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Money talks: Investors with â&#x201A;Ź1bn seek UK energy efficiency projects

April / May 2016

Power shift: Government backs smart grid plan with DSR to the fore

Heated debate: Technologies that can decarbonise heat at lowest cost

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INSIDE THIS ISSUE

Published 2016

The Heat Report

HVAC

Which technologies can decarbonise heat at lowest cost? The Energyst’s free Heat Report reveals trends, strategies, readers’ views and other expert opinions

Gas & Electricity

Making the switch to 100% renewable energy needn’t come at a large premium as suppliers step-up acquisition plans

Policy & Legislation

Produced by

The spectre – or grail – of Brexit looms large over business decisions and policymaking. What will it actually mean for energy managers?

Supported by

DSR Event 2016

The Energyst invites readers to a free conference on demand-side response, sponsored by National Grid, aggregators and energy suppliers. But be quick, places are strictly limited

Viewpoint

Supply and demand: Former SSE boss Ian Marchant argues we need a new energy trilemma focused on the demand-side

36 Policy & Legislation

The trajectory for costs is clear – what matters now is taking action to mitigate against it

Inenco argues that the only way is up for business energy taxes, no matter the outcome of policy reviews

theenergyst.com

Money talks: Investors with €1bn seek UK energy efficiency projects

Power shift: Government backs smart grid plan with DSR to the fore

The new name for Water, Energy & Environment

Heated debate: Technologies that can decarbonise heat at lowest cost

elpful

As corporate interest in demonstrating sustainability grows, so energy professionals have a substantial role to play

Government backs Infrastructure Commission’s smart grid plan with DSR and storage to the fore

April / May 2016

Powering your business with support that’s

Sustainability

Energy Storage

News & Comment

Staying aware of market changes See page 14

Call our UK based experts on

Billy Pryke I&C Internal Account Manager Danny Bond I&C Key Account Manager

01473 707755

14 Cover Story

Haven Power outlines the need to stay aware of market changes www.havenpower.com

Demand-side response

Sustainability

Insight

Energy Storage

Water management

Policy & Legislation

HVAC

Q&A

Gas & Electricity

CHP

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April/May 2016

COMMENT

Rebalancing supply and demand A report, Progress in energy efficiency policies in the EU Member States – the experts perspective, by Energy Watch Project (see news, p6) notes that the UK has slipped in the EU 28 ranking from 13th to 27th. In total, more than 1,100 experts from all 28 EU member states were consulted about the progress of energy efficiency policies in their own country in the past three years, of which 140 were from the UK. The EED has an annual target of new savings of 1.5 % of the annual sales to final consumers (Article 7 of the EED). This target is not well known among the experts. It is surely the government’s job to ensure that people know about legislation and that systems are in place to achieve it effectively. It is almost as if we need an energy efficiency deployment office within Decc.

regret that the energy efficiency refurbishment targets for local authorities were recently removed. Unless we effectively incentivise the renovation of old buildings, little will be achieved in the UK for energy efficiency.

A main concern expressed by the experts in the report is that present policy and decision makers in the UK do not see energy efficiency as an opportunity and focus on the supply side. They are also worried by the lack of systematic approach in energy efficiency policies. On the demand side much of the UK’s focus is on things such as energy taxation and smart metering. Along with the inspection of heating and air-conditioning systems those elements form the bottom three in policy effectiveness across the EU, according to the report. The top three are energy efficiency requirements for new buildings, the energy labelling of products and energy efficiency requirements for renovated buildings. While we do have fairly robust building regulations and follow energy labelling in some product areas, the big missing link for UK energy efficiency is refurbishment. The report notes that for the public sector, experts

The hot topic in demand-side management at the moment seems not to be saving energy but using it more flexibly in return for payments or high tariff avoidance. Given the interest shown by readers, The Energyst is launching a new conference focused on demand-side response and flexible power. The DSR Event 2016 takes place in London on 8 September at The Banking Hall in London’s Square Mile. The aim is to bring more businesses into balancing services and all readers interested in learning how they can turn assets into revenue should attend. See page 22 for further information.

Policy and decision makers in the UK do not see energy efficiency as an opportunity

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4 April/May 2016

When asked what policy measures the energy efficiency experts would like to see at EU level, the two most popular measures were “a large European energy efficiency fund [giving both grants and loans]” and “stricter minimum standards for buildings and appliances”. This would certainly help to push energy efficiency efforts if countries are to hit the 2020 targets – although if the UK votes to leave the EU, that may be a moot point.

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NEWS & COMMENT

UK becoming the ‘sick man of Europe’ on energy efficiency The UK is ranked 27th out of 28 member states for progress on energy efficiency, according to a survey of energy experts across the bloc. In 2012, it was ranked 13th. The UK is now also perceived as having the lowest level of progress in building renovation. Experts interviewed for the Energy Efficiency Watch Project, co-funded by the European Commission, said the UK was too focused on the supply side because policy and decision makers do not see energy efficiency as an opportunity. About 30% believed the UK has little chance of meeting Energy Efficiency Directive targets on current trajectories, although

the fact that almost two thirds of 140 UK experts polled were not aware of the EED target to save 1.5% of energy sales to final consumers calls into question their level of expertise. Within the public sector, experts cited the removal of energy efficiency refurbishment targets for local authorities as a cause for regret. Energy Performance Contract uptake was low, they said, and potential projects were threatened by further budget cuts. Among all member states, the UK experts see the lowest level of progress in building renovation. They called for more systemic incentives to generate demand for energy efficiency in both the residential and service

sectors (eg a tax scheme). Across the bloc, only Spain ranked lower for progress on energy efficiency. Italy, which languished in 27th in 2012, has made the most progress since then and is now ranked 13th. Government changes and austerity measures had led to some steep fluctuations in member state progress, noted the report. That would continue, it stated, “as long as the multiple benefits of energy efficiency are not sufficiently understood by national policy makers and stakeholders and have not become an integral part of security and economic policy – instead of ‘just’ a climate policy. “In some European

Among all member states, the UK experts see the lowest level of progress in building renovation countries, the understanding of the positive economic, environmental and social impacts of energy efficiency has already allowed it to become independent of political fluctuation and an inherent part of energy and economic policies,” it concluded.

Solar PV disrupts peaks €1bn seeks UK energy National Grid has predicted all-time lows for power demand on the transmission system this summer due to the boom in distributionconnected solar PV. The system operator also warned that it may have to issue emergency instructions to inflexible generators over the summer, whom it will pay to stop exporting power onto the system. It may also need to call on new demand-side response tools that ask firms to increase power use. According to National Grid’s Summer Outlook, the peak demand forecast for high summer, at 35.7GW, is the lowest on record, some 2GW lower than last year. Daytime minimum demand is expected to be 23.5GW, about 2.5GW lower than the minimum demand experienced in 2015. Those drops are driven largely by increases in

6 April/May 2016

embedded solar PV capacity, which, according to National Grid figures, almost doubled from 5.0GW in April 2015 to 9.3GW in February 2016. The system operator has assumed PV will continue to increase, albeit at around half that rate, by 200MW per month over the next year. It predicts total solar PV capacity to reach 12GW by the start of summer 2017. The system operator said forecasts indicated it would have sufficient capacity to meet demand, even with low interconnector imports during July and August, when generators tend to carry out annual maintenance. However, National Grid said the changing generation mix and demand profile would require more direct system operator intervention and a more flexible approach to system balancing.

efficiency projects A consortium of banks and infrastructure investors is aiming to invest more than ¤1bn in energy efficiency projects. The Investor Confidence Project Europe has been created in a bid to bring together those with capital and those with good quality energy efficiency projects looking for funding. ICP Europe senior advisor Steven Fawkes told The Energyst last year that a lack of data and standardisation was preventing otherwise viable projects from being bankable when presented to financiers. More robust data presented in a standardised format would de-risk projects and reduce transaction costs, he said, enabling an energy efficiency market to be created. With those protocols now in market, the Investor Network is ready to scale investment.

ICP Europe director Panama Bartholomy said: “The potential market for building retrofits in Europe is worth upwards of ¤100bn per year, presenting a massive, untapped investment opportunity. Offering investors a common language to compare risks and savings makes projects simpler, decisions easier and project performance more reliable.” Lada Strelnikova, director of Deutsche Asset Management and investment manager for the European Energy Efficiency Fund, said: “As an alternative, innovative financing instrument for energy efficiency projects in the public sector, we in Europe believe standardised energy upgrade approaches can accelerate project progress and facilitate a more structured project development approach to get access to financing.”

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Osborne confirms CRC axe with CCL set to rise The government has confirmed that the Carbon Reduction Commitment (CRC) is to be scrapped following the 2018/19 compliance year. The move was expected under the review of business energy taxes. The Treasury acknowledged the CRC had been “complex, bureaucratic and costly” for participants. It said the new landscape would see businesses “only charged one energy tax administered by suppliers”, rather than being required

to forecast energy use, buy and surrender allowances. To recoup the CRC money, chancellor George Osborne has said that the Climate Change Levy (CCL) will rise by 2019 and that charges will change to incentivise businesses to use less gas. That will affect business energy bills and represents further bad news for the renewable energy industry. The CCL is essentially a carbon tax. Up until last August, businesses were taxed for using fossil-generated

power with exemptions for those using renewable power. However, the chancellor removed that exemption in his 2015 Budget statement, with Treasury stating the move would save £3.9bn by 2020. The Treasury said it would change charges for different fuel types under the CCL, moving to a ratio of 2.5:1 (electricity:gas) from April 2019. It wants a ratio of 1:1 (electricity:gas) rates by 2025 to incentivise reductions in the use of gas. The government said it

will keep existing Climate Change Agreement (CCA) scheme eligibility criteria in place until at least 2023 with the discount rate increasing from 2019. The Treasury stated that a Decc-led target review would begin this year to “ensure agreements deliver on their energy efficiency goals”. The Carbon Price Support (CPS) rate will remain at £18 t/CO2 from 2016-17 to 2019-20 with a long-term plan for carbon prices expected in the Autumn Statement.

Major changes to capacity market and distribution charging regime proposed The Department Of Energy & Climate Change (Decc) plans major changes to the capacity market, the mechanism intended to ensure the UK has sufficient power during winter peaks. Significantly, Decc has also flagged plans to change the distribution charging regime for embedded generators, which industry experts have warned could have serious consequences for UK industry. Decc wants to buy more power, earlier, and will bring the start date for the mechanism forward a year. Capacity providers – both power stations and demand response units – will now start delivering power if needed from winter 2017/18. That will mean business energy bills increase sooner than anticipated. The capacity mechanism charge could add several percentage points onto bills, analysts believe. Diesel destruction Decc wants to incentivise the building of new gas plant, which the capacity market in its current form has failed

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Rotheray: ‘Fundamental change’

to do. What it has rewarded are rafts of small-scale diesel generators. The effect of those diesel farms is to undercut new gas power stations. Decc intends to make life harder for diesel generators via tougher emissions legislation that Defra will consult on later this year. However, the head of the Association for Decentralised Energy, Tim Rotheray, has warned that the move could inadvertently penalise back-up generation. The new rules would not simply limit operating hours but would apply to diesel generators (or aggregators of diesel gensets) from 1 MW to 50 MW, irrespective of their number of hours of operation.

“That could land hospitals, data centres and industrial users with back-up generation with very significant costs,” said Rotheray. “[Decc] is absolutely right to stop diesel farms but diesel back-up has a role to play to ensure security of electricity supply to those sites. The proposals for the Medium Plant Combustion Directive need more thinking through.” Demand-side response The department has also outlined changes for demandresponse providers. Proposals mooted include only allowing demand-side response from load shifting into the transitional capacity auctions, as opposed to allowing small generators to bid, or specifying a minimum amount within each auction that comes from demand reduction. Decc also plans to lower the minimum entry size from 2MW to 500kW. Distribution charging Significantly, Decc also flagged plans to change the distribution charging regime for embedded generators,

which experts warn could have serious consequences for UK industry. “Decc is right to look at security of supply and new diesel farms are a bad thing,” said Rotheray. “But the mention of the embedded benefit [within the consultation] is completely inappropriate. It has nothing to do with capacity or security of supply. If the embedded benefit were to go, we would see industrial plants shutting. It would be very significant.” Rotheray said the proposal was “a fundamental change” to the principles of electricity charging. “With that particular proposal an outcome has been decided upon, and every possible rule is being twisted to achieve that outcome. That is extremely harmful, especially given the work that has been done by the industry over the last two years [on embedded benefit].” Rotheray believes that government is plotting the changes purely to incentivise new gas. “And they are finding whatever possible route to new gas that they can.”

April/May 2016

NEWS & COMMENT

Energy intensives urge government to broaden renewables cost protection Industry bosses have urged government to broaden its proposals to limit the impact of renewable subsidies on energy bills as it launches a consultation to try and insulate British industry from rising costs. The plan is to take the cost from qualifying industrial firms’ bills and add it to everyone else’s. It is being achieved by adjusting energy supplier’s exposure to renewable levies in proportion to their energy intensive userbase – and suppliers passing on the costs and savings. Government predicts the tab to will equate to £5 per household bill. Businesses may find themselves paying more. Energy Intensive Users Group director Jeremy Nicholson said the proposals were necessary to protect a beleaguered sector but insisted

All our members need is a level playing field. Nobody wants British industry to be effectively protected at the expense of everybody else the group had never lobbied for consumers to pick up the cost. He said if green targets were not to be cut back for cost reasons, that recovery of industrial costs may be more fairly achieved through general taxation, which takes into account ability to pay. “All our members need is a level playing field. Nobody wants British industry to be

effectively protected at the expense of everybody else. But that is a government decision.” He said a preferable approach might be “getting the cost of the renewable programme down and not having unilateral carbon price support”. However, he continued, “instead of reining back [renewables], they have kept green targets in place and everyone is going to pay more.” How much more is open to debate, he said, given that protection will not kick-in until April 2017. “While we are trying to remain upbeat, given the events going on in the steel industry at the moment, whatever happens British steel is going to end up smaller at the end of it,” said Nicholson. “It may well be that some of the potential beneficiaries are no longer there. The sort

Competition watchdog orders Decc and Ofgem to speed half-hourly settlement While larger UK businesses are being moved to half-hourly settlement for their electricity use, it is likely that all firms will soon follow, according to recommendations published by the competition watchdog. The Competition & Markets Authority (CMA) has told Decc and Ofgem to improve settlement rules and procedures for both gas and electricity. The outcome should be more accurate bills for more business and the ability to pay less for energy by using it outside of peak times. Currently, most businesses are settled according to a profile class for electricity, rather than their actual consumption. That reduces incentives on suppliers to innovate and

8 April/May 2016

means businesses are not always paying reflective prices for their power use. By moving to half-hourly metering and settlement, businesses will face more reflective time-of-use charges for power – that is, expensive power in the morning and evening peak periods but cheaper during the late morning and mid-afternoon, and very cheap overnight. Moving to half-hourly metering and settlement effectively opens the door to smart metering and timeof-use tariffs in the business sector for power. Gas settlement has other issues but essentially the CMA is concerned that inefficient allocation of costs leads to gas firms ‘gaming’ the system and

businesses paying more than they need to as a result. The CMA said it wants to see Ofgem’s reforms of gas settlement implemented by October this year and additional security measures developed as soon as possible. For electricity settlement, the CMA recommended Decc consults on changing rules so that suppliers can collect more granular data and that Ofgem conducts a full costbenefit analysis for mandatory half-hourly settlement while considering how to make elective half-hourly settlement less expensive. Meanwhile, the CMA has also outlined plans to stop small businesses being overcharged and locked into poor-value contracts.

of potential closures that are on the cards… represent a big chunk of money that will not be translated into the exemption. Therefore should the benefit be increased for those remaining?” Meanwhile, Laura Cohen, chief executive of the British Ceramic Federation, said barely a handful of members may receive any protection. “We remain deeply concerned that there is very limited coverage of renewables compensation amongst our members. Perhaps only six companies might qualify. The consultation gives us the opportunity to press for a broadening of access to benefits more in line with that in competitor economies such as Germany and Italy where more comprehensive support is provided to other ceramic manufacturers covering a much broader range of products.”

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Support for energy intensives ‘will add 7% to third party costs on business energy bills’ Haven Power, the business energy supply arm of Drax, has warned that firms may not yet realise the costs of government plans to protect energy intensive industries (EIIs) from energy subsidy schemes. Chairman Peter Bennell believes suppliers should be more transparent in communicating price rises to customers – and about the implications for fixed-price contracts. While the support package for EIIs was originally mooted as a tax, it has since been shifted to energy bill payers, with the cost spread across both domestic and business users. Cornwall Energy estimates that the cost component of power bills relating to renewable power subsidies could increase by as much as 7%. Robert Buckley, a director at the consultancy, said: “We expect the exemptions for energy intensive users and imported renewables to reduce the charging base for the renewables obligation, Feed-in Tariffs and CfD FiT by about 7% when fully in force from April 2017. “As these costs are collected on a per unit basis by suppliers, charges to other users will be higher than otherwise (they will be rising anyway) by 7%.” Bennell believes this price

increase remains off the radar for some firms. Furthermore, he says that an increase of this proportion could potentially lead to suppliers reopening contracts to recover costs from customers, even with those products which are claimed to be completely fixed. “There is a concern to those businesses that don’t understand what’s in their price. They should understand their contract and what’s included. If it’s fixed price, can the price change? It can be a long time after the event that the supplier comes back for more money,” he said. From April 2017, Haven is reflecting the charges in its bills with the add-on charge incorporated. This push for transparency in pricing – what’s included and what’s not – is reflective of a general calls for greater transparency in the energy markets. “These changes come at time when wholesale energy costs have been falling. As a result customers may not challenge suppliers’ offers as thoroughly as they do in a rising market. This could lead to unpleasant surprises if suppliers haven’t factored In market changes such as EII into their offers and I would urge customers to firmly establish how their contract will treat these charges,” said Bennell.

