Water, Energy & Environment

October/ November 2014 Issue 94 theenergyst.com

Efficient control of utilities and facilities

Spectrum - end to end support for businesses with planning, funding and implementing energy reduction projects, right the way through from concept to installation, ROI tracking and full project management.

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INSIDE THIS ISSUE GAS & ELECTRICITY Editor Tim McManan-Smith tim@energystmedia.com

t: 020 3714 4450 m: 07818 545308

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It’s time to move beyond the low hanging fruit and get to grips with energy reduction

See page 18

Sales director Steve Swaine

41%

of businesses expect to act on ESOS audit recommendations

DEMAND RESPONSE

steve@energystmedia.com

t: 020 3714 4451 m: 07818 574300

The capacity market is not only encouraging the building of new gas-fuelled power stations but presents another opportunity for smaller generators through new developments in demand side response See page 30

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m: 07581 268914 Production Paul Lindsell production@energystmedia.com

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LIGHTING How presence detection has helped Reading Station Car Park to reduce energy use when it detects people and vehicles See page 38

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Front Cover - See page 14 October/ November 2014 Issue 94 theenergyst.com

News & Comment .................................................................. p4 Gas & Electricity ...................................................................... p12

Efficient control of utilities and facilities

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3

News & CommeNt

The disconnect between energy and finance

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By bundling the whole thing as a comprehensive solution to energy reduction they work together to get the best from all of the technologies

I often extol the virtues of energy efficiency as a method of reducing costs that go straight to a business’ bottom line. It has also has added environmental benefits that aid CSR obligations and can also result in winning bids and investment. There seems to be no reason why large savings cannot be made by most businesses in this field if they manage and operate their site effectively. Former US secretary of energy Steven Chu has said that “energy efficiency is not just low-hanging fruit; it is fruit that is lying on the ground”. So the obvious thing that most organisations do is to go for this low-hanging fruit first; the low-cost and no-cost measures. Bank those easy wins and then think about the more complex and longer term solutions for reducing energy consumption within the business. This sounds reasonable enough. However, it can create a problem that entails the stalling of future energy efficiency projects.

Larger projects such a large CHP installation, boilers and chillers or geothermal heating and cooling, for instance, can have paybacks that exceed what most businesses are willing to accept. In 2010, only 25% of companies surveyed by Siemens would accept a internal rate of return of more than three years. Following a prolonged recession, this is unlikely to have increased. The International Facility Management Association also found that the average maximum ROI is 3.4 years. This means that projects with longer paybacks tend not to get done very much unless the board has a long-term vision. Speaking with Ingenious Investments, an external financing company for clean energy projects, I was told about a interesting method of approaching this problem. By bundling a whole load of technologies into a broader energy efficiency project it is possible to get within an acceptable payback period. The low-hanging fruit, energy efficiency such as LED lighting, which may have a one- to two-year payback, combined with CHP, which could have a five-year payback, can result in an overall payback of three years, meaning that the CHP project goes ahead.

By doing all of the easy projects first many it is more difficult to package the longer payback projects to get a reasonable payback and so by bundling the whole thing as a comprehensive solution to energy reduction they work together to get the best from all of the technologies used. Of course, a company can go for the low-hanging fruit and then move on to the larger things if it ring fences the savings from the early projects, but this rarely happens in most businesses.

If the scale of the larger projects seems to much for your energy budgets to bear then perhaps external finance can help. I am told that there are financiers out there looking for energy efficiency projects to put money into (see page 10), just as there are energy managers citing finance as the number one barrier to implementation. Perhaps we just need to connect these two communities more thoroughly.

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Environment Agency’s ESOS lead assessor register announced The Environment Agency has announced the list of lead assessors able to sign off Energy Savings Obligations Scheme (ESOS) assessments.

Time is moving on for potential ESOS participants, your organisation qualifies if, on 31 December 2014, it meets the ESOS definition of a large undertaking. The first period in which qualifying organisations must contact the Environment Agency is between 1 January 2015 and 5 December 2015, when you make your notification confirming compliance.

You need to submit your ESOS notification of compliance to the Environment Agency when you have undertaken an ESOS assessment and are compliant with your obligations. This must be done by 5 December 2015, and if applicable, every four years afterwards.

All participants need to have their ESOS assessment signed off by an ESOS lead assessor and it is your responsibility to select a lead assessor with the necessary skills and experience to help your business comply with ESOS.

Approved register The approved register of lead assessors is listed with organisation and name of register: • Association of Energy Engineers – Certified Energy Auditor-International CEA-I • Association of Energy Engineers – Certified Energy Manager International (CEM-I) • Elmhurst Energy Systems – Elmhurst Approved ESOS Lead Assessor • Energy Institute (EI) – Chartered Energy Manager • Energy Institute (EI) – Register of Professional Energy Consultants (RPEC) • Institution of Chemical Engineers – Register of Chartered Chemical Engineers (MIChemE/FIChemE) ESOS LEA • Inteb – Inteb ESOS Register • Quidos – ESOSRegister.com • Stroma Certification Ltd – ESOS Lead Energy Assessor Certification • The Chartered Institution of Building Services Engineers (CIBSE) – The CIBSE Low Carbon Consultant (LCC) Register, ESOS Lead Assessor Subset • The Energy Managers Association – EMA Energy Saving Opportunity Scheme Lead Assessor Register • The Institute of Environmental Management and Assessment – Environmental Auditor & Full membership of IEMA (ESOS Lead Assessor Subset) • The Institute of Environmental Management and Assessment – Principal Environmental Auditor (ESOS Lead Assessor Subset)

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Let’s put some energy back into politics Dave Cockshott, chief commercial officer at Inenco, asks why energy took a back seat at this autumn’s political party conferences With less than eight months to go before the general election, this autumn’s party conference season was a chance to hear where the priorities of each party lie, and what policies we should expect to hear more about during their election campaigns.

Last year’s conference season was a bumper one for energy.

Labour surprised us all with their announcement of an immediate energy freeze should they be elected in 2015. The Tories responded with their commitment to cut “green taxes”, taking £50 off the average domestic bill and sending the insulation industry into disarray but doing not very much for business energy use.

Energy became last autumn’s political football, with each party vowing to keep prices down and tackle the so-called “huge” profits of energy suppliers, and a suite of initiatives rolled out in an attempt to appease consumers.

With baited breath, we waited to hear where energy would feature on the agenda this year.

The answer? Far down the agendas for each party, with no real developments to report. But why?

Both Labour and the Liberal Democrats proposed domestic energy efficiency measures, but there was no mention of its importance to British industry.

The Conservatives talked about the need to bring forward investment in shale gas and ensure renewables deliver “best value” for taxpayers but offered no further detail.

Labour insisted that freezing prices out to 2017 would allow them time to fix the “broken” market, but offered no further detail about how the price freeze would actually work. Many in the market believe such political uncertainty could well cause prices to shoot up ahead of the election

as suppliers lock out volume – and liquidity in the market could also be damaged. Faced with such criticism of an “unworkable” policy, where was the detail? They also affirmed commitment to 2030 decarbonisation targets – but how would this be delivered?

Energy quite literally fuels our economy, and the lack of focus on it concerns me.

The billions of pounds of investment in both generation and energy efficiency is one of the UK’s biggest infrastructure challenges.

The cost of energy impacts the corner shop as well as the factory, and thousands of households and businesses alike struggle with the effect of rising energy bills.

If there’s one thing that’s certain in energy, it’s the need for certainty. Whether it’s investment in energy efficiency or new generation capacity, one thing we all need is a stable environment.

Long-term stability will provide the right climate for investors to build assets that will outlive the term of several governments. It also enables businesses to plan beyond a couple of years, safe in the knowledge that they won’t be hit with unexpected policy and costs.

Energy isn’t a fair-weather issue.

The potential instability caused by a change in government threatens the ability to deliver investment, the price we pay for energy, and the ability of industry to compete in a global market.

Over the coming months, we need a commitment from across the political spectrum recognising the need for stability and, above all else, recognition of the importance of energy to UK plc.

News & commeNt

europe eyes 40% cut in GHG emissions by 2030 The European Union has reached an historic deal to cut greenhouse gasses by at least 40% by 2030. The target is part of a package of measures to make Europe’s energy system more secure, sustainable and competitive, announced at the European Council meeting in Brussels in October.

The agreement is a win for the UK, which has been leading efforts in Europe for an ambitious but flexible deal that cuts carbon emissions while giving the member states the flexibility to decide how they will decarbonise at least cost to consumers.

Energy and climate change secretary Ed Davey said: “Europe has sent a clear and firm message to the world that ambitious climate action is needed now. True to our word, we have delivered a highly ambitious EU climate target while also significantly strengthening Europe’s energy security by making us less reliant on imported energy. This morning only five countries in Europe had

“It seems designed to keep vested interests from the old economy happy” climate targets post 2020, now 28 countries do.”

The key elements of the package are: • A binding domestic EU Greenhouse Gas (GHG) emission reduction target of at least 40% by 2030 • A 27% EU level renewables target and 27% non-binding energy efficiency target that cannot be binding on member states • Calls for the EU ETS to be reformed by including a Market Stability Reserve (MSR) as the UK has been calling for (see page 7) • Extended and expanded EU level support – via

an ‘Innovation Fund’ – for Carbon Capture and Storage (CCS) demonstration projects Overall, this package will significantly strengthen Europe’s energy security by: • Cutting EU net energy imports by 14% in 2030 and cutting EU gas imports by 12% in 2030 • Delivering average annual saving to the EU’s fossil fuel net import bill of €14bn a year between now and 2030 compared to reference scenario • Delivering cumulative savings to 2030 of €285bn in reduced fossil fuel imports compared with reference scenario Reaction to the proposals was mixed. Wayne Mitchell, head of industrial and commercial at npower, commented: “This is an ambitious target that is bound to have an impact on British businesses’ energy bills. Rising energy prices remain a key issue for business leaders in the UK, with just 47% saying the shift to a low carbon

economy is important.

“There’s still work to be done to convince UK business leaders that energy policy is in their best interests and not another example of EU red tape.”

Jason Anderson, head of EU climate and energy policy at WWF European Policy Office, said: “European leaders are sacrificing our futures on the altar of politics.

The result seems designed keep vested interests from the old economy happy, at the cost of the wellbeing of citizens and forward-looking industries. Large polluters will find these conclusions to their liking since they may escape a meaningful pollution price signal for at least another decade.

“With renewable energy and efficiency targets barely above business as usual trends, a carbon market that will remain irrelevant for a decade and nothing to reign in coal power, Europe’s early efforts to combat climate change and advance clean energy have been set adrift by the Council.”

Hinkley Point c to be investigated for cost-effectiveness the National Audit office (NAo) has begun an investigation into UK government plans to subsidise eDF energy’s proposed new Hinkley Point c nuclear power station in somerset. the NAo is the financial watchdog which scrutinises public spending on behalf of parliament. the NAo move follows pressure from the House of commons environmental Audit committee (eAc). Labour mP Joan walley, chair of the committee, wrote to the NAo reiterating the committee’s earlier call for an investigation into whether the deal

Legal challenge could leave Hinkley Point c in limbo represented value for money.

A December 2013 report from the eAc expressed the view that the deal involved a subsidy, which the government had promised not to allow. the Austrian government

6 October/November 2014 | water energy & environment

has declared its intention to take the commission to the european court of Justice over this decision, and Germany is also considering it. In the UK, independent energy supplier ecotricity

is also among a group of companies and organisations considering a legal challenge. this could leave the project in limbo. Legal action would take at least a year to conclude and eDF energy would have to decide whether or not to risk proceeding. stop Hinkley spokesperson Allan Jeffrey said: “this is an extraordinarily bad deal, locking consumers into high prices until almost 2060. worse still, it will use up most of the money available to subsidise non-fossil fuel energy leaving almost nothing available for renewables at a time when their costs are plummeting.”

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Will grids make switch to DC current in future?

“Direct current power cables can carry larger supplies of power, and over greater distances”

prefer high voltage direct current (HVDC) grids because they are more efficient and can be controlled more flexibly.

Direct current power cables can carry larger supplies of power, and over greater distances. This means the equipment required can be smaller in size and in weight and is also more suitable to transport power from offshore renewable energy sources to onshore power systems.

A DC system is also better able to handle and control the fluctuating amounts of power that need to be fed into power grids from these renewable energy sources.

The difficulty with switching to DC power supply, however, is that when faults occur, they are extremely hard to control because the huge flow of direct current is very difficult to stop.

The final barrier preventing energy suppliers making the switch from AC power grids to faster, more efficient direct current (DC) systems could now be removed, according to research carried out at the University of Birmingham.

Electrical engineers led by Xiao-Ping Zhang, professor of electrical power systems at the university, have developed a way of managing faults in DC power systems – a breakthrough that has so far eluded engineers around the world.

The solution is to incorporate the technology needed to control the DC current into the grid’s AC/DC converter terminals, rather than building standalone circuit breakers, which are prohibitively expensive.

Using simple AC/DC converter terminals, the DC current can be controlled and

isolated from the AC side. The DC fault current can therefore be converted into AC current and interrupted very easily – even by a simple power switch or by a low capacity DC circuit breaker.

The innovation has been patented through Alta Innovations, the university’s technology commercialisation office, and partners are currently being sought to develop the work commercially.

“The need for DC current is such that huge, multibillionpound infrastructure projects are already under way in anticipation of a solution to this problem,” explained Professor Zhang. “We believe we have the missing piece of the puzzle that will allow DC power supplies to be adopted worldwide,” he added.

Electricity suppliers have been anticipating the need to switch

EU on course for 2020 targets

UK call for euro carbon market stability

European Union greenhouse gas emissions fell almost 2% between 2012 and 2013, putting the EU very close to its 2020 reduction target, according to the European Environment Agency (EEA).

The EU is also on track to meet two other targets to boost renewable energy and energy efficiency by 2020.

According to EEA analysis of member states’ own projections, the EU is likely to cut greenhouse gas emissions by at least 21% of 1990 levels by 2020, surpassing its 20% target. With 14% of final energy consumption generated by renewable sources in 2012, the EU is also ahead of the planned trajectory to hit 20% renewable energy by 2020.

Likewise, the EU’s energy consumption is falling faster than necessary to meet the 2020 energy efficiency target.

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The government is backing stronger reforms to make the EU Emissions Trading System work more efficiently and stimulate investment in low-carbon technologies.

The UK believes a Market Stability Reserve (MRS) will help Europe meet its greenhouse gas emission reduction obligations more cost effectively through the EU ETS. Energy and climate change secretary Ed Davey said: “A strong EU ETS can be a symbol to the rest of the world – but that is not what we have now.

“Europe has the opportunity to show the world how we can cut emissions while creating investment, jobs and growth – but only if we reform the system, and reform it fast. Otherwise we’re facing increasing costs for businesses, uncertainty for investment

to DC supply for a number of years: although power systems based on alternating current (AC) have served most of the world’s power systems throughout the 20th century, AC systems are not efficient enough to deal with the many different sources of power that are now being fed into power systems. Offshore renewable energy systems, for example,

and ultimately higher costs for consumers, which isn’t acceptable,” he warned.

An insufficiently ambitious cap, combined with the economic recession and other factors, has resulted in a surplus in the EU ETS of about two billion allowances, undermining the functioning of the market.

The result is that the system is not sending the right signals to low carbon investors, increasing the overall costs of meeting our future carbon reduction obligations.

The MSR will address this issue by creating an allowance reserve that will increase or reduce the supply of allowances in the system in response to levels of demand, allowing the market to operate effectively as external circumstances change. This would offer a long-term solution to the surplus beyond ‘backloading’,

under which allowances are being removed but are due to return from 2019.

However, along with Germany and others, the government believes that the Commission’s MSR proposals need to be strengthened to adequately correct the problem of oversupply and protect against future imbalances.

The UK is calling for: • the MSR to be brought forward to 2017 to reform the ETS as soon as possible so that it helps drive the low carbon investment we need; • backloaded allowances to be kept out of the market, either through cancelling them or placing them directly into the reserve; and • improvements so that allowances do not return prematurely, to ensure business can access allowances should significant shortages emerge in the future.

October/November 2014 | water energy & environment

7

News & CommeNt

Investment left out in the cold

by Labour’s price freeze promise Parliamentary under secretary of state for climate change Amber Rudd has warned that Labour’s price freeze promise, which was reiterated at Energy UK’s annual conference by Caroline Flint (22 October), is already harming investment in energy infrastructure.

“Without investment, we risk a return to the lights going out. I am also clear that the role of government is not to fix prices. Indeed, the price freeze proposal put forward by Labour is already

Rudd: ‘we risk a return to the lights going out’

having a detrimental impact on investment – with some reports suggesting a £3bn shortfall in investment in the energy sector over the past year. And a price freeze would ultimately drive up costs for the very consumers Labour say they are trying to help.”

There have also been suggestions that prices may have fallen for consumers but that energy companies are waiting to see if Labour wins the next election and enacts the price freeze.

UK’s energy efficiency market grows Confidence in the UK’s fast growing non-domestic energy efficiency market, valued at £10bn to £15bn, is at an all-time high, the latest quarterly Energy Efficiency Trends Report claims.

The report is based on a survey of the UK’s leading non-domestic energy efficiency suppliers and consumers. These are typically organisations that supply energy efficiency technologies and services to non-domestic clients and consumer organisations in the private and public sectors technologies and services.

Highlights of the report, produced by EEVS Insight, Bloomberg New Energy Finance and the UK Green Investment Bank, include: • Suppliers of energy efficiency technologies and services have expressed their highest level of confidence in the energy efficiency market since tracking began in 2012.

• The confidence index contained in the report is a measure drawn from five key indicators: order books, staff numbers, sale

“Consumers’ expectations are shifting towards longer payback periods”

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prices, industry risk and effectiveness of government energy efficiency policy.

Almost half of the suppliers surveyed confirmed a rise in their number of UK employees in the past quarter.

Over the same period, public and private sector organisations have shown increased demand for energy efficiency technologies.

Demand is driven by an increase in new projects in the areas of energy efficiency lighting and controls, motors and drives, HVAC, boiler optimisation, and refrigeration.

New projects continue to be concentrated in a

8 October/November 2014 | water energy & environment

wide range of property types, most notably offices, public buildings, schools and universities.

• Median project cost has reached an all-time high of £167,000 per project.

• In the area of finance, inhouse funding continues to be the dominant method of backing new projects although it is on sustained downward trend in favour of combined in-house and third party finance.

• Consumers’ expectations are shifting towards longer payback periods with almost a third expecting payback over more than five years.

Bill Rogers, head of strategy at the UK Green Investment Bank, said: “Greater energy efficiency is the key to a greener, more productive, competitive and secure UK economy. Non-domestic energy efficiency is fast growing and is forecast to require up to £15bn of investment between now and 2020. Confidence is critical to a new market, which is why the report’s findings are such good news.”

UK wind power supply record Wind power set a new record on Sunday 19 October by providing 24% of the UK’s electricity supply for the entire day. The previous record stood at 22% of total generation in August this year.

