net Zero

Electric Vehicles

Q&A

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

March/April 2020

NEWS & COMMENT

Robin Hood Energy under review after £23m loss Nottingham City Councilowned energy supplier Robin Hood has posted a £23.1m loss for 2018/19. While the firm’s management says it is “confident” financial stability can be improved, a professional services firm is being brought in to conduct a strategic review. “This will consider all options for Robin Hood Energy and will be complete by the summer,” stated the company. Robin Hood’s Interim CEO, former Ørsted UK boss Jeff Whittingham, said the results were “very disappointing” in what had been “an incredibly difficult year”. However, he thinks Robin Hood, which a

year earlier posted a £200,000 profit, can turn things around. “We’ve looked at all areas of cost, areas where we can improve efficiency and we are confident we can improve the financial stability of this business,” Whittingham said. “We know there will be focus on our financial health locally and we understand this. We’re listening and we need to ensure we’re providing real value back to Nottingham and the people of Nottingham. We are working together with Nottingham City Council to address the issues and ensure we put the business back on a firmer financial footing.” Signs that Robin Hood was

Triad dates published National Grid ESO has published the Triad dates for 2019/20. These were: • Monday 18 November, 17:00-17:30 • Monday 2 December, 17:00-17:30 • Tuesday 17 December, 16:30-17:00 Triads are the three highest winter evening peaks, at least 10 days apart. National Grid uses the methodology to determine transmission network charges for large companies. The more power companies National Grid ESO only reveals Triad periods retrospectively

6 March/April 2020

are using on these dates, the bigger their bill. For some, the difference can be seven figures. National Grid ESO only reveals Triad periods retrospectively, so companies switch to onsite generation or significantly reduce grid draw when they think a Triad is likely. The effect is to dampen demand on cold evenings across winter, creating headroom on the system. Triad is being removed as part of an overhaul of network charging by regulator Ofgem.

Robin Hood is confident it can turn things around

in trouble became apparent when it failed to pay its Renewables Obligation bill, with Ofgem having to chase it for more than £9m. The council bailed the company out with a loan. Its bosses were dismissed just before Christmas, with an interim senior management team, including Whittingham, Mike Thomas and David Bird, brought in to try and stem losses. Robin Hood also provides white label services for other councils, including Derby, Doncaster, Islington and Liverpool’s ‘the Leccy’.

O2 and SSE strike deal for discounted clean power O2 has struck a deal with SSE Business Energy whereby its suppliers will get a discount on renewable power – and pay the same rate as the telco. The move represents shrewd business, given O2 has committed to decarbonising its operations by 2025 – and to make its suppliers cut emissions by 30%. O2 said all of its suppliers – from SMEs to large firms – can take the deal. “This latest project with SSE Business Energy is the perfect example of working together for good: using O2’s purchasing power to give Britain’s suppliers and partners the option to access preferential renewable electricity rates, while reducing their own carbon footprint,” sad Tracey

Herald, head of partnerships & social impact at O2. Rachel McEwen, chief sustainability officer at SSE, said the firm is “delighted” with the arrangement. “From our perspective, O2 is one of the best examples of a customer demanding not only climate action but also improved sustainability credentials across their supply chain, and the promotion of SSE Green at a reduced rate will further strengthen the positive influence they can have on their suppliers,” she said. Other companies including Sainsbury’s and Microsoft have also pledged to decarbonise operations and force suppliers to decarbonise – and may be looking at similar arrangements with energy suppliers.

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Conn departs, Centrica battles on Centrica chief Iain Conn has left the company. The former CEO announced last July that he would be resigning in 2020, but stepped down as the company published its annual report. Finance chief Chris O’Shea takes over as the company continues to search for a replacement. Chairman Charles Berry has also stepped down, having been on sick leave. Scott Wheway takes over. Conn had presided over a difficult period for Centrica, with continuous rounds of cost cuts and restructures as its energy retail business was eroded by cut-price competition. Its generation business faces significant structural

in corona induced panic. and market headwinds The company is now worth and the company is exiting a tenth of its 2013 peak, which exploration and production. was close to £4/share. By the Centrica hopes to remodel time Conn took over from itself as a decentralised and Sam Laidlaw in January 2015, smart energy company, though its share value had almost its distributed power systems halved, trading just above £2. director, Mark Futyan, has just As of 30 March it was 36p. left to join Anesco after almost Ratings agency Moody’s has 13 years with the company. downgraded Centrica’s debt, but Centrica’s share price, in believes the firm “will be able to decline for the six years, navigate the challenges in appeared to stabilise its markets, including in recent months. because of the recent However, it dived on drop in commodity the back of heavy prices, and will losses announced take measures, in February and has as these may be more than halved necessary, to shore up recently as traders Ian Conn its financial profile”. dump global stocks

Eon no longer accepting letters of authority from unapproved TPIs Eon will no longer accept letters of authority (LOA) from third party intermediaries not signed up to its TPI Agreement, even if they already have an LOA in place. The energy supplier notified TPIs of the move on 6 March with the new rules coming into effect on 9 March. Brokers and TPIs use letters of authority to act on behalf of customers. They are legal documents that mean TPIs can sign them up to a supply contract and act as their intermediary for things such

as energy services, billing validation and reconciliation. Eon said some brokers and TPIs have abused letters of authority. In a blog post, director of energy sales Iain Walker wrote: “Increasingly – and I’m talking an average of 5-10% of incoming contact in recent months – we’re being presented with a Letter of Authority seemingly signed by a customer and giving permission for someone else to manage their account, agree terms or sign contracts on their behalf. “Except in those one-inten cases, that LOA wasn’t

signed by the customer, or was signed without their full knowledge and consent.” Walker said small businesses are sick of being hounded by brokers. While Ofgem is taking action, he said the review could run for “at least another year before substantive action results”. As such, non-registered brokers “will no longer be able to access customer data or manage customers’ accounts on their behalf ”, he added. An Eon spokesperson said its move has been welcomed by small business groups.

Ofgem delays Triad cull Ofgem has delayed killing off Triad avoidance until 2022. The regulator had intended a new charging methodology to come into force in 2021, but National Grid ESO asked for an additional year. The system operator and energy suppliers were concerned that clarity over the new banded charges would come too late in the year, leading to contracting issues. IT system changes would also be rushed which could compound problems, they argued. The changes – which will move the residual element of transmission network charges (TNUoS) from demand to a fixed charge based on a site’s available capacity, or recent annual demand – will now take effect from April 2022, in line with similar changes to distribution charges. Companies that load shift over winter to reduce their bills will welcome the move.

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CCS, hydrogen and twice as much power required for net zero The UK needs to quickly invest in carbon capture and storage, hydrogen and clean power generation to stand a chance of hitting net zero by 2050, according to the Energy Systems Catapult. Power generation will need to double – or triple if hydrogen is to be produced by electrolysis – to decarbonise heat and transport, according to its latest report. That means massive increases in both renewables and new nuclear power, including small reactors, which alongside industrial heat pumps could enable the required 12-fold expansion of district heating networks, states the report. The Energy Systems Catapult said while reforming methane and capturing emissions via CCS could represent the lowest cost approach to hydrogen production, “given implementation risks for these, electrolysis remains an important option for bulk production as well as offering unique opportunities for integration of renewables and more distributed hydrogen production”. Major and rapid advances in both heat and power storage are also required. All of the above requires a considered mix of market, pricing and regulatory interventions to shape market incentives across the economy, per the report. The UK will also need to plant up to 50,000ha of forest a year, cut meat and dairy production and consumption by up to half, and fly less to decarbonise the economy, the report states.

March/April 2020

NEWS & COMMENT

Transport and EVs The mooted £500m investment fund to boost EV charging was confirmed by Sunak. Overseen by the Office of Low Emission Vehicles, a rapid charging fund will incentivise operators to connect their fast charge points to the grid. A further £403m will extend the plug-in grant for private vehicles out to 2023. A total of £130m has been earmarked to offer a similar grant for vans and taxis. The government will consult on bringing forward the 2040 deadline for phasing out sales of ICE vehicles. That was welcomed by operators attempting to decarbonise their fleets. Simon King, sustainability director at Mitie, welcomed the new money, but with reservations. “It’s gratifying the chancellor has heard our calls for improved rapid charge point infrastructure and financial reforms to support the electric car and van market,” said King. “However, if we are to make the most of these commitments, investment must focus on areas where no off-street parking is available.” Network operators, which will be increasingly challenged by electrification of heat and transport, sounded a note of caution. “What needs to follow soon is the EV charging infrastructure review. We have the technology but the industry and government need to move fast on developing

8 March/April 2020

Budget: What’s in it for energy and transport? Before coronavirus started to bite, the chancellor outlined higher levies on gas, money for EV infrastructure and a stay of execution for renewable heat subsidies. Alban Thurston reports

Pic: Harriet Pavey/ No 10 Downing Street

hancellor Rishi Sunak’s multibillion drive towards a net zero UK targets transport, carbon capture and storage, and aims to create 1.5 million “high-skill, high-wage, low carbon jobs of the future”. But the Budget also sent mixed messages, with fuel duty unchanged for an 11th year, contrary to preBudget briefings, plus £27bn earmarked over five years to improve Britain’s roads.

a clear plan,” said Western Power Distribution DSO projects manager Roger Hey. Electrifying Britain’s road transport will require “the equivalent of London’s electrical energy 14 times over”, he added. Heat, gas and EU ETS The chancellor confirmed the ‘levelling up’ of green taxes applied between power and gas will continue. George Osborne’s 2016 Budget targeted parity between power

and gas within the Climate Change Levy by 2025. The Budget confirmed from April 2022 gas producers will pay £0.00568 per kWh, rising to £0.00672 per kWh in 2023-24. Electricity rates over the period will remain frozen. Users in energyintensive sectors will receive support with the transition, the chancellor promised. Meanwhile, the government will consult on a ‘Green Gas’ levy on consumer bills, to fund

CCS and new technology At least two industrial CCS ‘clusters’ are pencilled to start trials from the mid-2020s, the chancellor announced, supported by £800m in a dedicated Carbon Storage Infrastructure fund An additional £900m energy and development fund will support new research, including commercialisation of nuclear fusion Air quality Local authorities will receive £304m over five years for action to reduce nitrogen dioxide emissions

research into greener fuels. Heat pumps and biomass boilers receive support through a Low-Carbon Heat Support Scheme. £100m of new government funding will underpin their installation by SMEs and households, under a grant scheme from April 2022. The domestic RHI will be extended until March 2022. Injecting greater certainty for businesses using clean heat, the non-domestic RHI in 2021 will receive a new allocation of flexible tariff guarantees. There was also confirmation of £96m for the final year of the Heat Networks Investment Project, which finishes in 2022. After that, some £270m is earmarked to make heat networks green, including connecting them up to waste heat sources. As detailed in the Treasury’s supporting documents, the Carbon Price Support scheme continues unchanged until 2022 at £18 per tonne. In the post-Brexit transition, the government will aim to apply an ‘ambitious carbon price’, possibly linked to the EU’s Emissions Trading System. The chancellor made no mention of wind or solar as new power sources. The Solar Trade Association’s chief executive, Chris Hewett, accused the Budget of being “thin on measures to tackle climate change”. “Without good policies to support the uptake of solar, we will fall well short of the 40 gigawatts needed by 2030 to keep on track,” Hewett added. te

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CORONAVIRUS

Coronavirus: Keep calm and put the kettle on… National Grid ESO, power networks and academia suggest there is little risk of the lights going out as the UK adjusts to impact of the global pandemic

actually reduce demand on nergy companies the power system, “largely have moved to owing to a decrease in reassure the public energy use from industrial that the UK power consumers, which is likely to system can cope with any be greater than the increase impact from the coronavirus. in domestic demand as people Fears were raised midstay at home”, said Slye. March by newspaper He added that people reports that networks were should carry on norma: anticipating the worst, “Boil that kettle, tune in to working up emergency plans your favourite TV show and to keep the lights on should enjoy a hot shower… there they lose 80% of their staff. are teams of people working In response, National Grid 24/7 committed to making ESO director Fintan Slye sure you can do just that” wrote that, while the system operator has asked staff that ENA makes official statement can work from home to do so, The Energy Networks “nobody should be concerned Association (ENA), which about their electricity supply”. represents regional and Slye said the system national grid operators operator had has also sought to “well developed reassure a public procedures” in place grappling with and had modelled the removal of likely impacts routine and societal of a pandemic. norms. It wrote: More people “We have one of across the UK working Fintan Slye the most reliable from home should

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energy networks in the world. There are over 36,000 of us working hard to keep your power on and your homes warm. As you would expect, we’ve taken steps to make sure that we keep your energy flowing: minimising access to our control rooms, splitting teams to reduce risk of crossinfection and by preparing to bring in additionally trained colleagues if we need them.”

then there is a risk that some may have to be withdrawn from service if the crisis goes on for a long time.” However, he said the ongoing decentralisation of the UK power system actually breeds resilience. “The advent and scale of renewables in our supply system is helpful here as the size of renewable plants is generally much smaller, and the national power system Phil Hart Resilience will be better able Professor Phil Hart, director of to handle withdrawal of energy and power at Cranfield multiple smaller sites.” University, echoed that view: For larger thermal plant, “The risk to power supply international supply chains is very minimal, unless all for gas and biomass will need the work force in our power to be monitored for signs of stations are off sick or basic disruption, said Hart, “but fuel supply is interrupted. We certainly for oil and gas the obviously have maintenance pricing wars currently under regimes which have to be way seem to indicate a glut of kept up at all of our power supply, not an interruption, stations. If those are not met is most likely short term.” te

March/April 2020

CORONAVIRUS

eductions in electricity use in countries that have ‘locked down’ society to manage the Coronavirus pandemic have “fast forwarded some power systems 10 years into the future”, Fatih Birol, executive director of the International Energy Agency, said on 22 March. Economies that have taken strong confinement measures had seen electricity demand decline by about 15%, largely as a result of factories and businesses halting operations, Birol said. However, for countries such as Spain and the US state of California, with high wind and solar generation, that means traditional generators are likely to close while weather-dependent generators represent a larger proportion of supply. As a result, “the recent drop in electricity demand fast forwarded some power systems 10 years into the future, suddenly giving them levels of wind and solar power that they wouldn’t have had otherwise without another decade of investment in renewables”, he said. The IEA’s assumptions on falling demand were borne out by analysis by climate group Ember (previously Sandbag). Using data from Entso-e, weather-corrected, it said every country in Europe saw electricity demand fall in the week to 22 March. “These are very significant falls in the context of

Covid-19 ‘fast-forwarding power by a decade’ Countries that have ‘locked down’ to manage the coronavirus pandemic have seen demand for electricity fall, giving them levels of wind and solar power that they ‘wouldn’t have had otherwise without another decade of investment in renewables’ electricity demand, where temperature-adjusted changes are normally small,” Birol said. Impacts were highest in Italy, Spain and France but the figures pre-dated the UK lockdown, and it had seen least impact at that time. It estimated the impact in Italy at 20% over the past two weeks and it expected more reductions with more industry and services set to shut.