Bennell: suppliers should be more transparent in communicating price rises to customers

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Seeing the bigger picture Verifying the success of an energysaving project requires a holistic approach that take account of all variables, says David Bakst* There is sometimes a perception that fully modulating boilers are not subject to the inherent issue of wasteful boiler dry and short cycling, in the same way that non-modulating, high-low fired boilers are. All boilers, including fully modulating boilers, will suffer from ‘standing losses’. This can cause the boiler set point temperature to drop so that the boiler re-fires when there is no genuine requirement for further heat to meet the building load. This condition is known as ‘dry cycling’, which causes unnecessary energy use and costs. To improve boiler efficiency, there has been a drive to employ fully modulating boilers. In theory a modulating boiler will always meet and track a variable boiler load and never turn off. Therefore it will not allow the boiler to dry/short cycle. However, there are number of conditions that will limit the boiler from modulating during part-load conditions. The performance of a modulating boiler is determined by the ‘turn down’ ratio of the burner and the current load applied to the boiler. It is quite common that modern modulating boilers will have a turn down ratio of 5 to 1; in other words high fire is 100% of the boiler kW output and low fire would be 20% of the boiler output. For example, if the boiler was rated at 200kW the minimum boiler output capacity would be 40kW. Building/boiler loads will change dynamically according to the weather/hot water requirements etc. If the above example is used and the current system load is less than 40kW, the modulating boiler is not able meet this part-load condition without turning on/off

and cause the boiler to cycle. Other factors that can affect the performance of modulating boilers are due to an improvement of the overall building efficiency. Typically boiler plant is designed to meet the worst case scenario regarding building load and over time the boiler/s can become over-capacity for the current building conditions. 80% of boiler plant is over capacity and therefore can cause ‘part-load’ boiler inefficiencies. For some of the reasons given, it is very rare that fully modulating boilers operate as intended or designed and can suffer from the same issues as standard nonmodulating boilers. The solution is to deploy retrofit boiler load optimisation controls such as Sabien’s M2G, which will work in harmony with existing controls to prevent boiler dry/short cycling and reduce energy consumption. The M2G will constantly and dynamically measure the individual boiler load under all conditions, if this is on a fully modulating boiler the M2G will operate during part-loads only and will identify when the boiler is firing unnecessary. M2G will typically deliver a payback in less than 18 months and requires no servicing, maintenance or continued commissioning and is offered with a five-year warranty. *David Bakst is operations director with Sabien Technology Further information: www.sabientech.co.uk

INSIGHT

Brexit or remit – what matters most? Stuart Lloyd-Evans, director of risk and trading operations at Opus Energy, considers the implications of possible Brexit for the energy/facilities management market

he news agenda at the moment is dominated by politics and the future of our island. ‘Brexit’ discussion is everywhere – and at times it may feel like we can’t escape it. Whether we watch it on the news, listen to it on the radio or receive leaflets through our door, we know the Brexit vote is coming, even if we don’t know whether we’re for or against. In fact, it seems we can’t even escape this topic at work any more. According to our new research, it has been setting tongues wagging – from facilities managers to SME owners. The research found

10 April/May 2016

Potentially the UK could become an energy island with all the flexibility, and risks, associated with that

that 23% of respondents are sharing their opinion on Brexit and how they intend to vote directly with employees and fellow colleagues at work. This doesn’t stop at work, with 43% discussing how they will vote with their family. In fact, less than a third of decision makers (30%) have kept their opinion to themselves, with size of business seemingly influencing their decision to share their thoughts. Those most likely to share their views were working for SMEs with more than 100 employees (19% not sharing their opinions), and smaller businesses remain more secretive (a quarter).

However, one of the main problems of the campaigns so far is that among the scaremongering here is little information on what it actually means for us. So while people may be discussing their views openly, it may not be shedding any light on how it will affect us and how it might have an impact on our jobs and daily lives. So what does a possible Brexit mean for the energy/ facilities management market? Energy integration Irrespective of Brexit or not, a tightknit political union looks to be off the agenda on both

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sides, causing a state of flux with its associated uncertainty. Within the energy markets across the EU, it is far from clear if the march of energy integration would be stopped or not. Currently, there is an ongoing EU drive for energy market coupling and common security of supply measures (which considering the supply and demand issues experienced, coupled with a trend of rising energy costs across the continent, is not surprising). Whether the UK would be allowed to (or want to) stay in the club is far from clear if we did decide we are better off going it alone. Potentially the UK could become an energy island with all the flexibility, and risks, associated with that. For a facilities manager responsible for energy provision across multiple sites, this potential cost fluctuation may be an influencing factor in business profitability. Remit obligation In addition the EU obligation, Remit (Regulation on Wholesale Energy Market Integrity and Transparency)

– the obligation to report all wholesale trades and supply contracts over 600GWh – may be lost to us. This framework for identifying and penalising market abuse in the UK and across the rest of Europe is designed to help consumers, industry and other participants to have confidence that energy prices are open, fair and competitive. Again, if we were to exit the EU, would this army of analysts pouring over any wrongdoing be lost to us, potentially rendering the UK open to market abuse? While this is unlikely, it is still something to consider in terms of market parity and competitiveness. While the UK’s renewable energy revolution remains in the headlines, the UK still attracts significant amounts of green energy due to its subsidy schemes. This is part of the Renewable Energy Guarantees of Origin (Rego) scheme. The purpose of this is to promote and increase the contribution of renewables to electricity production in the UK and across the EU, providing a common

While there is the possibility costs could decrease, it could well go the other way for a time as the market adjusts to life outside the EU platform to facilitate the trade of renewable electricity between member states. If the European Guarantees of Origin (GOO) certificates ceased to be used in the UK, would there still be a mechanism for pan-European energy certification? This remains to be seen. Money, money, money The price of electricity itself could be impacted if the government chose to amend the carbon prise support mechanism. Embedded within UK wholesale electricity price is an additional cost of carbon linked to the European Union Emissions Trading Scheme (EUETS); if the UK was no longer a part of that scheme would the link be maintained? While there is the possibility costs could decrease, it could well go the other way for a

time as the market adjusts to life outside the EU. For a business’ bottom line, this uncertainty could cause a big hit, leaving businesses open to uncertain billing and unpredictable cash flow. The possible Brexit is taking up column inches without spelling out what it really will mean for us. Until we know the final result, we can’t actually accurately predict what will happen. However, established European diktats will need to be poured over and a decision made to make a clean break or revise current responsibilities. Whatever the outcome, we’ll still have the energy we need to power our businesses and suppliers such as us will be here to guide you. The source or regulation of it, however, won’t be decided upon until after 23 June. te opusenergy.com

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

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Energy Buyer of the Year 2015

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April/May 2016

INSIGHT

The potential for energy market disruption Mark Bartholomew gives his view on Brexit planning: a guide to navigating potential energy market disruption

s the EU referendum nears, the issues surrounding a potential Brexit are moving up the political agenda. While the outcome is difficult to predict, how might a Brexit affect the UK energy sector and what should energy companies and their customers be considering in their contingency planning? While much of what would happen in the event of a ‘no’ vote is uncertain, we know that there would be a twoyear notice period allowing time for the UK to make an orderly exit, probably followed by an extended period in which the detail of the new relationship would be developed. On the face of it, this would provide time to plan but, inevitably, could lead to an extended period of uncertainty. Uncertain future For the UK energy sector, this uncertainty will be unsettling for investors at a time when a step change in investment is needed to meet the twin policy objectives for energy security and climate change. Moreover, the new Feed-in Tariff/Contract for Difference subsidy regime and capacity mechanism are still bedding down, major uncertainty persists on a nuclear new-build programme and the outcome of the Competition and Markets Authority’s energy market investigation is still awaited. For these reasons, we can expect the UK government to

12 April/May 2016

It is perhaps ironic that the Brexit issue has come to the fore at a time when the so-called ‘Third Package’ of EU liberalisation measures for the sector is being implemented

want to act quickly following a ‘no’ vote to secure the UK’s ongoing relationship with the EU and to clarify any areas of change in energy policy. It is perhaps ironic that the Brexit issue has come to the fore at a time when the so-called ‘Third Package’ of EU liberalisation measures for the sector is being implemented; in particular, EU Network Codes that (among other things) are intended to facilitate cross-border trading in electricity and gas across the sub-sea interconnectors which link Great Britain to the rest of the continent. Given the price differentials between British and Continental energy markets, not to mention the energy security benefits of interconnected networks, cross-border trading is beneficial to UK consumers, especially at a time of lower security margins and focus on prices and suppliers’ margins. Any decision to exit would trigger negotiations over the basis of the UK’s relationship with the EU post-exit and it is inconceivable that this would not include the continuation of cross-border trading. A Brexit could, however, offer an opportunity for the UK to walk away from one or more of the EU’s 2020 (and 2030) energy and climate change targets. Unless the UK opted to join the EAA post exit, EU Climate Change targets would cease to bind it. As attractive as this might sound to some, the UK committed to legally-

binding carbon reduction targets in the Climate Change Act 2008 and reduced carbon targets would require a shift in policy. However, without the mandatory EU renewable energy targets, there could be more flexibility as to how the UK meets its carbon budgets. Greater room for manoeuvre could allow more cost effective reductions in carbon emissions. Less influence If a Brexit takes place, we can expect the UK to have less influence over EU energy policy in future and this is perhaps the most significant risk for the sector. To date, the UK has been a major influencer of EU policy in key areas such as energy and climate change. Without the influence of its economic liberalism, EU energy markets may become less competitive, which could have adverse consequences for energy companies and their customers. So, early days but energy companies, and especially energy-intensive industry, will want to keep a weather eye on the referendum debate. There is much at stake, and what the sector needs now, more than ever, is a steady hand on the tiller and a clear line of sight to any choppy waters ahead. te Mark Bartholomew is a partner at law firm Shakespeare Martineau. He specialises in advising businesses in the energy sector on a wide range of energy and climate change issues. shma.co.uk

theenergyst.com

The EU referendum and climate change legislation JRP Solutions’ managing director Jes Rutter asks what will the EU referendum mean for climate change management?

n 23 June the country will go to the polls for what could prove to be one of the most momentous and historical days in recent British history. Since the UK first joined what was then the Common Market in 1973, the EU has evolved and its powers and influence has steadily grown. The EU impacts on almost every aspect of our lives – from the shape of the bananas on our supermarket shelves to protecting workers rights. So would leaving the EU have a significant impact on the UK energy industry? To tackle the impact of climate change, the EU has committed to three targets for 2020. The first is to reduce emissions by 20% on 1990 levels. The second is to provide 20% of its total energy from renewables. The third is to increase energy efficiency by 20% from 2007 levels. Being part of the EU the UK is also currently committed to these targets but what happens if the UK exits the EU in June? One of the main mechanisms to reduce emissions within the EU to achieve the first target is the EU emissions trading scheme (EU ETS), which has been in operation since 2003. The UK government also operates climate change agreements (CCA) and the Carbon Reduction Commitment (CRC) Energy Efficiency scheme which have been active since 2001 and 2010 respectively. The second target is

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If the UK does vote to leave the EU, what will it mean for current climate change legislation?

addressed by the EU with the Renewable Energy Directive. Within this directive the UK has been allocated a reduction of 15%. More recently the UK government introduced the Energy Savings Opportunity Scheme (Esos) to address the EU Energy Efficiency Directive (2012), which provides the framework to promote improved energy efficiency across the EU to address the third EU target on climate change. If the UK leaves the EU in June what does that mean for all the current climate change legislation? The UK government announced in the July 2015 Budget that it would be reviewing business energy efficiency taxes (CCA and CRC) with the possibility of abolishing them and introducing a new single tax based on the Climate Change Levy (CCL). The outcome from the budget was to do so but only in respect of CRC, which ceases in 2019. The UK government also intimated that it would like to have a single reporting

framework based on Esos but taking elements from CRC and CCA. While CRC will be scrapped, there is no news of a single tax yet. The budget was expected to bring some clarity on these proposals but with the uncertain EU future is now the right time to make changes or announcements? If the UK does exit the EU is it better to wait and simplify the reporting framework further? Without the mandatory EU ETS and Esos reporting, the UK government has the opportunity to establish something new, which could encompass all the ambitions of the actions to tackle climate change in a simple system reducing reporting burden on companies. What impact might leaving the EU have on UK energy prices? As we are all acutely aware, energy prices have been very volatile and are still very much linked to the cost of oil despite various measures to decrease our dependency upon fossil fuels. While the political games of Opec, Russia and the US continue to strongly influence

world energy prices as do wars, political instability and the growing terrorist threat, the UK also has to contend with another pressing issue. The enforced closure of dirty and ageing fossil fuel power stations has reduced the UK’s generating capacity to such an extent that we now face the very real prospect of black outs particularly if we experience a prolonged cold spell of weather. Putting aside the long overdue need for a coherent and longterm energy strategy, the UK energy industry is in desperate need of serious investment in new power generation. So is the UK a more attractive proposition to investors as a member of the EU or if we were to sit outside of it? EDF recently stated that it is still committed to Hinckley Point and it is just the commercials that need to be resolved. Meanwhile, Norway’s Sovereign Wealth Fund, estimated to be £590bn and the richest on the planet, has said Brexit would not be a significant risk to the UK and that Britain could do better outside the EU. The Norwegians, who are outside the EU and the eurozone, are hoping to increase their investment in the UK and to continue to support the flow of natural gas from their huge fields to the UK. For better for worse, richer or poorer, in sickness and health do we say “I do” to the EU or do we leave them at the altar like a jilted bride? te jrpsolutions.com

April/May 2016

COVER STORY

Staying aware of changes in the energy market Antony Badger, commercial director at Haven Power, reflects on the changes set to hit the energy market and the importance of being aware of these as an end user

number of market changes have been announced during the past few months. These have either already been implemented or are expected to take effect in the coming years. The subsequent changes will unsurprisingly impact the make-up of customer bills, and therefore are something all consumers and their suppliers should be preparing for. In last yearâ&#x20AC;&#x2122;s Summer Budget, a review of the business energy efficiency tax landscape was announced, with the objectives aimed at simplifying and improving the effectiveness of the regime. The industry welcomed this review, as encouraging

14 April/May 2016

business energy efficiency is vital in boosting productivity and supporting the UKâ&#x20AC;&#x2122;s environmental objectives, with particular support for simplification of taxation in the business energy landscape. Consumption and taxation The changes introduced were thought to make it easier for customers to understand how they can save money and be more energy efficient, with a much clearer link between consumption and taxation. A major outcome from this review was the removal of the Carbon Reduction Commitment Energy Efficiency scheme (CRC), following the 2018-19 compliance year. The

The change has caused quite a stir in the industry, which is not unexpected

CRC was a carbon emissions reporting and pricing scheme that was obligatory for large UK public and private sector organisations using more than 6,000MWh per year of electricity and with at least one half-hourly meter operating on the half-hourly market. In place of the CRC, the UK will move to the Climate Change Levy (CCL) â&#x20AC;&#x201C; an existing tax on business energy use that is charged at the time of supply and will help to encourage increased energy efficiency and reduced carbon emissions. Charging per unit basis provides increased simplicity for the customer as savings will be made as consumption reduces.

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It is hoped that the newly modified CCL framework will improve incentives to invest in energy efficiency. However, last year it was also announced that businesses on renewable energy would no longer be exempt from the CCL tax. The CCL exemption meant that electricity generated from renewable sources would be exempt from the tax but as of the 1 August last year, this was no longer the case. This presented a huge challenge in efforts to encourage UK businesses to be more sustainable, as it caused the bills of some customers using renewable power to increase. The change has caused quite a stir in the industry, which is not unexpected. A new hurdle As a supplier of renewable power, this development certainly created a new hurdle but one that we have looked to tackle through giving our customers a choice with both the costs and through clear communication around the change. In addition to this market change, others have been put forward, one of which could take effect early next year. In the government’s Autumn Statement for 2015, it was proposed that energy intensive industries (EIIs) become exempt from paying a significant proportion of the costs of the Renewables Obligation (RO) and the Feedin Tariff (FiT). This was in an effort to reduce the impact of renewables policy for EIIs and enable them to maintain a strong competitiveness in international markets. EIIs are currently entitled to cash compensation from the cost of these schemes (ie they pay the costs but receive compensation from the government), but this suggested adjustment would change this to a direct

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or to keep existing generation available on the system – the capacity obligation means they must be available to deliver electricity when needed. CM costs for customers are expected to increase on average by more than £5/ MWh across all volumes over the year due to these changes to the CM. Regulatory changes affect the energy market, and therefore the make-up of customer bills. With increased complications constantly being added to bills it is even more important for suppliers to be transparent with their customers. Suppliers should present any industry alterations and subsequent bill changes to their customers as soon as possible in a conscious effort to raise awareness of changes in the energy market.

exemption at source. Under this exemption, companies operating in sectors such as metal casting, heavy manufacturing and mining will benefit, but non-exempt customers – including domestic consumers – will be expected to pay extra to cover the cost of these exemptions. Upward pressure This cross-subsidy will put further upward pressure on prices for these non-EII customers and its value is to the order of £390m per year. Pending EU State Aid approval, the government’s intention is to introduce this policy change from April next year, at which point, the bills of non-EII customers are expected to increase. Decc also recently published a consultation (to follow last year’s Summer Budget) proposing that the start of the Capacity Market (CM) be brought forward from October 2018 to October 2017. The CM is one of the main building blocks of the UK government’s Electricity Market Reform (EMR) programme that aims to ensure adequate capacity within the electricity system – a system which, in the future, is expected to rely increasingly on intermittent renewable and inflexible nuclear generation. It is thought that early closure of a number of coal power plants this year has spurred Decc into including this proposal to bring the start of the CM forward a year in its published consultation a few months ago. This CM auction is expected to significantly increase costs in the industry as they are recovered from consumers for providing the capacity at times of high system demand. Energy generators that are successful in the auction will benefit from capacity payments in winter 2017-18, a year earlier than planned. This aims to encourage them to invest in energy generation

A lack of industry awareness and preparation ahead of market changes could lead to unanticipated price increases for customers

Looking ahead The industry will continue to experience market changes, some of which may be unexpected for suppliers and challenging to accommodate. However, it is important for suppliers to constantly look ahead in the market in order to prevent avoidable surprises on customer bills. Ultimately, a lack of industry awareness and preparation ahead of market changes could lead to unanticipated price increases for customers. At Haven Power, we are confident in our honest and transparent approach with our customers and place high importance on delivering any changes openly and clearly. We strongly believe that energy companies should always look to offer support around customer bills and do their best to avoid surprises from market changes that will continue to occur in the future. For further information please call Haven Power on 01473 707755 or visit havenpower.com

April/May 2016

GAS & ELECTRICITY

Business energy taxes: the only way is up? Inenco’s chief commercial officer David Cockshott looks at the impact of the Budget on business energy taxes

fter much anticipation, George Osborne delivered the conclusion to the business energy efficiency tax review in his Budget, offering greater simplicity for businesses. It appears that businesses’ pleas for less admin have been answered: in a nutshell, a simplified energy tax and reporting framework will be introduced in April. The Climate Change Levy (CCL) ratio between power and gas will gradually be rebalanced so that it is split equally between the two commodities by 2025. While businesses will have to wait for a second consultation on reporting frameworks to know the future of the Energy Savings Opportunity Scheme (Esos), we do have clarity over energy taxes. But what do the changes to energy taxes and rebalancing of ratios mean for business

Increasing the CCL pot to recover the combined £1.7bn of energy tax revenue will create winners and losers energy professionals? Scrapping the Carbon Reduction Commitment (CRC) in favour of a simpler energy tax was hardly a shock announcement. The CRC has been viewed as an unpopular, admin-intensive scheme and the majority of respondents to Inenco’s survey on the topic confirmed they wanted it to be either reformed or abolished, meaning many participants will be pleased to see the back of it. Those outside the scheme may not be so cheerful,

George Osborne announced a simplified energy tax and reporting framework

16 April/May 2016

however. The energy efficiency review aim was always to be fiscally neutral, meaning any costs removed in one area will have to be borne elsewhere. The CRC brings the Treasury about £900m annually, to be recovered through an increase in CCL. The current CCL pot is roughly £800m but spread across all businesses, including those not currently in the CRC. Increasing the CCL pot to recover the combined £1.7bn of energy tax revenue will create winners and losers. Put simply, the move to increase CCL and collect the bulk of revenue via a direct tax from all businesses means that yet another element of non-commodity charges is on the rise and businesses currently outside the CRC will feel the brunt of it. While those currently paying for both the CCL and CRC will benefit from a net reduction of about £2/MWh in April 2019, those businesses consuming fewer than 6,000 MWh who currently pay about £5.60/MWh in CCL will see that cost more than double once the changes come into force in April 2019. Those industries with Climate Change Agreements (CCAs) were concerned that one outcome of the energy tax review would be the removal of some agreements. While Decc has promised to review all targets to ensure they are still appropriate, industries will be relieved to see that not only will all CCAs be kept in place until 2023, but they will be protected from the rising

