Future of energy

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June 2015 | business-reporter.co.uk

FUTURE OF ENERGY

Energy’s perfect storm René Carayol on why it’s time to rethink our energy policy

I’m more of a Star Trek than a Blade Runner man SIMON ASHBY

Why batteries are getting the Iron Man treatment JAMES MURRAY

How a £1bn tidal lagoon could provide power for 120 years ELERI EVANS

INSIDE The pressure is on in Paris to hit the 2° climate change target DISTRIBUTED WITHIN THE SUNDAY TELEGRAPH, PRODUCED AND PUBLISHED BY LYONSDOWN WHICH TAKES SOLE RESPONSIBILITY FOR THE CONTENTS

Business Reporter · June 2015

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Future of energy

Opening shots René Carayol

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VERY now and again, an industry will be presented with the “perfect storm”, when everything that really matters comes into alignment, but grasping the opportunity is not easy.

The future of energy is having just such a moment.

Three diverse strategic threads are abnormally converging, delivering a once-in-a-lifetime opportunity. First, the drive for innovation to move away from fossil fuel dependency assisting climate change is real, delivering a wide array of new technologies.

Second, the incredible success of horizontal drilling and hydraulic fracturing (fracking) in the United States has not only delivered a new energy self-sufficiency in the US, but has also kick-started a scramble worldwide for those who initially ignored its potential.

Third, and perhaps the real catalyst, is the plunging price of oil and the stabilisation of low gas prices that have forced a change in mind-set.

The global energy industry is being re-shaped and re-fashioned in a manner that will affect mankind for ever. The sustained rise of renewables is forcing a rethink of energy systems all over the world. Windfarms, solar panels and more disruptive technologies are putting our traditional and existing power networks under intense pressure.

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THE ESSENTIALS

Publisher Bradley Scheffer | Editor Daniel Evans | Production Editor Dan Geary

Seize the day: why it’s the right time to benefit from energy’s perfect storm This resetting of capability and capacity has encouraged a new range of technological solutions.

Traditionally-focused power companies are battling to combine and link solar panels, biomass generators and wind turbines with conventional power plants.

With some of these technologies able to send energy back into the system, traditional one-way grids are having to cope with becoming bi-directional.

This transformation also has to handle intelligent homes and new sources of energy while trying to maintain a stable and workable grid.

But it is not just the traditional electricity networks that are being forced to upgrade and change – fracking has revolutionised oil and gas production, and the oil industry in particular is still learning how to withstand this shale boom.

Despite all this innovation, by far the most obvious reason for optimism is the continued plunge in energy costs. Natural gas is the cheapest it has been for well over 10 years, and the price of oil has halved since the highs of recent times. Many

had predicted that the oil price would have headed back upwards many months ago from its lows of last year, but now low prices could be here to stay.

In the space of a year, the nearpanic emanating from whether the world could produce enough energy to meet the explosive growth of the global population has faded.

Today’s challenge is, remarkably, far more about having to deal with managing the abundance of energy.

It might just be time to take a hard look at perhaps removing the biggest barrier

to a sensible and sustainable future – the subsidies associated with the production and consumption of fossil fuels.

In 2014, world governments threw away £550billion dollars on subsidising energy, ranging from deliberately holding down the price of petrol in poor countries to incentivising wellheeled oil companies to get out and search for more oil. These subsidies encourage more use of the wrong sort of energy and, even worse, pushed global carbon emissions to frightening levels.

If there was ever a moment to reappraise the future of energy, it is now. Politicians have shied away from raising taxes for fossil fuels, as anything that makes driving or heating homes more expensive would see a negative payback at election time. But maybe it’s time for bold moves, with some sort of carbon tax that will reduce the use of greenhouse gases, as this will deliver so much more than the crazy subsidies for windfarms and nuclear plants.

The real sign of wisdom is to change your position in the light of overwhelming evidence. However, this is such a rare e x p e r ie nc e for politicians.

This may just be the perfect storm, and the perfect moment to rethink the future of energy.

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Future of energy

Client manager Emma Sutherland e.sutherland@lyonsdown.co.uk | Project manager Tevy Corman

Pressure on Paris to hit

target

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LL EYES will be on Paris in early December, when representatives from nearly every country in the world are due to sit down and put together a deal on climate change.

Environmental experts, politicians and scientists are all working behind the scenes to ensure that the UN’s Climate Change Conference 2015 is seen as a success. In other words, they a r e a i m i ng to m a n a ge expectations.

Already, several countries have declared their INDCs – their Intended Nat iona lly Determined Contributions – and, based on the submissions received so far, scientists are already warning that the chances of limiting climate change to no more than 2°C are low.