Ember noted that the crisis had hit Europe in the previous 10 days. But it thought the experience from China indicated that the falls might be deep and long-lasting. As people are working from home, the main reductions come from closing industrial operations and centralised business. But such users are also a major source of flexibility, adjusting usage

This is an important moment for our understanding of cleaner energy systems

Emergency may require wholesale rescheduling

eadlines in industry mechanisms are likely to have to be revisited as a result of the coronavirus emergency. Staff and access issues due to illness, self-isolation or lack of construction progress during the lockdown are

10 March/April 2020

likely to cause some Capacity Market participants to miss “significant progress” deadlines in construction. Knock-on delays, for example in processing planning applications, will also affect companies’ ability to maintain expected timetables.

The Capacity Market is just one example of mechanisms where deadines have been set in secondary legislation and will have to be revisited by the Department for Business, Energy and Industrial Strategy. That fear has already arisen for solar PV developers seeking to

beat an end-March deadline to qualify for feed-in tariffs. New solar projects had to register completion with Ofgem by 31 March to qualify for the scheme. But Community Energy England highlighted a number of projects on school roofs

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(or using onsite generation) to help balance the system. “That option is hardly open today,” Berol said. He added: “This is an important moment for our understanding of cleaner energy systems, including some of the operational challenges that policy makers and regulators need to address to ensure electricity security.” Long term, he said: “This highlights the need for policy makers to carefully assess the potential availability of flexibility resources under extreme conditions.” In time, electricity generation from renewables should not simply follow the weather, “but will have to be managed in an intelligent way in order to reduce costs and improve electricity security”, Berol said, adding that government and regulators should plan for disruption: “Electricity networks are far more vulnerable than pipelines to extreme weather – a vital consideration for policy makers as they plan for increasingly electrified energy systems. The longterm task is to make networks tougher by investing in underground cables and decentralised storage – and by designing network layouts that are resilient to emergency situations such as hurricanes and floods.” te The articles on this page first appeared in The Energyst’s sister publication, New Power. See newpower.info

Grid: Electricity system operating ‘within the normal envelope’

ational Grid ESO said that the electricity system was currently operating “within the normal envelope” and it had not been required to contract more reserve or response to manage it. In an update, it said demand had fallen by more than 15% on normal levels, which it described as between the ‘medium impact’ and ‘greater impact’ scenarios in its modelling. It expected the ‘lockdown’ announced on 23 March to take that reduction nearer to 20%, with an increase in domestic demand throughout the day and a reduction in school and commercial loads. It had a ‘sharp focus’ on what would happen after the weekend’s clock change, which typically sees demand fall and it was currently ‘stress testing’ for the summer period, which also typically sees plant maintenance outages. However, it said transmission network owners had rescheduled maintenance that would have taken lines out of service and that would give it more options on balancing. It is running regular ancillary service tenders on schedule, although the ‘pathfinder’ tender for reactive power on Merseyside will be delayed by a few weeks because the shift to home working has slowed the process. The system operator

highlighted the importance of timely and accurate information from industry members, acknowledging that power plant operators were uncertain about outage plans, especially if key staff members were ill or self-isolating. Demand side questions Industrial demand was “the customer segment most difficult to assess and therefore it provides the greatest uncertainty”, the system operator said. Such customers are also now an increasingly important source of flexibility for the system, especially at times of lowered demand when there is less generating plant in operation. Alastair Martin, founder of response provider Flexitricity, also told Energyst sister publication New Power Report that some of the priorities of the companies it dealt with had changed to remove flexibility: some, for example, were NHS suppliers and “we have always said that if you need to opt out [of response] your industrial process takes priority”. But he said the company had not seen a major withdrawal of capacity and “it’s a quantifiable and known issue”. The situation could potentially speed up the addition of new providers for some services. Martin agreed his company

could potentially sign up new businesses to provide flexibility, although it was not clear whether site visits would be possible to assess the potential. More radically, the system operator suggested that wind power might be used to manage frequency. That is an option that has been under development for some time and the programme was “very close to completion and credible”, NGESO said. One issue that was “top of the list” looking forward to the summer was the need for ‘foot room’ or ‘reverse margin’. That has been a growing need for NGESO in recent years as the summer period and local renewables depress demand in some areas to an extent that the SO needs to find more users to keep enough assets on the system to manage frequency and voltage. The lockdown will make that need more acute. Meanwhile, NGESO explained its own response to the lockdown and the potential absence of key workers. It has split the staff for its two control rooms so that there is no overlap, and most staff work from home and communicate with operators (preserving social distancing within the control room) via screens. The company has plans for accommodation on site for each control room if it becomes necessary. te

of deadlines set in secondary legislation where completion was set to be delayed. For example, access to buildings which have been closed for deep cleaning has been a problem and “access to schools beyond the closure date of this Friday [20 March] is in many cases impossible”, it said.

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Other projects could be held up by supply chain disruption, sickness among key project workers, social distancing, or even issues such as key-holders self-isolating at crucial times. One community developer said: “It would be deeply regrettable having got this

far and put in so much effort, blood, sweat and tears, for us to miss the FiT deadline. It would also put the whole of our initiative at economic risk in terms of paying back our loans and community bonds.” In a response to a concerned developer, Ofgem said it was

“alert to the potential impact” and it was making plans in line with government guidance and in contact with BEIS and “as part of this we are feeding in views on the impact to BEIS including those where we recognise that legislation dictates specific timelines”. te

March/April 2020

DELIVERING NET ZERO

Ofgem censured for its role in RHI-NI ‘cash for ash’ debacle Northern Ireland’s renewable heat incentive (RHI) scheme, administered by Ofgem’s E-serve division (now part of its ‘delivery’ function), was a “project too far” for the politicians and civil servants involved, the public inquiry into the botched measure has concluded

he RHI scheme in Northern Ireland, dubbed ‘cash for ash’, was established to encourage businesses and farms to switch from burning fossil fuels to biomass, such as wood pellets. But as the fuel cost less than the subsidy, claimant companies had a “perverse incentive” to burn more and collect more in subsidy payments. The Northern Ireland Executive is facing a payments bill which could be as much as £490 million, which represents a huge potential drain on the taxpayer. Controversy over the scheme, which was closed to new entrants in 2016, was instrumental in the political collapse of the administration at Stormont over three years ago. Stormont first minister Arlene Foster oversaw the introduction of the scheme in 2012 when she led the then Department for Enterprise, Trade and Investment (DETI), now the Department for the Economy. The inquiry’s report said the scheme was “novel, technically complex and potentially volatile, especially because of its demand-led nature and the wide range of variables – such as fluctuating fuel costs – which could affect its operation. These features together made the scheme highly risky, yet the risks were not sufficiently understood by all those who should have understood them within the Northern Ireland government, either at the outset or any time during the life of the scheme. Without the necessary resources and capability, DETI

12 March/April 2020

should never have embarked on such a novel and complicated, demand-led scheme.” The inquiry, chaired by former judge Sir Patrick Coughlin, concluded that the failures of the scheme were not the result of corruption, although the report did criticise the treatment of one whistle-blower. “Responsibility for what went wrong lay not just with one individual or group, but with a broad range of persons and organisations involved, across a variety of areas relating to the design, approval, management and administration of the NI RHI scheme throughout its life. “Across those different areas, there was a multiplicity of errors and omissions...There were repeated missed opportunities to identify and correct, or seek to have others correct, the flaws in the scheme.” Most of the hearing’s recommendations are aimed at the NI Civil service, politicians and their special advisers. But GB Regulator Ofgem did not escape censure. The report said the nature of the relationship established between DETI, as the owner of the NI RHI scheme, and Ofgem, as its chosen scheme administrator, was “unsatisfactory”. The inquiry concluded that “the service that Ofgem provided to DETI, as the NI RHI scheme administrator, fell below the standard that DETI could reasonably have expected”. Ofgem did not share important documents with DETI, for example the audit reports of RHI installations. Copies

Ofgem’s interpretation and application of the regulations ...contributed to considerably more public money being spent of these reports were not provided to DETI until many months after scheme closure. Ofgem’s fraud prevention strategy contained a fundamental error, incorrectly indicating that the NI RHI scheme had the protection of tiered tariffs. Ofgem also did not properly explain to DETI interpretations that it, Ofgem, had adopted in respect of the NI RHI regulations, or the potentially unwelcome consequences of those interpretations, even if, as Ofgem maintains, its interpretations were the legally correct ones. Ofgem’s approach to the concept of ‘heating system’ in the context of multiple boiler installations, an area in which there was significant financial exploitation of the scheme, was a critical example in this context. Said the report: “Early in, and throughout the life of, the NI RHI scheme, Ofgem received many pieces of relevant information (particularly through its administration of the GB RHI scheme) about scheme exploitation,

including from its own subcontracted auditor. Ofgem failed to pass that important information to DETI. “This failure of communication on the part of Ofgem deprived DETI of important opportunities to be confronted with or reminded of problems with the NI RHI scheme and to consider taking steps to remedy them.” The report expressly disagreed with Ofgem that there was no causal link between the regulator’s failings and what went wrong with the scheme. “It was Ofgem’s interpretation and application of the regulations to the accreditation process which it administered that contributed to considerably more public money being spent on incentives than was the original and clear policy intent. “Having previously warned that this might occur, it is not only a failing that this was not communicated to DETI when it did happen, but also that Ofgem had not analysed the financial consequences of its interpretation of the regulations and how they were being implemented” the report concluded An Ofgem spokesperson said the organisation welcomed the Inquiry’s findings. “Since 2015 we have overhauled the way we administer RHI scheme on behalf of the Department for the Economy, addressing the issues raised. We are studying the detail of the report and will consider whether further improvements to our administration of the scheme are appropriate.” te

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Accelerating the UK’s shift to electric vehicles By Vincent de Rul, Director of Energy Solutions at EDF Energy The UK government last year announced its plan to cut greenhouse gas emissions to net zero by 2050, meaning all emissions will either have to be avoided or offset. To help reach this target, the government has also committed to ending the sale of new diesel and petrol vehicles by 2035 with a consultation already under way to see if even this timescale could be accelerated. In 2018, transport overtook energy as being the biggest carbon emitting sector in the UK, accounting for 33% of all emissions. EDF data suggests that 65 million tonnes of CO2 could be avoided by switching the 32 million

petrol and diesel cars on UK roads to electric, all powered through a low carbon grid. It is estimated that this would shrink Britain’s carbon footprint by more than 10%. Clearly, electric vehicles have a vital role to play in helping us to achieve our net zero ambition. The pace of adoption has been accelerating massively in the past year thanks to ultra-low emission zones making it costly to drive nonqualifying vehicles in city centres, and government grants aimed at encouraging uptake, to name but a few measures. But there is a way to go yet on the road to net zero. New business models, partnerships and collaboration will be critical in overcoming the challenges and making the most of the opportunities presented by the decarbonisation of transport in the coming months and years. Get ready for Generation Electric Electric mobility is firmly entrenched in EDF Group’s strategy, with the aim of

becoming the leading energy company for e-mobility in France, the UK, Italy and Belgium by 2022. Last year, EDF in the UK launched Generation Electric, a call for the people of Britain to take their first steps in sustainably powering their lives, reducing carbon and even saving money. Whether it is generating and storing electricity, selling it back to the Grid, or buying an EV powered by renewable and nuclear energy – everyone is welcome. Collaboration is seen as key to innovation and progress in e-mobility through sharing different technical skills and expertise. As such, EDF Group has set up a joint venture with Dreev for smart charging, meaning businesses

largest transmission connected battery storage and electric vehicle charging network. And it is not just EDF that is teaming up with others in a bid to create new ideas and implement changes in pursuit of our low carbon future. The car manufacturers BMW, Porsche and Ford are currently working together with the charging network Ionity to deliver an ultra-fast charging network in Europe, for example. The message is clear, collaborative working is key to increasing the uptake of electric vehicles and to combating climate change.

can avoid charging at peak times and use energy collected in the batteries to power a building or sell energy back to the Grid, generating remuneration. This two-way flow of energy is termed vehicle to grid (V2G). EDF is also in partnership with Nissan to provide V2G solutions to EV owners in the UK. More recently, EDF has acquired Pod Point, one of the largest EV charging companies in the UK, allowing EDF to offer quality installations of charging solutions as part of even more attractive EV deals. This follows on from the acquisition of Pivot Power last year, a company looking to help accelerate EV adoption by developing the worldâ&#x20AC;&#x2122;s

How EDF can support your business If you are looking to start your EV journey, EDF has set up a one-stopshop offering expert consultancy, vehicle leasing, charge point installation and ongoing customer operations to both business and residential customers. And as a staggering number of new ICE vehicles sold are for commercial fleets and company cars, there is much to be gained from businesses going electric. Just last month, Royal Mail Group signed a deal with EDF to deliver EV infrastructure under the Optimise Prime Project. Another good example of different groups working together, this time to understand and minimise the impact that increased EV uptake will have on distribution networks. The three-year framework will see EDF acting not just as a supplier but also as a trusted solutions partner providing charging points across Royal Mail sites as well as the associated back office and maintenance. Providing that the current EV technology is suitable for your business needs, electrifying a business fleet is a great opportunity to save on running costs. This is because electric vehicles cost just 4p per mile to run against

6.5-11.5p per mile for petrol and diesel, and are cheaper to maintain due to having far fewer moving parts than traditional ICE vehicles. Company electric vehicles also enjoy tax benefits including 0% Benefit in Kind, road tax and congestion charge exemptions, as well as government grants to help with the upfront investment in the technology. EVs will also help your business meet sustainability goals and strengthen green credentials by lowering your carbon footprint as EVs emit 66% less CO2 and less air pollution in comparison to petrol and diesel vehicles. Businesses and organisations such as Cornwall Partnership NHS Foundation Trust are already seeing the financial and sustainability benefits of going electric; they are saving the equivalent of two nursesâ&#x20AC;&#x2122; salaries per year from introducing EVs, alongside a solar PV system. At EDF we understand that the EV transition may appear to be a challenging and often complex step for many businesses. But our specialists can help on all aspects of switching and will work together with you every step of the way; advising on EV suitability analysis and vehicle options, EV infrastructure design as well as charge point installation, ongoing operations and maintenance, and of course, low carbon energy supply. Because change is easier when we all work together. From politicians and industry leaders to Grid operators, and even you, the customer â&#x20AC;&#x201C; it s all about collaboration. Let EDF help you find the right solution for whatever your business needs. To see our full range of EV solutions visit https://www.edfenergy.com/ electric-cars/business/consult For advice on how to start your EV journey today call 0800 068 7171 or email energysolutionssales@ edfenergy.com