CCL cost by an increase in their exemptions. In 2019, exemptions will rise from 90% to 93% on electricity, and from 65% to 78% for gas (to account for Government shifting more CCL costs onto gas). What does that mean for the bottom line? Removing the administrative burden of the CRC will bring some relief to businesses but the proposed reforms will only reduce the multitude of taxes and levies by one. What’s more, when the CCL more than doubles in 2019, it will still be a smaller cost than the Renewable Obligation and will be similar in size to the Contract for Difference levy. The rising costs of network charges combined with the impact of capacity mechanism charges and the steady increase in environmental levies means that from April 2019 some businesses will face non-commodity charges in excess of £90/MWh. For those not currently in the CRC, that would be a staggering £30/MWh increase. Assuming the cost of power returns to the region of £50/ MWh by the end of the decade, the total cost of energy could be as much as £140/MWh. That cost could rise further should capacity mechanism result in more capacity being procured to guarantee security of supply in the medium term. How can businesses mitigate against the impact? Non-commodity costs now make up more than 50% of

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businesses. This could help the energy bill (see graphs to boost a business case for below). The fact that wholesale investment, but with potential costs have fallen to 10-year costs of up to £140/MWh lows has largely offset the by the end of the decade, it rise in this element of the will pay to make efficiency bill, but the overall trajectory a strategic priority whatever for energy costs is clear. carrot is made available. The most important way There are other ways to to protect your business mitigate rising costs. Demand against rising costs is an management has been the absolute reduction in energy buzz word in the consumption, with industry for some the rather obvious time, and for formula being good reason. the less you While direct use, the less taxes and you pay for. Potential total cost environmental The of energy per MWh levies are fixed mandatory costs, network energy audits by the end of the charges (and conducted decade future capacity as part of Esos mechanism charges) means thousands are based on time of use of businesses have in which can be influenced. their possession a whole Shifting load away from peak host of energy efficiency demand periods and using onrecommendations to site generation where available implement. However, to reduce consumption during according to Environment DUoS red bands and Triad Agency figures, just 13% of the periods will have a positive compliant businesses admitted impact on distribution and to having an energy efficiency transmission network charges. target or benchmark for energy The growing role of reduction in place. Targets are businesses in keeping the an essential part of turning Grid balanced is also well energy reduction from ‘nice documented. Participating in to have’ into strategic priority, demand response schemes along with senior level buy-in, by contracting directly with yet just 24% of compliant National Grid or working with organisations stated that a demand aggregator not only board members had discussed minimises network charges the Esos audit results. but also generates additional The government has revenue. It is worth speaking also promised incentives to to an expert about how to find encourage energy efficiency flexibility in your business to specifically for CCL-paying

£140

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The trajectory for costs is clear – what matters now is taking action to mitigate against it

benefit from load management and demand-side response. With the focus on rapidly rising non-commodity costs, businesses would be forgiven for de-prioritising wholesale costs when they have fallen to 10-year lows. Buying energy at the right time, at the right price, is still crucial to achieving a strong performance against budget, but wrapping non-commodity and commodity costs into one risk management strategy increasingly makes sense. That could be via setting wholesale market price target levels that offset particular non-commodity exposures as well as the procurement contract structure itself (such as whether to fix such non-commodity elements upfront or to recognise these as pass-through costs and accrue for them). The chancellor may have delivered businesses the simplicity many have been crying out for but as ever with business energy there are reasons to be cautious as well as cheerful. The trajectory for costs is clear – what matters now is taking action to mitigate against it. Three years may be an awfully long time in politics but less so in energy: to build an effective strategy, implement targets and take action before the April 2019 deadline, it would pay to take action now. te inenco.com

April/May 2016

GAS & ELECTRICITY

EU consultancy network launches German energy consultant ISPEX has launched a European energy consultancy and procurement network that will allow pan-European organisations to access the best local buying and regulatory knowledge, claims CEO Dr Stefan Arnold

he announcement of the ISPEX Network is laudable and will be of use to multinational operators. But what are the implications for buying and managing energy for pan-European organisations in light of a possible Brexit? Firstly tell us about ISPEX? We primary work for companies in Germany, Austria and Switzerland that spend more than Â¤250,000 per annum on energy. Our focus is on reducing costs but also on regulatory compliance. In recent years we have also become technology focused in order to provide detection and monitoring services, expense and billing information. What is the aim of the ISPEX Network? It was natural to grow into neighbouring markets like Austria and Switzerland but it was not as easy to branch out into areas like Benelux, Eastern Europe and the UK. This was not only due to geography but also to the very different markets and regulatory frameworks in those regions. Building satellite offices never seemed an attractive solution as we simply could not provide the resources and standard of services that we would deliver in our own territories. While claiming an â&#x20AC;&#x2DC;officeâ&#x20AC;&#x2122; in another region looks attractive on

18 April/May 2016

We decided that a better and more transparent solution was to find regional partners who have the local resources and technical skills as well as a similar business model

company letterheads or websites it is more often just window dressing. So we decided that a better and more transparent solution was to find regional partners who have the local resources and technical skills as well as a similar business model. In terms of management, clients will often want the contracts managed where the European headquarters are located. Regional partners will report to the local partner, who will then centrally manage the account and report to the client. Additionally, clients will get tailored proposals from all the regional partners to ensure that they are getting the best possible services and results from the network as whole. Our search for a partner in the UK led us to find Pulse Business Energy. It was clear to us it had the technical skills and that it managed large energy budgets but also had a high level of local regulatory knowledge as well. I was pleased to see that it won the Energy Buyer of the Year Award 2015 in the UK, which only reaffirmed our view of it. Like ourselves Pulse has also been technology-led and can provide software solutions in the UK to the level we do in our home territories. After talking to similar partners all over Europe we decided that a network of partners would provide the best possible solution for pan-European clients.

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How does the German energy sector differ from the UK? On meeting with UK energy consultancies we have learned that there are many differences which can be overlooked. In Germany we have more than 1,000 electricity suppliers and more than 800 gas suppliers and many of them operate regionally. Customers have a great deal of choice but it is impossible to speak to all these suppliers when a tender arises. So early on, we developed software that allows us to manage tenders through an online auction process so that all the interested suppliers can all bid at once and see how they rank. In the UK this type of process currently would not work because there is not the same volume of suppliers and subsequently not as much online supplier engagement. In Germany, the non-energy charges are often 70-75% of the overall electricity bill due to our earlier investment in renewables, which now dominates the overall cost. In the UK, the split between non-energy and energy can still be around 50/50. In Germany, the non-energy charges are fixed and all suppliers are aware of what these costs will be in advance of setting the supply contract. I was surprised to learn that in the UK many of the non-charges are calculated retrospectively. As a result, these costs need to be speculated on by suppliers, which lends to a non-energy cost bidding process in the tender that we see companies like Pulse provide for in the UK. Both in Germany and the UK this type of technical knowledge and the methods for taking advantage of it can only be provided by local expertise, resources and contacts. In addition, types of flexible buying contracts available in the UK are also a feature of the UK retail market

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and we are keen to watch this trend in Germany. So what regions does the Network operate in? Late in 2015 we formed the ISPEX Network together with Pulse Business Energy and Powergia as our partners in the UK and Switzerland. Since the Austrian energy market is very similar to the German one, we can provide our services by our German consultants. Now we are talking to prospective partners in Italy, Benelux and Eastern Europe. Within the next year, we want to have partners in every important European deregulated market. What impact do you think a Brexit might have on your Network? A Brexit would bring uncertainty across the energy market: less the European one but more the British market. The media currently spreads news which even predicts a rising number of blackouts in the UK as a result. Firstly, I do not think that leaving the EU will deeply affect British power supply or energy trading in the UK. Current contracts can and will last even without UK being part of the EU. Of course, nobody knows how British energy frameworks would develop outside the EU. European regulation has been responsible for some important issues such as the Esos scheme and the upcoming rollout of smart meters. This uncertainty actually will not have any trigging impact on our Network, but will strengthen it. Growing differences between markets will be responsible for a growing need for a local UK partner and regional partners for British companies working in the EU. te pulsebusinessenergy.co.uk

The heat is on The initial phase of compliance for the Heat Network Regulations is now complete. Did you know about it? The Heat Networks (Metering and Billing) regulations implement the requirements in the Energy Efficiency Directive (EED) with respect to the supply of distributed heat, cooling, hot water and cold water. The EED promotes energy efficiency in the EU to achieve the Commission’s 2020 20% headline target on energy efficiency. It lays down rules to overcome market failures that impede efficiency in the supply and use of energy. This initial stage required data to be gathered and notification of compliance submitted to the National Measurement and Regulation Office (NMRO). The next stage of the regulations requires a feasibility study to be undertaken to establish whether heat meters are required for all final customers utilising your heat networks. We are currently awaiting a revised assessment tool from NMRO and once this is available you will need to act – and quickly. The latest information on the legislation states that if meters are deemed necessary they will need

to be installed by 31 December 2016. When it comes to considering your options for heat metering technology it will be worth taking into account the following: • Depending on your system what the most appropriate type of meter will be • How the meters will be installed • Where the meters will be installed • If heat meters are installed, what will the bill be like for the final customers? A great opportunity can come from this by having a formal assessment of your heat network and looking how they be improved and encourage increased efficiency. A heating assessment can review the operational efficiency, improving or installing insulation and optimising heat controls can significantly improve the performance and reduce operating costs.

BIU offers a feasibility service to determine your status and a full compliance service. Please contact our Energy Management team for more information on sales@biu.com or call 01253 789816 to speak to one of our experts.

GAS & ELECTRICITY

Make the switch to renewable SmartestEnergy claims that buying 100% renewable power makes sound business sense

martestEnergy has Although there are launched a new report very good reasons for urging large firms to switching to renewable switch to renewable power, there remains power. The firm claims it apathy from large firms costs companies less than 1% of their total energy bill to buy 100% renewable. The report, Business and the Renewables Revolution, claims that switching to renewable power is the most costCost to firms of effective their total energy to the report. way for most bill to buy Meanwhile, organisations renewable only around to cut their 15% of I&C carbon footprint, demand is powered yet many FTSE by low carbon electricity. 100 firms and large The report suggests energy industrial and commercial labelling could increase (I&C) outfits remain that percentage threefold disinterested, despite what it during the next four years. argues are strong corporate But if it makes such responsibility benefits. good business sense However, while 74% of the why the apathy? UK’s 100 biggest companies “It is the reason why have set carbon-cutting we’ve written the paper,” targets, only 38% of the FTSE SmartestEnergy’s CEO Robert 100 purchased renewable Groves told The Energyst. “It electricity in 2015, according

our annual bill it was pretty much insignificant – it was cheap,” said sustainability manager John Bailey. “When we produce our carbon figures, we are now talking about the fact that we’re only buying renewable energy. It’s such an easy thing for people to understand.”

shows there are very good reasons to do it; primarily CSR and reducing your carbon footprint but for many it is not high enough on the agenda.” Groves said an ancillary benefit was that companies that buy renewable power often end up more energy efficient, because “it helps build interest among staff in energy”. The University of London is one customer that agrees. “The cost of paying the extra for renewables was so small in comparison to

Price is right? Groves believes that while the price premium for 100% renewable power is currently small, it will reach parity in the not too distant future – and reducing the hassle factor for businesses virtually negates the cost anyway. “Ideally the plethora of reporting requirements will gradually force companies to move towards 100% renewable energy,” he says. “Global corporates may be the first movers now but this will filter down the supply chain. If it is purely a price based decision then companies may choose brown electricity but the difference is marginal.” te smartestenergy.com

Report zero emissions for purchased electricity SSE Business Energy has launched a new 100% renewable energy product, called SSE Green, which allows organisations to report zero emissions for their purchased electricity. SSE Green is aimed at supporting large industrial and commercial operations in the UK to manage their greenhouse gas emissions (GHG). SSE will supply renewable energy matched to Renewable Energy Guarantee of Origins

20 April/May 2016

(Regos), certifying that the purchased electricity has been generated exclusively through a portfolio of wind and hydro assets. From October 2013, it has been mandatory for FTSE 100 companies to report their GHG emissions in their annual reports. The latest amendment to the GHG Protocol Corporate Standard, Scope 2 Guidance was introduced in January 2015 and made changes to the way in which

organisations should report their GHG emissions. Carbon management has therefore become an increasing focus for businesses as part of their wider environmental strategy, and organisations are increasingly demanding information about the sources of their energy. SSE has chosen to exclude biomass and only match Regos from wind and hydro assets with SSE Green. SSE’s director of Business Energy, Terry Tippell, said:

“We are delighted to offer this new contract to business customers which allows them to demonstrate their commitment to renewable and sustainable goals, as well as enhancing their environmental reputation and commitment to customers and other stakeholders. Equally, large organisations can benefit greatly by being able to report zero emissions for their purchased electricity.” te ssebusinessenergy. co.uk/green

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28/04/2016

14:11

There’s no premium to pay when ‘going green’ with Dong Energy Business energy supplier DONG Energy is offering UK business customers the opportunity to choose renewable electricity at no additional premium to traditional ‘brown energy’ sources. The company announced that it will cover additional costs associated with ‘going green’, so that UK businesses can access renewable electricity and achieve their sustainability

We are taking this bold step because we believe that all businesses should have access to renewable electricity supply without paying a premium ambitions without commercial disadvantage. DONG Energy Sales managing director Jeff Whittingham said: “We are taking this bold step because we believe that all businesses should have access to renewable electricity supply without paying a premium.” “If we are to embrace a truly sustainable energy future, we will need to take an integrated and forwardthinking approach to energy. One part of this is putting renewable electricity on an equal footing with traditional ‘brown energy’ sources.” In 2001, the government

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introduced the Climate Change Levy. Businesses that purchased renewable electricity could gain exemption from the tax by purchasing Levy Exemption Certificates (LECs). This drove a high demand for renewable supply in the UK and resulted in renewable electricity selling at a similar or lower price to brown electricity. Last year the government announced that the exemption would be phased out from August 2015. As a result, demand for renewable C electricity has once again become a sustainability M choice for businesses. The Renewable Energy Y Guarantee of Origin (Rego) CM certificates, used as evidence for the source of renewable MY electricity supply, now hold CY a value in the market and renewable electricity is sold CMY at a premium to brown. Businesses leading in K carbon reduction have paid this premium for renewable allowing them to report lower carbon emissions in market-based greenhouse gas (GHG) assessments and therefore receiving the reputational benefits of committing to sustainability. Whittingham added: “We are making this announcement at a time of tight budgets and fierce competition for businesses of all types and sizes who are under growing pressure to reduce carbon emissions and develop a sustainable business. “It is also a time when cost is key and the additional financial burden of buying renewable energy might be difficult for some companies to justify on a commercial basis.” dongenergy.com

Demand Side Response is an

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The 2016 Power Responsive Conference and Exhibition: • Hear from our leading industry Demand Side Response experts • Learn how Demand Side Response is benefitting UK businesses across all sectors • Explore your potential route to market in our exhibition space • Partake in the breakout sessions relevant to the questions you need answering • Come away with the answers to help you take your energy management to the next step Join us at the Grand Connaught Rooms, London on June 16th where together we can learn how you can become more Power Responsive.

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Power Responsive Conference 2016 Sponsored by:

DEMAND-SIDE RESPONSE

National Grid, aggregators and suppliers join forces for DSR Event 2016 A free conference for businesses wishing to turn assets into revenue takes place on 8 September at The Banking Hall in the City of London

he Energyst is launching a new conference focused on demand-side response and flexible power. The DSR Event 2016 takes place in London on 8 September at The Banking Hall in London’s Square Mile. The aim of the conference is to bring more businesses into balancing services and all organisations interested in learning how they can turn assets into revenue should attend. Free to end-users, the conference is sponsored by National Grid, aggregators Kiwi Power, Open Energi and REstore, and business

energy suppliers Dong Energy and SmartestEnergy. Businesses will gain insights into the latest market developments and

how balancing services – and indeed the entire power system – is changing. Expert presentations, panel sessions and end-

Why should you attend? The Demand-Side Response Event is designed to give businesses of all sizes a deeper understanding of generating income from assets by helping to balance the National Grid. If you use power, or have back-up or onsite generation, and want to reduce your overheads and earn revenue from existing assets, you should attend. Because older fossil fuel plants are closing down, and have yet to be replaced, winter power capacity margins are reaching alltime lows. Meanwhile, increasing amounts of intermittent power, and embedded generation, makes it much harder to balance the power system. That has led National Grid to rethink its strategy. It now needs more businesses to reduce power use, or switch to onsite generation instead of asking power stations to ramp up at times of system stress. Equally, in the summer, too much power on the system means it will pay people to use power. Along with broader changes to the energy market, such as more widespread time of use tariffs due to more businesses being brought into half-hourly metering and settlement, there is significant opportunity for businesses to avoid costs and generate revenue. The DSR Event will outline those opportunities – and how to take part. End users can reserve a free ticket at dsrevent.uk

22 April/May 2016

user case studies will provide delegates with both latest information and the opportunity to ask questions about the UK’s shift to a more flexible power system – and the implications for business costs and revenue. Decc will also outline changes to the capacity market, and the opportunities this brings to both businesses and aggregators. All delegates will receive a free copy of The Energyst’s new 2016 Demand Response Report, which will be launched at the conference. Free end-user places are limited to 100 seats and will be allocated on a first-come, first-served basis. There are also a limited number of tickets available to purchase for non-end user delegates. te To find out more and register for your free place, visit www.dsrevent.uk

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Thursday 8th September 2016 / Banking Hall, London, UK

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04/05/2016 18:22

DEMAND-SIDE RESPONSE

Firms urged to join Living Grid Open Energi and Forum for The Future urge large corporates to join demand-side response and storage ‘movement’ in a bid to scale the flexible power market. Brendan Coyne reports

ggregator Open Energi and sustainable development organisation Forum for the Future have launched The Living Grid, a platform to drive uptake of demand-side response and storage. Open Energi clients Aggregate Industries, Sainsbury’s and United Utilities are already on board and the group wants other large companies to join what it is calling a “movement”, rather than a demand response association or lobby group. Tarmac is also a supporter and collectively, the aggregator’s clients supporting The Living Grid represent 39MW. The aim is to bring about 20 large corporates under the banner by 2020, and The Living Grid hopes to represents 200MW of flexible power at that point. That deadline coincides with National Grid’s goal of achieving 30-50% of balancing

This is about critical mass and creating as much positive movement as possible Giles Bristow 24 April/May 2016