Wind’s consistently strong performance saw it outperform nuclear power from Friday evening throughout the whole weekend and into Monday morning. This also led to a number of coal plants being taken offline as they were surplus to requirements.

Wind power set a new peak record of generating 7,998MW over a 30 minute period at midday on Saturday once local turbines are factored in, according to National Grid statistics.

This is the equivalent of powering 17 million homes, based on average consumption in October.

A sudden drop off in gas power was caused by a fire at Didcot B power station, which has a capacity of up to 1,360MW, equivalent to the needs of a million homes. There are also four nuclear plants (nine reactors) currently offline due to unplanned outages and refuelling, which has removed 5,303MW of generating capacity from the system.

wind power generation peaked at nearly 8mw on 18 october

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scottish referendum ‘No’ vote removes ‘major uncertainty’ Scotland’s ‘No’ vote in September’s referendum on independence is important for the whole of the UK energy market, according to EY UK and Ireland head of power and utilities Tony Ward.

Commenting on the impact of the referendum outcome on the UK energy market, he said: “The UK markets have developed ever-closer and more integrated systems and ways of operating that serve to reduce, then smooth, the cost burden across all users.

This also enables investment choices to be made on systemwide merit and help achieve a degree of energy security that can often be taken for granted.

“A major uncertainty has been removed by the vote, particularly for those who were evaluating significant capital investments in Scotland. The EMR reforms and further developments of the UK’s competitive retail market can now progress while taking the UK market into account as a whole.

“The unpicking of this fully integrated market would have likely led to the creation of a significant degree of asymmetry in the separated markets, particularly in respect of the allocation of costs and assets. This is now smoothed by the ability to adopt a nationwide approach.”

Small businesses are missing out on energy savings While small business owners are concerned about the price of utilities, more than half (52%) of SMEs – 2.54 million businesses – do not know what they spend on electricity, gas and water as a percentage of their overheads.

A study, published by Utilitywise, shows that only one quarter (25%) of small business leaders can easily see how much electricity, gas and water their business is using and less than a third (30%) are able to access energy consumption information.

The study highlights that

more than half (66%) of small business owners delegate utilities purchasing and management to other staff, including their office manager.

Some 17% of respondents reported that they look after utility suppliers themselves, yet 11% of small business leaders admit they do not know who in their business is responsible for this important overhead.

This is despite the rising price of utilities remaining the main source of cost inflation for more than half of all small businesses (53.8%).

When it comes to energy purchase and consumption the data shows a lack of understanding and engagement among small business owners: • Business owners review their personal domestic utilities provision more regularly than they review the supply to their business (30% versus 20% respectively) • Worryingly, 14% of small business owners never actively review their utilities provision • Utilities has the highest percentage of small businesses that report they “never review their provision” • 68% did not know the difference between a fixed and flexible energy contract

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M2G delivers energy savings for NHS Ayrshire & Arran

Sabien’s M2G boiler load optimisation controls have delivered a 12% reduction in gas costs at NHS Ayrshire & Arran’s Biggart Hospital in Prestwick.

The project paid for itself in just six months As part of its ongoing programme to reduce energy consumption and carbon emissions, NHS Ayrshire & Arran installed Sabien Technology’s M2G boiler load optimisation controls to increase the energy efficiency of the existing boiler plant and reduce energy costs at Biggart Hospital in Prestwick. The 166-bed day hospital provides facilities to care for patients after discharge from acute care or directly from the community setting.

An initial measurement and verification project was initiated for three months covering five boilers.

The project ran from 20 December 2013 to 20 March 2014 and the energy savings were measured and validated in line with the principles of the International Performance Measurement & Verification Protocol (IPMVP)*. This included the use of Degree Day data to normalise fuel consumption in relation to variation in ambient temperatures.

In addition to the M2Gs being installed, Sabien installed independent GSM monitoring equipment to collate the data and analyse the energy savings. During the three-month winter period average energy savings of 9% were achieved, with a payback period of 1.3 years and a reduction in CO2 emissions of 53 tonnes per annum.

As a result of the M&V project the M2G technology has now been rolled out to other hospitals and healthcare centres across the NHS Ayrshire & Arran estate.

NHS Ayrshire & Arran energy manager Alastair Kay recalled: “We

are committed to improving our energy efficiency and reducing our carbon footprint. To that end we continually look at and evaluate technologies for saving energy, specifically those which will deliver best value. Since the initial M&V project we have continued to analyse the performance and the cost savings have increased to 12%.

“This is because dry cycling would have increased during the milder periods of the heating season, which M2G is now preventing. The project paid back in just six months.

Furthermore the delivery of the project has been seamless with minimal impact on our resources.”

The initial pilot project involved installation of M2G on three Hamworthy Wimborne boilers in the main boiler room and another two Remeha Quinta boilers in the plant room serving the Urquhart Ward.

Controls already in place included links to a building management system, so it was critical that the M2G units worked in parallel with the existing control strategies to achieve the additional savings. *The International Performance Measurement and Verification Protocol (IPMVP) defines a best practice framework for quantifying the results and benefits of energy efficiency investments. As such, it ensures that there is total clarity and transparency for all parties in relation to the scope of work from initial planning and measurement methodology through to the validation of results

For further information www.sabien-tech.co.uk

InsIght

Connecting finance and energy Managing down energy consumption using external finance while retaining the benefits from the project is now a real option, says Ingenious’ investment director – Clean Energy James Axtell.

By working with the right partners the most effective solution can be developed with the client and the project optimally managed over its life

I

n our most recent reader survey we again found that the number one barrier to implementing energy efficiency projects is finance. The problem is getting the board to sanction spending when there are so many other demands on a business’ cash and the trepidation that many firms feel about going externally for finance solutions.

Speak to James Axtell and you get rather a different picture. He says there are many finance companies wanting to invest in energy efficiency and that they can’t find the projects. Many companies are unwilling to go for external finance, believing that it is cheaper to do it themselves. The problem is many times they think like this and then they don’t actually get around to doing a project or if they do it is a couple of years down the line when they could have been having savings over that period, comments Axtell. So how can finance aid energy efficiency for businesses?

In a world where uncertainly seems, more than ever, to be screaming from the newspaper headlines, energy-related issues are ironically both a constant and deeply unpredictable – constant in that management of energy costs is a key issue for most organisations but unpredictable in that the scale of the change in the sources and supply of energy are unprecedented.

The so-called energy trilemma is now a familiar

External finance may enable energy efficiency projects to go ahead that othwise would not or that they happen faster

concept. Rising energy prices, energy security issues and issues related to carbon emission reduction are significant at a national level. The question for those responsible for energy use is what can be done to both protect the organisation from unwanted negative impacts but also to play a part in resolving issues nationally.

Energy efficiency is a key part of the management of energy costs. As a topic, energy efficiency inevitably rises in prominence when energy prices are high but sinks down the agenda when

10 October/November 2014 | water energy & environment

energy prices fall. Not seen as the most exciting of areas, particularly at board level, recent developments are changing the way in which energy professionals can drive change in their organisations.

Nonetheless, there is still a lot of work to do before benefits can be enjoyed.

Questions abound at this stage: What is the opportunity across my property estate? How do I scope the opportunity?

How do I get my finance director onside? Do we have the resources internally to dedicate to a project? How on earth would I identify and

approach potential providers of finance? Would I qualify for that finance any way?

How do I know the savings will actually materialise?

It is also tempting to think that one’s own organisation is unique and that existing solutions wouldn’t apply.

Having been working in the energy efficiency arena for a number of years and having reviewed dozens of potential projects, the experience of the Ingenious Clean Energy team is that all these questions can be dealt with and often more simply than at first thought.

The key as ever is to work with

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the right team. A team that has experience, independence and the willingness to work closely with you to realise the opportunities presented.

Two key changes sit behind the new, greater opportunity to drive value for the organisation. Firstly, the broadening away from pure energy efficiency to encompass the wider concept of resource efficiency. Secondly, the availability of additional, external sources of finance to enable organisations to realise greater benefits than previously available.

Resource efficiency covers a broader remit than energy efficiency by covering not only electricity and gas but also water and demand side response. The later has the capacity to generate revenue and therefore move the debate away from ‘saving’ and on to revenue generation opportunities. Inevitably this interests the senior decision makers more than savings.

The provision of external finance makes more comprehensive retrofit projects viable. There is otherwise the risk that a focus on shortterm payback projects means that interventions with a longer payback never get done as they are not crosssubsidised as part of a broader project. Providers of external finance will understand the wider opportunity and may well consider a longer term project than the organisation would feel comfortable with on its own.

A key point made time and again by those promoting resource efficiency projects within their organisations is

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just how critical senior buy-in is to success. In practice this often means that the finance director needs to see the value of the project when compared with alternative investment opportunities.

Helpful, then, in getting this buy in are both the provision of external capital to minimise the drain on internally available resources and also the revenue generation opportunities presented by demand response. Another attractive characteristic for the FD is the transfer of project risk, and the delivery of savings, to another party – a key element of the Energy Performance Contract approach.

While energy efficiency investment has often been focused on operational expense (i.e. annual energy spend) there is an increasing realisation that funds are available to upgrade major capex items which may be near end of life. Freeing up capex destined for these projects into other core business activities is also an attractive win for most organisations. Not given enough consideration at outset is also the opportunity to reduce maintenance costs as well as the improved level of comfort for building users.

In summary, even with uncertainty such as that in the Ukraine, Syria and many other places in the world, energy managers should be confident that they can help drive value for their organisation with a well presented resource efficiency project supported by the right partners. we&e theingeniousgroup.co.uk

The question for those responsible for energy use is what can be done to both protect the organisation from unwanted negative impacts but also to play a part in resolving issues nationally

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Room for sentiment: can feelings trump facts in utility markets?

By Serge Mazodila, lead trader of LG Energy Group The UK energy markets are driven by both fundamental data and market sentiment – but is one more influential when it comes to determining price? LG Energy Group takes a look at some of the underlying factors which determine the duration and extent of changes in market direction.

Facts: market fundamentals The UK gas and power markets are driven by fundamental factors, which influence supply and demand.

Key fundamental factors include: temperatures, gas storage levels, wind speeds, the state of the economy and crude oil prices.

The ways in which these factors influence supply and demand levels, and ultimately gas and power prices, are myriad. We all know that colder temperatures lead to increased demand for both gas and power, and thus higher prices, whereas a cold wind can actually lead to increased power supply and lower prices, as the UK has an ever-growing capacity for wind generation.

Feelings: market sentiment However, the utility markets are not solely subject to the laws of supply and demand. Traders take a view on how they think market prices will evolve, and in doing this they do not only consider factual, numerical data.

Market sentiment can be influenced by a wide range of occurrences – the most recent and obvious example being the ongoing disputes between Russia and Ukraine.

The utility markets have seen multiple price spikes during 2014, as traders reacted (and, sometimes, overreacted), to news-flows coming out of the region, despite the market

fundamentals remaining decisively Bearish (pessimistic with regard to prices).

Facts versus feelings Ultimately, utility market prices are driven by a combination of the views, ideas and opinions of market participants, in conjunction with the available fundamental supply and demand data. The two are inextricably linked, as many market views are based on specific fundamental data in combination with news-flows or supplementary data, such as weather forecasts.

At any given moment, facts, feelings, or a combination of the two can dictate the direction of the utility markets, with recent examples including whether power supply margins will be tight over the coming Winter (fundamental), and whether Russia and Ukraine will go to war (sentiment).

Outlook for Q4 14 Our outlook for the first half of winter 14/15 is currently focused on the fundamentals – gas storage levels are high and weather forecasts predict seasonal normal temperatures, giving an expectation of a slow, steady increase in utility prices.

However, in the case of Russia and Ukraine failing to reach an agreement over Ukraine’s unpaid gas bills, the potential for a European gas cut-off is deemed high. In this scenario, the initial reaction would be sentimentdriven (price spikes). If the situation persisted, gas supply into Europe would be greatly reduced, and this sentiment would translate into a shift in market fundamentals.

To learn more about LGE call 01253 767222 or visit www.lge-group.com

gAs & electricity

A difference of opinion A survey of energy and sustainability managers across the UK water sector raises interesting questions about the sector’s diverse approach to energy, argues Caroline Pitt, head of consulting and strategy for Utilyx

A

sk water company companies believe they could directors about the rise by 50% in real terms over big issues dominating the next five years, others their in-trays right expect them to edge up by now and there’s likely to be just a few percentage points. much common ground.

As energy already The need to deliver more represents a significant for less to meet regulatory proportion of operating demands at the same time costs for water companies, as preparing for nonthose two extremes domestic competition means would have very different all are facing the same financial implications. ‘big ticket’ challenges.

Of course, no-one has a But how individual crystal ball, but across the companies see those industries Utilyx works in challenges and what they we are seeing businesses are doing to prepare for looking to gain far deeper them varies widely. understanding into price That was highlighted trends and the factors by a survey Utilyx driving them. recently carried Those out among businesses energy and that can get a sustainability good handle of respondents cited managers of on where cost as the biggest UK water and prices (both factor driving their waste-water wholesale and companies. non-commodity energy strategy It aimed to costs) could provide insight be heading will into their approach to be better placed to energy at a time of significant avoid surprises, something concern over rising costs, which will be increasingly volatility, security of supply important as competition in and environmental pressures. the water sector develops.

It was no surprise cost Tackling energy consumption emerged as the number one across a business will also issue driving the energy become more important amid strategy of companies, with the growing price volatility 90% describing it as extremely expected in the years ahead. important. Security of Half of respondents to our supply (50%) and reputation survey acknowledged that (40%) were also among the insufficient understanding key factors highlighted. of consumption at individual But water companies sites or across a portfolio have a wide range of views could be a significant about how they expect the barrier to achieving energy challenge to develop their energy targets. over the years ahead.

Knowing exactly when The biggest diversity was and where energy is being seen on prices. While some consumed – as close to

90%

12 October/November 2014 | water energy & environment

real-time as possible – will be critical to make the most of demand side response incentives.

Such incentives were seen by respondents as having the biggest impact on the way they will buy energy by 2020.

Changing consumption patterns to move demand away from peak times is something water companies have already made major strides on in recent years.

But perhaps the most exciting opportunities will come from harnessing that smart engineering with better within-day energy price intelligence.

Scheduling a particularly energy-intensive maintenance operation to coincide with an expected dip in prices, for example, could lead to a significant cost saving.

A tighter grip on consumption and price will also help companies make the most of greater competition and product innovation in the supply market. Although our survey found that water companies typically don’t look

to fix supply deals for longer than three years currently, we are already seeing increased interest in sourcing longer term power purchase agreements to provide price certainty.

Our survey also found continuing strong appetite for investment in onsite generation by water firms with cost cited as the biggest single driver. Almost two thirds (62.5%) of respondents stated that cost was an ‘“extremely important” factor in their investment decision.

As we might expect, half of respondents said government incentives were key to their onsite investment decisions, highlighting that policy change could have a material impact on the sector’s investment priorities.

Given the upheaval in the energy sector through Electricity Market Reform and the potential of more change ahead after the general election, energy managers will need to keep a close eye on the policy landscape and how it may affect them. utilyx.com

the energy-related knowledge or skills respondents expect to strengthen within their organisation between now and 2020

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making big reductions in your energy costs and CO2 emissions can be a difficult task Which is why our UK customers trust Veolia to manage their on-site energy provision. We can design, build and operate energy centres that will cut your carbon emissions – giving you the benefit of long term sustainable CHP and renewable energy solutions. Guaranteeing you compliant energy provision that supports your activities. And we are so confident that we operate and maintain them – saving you money, cutting emissions and freeing your time.

With a track record in delivering energy management since 1938, and operational in thousands of sites across the world, we have the energy solutions that can work for you. www.veolia.co.uk

COVER STORY

Just how ‘Green’ can Green Energy Green Energy Consulting has quickly established itself as a leading consultancy within the energy sector, adding value and improving the green credentials of all its clients while aiming to keep costs down. Discover how it can help your business plan its journey to become greener

P

rotecting the environment, while trying to reduce expenditure, is a process that is important to almost all of us, not just as individuals but as businesses as well.

As a business working within the commercial sector, we understand the pressures that most organisations are feeling to both save money on energy and to ensure a more renewable and sustainable outlook. Government legislation means that limiting carbon emissions has now become mandatory for all UK businesses, emphasising the importance of secure energy management plan.

At Green Energy Consulting we strive to add value and improve the green credentials for our clients while keeping costs down.

Providing nationwide coverage we have quickly established ourselves as a leading consultancy within the sector. The business now has more than 20 staff, with roles varying from frontline procurement consultants, analysts and sustainability specialists through to our professional and hardworking administration team. From December this year our head office will move into our third 2,450 sq ft site also based in Gateshead, and just a stone’s throw away from the current site. Our previous site will be

kept and used as a training facility.

Our growth and success to date has been both due to our direct client opportunities that range from local business to multinational corporates.

However, also developing, growing as an aggregator with a partner channel now over 120 organisations strong and a total client portfolio of over 1,700. The constant strengthening of direct and partner supply agreements allows us to pass these benefits and services on to both. We work with clients to ensure that they are guided through the sometimes difficult transition to being more sustainable.

This includes complete lifecycle analysis of energy, its use within their buildings providing opportunites for reducing energy within agreed timescales.

Location, size and economic position are all factors which determine the best way to aid our clients in maximising their sustainability outlook. Once we have taken all of these aspects into account we are able to start the journey to a greener business.

First port of call for all of the organistions we work with is putting forward a proposal to move their energy supplies onto 100% renewably sourced contracts. Having the ability to contract the supplies to a large number of different supplier’s means each of these has different sources of renewable generation. Wind, hydro

14 October/November 2014 | water energy & environment

and biomass being the most common. However, some have more CSR benefits than others.

These proposals are made using certificated and certified green supplies; a standard ‘brown’ power offer is shown for comparison. To aid transparency and for us to show a fair independent comparison,

offers are broken down to show all costs and pass-through charges where applicable.

Also, additional charges over and above the unit rates are included. We meet with every client to evaluate their current energy portfolio, allowing us to identify any key areas within their current contracts,

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Consulting make your business?

consumption and energy performance that can be improved for both CSR and cost. Addressing each clients’ position separately allows us to find the most financially beneficial energy contract helping to improve their bottom line.

Another way we aid

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businesses is to reduce their carbon footprint through proactive carbon management solutions. This process involves identifying the small changes that a business can make, both in infrastructure and behaviour leading to it becoming a more sustainable business. This can radically improve the business’ green credentials, reduce excessive energy expenditure and even attract new clients through an improved company profile.

Carbon offsetting is another major way for a company to improve its overall carbon footprint.

Carbon sinks, or on a smaller scale tree planting, is a great way for a company to reduce its carbon footprint with an overall goal to become carbon neutral. Our partnership with Carbon Footprint Ltd, a leading provider of carbon management and sustainability services, is currently helping businesses across the UK to develop carbon neutral solutions, reducing their environmental impact.

As an example, Green Energy Consulting is working with a number of the Newcastle Gateshead Cultural Venues.

NGCV is a collaboration of 10 organisations across 19 venues in the North-east whose aim is to promote high quality cultural attractions through a plethora of mediums.