RENEWABLE ENERGY

Pic: Tom Corser www.tomcorser.com

Government makes onshore wind u-turn Renewables sector hails ‘win for decarbonisation and the economy’

nshore wind will be allowed to bid for governmentbacked revenue stabilisation contracts. The move has been welcomed by the industry, which has long argued that David Cameron’s administration was wrong to remove support for offshore wind in 2016, given its relatively low cost. Trade body Renewable UK said allowing onshore wind and solar to bid for Contracts for Difference (CfDs) is a win for decarbonisation and the economy. “Backing cheap renewables is a clear example of the practical action to tackle climate change that the public is demanding, and this will speed up the transition

The CfD consultation Alongside opening the door to onshore wind and solar, the Contracts for Difference consultation, published in March, also aims to reduce payments to generators during periods of negative pricing, likely to be an increasingly frequent occurrence, and to look at how to ease co-located storage into the mechanism. Meanwhile, the paper confirms new coal-to-biomass conversions will be excluded from future rounds of the CfD scheme. The consultation also asks for views on how to break down ‘pots’ allocated to technologies, how to link offshore wind decommissioning costs to future CfD rounds, and extending delivery years out to 2030. See the consulation at bit.ly/2UR3hnM to a net zero economy,” said CEO Hugh McNeal. “As one of the UK’s cheapest power sources, new onshore wind projects will be a huge boost for jobs and investment in local economies across the UK”. Solar Trade Association

CEO Chris Hewett echoed that sentiment: “New clean power auctions for Pot 1 technologies will accelerate the decarbonisation of the power sector and drive the shift towards net zero, bringing with it new jobs, cheaper electricity and

opportunities closer to home for Britain’s highly experienced solar investors.” Unsubsidised renewables can already bid for capacity market agreements. However, they are subject to derating factors, meaning they only receive a fraction of the auction’s per kilowatt clearing price. Energy companies and developers will now need to work out strategies that best fit their projects, given additionality rules. In the absence of government-backed contracts, developers have been trying to secure corporate backers for wind farms, with companies such as Vattenfall attempting to convince even small companies to commit to buy power direct in order to help finance their projects. The Contracts for Difference scheme, where developers compete for limited pots of money, has led to steep cost reductions for offshore wind. CfDs guarantee developers a set price for power, enabling them to finance projects. If the market price rises above the set price (or ‘strike price’), developers pay it back. If the market price falls below the set price, project owners get a top up, paid via customer bills. This creates an interesting balancing act for policymakers, given the increase in renewable generation is pushing down the wholesale cost of power. te

Cable failure sees wind farms paid to turn off

he failure of the high-voltage undersea cable between west Scotland and north Wales in January resulted in National Grid ESO paying almost £31m for wind farm operators to curtail output. Consultancy Cornwall Insight calculated the figure based on Balancing Mechanism data and prices during what was an

16 March/April 2020

exceptionally windy month. The Western Link HVDC cable went down on 10 January and remained offline until 8 February. It was the cable’s third complete trip in as many years. “The Western Link was designed to accommodate the increasingly high volume of power generated in Scotland and prevent transmission bottlenecks. But since

commissioning, the cable has been fraught with issues,” said analyst Lee Drummee. “Avoiding constraints not only allows more volumes of renewable power to flow onto the grid but reduces the amount of money that National Grid has to pay to turn off wind farms in Scotland. However, the reliability of the Western Link will need to be solved for its full potential to be realised.

“As more onshore wind develops, especially in Scotland, the problems of constraints will need to continue to be actively managed.” Following the latest outage, Ofgem has opened a probe into the £1.3bn Western HVDC connector, which links Highland wind farms via Hunterston to north Wales. te

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Total plans Celtic Sea floating wind farm

rench oil and gas giant Total is planning a 96MW floating offshore wind farm after setting up a joint venture with developer Simply Blue Energy. The two have submitted an application to the Crown Estate for the initial project, dubbed Erebus. They plan to use Principle Power’s Windfloat technology, first deployed off Portugal in 2011. According to the Offshore Renewable Energy Catapult, the Celtic Sea could support up to 50GW of offshore capacity, which would support thousands of jobs in Wales and Cornwall. Patrick Pouyanné, chairman & CEO of the oil supermajor, said the deal “confirms Total’s ambition to contribute to the development of renewable energy worldwide.” He said Total would bring to bear its offshore operations and maintenance expertise to the project, as well as the financial capability floating offshore wind will require to scale over the coming decade. Simply Blue Energy managing director Sam Roch-Perks said the company is “delighted” to partner with Total. “Together we will progress the first stepping-stone projects that will allow the local supply chain to build up their capabilities to help deliver the larger projects that will be developed for the 2030s,” he said. “It is like being in Aberdeen in the 1960s, except from Pembroke we look out onto a sea that can deliver wind energy, helping the UK reach

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We think the 2030s will be big for floating wind in the Celtic Sea…There is a lot of wind out there

its 2050 net zero target.” The Celtic Sea lies to the south of Wales to the north of Devon and Cornwall. It stretches as far west as Ireland and south to the coast of Brittany. Floating wind turbines could ultimately compete with standard offshore turbines, because they can be constructed on land and towed out to deep waters, reducing installation challenges. The approach could also help avoid some of the problems that have affected offshore wind farms, such as grouting issues which have led to movement issues within foundation connections. However, Christoph

Harwood, director of policy and strategy at Simply Blue Energy, was reluctant to say whether floating wind would ever be cheaper than its fixed equivalent. “You avoid some issues, but then you have to wrestle with others,” he told The Energyst. “We are a project developer rather than a technology developer, but Principle Power has been addressing those issues for some time now.” Harwood believes floating wind could be “cost competitive” in the 2030s. “We think the 2030s will be big for floating wind in the Celtic Sea. There are some real benefits in diversification [of GB offshore wind resource] and from spreading the supply chain benefit. There is a lot of wind out there,” he said. “We aim to capture it and bring it in to the grid.” For now, the company has to work through its planning applications and obtain consent from the Crown Estate. However, it has secured a grid connection in Pembrokeshire and has already undertaken bird surveys. Should all go to plan, the venture aims to bid for a contract for difference “between 2023 and 2025”. From there, the aim is to build out the supply chain with a series of “stepping stone” projects in order to progress to gigawatts in the 2030s, added Harwood. te

March/April 2020

DELIVERING NET ZERO

et zero will require businesses to eliminate carbon emissions – and firms will find it increasingly difficult to access finance and win new business if they fail to take demonstrable steps to decarbonise. Larry Fink, CEO of BlackRock, the world’s largest asset management company that controls some $7 trillion in funds, has warned companies that they will find access to capital more expensive if they do not decarbonise. Ultimately, laggards may not be able to access capital through standard channels. Meanwhile, directors will be held accountable, warned Fink. “Where we feel companies and boards are not producing effective sustainability disclosures or implementing frameworks for managing [sustainability] issues, we will hold board members accountable,” he wrote in January. “We will be increasingly disposed to vote against management and board directors when companies are not making sufficient progress on sustainabilityrelated disclosures and the business practices and plans underlying them.” Table stakes Businesses that embrace an environmental, social and governance strategy (ESG) will prevail as corporates are listening – and they will not do business with companies that fail to decarbonise. Microsoft has committed to net zero by 2030 – and to become carbon negative after that. Those companies that want to remain part of its supply chain must also follow its lead: from 2021, the company will make carbon reduction mandatory within its procurement processes. Sainsbury’s is taking a similar stance and others will follow. For heavy industries, the

18 March/April 2020

Prepare now for major changes ahead challenge is existential. The Transition Pathway Initiative, a consortium of institutional investors and asset managers that advise on assets valued at $18 trillion, have warned that industrial firms will die if they do not decarbonise. “Sectors like steel and cement face tough challenges to decouple emissions from production,” said TPI co-chair Faith Ward. “These industries must transform themselves if they are to survive the low carbon transition.”

UK shift The government is expected to issue an energy white paper, but while net zero policy is scant, the direction of travel is already clear. Energy and transport are converging through electrification, and the power system will soon become dominated by renewable generation. A power system dominated by intermittent renewables requires greater flexibility. That means everyone must change how they consume power, according to Ofgem,

Businesses and households will all need to load shift and react to market signals – or pay the price

which in February set out an ambition to include decarbonisation within its regulatory remit. “How and when energy is used must change,” wrote Ofgem’s new chief executive Jonathan Brearley. That means businesses and households will all need to load shift and react to market signals – or pay the price. Ofgem is working to make half hourly settlement mandatory across all profiles. That will enable time of use tariffs throughout the day and the disparity between off-peak and peak prices will likely increase. As well as load shifting, sharper price signals should also make energy efficiency increasingly valuable –

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30%

Claimed operational and energy efficiency savings for business via IoT platform especially now that incentives to avoid peak network charges have been removed.

The UK’s commitment to net zero will necessitate fundamental changes to the way businesses operate. Shields Energy CEO Dan Shields outlines what is coming down the track – and why businesses that prepare now will lock-in commercial advantage Smart energy technology can help energy, facilities and procurement teams make compelling business cases, Dan Shields says

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Take action: digitise to decarbonise Step change starts with small steps. The fundamentals of any ESG strategy is energy management – measure, manage, improve – form the bedrock of net zero planning. This is where low-cost sensors, and cloud-based analytics platforms can inform the net zero roadmap and drive immediate energy, cost and carbon savings. By providing quantifiable energy data – and easily identifiable hotspots – smart energy technology can help energy, facilities and procurement teams make compelling business cases to finance and investment committees. The savings delivered by

reducing consumption and wastage can then be recycled into further energy and carbon reduction measures, enabling businesses to demonstrate their commitment to decarbonisation to current and prospective clients as well as financiers and investors. Meanwhile, the granular data, connectivity and control provided by IoT-enabled energy platforms enables participation in an increasingly digitalised and flexible energy system. Which means lower bills, lower carbon and a significant competitive advantage. Reduce your footprint by 30% Shields Energy’s CODA IoT platform delivers the reports and the visibility businesses need to make good their net zero obligations and enhance a business’s ESG strategy. Through its consumption and control logic, CODA enables efficiency evaluation reports, benchmarking and graphical representations of buildings with live data and click-through data. Energy reduction, the amount of energy a business or function consumes is key for decarbonisation. However, most businesses are ignoring site and asset maintenance when looking at decarbonisation activities and route to net zero. By reducing planned, preventative and reactive maintenance activities and reducing time on site by maintenance personnel this further adds to a businesses drive for decarbonisation. CODA provides solutions for remote maintenance and where personnel are on site, through GIS (geographical information systems), ensures the time for investigation is reduced and assets are identified and faults rectified immediately. Via CODA, Shields’ aim is to create up to 30% operational and energy efficiency savings for business large and small. te

March/April 2020

DELIVERING NET ZERO

Peterborough eyes UK’s largest smart city regeneration project Plans unveiled for £2m city-wide energy system that will cut energy bills and provide green heat, electricity and transport for residents

SE is playing a keyrole in drawing up plans for the largest smart city-wide energy system in the UK. The Peterborough Integrated Renewables Infrastructure project (PIRI) combines a next generation heat network, electricity network and EV infrastructure under one scheme. Led by Peterborough City Council, the two-year project has been granted funding to begin the design of a local, smart energy system. Other partners include Element Energy, Cranfield University, Smarter Grid Solutions and Sweco UK. The PIRI project brings together energy generation, demand and storage, thereby unlocking efficiencies not deliverable under traditional energy systems. It is envisaged to be especially effective in areas where the electricity network is constrained; as well serving as a blueprint for other urban locations across the UK. PIRI will be part funded by UK Research and Innovation (UKRI) Prospering from the Energy Revolution challenge and unlock major social and economic value for the Peterborough area from 2022. Significant private sector investment has been secured for and by members of the partnership who each have existing decarbonisation expertise. The project is one of five to win funding to create a pipeline of innovative and investable local energy system designs that will be ready to roll out across the UK in the 2020s. Peterborough is one of the fastest growing cities in the UK

20 March/April 2020

while also being committed to reducing its carbon emissions. Its PIRI project aims to deliver a significant drop in CO2 emissions by 2030, while cutting energy bills by up to a quarter. Councillor Marco Cereste, cabinet member for the environment at Peterborough City Council, says: “This exciting announcement will give Peterborough the opportunity to use its own green, locally produced electricity and heat

technical elements into one solution that can help councils hit their net zero targets.” Shane Slater, founding director and Smart Energy Systems team leader for Element Energy, says: “Our future energy supply can be clean and low cost, but this comes with a key challenge of much greater variability in energy generation. “Element is delighted to support PIRI, which will demonstrate how integration

while Peterborough will lead the way as a sustainable city of the future.” Processor Simon Pollard, pro-vice-chancellor, School of Water, Energy and Environment and International at Cranfield University, says: “Cranfield University has a growing portfolio on smart cities and is delighted to contribute its expertise to PIRI. “Sharing the learning from practical projects like this has

It’s a landmark step in our aim to be carbon-neutral by 2030 and will be the most exciting and innovative clean, green energy project the city has ever seen to benefit residents. It’s a landmark step in our aim to be carbon-neutral by 2030 and will be the most exciting and innovative clean, green energy project the city, and indeed the country, has ever seen.” Nathan Sanders, managing director of SSE Enterprise Distributed Energy, says: “PIRI is an exciting project for us to be investing in. We hope it will demonstrate the potential of smart cities to drive local decarbonisation in a commercially viable manner. “It takes a ‘whole systems approach’ to energy one step further by integrating all socio-

of the diverse energy demands of heat, transport, and electricity, balancing supply and demand across day-today and seasonal variations, can deliver an efficient energy infrastructure that will be clean, secure and affordable for end users for decades to come.” Max Joy, president at Sweco UK, comments: “The real brilliance in the approach is to integrate wider infrastructure into energy management where all strands can play together. Far greater benefits will be realised, hitting the sweet spot between environmental gains and commercial viability,

proven instrumental to ensuring that communities and industry benefits from innovative designs. This unique partnership will help Peterborough and the UK achieve real energy system improvements.” Minister for business, energy and clean growth, Kwasi Kwarteng, says: “Every corner of the UK has a part to play as we eliminate our contribution to climate change entirely by 2050. This innovative project in Peterborough will deliver energy savings and reduce carbon emissions – a win-win for communities and the environment.” te

PIRI will unlock major social and economic value for Peterborough

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DELIVERING NET ZERO

Making boring more exciting The Institute of Physics’ new HQ won Commercial Project of the Year at the recent CIBSE Building Performance Awards. Sara Kassam, head of sustainability development from CIBSE, describes the scheme and its innovative geothermal borehole heating and cooling system

he Institute of Physics’ (IoP) ambition to make physics accessible to a wider audience is being realised with the opening of its new headquarters building, which has been designed as a ‘Living Laboratory’. The building has extensive metering and measurement systems to enable its operation and energy use to be monitored and used to inform the operation of the IoP’s HQ and the design and operation of buildings in general. The 1,566m2 scheme’s sustainable credentials include photovoltaic cells, mixed-mode ventilation, exposed thermal mass and a ground source

22 March/April 2020

heat pump (GSHP) connected to geothermal piles which incorporate an innovative heat exchanger. The engineering services were designed by engineer AECOM working with architect TateHindle and design and build contractor Murphy. The scheme impressed the judges at this year’s Chartered Institution of Building Services Engineers (CIBSE) Building Performance Awards, where it won the Project of the Year – Commercial category. The judges praised the scheme’s living laboratory approach as “a fantastic opportunity for people to be able see the impact of a holistic approach

to building services design”. The Building Performance Awards are the only industry awards to consider the actual performance of a building in use, rather than the design intent. Impressively, this pioneering new five-storey building has been created behind a retained Victorian brick façade in the Keystone Crescent conservation area of London’s King’s Cross. Its ground floor reception welcomes visitors to be building with an exhibition showcasing physics and technology. The ground floor also accommodates workspaces for physicsbased business start-ups.