Development of the demand-side response market is accelerating

services from demand-side response rather than through power stations by 2020. While Open Energi is the founder technology partner and its clients the founder members, Forum for the Future’s director of programmes Giles Bristow hopes other aggregators will join The Living Grid and further its aims. So far it has had discussions with Tempus Energy and a UK battery storage startup about joining the group. Distribution Network Operators (DNOs) are also welcome to participate, says Bristow. “Having one technology partner is a risk but we genuinely want to bring in more technology providers – they might be on the generation side, might be in storage, might be other demand-side technologies too. The more the merrier – this is about critical mass and creating as much positive movement as possible.” Pushing for change It is “definitely not” a lobby group, says Bristow, “but [a forum for] telling positive stories that this type of technology is now low risk. I think that has been a barrier to

people in the past. People worry about their kit and processes. But the internet of things has shown these are pretty low risk. So it is being part of a movement that is greater than the sum of its parts. “It’s a movement of forwardthinking organisations who want to bring a new approach to the energy system. The future needs to be quite radically different and we want to help prepare the ground for it.” Fees and funding While Forum for the Future is a charity, The Living Grid will be funded by a cut of the revenues that National Grid pays aggregators and participants for balancing services. “At the moment there is no membership fee, [the funding] comes through our contract with Open Energi – and other technology providers in the future – so Open Energi is meeting our management costs,” says Bristow. Some of that money is put into an innovation fund to “further The Living Grid’s aims and to showcase other technologies,” he adds. “We really hope Open Energi is the first of many technology

providers, and that [its clients] are the first of many large corporates to join,” says Bristow. Post COP21, he says, it is an opportunity for the latter to demonstrate their commitment with “actions, rather than hollow words” The move comes as the development of the demandside response market begins to accelerate. National Grid has launched several new schemes, some of which have been over-subscribed. Meanwhile, aggregators are trying to scale their businesses to meet Grid’s ambitious targets, and energy suppliers are launching demand-side products to help them balance renewable portfolios, which have recently become more expensive to manage due to changes in market balancing and settlement rules. At the same time, the government is planning reforms to the capacity market’s transitional arrangements which could mandate a minimum amount of demandside response rather than generation being allocated contracts. It is also proposing to lower the threshold for market entry to 500kW, which would mean more entrants in the aggregator market. The changes come as more and more businesses are moved to half hourly metering and settlement, with potentially significant cost implications. Those changes clear the path for increased take-up of demand-side response and storage, which the recent National Infrastructure Commission report said should be prioritised by government. te livinggrid.net

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DEMAND-SIDE RESPONSE

Creating an upside for UPS A new aggregator is targeting small firms and households with uninterruptible power supplies to scale demand-side response from the ground up. Brendan Coyne reports

new aggregator targeting small businesses and households has secured £545,000 to scale its operations. Rather than target the largest firms, Upside Energy is attempting to build demand-side response from the bottom up. The firm believes small businesses are underserved by current market demand-side response (DSR) programmes and participants. While aggregators have made strides in educating larger businesses around getting paid not to use power or by switching to onsite generation (UPS) are Upside Energy’s when the a good capacity target power system place to start is stretched, scaling DSR. smaller firms make “There are a up the bulk of the market, lot of small businesses according to CEO and with UPS and a lot of large founder Graham Oakes. businesses with multiple “The energy system is small sites. We are talking to very complex. Most small water companies, for example, businesses don’t really know that have pumping stations much about demand response,” and sewerage infrastructure he told The Energyst. all over the place, often “Even large businesses are with instrumentation with aware of STOR (short-term a small UPS attached.” operating reserve, the oldest The firm uses a cloud-based of National Grid’s balancing platform to connect those UPS services) but they don’t tend and monitor them remotely. to be aware of frequency When the power system is response (a newer service tight, it can aggregate the which is more technically systems to help balance the challenging and requires grid. National Grid pays much faster response time but aggregators for such services which pays providers much and Oakes says Upside gives more). So there is still quite a 75% of the revenue back to lot of education to be done.” participating businesses. Alongside households with When there is plenty of solar PV, Oakes thinks the spare capacity, Upside can UK’s hundreds of thousands of recharge the batteries when uninterruptible power supplies electricity is at its cheapest,

10GW

26 April/May 2016

so that businesses are effectively arbitraging power price differentials as well as getting paid a service fee. Monetising maintenance Oakes says smaller businesses – and also larger firms – tend to be risk averse when it comes to using their UPS for anything other than emergency back-up. But he thinks that is the wrong mindset. “From a small business perspective, one of the most important things is not just the revenue we create but actually in the monitoring of the UPS that we do,” says Oakes. “The fact that we are regularly testing the UPS and checking how it responds means that we can spot early on when the battery is degrading.” He says that is a “very valuable service”. “If you have a UPS, your concern is: ‘If someone is using the battery for something else, what happens when

The risk for businesses is that the UPS sits there for three years doing nothing. Then when you need it, you find it has degraded. We can help manage that risk Graham Oakes

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the power goes down and my battery is drained?’ “But the real risk for a small businesses is that the UPS sits there in a corner doing nothing for three years because the grid is very reliable. It is only when you do have a power outage that you find out that the battery has degraded,” he says. “You thought you had an hours’ worth of battery – but it actually dies after 10 minutes. So we can help them manage that risk.” That effectively allows businesses to monetise maintenance regimes as well as assets. But the challenge is convincing people that they are actually making their operations more robust rather than compromising them, says Oakes. Part of that fear of failure has been sown by the UPS manufacturers. Oakes believes they need to start pushing a “more nuanced” message. Fear factor “The risk aversion is there because UPS manufacturers have sold risk and said ‘it is really dangerous out there and you need our kit to address that’. There is a slightly more nuanced message and that is where we want to work with manufacturers and their reseller channels to put out there.” He says the firm’s business model is to work with resellers because there is benefit for all parties. “Through the battery monitoring service we are actually helping them identify where they should be selling battery testing and maintenance services. You should replace batteries every three or four years but a lot of small businesses don’t do that,” says Oakes. “So we are helping the resellers open up some of that maintenance revenue and in return they are helping to explain our service and sell a slightly more complicated message.”

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Growth curve Upside, which was born out of a National Grid competition in 2013 and has received funding from both Decc and Innovate UK as well as the latest £545,000 from ClearlySo, is currently managing about 400kW of load via field pilots, mainly via sub-50kW sites. Next quarter it will launch larger-scale pilots with the aim of entering National Grid’s Firm Frequency Response Bridging scheme (FFR Bridging) in the first quarter of 2017. That requires a 1MW minimum clip. But Oakes is confident the company – with fresh funds under its belt and advisors that include former SSE boss Ian Marchant – can quickly scale. “We have set ourselves aggressive targets. You have got to have 10MW to be a serious player with National Grid and so [our thrust now] is recruiting that capacity.” He says once the challenges around “metering and demonstrating from a large number of sites that you are meeting National Grid’s requirements” have been met, the company may look upstream in terms of business customers. Domestic PV But with the emergence of batteries and smart technologies, the domestic solar PV sector could actually dwarf the non-domestic market, Oakes believes. “There is huge pent-up demand on solar PV. People hate the fact that they have to export it at x pence in the morning and import it at a higher rate in the evening. People want to self-consume. Up until now the economics have not been there. But we are on the cusp. So I think our initial capacity will be [mostly from] small business but the domestic PV side is going to take off quite quickly.” te upsideenergy.co.uk

More than 125 industrial consumers monetise their flexible assets. Why don’t you? The time has come to stop using energy the way you’ve always used it – reevaluate your operations and re-energise your business with Demand Response. It requires no upfront investment, has no negative impact on productivity and results in significant payments from National Grid – a winwin-win (with no catch). Demand Response financially rewards electricity consumers for being flexible as to when they consume or generate energy. Today, REstore partners with over 125 of Europe’s largest industrial consumers from all sectors, such as ArcelorMittal, Sappi and Total, delivering Demand Response without impacting productivity. If you thought it wasn’t right for your business, think again. As an award-winning energy technology company, recognised globally by Platts, Frost & Sullivan, CleanTech Group and European Utility Week, REstore is the only Demand Side Response aggregator delivering dynamic FFR in the open market, which is the highest paying reserve. It’s REstore’s

“REstore is the only aggregator providing dynamic Firm Frequency Response – the most lucrative Demand Response programme” unique patented platform, Flexpond, which connects industrial equipment for short periods (around 5 minutes), without negatively impacting your production output or processes. REstore’s reputation as a trusted partner for automated Demand Response, is recognised by over 125 industrial partners. Why don’t you join them? Learn more about REstore at www.restore.eu or call 0203 608 7937

ENERGY STORAGE

Batteries included: government backs smart grid switch The National Infrastructure Commission has recommended building a smarter grid without delay. The Treasury has backed the plans. Those with flexible assets, particularly batteries, could stand to gain, writes Brendan Coyne

he government has backed recommendations to speed the development of a much smarter power system. The plan is to bring down market barriers for battery storage and demand-side response, which could provide significant revenue gains for operators of mission critical infrastructure. George Osborne’s March Budget gave the green light to the recommendations published a few days earlier by the National Infrastructure Commission. It stated: “The government will implement the commission’s recommendations, and will work with Ofgem to remove regulatory and policy barriers, positioning the UK to become

28 April/May 2016

a world leader in flexibility and smart technologies, including electricity storage.” While all political statements should be viewed with a degree of scepticism, it is clear from National Grid’s market signals that UK energy infrastructure is already headed in that direction. With more intermittent renewable generation and less thermal plant on the system, capacity margins are thin. The disruption of intermittent wind and solar has effected wholesale market power prices and the economics of thermal plant and developers are not rushing to build new ones. National Grid therefore needs more companies to respond to signals and switch to back-up plant or adjust consumption in

order to meet peak demand. Over the coming years it will need many more businesses to sign up to balancing services in order to keep a more weather-dependent and leaner power system stable. Paid twice Battery assets and UPS systems, which provide the fastest response times, will therefore become increasingly valuable. Recent market economics are starting to alter the economics of that type of storage. In the past few months energy suppliers have launched schemes that will effectively subsidise the cost of electricity to those that use power when the wind is blowing. That is because

changes to industry rules for energy suppliers make it much more punitive for them to be out of balance. So-called cash-out changes mean it is now more expensive for them to mismatch generation and supply. That means companies can recharge storage assets at a subsidised rate. They can also get paid to discharge their assets to perform grid balancing services when there is not enough power to meet demand. Contracting assets into both of those types of schemes may prove challenging. But, if possible, would fundamentally change the economics of battery storage, from getting paid once, to getting paid twice. There are also arbitrage

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opportunities for operators able to charge batteries when power prices are cheaper and discharge them when it is more expensive. It is worth noting that analysts predict power prices will become spikier within-day over the next few years. Key priorities In its report, the National Infrastructure Commission outlined key priorities for UK energy infrastructure. It said smart grid development – harnessing battery storage and demand-side response – and better interconnection with the continent would play a crucial role in keeping the grid stable and the lights on. It recommended that regulator Ofgem and policy department Decc lose no time in making the necessary new market rules. Big shift, big bucks The commission noted that the need for grid balancing services “could increase up to 10-fold” as intermittent power replaces baseload plant. It stated that investors were “queuing up” to invest in storage, and that storage would not require subsidy. That is largely because payments for the fastest forms of demand response are likely sufficient incentive for operators to build, own and operate those assets. Those who do not have to build assets, and already have grid connections, will

Making the market Battery assets and UPS systems, which provide the fastest response times, will therefore become increasingly valuable

Decc will consult on the energy storage market this spring with the aim of creating a level playing field. It will form part of a broader consultation on smart energy systems, including demand-side response. Ahead of the consultation, energy minister Andrea Leadsom said the department had already been consulting “behind the scenes” with industry and told the Energy and Climate Change Committee that energy storage was “a top priority” for Decc. therefore have an advantage in the tenders currently being run by National Grid and potentially in future, also by distribution network operators. Given that National Grid’s tender for 200MW of sub-second enhanced frequency response is six times oversubscribed, that advantage could prove crucial. Breaking down barriers The commission recommended a regulatory overhaul of the market to bring more electricity storage capacity to market. Currently, storage is treated is treated as both generation and consumption. That means storage operators are charged twice for using the electricity network. The commission thinks they should be classified as a distinct asset to remove double charging. “This approach ignores the other benefits that storage can play in the electricity system and creates barriers to investment in storage assets,” the report states. “For example, it increases

Prepare for higher bills and price spikes Also in March, Decc said it would bring the capacity market forward a year and proposed rule changes to bring in more demand-side response providers to the market. That’s good news for those with flexible onsite generation and consumption, as they can bid for contracts that will pay them to make available their asset flexibility to cover shortfalls in winter capacity. However, it will add cost to every energy bill as the money paid to those providers appears on bills as a levy, and Decc also published proposals that could have serious implications for use of diesel back-up generators (see news, p7). Meanwhile, the National Infrastructure Commission report contained one ominous line for those that do not, or cannot, consider more flexible power use. “We see a case for sharper allocation of the costs of the capacity market to incentivise consumers to reduce demand at peak times,” it stated.

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costs for storage asset owners by requiring storage to be charged twice for using the electricity network – once as a generator when exporting electricity and again as a consumer when electricity is being taken from the network to be stored. “While storage technologies are clearly making use of the network both as a consumer and producer, charging in this way takes no account of the fact that storage assets are likely to be exporting power at times of peak load, and drawing power at times of peak generation, reducing the stresses faced by the network rather than increasing them.” Storage assets also take a double hit on government levies such as the Contract for Difference scheme under which low carbon and renewable generators are given a guaranteed price for their power. The price of that support is smeared across all electricity bills. The commission said those operating storage assets should not pay that levy when charging, and then have the levy added again when their power is exported. A better approach “would be to charge these levies on the basis of the electricity actually used, reflecting that no storage technology is 100% efficient, rather than on both inflows and outflows. Not only would this be a fairer treatment, creating a level playing field with other technologies, but it would also incentivise more efficient storage technologies,” the report stated. te

April/May 2016

VIEWPOINT

How long is a piece of string? Karthik Suresh, committee member of the UKAEE and a director at Ameresco, discusses the art and science of checking energy savings

y colleagues and I waited for our turn with a length of green, slightly frayed string and a selection of measuring tapes. We were halfway through the second day of a course on measurement and verification delivered by Rajvant Nijjhar and, for the first time, I was literally going to measure a piece of string to understand the statistical principles behind measuring energy savings, such as variance, precision and error. We were studying for the Certified Measurement and Verification Professional (CMVP) qualification, established by the Association of Energy Engineers (AEE) and the Efficiency Valuation Organization (EVO). It is run in the UK by the Energy Services and Technology Association (Esta).

one to draw a conclusion: energy has been saved, or it has not been saved. The project is a success, or it is a failure. Donald J Wheeler, in his excellent book Understanding Variation: The Key to Managing Chaos, says this: “While it is simple and easy to compare one number with another number, such comparisons are limited and weak. They are limited because of the amount of data used and they are weak because both of the numbers are subject to the variation that is inevitably present in real world data.’’ Accountants use flexible budgets to explain variances The accounting profession has the most familiarity with the process of budget setting. At the start of the

IPMVP… helps build confidence that the savings stated in the project proposal will be delivered year, accountants create a budget, called a static budget, based on the information available at the time, such as last year’s production output. At the end of the year, they compare this budget with the actual figures and analyse the variance between items. This can often lead to differences that need to be explained. Why do the actual figures not match the budget?

A flexible budget adjusts the static budget based on the actual level of output. By using this year’s production output in the budget instead of last year’s, the accountant can compare this year’s actual figures with the adjusted budget based on the same production figures. This removes variances related to the amount of production, and allows the accountant to focus on variances that are significant, like a change in the market for the product, or an increase in material costs. Measurement and verification professionals determine savings using the same method but with different terminology The crucial step in a flexible budget, as used by

Energy savings from a project cannot be directly measured The first thing we learned was that energy saving from a project cannot be directly measured. The savings represent a lack of use or an absence of consumption. All you can really measure is the energy use after the project has been implemented and make adjustments. There is often confusion about how much energy has been saved The usual starting point for any calculation of savings is to compare last year’s energy use with this year’s energy use and calculate the difference. One number is likely to be higher than the other, and this leads

30 April/May 2016

Source: Concepts and Options for Determining Energy and Water Savings Volume 1 2012, IPMVP, page 7

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The changing face of commercial energy accountants, is determining what the budget would have been, had they known what they knew at the end of the period about the factors that could affect the budget. Determining what would have been the energy use had the energy saving project not been implemented is the crucial step in applying the IPMVP protocol, as shown in the graph below left. The baseline period is the time period before the energy project, referred to in the industry as an Energy Conservation Measure (ECM), has been installed. Once the ECM is installed, you can measure the actual energy usage during the reporting period. You then determine what the energy use would have been had the ECM not been installed, and the difference between these is the saving, expressed by the IPMVP’s equation: Savings = (baseline period use or demand – reporting period use or demand) ± adjustments What are adjustments? Adjustments account for the difference in conditions between the baseline period and the reporting period. They correspond to the adjustments made to a static budget to create a flexible budget. The IPMVP sets out how these adjustments can be made using statistical techniques to derive relationships between energy use and factors such as weather to create an accurate, complete, conservative, relevant and transparent assessment of the energy savings from the project. The IPMVP takes a professional approach to valuing energy savings The IPMVP is not a prescriptive approach that just tells you how to calculate savings. An M&V plan that adheres to the IPMVP will set out an approach for determining energy savings

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from a project on the basis of measurements before and after the project is implemented. This helps build confidence that the savings stated in the project proposal will be delivered. This is particularly important when the project has been financed by a third party, such as an energy services company (Esco) that receives payments based on guaranteed savings. Internal projects too, however, can benefit from adhering to the principles set out in the IPMVP, by demonstrating that savings are truly being delivered through an energy efficiency programme. EVO has a library of information available for users EVO is a group of volunteers that developed and maintain the International Performance Measurement and Verification Protocol (IPMVP). The IPMVP started life in 1996, sponsored by the US Department of Energy, and in 2002 was transferred to an independent non-profit corporation that aims to help determine energy savings from energy efficiency projects in a consistent and reliable manner. The IPMVP framework has been applied to thousands of projects around the world, and EVO makes much of its material available through its website at http://evoworld.org, including the IPMVP documentation and example M&V plans. In the UK, CMVP training is at http://www.esta.org.uk/ RESOURCES/TRAINING/ te ukaee.org.uk The UKAEE is the UK chapter of the AEE and membership of this fast growing organisation dedicated to supporting energy professionals is currently free. UKAEE provides Esos lead assessor status through the AEE’s internationally recognised Certified Energy Manager (CEM) or Certified Energy Auditor (CEA) qualification

By Danny Parr (above), business improvement manager at ScottishPower At ScottishPower, we’re proud to lead the way in an ever-evolving commercial energy marketplace. For us, it’s about understanding the needs of the sector and the people at the heart of it. Working directly with our Sales Partners, we understand the integral role they play in connecting businesses with the best providers for their needs. That’s why we’re investing in new services, products and innovative technologies to ensure the relationship between business, Sales Partners and energy suppliers remains seamless and straightforward.

Putting you in control ScottishPower is committed to helping our customers and intermediaries navigate and understand the industry. We regularly evaluate and update our commercial energy offering and implement new and innovative technologies to make sure our services are relevant and provide an effective resource in a growing digital landscape. Recent research showed us that having a simple way to monitor, track and progress sales, was something both Sales Partners and customers felt was missing in the commercial energy market. We took this feedback on board

and created the ScottishPower Commercial Energy Portal, tailored to these needs. The portal allows you to view all data, sales and renewals in one place, helping you manage your portfolio needs efficiently and effectively.

Committed to customers We have also launched a dedicated version of the online portal for our customers which gives businesses direct access to their energy consumption, bills and contract information. The portal puts the customer in control, helping them to make adjustments to benefit their business, save time and, most importantly, money. At ScottishPower, we are at our customers’ side every step of the way, both on and offline. Our strong service performance means we have an over 95% satisfaction rate among our customers. This is thanks to our team of commercial energy experts, who are on hand to support you whether you are transitioning to the new P272 requirements or need help assessing your business’ energy consumption. We will be exploring these subjects in more detail in future editions.