French president François Hollande knows that the UN faces a tough challenge in Paris. “We must have a consensus. If within our own country, that’s difficult, imagine what it’s like with 196 countries.”

Professor Nicholas Stern (below), an influential figure on climate change, warned last month: “It seems unlikely that the pledges from all countries before the Paris summit will collectively be sufficient to bridge the gap to an emissions pathway that is consistent with the limit of 2°C.” Christiana Figueres, the United Nation’s leading climate change official, accepts that the INDCs will not be low

enough to hit the 2°C target but says that, with futher work and determination, that target might be hit in the following decades.

“You don’t run a marathon with one step,” she says.

Recent work by two research institutes at the London School of Economics concluded that China’s greenhouse gas emissions will probably peak in 2025, five years earlier than its stated target, which is good news in the fight to reduce temperature increases.

On current trends, China will discharge 12.5 to 14bn tonnes of carbon dioxide equivalent (GtCO2e) in 2025, after which emissions will decline. In a statement, the research teams said: “This finding suggests it is increasingly likely that the world will avoid global warming of more than 2°C above preindustrial levels. China’s transformation has profound implications for the global economy, and greatly increases the prospects for keeping global greenhouse gas emissions within relatively safe limits.”

Hans Joachim Schellnhuber, from the Potsdam Institute for Climate Impact Research, accepts the 2°C target is a big ask. “It will not be a piece of cake. It would be perhaps comparable to what the US did in the Second World War – they changed their e c onomy to p r o duc i n g tanks rather than automobiles.” “ Pa r i s w i l l b e a funeral without a corpse,” Dav id Victor, a professor of inter national relations at the Universit y of California, told

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The Paris talks • UN negotiations are in progress to develop a new international climate change agreement • The agreement is set to be agreed at the Paris climate conference in December and implemented from 2020 • The climate conferences in Warsaw (2013) and Lima (2014) agreed that all countries were to put forward their emissions reduction targets before the Paris conference • The UN will publish these contributions and prepare a report by November 1 to assess whether they put the world on track to keep global warming below 2°C Reuters, predicting the 2°C goal would slip away despite insistence by governments that is still alive.

“It’s just not feasible,” added Oliver Geden, of the German Institute for International and Security Affairs. “Two degrees is a focal point for the climate debate but it doesn’t seem to be a focal point for political action.”

In an attempt to influence the UN’s climate change talks, the leaders of Europe’s six largest energy companies have said gas should play an important role in plans to tackle global warming.

In a letter to the Financial Times, signed by Ben van Beurden, chief executive of Shell, Bob Dudley, chief executive of BP, as well as bosses at BG Group, Eni, Total

and Statoil, they wrote: “As a group of businesspeople, we are united in our concern about the challenge – and the threat – posed by climate change. We urge governments to take decisive action at December’s UN summit.

We are also united in believing such action should recognise the vital roles of natural gas and carbon pricing in helping to meet the world’s demand for energy more sustainably.”

In an unusual step, the Pope has involved himself in the debate on climate change, calling global warming a major threat to life on the planet. He says it is largely due to human activity, and says the need to reduce the use of fossil fuels is a matter of urgency.

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Future of energy

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uring Flexitricity’s early years, Britain’s power system really was in crisis. The 2006 heatwave blacked out parts of London, and that winter’s gas crunch hurt industry badly. 2008 and 2009 were marked by failures: in May 2008, Sizewell B and Longannet together took Britain as close to a black start situation as it had been in the previous 35 years. And during the coldest week of the following winter the nation’s nukes just scraped half of their nameplate output. Yet electricity wasn’t news. Energy managers faced volatile and unpleasant bills, but no one commiserated.

This flipped about five years ago when talk of impending disaster got going just as the real world calmed down. “Blackout Britain” headlines coincided with one of the most stable periods that most industry lags can remember. Power stations are closing, partly because of emissions laws, but also because the market hasn’t needed their electricity.

This crisis has been all bark, no dog.

So what’s gone right? And will it persist?

Falling demand is part of the story. It’s hard to unpick the destructive effects of the recession from the remarkable success of LED lighting: these two demand-slashing phenomena emerged around the same time. It would take a heroic exaggeration of balancing costs to hide the beneficial effect that renewables have had on the nation’s fuel bill: wind and solar now beat gas generation too often to mention.

New infrastructure has added resilience, and

transmission upgrades are improving access to renewables. Investment replaces opex with capex, allowing the market to find the cheapest way to keep the lights on day by day.