Behind the reception desk is the building’s north-facing glazed atrium. The feature provides a visual link between floors, from the basement lecture theatre and exhibition space, through the open-plan offices on the mid-floors all the way to the top floor suite of seminar rooms and the council chamber. In addition to visual connectivity, the atrium also allows daylight to flood the floors to minimise the need for artificial lighting. The atrium is fundamental to the building’s mixedmode ventilation strategy. An ‘oversized’ ventilation system allows the building to run in

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The IoP’s new HQ is a glimpse into how buildings could be heated in a post-gas, low carbon world

natural ventilation mode in spring and autumn. Air is drawn down into the building from intake chimneys on the roof where air is cleaner. The air is distributed in an underfloor plenum on each floor. The cooler supply air displaces the warmer stale air, which rises and enters the atrium from where it will exit the building at roof level. To help mitigate peak temperatures the building’s reinforced concrete superstructure is exposed as thermal mass on the soffit of each floor. In summer and winter the building is mechanically ventilated, with fresh air rates controlled based on CO2 levels. Supply air is heated (or cooled) using a ground source heat pump (GSHP) connected to an innovative geothermal borehole-system incorporating GeoKOAX heat exchangers – the first time the system has been used in the UK. The innovative design of

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the GeoKOAX heat exchanger ensures the area of heat exchanger in contact with the ground is twice that of a conventional geothermal borehole system. Conventional thermal boreholes usually comprise a loop of plastic pipe contained in a grout-filled vertical borehole. Heat exchange fluid is pumped down one end of the pipe loop; it flows around the bend at the base of the borehole and then back up and out of the loop picking up heat from the ground on its journey. A single, or sometimes a double loop of pipe is used. Generally, the pipe is about 32mm diameter. By contrast the GeoKOAX heat exchangers comprise a 130mm diameter coaxial, pipewithin-a-pipe, arrangement, this is encased in a narrow ring of grout in the ground

to fill any voids to ensure the heat exchanger is fully in contact with the ground. The heat exchange fluid flows down the annulus and returns through the inner pipe. This arrangement significantly increases the surface area of pipework in contact with the ground, which is where the heat transfer takes place. In addition, because the rate of heat exchange between a liquid in a pipe and the pipe wall is higher when the liquid is in turbulent flow (as opposed laminar), the GeoKOAXheat exchanger incorporates helical blades, called turbulators, in the annulus to maximise turbulence in the heat exchange fluid without significantly increasing the pumping resistance. The consequence of the increased heat output as a result of these innovations is that borehole depths can be reduced, in this case from 200m down to just 75m, saving the project both time and money. A further benefit of the GeoKOAX system is that the heat exchangers generally hold about 13 times the volume of fluid compared with a conventional thermal borehole installation. Consequently, for the same overall flow rate, the fluid will travel at a lower velocity along the coaxial pipe, increasing the time for heat

transfer with the ground. The volume of carrier fluid also adds to the thermal capacity of the system, which may result in the GSHP having to cycle on and off less frequently, extending equipment life and potentially enhancing annual performance figures. All the building’s cooling requirements and the bulk of its heating needs are meet using the borehole/electricGSHP system. Gas boilers to provide top-up heat on cold mornings. The IoP favoured the use of the GSHP for heating because it wanted to limit combustion on the site to minimise impact on air quality. The London Plan is the statutory spatial development plan for London. At the time the scheme as designed, the carbon factor used in the London Plan for grid electricity was 0.519kgCO2/kWh. However, from 2019 the carbon factor of grid electricity has subsequently been updated in the London Plan to 0.233 kgCO2/kWh(SAP10) to reflect the increased contribution to electricity generation made by renewables, so the use of electric heat pumps will become increasingly common for heating. As such, the IoP’s new HQ is a glimpse into how buildings could be heated in a post-gas, low carbon world and a worthy winner of a CIBSE Building Performance Award. te

March/April 2020

DELIVERING NET ZERO

Hydrogen power: fuelling a greener transport system Jim Gregory (pictured above), European business development manager for alternative fuels at Luxfer Gas Cylinders, outlines outlines the role hydrogen can play in delivering net zero - and the hurdles to clear along the way

24 March/April 2020

he UK government has pledged that greenhouse gas emissions will reach ‘net zero’ by 2050, making the need for new sustainable energy sources ever more urgent. And with the recent launch of a new hydrogen taskforce for the UK, the fuel is rapidly becoming considered a crucial part of a greener transport system for the future. The cross-party coalition was launched in UK Parliament in early March with a goal of promoting large-scale deployment of hydrogen across the country. It published a report entitled: ‘The Role of Hydrogen in Delivering Net Zero’ with recommendations for industry and government over the next five years, including collaboration to establish 100

hydrogen refuelling stations by 2025 to support the rollout of hydrogen transport. Luxfer Gas Cylinders is the world’s largest manufacturer of high pressure composite and aluminum alloy cylinders, and is already playing a major role in the push to power trains, buses and boats with hydrogen fuel. But what benefits does hydrogen have over other energy sources for the transport sector? Zero emissions Hydrogen provides two things – a zero emissions solution comparable to battery electric vehicles (BEVs), combined with a vehicle range and convenience comparable to diesel or petrol. As with BEVs, if the source of electricity (or hydrogen) is carbon neutral,

the vehicle is carbon neutral. Where hydrogen comes into its own is the ratio of available power to weight, combined with the quicker refueling times. This makes it particularly well adapted to larger, intensive-use vehicles such as buses, truck, 4 x 4s and trains, where the power needed would result in unmanageably large batteries. The recharging time would also keep the vehicles off the road for too long – most passenger cars are used for one hour per day, yet a bus is constantly running for more than 16 hours per day. In reality, hydrogen and battery electric are complementary technologies, each with its own advantages and role to play in the push to zero emissions. Luxfer recently invested £500,000 into its Nottingham »

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IT’S TIME TO SPEAK TO THE EXPERTS Navigating your way through the complexities of the energy markets has never been more challenging. As the UK’s 2nd largest I&C gas supplier and now the 4th largest I&C electricity supplier*, we are the industry experts. Find out more at totalgp.com or call us on 0800 542 3275 *I&C volumes, Cornwall Insight, April 2019

PUTTING ENERGY TO WORK

DELIVERING NET ZERO The next phase of the HydroFLEX project is to put a hydrogen fuel system into a mainline passenger service

site to focus on the alternative fuel market, in order to purchase new manufacturing equipment and increase production. And Luxfer’s expertise has been used to complement a wide range of transport projects which champion the use of hydrogen fuel. HydroFLEX project Luxfer’s G-Stor H2 hydrogen cylinders were used to fuel the UK’s first full-sized hydrogen powered demonstrator train. The HydroFLEX project consists of a former Thameslink electric train fitted with a hydrogen fuel system. The next phase is to put a hydrogen fuel system into a mainline passenger service.

Tipped to become reality later this year, it will offer a range of about 600 miles powered solely by hydrogen. Luxfer worked with Porterbrook and the University of Birmingham’s Centre for Railway Research, using Department for Transport funding to make HydroFLEX a reality. On the roads, Aberdeen, London, Brighton and Birmingham are among the towns and cities investing in hydrogen technology. They will all soon see hydrogen buses in service on the streets, and these buses feature Luxfer systems. It’s particularly poignant for London, which recently launched the world’s first Ultra Low Emissions Zone. Meanwhile, a multimillion-

euro boat fitted with a hydrogen fuel cell system is currently involved in a six-year trip around the world. The Energy Observer set off from the River Seine in France in 2017 and powers itself completely by alternative fuel sources. As well as the Luxfersupplied hydrogen system, it also has solar panels and wind turbines and is producing hydrogen itself on board through electrolysis of the salt water. Another important consideration with hydrogen is safety. This is critical to our operation at Luxfer, and we have a robust set of systems

What do we need now to make hydrogen mainstream? As we go into the 2020s, which Luxfer Gas Cylinders is calling the ‘Decade of Hydrogen’, at Luxfer Gas Cylinders we see two big challenges. The first is to quickly develop the hydrogen infrastructure, which requires a leap of faith by governments and investors alike. Hydrogen vehicles require pumping stations and stored gas to be available in sufficient numbers and with the same reliability of supply that you can find with electricity, such that it encourages the private sector to take up hydrogen rather than just being restricted to public sector funded flagship projects. The second challenge is public relations. Toyota in the 2000s and Tesla in the 2010s paved the way for hybrid vehicles and battery electric vehicles respectively and embedded the two technologies in the public consciousness. Hydrogen needs a similar flagbearer to take up the reins, but it probably will not be an automotive manufacturer, but instead, a European government, region or a major transport provider. Countries such as the Netherlands and UK are already pushing hard, so the signs are positive.

26 March/April 2020

for testing to ensure the integrity of our products and the manufacture of our cylinders is so well controlled. The fundamental technology for hydrogen as a fuel is well developed and has existed for a long time but the key challenge is scaling up to the levels required, and at a cost to the user that is comparable to alternatives such as battery electric vehicles or petrol. For the past 20 years, the companies involved in hydrogen transport have been on a relatively small ‘workshop’ scale – producing hundreds of fuel cells per year rather than the hundreds of thousands required in the next few years. The reality today is that a hydrogen fuel cell powered vehicle (bus, truck or car) is more than double the cost of its diesel equivalent to produce. The signs are very positive, with investments in large-scale production across Europe and Asia, and with it will come some economies of scale. Yet at the same time the onus is on everyone in the industry to be innovative in the technology we use, the materials and the manufacturing methods to make sure that a hydrogen vehicle is a competitive choice for consumers and investors alike. te

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18/10/2019 14:09

DELIVERING NET ZERO

Can energy managers deliver net zero? Veolia asked The Energyst to convene a round table of energy and sustainability managers, plus consultants, to discuss the road to net zero and key delivery challenges. Here are their thoughts

round a dozen energy and carbon-focused professionals attended the roundtable, held in London before the coronavirus lockdown. These included representatives from retail, water companies, universities and hospitals. The discussion was held under Chatham House rules, which means quotes cannot be attributed to individuals. Below is a summary of key points raised. Net zero policy Government should set an overarching net zero policy that compels businesses to decarbonise over the next three decades, according to the panel. While some businesses have committed to net zero before 2050 – including Mitie, Microsoft, Sainsbury’s and O2 – many will need to be forced to act. “Government now has a big majority, so it can make big decisions. Businesses are increasingly motivated to do things morally, but we need the policy framework in the background,” said one panelist. “Because without a level playing field, some will do the right thing, but others won’t.” Carbon tax? “Businesses do have morals, but if they do not act in their own financial interests, they go bust, hence the need for a carbon tax,”

28 March/April 2020

said another participant. Implementing a blanket carbon tax, however, could pose potentially fatal to heavy industry. Some support was expressed for a carbon border adjustment, such as that being worked up by the European Commission. That would reassure businesses that international competitors are not being handed another advantage, while putting to bed historical objections to unilateral decarbonisation – the ‘squeezing the balloon’ argument. More immediately, some panel participants suggested rebalancing current levies across fuels, e.g. more on gas, less on electricity, which the March Budget has since committed to do.

enable net zero – and pointed to recent policy commitments to hydrogen projects that has started to mobilise investors. Electricity distribution network operators and property developers should also be better incentivised, if not mandated, to prioritise energy efficiency, the panel agreed. Ofgem should be more explicit in its decarbonisation requirements, they suggested. Incentivise directors on sustainability Directors, including finance heads, should be incentivised

on sustainability measures, with key performance indicators (KPIs) linked to remuneration, suggested one participant. That approach could lead to more realistic, longer-term

We need a sectoral business plan that uses existing technology to decarbonise as far and as fast as possible over the next decade

Focus on energy efficiency The absence of energy efficiency policy is one of the biggest barriers to net zero, according to the group. Some suggested measures identified by ESOS should be made mandatory. Others disagreed, pointing out that ESOS surveys can be inconsistent – and not all recommendations can be easily deployed given capital and resource constraints and hurdle rates. One participant stated that there is “$17tn of capital sitting in negative yields that is crying out for bankable projects”. He said energy efficiency policy could help unlock sufficient capital to

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payback periods, leading to strategic investment in decarbonisation rather than just low hanging fruit, said another. “Action has to be at a strategic level; hurdle rates have to change to enable net zero to become a reality,” they said. “But how many people working in energy and sustainability are operating strategically? Very few in my experience - and that’s an issue.” It is therefore incumbent on energy and sustainability managers to make business cases even more compelling, and wrap in broader benefits. Said one: “We need to get

smarter about how we present information [to investment committees], because if we fail on the business case, the opportunity is lost. We need to speak to financial and non-financial benefits.” Language, he said, is another barrier to overcome. “I am a technical guy. I am not comfortable speaking to the finance guy – and probably vice versa. So there is a need for a common language around decarbonisation.” Marathon, not a sprint The panel recognised the need to try novel approaches in order to achieve the scale of decarbonisation to deliver net zero. However, it will take at least two investment cycles to get there – and least regrets, proven efficient technology should be harnessed to do the initial grunt work, according to Veolia, which sponsored the roundtable. “There is no time to experiment. We need a

sectoral business plan that uses existing technology to decarbonise as far and as fast as possible over the next decade,” suggested the company. Emissions counting Most panelists said their organisation is getting to grips with scope 1 and 2 emissions reporting – which effectively cover businesses’ own estates. However, scope 3 emissions, which bring in third party emissions, pose a challenge. Scope 3 emissions can cover everything from students to conference attendance to visitor transport, said one NHS university energy manager. “So net zero has opened up a massive can of worms for us in that sense. At the moment, we are just focusing on scope 1 and 2 emissions, because we just can’t manage scope three. “Half of our emissions come from third parties embedded within our grounds. They have very little metering; reporting is just the first stage, and it is incredibly difficult to do.” Reporting “utopia”, said one panelist, would be “if everyone dealt with their own scope 1 and 2 emissions – then there would be almost no scope 3.” Put sustainability first A retail energy manager commended board directors for committing to net zero. However, he suggested a disconnect exists between that commitment and delivery. “It’s almost like we ‘ticked the energy efficiency box’ ten years ago. But we could still save a lot of energy. Probably 20 per cent on average in any building, so there are still massive opportunities – but energy needs to be considered when making business decisions.” He offered a prime example of where PR-friendly net zero commitments are

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fatally undermined: “If supermarkets mandated doors on all fridges, they could probably cut energy consumption by about 10 per cent overnight, which is about 1-2% of UK energy consumption. “At a property level, that is a no brainer. At board level, the response is ‘under no circumstances put a barrier in front of customers.’” Offsets, REGOs and greenwash The water industry has committed to net zero emissions by 2030. However, that commitment was made by senior leadership after the last regulatory price control had been set. That means water companies – which have strict limits on spending to keep water bills as low as possible - have not set aside a ‘net zero’ budget. The spending period from 2025 to 2030 must therefore enable much of the dedicated delivery. One water company representative said the sector “could achieve net zero within a year, if we were to take the route of REGOs (renewable energy guarantees of origin) and carbon offsetting. But the impact on bills would be dramatic”. Moreover, he suggested, “Carbon offsets will be the next scandal”. Other panelists agreed that offsetting lacks credibility, and is being used as “a crutch”. Instead, they suggested companies considering offsetting should “invest the money back into energy efficiency”, and urged government to mandate carbon reduction rather than outsourcing responsibility to questionable third party schemes. te The roundtable was sponsored by Veolia. Thanks to all participants for sharing their views and taking time to attend.