For information on the services available for ScottishPower commercial energy customers, please visit: www.scottishpower. co.uk/commercial-business/

VIEWPOINT

Heat networks: You may be in hot water and not know it Other than Esos, Esta’s Andrew Park outlines what else businesses should have notified by December 2015 to avoid risking civil penalties

he same EU Energy Efficiency Directive that brought about Esos also produced regulations that affect far more organisations in the UK than Esos does but that may mistakenly think are out of its scope. Meter manufacturers and some housing associations are fully aware of the regulations but experience suggests there is almost blanket ignorance elsewhere regarding The Heat Network (Metering and Billing) (Amendment) Regulations 2015. The scope of the regulations is very broad and will directly involve numerous operators who least expected to be included. The basic definition is that a heat network exists where A supplies heat to B. So if A operates a boiler house on an industrial estate and provides steam or hot water to B, and or others, then this constitutes a heat network and the regulations apply. In other words, if the principal occupier supplies heat to two or more other users then the regulations apply. However, within a single building where the principal occupier supplies heat to just one other user then there is no heat network and the regulations do not apply. The application of the regulations to residential properties is yet more complex. In this case there is no heat network where cooking, eating and/or sanitary provisions are communal. So a care home where meals are provided and the tenants’ personal quarters are a bedroom only will be out of scope of these regulations whereas a sheltered housing accommodation

32 April/May 2016

block with centralised heating plant would be in scope. Please note these regulations are concerned only with the supply of heat to others; the supply of electricity, gas or other fuels is not in scope. However, the definition of heat does include cooling so the provision of chilled water or refrigeration is covered by the regulations The first requirement was to notify the regulator, the National Measurement & Regulation Office (NMRO), about your heat networks by 31 December 2015. The information required to be notified is relatively straightforward and includes details of the individual submitting the form, the organisation supplying the heating/cooling, the properties that constitute the heat network and if the supply is of heat or cooling. As remarked at the outset of this article, many organisations are likely to be currently non-compliant with these regulations owing to ignorance of their existence. What should I do now? The first task is to audit your organisation to identify any qualifying heat networks that you may have. Then if qualifying heat networks are identified you should register these by notifying the regulator a soon as possible. By 31 December 2016 there is a requirement to either install heat meters or demonstrate that it would be technically infeasible or economically not cost effective to install heat metering. A tool was published by Decc to allow heat providers to evaluate cost effectiveness

If the principal occupier supplies heat to two or more other users then the regulations apply

Conferences Esta will be covering the subject of heat networks at its upcoming u|m|r Energy Regional Conferences in June. Details can be found at umr.esta.org.uk

but this was withdrawn in 2015 when it was found to evaluate provision of metering as non-viable for all networks tested. A new, updated tool is expected to be released by June but this will leave precious little time to carry out evaluations and where indicated install compliant metering. Compliant heat metering may be actual heat meters or heat cost allocators. The latter are not as well known in the UK as they are in the rest of Europe. In principle they measure the output of a radiator over time and use that measurement to allocate to that radiator the correct portion of the overall heat supplied to the network. In any case compliant heat metering must comply with EU standards and legislation. There is a further requirement to charge tenants for the actual heat used where this is feasible. Where measurement takes place it should lead to the issue to the user of a heat account with the charges levied proportional to the heat consumed. It has been possible only to summarise the basic details of the Heat Network Regulations in this short article. More detailed information can be found on the government’s website at gov.uk/guidance/heat-networks If you are affected by these regulations, as many are, but are unsure how to proceed, then it is recommended that you seek professional advice as soon as possible. te Andrew Park is a director of Swan Energy and member of Esta’s Independent Energy Consultant’s Group (IECG) esta.org.uk

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Published 2016

The Heat Report

Download your copy now at theenergyst.com Produced by

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BUILDING CONTROLS

A straightforward approach The control of energy in buildings is generally poor, despite the availability of a range of triedand-tested systems, with guidance perceived to be overcomplicated, explains Andy Lewry

uilding controls, whether standalone units or full building energy management systems (BEMS), are designed to provide a comfortable climate for building occupants while consuming the lowest possible amount of energy. Controls can be used to manage heating, cooling, air-conditioning and lighting systems, blinds, fire and security systems and lifts. They can also be used to collect and display data from meters. Energy information can then be displayed on the BEMS. Having goodquality data about actual energy consumption is the key to achieving an energy-efficient building. Demand-based control is the most energy-efficient approach, which means turning systems off when not needed or, if this cannot be done, then at least turning them down. Energy can account for about 40% of the running costs of a building over its lifetime (Figure 1).

Anything that can be done to help manage this effectively is a benefit to building owners and occupants. Any decision on what to specify should be based on lifecycle costs, not short-term thinking about the initial capital cost. Controls can be applied equally successfully to a new or refurbished building. A growing trend is greater integration, which can best be achieved through products that use open communication protocols such as BACnet, KNX, LON, Modbus and M-Bus. Remote access is also now possible, allowing a facilities manager or service engineer to interrogate the system remotely and diagnose problems. It may even allow for the plant to be switched on or off for special events without the need to be on site. I have previously published a guide, Understanding the choices for building controls, that provides simple explanations of various types of controls, what

Having good-quality data about actual energy consumption is the key to achieving an energy-efficient building 20%

Cost Years

1 to 2

2 to 5

Design and build

Figure 1: The life costs of a building

34 April/May 2016

The pros and cons The process underpinning the various types of controls can be broken down ino the following steps: 1. Understand what controls you already have 2. Determine your business needs 3. Determine the functionality required of the controls 4. Select an appropriate servicing strategy 5. Match these against a class of BS EN 15232 6. Ensure the chosen class has the required functionality Produce a comprehensive specification 7. Ensure the 10 key issues are addressed 8. Engage an expert(s) at the stage where internal capabilities are exceeded; this is not something you can learn as you go along they can do and where and why they can and should be used – the pros and cons – and how to achieve an effective solution in practice (see box). There are 10 key issues to address: 1. Specification breaking – procurement routes and “value engineering” This is normally a cost-cutting exercise with the temptation to cut capital costs. Standalone controls are cheap, in the order of £250 installed, but several will be required. Preprogrammed BEMS have an installed price of about £1,000. However, to fully realise the potential savings from energy efficiency, you probably need

a programmable BEMS, which costs in the range of £3,500 and £5,000 installed. 2. Occupancy patterns – schedules and density Knowledge of how the building is used improves the estimation of potential savings and, following installation, allows commissioning of the controls to fully realise the potential energy savings. These range, for offices, from a potential of 34% for zonal controls to 54% for a fully programmable BEMs. 3. Future proofing – flexibility and upgrades Technology soon becomes

80% (of which up to 50% are energy related) 20 to 40 Operate and maintain, renovate and revitalise

0 to 1 Deconstruct

dated and to ensure that your system does not become redundant it needs to be programmable. A programmable system is likely to be flexible enough to take into account changes in usage and can be upgraded to benefit from technological and software advances. 4. Links to monitoring and targeting (M&T) – optimisation systems Energy management relies on the old adage “you cannot measure it, you cannot manage it”. This means that the control system (ie the BEMS) needs to be linked to the metering, so that all the monitoring and targeting M&T functions can be carried out in the same place, thereby allowing management to be instantaneous. 5. Verification/certification To justify business cases it is increasingly important for the performance of new assets, including control systems, to be verified. A fully integrated system can allow collection and analysis of this data, thus allowing this step to be simple and relatively painless. 6. Commissioning – initial setup and an ongoing process It is essential to understand your business and building(s) when producing a servicing and controls strategy. The next step is to ensure that the controls are installed and commissioned to achieve this strategy. However, it is an unending process to resolve operating problems, improve comfort, optimise energy use and identify retrofits for existing buildings and central plant facilities. 7. Training Training is only as current as the last person trained, so, like commissioning, should be an ongoing process to ensure that facilities staff, the facilities management contractor (if you have one) and other users

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know how to optimise the use of the system. If knowledge is lost, the temptation is to use default systems, which leads to inefficiencies and defeats the object of having a customisable programmable system. 8. Maintenance requirements – planned upgrades This runs alongside ongoing commissioning, requiring the hardware to be monitored and upgraded where appropriate. This is especially true of sensors where the system will still run if they are damaged or have drifted due to old age, but not at optimal performance. The likely result is far higher running costs. 9. Management reporting For energy management to be effective, the data has to be presented in a concise manner and in a form appropriate to the audience. What is required for management of the system will be far more detailed than that required for the financial department to reconcile the bills on a monthly basis. Board reports need to be concise and to highlight any issues. 10 Additional functionality – critical services/alarms When managing services you need to ensure that they are delivering the right amount at the right time. Modern systems can be set up to alert key staff by email when services fail to switch off when expected, use more energy than expected or when communications go down. This minimises risk to the business in terms of uncontrolled usage and possible damage to the asset. te Dr Andy Lewry is a principal consultant at the Building Research Establishment A new briefing note, Energy management and building controls, on which this article is based, is available as a free download at bre.co.uk/energyguidance

VIEWPOINT

Supply and demand: why we need a new energy trilemma Ian Marchant, former head of SSE and of the Energy Institute, argues that there is a need for a demand side trilemma in addition to the supply conundrum

he biggest energy policy issue facing us is not the so-called energy trilemma but the various perspectives and drivers of the demand and supply of energy. The demand side involves decisions by millions of different people and businesses all over the country, whereas there are probably only 100 or so companies involved in the supply side. The scale of decision is also different, ranging from hundreds of pounds to hundreds of millions. For all these reasons, and because supply side energy assets are interesting and give good photo opportunities, it dominates the policy agenda. The three issues of affordability, security of supply and sustainability are a useful framework for a policy discussion but it is invariably a supply side discussion with occasional lip service to the demand side. Electricity policy debates quickly descend into who should build what power station, using what technology, where and when. The supply side trilemma is important, but it is only half the story. We need a demand side trilemma. Balancing act I think that policy on energy demand needs to balance three forces â&#x20AC;&#x201C; flexibility, meeting of needs and affordability. Our current energy system is actually remarkably flexible but in an oddly constrained way. The constraint is

36 April/May 2016

The supply side addresses the unit cost of energy but the demand side looks at unit consumption. Energy efficiency is a key part of making energy affordable but we must not simply be wasting energy more efficiently

economic in that the cost of providing that flexibility varies enormously over the day and the year â&#x20AC;&#x201C; but we are completely unaware of that variable cost as our tariff is fixed regardless. As users, we want to be able to control our central heating and lights from wherever we are. As businesses and consumers, we increasingly want to be able to match our own generation with our own demand. The electricity industry also wants to increase flexibility and control to manage its networks more efficiently. This is why network operators are exploring smart grids and the generation and supply side of the industry want to move to prices that vary over time to reflect their costs. All these three sources of flexibility can pull in different directions. The supply side addresses the unit cost of energy but the demand side looks at unit consumption. Energy efficiency is a key part of making energy affordable but we must not simply be wasting energy more efficiently. It is no good if my car has good fuel efficiency if

Energy Systems conference The Energy Institute is hosting its biannual Energy Systems conference on 14â&#x20AC;&#x201C;15 June in London. This event will bring together industry, researchers, policymakers, investors and academia to explore the most suitable and efficient ways to design, finance and build a better and more sustainable energy system. For more information, visit energysystemsconference.com

I drive it when I should be video conferencing. The two energy trilemmas need to sit alongside each other in the policy debate and be given equal weight. We also need to recognise that the two sides of the energy industry are fully interconnected and when a lever is pulled on one side, it has consequences on the other. Policymakers, and those who seek to influence them, need to be aware of this full picture as an over aggressive focus on one trilemma or a point on a trilemma will only be counterproductive and potentially damaging. Remember the demand side The biggest shift we need is to remember the demand side. On the supply side, policymakers and indeed engineers often like big solutions like nuclear/carbon capture etc. This centralised supply side thinking needs to change. We have seen the democratisation of intelligence in the computer industry from large mainframes through to PCs and smartphones. The same needs to happen in energy and I believe that a new demand trilemma of flexibility, meeting of needs and affordability should help to achieve that refocus. te Ian Marchant was EI president from June 2013 to June 2015. He was previously chief executive at SSE. He is currently chairman of Aberdeen-based oil services company Wood Group and chief executive of Dunelm Energy energyinst.org

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EVENT NEWS

edie Live 2016 launches Registration is now open for energy, sustainability and resource efficiency professionals. The organiser says visitors can expect a host of new features, networking events and free access to CPD-certified seminars as well as the high-level edie Leaders Conference

ormerly known as Sustainability Live, edie Live 2016 returns to the NEC Birmingham on 17-18 May. Organiser Faverhsam House promises it will connect people with the information, ideas and suppliers they need to make their business more sustainable. CPD-accredited seminars and theatre The edie Live 2016 exhibition and conference will feature free-to-attend practical, CPDaccredited seminar theatres. Resource Efficiency Theatre Business continuity is fundamentally reliant on the resources the organisation consumes – from the energy and water needed to keep basic operations running to minimising waste outputs, raw materials use to and increasingly more complex and vulnerable supply chains. Reduction strategies and alternative models are needed for businesses of all sizes, including practical, applicable guidance about implementing those new models such as closed loop systems and circular thinking. The organiser claims this theatre is a must-attend for any business, small or large, seeking to reduce their consumption, minimise their waste outputs and mitigate risk in their supply chains. Energy Efficiency Theatre Energy is still the number one resource priority for the majority of sustainability and energy managers. Reducing

38 April/May 2016

consumption, and the associated cost and carbon, is one of the biggest wins both from an environmental and economic point of view. However, ranging from procurement to plug, the energy management role is a diverse and complicated one. Taking delegates through legislative compliance to smashing targets, this theatre addresses all the major concerns of the energy manager. From reducing consumption, to buying better to generating your own, it examines the key drivers, the best initiatives to enable better business decisions. Onsite Solutions Theatre From onsite energy management systems to rainwater harvesting and greywater recycling, recovering waste heat to onsite energy generation, the technology solutions available are vast. However, deciding where to start and selecting the right focus for your business can be an involved and confusing process. This theatre examines the options

open to sustainability, energy and facilities managers responsible for energy and water on their sites. Delegates will benefit from expert case studies drawn from across business sectors. From the UK’s largest onsite solar installations, to smallscale, single site solutions, hear from those sustainability professionals that have already done the work and are making it happen for their business.

edie Leaders Conference The strategic conference will help delegates understand the broader risks and opportunities for driving profit, innovation and brand value through sustainability leadership. Leaders theatre session titles include ‘Inside the mind of the finance director’ and ‘Making it happen: first steps to a new business model’. Meanwhile, SMEs that have developed green technologies, systems or business models are being invited to enter the Innovation competition, which is designed to promote and support innovation in the sustainability space. Industry imperatives On the edie Live show floors, Topic Trails offers free information-packed maps to guide visitors to the exhibitors who can answer specific questions and demonstrate their products and technologies. te

Who should attend? If managing energy, resources or sustainability forms part of your remit, then you should attend edie Live, says organiser Faversham House, including those involved in energy management, facilities management, environmental management, sustainability management, CSR management, waste management, renewables management, health and safety management, SHE management, procurement and project management. Registering for your free edie Live 2016 entry badge gives you unlimited access to: • Three practical seminar theatres – energy efficiency, resource efficiency and onsite solutions • The edie Sustainability Leaders keynote conference • Professional advice clinics • Innovation Zone and technology showcases • Hundreds of new products and services Register for your free edie Live entry badge at edielive.net

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THE HEAT REPORT

The heat is on With 2020 four years away, the energy secretary has admitted decarbonisation of heat is behind schedule. Money is tight, the energy market is in flux, oil and gas are cheap. Against that background, what are the problems and where are potential paths to progress?

s the first set of decarbonisation targets loom, potential Brexit aside, the heat is literally on. The drive to decarbonise the power sector means electricity looks set to deliver its share. The problem is that, apart from guaranteed contracts already negotiated by government and certain power companies, the billions of pounds which drove the renewables boom appear to have dried up. But heat is actually responsible for a far greater percentage of energy use and carbon emissions and is arguably much harder to decarbonise. So which policies, actions and incentives can deliver both progress and best bang for remaining buck? Wasted heat Tim Rotheray, head of the Association for Decentralised Energy, says waste heat must be better used and incentivised. He thinks subsidy rules

40 April/May 2016

around additionality should be relaxed so that projects can become economically viable by amalgamating all available support. Rotheray also believes local authorities must be given more resource to decarbonise heat, and users more say in decision-making. Heat “by definition is local”, he says. The only way to decarbonise it “is to design the policy framework so that it works for the user”. The European Commission plans to give heat a major push this year and will simultaneously review the Renewable Energy Directive, under which waste heat from non-renewable sources cannot receive subsidy. Whether or not rules change, some may reasonably argue that subsidy is unsustainable. Others argue that without sufficiently attractive incentive, the money to decarbonise heat will remain wherever the returns are higher.