Clients within the group include Sage Gateshead, Theatre Royal, Life Science Centre and the Tyneside Cinema, all with renewable energy contracts in place that showed either direct savings against their current contract term or a lower market exposure going forward. These

venues also receive carbon neutral gas supplies and consultations regarding energy management, consumption reduction (such as low energy lighting and onsite generation) and metering connections.

Newcastle has won ‘Most Sustainable City of the UK –2009, 2010 and 2014’ and NGCV takes its responsibility

seriously in trying to live up to this reputation. The venues’ support this protecting of the environment through carbon management.

As these venues are well known worldwide and influential within the cultural sector promoting green and ethically sourced energy is highly beneficial to their business images.

This year all 19 NGCV venues were awarded the Industry Green Certification, which is recognition in the cultural sector for their commitment to reducing carbon emissions and promoting environmental sustainability. This highlights their positive progress towards sustainability and as a company we are honoured that we are involved in helping them secure this award.

Over and above the

procurement of energy, consumption reduction and carbon management, we are of course keen to work with clients long term on all the other aspects of suitability.

Other areas of added value such as energy auditing, ISO accreditation and ESOS will be put forward for the client’s consideration.

These other services are all offered by GEC, with in-house capacity to offer a fully managed and bespoke service including implementation, auditing and facilitation of external certification.

With the introduction of ESOS this year, we have employed two consultants qualified to ESOS standard while also having brought in a lead auditor qualified assessor.

Our goal going forward is simple; to assist more and more organisations with the complicated changes that are happening in the sector and to identify affordable and practical green solutions that they can benefit from by addressing our core five areas.

These five key areas are: • reduction in energy expenditure; • access to bespoke services; • continued management support; • enhanced green credentials • increased social; environmental and ethical responsibility.

For any further information on anything within this article or other questions relating to energy and sustainability contact us at: info@ greenenergyconsulting.co.uk, call 0191 300 6161 or visit greenenergyconsulting.co.uk

October/November 2014 | water energy & environment

15

gAs & electricity

What’s in store for intensive users?

Times have been difficult for energy intensive users emerging from the largest recession in living memory, How is industry to coping with the current challenges? Tim McManan-Smith met up with director of the Energy Intensive Users Group Jeremy Nicholson to discuss

A

s well as potential energy price rises, energy intensive industrial companies are facing legislative changes that will impact on their operating costs.

“There are a number of policy measures that affect electricity, more so than gas,” comments Mr Nicholson.

“There is direct taxation, such as the climate change levy (CCL) and the Carbon Reduction Commitment (CRC), though less energy intensives are captured by this scheme, carbon pricing with the EU Emissions trading scheme (ETS) and in the UK’s case the self-inflected wound of setting and independent carbon price floor.

“The carbon price floor doesn’t reduce emissions overall within Europe because they are covered by a common cap, namely the EU ETS. It does, however, increase the proportion of the burden that falls on UK consumers.

The third element relates to

“

available for other industrial sectors. “This is a big tick for the government on formalising this,” says Mr Nicholson.

Taxing carbon via a cap and trade model is the EU’s main weapon for reducing carbon intensity. The EU ETS allows for certain qualifying industries to be exempt from the price impact of this to protect European heavy industry.

“Chemicals and steel are on the list and so they will be compensated but if you are unlucky like a brick maker, which is relatively energy intensive but for whatever reason wasn’t considered worthy when the list was compiled a few years ago, then you are not eligible to receive compensation,” states Mr Nicholson.

This inconsistency is a gripe for many energy intensive industries when it should be about the energy intensity of their processes and not whether they are on certain seemingly arbitrary lists.

Even when industryies

We have reformed the market in a complicated way with a multiplicity of measures

subsidies for renewable energy and nuclear as well,” he adds.

There is some protection for those that operate in industrial sectors that are covered by climate change agreements (CCAs) and these give a reduction on the CCL. Mineralogical transformations and metals production are exempted from downstream energy tax under EU law and up to 90% reductions are

recieve compensation, it is not for the full cost.

Compensation is degressive, starting at 85% of eligible costs for 2013-15, 80% for 2016-18 and 75% for 2019-20.

Mr Nicholson says that “there is a somewhat bizarre theory that not having full compensation increases the incentives for industry to be more efficient, as if we didn’t already have one.

16 October/November 2014 | water energy & environment

As if industry wants to get up in the morning and set fire to their shareholders money unnecessarily.”

If there is the threat of carbon leakage from the EU for energy intensive companies operating within the ETS then surely full compensation should be granted as these companies are competing internationally where such schemes do not exist?

“Arguably we might be better off if we had a slightly higher carbon price and less other interventions in the market but we’re not there yet,” says Mr Nicholson.

“Let the carbon price do its work. The object is to do things cost effectively, not to

cause the most pain possible.”

The unilaterally introduced UK carbon price floor has had to apply for stateaid exemption for energy intensive industries. The EU has deemed that the UK can only pay compensation for the carbon price floor with eligibility on the same basis as EU ETS and is adamant about that even though the UK is the only country within the EU to have implemented such an own goal against its international competitiveness.

“There are some very energy intensive industries that aren’t on that list such as industrial gases; they can receive stateaid for renewable subsidies but not for the carbon price, which

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is bizarre, states Mr Nicholson.

The UK government has taken the view that the EU ETS is not providing a robust enough price for carbon and therefore has implemented its own price support. Has the UK carbon price floor undermined the EU ETS in any way?

“There was consternation when this was announced as it was thought to be an uncommunitaire thing to do, although there was some sympathy for it from some environmental ministries elsewhere in Europe,” says Mr Nicholson. “As there wasn’t sufficient political support to implement similar measures elsewhere on an EU wide basis, the general response was ‘why are you doing this? Why are you doing it this way? How does that actually in practical terms help the case for the reform of the EU ETS?’ The EU has been fair about this in a legal sense but it is regarded as a headache that shouldn’t have been inflicted upon them.

“Others in the EU are looking to reform their markets but we have done it in a complicated way with a multiplicity of measures. We are obviously unique in having our own carbon price and I don’t think there are CfDs in place elsewhere. Big wind generation and new nuclear do need something like this in place with high capital costs and low running costs but competition for the price of CfDs needs to happen,” he says.

The CfD for new nuclear power stations is £92.50.

Is that a fair price for low carbon generation?

“EDF has obviously negotiated very successfully.

You can make a case that £92 is cheaper than offshore wind, even with declining costs over time, it doesn’t have to have its own back-up for intermittency and grid extensions and so on.

Whether wind is really low carbon generation depends on the carbon content of the back-up,” says Mr Nicholson.

theenergyst.com theenergyst.com

“I don’t wish to denigrate nuclear when saying this, we all want it as part of the solution for baseload supply and it will provide a huge amount of jobs at the site and for manufacturing along the supply chain.

It’s got to be a good thing but not at any price.”

The problem as Mr Nicholson sees it is that the government is picking winners, valuing what is a better technology at government level rather than investors deciding and footing the bill for the best options. “In terms of £/MWh or tonnes of CO2 saved then offshore wind is not the best thing to do. When the offshore wind industry claims that in a few years we will be able to produce at £100/MWh my response is fine, we’ll give you a CfD for that and you can sign on the dotted line. ‘Oh we can’t do that yet.’ The fact is that it is a long way from grid parity especially when you internalise the cost of back-up. You have to look at dispatchable technology which wind isn’t, it might be generated exactly when you need it but on the other hand it might not,” he says.

“If you are interested in the least cost carbon reduction, doing it through carbon pricing whether it’s taxation or trading and giving the market the maximum flexibility to find the most economically efficient solutions, it has got to the way to go, at least with mature technologies. There has always to be a case for less mature technologies to have support if you want to accelerate the development of these,” says Mr Nicholson.

Uncertain times for sure but there are moves in the right direction from government. It just remains to be seen whether a consistent and beneficial approach can be found that joins up the Treasury, BIS alongside the Department of Energy & Climate Change to prevent further damage to heavy industry. we&e

Watch out: the Triads are coming!

Darren Lennon, head of strategic sales at npower, explains Triads ahead of the peak season With the colder weather and darker days comes another inevitability of winter: the Triads.

These are the top three half-hour peaks of energy demand across the National Grid – the periods when more energy is consumed than at any other time of the year. This may sound innocuous enough, but our message to businesses is clear: watch out for the Triads as they could end up costing you dearly.

In order to manage demand during the Triads, the National Grid imposes a charge: Transmission Network Use of System (TNUoS). By reducing demand, this charge helps ensure the Grid is not overloaded, while also financing maintenance.

Impacting customers with halfhourly meters, the charge is proportional to businesses’ energy use over the Triad periods and linked to location.

Given that (depending on location) the charge can be as much as £34,000 per megawatt, it is absolutely critical that businesses try to avoid it.

The answer therefore seems simple: businesses should reduce demand during the Triad periods.

The only problem is that knowing when Triads will occur is a far from simple business.

There are, however, some indicators that businesses can look out for. We know, for example, that Triads occur between 4.30pm and 6.30pm from November to February and have to be separated by 10 consecutive days.

We also know that the main driver is when the domestic teatime period clashes with endof-day industrial demand – so Triads nearly always occur on a weekday.

But there are too many factors

in play to be able to forecast with complete certainty.

A cold snap could occur at any time, or there could be an exceptional ramp-up of industrial activity.

The good news is that help is at hand. For example, we run a Triad warning service where we alert customers 24 hours in advance of a potential Triad. This alert enables them to respond accordingly, either by ramping up on-site generators or reducing consumption until the peak has passed.

As part of this Triad warning service, we have also created a TNUoS calculator online that allows users to calculate potential energy savings during a Triad.

We have estimated that through a strategic approach to Triads, an average medium to large energy user can save around £50,000. We are therefore advising all businesses to take action now to help ensure they do not fall foul of the Triad season this winter.

Whether you are partnered with us or another supplier, we’re able to offer the Triad warning service to help you plan for Triads. For more information contact the dedicated team on: business@npower.com

gas & ElEctrIcIty

Overcoming the barriers It’s time to move beyond the low hanging fruit and get to grips with energy reduction, says Dave Cockshott, chief commercial officer at Inenco

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n a recent survey by Inenco, cost reduction was cited as the biggest driver of their energy strategy by 83% of large businesses, which will come as no surprise in a climate of rising non-commodity costs and volatile markets.

Yet despite the fact that cutting consumption is the key to reducing costs and meeting that strategic energy target, many businesses are still lacking a focus on long-term, strategic energy reduction. Take the Energy Savings Opportunity Scheme (ESOS) – for the first time ever, the identification of energy efficiency initiatives is a mandatory requirement for 10,000 of the UK’s biggest businesses, meaning much of the planning and development of energy reduction strategy will be completed in the compliance process. However, only 41% of businesses said they expect to act on audit recommendations.

The time has come to move beyond the low cost or no cost measures and seriously consider investment in longterm projects. The technology market has matured significantly in recent years, and partners exist to support businesses throughout the process. We asked businesses what they felt were the biggest barriers to energy reduction.

A third told us that funding is a key issue and 20% were sceptical about return on investment. A quarter of large businesses also admitted that the time and impact of implementing measures would also put them off developing.

So how can businesses

overcome these barriers and implement an energy reduction project in their organisation? analysis and planning You need to conduct a thorough analysis of your portfolio. The good news for businesses complying with ESOS is that the audit report will go much of the way towards doing this for you. The main aim here is to understand where the high priority sites are and agree where to focus efforts to get the best ROI. Most long-term projects will require capital investment to amend the infrastructure, processes or equipment on your site and payback will vary by technology chosen.

A technology agnostic partner will be able to help you navigate the market and identify suitable options.

Look for commercially proven solutions, from technology providers that are willing to demonstrate experience and provide case studies.

Detailed modelling can be undertaken to predict savings and outcomes to confirm project viability, budgets and timescales.

“

Only 52% of businesses surveyed agreed that their energy reduction plans were integrated with their energy buying strategy

18 October/November 2014 | water energy & environment

financial and usage savings Funding was listed as a key at the start of the project and concern by businesses, and reporting on them is essential. finding the capex to deliver a The right partner should project can be a challenge in provide cumulative savings and the current economic climate. project returns, but be However, funding sure to check their options can enable accreditation: businesses funding to deliver partners for reduction shared saving projects of businesses expect models will without to act on audit expect reports upfront on savings expenditure recommendations prepared by repaying the to specific capital outlay criteria (usually through savings.

IMPVP accredited Look for partners willing project tracking). to commit to guaranteed Over the coming months, savings, to remove the as businesses embark upon associated risks and ensure all their ESOS assessments, parties have some ‘skin in the it’s vital that focus remains game’ for a successful outcome. on a long term strategy.

Before finalising the business The identification of energy case, be sure to engage saving opportunities across a procurement teams. Only 52% business is a chance to bring of businesses surveyed agreed together disparate elements that their energy reduction and create a structured plan to plans were integrated with their deliver operational efficiencies energy buying strategy, but this and significant savings. is a critical step in the process.

Inenco has recently Ensure anticipated savings feed launched Spectrum, an endinto buying plans, as well as any to-end solution to support anticipated site interruptions businesses throughout the during the installation stages. planning, management and implementation of Manage projects with guaranteed Time investment is also savings of at least 15%. seen as a barrier to projects, Let’s not forget that every with everyday pressures and 1% saved on energy costs priorities over-riding the equates to significant savings: additional time required to up to £300,000 for a middeliver a successful project. sized manufacturer, and Finding the right partner to around £500,000 for a large manage the project can be retailer. Energy reduction is a a sound decision, ensuring logical way to regain control smooth implementation. The of energy costs, and with the need to manage multiple removal of barriers, focusing contractors and keep the on long-term projects makes project on track and to budget sound business sense. we&e is critical to ensure its success. inenco.com/spectrum Setting clear KPIs for

41%

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To find out how we can save your business time and money, contact us today - procurement.team@biu.com

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Viewpoint

An expense worth having Energy Managers Association CEO Lord Redesdale asks whether the cost benefits of the Energy Savings Opportunity Scheme (ESOS) are worth the expense of conducting the audits

i

f you are a UKIP supporter, do not read this article.

ESOS is on its way and despite all the antiEuropean rhetoric this is one piece of European regulation that will make British business more competitive, more profitable and more environmentally friendly.

How dare the members of the European Commission make British companies reduce their energy bills? This outrageous interference could even be used as an argument for Britain staying within the EU. For those of you who are not acquainted with the Energy Savings Opportunity Scheme (ESOS), it is Britain’s version of the energy audit that has been mandated as part of the Energy Efficiency Directive.

Europe has a problem, almost all of the 27 member states face major energy price hikes, coupled with the cost of replacing ageing and creaking infrastructure. To combat these rises, energy efficiency has been seen as an effective element of the answer.

The problem is that to meet European targets, ¤60bn needs to be invested by 2020 and only a small fraction of that is actually being invested.

The Commission has identified that one of the reasons why companies do not spend on energy efficiency is that very rarely do companies understand the potential savings that could be made. Therefore it mandated in the directive that the largest companies in Europe should undertake an energy audit of a majority of their properties and this should

be done by December 2015.

Subsequent audits should take place on a four-year cycle.

This all sounds like a piece of expensive European-inspired bureaucracy. However, it is worth looking at the value chain for Britain. In the UK there are roughly 9,000 companies that fall within the scope of the measures, those are more than 250 employees or ¤50m of turnover or ¤43m of assets. Those organisations will have to audit an estimated 180,000 sites.

Why is there any value in this process? The answer is simple, energy prices are about to go up sharply for many reasons.

Oil prices are falling but gas prices are under enormous pressure, internationally despite fracking in the US to rise. Britain gets two thirds of its energy from gas and with the closure of the coal stations this will lead to higher bills.

Boards are going to be faced with fuel price rises they had not planned. ESOS will provide a list of effective measures it can invest in to reduce the

20 October/November 2014 | water energy & environment

“

The Commission has identified that one of the reasons why companies do not spend on energy efficiency is that very rarely do companies understand the potential savings that could be made

bill. This could be the start of the retrofit revolution Britain, with its aging buildings and inefficient building stock, desperately needs.

How will ESOS work? ESOS has been designed to be light touch regulation with hefty fines for non-compliance.

Assessments will need to be carried out in companies by a lead assessor. The lead assessors will need to be registered on a register such as the EMA’s lead assessor register. The lead assessor will need to have energy assessment experience but can be trained in the workings of the Publicly Available Standard that sets out how assessments are carried out. The Energy Managers Association and CIBSE have training courses. It is not necessary to get an audit done externally by consultants as in-house lead assessors can and in many cases should be the ones who manage and undertake the work.

The process to be compliant has to be presented to the board of the company by December 2015 and this process being reported to the Environment Agency.

There is a cost to the process but companies that ignore the need to cut their energy bill will pay a far higher price in competitiveness and a threat to their profit margin that could be a far higher price to pay. we&e Lord Redesdale established the Energy Managers Association in February 2012 and it now represents energy managers from companies with a collective energy spend of about £3bn

theema.org.uk

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Gas & ElEctRIcIty

How will EMR impact on you?

Head of I&C sales at Haven Power Ashley Phillips looks at what businesses can do to prepare for the cost associated with Electricity Market Reform

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lectricity Market Reform (EMR) is no longer a future initiative but an active one, following the regulations that came into force on 1 August 2014. These policies set out major change within the electricity market; all aimed at ensuring demand is met as well as responding to stringent climate change targets set by the European Commission.

These targets include a 40% cut in greenhouse gas emissions, a 30% increase in energy savings and an aim to get 27% of energy used from renewable sources.* Businesses in particular need to be fully aware of what EMR involves and how it will affect them. As with most schemes designed to address climate change targets, it comes at a price.

What’s important is to be fully informed and understand the cost implication to UK businesses.

What is EMR? Quite simply, EMR is the government’s response to demand to deliver low carbon electricity and guarantee supplies at peak demand. It is estimated that by 2020, due to plant closures and the need to replace and upgrade the UK’s electricity infrastructure, the UK electricity sector will need to attract about £110bn of investment and new networks to increase our generating capacity.

Two key provisions to meet carbon reduction targets by encouraging low carbon generation and to ensure security of supply, are: Contracts for Difference (CfD) – Planned to stimulate longterm investment in low-carbon

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place in the industry, it can be hard to keep up. Since the initial EMR plans were made public, we have seen the regulation become more complex, and it needn’t be. A breakdown of the many elements that make up EMR can be found at gov.uk/government/policies/ maintaining-uk-energysecurity--2/supporting-pages/ electricity-market-reform

generation, CfDs will provide predictable revenue streams for generators. The aim is to encourage new and efficient investment by reducing risks to investors under a private law contract. The first round of CfD allocations has begun and we should hear the results before the end of the year.

Capacity Market (CM) – This new auction-based arrangement is being put in place to secure the UK’s electricity supply by making financial incentives available to participating generators and customers that can demand side manage their consumption, to provide reliable capacity. This initiative addresses the concern over the lights staying on at times of peak demand.

Crucially for businesses, this scheme allows businesses who generate their own electricity to participate and generate additional income by supplying any surplus energy back to the grid.