Every power system needs reserve capacity, and a renewable-heavy system needs it in both directions. Positive and negative reserve, or headroom and footroom, are often best provided by business energy

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users, not by power stations. This is demand response and this is what Flexitricity delivers.

Hospitals, data centres, events venues, logistics, cold chain, horticulture, universities, manufacturing and retail all participate in demand response. Some turn down – or up – electricity consumption at short notice. Others offer their emergency generators as a grid resource. Flexing combined heat and power (CHP) schedules is one of the best sources of balancing energy.

As National Grid recently proved, demand response is low-carbon.

Flexitricity kicked off this sector in 2008, and dominated the surge that led, in August 2014, to demand response all but eliminating power stations from National Grid’s largest reserve tender.

The big generators fought back, but demand response has a tenacity that arises from its diversity. The latest battleground is the government’s capacity mechanism, where we’ve taken a long-term position, tackling power stations head-on. Because Flexitricity took businesses into the heart of electricity balancing, at least one coal power station won’t be charging unnecessary rents to customers.

(Not Longannet, for the record.)

The best crisis spurs the right actions to solve the problem before it lands. Flexitricity has been doing that since 2008. We’ve no intention of stopping now. info@flexitricity.com www.flexitricity.com

Now fuel cell technology is proving its worth

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he global market for stationary hydrogen fuel cells is forecast to reach 7,000 MW by 2022, according to latest figures from e4tech, and one UK-based company is planning to take a material proportion of the total installed capacity in this market.

When Australian Adam Bond (below) took over the reins at alkaline fuel cell energy developer AFC Energy, he raised a few eyebrows by setting an aggressive target for the company of 1GW (1,000MW) of fuel cell capacity in its order pipeline by 2020. Achievement of the above would make AFC Energy the world’s largest fuel cell company.

As opposed to mobile or hydrogen-powered vehicles, stationary fuel cells have applications as primary and secondary power supply at industrial sites, as well as the home. AFC partners with hydrogen suppliers and uses their surplus hydrogen source to generate electricity and trade the power into the power grid, while retaining ownership of the fuel cell system itself (known as the Energy Supply Company model, “ESCO”).

Bond says: “Having established what was considered to be a highly aggressive target of 1GW of fuel cell generation capacity under development by the end of 2020, I am now increasingly confident that this expectation will be met, and may potentially be exceeded over this timeframe.”

In April, AFC signed a memorandum of understanding (MOU) with Dubai Carbon Centre of Excellence, providing a framework for the assessment and potential deployment of an estimated 300MW of fuel cell generation capacity in Dubai over the next five years. This MOU represents the largest single fuel cell deployment programme in the world. This followed smaller but no less significant deals in South Korea and Thailand.

After years of unfulfilled promise, fuel cell development momentum is now so great that its emergence as a dominant technology appears inevitable.

Unlike intermittent energy sources such as solar or wind, fuel cells provide clean, reliable and sustainable power.

“The market for fuel cell technology deployment is growing daily and I expect AFC Energy will remain at the forefront of this emerging growth industry for many years to come,” Bond said.

According to the New Energy and Industrial Technology Development Organisation, it is estimated that the combined market for fuel cell and hydrogen technology, including hydrogen-powered cars, could reach $8.35billion a year by 2030.

Already countries such as South Korea, Japan, Germany and the United States are supporting fuel cell growth due to its green credentials. Unfortunately, the UK currently has a number of questions that have yet to be answered as to its future policy on hydrogen. Bond said:

“I think the general understanding of where the fuel cell industry and the technology is at in the UK perhaps isn’t quite as well understood as it could be, and when you look at the level of subsidies being afforded other clean energy technologies I believe that in a number of circumstances you’d find that fuel cells would be economic.”

However, Bond stressed that it remains interested in the UK and Europe in general and that it would like to work with governments to support an emerging hydrogen industry. Focus now needs to be on the implementation of a sustainable business model built around the basics of a cost-competitive supply chain, efficient manufacturing, enhanced fuel cell performance and pursuit of the right markets and partners. jcharles@lionsgatecomms.com www.afcenergy.com

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Future of energy

Iron Man to the rescue!

An audit for audit’s sake doesn’t make for good practice

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James Murray on why batteries could be more interesting than you may think

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EW TECHNOLOGIES are less likely to get the pulse racing than the humble battery.

Most people’s interaction with the technology is limited to the Christmas Day trip to a garage to find some batteries for a child’s new toy, or the frustrated rummage through a cupboard in a desperate bid to find a battery for the TV remote. But all that could be about to change.

Batteries are getting the Iron Man treatment.