Heat by definition is local. The only way to decarbonise it is to design the policy framework so that it works for the user Tim Rotheray

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Heat networks versus Hinkley Heat networks are one such technology that divides opinion. Now a significant policy focus, with government pledging cash to support their development, they are seen as investible infrastructure than can deliver carbon reductions at scale. However, some think they are too disruptive, take too long and are too expensive. Heat networks would require subsidy of 75p/kW hour to create the seven-year payback periods sought by investors, Wales & West Utilities director of asset management Chris Clarke recently told the Energy & Climate Change Committee. Such subsidy would make even Hinkley C look cheap and the ADE’s Rotheray labelled such conclusions “absurd”, given heat networks, like Wales & West’s gas distribution network, are multi-decade assets. Wales & West’s investors have ample appetite for those type of assets, he points out. Dr Tanja Groth, decentralised energy manager at The Carbon Trust, agreed. “Most of the unsubsidised schemes that we work on have payback periods of 10-15 years, and in some cases lower than this,” she wrote in response. Greater constraints, she said, include “the general lack of information and awareness about district heating and its potential advantages in terms of cost and carbon savings, lack of clarity around local authority planning policy power to support district heating development and constraints on access to lowinterest capital financing.” Hurdle rates Government has recognised the challenges faced by cashconstrained local authorities and last year made £300m available to help develop up to 200 heat networks. That’s a big help, according to district heating and cooling specialist Vital Energi. But the firm takes the view that rates

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Small-scale CHP, storage and hybrid systems

Investment has to take a long view… you need to be in it for 25 years, not only to make your money back but also to make sense of the asset Jenny Curtis

“Smal-scale CHP is currently only cost-effective if all electricity can be used on site but this often creates restrictions on output if the heat and electrical loads do not coincide,” says Sustain’s Chris Jennings. “Being able to have small-scale electrical agreements with private clients over the network would help with the viability of these systems.” While energy storage is a “vital support” for many renewable heat technologies, it “will not succeed in the short term without support to reduce costs”, says Jennings. He believes hybrid gas/heat pump/solar systems “look appropriate for mid-term decarbonisation as system integration can be more flexible and risks are lower, but the technology is still currently not cost competitive”. of return are currently too low for many would-be investors. “The recent funding has allowed local authorities to prepare detailed business cases to prove the viability of potential projects,” says Vital Energi business development manager, Brendan Clancy. “What we need now is the funding to take these projects from feasibility to delivery and this sets a new challenge. Companies such as ours are being invited to bring private investment into the projects. But unfortunately the rate of return on our investments can be relative low, in some cases as low as 4-8%.” At those rates, he says, “the projects are not financially viable for us to invest”. Infrastructure investors,

on the other hand, find return rates acceptable. Numbers game “These projects will probably not attract traditional bank debt at the moment, but they do work for a longerterm infrastructure-type play,” says Jenny Curtis, a director at specialist investor and fund manager Amber Infrastructure. “I don’t think [the need for a seven year payback] is true at all.” Investment has to take a long view, says Curtis, “because heat networks are about a long-term partnership with the sponsoring body and they require long term-asset management. So you need to be in it for 25 years, not only to »

To create the payback periods sought by investors, heat networks would need a subsidy ‘that would make Hinkley C look cheap’

April/May 2016

THE HEAT REPORT make your money back but also to make sense of the asset.” Curtis thinks the real challenge is robust modelling and scoping. Numbers and data, even at a basic level, can be “pretty ropey”, she says. But a district heating project that comes to potential backers with full, robust background data can go “a huge way” towards successful delivery. More subsidy or less? While some argue for higher, more targeted heat subsidy, Curtis says infrastructure investors do not base business cases on incentives. “We are always very wary of subsidy schemes because they are very open to political risk,” she says. “We haven’t invested heavily in any of those subsidybased projects. We would rather do the schemes that stack up on their own two feet or to be working with local authority covenants that we know will be there for the long term.” End-users can be equally wary. James Tiernan, energy and environment manager at Unite Students, looks

If projects manage to get support it is then almost like a bonus. In which case you don’t need it anyway because you have already had to write a viable business case. So it is almost irrelevant James Tiernan 42 April/May 2016

after 136 UK properties. He decided against applying for Eco funding for a heat network project not just due to hoops and hurdles but because of the increased risk. “If you predicate your business case on the funding, and you don’t actually get it, it is just too high a risk. Plus you have to have bridging funds in the interim anyway because [that Eco funding] is retrospectively applied.” If projects manage to get support “it is then almost like a bonus,” says Tiernan. “In which case you don’t need it anyway because you have already had to write a viable business case. So it is almost irrelevant. The way we see it, something is cost-effective and viable, or it is not. You have to build a business case that stands on its own two feet.” But others think that existing support schemes could make a big difference if properly directed. Better allocation? In the domestic market “most financial instruments don’t work,” says Andy Lewry, principal consultant at the Building Research Establishment’s sustainable energy team. In both the domestic and non-domestic market, “insulation is a much bigger issue”. The problem with support in the non-domestic sector, says Lewry, is that while the Enhanced Capital

Improving operations and maintenance may be the most costeffective measure per tonne of carbon reduction Chris Jennings

Allowance (ECA) scheme is “a good idea, it doesn’t support fabric measures”. He says a cynic may argue that is because insulation is not photogenic. “ECAs don’t support insulation because it is not plant and machinery. Why isn’t there a mechanism for improving the fabric first? Because it is not sexy and it doesn’t provide a photoshoot.” Windows and roofs may not be sexy, says Lewry, “but surely there should be something alongside the ECA that provides incentive for building fabric?” Adjusting schemes such as the RHI to prevent abuse would also ensure the available pot goes further, says Chris Jennings, strategic development manager at energy and carbon consultancy Sustain. Biomass boilers, he says are often “inappropriately sized to maximise income from the RHI and not to be the most efficient installation.” Proper regulation of operation and maintenance of assets is also absent, he believes. “Improving operations and maintenance may be the most cost-effective measure per tonne of carbon reduction,” says Jennings. “Better procurement practices to hold an operations and maintenance operator to efficiency performance targets would help.” Others think policymakers move too slowly and risk paying over the odds for technological losers and that manufacturers

Immediate heat challenges Heat Network (Metering and Billing) regulations pose one of the most pressing challenges to anyone that supplies and charges for heating, cooling and hot water. District heating and communal heat networks fall under the scope of the regulations, which are part of the EU Energy Efficiency Directive, and are intended to make users more energy conscious by making them more aware of consumption. It means heat suppliers, such as commercial landlords and local authorities, must install

meters for each final customer unless they can prove it is not viable to do so. That is no small undertaking and the job is made harder because precisely what constitutes technical and financial viability is under review, and will not be consulted upon until summer. It is therefore likely that the original meter installation deadline of 31 December 2016 will need to be pushed back, although some suppliers will have to install meters regardless of any changes.

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Which technologies are readers investing in? A total of 81 people completed the survey for the heat report across sectors spanning manufacturing, health, local government, central government, leisure and retail. Respondents also included consultants working across multiple sectors. About 50 respondents specified which technologies they were deploying or considering. Of those, 44% are assessing or deploying more than one type. A handful of others said they were

should also step-up. Former energy trader Toby Costin once ran the supply side of three of RWE’s power stations but now runs Social Power Partnerships. He accepts the requirement for due diligence on technology support, but is frustrated at the time it takes to make decisions. “Government has got to fast track technology quicker,” says Costin. “It always seems

Government has got to fast track technology quicker. It always seems to be a year or two behind what the commercial people are looking at. We need a way of speeding up that process Toby Costin theenergyst.com

assessing all options or that choices were dependent on client suitability. By volume, survey data shows that they are most interested in heatpumps, with 19 respondents stating they are either considering deployment or are deploying the technology, most of which were air-source where specified. Combined heat and power was the next most popular technology, cited by 16 respondents, followed closely by biomass (15).

to be a year or two behind what the commercial people are looking at. We need a way of speeding up that process.” Costin is trialing infrared heating panels within electrically-heated social housing schemes and believes they could make drastic efficiency gains. Along with nanotechnology insulation for walls and windows, he thinks such CE-marked technologies should be supported “because it will halve the amount of work that needs to be done”. “We need to be faster than we are,” says Costin. “Not two-year deliberations.” But government can’t be expected to do everything and Costin says manufacturers must also do their bit. He questions why heat pumps in particular are so expensive, given “this is not a particular difficult technology”. Solar thermal and heat storage While electricity storage appears to be making progress towards commercialisation, thermal storage appears to have been left out in the cold. But it would not take much to prove commercial viability, according to Chris Sansom, associate professor of precision engineering at Cranfield University. Sansom says solar thermal panels have been similarly overshadowed by their PV counterparts, “but there is enough energy falling on 6,7,8 square meters of roof panels

Respondents are also either deploying or investigating: waste heat recovery (4); condensing boilers (3); solar (3)*; solar thermal (3); heat networks (2); BMS/controls (2); energy from waste (2); infrared panels (1); geothermal heat (1); fuel cells; nanopartical technology (1). *As responses to this question were open-ended it may be that solar actually refers to solar thermal, more commonly used than PV for heat.

Once you build a demonstrator and show people that it works in reality, the commercial guys all come in Chris Sansom

Published 2016

The Heat Report

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to provide heat and hot water [for households] all year round,” he says. “That is fact.” Storing solar heat is the challenge. Sansom is working on a solution that uses Epsom salts as a seasonal heat store (ie for four to six months). He is hoping to secure funding for a commercial demonstrator with a housebuilder to prove it works “at the three or four house level”. “We are not doing basic research any more. We are building this system to serve several houses. And once you build a demonstrator and show people that it works in reality, the commercial guys all come in.” Sansom thinks a tightly directed fund from Decc or Innovate UK for applied research “with a company-led commercial plan at the end of it as part of the call” would cost no more than “a few hundred thousand pounds” or “low millions” to fund several projects. “That is the stage we are at,” he says. “It really isn’t that far away.” te

Free report This article forms part of The Energyst’s Heat Report, which surveyed attitudes to heating and decardonisation. Download your copy of The Heat Report 2016 supported by Andrews Water Heaters, Potterton Commercial, Remeha Commercial and SenerTec at theenergyst.com

April/May 2016

HVAC

A hybrid approach to heat Often it is not just individual components of a heating and hot water system that are important; a combination of products working together can also greatly increase efficiency. Here Chris Meir, sales director at Andrews Water Heaters, explains why installing a water heater alongside other low carbon technologies can make sense

ontributing 38% of the nation’s carbon emissions, the commercial sector has a significant role to play in meeting UK carbon reduction commitments. Heating and hot water in particular can account for a considerable amount of an organisation’s energy use, so it is, of course, essential that the system specified is as efficient as possible to achieve carbon reduction targets. Specifiers are now turning to alternative methods to improve a building’s green credentials, with hybrid systems quickly becoming a popular choice – particularly where solar thermal and combined heat and power

(CHP) have been used to great effect as the lead heat source. Solar Pre-heating direct-fired water heaters (pictured below) using solar thermal energy significantly reduces the energy consumption of the appliances while guaranteeing a reliable hot water supply. In the UK, commercial solar thermal systems are able to supply around 30 to 40% of the annual hot water load, known as the solar fraction (SF). In summer months, well-designed solar thermal systems could supply almost all of the hot water demand, whereas in winter the SF will drop to around 20% due to the lower solar irradiation.

Commercial solar thermal solutions use either glazed flat plates or evacuated tubes to harness solar energy. These easily installed, roofmounted solar collectors capture energy from solar irradiation, including infrared and ultraviolet rays, so even on a cloudy day solar energy can used be to support the production of hot water. The heat absorbed by the collectors is typically passed into a transfer fluid, which is then pumped through a coil, heating the stored water. While there is clearly more benefit in the summer, solar thermal systems can be used to reduce a building’s carbon footprint all year round, particularly with

UK power generators emit more heat through their cooling towers than the country’s entire demand for gas-fired heating evacuated tubes, which are considered more efficient. Solar thermal systems work in tandem with directfired water heaters, with the latter acting as a failsafe to ensure that there is no break in hot water delivery and that the water is heated to the correct temperature. Further savings can be made by choosing manufacturers that offer mounting frames for quick and easy installation of the solar collectors, minimising disruption on site and lowering labour costs. CHP CHP has an important role to play in improving the efficiency of UK buildings, particularly those with high and continuous heating loads. Savings are made from electricity being produced by CHP using natural gas rather than purchasing electricity from the grid, plus the generation of heat. Compared with power produced by CHP, electricity from the grid is subject to transmission losses, and costs

44 April/May 2016

Sener-Tec CHP units integrated with an Andrews Water Heaters systems three or four times more than that produced onsite.* CHP makes use of the ‘waste’ heat from the generation process that would otherwise be lost, capturing and using valuable heat onsite. UK power generators emit more heat through their cooling towers than the country’s entire demand for gas-fired heating. By using waste heat, CHP plants can reach efficiency ratings in excess of 80%. Compared with the efficiency of gas power stations, which in the UK range between 49% and 52%, CHP can be approximately 30% more efficient than traditional heating plant electricity.** When it comes to working alongside water heaters in a hybrid system, CHP units are effectively designated as the lead heat source, providing pre-heated water to the water heaters via storage or buffer cylinders. Meanwhile, the CHP system generates a steady supply of electricity, which is used inside the building. Just as with any CHP system, sizing and designing the system to suit the building is essential to get the most out of this highly effective carbon saving technology. Knowledge and expertise The benefits of integrating low carbon technologies into

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a water heating system are clear. However, as with all sophisticated technology, it is advisable to work with the experts in order to maximise energy and carbon savings. Where possible, it is beneficial to source all components from the same experienced manufacturer. For example, Andrews Water Heaters is part of Baxi Commercial, which also includes CHP expert, SenerTec – this means they will have knowledge as a group about the products and will understand how best to combine them – resulting in better design and best practice installation. Manufacturers should provide support throughout the project – from the initial site visit to the postinstallation assessment and final commissioning stage, as well as during the servicing schedule which is particularly important for CHP. te andrewswaterheaters.co.uk. * The average cost of electricity from the grid is 14p per kWh. However, the gas used to generate electricity on site costs an average of just 4p per kWh (www.energysavingtrust. org.uk/domestic/content/ our-calculations) ** http://www.theade. co.uk/what-is-combinedheat-and-power_15.html

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HVAC

The next word in boiler design Fulton is launching what it claims is the most radical change to boilers in nearly 70 years

n the year that sees the company celebrate 50 years of UK manufacturing, Fulton is launching its latest heat transfer solution, claiming that the next-generation SRT Series is the most radical change to vertical steam boiler design for nearly 70 years. By adopting a systems engineering approach to design and using its own ‘PURE’ technology, Fulton’s SRT Series challenges the heat transfer and mechanical design principles of traditional vertical steam boilers. With more than 30 worldwide patents pending, the new vertical boiler’s spiral-rib tubeless design enabled Fulton to create a compact boiler with the industry’s smallest footprint. In fact, compared with the equivalent 30hp model from the company’s J Series, the SRT Series is 40% smaller. Using a combination of in-house modelling with computational fluid dynamics and finite element analysis (pictured), the ‘PURE Optimised’ design of the SRT Series makes the new

Fulton’s SRT Series challenges the heat transfer and mechanical design principles of traditional vertical steam boilers

boiler durable and reliable in operation; and with up to 6:1 turndown and featuring a fully-modulating burner, the SRT’s performance is 84.5% Gross (93.5% Net) thermal efficiency and 99.5% steam quality from a fully-water-backed design with no refractory. The SRT Series features patented, self-compensating stress relief architecture that virtually removes longitudinal stress and deflection absorption. What’s more, to comply with anticipated EU regulations, the boiler’s combustion technology

has also been completely reconfigured, with the mesh burner and furnace designed as a single component, resulting in ultra-low NOx emissions of less than 40mg/kWh. Fulton has further reason to celebrate, as 2016 sees the company celebrate 50 years of UK manufacturing, with the Bristol-based facility now an important design and manufacturing base in Fulton’s global network, which includes production facilities in the US and China. Fulton, sales and marketing manager Doug Howarth explains that Fulton

concentrated on steam boiler manufacturing for many years but the company is now a major solutions-based provider specialising in fully-packaged, ready-to-ship steam, hot water and thermal fluid heat transfer systems. Howarth says: “This will be quite a year for Fulton. Not only are we celebrating 50 years of manufacturing in the UK but we’re also launching a great new heat transfer solution that we believe to be the most radical change in steam boiler design since we pioneered the vertical tubeless boiler in 1949.” te fulton.co.uk

Go Overboard with retrofit underfloor heating Maincor has introduced a new system for retrofit underfloor heating applications. The Overboard system is quick and easy to install, offering an energy efficient solution and a comfortable internal environment for building occupiers. The underfloor heating pipes (12mm multi-layer composite pipe) are laid within the 18mm thick prerouted Overboard panels offering a low profile solution which lends itself to situations where minimal floor

46 April/May 2016

height adjustments are desired. This makes the Overboard system suitable for virtually any property desiring UFH with its indoor comfort benefits, lower heating bills and reduced CO2 emissions. Overboard is installed directly over existing floor surfaces without the need to disturb floorboards etc. The system is a dry alternative to wet screed systems, therefore cutting down time on site and benefitting the build programme.

The result is a system that is quick to install with minimised disruption to the building occupiers during the installation. The Overboard panel installation is made up exclusively of dense gypsum fibre boards, which allow the heat to spread effectively across the entire area. The system does not use any plastic panels, meaning that 100% of the floor surface is providing a high heat output, resulting in greater comfort and efficiency. te maincor.co.uk

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HVAC

Waste not, want not The most efficient way to harness waste heat is to reuse it for space heating or hot water. However, if this is not possible, why not convert it into electricity instead? Tim McManan-Smith caught up with Heatcatcher’s CEO Darren Bryant to find out more

f you have waste heat what are the options to recover it? Initially you have to ascertain what grade of heat and how much. “Firstly you would preheat a process. Often this has been done already,” says Heatcatcher CEO Darren Bryant. “With lower grade heat; space heating or cooling is effective. You can sell it ‘over the fence’ to a district heat network or a neighbour. “However, there can be lengthy contractual difficulties here. If these aren’t options, then turning it into electricity is a great way to make useful low carbon energy out of what was waste.” Large potential Bryant, who’s firm converts waste heat into electricity, says there is a massive market in UK and one that is currently underserved. It’s potentially so large that Bryant “can see heat recovery engineers becoming a trade within the energy industry.” Successful projects require a turnkey system designed to operate with minimal operational cost and maximum financial return. “We conduct the full evaluation of the potential for heat recovery at the site,” adds Bryant. Heatcatcher’s service starts with an initial proposal, to feasibility study and includes full design specification, project management, installation, commissioning and the lifetime maintenance of the system. The firm’s Waste Heat to Power Forecasting model uses process performance data. From this the customers’

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Steetley Dolomite’s plant in Brighton – rotary kilns are a prime target for this type of technology

The plant fitted at Steetley Dolomite recovers 4MW of thermal power, and converts it to 0.5 MW of cheap, lowcarbon electrical power

financial and environmental benefits are determined against the investment cost of the Heatcatcher system. It is not all plain sailing at present though, says Bryant. “The recent exemptions announced for energy-intensive industries from renewable policy costs such as the renewable obligation (RO), and Feed-in Tariffs (FiTs) has impacted the implementation of energy efficient technology in these sectors,” says Bryant. “These exemptions are not linked to any energy efficiency measures to qualify. This is a massive missed opportunity. We’ve had one client not going ahead [with a waste heat recovery programme]because the cost of electricity went from over 7.3p/kWh to under 6p/ kWh [with the exemption]”.

The technology explained Heatcatcher designs, builds and operates waste heat recovery systems integrating organic rankine cycle (ORC) technology into renewable heat sources, industrial kilns and furnaces. The organic rankine cycle generator is capable of converting waste heat temperatures as low as 85°C into electricity. Waste heat from heat intensive industrial processes can recovered from: • High temperature hot water above 85°C • Saturated steam above 6 bar • Exhaust gas above 130°C. These sources of waste heat are fitted with a heat exchanger designed for the application. The heat exchanger has a working

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fluid pumped through to build up the pressure to evaporate the liquid to a gas which is then passed through a rotary expander coupled to the alternator to generate low carbon electricity. After expansion the working fluid is then condensed back to a liquid to be pumped back through the heat exchanger to repeat as a continuous closed loop process. For Steetley Dolomite (see case study, right), the plant fitted with the system recovers 4MW of thermal power, and converts it to 0.5 MW of cheap, low-carbon electrical power. This gross efficiency figure is dependent on the temperature of the waste heat. The range of Gross Electrical Efficiency for ORCs can range from a maximum of 25% above temperatures of 300°C down to 7% at 80°C.

Case study Heatcatcher completed a waste heat to power system for lime and cement manufacture Steetley Dolomite in Brighton delivering a £1.3m generator contract. The system results in 25% improvement in electrical efficiency, according to Heatcatcher. Early data indicates that it can be expected to generate net power of around 3,000MWh annually, equivalent to 7,500 hours of carbon-free electricity. In total, CO2 output will be reduced by 1,600 tonnes per year. “The project offers an attractive return on investment, when you consider the £1.3m investment against purchasing 3,000MWh per year of electricity from the grid over the next 10 to 15 years,” says Steetley Dolomite managing director John Carlill.

ORC technology ORC technology has been around since the 1960’s, and is based on several well-known and tested technologies. The majority of electricity produced worldwide is generated using the Rankine Cycle, typically a (water) steam generator. The ‘Organic’ term refers to the fluid used in the cycle which is typically an

organic-based working fluid which evaporates at lower temperatures than water. The advantage of using working fluids with lower evaporation temperatures is that heat can be recovered and passed through the expander of an ORC at much lower temperatures. Current technology available can recover hot water temperatures as low as 85°C to generate electricity.