What’s next?

As of April 2015, customers will

start to see their bills increase as suppliers are charged to cover the new EMR initiatives, in particular, CfD. At Haven, we’ve been engaging with government to encourage them to provide clarity for all customers, especially businesses, to give them confidence that EMR will not only support future stability, but will also reduce uncertainty and eliminate unnecessary costs.

We fully support any scheme that encourages investment in the electricity market but we also want to ensure we support businesses to plan for any increase in their bills.

Now that the EMR policies are in place, we would urge other suppliers to work these costs into their products in a clear and transparent way.

Constantly reviewing the changes in the market is a focus for us at Haven, to ensure we are providing products that fully address any developments. We make sure any additional costs are transparent and our product range allows customers to choose a product that suits their approach to risk.

With so much change taking

Is anyone exempt?

In order to retain competitiveness within the UK for business and industry, the government is seeking to make electricity-intensive industries exempt from some of the CfD costs and other indirect costs incurred through energy and climate change policies. The government has been consulting on eligibility for EMR relief and more details can be found on its website.

How can businesses prepare?

We’d highly recommend reviewing your energy strategy as soon as possible to ensure your supplier is providing you with the best possible contract for your needs. Preparation is key. Ultimately, addressing your energy usage is the single most effective way to reduce your energy bills. Monitoring usage and identifying areas of wastage will make a huge difference.

EMR is here to stay and it continues to evolve, so making sure you keep fully up to date and identifying ways to work with the new policies will pay dividends.

For more information, visit www.havenpower.com/emr *Source: Allenovery.com

October/November 2014 | water energy & environment

21

Advertorial

GAS & ELECTRICITY

EMR stiffles investment and creates Water, Energy & Environment asks leading energy professional Dr Tony West, energy trading consultant at Pulse Business Energy, to outline his view of the state of the energy market and how EMR will bring new challenges to the management of your energy portfolio Without being too modest could you summarise your experience in the energy market.

I have been in the energy market for more than 25 years, mostly in so-called front office wholesale trading roles, including the management of diverse teams of traders, but also senior strategic, consulting and advisory roles.

During the establishment of NETA (and later BETTA) I was instrumental in helping National Power (later Innogy) build its utility business (now npower, of course) as it progressed as part of RWE. Foremost in this was the development of the assetbacked trading model, which was essentially an internal market, that exists even now at the centre of all the “big6”utility businesses, designed to manage their risk and encourage competitive pricing; at the interface with retail, the gas market, generation and fuel supply. In fact, according to Wikipedia, I have been credited with coining the term “sparkspread”, which is a critical feature in the understanding of the generator’s risk.

After RWE, I worked as an advisor too, or worked directly for several other energy trading businesses including Scottish Power, where again I managed the trading activity in their integrated energy management business, and most recently with Gazprom, where my role was primarily to provide oversight in the form of strategy, expertise and first-hand knowledge to the development of their ‘gas to power’ business. I am now looking to exploit my experience further by providing energy trading and risk management expertise in support of the objectives of other businesses.

info@pulsebusinessenergy.co.uk T: 0333 7000 250 www.pulsebusinessenergy.co.uk 22 October/November 2014 | water energy & environment

How do you see the global outlook for gas and oil prices?

This is always a good question but unfortunately it is impossible to predict futures prices – if only I could. However, there are some important drivers that are likely to impact development of prices over the coming months, apart from the weather of course.

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will be an important indicator to watch, especially if market volatility is high.

As for the oil market, the recent significant drop in prices could indicate the other energy markets may still be relatively over-valued, and in real terms crude oil prices could still be considered high. However, compared to gold prices, the

The impact of EMR is that liquidity is shifting to more prompt periods, from later forward periods, and volatility is likely to increase

The gas market will continue to watch political developments in the Ukraine and higher volatility is likely to be a good indicator of any uncertainty created. The market will be especially nervous as we approach key periods like the turn of the year when many long-term supply contracts are under negotiation and EU demand, especially Eastern European demand, is approaching its winter peak – storage levels throughout EU

marginal cost of new US shale oils and the budget breakeven for the majority of Middle Eastern oil producers, Brent crude could be considered as near its low.

One word of advice, which may be contrary to what seems intuitive, is do not look at the forward (price) curve simply as a prediction of future price. A common misperception is that the forward price is a forecast.

This is not the case unless you believe nothing will change in

theenergyst.com

market volatility the world or you have a good tolerance to risk.

What impact could EMR and the increased regulation have on the wholesale energy cost in the UK? One of the unintended consequences of EMR, and increased regulation generally in the commodity and financial markets, is a reduction of liquidity and fewer marketmakers and traders with high credit ratings active in the forward markets. The uncertainty this regulatory and political uncertainty creates has also made investment in generation and transmission infrastructure more difficult; forward prices have remained much lower than that required for investment without additional subsidy. The impact of EMR is that liquidity is shifting to more prompt periods, from later forward periods, and volatility is likely to increase, which will potentially increase the risk premium applied to retail contracts for volume and shape uncertainty and potentially make the benefit of flexible contracts more valuable.

This role at Pulse is a change to your previous roles.

What attracted you to it?

Pulse Business Energy is a vibrant and exciting business that has a very strong customer service ethos. The team is focused on giving their customers the support they need to manage their energy budgets effectively, efficiently and with transparency. As a part of this, Pulse’s procurement strategy is demonstrably successful.

Recognising that markets constantly evolve, Pulse has asked me to provide independent and experienced oversight to help validate its approach as the wholesale

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markets change, to develop any necessary and appropriate enhancements to its wholesale market strategy and to help further differentiate their customer offer.

Working with an energy broker such as Pulse allows me the opportunity to participate in the energy market from a different perspective and bring fresh ideas helping Pulse grow its presence in the retail market.

What have you learned about the role an energy broker can play?

During recent years the need for consumers to manage the various exposures and activities associated with the energy market has increased. Risks and compliance requirements are being pushed more and more downstream as a consequence of changes in regulation and new political initiatives. At the same time, the pressures on businesses to maintain competitiveness requires increasing focus on their core activities.

Not only does the energy broker understand the complexity of the energy market and how it works, but managing the tasks related to energy procurement are really just day-to-day activities for an energy broker like Pulse. The extent of the support brokers such as Pulse provide can be completely at the discretion of the customer but there seems little doubt that for many businesses this outsourcing can be the best and most efficient solution. This is probably more relevant now than ever before as EMR, ESOS and other changes take hold.

Come and see Tony West speak on 2 December in London at Glaziers Hall. Register for tickets at eventbrite.co.uk/e/ esos-energy-training-seminartickets-12775924133

Wind turbines help turn a profit for zoo High electricity costs were overcome at Hamerton Zoo Park, near Sawtry in Cambridgeshire, with the help of Opus Energy and the zoo now sells its excess energy to the grid

H

amerton Zoo Park initially installed a couple of small wind turbines. However, after 18 months of seeing the benefits, the zoo decided to install two larger turbines on the same site in November 2012. The wind turbines, combined together with the solar and a biomass boiler to heat water from waste, make it the most environmentally friendly zoo in Europe.

The two new large turbines are projected to provide all of the electricity the park needs to operate, plus generate a surplus it can sell back to Opus Energy.

Andrew Swales, director of Hamerton Zoo Park, comments on its sustainability focus and the opportunity to drive additional revenue for the site: “We are focused on providing a sustainable environment for our staff, visitors and animals, so we’re always looking to

improve our energy efficiency.

We’re proud to be the most environmentally friendly zoo in Europe and needed to work with a supplier to help us meet our latest renewable energy needs to ensure this status was maintained.”

Renewable generators such as Hamerton Zoo Park are able to sell their excess power to an energy supplier by setting up a power purchase agreement (PPA). Once renewable generators have signed their PPA with Opus Energy, the team then liaises with the generator on a monthly basis to send its energy payments.

Mr Swales continues: “We looked into a few alternative suppliers to help support our renewable energy needs, but Opus Energy was the most flexible. While working with Opus Energy, we have benefitted from competitive prices, high quality documentation and an efficient service.” we&e opusenergy.com Hamerton Zoo Park signed a power purchase agreement with Opus Energy to sell its excess power

October/November 2014 | water energy & environment

23

ESOS updatE

ESOS – are you on the case?

E

The Energy Saving Opportunities Scheme (ESOS) reached its latest milestone following the publication by the Environment Agency of its first register of professional bodies approved to provide lead assessors. This means that affected organisations can move forward and take the next steps towards compliance, writes National Energy Foundation technical director Malcolm Hanna

SOS compliance runs in four-yearly cycles and the deadline for organisations to determine whether they need to comply is 31 December, 2014. The deadline for compliance is 5 December, 2015 and noncompliance could lead to civil penalties, including fines.

If an organisation is subject to ESOS, it needs to undertake an assessment, which will help work out what it needs to do to comply.

• Having calculated its total energy consumption, the organisation is required to audit at least 90% of it, as well as its energy efficiency. This must be done across all its buildings, transport and industrial processes. These audits must be done using energy consumption profiling.

• The organisation needs to identify the scope of the audits and the personnel and skills required to undertake them, as there will be a need for different expertise across the three operational areas.

• A lead assessor must be appointed to carry out, oversee or review the energy audits and the overall ESOS assessment.

Lead assessors can be either external consultants or in-house experts. They must be knowledgeable and appropriately competent, and be members of an approved register. The Environment Agency has published

approved registers.

• The audits should review energy data, data management and how energy is used. It should also identify any potential cost-effective energysaving opportunities.

• Any recommended energysaving opportunities should include the estimated costs and the benefits of implementation them.

• The audits should also include (a representative sample of ) site visits.

As with any audit, it’s important to keep good records and they should be kept on file as evidence of compliance.

• The audit must be based on 12 months’ verifiable data, which must: 1. Be for a continuous period.

2. Begin no earlier than 6 December 2010 for the first compliance period (and no more than 12 months before the start of future compliance periods).

3. Begin no more than 24 months before the start of the energy audit.

4. Not have been used as the basis for an energy audit in a previous compliance period.

• It’s a requirement that the audit is reviewed and signed off by both the lead assessor and a board-level director (or two if the lead assessor is an internal member of staff ). This ensures that the board is aware of both what’s required and any

24 October/November 2014 | water energy & environment

any costs will be outweighed by the long-term financial benefits derived from reduced energy bills and increased efficiency

energy-saving opportunities that have been identified.

• The final stage is for the organisation to inform the Environment Agency that compliance has been achieved.

However, there are other ways to achieve compliance.

What’s more, provided an organisation covers 90% of its total energy consumption, it can use a mix of approaches with some of its energy consumption covered by ISO 50001, some by Display Energy Certificates (DECs) or Green Deal Assessments (GDAs) and some by ESOS energy audits.

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• If an organisation is fully covered by ISO 50001 (implementing and operating an independentlycertified ISO 50001 energy management system) it doesn’t need to carry out an ESOS assessment. It just needs to notify the Environment Agency that this is the case and that it’s compliant with ESOS. • An organisation can also use valid DECs and their corresponding recommendation reports.

However, a DEC is based on a building’s operating data only so the organisation will still need to audit its energy use in transport and any industrial processes.

DEC documentation is valid for 10 years but can’t be used for more than one ESOS cycle.

• Alternatively, an organisation can opt to use valid GDAs, which consist of Energy Performance Certificates (EPCs) and Occupancy Assessments. However, like DECs, they only apply to buildings. Again, they are valid for 10 years.

What help might you need?

Although the overall responsibility for compliance with ESOS lies with the organisation itself, many will need external help from organisations such as the National Energy Foundation that have the necessary specialist skills in energy consultancy. Organisations will be looking for a range of cost-effective support services – possibly on a ‘pick and mix’ basis – when and where they need it, for example: • Pre-assessment gap analysis. Identifying any work that has already been done that might count towards compliance.

• Providing a lead assessor to carry out, oversee or review the energy audits and the overall ESOS

theenergyst.com theenergyst.com

assessment, including any sampling and timetabling.

• Developing a strategy, including its costs and the cost benefits, pay-back periods, and feasibility of any energysaving opportunities.

• Preparing and maintaining an evidence pack to substantiate the audits, their findings and the recommendations.

• Building a business case for investment in energy efficiency opportunities, including their funding and practicality.

What are the costs and benefits?

Commissioning external assistance will be just one of the direct and indirect costs of ESOS compliance.

Others include: • Administration and training.

• Employing a lead assessor and other specialist internal or external staff.

• Possibly appointing a permanent energy manager.

• Implementing and sustaining the recommendations.

Although there’s no legal requirement to implement any energysaving recommendations, organisations are encouraged to go down this route. As a result, any costs will be outweighed by the long-term financial benefits derived from reduced energy bills and increased efficiency.

Finally…

If you haven’t already, find out whether your organisation is subject to ESOS – the 31 December deadline is fastapproaching. Then, decide if you need any help. If you do, start getting it as quickly as possible. The compliance deadline might seem a long way off but it’s not really. we&e nef.org.uk gov.uk/energy-savingsopportunity-scheme-esos

Four steps to effective energy management with ISO 50001 – step 4 Martin Hockaday, environment and energy sector manager at NQA, reviews the Plan, Do, Check, Act cycle of ISO 50001 and how it improves energy management We started this review back in the April/May issue of we&e – progressing through the Plan, Do and Check stages of the Deming Cycle, we’ve arrived at Act. It is time to make improvements to the energy management system and to achieve the objectives set during the Energy Planning Process. This step in the cycle is covered in the last requirements section of ISO 50001 – section 4.7 Management Review.

Management review

The principal aim of management review is to ensure that decisions and actions are taken to improve the management system and energy performance of the organisation. This requires those with the authority to direct key resources and budget to be actively involved in the process.

ISO 50001 identifies management review as a responsibility of top management, which it defines as “a person or group of people who directs and controls an organisation at the highest level”.

The review must take place at planned intervals and be recorded – the intervals are entirely flexible to each organisation depending on size and complexity. And whilst there is no stated need to call a specific energy management review meeting, the practicality of covering all of the inputs may necessitate a separate forum for review.

Inputs to management review

ISO 50001 specifies nine inputs that must be included in the management review. These are available from the previous Plan, Do and Check steps of the energy management system.

For practicality and to demonstrate compliance to the standards, particularly for organisations with ISO 50001 certification, these inputs could be set out as a standing agenda: 1) Actions from previous reviews 2) Review of energy policy 3) Review of energy performance indicators (EnPIs) 4) Compliance with legal and other requirements

5) Status of energy objectives 6) EnMS audit results 7) Status of corrective and preventive actions 8) Projected energy performance for the next period 9) Recommendations for improvement It is optional to include additional inputs, but the minimum requirements are quite comprehensive.

Outputs = decisions and actions

The output from the management review must be decision and action based – this ensures the review is productive, valuable and integral to the organisation. ISO 50001 highlights five key areas that decisions and actions should relate to: 1) Change to energy performance 2) Change to energy policy 3) Change to EnPIs 4) Change to objectives 5) Change to allocation of resources The emphasis is on changing the energy management system in the spirit of continual improvement.

This derives the most benefit from the EnMS and delivers tangible improvements right through to the bottom line.

Implementing the outputs of the management review brings the process full circle to Planning and Doing – it is an iterative process that ensures incremental improvement as the energy management system matures and the biggest gains have been achieved.

This concludes our four-step review of ISO 50001, which has demonstrated a structured and logical approach to energy management – adaptable to different types of organisation, scalable to size and complexity and flexible to change. If you are serious about achieve energy efficiency, you should be serious about ISO 50001.

• NQA is the first UKAS accredited certification body for ISO 50001 and can support your route to ESOS compliance. For more information on training, implementation and certification of energy management systems please visit www.nqa.com/enms or contact info@nqa.com

Viewpoint

ESOS – the Golden Ticket?

The Energy Services and Technology Association warns that it is essential to choose the right supplier to implement your ESOS assessor’s findings

t

he Energy Saving Opportunities Scheme (ESOS) will force many energyconsuming companies to step out of their comfort zone and engage with new third-party contractors if they are to take advantage of their assessor’s findings.

We will by now have found out the approved lead assessor registers (see News section) and the scramble for accreditation and partnerships between auditors and Lead Assessors will begin. This initial positioning and short timescales to the first reporting in December 2015 is currently where the focus lies; but there is a

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ESOS is not intended to be viewed as simply compliance reporting – it is a much longerterm scheme to encourage through demand-side projects

26 October/November 2014 | water energy & environment

bigger picture and story to tell. ESOS is not intended to be viewed as simply compliance reporting – it is a much longer-term scheme to encourage and further energy efficiency through demand-side projects.

It is the question of what happens to the report, findings and opportunities that require company director sign off that holds the

key to the success of the scheme.

A possible array of energysaving measures could confront any reporting company; yet what help is there in choosing the right suppliers for the task?

Relying on the advice of your lead assessor is one option, but are they also in a similar position?

The famed ‘Golden Ticket’ captured our imagination 50 years ago and while some demand-side providers may see ESOS as their ‘Golden Ticket’ to provide services into your company; do you really want to allow just anyone through your front gates as your preferred candidates for installing efficiency measures?

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Some demand-side providers may see ESOS as their ‘Golden Ticket’ to provide services into your company; do you really want to allow just anyone through your front gates as your preferred candidates for installing efficiency measures?

Recommendations from current contractors and trusted sources are a must if this scheme will provide the benefits it envisages.

We must work more closely together and across differing, perhaps, siloed-practices to realise the potential that ESOS could bring to the marketplace. The scheme needs to be embraced for its positive attributes and absorbed into an overall business strategy. While there will be winners and losers, there will not be a one-size-fits-all solution, and how the opportunities are communicated will determine whether an integrated approach or whether bit-part solutions gain the lion’s share of the implementation.

To gain insight into ESOS post-reporting we have teamed up with Cambium LLP to undertake a survey into the market impact of the scheme. Particularly, to assess the interest and readiness of energy efficiency suppliers, not just across our membership but also the wider stakeholder community up and down the demandside supply chain. The survey will conclude mid-November and key findings published before the year end.

This information resulting from the survey, combined with increasing membermember tie-ups we are seeing underneath the Energy Services and Technology Association (ESTA) umbrella; will help to provide insight and a level of trust across differing technology and service solutions.

theenergyst.com

ESOS will by definition bring many companies in contact with facets of the energy industry for the first time and our collective role must be to ensure that the industry maintains its professionalism, quality and trustworthiness. This is especially apposite as service providers, merge, diversify and extend and enhance their current offerings in order to deliver a widerrange to this potentially more receptive market.

While we can argue that ESOS only plays a part in an overall energy strategy, the opportunity it provides for serious permanent demand-reduction cannot be underestimated. The hope is that this scheme will steer more companies towards taking a holistic view of energy within their company; one that encompasses not just energy efficiency, but also, energy procurement, behavioural change and policies that will affect the landscape for years to come.