March/April 2020

HEATING & VENTILATION

How councils can change the way we heat our homes

Dr Tanja Groth, lead economist of energy and environment at engineering consultancy Sweco UK, explains how thinking differently about how heat is delivered to homes could help councils make major gains in carbonemissions and running costs

eating homes accounts for a fifth of overall UK energy consumption, making it a priority when it comes to cutting carbon emissions. Currently, most properties are heated by individual gas or electric boilers but this is a fundamentally inefficient solution. By connecting multiple residences to a communal system – an approach known as district heating – the energy needed to heat homes could be cut by up to 30%. As well as delivering large carbon and fuel savings, this could

30 March/April 2020

30%

Typical reduction in energy needed to heat homes using district heating also save residents money on their heating bills. While we are beginning to see schemes in the UK – such as the network we are helping to create for Leeds City Council, which will connect 2,000 homes in the city – it remains a rarity. In fact, it provides just 2% of heat demand across both domestic

and commercial buildings. By contrast, in Denmark, 63% of households are heated this way, with virtually every home in the country’s major urban centres being connected to a network. Clearly there is a lot of scope to increase the deployment of district heating across the UK, and local authorities are uniquely placed to make this possible, especially where their own housing stock is concerned. A firm financial footing One of the most important factors in making any district heating network a success is that it must be underpinned

by a solid financial rationale. Such are the efficiency savings available from network heating that schemes can easily pay off their initial capital costs – normally over timescales of approximately 30 years. The major challenge for any local authority looking to set up a scheme is designing billing arrangements that deliver a fair deal for residents while also ensuring that set-up costs will be recouped by the council in an acceptable timeframe. Currently, heat network operators have a good deal of freedom in how they choose to bill users. As it stands, there is no obligation to install meters

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While Leeds City Council is creating a district heating network connecting 2,000 homes, across the country just 2% of homes and businesses are heated in this way. Below: Bristol City Council has already invested £50m in energy projects including district heating

to measure the exact usage of individual properties, or even to link billing to consumption. This could be set to change, however, and there is currently a government consultation taking place on whether to update the relevant rules – the Heat Network (Metering and Billing) Regulations 2014 – to include those obligations. For councils setting up a heat network, the current freedom

act that involves several key considerations if authorities are to keep residents on-side once the scheme is implemented. Of course, the primary factor here is that bills must be roughly equal to or lower than those that would be expected from a traditional boiler arrangement. Clearly, introducing a district heating scheme and then hitting users with increased bills will not be well received. It is also very important that billing is perceived to be fair and transparent and reflect the amount of energy each household consumes. It may be simpler to split the cost equally between all users, but this

Successful schemes require long-term financial and time investments from organisations looking to operate these systems Tanja Groth, Sweko UK coupled with lack of guidance can be a double-edged sword. That’s because getting billing right is a complex balancing

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will rarely lead to contentment among residents. If they begin to feel that they are paying more than they should in order to subsidise excessive energy consumption by others sharing the network, this can cause significant problems. Another interesting learning that we have gained from our experience of designing billing structures for heat networks in Scandinavia is that annual flat-rate billing – that is, charging the same aggregated fee whether it is August or January – is also very poorly received by many residents. Users expect to see their bills decrease in the warmer months, and we have found that flat rates that smooth out costs throughout the year are not favoured by residents who struggle to understand why they are paying for heating when their boiler is switched off. Again, designing billing based on monthly consumption

data increases complexity, but is important in ensuring users stay on-side. Help is at hand The complexity of balancing these requirements means that councils establishing networks commonly seek support from external consultants, adding to the set-up cost. To help address this, Sweco has developed a tariff calculator for local authorities that allows key information – such as number of properties, expected levels of consumption, current billing levels and preferred revenue profile – to be plugged in, and a programme of tariffs automatically generated. This is available free of charge to councils looking into the feasibility of upgrading metering and billing systems across communal and district heating in their estate. The added control this gives councils can also drive further carbon reduction benefits, as it allows cost incentives to be built into tariffs for those that use energy responsibly. Perfectly placed The UK faces legally binding obligations to become net zero by 2050 in response to the climate emergency. District heating has the potential to be a big part of the solution by increasing efficiency and making it easier to incentivise responsible energy use and is a proven, technologyagnostic pathway to longterm decarbonisation. Successful schemes require long-term financial and time investments from organisations looking to operate these systems. Councils are uniquely well-placed to implement the schemes, delivering benefits not only in terms of carbon emissions but also when it comes to residents’ comfort and quality of life. te

March/April 2020

DSR & STORAGE

n 4 March at 6pm the system price in the Balancing Market spiked to £2,242/MWh – the highest level since 30 November 2015, when the system hit VoLL at £3,000/MWh. Loss of load probability (LOLP) also reached 37%, which meant there was more than a one-in-three chance that National Grid would have to take emergency action to prevent a power loss event occurring. Although these occurrences normally happen when units trip off the system, this event did not involve any major power station operating differently from what it declared it would do. Using LCP’s real time Balancing Market trading platform ‘Enact’, we investigate what happened to cause the price spike and what could have been done to prevent it. What happened? After weeks of high wind output, 4 March saw a significant drop in wind generation – from an average of ~15GW at the weekend to less than 1.5GW during the evening peak of 4 March. Peak demand was 45,649MW, which is high, but there have been multiple other occasions during the past year where demand has been higher. What made matters worse was that, due to low wind output, nearly every unit was already operating at full load, leaving very little head room (plant available to turn up in the BM) to

Cashing out and cashing in LCP’s Kyle Martin delves into what caused the Balancing Market to reach a four-year high in March, with National Grid paying flexible generators upwards of £2,000 to match supply and demand provide the additional power needed to meet demand. The offer table below (Figure 1) shows the units that were offering to provide more than 100MW, but the majority of these required being turned on, which meant they needed sufficient advanced notice (‘NDZ’ in table below, in minutes). Ratcliffe 2 had been warmed earlier in the day but National Grid cancelled this instruction, so it also could not respond. As 6pm approached, National Grid was facing an even lower wind output than forecast, and with limited

options to increase generation it turned to Short Term Operating Reserve (STOR) units. For the purpose of the imbalance calculation, STOR units are repriced as the maximum of their utilisation price and the Reserve Scarcity Price. The following extract below, taken from the Elexon regulations regarding imbalance pricing, shows that these units were repriced as 0.374 (LOLP) * £6,000/ MWh (VoLL) = £2,242/MWh, and with so many of these units being used to keep the lights on they also ended up setting the system price.

“Actions derived from BOAs and BSAAs that are STOR Provider Flagged, and that are accepted during STOR Availability Windows are included in the calculation of imbalance prices as individual STOR actions, with a price which is the ‘greater’ of: • The Utilisation Price for an action (the price that STOR capacity is paid when it is called upon; and • The Reserve Scarcity Price (RSP), as determined by LOLP*VoLL” We can see how the derated margin, a measure of the amount of available

Figure 1: LCP Enact table showing offers available to National Grid – 4 March 6.00pm

32 March/April 2020

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capacity to turn up, decreased to nearly zero at 6pm in Figure 2, causing the system price and LOLP to spike.

Figure 2: LCP Enact chart showing derated margin, system price and LOLP – 4 March

Figure 3: LCP Enact chart showing National Grid’s wind forecast, LCP’s forecast and wind outturn – 4 March

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What can we learn from this event? While peak demand was high and wind output was low, the system seemed to struggle, despite having a number of unused generation units that provided offers at much lower prices than the repriced STOR units. While wind was forecast to be low, the outturn was a further 2GW below National Grid’s forecast – forecasting accuracy in these tight periods is particularly important. LCP Enact’s wind forecast (Figure 3) was showing this lower wind generation and those with a view of this stood to benefit from positioning themselves in the market. While some units achieved high offer prices in the BM, with some units taken at £125/MWh, the real winners from this high system price event were units that were Net Imbalance Volume (NIV) chasing. Those NIV chasing units that spilled power during this period will be entitled to receive the system price of £2,242/MWh. As an example, if you had a 100MW portfolio of gas peaking engines all running during this half-hour period, you would earn £112,000. Conversely, those that did not generate as much power as they should have will be faced with a large imbalance bill for failing to deliver in this period. Overall, yesterday’s events highlighted two key facts about the market – the system may still be vulnerable to future high demand and low wind events, particularly if there are any larger unit trips, and accurate data is essential to running the system in the most economic way possible, competing in the market and making profitable decisions during these events. te

March/April 2020

DSR & STORAGE

Flow storage ‘can be much cheaper than lithium’ Avalon president Matt Harper believes vanadium-based energy storage is already cheaper than lithium on a whole life basis. Brendan Coyne reports

S-based Avalon is merging with UKbased vanadium storage firm RedT via reverse takeover. RedT is involved in projects including the Oxford Superhub, where it aims to deliver a 2MW/5MWh flow storage battery to complete a 52MW lithium-flow hybrid. The battery will be used to help enable a smart grid, which wraps in electric vehicle charging, heat pumps and energy balancing and trading. Harper, who is also Avalon co-founder and chief product officer, says flow storage’s ability to perform multiple roles without degradation is what will ultimately set it apart. He claims the new merged company – Invinity – will also prove that relatively high costs asso-ciated with flow storage can be reduced through standardisation, both of manufacturing

and of business models. Cost curves For now, Avalon’s customer base is primarily individuals with solar in California. But Harper says the firm also has around a dozen industrial and commercial (I&C) installations up and run-ning – and that delivering those units has enabled greater efficiencies in manufacturing. “We have a rigorous focus on standardisation,” he says. “Most of the other flow batteries have delivered hand-built projects, which is not a good way to get to good cost or quality control.” Harper says there are multiple factors behind the drive to standardisation. “In the solar market, megawatt scale plant are being built in weeks, but the flow batteries are taking months or years. So we had to come with something totally standardised and that

problem for vanadium players left the factory complete. and investors is pretty “That has enabled much everyone else us to drive absolutely is backing lithium – all the excess cost and lithium battery out of these things, costs continue to fall. to a point where RedT’s share we are broadly price, on a broadly comparable on downward trend capital cost with Matt Harper: for some years, lithium systems,” Standardise to win collapsed a year ago claims Harper, withafter the company out lithium ion’s started to reveal the extent additional maintenance costs. of its cashflow problems Over a 20-30 year (although it has increased 55 lifetime, Harper claims per cent off a low base since flow batteries can be “up AIM market readmission to 60% cheaper” than their earlier this month). lithium equivalents. Vanadium mining company Meanwhile he says greater Bushveld, with whom RedT throughput enabled by nonand Avalon have struck an degradation of vanadium ‘electrolyte-as-a-service’ electrolyte “gets you to a better supply deal, saw its share position” in terms of RoI, price broadly halve in the because flow batteries can year to February. It has since cycle more, to greater depth halved again – though due to of discharge, and essentially the market-wide Coronavirus work harder for longer. rout than anything else. However, Avalon is Bumpy ride convinced in the fundamentals The theory stacks up. The

150MW: Developers of

he developers of the UK’s largest battery are aiming to take it up to 150MW. And they say they can go even bigger. Penso Power, the originators of the 100MW Minety battery, are now in talks with potential offtakers for the 50MW extension. The Minety project, backed by China Huaneng Group, is actually two 49.9MW adjacent schemes in Wiltshire. It is

34 March/April 2020

expected to enter operation in autumn. The extension, called Stone Hill, is “immediately adjacent to the projects, said Penso CEO Richard Thwaites, and is expected to come on stream in 2021. He said the company has another 100MW project in planning that will be “investment ready within three months”, and a further 100MW scheme “a little further out”, both in the south of England.

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of the business – and RedT has managed to raise a further £8m from shareholders to fund Invinity’s growth. Funds and funding Within the I&C sector, delivering that growth requires standardisation of business model as well as product, says Harper, “which is where we are looking to put the additional funding post-merger”. RedT struck a deal with Norwegian state-owned utility Statkraft last year to try and package a funded solution to the industrial and commercial market. To date,

it has delivered nothing, but Harper believes results will come in the next 12 months. “I am [confident],” says Harper. “Compare it to where the solar industry was five or six years ago. Solar’s success was not [just] about decreases in cost. It was standardisation around structures that allowed the industry to flourish. I think we will see the same here for commercial and industrial, either standalone or co-located.” The Statkraft deal and electrolyte financing with Bushveld, he adds, “to me look very repeatable”.

Solar’s success was not [just] about decreases in cost. It was standardisation around structures that allowed the industry to flourish

Burning issue Harper also believes the transition to electric vehicles and incoming grid capacity constraints will drive growth for flow storage, both within industrial and commercial and utility markets – in tandem with safety concerns in urban areas. He thinks the Los Angeles Department of Water and Power (LADWP), the largest municipal utility in the United States, may soon be a big customer for that reason. “LADWP have said they will install 1.4GWh of batteries in the next four years … because they see capacity crunches coming. That is a massive opportunity and will make a huge difference to the addressable market we can serve,” says Harper. “LADWP is interested in us for two reasons – because they will require long duration [storage] to provide power overnight; and at sites where batteries are adjacent to residential networks and they perceive a fire risk.” According to Harper, it is “challenging to mitigate that risk at specific distribution nodes” with lithium ion technologies. “It is a different ball game that requires different technologies.” One way or another, the next few years will likely determine which technologies end up delivering that requirement. te

UK’s biggest battery plan to make it bigger Shell is the offtaker at Minety, with its Limejump subsidiary monetising the battery in merchant markets. Thwaites, formerly chairman at Limejump, said offtake arrangements for the extension – and other upcoming projects – would likely follow a similar structure. In the two years since founding Penso, he along with chairman John Wybrew and CFO Andrew McAleavey

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appear to have hit on a structure that gives investors sufficient confidence to back very big batteries. Getting the next tranche over the line will underline its credentials. “We need to meet the risk appetite of investors that will fund these projects. So there is a fixed element of the offtake structure that provides a guaranteed monthly income, with some upside beyond that,”

said Thwaites. “So we can demonstrate to investors that they will hit a returns target with secure income, and there is scope to go beyond that.” Thwaites did not disclose precise returns, but said they were double digit. How big? While the Minety project is billed as Europe’s largest battery, Thwaites said Penso “could go a lot larger”.