The operation of the ORC plant is fully automatic in normal operating conditions as well as in shut down procedures without any need of supervision personnel. In case of faulty conditions, the ORC plant will be switched off automatically and separated from the thermal oil or hot water circuit and from the electrical grid. te heatcatcher.com

Our eQ Prime Air handling Unit is ’Best in Class’ with straightforward and simple plug and play, *80% energy recovery which results in low SFPs (1,5 kw/m3/s), as a solution you can’t go wrong. • Reducing your CO2 • *80%+ efficiency • Sorption rotors to maximise cooling recovery • High efficiency PM motors • Eco Design 2016 & 2018 compliant • Integrated controls • Plug & Play installation • Short delivery times • High efficiency counterflow heat exchangers • Eurovent certified

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01/03/2016 10:12

April/May 2016

HVAC Hoval’s ServeLine delivers low energy data centre cooling Hoval says its ServeLine system provides secure cooling for data centres with extremely high energy efficiency – avoiding the need for mechanical cooling for about 97% of overall operating time in accordance with ASHRAE TC9.9 (Data Center Networking Equipment – Issues and Best Practices). The ServeLine concept uses three forms of cooling. The first stage is indirect free cooling with fresh air, supplemented with low energy adiabatic cooling when necessary. Mechanical cooling is only introduced when required to meet unusually high cooling loads. Control is via the ServeNet control system, which records all relevant parameters, compares current efficiencies

of the three cooling mechanisms and optimises their interaction. ServeNet can be fully integrated into the datacentre infrastructure management and supplies all information for power usage effectiveness (PUE) evaluation. Indirect cooling via high efficiency plate heat exchangers eliminates the risk to IT equipment from dust or humidity variations. In the event of emergency,

Community heating made smart

Switch2 has launched a three-in-one smart pay-asyou-go billing and energy management system for community heating schemes. The firm says Incontro helps developers and landlords to manage costs, reduce debt risk and improve environmental performance, while making it simpler for residents to pay for their energy and control and monitor their energy usage. The UK designed and manufactured technology combines either prepayment or credit billing with monitoring household energy usage; simple to use multi-zone thermostat, time and temperature control; and an in-home display. Incontro enables developers and landlords to comply with building regulations, new heat network regulations and the

50 April/May 2016

Code for Sustainable Homes (worth up to two points). It is also compatible with the new CIBSE Heat Networks Code of Practice and Heat Trust scheme Switch2 head of research and development Ian Allan commented: “In our experience, where unmetered community heating sites make the switch to smart metering, the savings can be as much as 50%. By putting residents in charge of their heating system and costs, as we are doing, the results are often amazing. Our current prepayment billing system is predicted to reduce annual bills for 6,000 residents connected to Sheffield City Council’s heat network by a total of £1.4m.” Incontro can also monitor six other utilities, including water, and handle billing of electricity. incontro.co.uk

the system ensures the data centre can be cooled exclusively by chilled water. The modular configuration and compact design of ServeLine makes this a fully scalable solution for all sizes of data centre from 100m2 upwards, with the ability to extend the system if the data centre grows in the future. For ease of siting, the units can be located internal or externally. hoval.co.uk

Giacomini in BSRIA heat test standard first A Giacomini heat interface unit (HIU) has become the first in the UK to meet BSRIA’s new test standard. BSRIA announced the launch of its new method for testing HIUs in December 2015. BTS 2/2015 fills a gap in the UK market and provides a means of testing the performance of HIUs to a British standard. It creates a level playing field across industry and serves as a reference point for manufacturers, contractors and end users. Following the announcement, Giacomini’s 49kW twin heat interface unit (the GE556Y172) was tested against the new standard, making it the first HIU model in the UK to do so. Discussing the news, Giacomini UK managing director Matt Lowe said: “Our twin HIU is one of our most popular models and we’re incredibly proud to have it tested by BSRIA. It’s a privilege to be the first manufacturer to be involved with the

new test standard. Having this recognition supports our position as a leading manufacturer of HIUs and recognises the high standard of production that goes into all Giacomini products.” BSRIA senior test engineer Colin Judd said: “We are delighted BSRIA was able to employ its knowledge and convert existing information into this test standard. We know such a standard will be extremely useful for members and industry alike. We are glad that Giacomini chose BSRIA to work with it to test this standard.” giacomini.co.uk

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Collect your data on the go With READy mobile reading, you can easily read the Individual metering of utility’s meters directly from your car. All you need is an Android smartphone, small converter unit and a energy andawater PC program. The reading takes place automatically while you drive. A road map on your smartphone shows your meters nearby, the ones being read or about to be read. It’s that simple. For more information or advice on which of Kamstrup’s products and metering solutions best suits your requirements, please call 01787 319081 or info@kamstrup.co.uk Kamstrup has moved to a new office - new address is: Unit 5, Stour Valley Business Centre, Brundon Lane, Sudbury, Suffolk, CO70 7GB

CHP

Improving efficiencies with the right CHP solution Finning UK & Ireland’s gas power solutions sales manager Nigel Thompson explains how a CHP system works, discusses the two primary technologies available – gas reciprocating engines and gas turbines – and the operational efficiencies it can help realise

ith conventional power-generation systems being only 40% fuel-efficient, a combined heat and power (CHP) unit offers a more economic means of harnessing a generator’s full potential. CHP – how does it work? A CHP system consists of a prime mover, such as an internal combustion engine or gas turbine to provide motive power, an electrical generator and a means of recovering heat. This is typically from the engine jacket cooling circuit via a plate heat exchanger and from the exhaust gas stream via a shell and tube heat exchanger. Alternatively, exhaust gases can be used to generate steam. As a result, a CHP solution reduces the amount of electricity the site purchases from the grid and the volume of fuel required to generate the appropriate amount of heat for the site. While typically all the thermal energy generated as part of a power-generation system goes to waste, a CHP system captures useable heat, meaning fuel efficiency can increase to more than 75% and, in some cases, as much as 88%. Furthermore, CHP can be used to deliver cooling energy. Trigeneration, or combined cooling, uses an absorption chiller to convert heat into cooling energy. This is economical and environmentally-friendly,

52 April/May 2016

Reciprocating engines have multiple recoverable heat sources: exhaust, jacket water, aftercooler and oil cooler. They can produce heat in the forms of warm water, hot water, and low to mediumpressure steam (from exhaust)

as it eliminates harmful refrigerants and reduces overall air emissions. As an absorption chiller has no moving parts, the opportunity for wear and tear is low, resulting in minimal maintenance costs. Additionally, there are now absorption chillers available on the market that can be powered directly with the CHP exhaust, removing the need for an intermediate exhaust gas heat exchanger. A versatile solution The versatility of CHP has guaranteed its use in a wide range of industries, including oil refineries, chemicals, paper, publishing and printing, and food, beverages and tobacco. It is also increasingly being used in sewage treatment, transport,

commerce and other sectors. The efficiency of a CHP system requires the equipment to be sized correctly, which depends on a plant’s base electrical load profile. As a site’s electricity requirement can potentially vary quite drastically throughout a year, calculating the base level of electrical consumption correctly will ensure the CHP system can withstand the dayto-day demands placed on it. Understanding a plant’s base electrical load profile means a power-to-heat ratio can be calculated. For example, a site may require 1MW of heat and 1MW of electricity to operate to maximum production output. In a conventional installation, the heat will be provided by a series of gas boilers and the electricity purchased directly from the grid. In contrast, a CHP installation may produce 800kW of heat and electricity respectively from one natural gas fuel source, meaning that the operator can significantly reduce its utility costs, importing only the additional power it needs above the 800kW base. In some instances, to achieve the power-to-heat ratio necessary, it can be more economic to oversize the package to deliver slightly more power than the base load requirement, with the option to sell any excess electricity generated back to the grid at a profit. In other applications, it can be

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more profitable to size to the site’s lowest average heat demand, with the CHP system acting as the lead boiler and backup boilers picking up additional heat requirements. Generally a gas-fired product, a CHP system is cleaner than many other fossil fuels, typically reducing CO2 emissions by a third. It also offers a range of tax incentives, such as enhanced capital allowances and certain business rate exemptions. The right CHP system can realise significant cost savings in the long-term compared to other capital investments in plant and equipment. Gas engines or gas turbines? When installing a CHP system, specifiers can choose between two primary technologies: gas reciprocating engines or gas turbines. Each technology has attributes that will make

it more suitable for the specific conditions of fuel type and quality, electric and heat load profile, physical space, altitude, ambient conditions and other factors. Turbines are well suited for full-load operation for extended annual hours and the favourable economics of CHP can make them attractive for continuous, base-load duty. Turbines produce a large volume of exhaust at temperatures of roughly 490°C. As a result, they produce a high quality, high pressure and high volume of steam, well in excess of 690 kPa, suited for many industrial processes. Combustion turbines also have high excess oxygen in the exhaust, enabling significant variations in thermal output. While gas turbines have a reputation for delivering thermal efficiency, there are

Unlike gas turbines, gas-fuelled reciprocating engines can also be located near to the point of use, which is extremely valuable when specifiers are seeking a solution with minimal energy wastage. If operators take advantage of CHP, significant cost savings and energy efficiencies can be realised, ensuring businesses maximise profitability and maintain productivity. However, a CHP system is a long-term investment. Therefore, it is important to use an experienced and trusted partner when understanding how a CHP package can deliver improved efficiencies, one that will be able to advise and support with the ongoing operation and maintenance of the equipment for many years to come. te finning.co.uk/powersystems

key points of differentiation that often make a gas reciprocating engine more suitable for many applications. Today’s advanced lean-burn reciprocating engines are generally more fuel-efficient than turbines in pure electric power applications. They offer a lower initial cost per kW in smaller projects, typically less than 10MW, as well as being more tolerant of high altitude and higher ambient temperatures. They also operate on low-pressure fuel – 10 to 35 kPa – eliminating the costs to install and maintain a fuel compression system. In CHP systems, reciprocating engines have multiple recoverable heat sources: exhaust, jacket water, aftercooler and oil cooler. They can produce heat in the forms of warm water, hot water, and low to medium-pressure steam (from exhaust).

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SUSTAINABILITY

Winds of change As corporate interest in demonstrating sustainability grows, so energy professionals have a substantial role to play, says DONG Energy Sales UK’s managing director Jeff Whittingham

orporate renewable energy made the headlines again recently as Hewlett Packard (HP) pledged to procure 100% of its electricity from renewable sources by 2020. The company has set itself a tight deadline to achieve its goal but, by getting there, HP will join a host of other organisations signing on to the group Dong Energy’s known as RE100. This is a emissions. UK offshore wind global coalition In fact, installed capacity of top companies our current that have pledged wind farm to procure all their portfolio provides electricity from renewable an emissions saving sources by a specified year. equivalent to taking 1.8 Of course, RE100 was million cars off UK roads. just one of the initiatives There is, of course, represented at last year’s substantial reputational COP21 climate change talks benefit to buying green and in Paris, where unprecedented publicly demonstrating your commitments to sustainability corporate responsibility. were made by huge numbers Whether your customers are of organisations worldwide. consumers or businesses, your organisation is still Why go for green? dealing with people, and For many, it is just about doing values that resonate are the right thing. Businesses important to many. have the ability to make a From a practical perspective, significant difference to global purchasing renewable emissions and many take that electricity makes a tangible responsibility very seriously. It is contribution to emissions an ethos we recognise at Dong reductions and carries a zero Energy. Our story is simple: the emissions factor in greenhouse world needs energy, we deliver gas (GHG) reporting. energy responsibly, and we accompany our customers on More than just renewables the journey to a better future. Renewable energy represents Last year we celebrated the just one aspect of a sustainable launch of our eighth offshore energy management strategy. wind farm in the UK, taking As energy managers are only our installed capacity to more too well aware, to really make a than 2GW, and our wind farms difference organisations must are helping to offset UK carbon balance a range of activities

2GW

54 April/May 2016

– from the installation of new technologies that improve energy efficiency to managing consumption flexibly to support grid balancing. As well as the environmental advantages, an active energy management strategy enables organisations to combat rising non-commodity costs, create new revenue streams and reduce overall energy bills. This process is reminiscent of the approach we are taking within our wind generation business. By building so much new capacity over the next few years, we are working hard to drive down the overall cost of wind generation. In

Our current wind farm portfolio provides an emissions saving equivalent to taking 1.8 million cars off UK roads

particular, we are focusing on: technological innovation, efficiency and the reduction of operating costs through component standardisation. Working closely with our customers, it strikes me that we are on a similar journey. They too must embrace new technological innovations and identify efficiencies to drive down costs and operate more sustainably. Now that there is renewed focus on electricity flexibility to support grid balancing, we are seeing more innovation in this field, all aimed at making the lives of energy professionals a little easier. For instance, our site optimisation technology combines market and site information to produce bespoke run schedules for customers. This enables them to optimise prices for export and avoid expensive periods, without impacting on internal resource to make these detailed calculations. This makes the energy you need to consume for your businesses processes work even harder. Improving efficiency reaps both environmental and financial rewards, and as such remains a focus for businesses. While different organisations are naturally at different stages in their efficiency journey, they will all have received the outputs from their Energy Savings Opportunity Scheme (Esos) audits at the start of this year, which pinpoint the areas where the greatest efficiencies can be achieved. With a simultaneous strategy of sourcing renewable alternatives, this combined programme of energy reduction with greener purchasing

Demand Side

really adds weight to your overall CSR contribution. A deeper partnership In identifying a partner for energy supply it is, of course, of utmost importance to ensure that the range of services they offer matches your organisation’s requirements at a price that is right for you and with an appropriate support service. More widely than that, organisations are increasingly keen to ensure that their partners and suppliers are aligned in terms of values and ambitions. We have seen a shift in recent years to companies demanding sustainability standards from their supply chain, to ensure that their environmental commitments to customers are absolute. We are also seeing more requests for the detail of Corporate Social Responsibility (CSR) credentials within tender requests. When you consider the range of activities contained within the CSR term, it is an important question, as it lays the groundwork for development of a true partnership. For instance, do your organisations’ charitable or community activities align? Could you strengthen your

contribution by working together? What opportunities could exist to collaborate in areas such as recycling, reusing, staff travel schemes or wildlife initiatives? The more closely your organisational values are aligned, the greater the opportunity for longer-term collaboration to support a whole range of CSR activity. In summary Corporate interest in demonstrating sustainability is growing, and done well it should spell commercial advantage. Energy professionals have a substantial role to play in supporting their organisations to achieve their CSR targets – be it through reducing emissions, costs or both – as well as supporting the development of a more sustainable supply chain. Going further than the supply contract, the opportunities to make a positive environmental and social contribution are vast and as we have seen from the companies signing up to the likes of RE100, go a long way to positively impacting your company’s brand association. te dongenergy.co.uk

Response Bringing businesses into balancing 2015 Report

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Sustainablity in the UK from DONG Energy • 2020 target to have installed 6.5GW of offshore wind in Europe. • In the UK, DONG Energy’s existing wind farms save emissions equivalent to taking 1.8 million cars off British roads. • In 2017, Dong Energy will opening bioresource plant REnescience, which will process 120,000 tonnes of waste each year. REnescience is a safe, reliable technology that does not involve waste incineration. It uses the enzymes, mechanical sorting and anaerobic digestion to produce biogas and generate approximately 5MW of renewable electricity, as well as clean recyclable materials and other products. • Dong Energy is investing in wildlife research, from studying birds’ migration routes to raising awareness of marine life in Liverpool Bay via a £20,000 grant to The Wildlife Trust.

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SUSTAINABILITY

To turn back the tides we need more than high walls Luke Strickland and Stuart Divall (far right) consider what can be done to protect London from the ever-increasing risk of flooding London’s doomsday scenario: in the face of bigger storms and rising seas, perhaps it’s time to redefine our relationship with water?

ne of the defining features of London is the River Thames, its iconic twists and turns familiar to residents and tourists alike. It is the longest river in England and second only to the Severn in the UK. However, for such a big natural feature it is heavily constrained as it passes through the capital. It is easy to take for granted by residents, along with the assumption that the surrounding land is safe and dry – an assumption that is challenged regularly each winter. A quick glance at the Environment Agency’s indicative flood maps

56 April/May 2016

uncovers swathes of blue floodplain across the city, a reminder of the latent power the river is able to unleash. In February this year, a combination of heavy rainfall and astronomical tides caused the Thames to burst its banks in Greenwich and reach pavement level elsewhere. The Thames Barrier was shut yet again to minimise the extent of the ensuing flooding. Flood defences London’s extensive flood defences include barriers on both banks, which are kept to a minimum height, as well as the iconic Thames Barrier.