As we head rapidly towards the end of 2014, leaving just 12 months for the first audits and reports to be completed and submitted, time will tell as to whether this policy is simply treated as the lowest-cost route to compliance or whether ESOS will become the ‘Golden Ticket’ for energy saving measures to be implemented in UK business. we&e ESTA represents more than 100 major providers of energy management equipment and services across the UK esta.org.uk

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12/03/2014 21:

demand response

A response to demanding times ‘No build’ demand response is more reliable and cheaper than gas and nuclear generation and could save £1.12bn on new generation and grid upgrades by 2020

F

igures released by Open Energi show the rising importance of demand response as a win-win for protecting the UK power grid, while simultaneously creating revenues of up to £1bn a year for heavy energy users, by redirecting their unused energy capacity to meet demand.

National Grid has used Open Energi’s Dynamic Demand technology since 2010 to aggregate the electricity use of major energy users, such as Sainsbury’s, Aggregate Industries and United Utilities.

By turning their equipment into smart devices for balancing supply and demand across the network, UK firms can earn revenues, equal to 5-10% of their energy bill, from National Grid.

Dynamic Demand works by making adjustments to the energy used by a wide range of equipment, from

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The cost Dynamic Demand is cheaper than both existing peaking plants and current battery systems. The costs break down as follows: • Peaking plants: £700,000-£5m/ MW • Pumped storage hydro: £600,000-£2m/MW • Battery systems: £500,000£1.8m/MW • Open Energi Dynamic Demand: £50,000-£150,000/MW this winter and capitalising on renewable energy, requires a range of balancing techniques; from peaking generation through to demand response.

Dynamic Demand allows fluctuations in supply to be met, almost instantly, by adjusting demand, which helps balance the grid, as well as creating a revenue opportunity for UK industry.”

If you compare the constant flow of energy on the grid to traffic on a motorway, Dynamic Demand prevents the need for adding lanes, by adjusting the flow of traffic at peak times fridges to furnaces, to free up unused capacity in the form of stored energy.

Dynamic Demand typically responds to balancing requests from National Grid within two seconds. This means it has an invisible impact upon the business operations of firms that use it.

National Grid energy demand manager Nigel Fox says: “Building in resilience

Currently, the majority of grid balancing is supplied by switching on gas and coal-fired power stations to increase supply, yet managing demand instead can help to maximise the use of existing system capacity. National Grid’s use of Dynamic Demand uses internet intelligence to increase grid efficiency and reduce its reliance on “peaking power” providers, which cost between

28 October/November 2014 | water energy & environment

£15-20/MWh. In doing so, Open Energi estimates that Dynamic Demand could save National Grid about £40m on peaking generation over the next 10 years.

Additionally, Open Energi forecasts that by 2020 demand response could save £1.1bn by reducing investment in new transmission and generation infrastructure, since every MW provided by Dynamic Demand is the equivalent of avoiding the need to generate 2MW. In total, Open Energi estimates the avoidance of grid modernisation, plus peaking power costs, could save £1.12bn by 2020.

Open Energi commercial director Ged Holmes says: “If you compare the constant flow of energy on the grid to traffic on a motorway, Dynamic Demand prevents the need for adding lanes, by adjusting the flow of traffic at peak times.”

Following a successful trial, United Utilities is now rolling out Dynamic Demand across its whole North-West operation, with 10MW being made available within the next 12 months. During the next

five years the company expects to have a total of 50MW of flexible capacity to offer to National Grid. This will reduce carbon emissions by 100,000 tonnes per year and generate about £5m in revenues.

Andy Pennick, energy manager at United Utilities, says: “Water and wastewater treatment is a really energy intensive process – power is one of our biggest operating costs. By using Dynamic Demand, we can minimise the environmental and grid impacts of our equipment with zero interruption, while simultaneously generating revenue, which can be reinvested into site assets to reduce operating costs.”

The £1bn annual revenues for the UK’s heavy energy users from Dynamic Demand are based on the 5,400MW balancing market. However, the more companies that use Dynamic Demand, the larger the revenue earning potential for them and the greater the opportunities for National Grid to cost effectively balance the network. we&e openenergi.com

theenergyst.com

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26/09/14 15:07

DemanD reSponSe

Time to start thinking smart DSM (demand side management or DR (demand response) as acronyms are banded about with the assumption that everyone does, or should, know what they mean? Smart Grid Consultancy’s Gary Swandells explains

D

SM and DR have become commonplace along with the other big catchall phrase ‘smart grids’, but do most of its users know what it means? Or does it potentially mean different things to different people?

DSM and DR are Smart Grid services of great interest right across the energy industry and can also include consumers, particularly those in industrial and commercial sectors.

Short term reserve If you are already aware of DR it is probably through another acronym, ‘STOR’, The National Grids Short Term Operating Reserve service.

Many industrial customers including water companies, financial institutions and manufacturing facilities have the ability to vary their load or generation to support their sites in the event of mains power failure.

By contracting directly or via one of the several service aggregators, these customer sites can be combined to act like a power station, ready to be started up at short notice to top up electricity or reduce demand when the system experiences shortfalls.

Naturally, they get paid for this and are therefore able to offset the cost of owning such assets.

Similarly, when a site has the capability to offer STOR, it can potentially start to conduct several other activities that can contribute to the bottom line of a business, in many cases taking an asset such as a standby generator and enabling it to become a

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The capacity market is not only encouraging the building of new gas-fuelled power stations but presents another opportunity for smaller generators

30 October/November 2014 | water energy & environment

useful profit centre. One of the most common of these is for triad avoidance. This is where a customer can avoid consuming energy during nation high demand periods and in turn avoid annual charges that can be as high as £25K+ per MWh. Since 2009, triad benefits have increased. However, prices paid for STOR have steadily fallen as it has grown in popularity and the numbers of providers offering services has also grown. But the industry hasn’t stood still during this time and 2015 looks to be a key year in the development of several new opportunities.

National Grid has other services that relate to system balancing. While STOR needs response typically within a six to 30 minute range, there are a couple of other services aimed at managing system frequency

that act much quicker and present further opportunities to earn for sites that can respond right down to sub one second from a trigger signal.

Balancing reserve National Grid is still keen to grow its STOR participants connected on the low voltage distribution networks and is currently creating a new easier access service called STOR runway that simplifies the processes and lowers the entry barriers to encourage more new sites to get involved.

Some of this may be driven by concerns that other new opportunities will attract current STOR sites away to alternative paid schemes such as demand side balancing reserve. DSBR is brand new and while it too is being procured by National Grid, it is for a very different function and at apparently

theenergyst.com

more attractive prices. Its purpose is not to address the unpredictable periods of imbalance, instead its function is to help over the next few winters where there is concern that there may not be enough large generation capacity to meet peak demand periods.

DSBR is expected to just be a temporary or transitional service while the results of the UK’s Energy Market Reform (EMR) is enacted, including the roll out of the new capacity market (CM).

Capacity market The CM is largely a correctional policy from government and the regulator to help stimulate the commissioning of new power generation that has largely been neglected due to insufficiently attractive

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price signals from the market.

All this while, old plants are steadily reaching the end of their life and closing. The CM is not only encouraging the building of new gas-fuelled power stations but presents another opportunity for smaller generators or even sites willing to reduce demand during such periods to be rewarded as power stations.

Even better, these agreements are in advance and for longer contracted periods, meaning they can also encourage the building of new smaller, efficient facilities such as CHP (combined heat and power) plants as well as additional emergency backup generators.

Add to this the current range of trials being carried out by the six UK electricity distribution companies which

own and operate the networks that connect to customers and it could be that the competitive aspect could shift from a buyer’s to a seller’s market.

In respect of this the DNOs and National Grid have already recognised the conflict of two publicly funded bodies competing for exclusive use of customer sites. As they progress the development of a service sharing framework it is likely that we will see the introduction and rapid growth of DR being used as a tool not just for national requirements, but also dealing with local constraint issues and helping ensure increased resilience and value from their Smart Grid innovations.

Suppliers involvement It is widely recognised that the big six and several of

the smaller companies are watching this space very closely indeed. Their reasons are again different as to why they may want to get involved in working with customers who can offer flexibility.

With the ability to not just manage their energy trading through the purchase of energy but have real time control as a portion of their clients demand they may be able to avoid much of the most expensive energy that is sold when the commodity is in short supply, or limit the cost of trading imbalance.

What is clear is that the way in which energy is regarded and how customers can participate has changed and we are unlikely to ever be seeking to return to a dumb grid ever again. we&e smartgridconsultancy.com

October/November 2014 | water energy & environment

31

EnErgy managEmEnt

External thermal insulation benchmarked A consortium of European companies is investigating how common installation faults affect the performance of external insulation with the help of Flir Systems’ thermal imaging cameras

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xternal thermal insulation systems are gaining popularity in European construction, driven by need to maximise the energy efficiency of buildings. Unfortunately, best practice in their installation is lagging behind take-up, often compromising the effectiveness of this new technology.

A consortium of European companies, including the Italian Association for Thermal and Acoustic Insulation (ANIT), is now investigating how common installation faults affect the performance of external insulation with the help of Flir Systems’ thermal imaging cameras.

Thermal imaging is the ideal technology for establishing the integrity of internal and also external insulation. The aim of this study was therefore to establish benchmark thermal data that will guide thermographers in the correct interpretation of the nature of faults when inspecting external insulation installations.

For this purpose a test structure was built, covered on three sides with thermal insulation panels made from expanded polystyrene (EPS) with graphite additives. In the top half of the structure, the walls were covered replicating the laying mistakes that are commonly made. In the bottom half the external insulation was correctly laid, with and without EPS dowels.

The thermal performance

this project. For example, the camera had to be able to discern small temperature differences, typically 0.5°C, and to record superficial temperature variations automatically during different time lapses. The camera’s ability to generate good quality video images was another factor in its favour.

test specimen layout before coating

of the entire wall was then captured by a Flir T640bx thermal imaging camera, which took and stored periodic radiometric images during the solar cycle. The method used for this work is known as active thermography when the thermal effects of the solar radiation on the substrate are analysed during the discharge phase, in other words, when the sun goes down.

32 October/November 2014 | water energy & environment

ANIT chose the Flir T640bx camera – one of the company’s dedicated building models – because of its suitability for the variety of technical requirements involved in

the findings Analysis of the characteristics of the materials shows different behaviour in terms of energy charging caused by solar radiation and subsequent discharge when the structure was in the shade.

In the first graph it is clear that the PVC and adhesive have greater effusivity than EPS (see figure 1).

Thermal effusivity is a measure of the material’s thermal energy penetration ability.

This is an

Flir t640 thermal imaging camera

theenergyst.com

Figure 1

top: Ir-charging: thermographic analysis while charging the external wall surface having an average solar absorption coefficient Figure 2 Bottom: Ir-discharging: thermographic analysis while discharging external wall surface with average solar absorption coefficient Left: the graphs show temperature differences that occur on the upper part of the specimen during thermal loading, where installation errors are present and intentional

important parameter as the surface temperature of the external thermal insulation is strongly influenced by how the material conducts heat to the various sub-layers combined with the material’s capacity to accumulate heat and therefore warm-up.

The lower the effusivity value, the lesser amount of energy is required to heat the material (see figure 2).

In the second graph the structure is allowed to cool

theenergyst.com

in the shade. The PVC and adhesive have a greater volumetric heat capacity so they have accumulated more thermal energy and will be initially hotter than the EPS. The EPS itself cools down more rapidly with the dowels and the adhesive joints being the hottest points.

What does this tell us?

The thermal analysis makes it clear that there are two distinct types of surface layers;

the insulating material with low thermal conductivity and limited thermal capacity and the adhesive and PVC dowels which have higher thermal conductivity and greater heat capacity.

This information is essential knowledge for any building inspector using thermography to determine whether external insulation has been correctly installed and the nature of any fault. As with all thermal findings, a thorough

understanding of the physics involved in the technology and the anomalies that are specific to the application are vital components in its effectiveness.

These research findings are now being applied by both ANIT and training bodies such as Flir Systems’ ITC to ensure building thermographers are better prepared for the inspection of external insulation. we&e flir.com

October/November 2014 | water energy & environment

33

LIGHTING

High bay lighting yield boosted

T

he Goodlight GX1 LED High Bay from LED Eco Lights provides bright light and incorporates patented cooling technology for optimum performance and reliability.

Integrating a Bridgelux Vero circular LED chip with a radial die pattern results in improved lumen density and beam control. This, in turn, provides better true colour reproduction with two and three colour SDCM colour control/management.

Uniform white light is assured at colour temperatures of 3000K, 4000K and 5000K. A nano-coated reflector, incorporating a special lightscattering coating, boosts light yields by 10%. With an efficacy of 107Lm/W, the GX1 provides an improved lux performance compared with a 400W traditional high bay light.

The performance of the new GX1 is supported and enhanced by a unique heat management system. This cutting-edge technology

“

A nano-coated reflector, incorporating a light-scattering coating, boosts light yields by 10%

relies upon a copper cooling column that swiftly and evenly pulls heat away from the LED across the heat sink.

In addition, a patented “phase-change” liquid core ensures rapid heat transfer thereby maintaining more lumens for longer. The combination of these features results in a heat management system that provides 100 times more efficient heat dissipation than a conventional LED high bay fixture across a wide range of demanding applications and environments.

While designers of traditional high bay lighting have paid little attention to the appearance of the finished products, the GX1 has bucked the trend.

The company has long recognised that, although high bay lighting has been widely regarded as predominantly a utilitarian necessity in warehousing and distribution environments, it has a growing presence in commercial, retail, leisure and amenity applications. Consequently, great care has been taken

with the visual appearance of the GX1, which boasts sleek curves and a matt black finish, to ensure that rugged performance and modern styling go hand in hand.

The GX1 offers a three-inone dimming capability that is compatible with 1-10V, PWM signal and resistance. It also incorporates protection with auto-recovery to cope with a variety of situations including short circuits, current surges and overheating.

Modular construction ensures quick and simple interchangeability or replacement of components during upgrades.

The new Goodlight GX1 High Bay offers a 120° illumination beam and IP65 conformity. In addition, a super-charged GX1 Plus model is available for installation at extreme heights and where super bright lux performance is required. Furthermore, the GX1 range is covered by a comprehensive fiveyear guarantee. we&e ledecolights.com

Versatile fire rated LED fittings Versa-LED from Megaman UK is a fully integrated fire rated downlight incorporating a serviceable LED module to provide the ultimate control.

Offering maximum versatility, the new 8W VersaLED incorporates a wealth of unique features, including the latest super efficient Megaman LED module, easy click connectors and large push-button terminals.

The fitting also has ‘Loop in Loop out’ features to save on installation time and advanced thermal design to lower operating

temperatures and extend life. Its unique honeycomb lens, which provides a beam angle of 36°, also matches Megaman’s popular GU10 range, allowing seamless integration within projects.

Incorporating integrated driver technology (no external driver required), the module can be removed for installation on site and then added quickly and easily via clip in connectors for final commissioning. If the lighting requirements in the

34 October/November 2014 | water energy & environment

building change, the module can be upgraded or removed and replaced with another colour temperature or a higher performing option.

Available in three bezel finishes – white, chrome and satin chrome – and providing a life of 30,000 hours, Versa-LED is available in warm white 2800K or cool white 4000K, in fixed or tilt.

The high quality of the new Versa-LED enables Megaman to supply the product with a four-year warranty. megamanuk.com

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A Worldwide Standard Meets World Class Energy Saving Controls

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KNX, the established protocol for intelligent building control - and CP Electronics’ energy saving microwave and PIR detectors specifically designed for KNX applications.

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Our presence detectors work seamlessly with the KNX system to control lighting and heating.

● Two volt-free switch inputs

Add to this the ease of configuration, our presence detectors give the installer total flexibility while also cutting installation time.

● User-configurable logic functions and timers

● Walk test LED ● Light level sensor ● Infrared remote control sensor

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Lighting control for the most demanding areas connect with us

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Lighting

Super flat occupancy sensor B.E.G. has launched a flat occupancy sensor with a thickness of less than 1mm

A

new super-flat occupancy sensor with a thickness of less than 1mm has been released by building automation specialist B.E.G. The B.E.G. Luxomat PD11 is so thin it is almost invisible once it has been built into the ceiling but still detects motion and light within an area of up to 9m. It is the latest innovative energy-saving product to be launched by German lighting controls manufacturer B.E.G. The Luxomat PD11 maximises the use of natural daylight so that once occupancy is detected the sensor measures the natural light, compares this against the pre-determined light level and turns the fitting on if below the required level.

When the natural daylight increases above this threshold, the sensor will turn the fittings off, even though movement is detected.

Ideal for sophisticated interior design, the occupancy sensor includes ornamental rings with five different colours available to match any building’s decor with only 0.85 mm of the device visible when built into a ceiling. These colours include black, silver, red and grey.

The Luxomat PD11’s flat design means it takes up little space in the ceiling and the device includes spring clips so it is quick and easy to install in suspended ceilings and light fittings.

Available as a Slave version for connecting to a Master device, the sensor uses a conventional 230V supply and has a 360°detection area. The Luxomat PD11 has one switching channel for operating the light and can be programmed with a remote control.

B.E.G. sales director for UK and Ireland Paul Jones said: “The PD11 is

another great addition to the B.E.G. Luxomat range.

“It is perfect for customers that are looking for all the energy-saving benefits that occupancy sensors offer but without it almost being seen as its .85mm thickness means the device is practically invisible.

“Interior designers have been waiting for this type of sensor to be available so B.E.G. is delighted to be the first to launch a product that incorporates the latest technology to meet these requirements.” we&e luxomat.com

Eaton extends architectural downlight range Eaton’s Cooper Lighting and Safety business has launched the RXS Trimless Gimbal, the latest addition to the RXS family of architectural downlights. Integrating multidie LED chip technology and available in both trimless gimbal and sleek trimmed fixed bezel, the new downlights and spotlights offer specifiers a choice of fixed output, 1-10V, DALI or Phase dimmable control gear in order to maximise energy savings.

Eaton product manager Greg Herring said: “The new RXS Trimless Gimbal further complements our existing

range of RXS downlights.

The new additions feature efficient thermal management, thus maximising the LED output and life of the product.

They are a perfect solution for any specifier seeking

36 October/November 2014 | water energy & environment

lighting for low profile housing or low ceiling voids.”

The new downlights and spotlights feature pre-wired driver connection for rapid installation. Additionally, they offer three beam angle options

and a choice of 3000K or 4000K colour temperatures.

A key benefit of the RXS Trimless Gimbal is the first fix plaster-in bezel, which allows the luminaire head and control gear assembly to be easily removed from the bezel for simpler maintenance and redecoration. In addition, the gimbal function of the standard luminaire head allows a class-leading 30-degree tilt in all directions and the machined decorative bezel can be customised with an aesthetic or function that will suit a variety of applications. cooper-ls.com

theenergyst.com

Silence is Silver The brightest LED SON replacement lamp is now also the quietest.

SILENT DRIVE MAGLEV COOLING SYSTEM

Other LED SON replacements run very hot and rely on noisy cooling fans to prevent lamp failure.

Our revolutionary new cooling chamber and heat sink are cooled by a practically silent MagLev fan. This advanced cooling allows us to run our chips up to 30% brighter!

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RADICAL NEW DESIGN We have put a lot of thought into the design, to improve the reliability, consistency and performance.