“It really comes down to the opportunities that are available and those we can find,” he said. “I don’t think the technology is a limiting factor in terms of size.” Meanwhile, big batteries could partner with some interesting generation assets. “We are looking at a range [of colocation projects],” said Thwaites. “The initial pipeline is standalone, but we are very open to colocation models as well.” te

March/April 2020

DSR & STORAGE

Compare the flex market: Piclo lands Beis funding for next phase Flexibilty platform to offer a marketplace to strike standardised and simplified flexible PPAs

iclo is preparing to launch the next phase of its flexibility platform, a genuine marketplace that enables people to bid into multiple tenders – and trade their commitments. It will also provide ‘Compare The Market’ type functionality for people to strike standardised and simplified flexible PPAs – using historical data to rate providers. The company has secured £562k of government funding to build the marketplace, which CEO James Johnston said is now “exiting stealth mode”, though the trial is unlikely to launch officially before summer. Trade deals To date, Piclo has focused on DNO flexibility services, encouraging those with flexible assets to register them on the platform and bid into relevant procurement rounds and secure contracts to help balance local grids. Now it has built out the sell-side of the market (some 250plus registered flexibility providers), it is working to add more on the buy-side. This includes secondary trading of ancillary services such as Stor, where contracts can now be transferred after National Grid Piclo will provide ‘Compare The Market’ type functionality

36 March/April 2020

ESO adopted a rule change. More services, including trading flexible connections, will be added, though “it’s not going to cover everything to begin with”, said Johnston. “We need to prioritise the low hanging fruit.” However, the types of product that can ultimately be traded on the marketplace will only be limited by contractual rules – if they are allowed to be traded, they will be traded, said Johnston. Flexible PPA market Later this year Piclo aims to launch the flexible power purchase agreements (PPA) aspect. Asset operators and developers seek offtake agreements with a licenced entity so they can access all markets. They can choose from a variety of providers, with some aggregators now holding supply licences. But it is not always a transparent process and the market lacks standardisation. Piclo aims to enable a standard format and process to take place on the platform so that flex asset providers can pick a partner according to their merits and ultimately use historical performance data to inform decisions. Value and visibility Putting everything in one place via

a single interface for traders is one of the platform’s benefits, said Johnston. Common processes and market transparency encourages participation, he added, and Johnston believes that greater transparency on offtaker performance “can only help developers attract finance to complete their projects”. He thinks the marketplace can also add value to market participants through better co-ordination. “For example, if flex

emerging platforms. If you think about standardisation in a transitioning market it will lead to bad results,” he told The Energyst in 2018. “But I believe there will be natural consolidation. Look at the stock market, it is not a regulated monopoly but there are only two in the UK. I think that will eventually emerge in flex. There are a small number of parties focusing on different niches, so let that play out,”

We need to prioritise the low hanging fruit James Johnston, Piclo providers are sharing the latest availability of their assets in order to secure transfers of Stor contracts, that visibility is useful to DNOs in their planning,” said Johnston. “So it adds value and helps them to co-ordinate.” He added that the standardised DNO contracts the ENA is working to deliver will also be integrated into the platform when they are ready. Competition is good There are now several other flex marketplaces vying to enable similar multi-faceted trades, such as Centrica’s Local Energy Market in Cornwall, and the Nodes market platform, a joint venture between Nord Pool and Norwegian utility Agder Energi. Johnston has always argued that competition will drive innovation. “It is very useful to have

said Johnston. “And if there weren’t any other players, we would be quite worried.” That view has not changed, he told The Energyst. “The biggest challenge competitors face is not each other, but trying to move the market forward; trying to create the liquidity and volume of transactions, that is our shared goal,” said Johnston. “Emerging competition and approaches are very welcome. All the [flex] platforms are subtly different, and as long as we continue to grow and learn from each other, right now there is definitely room for multiple platforms.” In the meantime, Piclo also has international ambitions. “I can’t say anything right now, but we have a lot of plates spinning globally,” said Johnston. “Watch this space.” te

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DSR & STORAGE

Japan’s Sumitomo invests £36m in cryogenic storage firm Highview Power

Liquid air energy storage firm Highview Power has landed a $46m (£35.6m) investment from Japanese manufacturing giant Sumitomo Heavy Industries. Lancashire-based Highview has been seeking funds to extend its cryo battery technology, which can deliver long-duration storage at scale. In 2018 the company opened a 5MW/15MWh pilot in Bury (pictured). It is now developing a 50MW/250MWh project at a disused thermal power station in the north of England. The companies say Sumitomo’s investment will enable Highview to hone its

technology for deployment at global scale, citing strong demand in Asia and the US. Highview’s technology works by purifying air and chilling it to -190 degrees. Releasing it under pressure, the multi-phase process enables generation of clean electricity, as well as creating secondary offloads of decarbonised energy for storage or distribution through heat networks. Supporters say that liiquid air energy storage batteries lose little performance over working lives as long as 30 years. Components can be adapted and improved from existing piped infrastructure.

Highview claims that sourcing is easier for larger projects than smaller ones, but has stated that economies of scale work at around 20MW upwards, making large industrial companies potential customers, as well as utilities. Highview CEO Javier Cavada hinted at the investment in a newsletter recently, stating that 2020 will be “transformative” for the company. Highview is also expanding its senior team. The company has hired Simon Richards as commercial director and Gary Preece as power systems development director. Both have joined from Drax.

EDF and Wärtsilä strike 100MW battery deal EDF has ordered 100MW of storage from Wärtsilä and will deploy the batteries at two UK projects, the 50MW Oxford ‘superhub’ and at a site in Sittingbourne, north Kent. The sites are both projects developed by Pivot Power, recently acquired by EDF. The Oxford storage facility will be connected at transmission level at Cowley substation to underpin a network of EV chargers via a 10km private wire around the city. Some 300 heat pumps are set to be installed as part of the project, which, along with the battery and EVs, will be smartly controlled to enable flexibility trading. Habitat Energy will trade the flexibility, largely on the wholesale markets. Kensa Contracting will provide the ground source heat pumps. The storage, private wire and EV chargers are slated to be in place by the end of this year, with the heat pumps installed by 2021, when the Renewable Heat Incentive closes. The 50MW Sittingbourne project is also expected to be operational by the year end.

Gresham House buys 50MW battery project and is on track for 330MW Gresham House Energy Storage Fund has bought its biggest battery storage project yet, a 5MW scheme in South Yorkshire. The grid-connected site at Thurcroft, near Rotherham, is the fund’s 10th UK project. To be constructed by Noriker Power and the fund’s in-house developer,

38 March/April 2020

GH DevCo, the project is expected to commission in early summer. Once completed, the Thurcroft acquisition will bring Gresham House’s UK storage capacity to 224MW, with the firm eyeing 330MW by the year end. Chairman John Leggate told investors to expect

announcements on more projects, including a 50MW operational target in Wickham Market, Suffolk, and a 10MW extension to a project at Glassenbury, Kent. An unnamed third site may yield a further 50MW, conditional on planning consent and due diligence, he noted.

In February, the firm raised a further £31m to expand its portfolio. Starting with £100m from its IPO in November 2018, Gresham House has now raised a total of £237m. Besides storage, the asset manager also has interests in 195MW of wind and solar generation.

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National Grid and UKPN combine on regional reactive power market National Grid and UK Power Networks are working on a reactive power market trial in the South East – and now seek participants. The two aim to work out how to maximise flexible resource to help balance both local and national power systems and keep voltage levels stable. Across the GB network, distribution-transmission co-ordination is becoming increasingly important

to mitigate conflicting signals and will become a fundamental component of the smart grid the ESO and DNO/DSOs are trying to build. The three-year Power Potential trial also involves Innogy, and kicks off with 10MW of battery storage via via Zenobe’s King Barn scheme in Sussex. If successful and scalable, National Grid ESO thinks Power Potential could

enable another 4GW of capacity in the South East, one of the most constrained parts of the country. If replicable at some 59 sites nationally, it could save some £412m by 2050 in network reinforcement, according to the ESO’s calculations. Duncan Burt, former director of operations at the ESO (now heading up COP26 for National Grid), said Power Potential is “a completely new way for the

ESO to buy services such as voltage stabilisation in the South Coast region”. For UKPN, he said, it is a new way to buy megawatts and to manage voltage for its own network needs. The two now seek trial participants, asset owners/ operators and aggregators that can provide either active power (generated), or reactive power (generated or absorbed). Those that can do both are particularly sought.

Bristol City Hall to install battery storage

Zenobe’s King Barn scheme in Sussex

United Utilities buys 2MW battery, co-locates with solar, plans flex trades United Utilities has ordered a 2MW battery storage system from Zenobe. Believed to be the biggest yet in the UK water industry, the utility will deploy the battery to support PV at its Clifton Marsh treatment plant near Preston. Targeted for full operation in late May, the battery will enable United to trade in flexibility services to the grid.

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Steve Slavin, United Utilities’ head of renewables, said the battery enabled the firm to maximise its value of onsite generation, adding predictability and stability to energy costs. In February, Zenobe announced £25m of new equity from two Japanese power majors, Jera and Tepco (Tokyo Electric Power Company). The latter,

Japan’s biggest utility, is perhaps best known outside of its home country for its operation of the Fukushima Daiichi nuclear plant. The pair’s stake added to the £45m Zenobe has raised already from investors since late 2018. Zenobe claims it has some 73MW operating assets, and a 25% market share of the UK’s EV bus charging sector.

Bristol is to install a 300kW battery at City Hall later this year. The council has committed to decarbonise its own buildings by 2025 and is attempting to make Bristol a net zero city by 2030 under the City Leap project. Funding for the battery, some £356k, was approved in February. Upside Energy will work with councilowned Bristol Energy to deliver payback from load shifting and grid services. The council projects annual savings and revenue of about £33k, suggesting a 10 year return on investment. However, that calculation includes peak network charges (TNUoS and DUoS) savings, which are set to largely disappear in 2021 and 2022, respectively. Industry is hoping that Ofgem and power network companies will develop other incentives from 2022. If the battery delivers as expected, the council hopes to roll out storage and other technologies across its estate.

March/April 2020

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ELECTRIC VEHICLES

Vattenfall exits EV charging in UK, sells charging network Swedish energy firm is refocusing its UK businesses on generation, B2B sales and heat distribution

wedish stateowned energy firm Vattenfall has sold its British EV charging network to Norwegian state-owned Statkraft. The move follows its sale of UK energy retail business iSupply to French state-owned EDF. Vattenfall said it is refocusing its UK businesses on generation, B2B sales and heat distribution. The utility entered EV

charging in the UK in 2018, contracting with councils in Norfolk and Hampshire to power public points from its wind farms. It was also involved in a project to develop on-street charging using Virgin Media’s onstreet telecoms boxes, and had struck a roaming agreement with New Motion. Tomas Björnsson, Vattenfall’s head of e-mobility, said the firm is “taking stock, to ensure

that the transport offer in the UK is fit for purpose”. Terms of the deal were not disclosed. Vattenfall said operations of its EV charge stations in Germany, the Netherlands, Norway and 15,000 points in Sweden, would be unaffected. In early March it announced an alliance with Honda and storage firm Moixa to commercialise time of use tariffs for EV charging Also in March, Vattenfall confirmed the sale to EDF of 190,00 domestic accounts of iSupplyEnergy, its energy retail business, which last year was hit with a £1.5m penalty for overcharging customers. Ahead of the fine, CEO Magnus Hall had described the UK retail market as a “mess” and warned that the company was considering walking away. te

EV charger connection tool launched Northern Powergrid has launched a tool that helps people see where they can install EV chargers quickly and at lowest cost. The grid operator said its AutoDesign software provides an indicative connection cost in minutes. The DNO spent £1.1m improving asset data and developing the tool because its connections department is facing “unprecedented pressure” from people wanting to connect small scale generation and charging points onto its network. As such, Northern Powergrid said engineering resource is tied up doing relatively routine work, diminishing its ability to do more complex stuff. It hopes the tool will help solve that challenge, while easing frustration for customers. “It will enable local authorities, EV installers and businesses planners to see, in a matter of minutes, the best locations to install chargers and the associated cost,” said Derek Fairbairn, system design manager at Northern Powergrid. See the tool at northernpowergrid. com/auto-design

Volkswagen aims for terawatt-scale V2G

he world’s biggest carmaker is aiming to be a major power player – via electric vehicle batteries. Chief strategist Michael Jost told journalists that VW is aiming to amass 350GWh of storage at its disposal by 2025. By 2030 the firm intends that total to reach 1 terawatt hour, he suggested. “We can guarantee that the energy will be used

42 March/April 2020

and stored and this will be a new area of business,” said Jost. Grid balancing is a preferred option. VW announced last year its intention to launch Elli, its branded energy company, supported by a ¤30bn investment in the next five years in e-mobility and V2G. Nissan told The Energyst last year that the storage within its 400,000 Leaf vehicles already represented “about 4 gigawatts already

VW is aiming to amass 1 terawatt of storage by 2030

connected to the grid”, if all were connected via 10kW bi-directional chargers.

Meanwhile, Honda is pushing in that direction, with BMW also trialling V2G.