Elon Musk, billionaire co-founder of PayPal and purported inspiration for the character of billionaire tech genius Tony Stark in the Iron Man films, has recently launched a high-profile effort to “change the fundamental energy infrastructure of the world” via energy storage technologies – or batteries, to give them their more prosaic name.

As CEO and product architect of Tesla Motors, analysts originally thought Musk’s vision was to use the company’s highly desirable electric cars to transform the automotive sector. But last month saw long-awaited confirmation that Musk wants to transform the energy sector too.

The spark for this revolution is to be provided, Tesla hopes, by its newly launched Powerwall, a modular, wall-mounted lithium-ion battery system, which looks not unlike a high spec car bonnet. Significantly, the Powerwall systems starts from $3,000 for a 7kWh battery, offering properties that have onsite renewable power such as solar panels a means of storing green power for use when they want it. More significant still, like any new technology, the direction of the cost curve from this point on will be downwards. Energy storage costs have fallen fast in recent years and with Tesla committed to manufacturing the Powerwall technology at a giant “Gigafactory” in Nevada, costs are expected to keep falling.

Inevitably, not everyone is convinced. Detractors have argued large-scale battery technology is still too expensive, counselling that the grid will be with us for a long time to come. But, while they are right to warn that this energy revolution will take time, criticism of the Powerwall and similar battery technologies tends to underplay the scale of the opportunity and the pace at which viable energy storage systems are emerging.

As Catherine Mitchell, professor of energy policy at the University of Exeter, observed, the Powerwall could prove to be “a nail in the

coffin” for conventional utilities. “Storage offers the ability to extend both the displacement of fossil fuels and reduction of prices beyond peaks – making it even worse for companies whose business models are based on fossil fuels and peak pricing profits,” she said. “The question is no longer whet her decentralisation will happen within the energy system, but when the tipping point will be.”

The Powerwall offers homes and offices the opportunity to insulate themselves against volatile energy prices and could yet negate one of the biggest criticisms of renewable energy – namely, that its intermittency makes it unreliable. Throw falling solar panel costs and reduced domestic energy demand into the mix, and the zero-carbon off-grid home could become a reality.

Meanwhile, the revolution heralded by the Powerwall is being mirrored by the emergence of larger grid-scale batteries (unsurprisingly Tesla is working on batteries for this market too), which can help get more renewable power onto the grid while reducing the need for costly and polluting back-up power plants.

Whether it is Tesla, existing utilities, or as-yet unheralded innovators who reap the rewards from this transformation is yet to be determined.

But Musk has fired the starting pistol on a race that will shape the energy industry t h r o u g h o u t t h e n e x t c e n t u r y.

A week after Tesla launched the Powerwall, Musk provided an update during which he revealed the company had received 38,000 reservations for the system. “ T he response has been overwhelming,” he said. “It’s like crazy off the hook.” It turns out a lot more people find batteries interesting than anyone would have thought.

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Left: Elon Musk’s Powerwall technology is designed to make consumers less vulnerable to fluctuating energy prices; above: Tony Stark in the Iron Man films was supposedly inspired by Musk

here are less than six months left for qualifying organisations to comply with the Energy Savings Opportunity Scheme (ESOS), and no one wants to be facing the potential penalty of up to £50,000 for failing to meet the deadline.

ESOS is the government’s response to Article 8 of the EU’s Energy Services Directive.

This scheme means large companies with 250 or more employees, or with an annual turnover of more than £38,973,777 and a balance sheet of £33,486,489, will need to regularly audit their energy performance.

Compliance requires them to estimate their total energy consumption and audit the areas of most significance for a report which is signed off at company board level and lodged with the Environment Agency. This is where compliance stops and good practice should start.

Why? The clue is in the title – energy savings opportunity scheme. Because simply submitting the audit is not enough to benefit from ESOS – implementing the recommended energy measures is what will make a real difference.

So don’t stop at the filing of the report, don’t even stop when you celebrate the first year’s energy and financial savings – make energy efficiency an essential part of your business practice to reap long-lasting benefits.

The Energy Institute provides an ESOS toolkit to help businesses collect their data and choose the best route to compliance. We also have a free advice service.

Combine that with our skilled, experienced and highly qualified lead assessors, there is still time to meet that compliance deadline if you act now.

Louise Kingham OBE FEI is chief executive of the Energy Institute www.energyinst.org/ energy-efficiency

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UK wind power industry in danger of falling behind European rivals

By Ledetta Asfa-Wossen OFFSHORE WIND power has a growing role in cutting UK carbon emissions, but it is expensive. Onshore wind has proved itself to be a worthy energy competitor but, as subsidies threaten to dry up for this mature technology and planning power moves from Whitehall to local authorities, the future is hard to predict.