New vent ducts create maximum airflow around the lamp.

A distinctive LED configuration delivering an even light spread with no shadowing.

ULTIMATE BRIGHTNESS

The G360 range of lamps are the brightest LED SON Lamp replacements available on the market, reaching a staggering 140 Lm/W. TM

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Or contact our team on 0845 2183 786 for details, or visit goodlight.co.uk. *For terms and conditions, visit www.ledblog.co.uk/G360-Challenge

Lighting

CP Electronics helps Reading station

L

ighting control specialist CP Electronics has provided the ideal solution for Reading Station Car Park, in terms of energy savings and functionality, with its EBMPIR-MB-PRM batten mount PIR detectors The 48W LED fittings have been mounted in threes using custom-made troughs with one PIR to every three fittings.

The lights in the car park are expected to be on for 24 hours a day, 365 days a year and, with the excellent dimming capabilities of EBMPIR-MBPRM PIR, the projected cost savings are anticipated to be in the region of 60%. The whole project has been designed on CPâ&#x20AC;&#x2122;s ethos of high energy savings, simple installation and maximum functionality.

The car park ceiling design had previously made using energy control very difficult but by using the latest technology in motion

the PiR turns the lights at Reading Station Car Park to full brightness when it detects a person or a car

detection and providing an excellent coverage, the PIR turns the lights to full brightness when it detects a person or a car. After a dedicated set time, the system drops to a level of 10%, providing maximum financial and energy savings but not compromising the safety of customers

returning to their vehicle.

These savings are compounded by the use of LEDs, which provide substantial cost savings when compared with conventional lighting, with no sacrifice in the quality of light emitted.

Owned by Network Rail, Reading Station Car Park has 10 levels and 1,600 car parking

spaces. SSE Contracting Railway Services was awarded the contract to rewire and renew the lighting of the multistorey car park with new energy efficient LED lighting.

The construction of the car park made this a particularly difficult installation for detection as all the fittings were fixed into the inside

Taking control of lighting at Sunderland College Two new buildings on the Bede campus at Sunderland College have been fitted with a networked lighting management system from

CP Northern to ensure optimum use of lighting with minimum energy consumption and carbon emissions.

The ÂŁ22m expansion of

Bede campus at Sunderland College

38 October/November 2014 | water energy & environment

the Bede campus includes a new sports hall with fitness suite, sports laboratories and teaching rooms, while the second building provides a new performance hall, dance and drama studios, music recording studios and a digital film lounge.

CP Northernâ&#x20AC;&#x2122;s Rapid system was specified by consultant Desco in the very early stages of the design to support a comprehensive and flexible lighting management strategy that would enable the lighting to be fine-tuned to the needs of each space.

This includes interfacing to a DMX-based performance lighting system in the main

hall of the performing arts building.

The networked lighting management system also delivers presence/absence control and daylight dimming as appropriate to each of the spaces being controlled.

The Rapid system is fully addressable and networkable with an easy-to-use graphical user interface. It is designed to meet the most demanding lighting control applications without the cost and complexity of other systems.

CP Northern provided a full turnkey design and commissioning service for the project. cpnorthern.co.uk

Featured column

to make tracks

recesses of the ceiling.

R&M Electrical Group’s lighting division worked closely with SSE on the lighting and controls design process and specified CP Electronics’ EBMPIR-MB series of batten mount PIR presence detectors to provide automatic control of lighting loads.

The CP detectors were specified because they are quick and easy to fit, taking approximately five minutes to fit and give excellent coverage. The units are IP65 rated and are therefore suitable for outdoor use as well as wet and wash-down areas. we&e cpelectronics.co.uk

Mastering the art of saving In upgrading to energyefficient lighting and also ensuring that old luminaires were disposed of responsibly, the National Gallery has both reduced energy costs and minimised its environmental impact.

As part of an ongoing programme to enhance the energy performance of the gallery, ageing 100W tungsten halogen spotlight fittings in the gallery spaces have been replaced with Erco low-energy 12W and 14W LED spotlights.

As Erco is a member of notfor-profit compliance scheme Lumicom, the National Gallery was able to take advantage of Lumicom’s luminaire disposal infrastructure.

theenergyst.com theenergyst.com

“Using the Lumicom scheme we were able to ensure that all of the old luminaires were recycled so that valuable resources such as copper and aluminium were recovered,” said Erco managing director Chris Tiernan. “The whole process was seamless and the added value was greatly appreciated by all parties,” he added. lumicom.co.uk

The case for LED tube lighting

By Saima Shafi For more than 50 years, fluorescent tubes have been a reliable and effective means of lighting an enormous range of domestic, commercial and industrial environments.

The universal popularity of fluorescent tubes was based, understandably, on good performance, reliability, availability and the lack of any feasible alternative. However, the first few years of the 21st century heralded a challenge to the allconquering fluorescent tube with the arrival and development of LED lighting technology.

It’s probably true to say that the single most significant fact regarding LED lighting is its potential to help users achieve huge energy savings. Reductions in energy costs by switching to LED lighting can range from 50% up to 90% depending on the application. These savings then translate to extremely short payback times so, at the very least, the argument to consider LED lighting is compelling.

Unsurprisingly, the principal advantage that fluorescent tubes have over LED equivalents is their familiarity. Having been commonplace for decades, they have earned the trust of users all over the world. It’s this issue of trust that LED tubes need to overcome if they are to be accepted and, indeed, welcomed in the future. Users need to be confident not only in the product, including its performance and reliability, but also in the suppliers of this burgeoning technology.

Of course, trust cannot be achieved overnight, especially considering many people’s reluctance to try something new. It’s easy to say “You’ll really appreciate it once you’ve tried

it” but how do you persuade someone to take that allimportant step of faith?

Actually, that’s a lot easier than you may imagine. Any reputable supplier will allow customers to “try before you buy” thereby enabling them to accurately gauge performance plus energy and carbon savings before embarking on a full scale installation. At that point, these same suppliers will provide specially designed financial deals that often cover the cost of the installation using the money saved as the new lighting is being used. In this way, it can be possible to eliminate the need for any monetary investment to be made in advance.

Another element of trust is reliability. Again, a reputable supplier will be keen to show you existing LED tube installations and provide details of energy and carbon savings. Furthermore, these suppliers will also offer genuine guarantees for their products based on actual performance data over many years. Beware of the supplier who’s been trading for a few months but is happy to match, or even beat, the lengthy and comprehensive guarantees offered by their much more experienced and longer established competitors.

I am personally aware of numerous, diverse applications where LED tubes are providing top performance, cost effectiveness and reliability. Give LED tubes the opportunity to prove themselves – you’ll be glad you did.

If you have any lightingrelated questions for Saima to explore, please email tim@ energystmedia.com Saima Shafi is co-founder of Camberley-based LED Eco Lights

ENERGY MANAGEMENT

VO with no upfront costs

N

ow is a good time to consider installing voltage optimisation to cut not only energy costs but CO2 emissions as well. The Powerstar voltage optimisation system is being offered with no upfront costs, thanks to two new leasing packages the company has introduced.

The flexible leasing packages make it possible for companies to pay for the investment out of savings as they are realised. Repayments can also be set below monthly energy savings to create a positive cash flow from the outset and all repayments are 100% tax deductible.

The two leasing schemes available are an operating lease and a finance lease.

Operating leases are available over a five-year fixed period with significantly lower monthly payments. At the end of the term there will be a 20% residual balance. At this point the customer has the option of either purchasing the product at the residual value, returning the unit or refinancing the outstanding balance.

Finance leases are different to operating leases in that the term of the lease is flexible and at the end of the term the customer takes ownership of the unit. Like the operating leases, payments

40 October/November 2014 | water energy & environment

are monthly and there is no upfront payment required.

Powerstar voltage optimisation systems have been designed, engineered and made in the UK for more than 13 years and are the only systems in the world to be granted a patent on their design. Average savings following the installation of a Powerstar system are between 12% and 15%. Powerstar solutions also come with guaranteed financial savings and a 15-year warranty.

Powerstar voltage optimisation products include Powerstar, Powerstar MAX and Powerstar HV MAX. we&e powerstar.com

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Micro-BEMS to deliver for small businesses An energy report from Verdantix has singled out IMServ’s Control 10 for delivering a strong ROI

D

espite representing the majority of buildings both in terms of number and square footage, small and medium-sized commercial buildings have traditionally been ignored by the buildings control industry. However, with increasing evidence of the cost savings and impact on the bottom line that can be achieved, and regulations promoting the installation of Building Energy Management Systems (BEMS) technology, demand is on the rise.

Verdantix, an independent analyst firm, recently released a report highlighting how IMServ Europe, one of the UK’s largest independent energy data management providers, has cracked the energy management market for small buildings.

According to Navigant Research, worldwide revenue for BEMSs for small and medium buildings will grow from $277m (£173m) annually in 2014 to $1.3bn (£813m) in 2022. This is unsurprising when a 20% cut in energy costs represents the same

bottom line benefit as a 5% increase in sales. However, for many, traditional building energy management systems have proved too expensive and hard to justify for buildings with a low energy spend. For cases such as these employing a Micro-BEMS system could provide the solution.

Verdantix recently reviewed IMServ’s Control 10, an energy monitoring and management solution designed for small premises with annual energy bills of around £10,000, reporting: “There are early indicators that IMServ’s Control 10 has got its product and economic model right: it can deliver an attractive ROI for sites with low energy consumption, and it has adapted BMS technology with small premises in mind.”

James Graham, hardware product manager at IMServ on Control 10, explains: “IMServ’s Control 10 was the first Micro-BEMS solution to market and is an effective way to centrally monitor and regulate outputs such as door heaters, sign lighting, air conditioning and ventilation,

Micro-BEMS system offer a solution for buildings with a low energy spend

and cutting out-of-hours energy consumption.

The level of achievable savings is dependent on the control systems in place and existing practices.

“However, we have ensured that our controller allows versatile installation options, communications methods and hardware options to allow smaller premises to achieve an attractive ROI. Control 10 aims for energy consumption savings of up to 30% across

an entire portfolio.”

Control 10 is designed to suit large chains of small retail stores which generally comprise of multiple facilities with similar load profiles, to enable energy to be managed cost effectively witha repeatable and scalable solution. IMServ’s retail customers in the public domain include Carphone Warehouse, Pizza Hut and Poundland in the UK. imserv.com

ControlZAPP

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THE SMARTER WAY TO SAVE ENERGY ControlZAPP is the new energy saving lighting controls range with Bluetooth ‘Smart’ interface.

ControlZAPP can be used to remotely set-up, adjust or override settings such as occupancy detection, time lag, short visit mode, respond to daylight, override ON or OFF etc at different times of day to an accurate schedule, even different holiday and shut down settings. ControlZAPP is easy to install and configure and is ideal for flexible energy saving and end user comfort.

FOR MORE INFORMATION PLEASE CONTACT US ON:

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42 October/November 2014 | water energy & environment

theenergyst.com

Reduce your carbon footprint with Vitobloc cogeneration CHP

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Achieve CO2 savings of more than 30% Vitobloc 200 modules achieve up to 95% efficiency CHP output range from 5 to 401 kWel Over 1500 CHP units installed worldwide Available now, for more information please see our website or email us at, info-uk@ viessmann.com www.viessmann.co.uk

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Celebrating 25 years in the UK

Building ControlS

Not spending money like water When installing a water reuse facility at a car wash centre, KIT Wassertechnik used components from Eaton for ite decentalised control system

S

wiss company KIT Wassertechnik AG develops environmentally friendly water systems for a wide range of different requirements. One of its latest projects is a plant for a car wash centre in which the water is completely reconditioned and the water loss replenished with rain water. Part of the installation includes an illuminated fountain that serves as an ornamental feature in the grounds of the wash centre.

KIT Wassertechnik ceO Roland Graf says: “Our client wanted a water conserving and environmentally friendly solution for its new car showrooms and connected car wash, which would also reuse the waste water produced during operation. They also wanted a fountain system as a special feature of the new building, which was required to run at night with a precisely controllable variety of colours.”

Solution The core of the installation is a central localised, multi-stage water treatment plant. From here the water is pumped to the car wash and the fountain and to the consumers of the car showroom several hundred metres away.

“Rain water and the waste water returning back from the plant is first collected in the raw water storage tank,” Mr Graf explains. “This raw water is cleaned using band filters and multi-layered active charcoal filters and membrane filters. It is then kept in a storage water tank

the system includes this eye-catching fountain

with a capacity of 7,500 litres.”

The 100,000 litres of stored rain water in two tanks is used to compensate for the water loss of the car wash centre.

The stored water is also enough to run the installation on its own during periods of drought. The car wash is operated almost exclusively with treated water and with rain water.

“Replenishment with fresh water is really only necessary occasionally,” says MrGraf.

The KIT system will pay for itself in just over three and a half years simply through the savings made in fresh water and drain water costs alone.

Water treatment is a complex process that requires permanent water analysis and process control to be perfectly matched and reproducible.

44 October/November 2014 | water energy & environment

“

The car wash is operated almost exclusively with treated water and with rain water

Subsequently, KIT chose to use eight eaton easy819 control relays that are interconnected at distances of more than 300m. The simple networking capability and expandability of the easy800 system made it possible to create an the decentralised control system.

“Seven devices are also connected to easy618 expansion modules via easyLink, so that we are able to operate over 250 I/O points with this system,” Mr Graf explains.

Three more easy819 control relays provide a delightful water display for visitors. As soon as it gets dark, these trigger the fountains to change colours.

“For this we use the easy806 with SmartWire-DT. It fits in precisely because we needed analogue outputs for automating the LeD dimmers,” says Mr Graf.

“We are completely free to programme the colour changes as we like and can generate a precise 0-10V control signal that enables a slow and precisely defined colour change.”

KIT Wassertechnik also appreciated the spacesaving design of the SmartWire-DT system.

“The system combines the functionality of an easy800 relay with the direct connection to the communication for switchgear, ideal for our application,” Mr Graf adds.

“The installation is totally reliable. eaton technology is making a decisive contribution here.” we&e eaton.uk.com/electrical

theenergyst.com

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compressed air

Efficiency the focus for new models

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PC Kaeser’s latest fluid-cooled CSD and CSDX rotary screw compressors combine energy efficiency with a versatile and compact design.

With motor powers from 45kW to 90kW, the five models of both ranges cover free air deliveries from 8.3 to 16.1m³/min (at 8.5bar) and are designed for pressures up to 15bar.

The new CSD and CSDX rotary screw compressor series provides significant energy savings in four ways: • CSD and CSDX units feature a large, low speed SIGMA Profile airend equipped with flow-optimised rotors for superior efficiency. In combination with additional optimisation measures, such as the minimisation of internal pressure losses, HPC Kaeser’s energy-efficient design has enabled specific power to be reduced by between 3 and 6% compared with previous models • HPC Kaeser rotary screw airends are powered by the latest premium high efficiency IE3 drive motors for maximum performance and reliability. These motors

will become obligatory in the EU from 1 January, 2015, but users can already enjoy the benefits that this new technology has to offer by choosing HPC KAESER compressors.

• A highly efficient 1:1 drive design eliminates the transmission losses associated with gear or V-belt driven systems, as the motor directly drives the airend.

• The recently updated PCbased SIGMA Control 2 compressor controller enables compressor performance to be precisely matched to actual air demand thereby allowing additional energy savings.

HPC Kaeser’s SIGMA Control 2 controller provides flexibility through its numerous interfaces and plug-in communication modules for connection to energy-saving master control systems, computer networks and/or remote diagnostics and monitoring systems, such as HPC Kaeser’s Teleservice facility.

An effective cooling system within the CSD/CSDX Series design ensures low compressed air discharge temperatures and features a condensate separator

with full-flow automatic drain monitoring. Consequently, over 95% of accumulating condensate can be separated from the air flow. The system prevents the cooling air from being pre-warmed and, as a result, optimises the cooling effect. Downstream compressed air treatment equipment is therefore also enhanced.

The fluid-filter element is metal-free and can be incinerated after use without further treatment.

As well as standard versions, models are available with frequency control and an integrated refrigeration

dryer module that allows production and drying of compressed air with minimal space requirement. Even more efficient than previous models and using nearly 50% less refrigerant, the dryer is designed for high ambient temperatures and operates with minimal pressure loss. Moreover, because it is installed in a separate enclosure, the dryer remains completely unaffected by heat from the compressor.

CSD and CSDX compressors are also available as variable speed-controlled versions. we&e hpccompressors.co.uk

PREPARE TO LOOK AT COMPRESSORS IN A TOTALLY NEW WAY...

Atlas Copco vsd-rev teaser 210x74.indd 1

theenergyst.com

07/07/2014 12:26

October/November 2014 | water energy & environment

47

compressed air

Heat: the forgotten saving?

F

Although great strides have been made in recent years in reducing energy consumption in industry, one vital area has often been overlooked: heat recovery. Boge Compressors’ general manager Mark Whitmore looks at how the process can boost energy efficiency while minimising compressed air waste

igures released by The Carbon Trust state that more than 90% of electrical energy used by a typical air compressor is lost as heat. This figure may be somewhat high, as modern compressors are extremely efficient; nonetheless, energy is inevitably lost through frictional forces, pressure changes, in poorly maintained systems, and air leaks. As every user of a compressor will know, heat is generated from the moving parts and cooling system, and can be felt as it radiates from the motor, oil cooler and airend, and in the temperature of the compressed air itself.

The good news is that what would otherwise be wasted energy can easily be recovered and used for other factory or process duties. For example, in an oil lubricated screw compressor more than 90% of the electrical energy consumed can be reclaimed by recovering the heat generated.

Typically, depending on the type of compressor and associated cooling system, heat can be recovered in two ways. In the first option, heat can be recovered directly as warm exhaust air from the compressor cabinet and fed through ducts to the point of use. This is especially efficient

in applications where the compressor is situated close to the area to be heated, for example in a workshop, or where there is easy access to fit ducting to carry hot air to a remote area, such as an office or distant part of a factory.

The second option is to incorporate a heat exchanger into the oil cooler circuit, enabling heat from the oil to be transferred to a water circuit. Typically, output water temperature is in the region of 70°C, making it suitable for use in central heating or boiler systems, industrial cleaning processes, plating, operations, heat pumps, laundries, or any other application where hot water is required.

Before investing in heat recovery systems, end users can calculate the potential energy and cost savings by assessing the heat or hot water demand in areas adjacent to the compressor installation. This assessment can then be compared to the average operating hours of the existing compressed air system, which will highlight the possible payback in terms of the immediate reductions in electricity, oil or gas costs.

The benefits can be striking; for example, Boge’s Duotherm heat recovery system can recover up to 94% of the input energy used in compression in the form of heat.

To illustrate the point, consider this example of a typical 75kW compressor. This will produce useable heat of around 227MJ/hour. Assuming that the machine is used during a single shift system and is

48 October/November 2014 | water energy & environment

“

In an oil lubricated screw compressor, more than 90% of the electrical energy consumed can be reclaimed by recovering the heat generated

operating for 2,000 hours/year, but that heat recovery takes place during only half of these operating hours, then there is a potential saving of more than £3,125 per annum. If a three shift system is used then savings can be considerably higher, by a factor of up to six. In each case, payback on capital investment can be extremely fast.