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Take our electric vehicles and charging infrastructure survey The Energyst is once again surveying readers for views on EVs and charging infrastructure to better understand business impacts and implications for the energy system. If your organisation is considering electric vehicles and charging equipment – for workplace charging, for customers and visitors, or fleets – please take the short (5-7 minute) survey. We aim to create an accurate snapshot of the state of play – and in return, we will give you a free copy of the 2020 EV Report. The report will contain key survey findings, plus expert views on everything EV as the UK aims to decarbonise transport over the next 10-15 years. The report will be published at The EV Event, which has been rescheduled for 27-28 October, at Silverstone, and the conference programme will discuss key aspects of electrification – from vehicles and visibility, to charging options, impact on power capacity, smart charging and vehicle-to-grid. Please take the survey at www.surveymonkey.co.uk/r/EVNetZero

DPD adds 100 e-vans as it urges manufacturers to ‘get a move on’ Parcel delivery firm is aiming for the UK’s greenest van fleet, but its CEO says the lack of electric vans and trucks is holding back transition

arcel delivery firm DPD has agreed a deal with MAN Truck & Bus UK for 100 eTGE electric vans. DPD says the agreement means it will have the largest 3.5t electric van fleet in the UK and takes its electric fleet to 600 vehicles in total. DPD will start to take delivery of the vans in June, which are designed for inner city use, with a 36kW battery providing relatively short range (65-70 miles), but capable of 80% rapid recharging in 45 minutes. DPD opened the UK’s first all-electric parcel depot in Westminster and in November last year launched a purpose-built, e-cargo bike. The firm will also take delivery of 300 Nissan e-NV200 vans by May 2020. DPD wants to make 10% of its van fleet

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DPD CEO Dwain McDonald (right) with Thomas-Hemmerich, managing direcor of MAN Truck & Bus UK

electric by the year end. “We’re building the largest all-electric delivery fleet in the UK, in double-quick time,” said CEO Dwain McDonald. “The 3.5t van is absolutely core to our delivery and collection fleet strategy, so this is a big deal for us. It gives us huge efficiencies on the road in terms of route densities, but we’ve had to wait a long time for the first electric right-hand drive 3.5t

We’re building the largest all-electric delivery fleet in the UK, in double-quick time

vans. We’re really pleased to be partnering with MAN Truck & Bus on what is another UK EV first, and we are hugely grateful for their support.” McDonald urged other manufacturers to get to market with right hand drive e-vans. “We can take far more. It isn’t just us demanding them, our retail customers have responded very positively to our new EV fleet and they want to be telling their customers about their green deliveries too. We are designing new ways of working to incorporate these vehicles into our operation, so they are transforming our business as well as contributing to cleaner air and less congestion.” te

March/April 2020

ELECTRIC VEHICLES

EDF seals deal for Pod Point, says EV demand requires new nuclear EDF deal will enable Pod Point to accelerate national roll-out of its charging points

EDF has acquired a majority stake in UK electric vehicle firm Pod Point. Under the terms of the transaction, Legal & General, which held a 13% stake in the company, will increases its share to 23%. Pod Point has one of

the UK’s largest charging networks, with customers including Tesco and Lidl. CEO and founder Erik Fairbairn said selling to EDF means “we can take things to the next level and accelerate our national roll-out of charging points and make it

even easier for drivers across the UK to go electric.” Fairbairn told The Energyst in January that the UK is approaching an electric vehicle tipping point. He believes 2020 will deliver “stratospheric growth” in EV car sales. The deal has been months in the making and marks a significant milestone in EDF’s push to become a leader in e-mobility. While parts of the power industry, including National Grid, believe UK infrastructure can handle an EV boom without a significant increase in generation capacity, EDF’s UK CEO, Simone Rossi, offered a different view. “The additional electricity demand from EVs will require urgent investment in low carbon generation from renewables and nuclear,” he stated.

Renault Trucks and EO Charging partner on commercial EVs Renault Trucks has partnered with EO Charging as it starts to ramp up commercial electric vehicles. The automaker is targeting retail and SME sectors with its first electric Master ZE vehicles, which come as vans (pictured), minibuses or trucks, with Renault planning to also configure them as cherry-pickers, construction welfare vehicles and refrigerated vehicles. A free EO smart charger (22kW) will be bundled with the first 50 vans, which enables fleets to manage site load and charge vans

44 March/April 2020

when it is cheapest and/ or cleanest to do so. EO said its ‘Genius’ charger

is used by commercial fleets including Sainsbury’s Online, Ocado and Gnewt Cargo.

Royal Mail rolls out another 87 electric vans

Royal Mail is adding another 87 electric vehicles to its London fleet. The vans, Mercedes eVitos and Peugeot Partners, will arrive at the Mount Pleasant depot over the next two months. The vehicles will be used in the Optimise Prime project, a back-to-base smart charging project funded through Ofgem’s innovation allowance, which also involves Hitachi and UK Power Networks. Royal Mail fleet director, Paul Gatti, said the firm the vehicles “allow the business to continue to deliver letters and parcels safely, efficiently and in the most environmentally friendly way possible.” Meanwhile, EDF has signed a deal to supply Royal Mail’s charging infrastructure in the South East as part of the Optimise Prime project.

Gridserve starts work on charging hub Gridserve has started work on its first electric vehicle charging forecourt near Braintree in Essex. The hub, akin to a motorway service station with retail and other services, will house 24 EV chargers that the firm claims will be able to deliver up to 350kW of charging power simultaneously. Gridserve hopes to develop a UK network of the charging stations. It is also developing solar and storage.

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POWER PURCHASE AGREEMENTS

ith the world’s largest asset managers threatening to withhold money from companies that drag their feet on sustainability; pressure from governments and citizens pushing companies towards net zero; and the removal of subsidies forcing developers to seek new partners, Juan Pablo Cerda thinks the corporate PPA market is on the cusp of a boom. Hence PPA marketplace platforms such as Zeigo vying for supremacy. “Finally, everyone is landing on the same page,” says Cerda. The challenge is developing a plot line that delivers a happy ending. The buyers are starting to play their part, says Cerda. Net zero commitments from blue chip firms are coming thick and fast and many are binding their supply chains by the same rules. To avoid accusations of greenwash, they are also setting out methodologies that will ultimately leave little scope for fudge, says Cerda. That means companies will start to move away from schemes that arguably contribute little to decarbonisation. Renewable Energy Guarantees of Origin (REGOs) might not cut it for much longer, some suggest. “REGOs are not a very impactful way to contract renewable energy, they do not meet the ‘additionality factor’,” says Cerda. That is, “you are not replacing fossil fuel energy with green electrons by using REGOs – and that is what the world needs right now”. That awakening – and possible tightening of regulation – is good news for platforms such as Zeigo and others trying to build PPA marketplaces for the masses. But, as Ørsted CEO Henrik Poulson acknowledged when discussing 2019 full year results in January,

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Corporate PPAs ‘key to cutting carbon emissions’ A power purchase agreement ‘is the most impactful way that any corporate can contribute to reducing carbon emissions across the world’, according to Juan Pablo Cerda, founder and CEO of Zeigo. Brendan Coyne reports “education” is required on both sides of the deal. “There is a knowledge gap between the corporate world and the impact of PPAs,” says Cerda. “Historically they have only been available to big tech companies and the like. What we are trying to do is simplify that process and democratise the way smaller firms can access clean power direct from generation – and know that they are replacing fossil fuel with renewables.” To that end, the firm is working with law firm Bryan Cave Leighton Paisner to streamline legals, and Cerda hopes to further simplify heads of terms to just a few pages. Not just for Tesco The minimum commitment via the platform is 20GWh per annum. Given a corporate might take 20% of their power via a PPA, that means the marketplace is open to firms consuming 100GWh per annum – effectively the mid market. For context, Tesco might consume 2.5TWh per annum; a cleaning

equipment manufacturer might consume 400GWh per annum, an investment bank with a data centre around 100GWh per annum. To get further down the food chain, some companies are starting to develop aggregated PPAs – whereby multiple smaller buyers contract with a single provider, though these remain few and far between. Cerda says Zeigo is “very focused” on aggregated PPAs, and says multiple offtakers can provide benefits for developers. “There are a finite number of companies in the world with large energy consumption and AAA+ credit rating,” says Cerda. Packaging up buyers with lower credit ratings is viable and reduces the risk if one party defaults, he says. For now, he thinks three or four offtakers is manageable. “Beyond that, if we want to get to 10 companies for one project, we need to get smarter in terms of standardisation,” says Cerda. Banks will also have

There is a knowledge gap between the corporate world and the impact of PPAs Juan Pablo Cerda, Zeigo

to get more comfortable with the concept, he adds. Carbon topiary Power prices are currently soft. Cerda says that will “affect some positions for sure”, but does not undermine the business case for PPAs. “The biggest enemy in terms of moving to renewable energy is time. The transition is not moving fast enough and the corporate sector is crucial to delivering net zero,” says Cerda. “Fundamentally, we see a very strong business case for PPAs. It is just understanding how that is positioned within the overall energy buying strategy. It is a de-risking element, you are hedging your power price for the next 7-10 years,” he adds. “For corporates, that makes a lot of business sense. We do not know what prices will do over that period, but having a diversified portfolio makes financial sense because it derisks exposure to price and market volatility.” Moreover, for companies planning to transact with the likes of Sainsbury’s and Microsoft, or seek finance from the world’s largest asset managers, genuine decarbonisation efforts, he says, are now table stakes. te

March/April 2020

POWER PURCHASE AGREEMENTS

Renewable generators go short on PPAs in hope prices will rise Independent renewable generators are striking shorter-term deals with offtakers in the hope that depressed power prices will rise, according to specialist platform, Renewable Exchange. Alban Thurston reports

enewable Exchange was founded by former Ovo trader Robert Ogden to provide a route to market for smaller generators to sell power to licenced suppliers. In its first full year of trading, the Bristol-based platform has attracted more than 900 generators controlling 1.5GW of contractable capacity. Assets committed range in size from barn roofs of 100kWp or less, to portfolios of 20MWplus, according to chief commercial officer Chris Smith, who said buyers and sellers appreciate flexibility they may not get elsewhere. “We have found a niche, and we can enable deals which other platforms miss,” suggested Smith, citing the ability to contract with individual offtakers and to respond quickly to price volatility as valued attributes. Unlike other PPA platforms, Renewable Exchange is not yet

addressing corporate PPAs. Its 34 off-takers are all suppliers and licenced re-sellers, including Ecotricity, Smartest Energy, Limejump and EDF. However, Smith said an increasing number of smaller suppliers are coming to the platform to source renewable power and Renewable Energy Guarantee of Origin (REGO) certificates. Corporate market not there yet Renewable Exchange does not see corporates seeking green PPAs for selfconsumption as a priority. “They’re not really our target at present” said Smith. “Particularly at the smaller end, as they still require a little education.” The firm has just added solar farm owner IB Vogt to its platform. The German developer used the platform to contract power from 10MWp of solar farms in Hampshire. The auction attracted

nine PPA providers, with Ecotricity winning out after three rounds. Even in the final round, bids varied in value by as much as £3/MWh, according to Renewable Exchange, underlining the potential upside for asset owners. Smith declined to disclose the price struck, citing commercial confidentiality. But he pointed to the German firm’s participation as a sign of growing confidence in the platform. “We are enabling generators big and small to conserve value in today’s difficult wholesale markets,” he said. In January, Aviva Investors used Renewable Exchange’s platform to close 23 PPAs with offtakers for power from 35.5MWp of its onshore wind farms, praising the platform’s “resource light” simplicity. Utility-scale storage linked to renewable

We are enabling generators big and small to conserve value in today’s difficult wholesale markets Chris Smith, Renewable Exchange 46 March/April 2020

assets is yet to feature in the platform’s deals, said Smith, though owners are assessing its potential value. “In terms of PPAs, [storage] does change the dynamics, as generally asset owners look more at the day ahead market, rather than any longer term fixed prices,” said Smith. The platform supports contracts of up to 36 months. In practice, Smith said, parties are contracting on deals of six months or shorter, in the hope that wholesale prices weighed down by a glut of gas on world markets and the UK’s warm winter, must at some point turn the corner. “PPA prices have really suffered with the collapse in power prices, which has seen further declines since December 19,” Smith stated. “We are seeing parties go for shorter and shorter terms as they look to avoid locking in low prices. If buyers or sellers see no point in contracting long, it’s in our interest to let them set shorter terms.” te

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LIGHTING

Decorating materials specialist gets energy-saving makeover Brewers Decorator Centres sees energy savings of 70-80% per fitting from LED swap out

rewers Decorator Centres, the UK’s largest independent decorator’s merchant, is seeing a visible saving in energy consumption after installing high performance, energy efficient LED lighting solutions in its stores. A total of 27,600 sq ft of showrooms are now illuminated with products from the Goodlight LED range – giving energy savings of 70-80% per fitting, reducing carbon footprint, saving maintenance costs and enhancing the customer experience. The first five stores to upgrade to Goodlight LED lighting were Haslemere, Lewisham, London Victoria, Sevenoaks and Surbiton. Energy hungry fluorescent tubes and metal halide high bays were replaced across the stores with Goodlight G5 LED Battens, GX1 LED High Bays and Eco LED Panels. Financial savings In addition to the significant energy cost savings, the guaranteed five-year, 50,000 hour service life of Goodlight LED luminaires produces considerable maintenance cost savings compared with the rated 20,000 hour life of typical fluorescent tubes. Paul Dennington, premises manager at Brewers, says: “Since installation, our running costs have reduced and the lighting levels across our sales areas have improved dramatically. The Goodlight LED lighting provides bright, welcoming illumination allowing

theenergyst.com

Goodlight G5 LED Battens installed at Brewers Decorator Centres showroom in Haslemere. Below: GX1 LED High Bays in Lewisham

customers to accurately evaluate our products. We are certainly considering future installations.” Goodlight supplied Brewers with 4ft 40W G5 LED battens as a direct drop-in replacement for the outdated twin 4ft T8 fluorescent battens drawing 72W in its Haslemere store, producing electricity cost savings of 80%. Delivering very high levels of output and offering 110 Lm/W, the G5 features a 120° beam angle for optimal light spread. Available in daylight, natural and warm white colour temperatures, the G5 is glass-free and maintains an attractive appearance for showrooms as well as being robust and durable in workplace environments. The Lewisham and Surbiton showrooms were fitted with the highly reliable GX1 High Bays, in 120W, offering up to 125Lm/W. These replaced

the inefficient metal halide high bays that were insitu previously, reducing electricity consumption by up to 70% per fitting. Carbon savings Goodlight supplied Brewers’ Sevenoaks and London Victoria stores with ultra-thin, 600mm square Eco LED Ceiling Panels that draw just 40W, replacing quad 2ft T8 fluorescent tubes drawing 72W per fitting, to give energy cost savings of up to 80%. They are designed to slot easily into existing ceiling grids and provide even illumination. These LED Ceiling Panels deliver up to

100Lm/W brightness and are ideal for retail spaces. Dennington adds: “Brewers’ energy running costs have been reduced since installing Goodlight LED lighting. In addition, the longer life of the Goodlight LED light fittings will reduce our maintenance costs. Our aim as a company is to improve our carbon footprint, and the installation of environmentally friendly LED lighting supports this policy.” Saima Shafi, sales and marketing director at Goodlight, says: “It is exciting to see how Brewers is realising significant and ongoing reductions in its business overheads as a result of replacing inefficient lights.” te

Energy running costs have been reduced since installing Goodlight LED lighting. In addition, the longer life of the fittings will reduce our maintenance costs March/April 2020

LIGHTING

cottish technology company Arbnco is the delivery partner for a first-of-a-kind smart street lighting pilot in Lincolnshire, in partnership with South Kesteven District Council, that could eventually be rolled out across the council’s 3,600 lights. In addition to providing high quality LED street lighting, Arbnco deployed IoT technology to monitor air quality and footfall in the community during the trial, which concluded at the end of February.