The UK’s wind power industry is developing fast but there is still considerable room for improvement to compete with other sources of electricity. Reducing cost will be a key priority for the future.

Michael Parker (below), head of onshore wind at RWE Innogy UK, says: “Onshore wind is one of the cheapest and most effective forms of renewable electricity generation we have in the UK. As an industry, we’re working hard to drive down costs. Equally, we are trying hard to develop opportunities for local individuals and communities to have a real share in developments and the revenue generated from the electricity produced.”

The main way to reduce the cost of wind energy production will be through targeted R&D. To this end, there have been some innovations in the field that could help cut costs for this renewable energy market.

One concentrated area of research has been to improve the durability, speed and effectiveness of turbine rotor blades.

A team at Iowa State University, USA, has been looking into dual-rotor technology.

The technology uses a smaller second rotor and could lead to wind farms harvesting 18 per cent more energy.

O t he r i n nov at ion s a r e being led by EU consortium WINDTRUST, which has begun to optimise the use of carbon fibre to i nc rea se rotor blade durability and reduce component weight. The

technology could extend the overall life of a wind turbine to 20 or 30 years.

Regardless of key innovations in the wind sector, critical issues remain around planning, which Parker believes are adding to the overall cost of wind production.

“The planning system does not tend to consider the amount of energy produced when deciding if a wind farm planning application should be approved,” he says.

“The tendency is for decision makers to focus on the headline statistic of turbine height, and resist these slightly larger turbines and their potential advantages.

“I would really like to see an amendment to the government’s planning guidance so that the average energy production is considered, rather than just the height.

This would make it possible for the planning system to take these benefits into account; to achieve our 2020 (and beyond) climate change targets and reduce the costs of generating energy.”

Parker argues that, in the long term, cost reductions will come from turbines that are slightly larger. He adds: “A turbine that is 131 instead of 125 metres high has little discernible visual effect and you generate more electricity per machine.

Ultimately, this would mean generating the same or more energy from fewer turbines. The technology that we are still installing in the UK is outdated, while more modern up-to-date turbines are being installed on the continent.”

According to a recent Renewable UK report, onshore wind contributed £906million to the UK economy last year, with 27 per cent of the benefits going to the local areas around each project. The wind power industry is growing but a “nimby” approach to turbines and planning legislation could leave the UK playing catch-up with its European neighbours.

South Wales windfarm brings

By Eleri Evans

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HE LARGEST onshore windfarm currently under construction in the UK straddles the county boroughs of Rhondda Cynon Taf and Neath Port Talbot. Once it is operational, the South Walesbased windfarm Pen y Cymoedd, with its 76 turbines, will generate enough electricity to meet the domestic needs of 140,000 homes every year.

The windfarm will also generate a significant annual community benefits package of £1.8million for more than 20

years. With the windfarm located in a European convergence area, it is money that will be very welcome and that could make a real difference.

Piers Guy, head of development for Vattenfall, the Swedish company behind the project, said that ensuring the fund realised its potential was a huge challenge that would require the input of as many local people as possible.

More than 3,000 residents of the upper Rhondda, Cynon, Afan and Neath valleys have had their say on how they think the money should be spent. The

question was simple: What could this fund do to bring real benefit to the local area? Hundreds of people contributed ideas online, through the post or at events and meetings designed to encourage individuals and groups to get involved.

As themes began to emerge a series of workshops on specific areas such as the economy, the environment, health and wellbeing, culture and heritage were held to bring together residents with experts to discuss how the area could be enhanced to the benefit of the community.

Several months and thousands

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“Onshore wind is one of the cheapest and most effective forms of renewable electricity we have in the UK” – Michael Parker, RWE Innogy UK

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Why I prefer Star Trek to Blade Runner when it comes to looking into the future EXPERT INSIGHT

Simon Ashby

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£1.8m windfall to community of responses later, those ideas have been pulled together into a vision for a bright future focused on social, economic and environmental regeneration.

Priorities include improved education and training opportunities, the regeneration of buildings and spaces, better transport links, more energyefficient homes and new attractions such as hotels and restaurants.

Guy said: “From day one we’ve been clear that the vision and priorities for this community fund would be set by the community to meet its needs for

A poster on a Swansea bus draws attention to the consultation on the community fund

the future. The result is ambitious, bold and full of possibilities that build on the strength of the area, from its heritage to its natural environment, its community spirit, its tourism and existing assets.”