This was completed in 1982 and is designed to protect the city from the devastating tidal surges such as those experienced in 1928 and 1953. Its design was originally only intended to last until 2030, meaning that the barrier is approaching the end of its design life, although a recent study by Environment Agency concluded that the barrier would continue to be effective until the 2080s. Whether this is the case remains to be seen, depending on how accurate climate prediction models turn out to be. Whatever the case in the future, the barrier is

being used much more often than originally predicted. As events in Cumbria have shown, it is not just London where our flood defences are at full capacity. Even brand new defences have been overtopped, a reminder that no matter how we define the risk, there is always potentially a bigger storm around the corner. As the Intergovernmental Panel on Climate Change (IPCC) has identified, the expected outcome of a changing climate is an increase in extreme events, such as the record 341mm of rainfall recorded in 24 hours at Honister Pass in the Lakes

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this winter – equivalent to a one in 1,300 year storm event. Adding to the debate, a paper published in March 2016 by a team of scientists led by former NASA climate director James Hansen suggests that feedback mechanisms surrounding the melting of the ice sheets could point to a more rapid rise in sea levels than the IPCC predicts – perhaps even several metres higher. This would be accompanied by even more severe storminess. In the face of this scenario, our flood defences would be rendered ineffective and our coastal communities lost. Redefining our relationship With bigger storms and rising seas forecast, perhaps it is time to redefine our relationship with water. As much as we are indebted to our Victorian civil engineers for sanitation, we have inherited a mindset where rainfall runoff is seen as a nuisance. Rainfall has become a problem to be dealt with rather than an opportunity, and is swiftly directed out of sight into buried sewer systems. However, we can’t keep building higher walls to keep out the floods, like King Canute commanding the waves to retreat. Instead, we need to see water as an asset that can add to the amenity, ecology and liveability of our cities. We need to allow waters right back into the heart of our communities, bringing it to the surface rather than burying it underground. Victorian civil engineer Thomas Treadgold talked about “the art of directing the great sources of power in nature for the use and convenience of man”. Rather than directing waters away from our cities through ever larger defences, it is time to harness the power of water within our communities. Water need not be a destructive nuisance, instead we can utilise it for amenity and habitat – improving the quality of our urban areas as well as providing a role in

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streets, and central areas of retention in existing squares and lakes. Road profiles and cambers are adapted to provide surface level storage in cross-section, while also keeping a ‘dry lane’ to maintain movement across the city. In St Jorgen’s Lake, an existing lake in the city centre, it is proposed that the water level will be lowered to provide a central storage area for flood waters, along with designated city squares which will also provide surface level storage. This network of blue-green infrastructure aims to replicate the natural water cycle that has been disrupted through modern urban development. As well as the flood relief and water management functions, the solutions also contribute to the amenity and liveability of the city.

alleviating future flooding. Making our cities more resilient to a changing climate. Wonderful Copenhagen This is something being done by the Danish city of Copenhagen. On 2 July 2011, 150mm of rainfall fell on Copenhagen in just two hours, leaving swathes of the city under up to a metre of water. The city describes this as a ‘Cloudburst’ event, from the old Danish word Skybrud, and it seems a fitting term for the extremely intense storms that are becoming more frequent. Insurance claims from this flood exceeded ¤800m and the total socio-economic loss has been estimated to be double this figure. In recognition of these significant economic costs, the city produced a Cloudburst Mitigation Plan. This plan, and the subsequent catchment level plans (prepared by Ramboll among others), identifies the parts of the city most at risk from future Cloudburst events, and proposes a toolkit of solutions to increase the city’s resilience to flooding. The overall principles of the strategy are: to retain rainwater in the higher elevated areas; to provide robust and flexible drainage of lower lying areas, and; a focus on green and blue solutions to be implemented in existing projects. A ‘finger strategy’ was adopted – cloudburst ‘fingers’ to convey runoff were located between the major roads into the city centre. Various roads which connect to these cloudburst fingers are then transformed into green retention roads. City catchments were subdivided by topography and sewer network to assess practical solutions on a local scale. These solutions take the form of a toolkit – a portfolio approach – including the cloudburst streets and retention streets mentioned above, along with other green

NASA climate director James Hansen suggests that feedback mechanisms surrounding the melting of the ice sheets could point to a more rapid rise in sea levels than the IPCC predicts

Harnessing power Back in the UK, when flood defences are breached, the impact is dramatic. Perhaps we need to be as bravely dramatic in our decision making about how our cities look, feel and function – harnessing the great power of nature for our benefit. The best way to protect our infrastructure is to start with the awareness that defences will fail. Beyond that, the change from big centralised solutions to a network of smaller solutions is a step in the right direction – whether this is flood defences, power plants or waste facilities. We need a portfolio of solutions at every scale. As Copenhagen discovered, the economic cost of flooding is staggering. Perhaps we would be wiser to invest up front in our future – and take a leaf out of their book? te Luke Strickland is associate and Stuart Divall is director of international environmental, safety and health sciences consulting firm Ramboll Environ ramboll-environ.com

April/May 2016

WATER MANAGEMENT

Who will sink, who will swim? With the advent of competition next year there will be testing times ahead for water companies to be ready, says Angus Panton, director of power and communications at SQS

58 April/May 2016

he water industry is going through a period of unprecedented change. Having been static for two and a half decades, the structure of the retail market is about to be turned on its head. This is set to open the flood gates for new entrants and competition from existing suppliers. Previously a regionally allocated utility, from April 2017 the Open Water Act will mean businesses can choose their water retailer, no matter where they are based in the UK. While this change in regulation is financially beneficial for business customers who can shop around for the best deal, water suppliers could lose

out to the competition unless they can cope with the changes it will bring, and manage the transition. Ultimately, the incumbent retailers – often part of the same company that treats and distributes the water – could see the evaporation of what was once a guaranteed customer base. Investing in change The key to making the transition as smooth as possible is in the preparation. With the central transactional clearing service, MOSL, finalised in August, suppliers now need to take the next step towards putting systems in place to deal with billing and CRM. This will be crucial for success under the new structure.

These uncharted waters make it vital to follow a robust process so that when the deadline does come around in April 2017, the industry is primed to cope with a potential influx of new retailers, and manage the resulting transactions. Such preparation will ensure customers and regulators have confidence in the new market. What’s more, new entrant retailers will come to the table without the baggage of previous systems and processes, meaning they could steal a march on the more established players if customerfacing and back-office systems are not up to scratch. Price and customer service will be the main differentiators here. »

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WATER MANAGEMENT With British Gas itself admitting that one of its biggest complaints is its estimated bill service, it was important for the smart meter service to address this problem and give customers confidence in the technology while performing due diligence throughout the switch.

However, if the infrastructure to back this up is not reliable and robust, suppliers and retailers are set to fall flat on their face. As well as new players, we may also see the well-established utilities businesses diversifying into water provision. Testing, testing Whether an established retailer or supplier, or a new retailer to the market, now is the time to decide whether you take the lead or follow others. In the energy industry, those who are the most proactive and innovative have proven to hold their positions and increase market share. Those slow to act frequently lose ground. For all involved, there will be testing times ahead of the looming deadline, in more ways than one. The recent introduction of smart meters in the energy market provides a great example of an industry that has faced similar challenges, having been largely stagnant in the technology stakes before this significant overhaul of systems. In the six months prior to the official smart meter roll out in April 2016, heavyweights British Gas and E.ON, along with smaller player First Utility, led the way. Although not necessarily the first consideration that springs to mind, market readiness testing and assurance played a critical role in their success. A key learning for the water industry. The complexity of upgrading and integrating with different systems in the utilities industry have demonstrated the importance of defining the needs of technology up front, as well as testing its suitability and compatibility along the way to ensure no nasty surprises.

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Ultimately, the incumbent retailers – often part of the same company that treats and distributes the water – could see the evaporation of what was once a guaranteed customer base

Taking the plunge So what can those in the water industry learn from a similar industry overhaul? Firstly, although the 2017 deadline seems a long way off, getting your ducks in a row early can pay dividends and ensure contingency for any teething problems en-route. British Gas was first out of the blocks in the utility smart meter roll-out race, but took time to ensure that the underlying infrastructure could manage the transition, meaning its customers always came first and benefitted from the upgrade. Setting clear goals at the outset and aligning these with the technology that needs to be implemented will be vital for success. The complex challenge ahead for the water industry demands a new approach. Technology can’t simply be bolted on to cope with this change. Embracing agility and following a robust process, with testing at its core, will ensure new developments and ongoing changes are up to the required standard, now and in the future. Full end-to-end integration system testing is crucial to managing business and market technology integration. Regression testing will also ensure that the market interface and data flows will work once any enhancements are added to internal IT programmes. This can be eased with an agile and automated approach. Exploring a DevOps method and effective collaboration

between software developers and users will help steer the ship during the changes and rapidly produce products and service improvements fit for purpose. Next steps With the deadline approaching, now is the time for the industry to be clear on how new systems will be executed, how much investment needs to be made, and whether you want to lead the way or risk losing out by sitting back and waiting for others to set out their stall. Whatever you decide to do, testing procedures need to be front of mind to stay ahead of the competition and make the most of the changing situation. If they are not thought about up front, customer reputation will be compromised and could impact the whole market. Don’t just take our word for it though. Myron Hrycyk, former group CIO of Severn Trent Water and who now runs his own independent consultancy, agrees: “Preparing for business retail is no ordinary IT implementation. There is an absolute deadline to meet, external forces calling many of the shots, the reputation of your company as well as the whole industry to consider, and smooth interfaces with other market participants a baseline requirement. “For these reasons, testing just can’t be a bolt-on afterthought. Robust and thorough system tests should be planned as part of strategic decision making, brought into play much earlier than usual, and well provided for in the implementation timetable.” te For further information on the critical role of market readiness testing and assurance, download SQS’s in-depth article ‘Testing the water’ at http://bit.ly/1YWjiTq

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VIEWPOINT

How important is energy management to SMEs? Energy managers are often responsible for controlling millions of pounds worth of energy spend in large organisations but who should be given the job in an SME? The answer should be whoever pays the bills, says Lord Reesdale

uring the past few years energy cost reduction has been almost exclusively based around getting the best deal from an energy supplier, with the use of energy being often ignored. This process worked well when energy was cheap, but with the shortage of generating capacity, prices are predicted to ramp up within the next couple of years. To control energy costs, ownership and control of the energy use within an organisation has to be given to an individual. Obviously it will not be expected to be a full-time job, rather an extra responsibility. The employee who has the role will need to look at a number of areas, such as billing, equipment, metering and future planning. How much energy? The first is to look at past bills; this will give an indication of how much energy is being used, also changes in use, brought about by seasonal variations from summer to winter or new equipment should show up. It is worth remembering that while most people focus on electricity, roughly two-thirds of the bill will be from the use of gas. For most businesses space heating and cooling use by far the largest amount of energy. Air conditioning relies on sealed environments and an open window or door can cost a fortune, so training the staff to conserve cold air is important.

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Once the designated energy manager has an understanding of the cost of energy finding, the main uses of energy is the next step. A simple example is a corner shop. The biggest users of energy are going to be the fridges and freezers. A corner shopâ&#x20AC;&#x2122;s margins are extremely tight but how often do you see old badly maintained fridges or freezers with the doors open? A simple off-theshelf energy measurement meter could give an idea of the use by each appliance, or the use of a VDU visual display unit could give an indication of the amount each appliance is using. For many businesses there are few options available for

How many employees of an SME even know where the meter is?

energy saving especially in managed offices. However, the use of equipment can have a dramatic effect. Switching off printers and photocopiers overnight has a noticeable effect on the bill. It will also keep the air conditioning cost down. Understanding behaviour Behaviour change is often ignored but getting employees to understand their use of energy and how to reduce it is the most effective and cost efficient tool for energy reduction. The EMA calculates that energy reduction is 40% efficient kit, 20% controls and 40% through behaviour change. This all sounds obvious and basic but how many employees of an SME even know where the meter is? Reading and checking that estimated bills are not being used is the next stage. Once all this data is collected then writing an energy plan for the company would be the obvious next step. Many companies ignore energy costs and often fail to

even shop around on energy deals. This is not surprising as most companies, especially SMEs, do not have one employee responsible for its management. There is an argument that time spent on energy could be better used elsewhere. However, it has been calculated that a 20% reduction in energy costs is the equivalent of 5% of sales. Calculating the number of bags of crisps that will be needed to be sold to pay for the wasted energy in the shop is a simple and effective message. Every company can assess how much they will need to produce or sell set against their energy bill to make the cost relevant. Energy reduction can be a cheap way of cutting cost, it may involve Capex, which is often an issue, but the payback can be short term, especially if fuel prices shoot up next year. With this in mind the EMA is running a course in June targeted at the SME sector, to enrol contact the EMA. te theema.org.uk

April/May 2016

PRODUCTS Affordable energy training for all staff A new eLearning programme has been launched that its developers claim makes it possible for even the largest organisations to involve every employee in their energy saving journey. Most energy-conscious organisations realise that training staff in energy awareness would be beneficial to the business but often cost is seen as a barrier. JRP Solutions says Be Energy is an eLearning programme that will help employees to understand what energy is, how the use of energy impacts on our environment and how they can contribute to using less energy to save costs and to create healthier, more robust businesses, a more secure economy and a healthier planet.

Through a series of videos and interactive elements, participants will see how they depend on energy every day at home and at work and how they can start to use less energy through making small changes to how they think and act and through using low-energy technology. There are

Data loggers for industrial and outdoor locations Gemini Data Loggers, manufacturer of the Tinytag range, has announced the launch of new Plus Radio data loggers. Building upon the capabilities of Geminiâ&#x20AC;&#x2122;s existing Radio Data Logging System, the new rugged and weatherproof units are designed for monitoring in outdoor, industrial and warehousing applications. Loggers in the Plus Radio range monitor temperature and relative humidity, and also count inputs, low voltage and current. The system consists of a receiver connected to a computer or LAN and a number of radio loggers that self-configure to form a robust mesh network. The loggers work together to send information to the receiver for viewing on a PC, across a LAN or remotely across the internet. There is no need to individually configure, or manually access each device to view the data, making them ideal for applications with multiple monitoring points. The system is easy to set up and use and the loggers are

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versatile, with the ability to receive, log, store and transmit data. If a logger is out of range and cannot

send the data directly to the receiver, it will re-route it via other loggers. If a logger has lost all connections and is unable to find a way of sending the data to the receiver, it stores it locally until communications are restored. Alarm warnings can be sent via email or SMS enabling corrective action to be initiated. The range support energy efficiency applications by accurately monitoring power usage, CO2, temperature and relative humidity locally or throughout a building. tinytag.info

interactive graphics, questions and multiple-choice quizzes after each module to engage the participant in the programme and to ensure they take away the key messages. Delegates are able to download a certificate to show they have successfully completed the programme. The one-hour programme can be branded and tailored to an organisationâ&#x20AC;&#x2122;s own requirements, has engaging multi-media content and is suitable for all employees, no previous knowledge or experience is required. Costs vary depending on user numbers and whether bespoke elements are required, but can be as little as 90p per delegate. JRP says this makes it a very affordable step towards engaging all staff to save energy. jrpsolutions.com

Power energy logger for sub-metering Chauvin Arnouxâ&#x20AC;&#x2122;s PEL 105 logger for energy auditing or point measurements on networks is simple to use with an all-terrain IP67 casing capable of withstanding shocks, UV rays and extreme temperatures. It is well suited to outdoor installation directly on an electricity pole. With its 1000V CAT IV safety rating, it can be used for measurements on all LV networks, including neutralearth voltage and the neutral current. This stand-alone instrument is equipped with a self-powering system via its voltage inputs up to 1000V. The PEL 105 offers five voltage inputs and four current inputs. Compatible with a large number of current sensors to make it easier to use, it also recognises the sensors automatically. The PEL 105 can be set up in places where access is difficult. The measurements can be monitored in real time or the data can be recovered via USB, SD card, Ethernet,

Wi-Fi or Bluetooth for processing on a PC or tablet. The PEL 105 can be used to measure, record and analyse the power values (W, var, VA) and energy values (kWh, kvarh, kVAh). At the same time, it records the power factor and the displacement power factor. Recording is continuous with a sampling interval of 200ms. To improve energy efficiency according to ISO50001 or carry out the audits required by regulations, the PEL 105 can be set up on the different electrical feeders. The DataView software platform is equipped with a wide range of functions including analysis of the measurements, comparisons and generation of measurement reports. chauvin-arnoux.com

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Potential to boost solar module performance by more than 50%

Swedish advanced materials start-up Sol Voltaics has confirmed the successful alignment and orientation of nanowires in a thin film. The achievement represents a significant technology milestone in solar nanowire manufacturing to date, whith the company claiming it paves the way for photovoltaic (PV) module efficiencies of 27% or more – a 50% boost in energy conversion efficiencies for today’s solar modules. While showing highly promising characteristics in solar energy generation, nanowires are notoriously difficult to align due to their high aspect ratios and material characteristics. By controlling nanowire orientation and

alignment at centimeter scale on standard-sized wafers, Sol Voltaics has taken a major step toward the commercial production of solar films for tandem solar PV modules. Sol Voltaics CEO Erik Smith said: “The announcement marks a significant moment for both Sol Voltaics and the global solar energy industry. Gallium arsenide (GaAs) nanowires have recently come to the forefront as holding great promise for boosting solar module efficiencies well beyond current levels. By aligning nanowires within a membrane, we’ve taken our greatest stride yet toward manufacturing solar nanowire films at the commercial scale. This will enable solar panel manufacturers to greatly enhance the energy-generating capability of their products.” In addition to the nanowire alignment breakthrough, Sol Voltaics has progressed through several generations of development of its Aerotaxy production technology. The patented process allows cost-effective III-V nanowire solar cell production via a continuous gas phase process. solvoltaics.com

Protection and control comes Easergy Schneider Electric has launched its Easergy P5 protection relay. It claims to provide the nextgeneration standard for businesses’ critical assets. Schneider Electric senior vice-president of energy automation Vincent Petit said: “In the fast-changing world of energy, customers expect reliability, safety, security, efficiency, and sustainability to answer to the new network challenges driven by new technologies, new regulations and new standards. Easergy P5 is the cornerstone of our new digitised electrical distribution, a dramatic step change for the industry. “Today’s distribution systems are becoming more and more decarbonised, digitised and decentralised. Consequently, safety, reliability, security, efficiency and sustainability are becoming increasingly

critical and complex to realise. We’re pioneering the paradigm shift toward more real-time and open integration over the full product life cycle.” Proven protection and control functions give the Easergy P5 a rock-solid foundation and ensure firstclass performance, claims the firm. It is fully aligned with the latest safety standards while users can operate their device in safe conditions with a new mobile companion application. Cyber security is in full compliance with IEC 61351 and helps protect installations with security based on users’ job functions. The Easergy SmartApp mobile companion application can be used on smartphones and tablets and allows easy and safer operation without standing in front of a circuit breaker. schneider-electric.com

Utilitywise and Dell sign internet of things energy management deal Utilitywise and Dell have partnered to sell connected energy management solutions into the UK market. While Utilitywise operates largely in the industrial and commercial sector, it has increased its focus on the SME market in recent years and the two firms believe they can open up automated demand reduction and response to SMEs. Dell sees energy management as a strong application of the internet of things (IoT). The aim is to connect disparate systems and devices, such as HVAC, refrigeration, lighting and security, into a single automated building energy management system. “IoT technology is changing the way

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we live, work and do business,” said Andy Rhodes, executive director, commercial IoT solutions, Dell. “We know the IoT can provide a number of advantages to the energy management industry such as reducing waste, identifying

efficiencies and cost savings.” He added that the firm had partnered with Utilitywise, which has 29,000 UK and Ireland customers, because “we believe they have the infrastructure, industry knowledge and market reach to introduce innovative IoT solutions”. Utilitywise COO Brin Sheridan said IoT technology was a natural next step for its existing building controls business. “When we acquired t-mac, we recognised that the emerging IoT landscape would complement its cloudbased analytics and controls solution. Now, in addition to providing traditional BeMS users with enhanced solutions, IoT technologies will enable Utilitywise to offer affordable solutions to SMEs who are usually priced out of this market.” utilitywise.com

April/May 2016

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April/May 2016

Q&A

Neville Small Potterton Commercial boilers and key accounts’ sales director talks about being a heart transplant surgeon, golf and Pulp Fiction Who would you least like to share a lift with? Why? Lance Armstrong as he tainted cycling by being a drugs cheat and then lied about it.

What would your super power be and why? I would like to be able to read people’s thoughts so I could take appropriate actions.

You’re God for the day. What’s the first thing that you do? I would make everyone happy and put a smile on all of their faces.

What would you do with a million pounds? Put some to charitable use like the Sick Children’s Trust and Marie Curie, and then buy a holiday home in Barbados.

If you could travel back in time to a period in history, what would it be and why? I would travel back to before slavery began and try to prevent it. Who or what are you enjoying listening to? John Legend (All Of Me). What unsolved mystery would you like the answers to? What really happened to Malaysian flight MH370?

I would make everyone happy and put a smile on all of their faces

What’s your greatest extravagance? Playing golf at expensive courses. If you were blessed with any talent, what would your dream job be and why? A heart transplant surgeon so I could save lives and get excellent job satisfaction.

What is the best piece of advice you’ve ever been given? My mum taught me to treat others the way I would like to be treated. What irritates you the most in life? When you’re driving and every traffic light turns red as you approach it. What should the energy users be doing to help itself in the current climate? Reducing the amount of electrical energy they use by employing alternative natural resources like solar, wind and water turbines. What’s the best thing – work wise – that you did recently? I employed a new area sales manager who will add value and complement my team. te

What would you take to a desert island and why? A set of golf clubs and balls so I could practice and get better. What’s your favourite film or book and why? Pulp Fiction – Samuel L Jackson is my favourite actor and Quinton Tarantino my favourite director. If you could perpetuate a myth about yourself, what would it be? Denzel Washington and I are brothers.

66 April/May 2016

Extravagance: playing golf on expensive courses

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