Also, by combining a compressor heat recovery system with other energy efficiency improvement methods, such as pipework leakage testing and regular servicing, then compressed air users can reduce their operating costs still further.

Redirecting the heat generated by a compressor for heating spaces or process water are options that can assist end users in significantly reducing their energy bills and optimise their compressor use.

So, it’s well worth considering heat recovery as a means of recovering not only energy but profitability. we&e www.boge.co.uk

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VSD+ - NOT JUST AN EVOLUTION, IT’S A COMPLETE REVOLUTION. The new VSD+ changes the way you look at compressors. With up to 50% energy savings, noise levels down to 62 dB(A) and a 12% leap in free air delivery. A vertical design format that shrinks its footprint and a unique, patented permanent magnet motor.

It’s enough to turn your world upside down.

Atlas Copco Compressors Phone: 0800 181085 Email: compressor.sales@uk.atlascopco.com Web: www.atlascopco.com/gavsdplus

Sponsored column

Space Airconditioning plc, the UK’s longest established Daikin distributor, has extended its impressive product portfolio to include the full Daikin range of Air Handling Units

Daikin AHUs Automation tips from Space Air for door systems Tony Saunders, national sales manager for sara LBS, explains how state-of-the-art, automated doors can facilitate productivity and also help to reduce running costs

To coincide with the announcement that the company is now supplying Daikin air handling units, Space Air has launched two new sales brochures.

The brochure Integrated Ventilation provides an overview of Daikin ventilation products and the Daikin Air Handling Unit Solutions brochure details the highly versatile “Professional”, “Energy” and “Easy” commercial air handling units.

Soon to be added is the allnew “Compact” range. Available in 10 standard sizes (0.33-6.9m3/s) and based on the “plug and play”, high efficiency, thermal wheel heat recovery concept as standard, “Compact” units are prewired and supplied with pre-commissioned controls.

Direct driven fans with IE4 EC motors generating low noise levels delivering outstanding performance are a feature.

Marketing-leading design

Daikin AHUs from Space Air owe their design origins to the market-leading AAF (later McQuay) brands, but following acquisition by Daikin Industries they have been enhanced and globally rebranded under Daikin Applied Products and became available for Space Air to select and distribute on Daikin’s behalf.

Covering airflows from 500 m3/h to 144,000m3/h (0.14m3/s to 40m3/s), these AHUs can be adapted to suit most airflow requirements in pre-defined sizes.

A wide choice of fixed sizes are available. However, the sectionby-section design means that unit dimensions can be adjusted in 1cm increments. The units can be assembled on site without

welding, to suit space constraints of the installation.

Focus on energy efficiency

Space Air’s managing director Neil Afram commented: “As UK Daikin distributors since 1980, our main focus in marketing the extensive Daikin range of air conditioning has always been energy efficiency. This primarily had its roots in the highly flexible and energy efficient Daikin VRV, modular, direct expansion heat pump-based systems.

“However, Daikin’s “central air conditioning” applied range, including chillers and air handling units, is now one of the largest available in the market,. These products have also been developed to offer market leading energy efficiency characteristics in addition to Daikin’s world-renowned build quality and reliability.”

Total Solution

Mr Afram concluded: “Adding the extensive and exceptionally high quality, yet competitively priced Daikin air handling unit range to our portfolio of Daikin products completes what we are calling the “Total Solution”. Nobody knows Daikin better than Space Air. We offer the advantage of a highly experienced, single source supply and support for the complete air conditioning system package.”

M

odern automated warehouses are designed to be efficient. As one of the busiest working areas within any warehouse is the loading bay area, it makes sense that they are fitted with the best automation technologies available.

The purpose of warehouse automation is to drive efficiency into operational processes, thereby reducing overall costs. Loading bay doors are a vital link in the constant chain of operations, serving multiple functions including security, hygiene and heat retention.

Clearly, high-speed doors will allow operations to proceed more efficiently than slower or manual ones and integrating them into the wider automation environment will lead to even greater productivity.

In a warehouse and logistics operation, many of the major costs are absolutely fixed. So it is imperative that those costs that can be controlled are optimised against operational requirements. High-speed loading bay doors can be a major contributor to this by facilitating operational efficiency; significantly reducing heat loss and the associated energy costs; providing improved security and hygiene; as well as numerous other benefits.

Many sites are moving to operate on a just in time (JIT) or lean basis, with all functions optimised to minimise losses through inefficiency. Such an environment must operate like a well-oiled machine, with every stage of the production process moving in time with the next. Doors that are slow to open and close,

For your copy of the new Daikin AHU brochures or enquiries please email ahu@spaceair.co.uk

theenergyst.com

HVAC

sara LBS offers high-speed roller shutter doors for warehouse and factory environments, which can be fitted with the patented MCC VectorControl system

or are awkward to operate, disrupt the momentum of production and cause bottlenecks at vital areas throughout the site; especially the loading bay. And not only can these bottlenecks slow down production, they can pose a safety risk too.

The benefits of high-speed doors can be significantly enhanced by making them ‘intelligent’. For instance, sara LBS offers high-speed roller shutter doors for warehouse and factory environments, which can be fitted with the patented MCC VectorControl system. Not only does this system deliver superfast, super smooth opening, it also allows installers to program the door to integrate with its surroundings.

At a basic level the advantages of MCC VectorControl include radar, induction loops, radio, etc. activation for automatic opening. At an advanced level

“

High-speed loading bay doors can significantly reduce heat loss and the associated energy costs

it can fully integrate with an automated warehouse environment and will allow advanced functions. These functions include preprogrammed opening heights for recognised vehicles; preventing machinery from operating until the doors are fully closed; and opening with enough timed accuracy to let products pass through with only a second to spare either way etc.

While other doors may be able to achieve this, it requires a third party to install and programme additional equipment.

With its Sprint range, sara LBS carries out the design, programming, installation and commissioning using in-house engineers. This removes an unnecessary and potentially weak link in the chain, cuts installation time and costs, ensures quality and fully integrates with an on-going maintenance plan.

sara LBS engineers start by conducting a comprehensive site survey, which includes a calculation of potential energy savings (typically this is of the order of 5-10% and verified after a year).

Safety in operation is ensured thanks to the sara safety beam, a unique noncontact travelling safety beam, which runs in front of the curtain and prevents it closing in the event that there is an obstruction.

The Sprint range of highspeed doors offers the fastest available opening speeds – up to 3.2m/s – as well as a wide range of options, such as aluminium roller shutter doors, mesh grill doors, doors with windows, fully transparent doors, heavy-duty textile, PVC or plastic doors, specialist doors for food and clean room facilities, laser or optically protected doors, wind excluders, etc. we&e saralbs.co.uk

October/November 2014 | water energy & environment

51

HVAC

Whisky savings galore The Royal Brackla distillery in Nairn is reducing its energy costs and its greenhouse gas emissions thanks to funding from the UK Green Investment Bank

T

he Royal Brackla distillery in Nairn The Royal Brackla distillery is the latest Scottish distillery to benefit from UK Green Investment Bank funding to improve its energy efficiency.

The UK Green Investment Bank (GIB) says the project will finance the installation of a biomass boiler to replace the existing, heavy fuel oil boilers. This will reduce the distillery’s energy costs and its greenhouse gas emissions, greenhouse gas emissions without requiring any as taking 2,265 cars off upfront capital investment the road. As well as saving from the distillery. greenhouse gas emissions The boilers will be used by switching from oil to to produce steam, necessary biomass, the biomass boiler for several parts of the is anticipated to be 50% whisky production process. more energy efficient than Speaking at the Green the current oil-fired boilers.

Investment Conference in Royal Brackla, run by John Edinburgh, GIB’s chairman Dewar & Sons, was founded Lord Smith of Kelvin said: on the outskirts of Nairn in “Scotch whisky is a critically 1812. It was the first distillery important part of the to receive the Royal Scottish economy.

Warrant and has That’s why I am been since lauded delighted that as “The King’s we are able to Own Whisky”. help another It was also distillery one of the Improved energy to save efficiency of the new first malt money and whiskies used biomass boiler reduce their in producing greenhouse blended whisky. gas emissions.

Iain Lochhead, These projects operations director of have been structured John Dewar & Sons Royal so that the distilleries can Brackla distillery, says: “The start saving money from installation of the biomass day one and don’t need to boiler will mark a significant find the capital up-front. change in the environmental This is an investment to performance of the distillery help one of our most iconic as we are expecting an annual industries to modernise, target reduction of some 5,000 become more efficient and tonnes of CO2 emissions. reduce its carbon footprint.”

This goes hand-in-hand The project is expected with our company’s larger to save the same amount of ‘Good Spirited’ goal to reduce

50%

52 October/November 2014 | water energy & environment

greenhouse gas emissions globally by 50% by 2017. By a happy coincidence it also marks the return of Royal Brackla as a single malt.”

Earlier this year, GIB announced that it had made £5m available to fund energy efficiency projects at a number Scottish distilleries, via its fund manager Equitix. Half of this will come from GIB, with matched funding from private capital through the Equitix managed Equitix Energy Efficiency Fund.

The project at Royal Brackla distillery will be financed from this tranche of funding.

The Dewar’s Aberfeldy distillery in Perthshire, Balmenach distillery in Speyside and Tomatin distillery near Inverness have already taken advantage of the finance available and put in place energy efficiency measures. Tomatin distillery

“

We are expecting an annual target reduction of some 5,000 tonnes of CO2 emissions

is on track to reduce its greenhouse gas emissions by about 80%, and Aberfeldy distillery estimates that it will reduce its carbon footprint by up to 90%.

The secretary of state for Scotland, Alistair Carmichael, says: “The UK Green Investment Bank that this coalition government set up continues to go from strength to strength by investing in key Scottish business sectors like whisky, allowing them to cut energy costs and protect the environment. I’m delighted to see more projects in Scotland benefit from UK GIB. “Growing the Scottish and UK economy is a priority for this government and doing it in an environmentally responsible way is crucial to tackling climate change. The UK GIB is a key partner in helping us achieve our priorities.”

Ernest Kidney, managing director of Balcas, adds; “Royal Brackla is the fourth distillery to benefit from our fully integrated energy solution. We are delighted to be working with the organisation to assist them in reducing business overheads and overall environmental impact.

“The Scotch whisky industry has certainly embraced the switch to renewable fuels, and is leading the way for industrial steam users in the UK. This is in turn providing instant and significant carbon savings, security of fuel supply and the opportunity for these companies to take advantage of the governments’ Renewable Heat Incentive, which offers substantial commercial benefits.” we&e greeninvestmentbank.com

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ROTRONIC Instruments (UK) Ltd, Crompton Fields, Crompton Way, Crawley, West Sussex, RH10 9EE T: 01293 571000, F: 01293 571008, E: instruments@rotronic.co.uk

CHP

Sizing CHP for tomorrow’s demands CHP won’t deliver for every development and detailed analysis and modelling is required to assess feasibility and then to ensure that it is sized and specified accurately to provide maximum efficiency – both in the short and long term, where energy demand patterns might change, writes Ian Hopkins

I

n conventional power and heating applications, plant capacity is usually dictated by maximum demand, resulting in the system operating predominantly at part load.

To gain the efficiency and economic viability of CHP plants, high utilisation is required; hence it is essential to understand the minimum energy demands during the running period, as well as the maximum demands.

Sizing a future-proof CHP unit requires accurate measurements today and a measure of how the balance between heat and power baseloads might shift. It is important to ask careful questions about what the CHP system will need to do in both the next half hour and in the next 10 years.

The process should start with an audit of current and future demands of heat and power.

Site demand information will show how demand profiles peak and fall with: • Time of day • Day of the week • Season of the year When a CHP system has been sized against the building’s normal patterns of consumption, it is always wise to compare the economics and environmental benefits with those of a larger and smaller plant.

Theory says a well-designed CHP system will use all the heat and power produced, but a larger CHP plant generating surplus heat may show greater

economy and environmental benefits in future. The chief considerations are: • Planned energy efficiency measures that would reduce the current demand for heat and/or power • Planned changes to the business, the building or the occupancy that will increase or reduce energy demand For example, in a sports centre, is a swimming pool planned? In a hotel, will the fabric of the building be insulated, or will doubleglazing be installed? For any business, will the staff numbers grow?

Don’t guess Many CHP installations are oversized because the energy demand profile has not been assessed properly.

To get the full benefits of CHP, the unit needs to run all day every day, and all the power and heat produced has to be fully utilised.

Ideally, the demand information would be based on heat and power consumption measured every hour for one year. Annual or monthly electricity and gas meter make no allowance for seasonal variations, particularly in heat. As such, it is important to get as close as possible to hourly or even halfhourly consumption figures.

Electricity usage profiles can be obtained by looking at halfhour meter data from your electricity supplier. Heat usage profiles are more difficult to assess, so you may need to use some temporary metering.

54 October/November 2014 | water energy & environment

Monthly fuel bills will indicate some degree of seasonal variation. For weekly and daily profiles it is important to understand the operating pattern of the building and to add to that a short-term monitoring exercise or audit.

Once you have established the demand profiles you can

“

Sizing a futureproof CHP unit requires measurements today and a measure of how the balance between heat and power baseloads might shift calculate the electricity and building’s heat baseloads.

The useful output from a CHP gas engine is typically about 40% electricity, 45% heat. From the current and projected demands of the building and the business, you need to establish whether the CHP sizing will be based on the electricity or heat demand.

A heat-led sizing will meet the site’s heat demands. It may produce surplus electricity that can be exported or leave a need for top-up power.

The economics of exporting power then becomes a priority issue. A power-led sizing could produce excess wasted heat, so it may be worth considering a smaller unit.

Once a CHP unit has been sized on a current heat-to-power ratio, future considerations need to include an assessment of how the heat-to-power ratio of the building’s demand might change over time and to incorporate these scenarios into your planning. we&e Ian Hopkins is a director of ENER-G Combined Power.

He is a technical sales and marketing professional and business leader with more than 15 years’ experience in delivering energy efficiency projects and strategy in Europe and the US energ.co.uk/chp Download the ENER-G guide ‘CHP project planning: How to determine site heat and power demands’ at energ.co.uk/chp

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Water management

On the crest of a wave Bürkert’s FLOWave flowmeter uses new technology based on surface acoustic waves to deliver unrestricted, highly accurate measurement even in turbulent or laminar flow

U

ntil now flowmeters have come in a wide variety of designs with individual strengths and weaknesses that define their suitability for different applications. However, Bürkert has developed FLOWave, a solution for liquid flow measurement, which has the potential to change the market significantly. The FLOWave design uses new technology based on surface acoustic waves (SAW).

From the most basic paddle wheel system to an advanced Coriolis flowmeter, each and every design has one or more operational constraints which must either be accepted and managed or rejected in favour of a different design that is more suitable. Most of the mechanical flowmeters, for example, have moving parts that require direct contact with the fluid flow, which can cause a restriction to the flow as well as hinder any hygienic cleaning process.

The more advanced noncontact technologies, such as ultrasonic, electro-magnetic and Coriolis sensors, still have limitations, especially with liquids that are nonconducting, contain bubbles or debris. In addition, the orientation, size, weight,

mounting length and location of most current flowmeters can be determining factors in deciding which design is best suited to a particular application.

Surface acoustic Wave (SaW) technology The main principle of Bürkert’s flowmeter is based on wave propagation forms similar to seismic waves, which start from an initial point of excitation and spread along the surface of a solid material. FLOWave uses at least four interdigital transducers, which are located on the outside of the measuring tube and therefore have no direct contact with the liquid. Each transducer can act as a transmitter or a receiver.

Figure 1 shows one transducer emitting the wave, part of which travels directly to the first receiver, part of the same signal is transmitted through the liquid to the opposite side of the tube, where it splits again, with a proportion of the signal going to the second receiver and the remainder travelling through the liquid where the process repeats itself. Thus, a single excitation leads to a sequence of signals being received by two other transducers.

The absolute time for

56 October/November 2014 | water energy & environment

Figure 1

the wave to travel from the transmitter to the receiver depends mainly on the tube diameter and the type of liquid.

The difference between the time of propagation in the forward and backward direction is proportional to the flow. The analysis of all the signals and comparisons based on different criteria such as amplitude, frequency and runtimes, allows evaluation of the quality of the measurement, the existence of gas bubbles or solids as well as the kind of liquid.

Benefits to users The first and most obvious advantage to this technology is that none of the components come into contact with the liquid and there are no flow restrictions inside the measuring tube. Furthermore, the internal surface of the tube can be manufactured to the same surface finish as the rest of the pipeline, meaning that in terms of hygiene, cleaning and flow conditions, there is no difference to any other piece of straight pipe.

This measuring system currently provides very accurate flow and temperature data and the technology will, in the future, allow density

measurement to be used to determine the mass flow rate.

The principles behind this design enable the flowmeter to work with a stagnant liquid and so reliable flow figures are available even for the smallest flow volumes. The technology also enables it to recognise quick flow changes reliably, which makes it suitable for fast filling processes.

FLOWave also solves many of the issues associated with some high-end flowmeters, such as system vibration in the plant, magnetic and electrical effects as well as the conductivity of the liquid – none of these factors have any effect on the accuracy or reliability of the flow measurements; plus, the SAW technology also has the ability to distinguish between laminar and turbulent flows, a feature that will available later.

This flowmeter can also be installed in applications in any orientation without affecting performance. The initial design, Type 8098, will comprise an all-stainless steel body in four sizes, DN15, DN25, DN40 and DN50, fitted with a clamp connection to meet hygienic standards. we&e burkert.co.uk

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The Wilo Way: Customised solutions with personal commitment.

Water Management by Wilo – that’s more than innovative technology and long-term expertise. The Wilo Way rather means making your working life easier by providing you with all the information you need – exactly when you need it. This includes planning tools, documentation and personal assistance in every project phase. That is how we live our promise “Pioneering for You”.

So how can Wilo support you? www.wilo.com/WaterManagement T: +44(0) 1283 523000 F: +44 (0) 1283 523099 E: sales@wilo.co.uk

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Water ManageMent

The L8 revision – what do you need to know?

Paul Sear, technical manager at Environmental Scientifics Group, reviews the ‘Legionnaires’ disease: The control of legionella bacteria in water system Approved Code of Practice (ACOP) L8’ and what the updates mean for those taking charge of legionella risk management

M

ore than a decade since its last revision, the Health and Safety Executive (HSE) has released an updated version of its legionella management guidance. Those familiar with the previous legionella guidance will notice ACOP L8 takes a new format, separating the technical element of managing risk into a stand-alone document – Technical Guidance HSG274.

The new HSG274 gives practical advice, which is broken down into three clear sub-divisions: Part 1, The Control of legionella bacteria in evaporative cooling systems; Part 2, The control of legionella bacteria in hot and cold water systems (this remains the same as the previous version as an interim measure and the revised document is expected to be published in 2014); and Part 3, The control of legionella bacteria in other risk systems.