Work will now begin on making the vision a reality. One of the first jobs will be to set up an independent body to manage the fund to which businesses, groups and entrepreneurs can register their interest in delivering projects identified in the vision and apply for funding. This will be available once the windfarm starts operating in late 2016.

S A FAN of quality science fiction (Margaret Atwood, Iain M Banks, etc) I have learned that energy (or rather its availability) is a key determinant of whether our future is likely to be a utopian or a dystopian one.

In utopian futures (think Star Trek) energy is freely available and generated in unlimited amounts.

Hence businesses and society in general are freed from the limitations and social/financial costs associated with energy generation, to instead spend their time on nobler pursuits such as innovation and exploration.

In the dystopian futures (such as Blade Runner), life is far bleaker.

Nothing works and to a large extent this is the result of insufficient resources, including energy – blackouts and brownouts are frequent and society and its businesses are in decline. Except, of course, those businesses controlled by the not-sobenevolent dictatorships that have evolved to manage the situation.

This is not childish fantasy – all our futures are inextricably linked to the availability and cost of energy.

And this includes the future of business. The need for energy is only increasing. We all have far more energy-consuming devices than we did when I was growing up in the 1970s. Plus, we have become used to travelling long distances, for work and play, and supply chains are becoming increasingly international.

All of which consumes vast amounts of energy.

So we need energy like never before, but it is unlikely that current levels of supply can keep up with global demand - especially as that demand increases. To date there seems to be no clear solution. Fossil fuels are limited and new extraction techniques such as fracking are contentious. Plus, let’s not even start on the renewables debate, although solar and wind power are undeniably

beneficial for most businesses (lowcost daytime electricity and relatively quick payback periods thanks to government subsidies), even if some homeowners can get very irate. As for nuclear, the high set-up costs and long payback period means that few privately owned energy companies are willing to undertake new investment, even though such investment can bring huge economic benefits to the local areas in which nuclear power stations are sited.

What we need is fresh thinking.

One positive sign on the horizon is the forthcoming Tesla household electricity battery, which can be used to store cheap night-time or renewable energy for later use. It might even help some homes and businesses to move off-grid, storing their own solar and wind-generated power to ensure continued and very low-cost electricity supplies.

New battery solutions such as aluminium-air technology (being developed by Phinergy Alcoa) may also increase storage capacities significantly.

But this is only part of the solution.

I am reluctant to call for government intervention, but it would seem to be the only option. We need more blue sky research on alternative methods of energy generation (such as lowcost hydrogen fuel cells and nuclear fission) and the costs and lead times involved mean only governments are likely to think sufficiently long-term.

I have always preferred utopian visions of the future, and our ability to live well is inextricably linked to energy production. If we carry on as we are, with demand exceeding supply I predict a more dystopian outcome, which will be far from good for business. It’s time for governments to devote the time and resources necessary to solve our long-term energy problems.

Dr Simon Ashby is Associate Professor of Financial Services at Plymouth Business School

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Harnessing

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LIMATE change and concerns about energy security put pressure on managing power in a way that is sustainable for generations to come.

One project that is currently creating waves in the UK is a plan to generate electricity from the world’s first series of tidal lagoons. The six lagoons – four in Wales and two in England – will capture incoming and outgoing tides behind sea walls, and use the weight of the water to power turbines.

The first of the six tidal lagoon power stations – in Swansea, South Wales – was given planning approval by the UK government earlier this month. Announcing the decision, Energy and Climate Change and Wales Office minister Lord Bourne said: “We need more clean and homegrown sources of energy, which will help to reduce our reliance on foreign fossil fuels. Lowcarbon energy projects like the tidal lagoon in Swansea Bay could bring investment, support local jobs and help contribute to the Welsh economy and Swansea area.”

The company behind the project, Tidal Lagoon Power (TLP), believes tidal lagoons are a vital part of the future energy mix. TLP chief executive Mark Shorrock, said: “Finding viable alternatives to fossil fuels is essential. Tidal lagoons could provide the key to unlocking large quantities of reliable, low-cost, low-carbon electricity for the next 120 years. If we get it right the UK could develop a world-leading tidal range industry.

What a fantastic legacy to leave our children.

“Wales led the way providing the fuel for the industrial revolution. We are now entering the era of the climate change revolution – de-carbonising our world in time to avoid two degrees of global warming. Wales can now lead this next revolution.

“With the Swansea Bay Tidal Lagoon becoming a reality, we have the potential to help transform our industrial economy and the UK’s energy mix. From Rugby to Pembroke Dock, from Sheffield to Swansea Bay, from Chepstow to Port Talbot, companies are working in the supply chain to prepare for the delivery of a new approach to energy infrastructure. Through a single project we have the opportunity to create a whole new industry.”