60%

Expected energy saving pilot is expected to deliver The pilot aims to help the council reduce its energy consumption and support its ambition to reduce its carbon footprint by 30% before 2030. It is expected to deliver energy savings of at least 60%. IoT for councils The project forms part of the IoT for Local Authorities programme run by Digital Catapult, a digital technology innovation centre. The programme aims to help local authorities harness the potential of IoT by collaborating with start-up and scale-up technology companies. Twelve street light heads were installed for the pilot, which collected data on their surroundings: four on a public footpath in Grantham; four at Stamford bus station; and four at Cattle Market car park in Stamford. These were fully integrated with smart technology, offering sensor control and dimming, with some of the lights also providing air quality and video monitoring. Data collected by the lights was streamed in real time to

48 March/April 2020

Pilot project in Lincolnshire boosts energy efficiency, generates cost savings, improves safety and reduces pollution

Smart lighting trial is streets ahead a control dashboard via the cloud, allowing the council to make informed data-led decisions, interventions and optimisation strategies. Savings and safety The LED chips used in the light heads are more durable and efficient than the existing metal halide lamps, and generated a minimum of 60% reduction in energy costs. They are also able to simulate natural daylight

also enabled the council to monitor footfall and direction of travel along the path. In addition to the enhanced controls, the lights at the bus station were fitted with sensors to monitor air quality, helping the council to reduce pollution levels. Sensors on the lights monitored temperature, humidity and pressure, as well as compounds that can be particularly harmful to humans, such as sulphur dioxide, nitrogen dioxide, and

This project is going to generate substantial energy savings, help to reduce nighttime crime and enable the council to monitor air quality with a colour rendering index (CRI) of 95, bringing a new level of safety for drivers, cyclists and pedestrians. All 12 street lights were fitted with timing and dimming controls to reduce their energy consumption through the night. The lights along the footpath also had a built-in camera, allowing the dimming to be controlled via motion-detection. At night, these lights were reduced from 70W to 5W to reduce wastage, and brighten again when they detect movement. The video monitoring

fine particulate matter. This will allow South Kesteven District Council to understand air quality in the area, how it might affect residents, and take measures to improve it. Happy councillor South Kesteven Councillor Peter Moseley says: “We are continually looking for ways to reduce our carbon footprint and save money and this is a great example of using the latest technologies

to do both. IoT technology is playing an increasingly important role in local government, and offers the opportunity to remotely control and monitor the condition of equipment, and make the best use of resources.” Arbnco worked with SSE Enterprise Contracting, and its subsidiary Mayflower Smart Control, on the delivery of the pilot. They installed a central management system (CMS) to assist with maintenance and data reporting. By analysing the data fed from the streetlights into the CMS, Arbnco can determine the payback period for the council, at which point the cost of installation would be covered by the resulting energy savings made. Simon West, chief operating officer at Arbnco, says: “IoT technology enables us to develop much more intelligent networks, which bring significant benefits for local authorities. This project will generate substantial energy savings, help to reduce nighttime crime by ensuring the community is as well-lit as it can be, and enable the council to monitor air quality, one of the biggest public health crises of our times. ” te

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OFFICE

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WILSONPOWERSOLUTIONS.CO.UK

colightingUK was specified for the LED lighting at a 495,000 sq ft clothing and home distribution centre in Hatfield as part of a fiveyear transformation plan for a large UK retailer. The site, formerly used by another retailer, has been converted into a mechanised clothing distribution centre serving 150 stores in the South East and employing more than 500 people. Ecolighting was chosen to provide the lighting installation within a number of services for the tender, which also included ancillary electrical works, PA systems and fire and smoke detection. A main contract of more than £16m was awarded for the works. The specification was to install LED luminaires inside the distribution centre alongside a RAPID emergency monitoring system (see box). The site was also fitted with external lighting. Split into two warehouses, Boxed (boxed items) and Hanging (hanging garments), both buildings have been installed with automation so that products are able to be transported between floors. The Boxed warehouse and the Hanging Garment warehouse combined have been fitted with more than 13,600 of Ecolighting’s Sapphire luminaires with 3,600 programmable dimmable sensors providing background lighting after non-occupancy and 10,000 switching sensors. Both warehouses also benefit from more than 2,600 Altos emergency lighting LED luminaires and each has the RAPID

Emergency system installed. Ecolighting’s Sapphire is one of the company’s most popular LED luminaires and is designed for use in commercial and industrial environments. Sapphire features high output chip-on-board LEDs and OSRAM driver encased in a linear body with a polycarbonate diffuser, all rated IP54. The 1,500mm length luminaire comes in power ratings of 40W, 50W, 60W and 80W, with up to 9,600 lumens, a colour temperature of 4,000K and colour rendering of RA80. With lamp life of 50,000 hours, the Sapphire comes with a five-year warranty. For the outside areas at the site, 100W and 200W Atlantis LED floodlights and 35W, 60W and 200W Medusa amenity lights were selected. With energy savings of up to 90% compared with halogen lamp floodlights, the frosted tempered glass cover for uniform illumination offers IP65 protection and a luminaire efficacy of up to 115 lumens per watt. The Atlantis and Medusa luminaires provide huge cost savings and makes a substantial difference to energy bills. By using top quality LEDs, Ecolighting ensures high thermal conductivity, minimal light decay, pure light, very stable performance and a 50,000-hour lifespan. As a result, Ecolighting is able to offer a 10-year conditional guarantee with optional photocell control and a pre-programmed dimming cycle for smaller projects. Also used outside is Ecolighting’s compact Pegasus luminaire. Pegasus from Ecolighting is a top specification LED High Bay luminaire and one of the company’s most

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LIGHTING

the box popular light fittings. Encased in a robust yet lightweight and stylish aluminium body, Pegasus uses an Osram driver and top quality Osram LEDs giving 166 lumens per watt and up to 80% energy saving in installations. The sealed dustproof construction prevents access from insects and makes for easy cleaning. The Pegasus High Bay luminaire is used by Ecolighting frequently for a wide range of applications from industrial, warehouses, cold stores and manufacturing to sports halls and retail stores. Ecolighting has its own team of lighting and electrical installation engineers as well as carrying out the lighting scheme design with Relux software in the early stages

of client lighting projects. It makes its luminaires in the UK and uses UK-sourced Osram control gear and LED chips. The company is also a Carbon Trust Accredited Supplier, assessed to BSEN ISO 9001:2015 and a member of the Lighting Industry Association. te

RAPID Emergency system The RAPID Emergency system combines state-of-the-art technology and modular mechanics with an easy to use graphical interface. LED Ecolights claims it meets the most demanding lighting control and energy management applications without the cost and complexity of other systems and works with new patented Energy Measurement Technology to enable a complete lighting control solution.

Ensuring the energy performance of electrical installations, wherever it is critical. When electrical power is crucial, when lighting is essential, when the process is critical... Whenever energy matters, our engineers, technicians, production team and salesforce work closely with our customers to ensure the safety, availability and energy performance of their electrical installations. Power Switching, Monitoring & Conversion Energy Storage - Expert Services

info.uk@socomec.com â&#x20AC;˘ www.socomec.co.uk

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14:30 March/April05/04/2019 2020 51

COMPRESSED AIR

Coming down like 200 tonnes of carbon dioxide Compressed air and vacuum system makeover generates energy, carbon and downtime reductions for brickmaker

tlas Copco’s compressed air and vacuum systems upgrade for Manchester-based brick maker Wienerberger is resulting in estimated energy cost savings of £38k per annum, along with reduced CO2 emissions and production downtime, plus the added benefit of a short-term payback. Stark choice Wienerberger’s Denton plant, near Manchester, is one of 14 production sites in the UK. The existing compressor system upgrade project at the factory was triggered by episodes of unreliability. This led to a stark choice between carrying out costly motor rewinds or taking the longer view and replacing the compressors with modern alternatives offering higher efficiency and dependable performance. The compressor installation’s primary function in brick production was a 7-bar air

52 March/April 2020

supply to pneumatic cylinders, powering the clutches of the mixers blending essential additives with the basic ground and milled clay processing operation, and those of the extruders. This, together with the final sandblast treatment, determined the quality, performance and appearance of the finished products. There were similar performance and efficiency issues with the vacuum pump system employed to remove

Wienerberger’s compressed air and vacuum systems upgrade has resulted in annual energy savings of £38k and reduced its carbon footprint by almost 200,000kg

air from the brick material before extrusion, forming and kiln firing. Operation was intermittent because of problems running cooling water through the pumps, whose design offered only limited opportunity for corrective maintenance. To rectify these problem areas of his manufacturing processes, Miles Coppinger, Wienerberger’s director of production North, called on the services of Atlas Copco, which is a specialist supplier of both compressed air and vacuum equipment. Diagnosis, cure The first task was a week-long data-logging procedure to determine the energy usage of the existing plant, the air demand requirements and the system’s capabilities in order to establish a flow profile. The results demonstrated a clear opportunity to make significant energy savings, reduce the company’s carbon footprint and introduce a

higher level of reliability and performance. The recommendation was for a complete replacement compressed air installation, comprising an Atlas Copco GA90VSD+FF rotary screw compressor, a fixed-speed GA 75+ machine together with an FX15 refrigerant dryer, a 3000-litre air receiver with electronic zero-loss drain, plus ancillaries including an OSC oil/water separator, all connected by an Optimizer 4.0 central controller. To minimise pressure drops in the air network, the existing four-inch galvanised pipework was to be replaced with an Atlas Copco AirNet 80mm modular aluminium system, installed by local premier distributor, Pennine Pneumatic Services. To contribute to overall energy efficiency, the compressors would feature winter/summer ducting to aid heat recovery and direct hot air into the factory during colder months via manual vent switching. The Denton plant had previously used liquid ring

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A Wienerberger employee and John Green with the Atlas Copco VSD+ compressor. John was responsible for the sale as well as the initial audit and onsite meetings

Smart features The smart features of the Atlas Copco GHS585 VSD+ allow Wienerberger to link directly into the application’s programmable logic controller system providing direct control of the pump when the production line is running. This enabled energy savings due to the set point control feature of the vacuum pump, which optimises the process and provides maximum energy efficiency by ensuring that only the vacuum required is generated. Furthermore, it is now the Wienerberger parent company’s policy to switch from liquid ring vacuum pumps to rotary screw vacuum pumps in all its production plants. vacuum technology for clay extrusion but required a more efficient solution that would also remove the risk of Legionella from the cooling towers used to support the existing liquid ring pumps. The new vacuum system needed to be suitable for the high water content and high ambient temperatures involved in Wienerberger’s clay extrusion application, Based on the substantial energy saving potential and the option to remove the cooling requirement, Wienerberger chose the Atlas Copco GHS585 VSD+ Humid oil-sealed, rotary screw vacuum pump to meet the site’s requirements.

Plant room with the Optimizer 4.0 central controller, FX dryer, AirNet pipework and GA90VSD+FF rotary screw compressor

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Recycling space The whole operation was carried out over a three-phase installation plan and included solving an accommodation problem in siting the new equipment. This is where a bike store came into the picture. In the first phase, the GA75+ compressor and FX dryer back-up units were installed in the bike store, which was eventually resited in the old compressor house from which the original units were removed. The second phase saw the new main duty compressor system equipment in place and commissioned before completion of the final phase, involving removal of the redundant units and installing ducting. At the same time, the central control and monitoring

system was linked to the newly installed Atlas Copco GHS VSD+ oil-sealed and air-cooled rotary screw vacuum pump, which solved the company’s air extraction reliability issue. Two year payback The net result of this major makeover project in terms of system savings and a potential payback within only two years is good news for Wienerberger’s Coppinger. He commented: “The estimated energy saving from the first two phases is in the region of £38,000 per year. By replacing the old equipment, we avoided the cost of overhauls, which would have amounted to at least another £30,000. Naturally, I will keep a sharp eye on continuing performance and will be establishing data from sensors both in terms of kW/hr/m3 air power costs, but also as power related to the total volume of product output for any given period.” In addition to cost and maintenance savings, Wienerberger has reduced its carbon footprint by almost 200,000 kg per annum, and it is safe in the knowledge that key components are proven to be top-performing energyreducing products. These are the NEOS inverter in the GA VSD+ compressor and the Optimizer 4.0 master controller. Both are included in the Carbon Trust’s Energy Technology List, providing businesses with accelerated tax relief on profits. te

March/April 2020

Q&A

Katie Greenhalgh Energy Projects manager at Nottingham City Council

Who would you least like to share a lift with? I’m a terrible passenger, taking advantage of the time to sleep or catch up on e-mails, news or gossip with friends, so anyone that wants my full attention is in trouble. You’re God for the day. What’s the first thing you do? A tree-hugger at heart, it would have to be some serious ecological restoration. If you could travel back in time to a period in history, what would it be? I think I’d prefer to travel forward – the current pace of technological advancement and innovation makes it hard to even imagine what the world could look like in a decade or two. Who or what are you enjoying listening to? A strange, eclectic mix of Motown, dance music and Disney; anything that puts a smile on my face. What unsolved mystery would you like the answers

to? My children are quite a mystery to me: How do they eat so much? How do they make so much mess? Why do they get up so early? How are they so different to each other? How can they make me so frustrated then so proud within such a short space of time? What would you take to a desert island? My cats, Mitsy and Monty, would provide me with hours of entertainment and companionship! What’s your favourite film (or book) ? I think everyone should watch An Inconvenient Truth by Al Gore and Climate Change – the Facts by David Attenborough. Eye-opening and at times terrifying, but also inspiring, they give me purpose and determination. If you could perpetuate a myth about yourself, what would it be?I don’t swear too much, I don’t have a chocolate addiction, and I definitely don’t like gin.

What would your super power be and why? A photographic memory – I remember almost nothing and have to write everything down, so this would make life a lot easier. What would you do with a million pounds? My husband is an architect, so together we’d design and build our dream, ultra-sustainable home. What’s your greatest extravagance? Travel – we spent a fortune on our honeymoon travelling around Brazil and Peru; watching Lionel Messi score in the World Cup and walking the Inca Trail. If you were blessed with any talent, what would your dream job be and why? I love my job and am resolved to save the planet, but I’d also like to make people happy. So if only I were funnier, I’d chose to be a comedian and hear people laughing every night. What is the best piece of advice you’ve ever been given? Understand what you’re truly passionate about and make it your career.

Eye-opening and at times terrifying, but also inspiring

54 March/April 2020

What irritates you the most in life? Lateness, unnecessary plastic, idling vehicles outside schools and climate change deniers.

I don’t swear too much, I don’t have a chocolate addiction, and I definitely don’t like gin What should businesses be doing to help themselves energy-wise? Measure, reduce and generate: data is so important to identify where energy can be reduced; having an expert energy audit will highlight which areas of the business have the most potential for savings; generating energy on site through renewable technologies like solar PV is a great way of working towards carbon neutrality in a way that makes sound financial sense. What’s the best thing – work wise – that you did recently? Managing the Energy Projects Team at NCC I have a lot to be proud of alongside my fantastic team members; our awardwinning domestic deep retrofit ‘Energiesprong’ projects, our large-scale vehicle-to-grid and storage demonstrator, leading on the commitment to become the UK’s first carbon neutral city by 2028, the Plastics Taskforce and so much more. te

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