Given the ACOP’s special legal status, this separation and a simplification in language has been introduced to ensure the guidance provided is clear, concise and easy to follow. As a result, those following ACOP L8 can do so in the knowledge that they are complying with the law surrounding legionella management and control.

In addition, it provides a simple tool to improve their communications, helping to ensure better control of risk both internally and externally.

“

The risk assessment document should now be treated as a living document, which receives regular reviews Who’s in control?

Much greater emphasis has been placed on the duty holder throughout the new ACOP L8, but the HSE has simultaneously taken steps to remove the ‘controlling mind’, encouraging multiple people to be charged with ‘competency’ as responsible persons for legionella control.

As a result, it need not only be directors or senior managers who are deemed the responsible person and, in fact, such competent individuals can be appointed from outside the organisation.

It is crucial, however, that those identified can

58 October/November 2014 | water energy & environment

demonstrate competence, knowledge and authority and have been suitably trained.

When an external competent or responsible person is appointed, the organisation’s internal responsible person and duty holder must maintain sufficient competence, knowledge and authority for day-to-day control. It is important that they also ensure a regular audit of external competent persons is undertaken. assessing risk The new L8 document provides a less prescriptive regime for assessing risk, removing the requirement for periodic assessments to be conducted every two years.

However, the risk assessment document should now be treated as a ‘living’ document, which receives regular reviews.

As such, the duty holder and responsible persons must ensure future reviews – in the form of regular auditing – become an integral part of their

control procedures. Where systems are deemed to be lowrisk, a proportional approach to risk management can be taken.

Conversely high risk systems may require a more robust approach to risk management.

It is also worth noting that both the ‘Review of Control Measures: monitoring and routine inspection’ and ‘Carrying out a Risk Assessment’ have now been given ACOP status and extra detail has been provided around the risk in artificial water systems (BS8580:2010).

Future control For those who already have good control measures in place, the changes will not require a significant or immediate overhaul of these.

The fundamentals of legionella risk management remain the same: identify and assess sources of risk; prepare a written scheme for preventing or controlling the risk (if appropriate); implement, manage and monitor precautions; appoint competent person or persons to manage the risk; and ensure records are kept.

Nevertheless, there are some changes that may affect the management and control of future risk, and experts will be able to provide best practice advice and examples of how to address any uncertainty in these areas.

Copies of the revised documents can be found on the HSE website hse.gov.uk we&e esg.co.uk

theenergyst.com

New Waterless Urinal Adaptor system from Water Solutions converting your urinal to our award winning system

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Green ICT

Smarter alternative to euro grid The CEO of one of Europe’s leading ICT companies, Maingate, argues that ICT has the potential to deliver much of Europe’s smart energy agenda, reducing the need for a potential investment of up to €1 trillion by 2020 to reinforce the grid

B

aard Eilertsen presented his perspective on the challenges currently facing the smart grid revolution at the European Utilities Telecom Council annual conference EUTC 2014 held on 22 to 24 October in Monaco.

During his keynote presentation, Mr Eilertsen argued that ICT can enable distributed intelligence, monitoring and control across the electricity grid, and discussed why this is essential if we are to meet the energy demands of the next 20 years.

“Europe cannot afford to spend the trillion euros currently forecast on creating a smart grid, so what can we do to avoid the lights going out?” asked Mr Eilertsen.

“By harnessing the best of telecommunications technologies, machine-tomachine connectivity and Internet of Things capabilities, it is possible to deliver much of the smart energy agenda without the heavy engineering and costly approach that is typically associated with upgrading the grid.”

The Internet of Things (IoT)

ICT can enable distributed intelligence, monitoring and control across the electricity grid, says Baard eilertsen (right)

“

By harnessing the best of telecommunications technologies, machine-to-machine connectivity and Internet of Things capabilities, it is possible to deliver much of the smart energy agenda without the heavy engineering and costly approach that is typically associated with upgrading the grid

60 October/November 2014 | water energy & environment

is rapidly developing in almost every sector. But while there’s been a lot of talk about how it might function in our homes and businesses, awareness is now growing of the significant role it could play in solving the daunting challenges facing the energy sector.

“Applied to the energy sector, IoT allows all kinds of new solutions and business models that can be alternatives to heavy, costly engineering,” explained Mr Eilertsen.

“It enables demand side response initiatives that defer the need for grid reinforcement; behaviour change programmes to reduce overall energy demand; the integration of energy assets across storage and production so that the grid can become self balancing; and the creation of system wide storage facilities to contain peaks in both production and consumption.”

“This approach reduces the CAPEX requirement, improves time to market and actually helps build the business case for investment by spreading the risks and benefits.”

Mr Eilertsen also referred to the lessons the energy sector can learn from recent evolution in the telecommunications sector, where unbundling has led to significant innovation.

“Experience has shown us that it is possible to move from a heavily engineered, closed industry to an industry that is open and flexible; an industry that is built around enabling standards; and an industry that is market rather than technology led.”

Maingate provides Internet of Things capabilities for a smart energy ecosystem by combining machine-tomachine connectivity with cloud-based data management.

The company’s recent projects in the energy sector include conducting Sweden’s largest energy consumption experiment in partnership with E.ON; launching a new initiative to trial consumers’ responses to real time energy prices with Norwegian utility NTE; and a multimillion-pound energy efficiency project with UK network operator SSEPD. we&e maingateenergy.com

theenergyst.com

tion

ump s n o C y g r Low Ene ies g o l o n h c e Green T ts s o C e l c y Low Lifec

Vacuum and Pressure Solutions for Water and Wastewater Applications Gardner Denver Ltd Claybrook Drive, Washford Industrial Estate Redditch, Worcestershire B98 0DS, UK Tel. 01527 838200 | Fax. 01527 521140

er.uk@gardnerdenver.com www.gd-elmorietschle.com

Products Low carbon heating for caspian Wharf SAV Systems has supplied LoadTracker 15kWe/30kWth combined heat and power (CHP) units to several phases of the Caspian Wharf residential development in east London.

Selected by MLM Consulting Engineers, a total of nine LoadTracker units have been installed across three central energy plant rooms and will deliver low carbon heating to apartments and commercial units, as well as electrical power to landlord’s areas, at Caspian Wharf.

Developed by The Berkeley Group, Caspian Wharf is a brownfield site development on the Limehouse Cut that comprises contemporary studio, one-, two- and three-bedroom apartments with a mix of both private and social housing. The Berkeley Group has a strong commitment to sustainability so a low carbon design was central to the design.

For the largest energy centre, MLM selected five SAV LoadTracker CHP units and three 1,000 litre heat storage vessels to serve the 289

apartments. “The CHP was a key element in our energy plan for the development, helping us to reduce emissions and meet Local Authority requirements in compliance with the London Plan,” recalled MLM technical director Colin Bowen. “The CHP was sized to meet heat loads

while ensuring that all of the power generated was used to meet the buildings’ parasitic loads with no predicted export to the national grid.

This arrangement ensures that we minimise the use of mains electricity and the high carbon emissions associated with it.”

SAV calculate that the CHP plant is expected to produce nearly 480,000kWh of electrical power and more than 950,000kWh of heat per annum. The installation is projected to reduce CO2 emissions by 113 tonnes per annum, compared with a conventional mains electricity/gas-fired boiler arrangement.

A key criterion in the specification of SAV LoadTracker units was their ability to modulate, matching the varying heat demand and ensuring that the electricity generated never exceeds demand. This also helps to ensure that the CHP will maintain efficiency if other energy-saving initiatives reduce demand in the future, with the opportunity to connect to off-site district heating networks, which are predicted to be introduced to the area. sav-systems.com

controlling limescale in process plants KalGUARD from Sentinel Commercial has been Independently verified

by Cranfield University to practically eliminate limescale build up.

Wherever untreated water is heated, limescale often follows, causing a range of problems from reduced energy efficiency and blockages to equipment damage, especially on pipework, pumps, heat transfer surfaces, heat exchangers and water tanks. Unfortunately, hard water (200ppm or more) is supplied to about 65% of the population of England, meaning most industrial plants are vulnerable to limescale formation if left untreated.

KalGUARD by Sentinel Commercial can help protect systems from limescale build-up. KalGUARD permanently ‘conditions’ water by dosing it with a very low level of stable zinc (the level of which is adjusted by an intelligent water controller and meter system) via an electrolytic process that uses a zinc anode and a copper cathode. This forces naturally occurring calcium carbonate crystals to form as soft, non-deposit-forming aragonite rather than into hard, deposit-forming calcite (limescale).

Independent tests carried out at Cranfield University have proven KalGUARD’s ability to reduce limescale drastically. As a point of note, it is worth considering that electrolytic technology is recommended by the Part L1 Building Services Compliance Guide for the control of limescale in domestic heating systems. When installed on a rising main, just one KalGUARD system is able to treat all incoming water. In addition, KalGUARD is WRAS approved and does not impart undesirable chemicals into the water, making it suitable for most industry processes, including those in food and beverage plants. sentinelprotects.com

62 October/November 2014 | water energy & environment

delivering the mayor’s district heating vision Cofely has acquired the energy centre connected to the ExCeL exhibition and conference centre in east London. The company has also signed a 40-year energy services contract with ExCeL to supply heat, chilled water and CHP-generated electricity to the venue. The transaction makes possible future development to link this scheme to Cofely’s existing district energy network at the Queen Elizabeth Olympic Park and Stratford. “This acquisition has enormous significance, not just for Cofely and ExCeL but also for the low carbon regeneration of east London, and the wider mayor of London’s heat strategy,” said Wilfrid Petrie, chairman of Cofely UK. The ExCeL energy centre currently has capacity for 18MW of heating and 5MW of cooling, but the envelope of the building can contain significantly more plant and was built to supply energy to the wider area. Cofely will initially be installing a 2.6MWe of CHP, as well as additional cooling plant. It will also be replacing the existing 300m of pipework that serves the centre.

When the ExCeL network is connected to the existing network the resulting 230MW of heating capacity will be sufficient to heat the equivalent of 45,000 homes. cofely-gdfsuez.co.uk

theenergyst.com

Efficient space heating for Leeds Metropolitan Riello has supplied 23 gas-fired modulating burners for use with Ideal Commercial boilers that have been installed to provide energy efficient space heating to the Headingley campus of Leeds Metropolitan University. The matched burners and boilers were specified due to their ability to provide energy efficient heating, therefore enabling the university to qualify for funding based on subsequent reduction in energy use.

The new heating equipment will also play a key role in helping the university reduce its running costs and carbon emissions, releasing funds that can be used towards enhancing educational facilities Ideal stocks an extensive range of commercial boilers, which enable quick turnaround times and project installations – a requirement for this project. The Ideal commercial boilers used in this project comprised 22 Harrier models and one Concord. They were specified and installed

by Leeds-based ICH Services in 11 plant rooms across the campus to serve a variety of applications. The Riello burners were matched to the different boilers and included RS34 and RS44 two-stage progressive burners as well as GS20 models.

“The existing boilers at the campus were all quite old and inefficient so replacing them created a good opportunity to improve the

efficiency of the heating system,” recalled ICH’s Michael Holmes. “On the basis of the efficiencies of the boilers and burners proposed for the project, the university was able to obtain an energy-saving grant towards the costs.”

Andy Forrest of Ideal Commercial added: “We required high-performance burners for this project and Riello was the supplier of choice on the basis of efficiency, quality and reliability – as well as competitive pricing. As

this was a retrofit project, the specification team at ICH Services needed to ensure the boilers chosen would offer the necessary flexibility for effective integration with the existing heating system within each building.

Both boiler ranges are extremely adaptable, as well as being compact enough for manoeuvring in existing plant rooms, thereby offering a comprehensive solution for this project.” rielloburners.co.uk

Wall-mounted gas-fired condensing boilers

Heat transfer stations

MHG Heating has launched the ProCon MC range of wall-mounted gasfired condensing boilers, available in 90kW and 115kW outputs, with 4:1 turndown capability due to a fully modulating pre-mix burner. ProCon MC boilers are low NOx (Class 5) with net efficiencies up to 108.3% at part-load (30%) and 106.7% at full load.

When used in a cascade configuration ProCon MC can deliver capacities from 22kW to 460kW. They are suitable for use with natural gas and LPG (liquefied petroleum gas) and are supplied with matched mounting frames, integral anti-seize pump and cascade hydraulics – including low loss headers or matched system separation plate heat exchangers.

ProCon MC boilers incorporate cascade and zone controller options, as well as a frost protection programme, and offer direct connectivity to a building management system. Remote monitoring is available using the GSM phone network or the internet. Integral safety controls ensure compliance with BS6644:2011. mhgheating.co.uk

Hoval’s new TransTherm heat transfer stations are the subject of a new film which explains their key role in connecting buildings to increasingly popular district heating networks.

The short animation illustrates how TransTherm heat transfer stations provide efficient and reliable distribution of heat to each of the buildings connected to the network.

Crucially, each transfer station can be easily adapted to provide a customised solution that meets the precise heating and hot water requirements of each building – in both retrofit and new build projects.

Flexible and simple to install, the compact TransTherm units are delivered as complete systems, fully equipped with all controls and sub-assemblies, ready to connect.

The Hoval TransTherm range extends from 15kW to 1,720kW, providing solutions for a wide range of applications. hoval.co.uk

theenergyst.com

October/November 2014 | water energy & environment

63

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Q&A

Ben Dhesi The managing director of Pulse Business Energy talks about being a cinema usher, playing with balls and painful injuries

W

ho would you least like to share a lift with?

I once went to the top of one of the twin towers in a lift and even that took no longer than three to four minutes. I don’t think there is anyone I can’t bear for that amount of time.

You’re God for the day. What’s the first thing you do?

Announce I’m no longer a fan of conventional religion and that everyone will be judged on their deeds in life.

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

Several weeks ago someone asked me to play football (not played for years) and I snapped my Achilles tendon, crutches, casts and walking boots have ensued ever since… selfish I know.

Who or what are you enjoying listening to (music, radio etc)?

I recently saw a documentary on Netflix called Soul of America about a 65-year-old man who struggled against poverty and prejudice his whole life. He made a living as a James Brown tribute act until a group of young New York musicians discovered his voice and invested everything into producing his album. Two albums later he’s topped the US billboard charts and is seen as the lost voice of a generation.

I’m listening to those albums

by Charles Bradley.

What unsolved mystery would you like the answers to?

A cure to diabetes.

66 October/November 2014 | water energy & environment

What would you take to a desert island and why (excluding loved ones and practical things)?

My sand wedge and a limitless supply of balls. I would never worry about being in a bunker again.

What’s your favourite film?

My first job at 16 was a cinema usher and I saw what are even today some of my favourite films at least 30 to 40 times, like The Fugitive, Shawshank Redemption, Pulp Fiction and Indecent Proposal. I still have to record/watch them when they come on TV. If you could perpetuate a myth about yourself, what would it be?

There are a few I’d like to quell.

What would your super power be and why?

Unbreakable Achilles tendons. (Why? See above.)

What would you do with a million pounds?

Practically pay my mortgage…

Philanthropically donate to finding a cure for T1 diabetes.

What’s your greatest extravagance?

In my early to mid-twenties I saved up five months’ wages when I was living at home and walked into a shop in Bond Street and bought a Breitling Navitimer. That’s still is, and likely always will be, my greatest extravagance.

If you were blessed with any talent, what would your dream job be and why?

I love sport so a career in

football/golf is the obvious answer. Otherwise we all have talent, what we lack is opportunity and practise. My job gives me the opportunity to build a business and to practise at being a market leader, so I am fulfilled and I would look for the same things in any role in the future.

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

It was the opening quote in a chapter of a book I read years ago. It was something like: “There are two types of people in the world, the ones who think they can and the ones who think they can’t and they are both right.”

What irritates you the most?

I’ll give you a clue, it’s made of muscle tissue and found between the heel and calf.

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

Come to our Energy Seminar at Glaziers Hall on 2 December and hear Dr Anthony West reveal the trading secrets of the wholesale market (see eventbrite.co.uk/e/esosenergy-training-seminartickets-12775924133 for further details).

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

Hiring Dr West and a team of energy graduates and sending existing employees out to gain their CEM degrees at the Energy Institute. As a business grows, so must the skills of the team. we&e

theenergyst.com

Brought to you by

ENERGY MARKET ANALYSIS

Market report water energy & environment’s regular section brings you an eight-week overview of the latest analysis of the power and gas markets from Energy Trader Daily. By Serge Mazodila

T

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66 Pence/therm

he fundamentally Bearish gas trading environment of 2014 has continued into the first part of winter 14/15, as temperatures across the UK remain above seasonal normal levels, resulting in continuing low demand.

The high gas storage levels seen in the UK (and throughout Western Europe) have added further downside pressure to the gas curve, as we are heading into the colder months with a relatively strong position, and front season prices are currently approaching the lows of midJuly (all-time contract lows).

The sentiment-driven price rises seen between late August and early October have recently evaporated, as the market has pre-emptively priced in a gas agreement between Ukraine and Russia, assuming that the supply deadlock, which has been in place for much of the year, will soon be ended. The expected positive outcome of talks between Russia and the ex-Soviet State at the end

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July 2011

July 2012

July 2013

July 2014

NBP Sum'15 Gas Contract

of October is likely to result in some market turbulence, as speculators close their positions and take profits, but, if the talks fail to fulfil market assumptions, a much larger amount of volatility is probable, with potential for sharp price rises in the case that flows through Ukraine do not resume.

Assuming that Russia and Ukraine are able to come to an agreement at the end of the month, the outlook for the gas market over the first half of winter (Q4 14) remains mildly Bullish, as small price rises are expected to occur in line

with the progressively cooler winter weather (seasonal normal temperatures are predicted). More extreme price movements are anticipated for Q1 15, when long-range weather forecasts indicate the arrival of below seasonal-normal temperatures for the UK. The UK power market’s behaviour has been wellcorrelated with the UK gas market for most of 2014 – however, recently, the power curve has begun to slightly diverge from the pattern established by NBP gas, as fundamental

changes in the UK’s power market have occurred.

The market-impacting factors which are currently affecting the UK power price are driven by the unexpected outages seen at a number of nuclear power plants, which were shut down by EDF as a precaution, following the discovery of cracks in a boiler spine at Heysham.

The phased return of these plants during Q4 14 should see the power market begin to correlate more strongly with the gas curve once again, but in the meantime, power prices are deriving support from the potentially reduced power margins which are expected to occur in the first half of winter.

The outlook for the power curve during Q4 14 is mildly Bullish, with price rises anticipated as temperatures grow cooler in line with seasonal expectations.

Additional price support coming from the nuclear outages could lead to some stronger price movements, should cold temperatures lead to unusually tight UK power margins.

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February 2014 March 2014

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NBP Sum'15 Gas Contract – weekly chart

theenergyst.com

August 2014

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October 2014

A leading UK energy trading desk which examines market areas and utilises established methodologies, in order to deliver market intelligence, focusing on both fundamental and technical analysis. ETD has a wealth of knowledge, real time streaming direct to your desk, and an expert trading analyst team to help you manage future market uncertainties. www.energytraderdaily.com

October/November 2014 | water energy & environment

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