Gaining planning permission isn’t the end of the story, though. TLP still needs a marine licence from National Resources Wales and it will need to agree a strike price for the energy it

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How a £1bn tidal lagoon could provide the key to unlocking large quantities of reliable, low-cost, low-carbon electricity for the next 120 years. Report by Eleri Evans

hopes to generate. Agreeing a strike rate – the subsidy or guaranteed price that the UK government agrees to pay for the electricity generated for 35 years – is a crucial part of the £1billion Swansea scheme. If TLP manages to get all the approvals it needs and to agree a strike rate with the government, it hopes to start work on the site in the spring of 2016.

Picturing climate change differently: making the invisible visible

RENEWABLE ENERGY schemes are often met with effective public opposition, particularly windfarms.

So when, as a researcher into processes of effective community engagement with low-carbon energy projects in Wales, I heard the developer behind the Swansea Bay Tidal Lagoon was using an arts project to engage people, I was keen to learn more.

The site is particularly suitable for a tidal lagoon because the Severn Estuary holds the second-highest tidal range in the world – within this, Swansea Bay benefits from an average tidal range during spring tides of 8.5 metres. The company says the project could power more than 155,000 homes (equivalent to 90 per cent of Swansea Bay’s annual domestic electricity use)

By Eleri Evans Using the arts to encourage people to think about climate change is not new. Many initiatives have, however, tended to focus on using professional artists to influence us through their work. Tidal Lagoon Power commissioned Cape Farewell, an arts

for 120 years. The aim is to build a six-mile U-shaped breakwater or seawall out from close to the mouth of the River Tawe and Swansea Docks to Swansea University’s new Fabian Way campus to the east. It will house 16 underwater turbines generating electricity on both the rising and falling tide. The power will be generated as the incoming and outgoing tides – the daily

organisation that traditionally arranges for small groups of professional artists to join scientists on field trips to the Arctic, to organise an arts and science expedition closer to home. David Buckland, the artist behind Cape Farewell, believes artists can act as catalysts to stimulate the conversation on climate change.

As a result I joined a two-day arts and science expedition in

Swansea Bay that brought marine scientists and lowcarbon engineers from Swansea University together with creative writing students from the university and fine art students from Swansea Metropolitan University, plus some professional artists, many of whom also worked as lecturers at the two universities. It was an interesting mix.

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g the power

9

“ Finding viable alternatives to fossil fuels is essential. If we get it right the UK could develop a world-leading tidal range industry. What a fantastic legacy to leave our children” – TLP chief executive Mark Shorrock

Left and above: Swansea Bay has one of the highest tidal ranges in the world, a source of reliable energy that is currently untapped. The proposed development will encircle the bay with a causeway and will also include tourist facilities and opportunities for hosting watersports events

equivalent of 100,000 Olympic swimming pools’ worth of water – pass through the turbines.

A walkway on top of the seawall will be open to walkers and cyclists and there will be a visitors’ centre which will showcase tidal energy. It is hoped the lagoon will become a watersports venue that will host sporting events such as triathlons and sailing. The company anticipates

The aim of the collaboration, as Karen Ingham, artist and reader in art and science interactions at Swansea Met saw it, was for the artists to reveal the biodiversity and science discussed during our time together, most of which was hidden by murky water. The challenge, she said, was to make the invisible visible, in an interesting way.

that up to 1,900 jobs will be created during the construction of the lagoon and some 180 permanent jobs thereafter.

TLP intends to follow the Swansea Bay Tidal Lagoon with another three tidal lagoons in Wales – in Cardiff, Newport and Colwyn Bay – and two in England – one in Bridgwater in Somerset and one in West Cumbria. Between them, the six

We ate and drank together as we learned more about the life, particularly the marine life and history of the bay, and heard TLP present its plans.

Hopes and uncertainties were expressed by members of the expedition. If there is one thing, however, that I have learned about successful engagement projects, it is that the process of engagement isn’t about getting people to

Arts collective Cape Farewell worked with TLP to prompt discussions on climate change

projects could provide 8 per cent of the UK’s electricity by 2027.

A major benefit of tidal power over solar or wind is that it is more predictable. It is possible to know how much energy a scheme will generate.

Turbines capture energy from two incoming and two outgoing tides a day and are expected to be active for an average of 14 hours a day. But getting

started isn’t cheap. The cost of generating power from the Swansea project will be high, but TLP argues that the subsequent lagoons will be able to produce electricity much more cheaply.

TLP argues that the series of tidal lagoons would be far cheaper and more productive than the £30billion Severn Barrage scheme that received huge opposition from environmentalists because it would prevent the daily exposure of the mud flats vital for wading birds. The Swansea Bay lagoon has been cautiously welcomed by environmental groups who have placed the amount of clean energy it will generate above the limited disruption to the ecosystem of the bay from the delayed tides.

think the same as you – it is about inspiring people to care enough that they actually bother to think at all.

Getting people to care about climate change is an uphill challenge. There are reams of research on people’s lack of engagement with climate change, namely the gap between what people know about climate change and what they (don’t) do about it. By

commissioning Cape Farewell, TLP has sought to engage people in Swansea Bay in an unusual way.

• Dr Eleri Evans was researching for a PhD at Swansea University when she took part in the arts and science expedition. Her thesis is entitled Building a Low Carbon Future: Examining Processes of Effective Community Engagement in Wales.

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The UK’s energy mix: time for a firm hand on the tiller The government has control over the future UK electricity mix, but the choice is limited. Clarity would reduce costs and create more British jobs

T

here is no natural market for electricity.

Electricity is invisible and must be made and consumed instantaneously. Today’s wholesale electricity market is a complex mix of policy and regulation. Prices are set by old, dirty power stations whose capital cost was paid off years ago. Somehow we need this artificial market to trigger the timely building of the right mix of new power stations.

In the past, when the market hasn’t delivered the right balance, governments have intervened.

Not directly, but by tweaking market rules. Most recently the coalition government, with all-party support, introduced the 2013 Energy Act. It gives government all the levers needed to steer the construction of each type of power station. Successive governments have gone out of their way not to say what mix they want. A desire not to pick winners has led to the official pretence that an unrealistically wide range of options exists and the market will decide. In fact the market will deliver whatever it is set up to do.

Investment in any type of new generating plant carries huge risks. It can take two parliaments to consent and build plants which will then operate for another five or more.

Investors need confidence in the direction

tainabilit us

Security

Where electricity comes from in 2030 when wind and solar are not available

y

S

The energy trilemma

future governments will take. Political risk pushes up the cost of capital for all generation.

The lack of a clear pipeline of UK projects stifles investment that would bring down costs and also discourages the training of a UK workforce.

It’s as if we have tried to steer the ship of Britain’s vital electricity infrastructure by adjusting the wind in the sails in evermore ingenious ways.

It is now time instead for a firm hand on the tiller. “Somebody tell us what you want!” is the cry from many in the industry.

Clarity on the future energy mix, and crucially, the build rate for each technology, would remove most political risk, reducing the cost of all types of generation and allowing supply chain investment in UK jobs.

Providing clarity on the future energy mix is less of a philosophical challenge for the new Conservative government than might be expected. Conservatives like markets, but when markets fail they feel it is right to intervene, especially when it’s a vital national infrastructure, such as electricity. It is better to recognise that the UK has limited options for its generation mix and focus on delivering that mix efficiently. Competition between generators of a similar type is more efficient than the muddle of one complex market.

Cost

Electricity mix – 2014 and 2030

Consider 2030. National Grid predicts an annual demand for energy of around 350 terawatt hours (TWh) and sufficient capacity for a peak of around 62 gigawatts (GW), 10GW more than the actual peak last winter. We need to meet these demands within a total limit for carbon dioxide (CO2) emissions. Let’s assume a 2030 CO2 target of 100g per kilowatt hour (kWh) which is at the upper end of the range likely to be set in 2016. So what part can each technology play in meeting our 2030 energy demands?

Wind

Coal

The 2030 energy mix pie chart is deliberately 5 per cent short. During the mid 2020s, we need some flexibility to do a little more of the most successful technologies and a little less of others.

What about new technologies or cost breakthroughs? Carbon capture and storage (CCS) is considered one of these “silver bullets”, .

CCS could be demonstrated by 2030, but it will not have been deployed on a large enough scale to change the energy mix significantly. In practice, energy technology doesn’t change very rapidly. The 2030 network will be built mostly from technologies that we have now.

The good news is this mix works. It would be secure, sustainable and affordable. Over the next 15 years, as coal is phased out, old nuclear is replaced and solar roofs blossom, we would build 10GW additional gas and around 30GW of wind, mostly offshore. Most of these projects are already being developed, as are the smaller contributions from other renewables.

This mix would deliver peak capacity, even on a day with no wind, with average CO2 emissions per kWh less than 10 per cent of an old coal power station. Nuclear, wind, solar and gas industries are ready and willing to deliver this investment in UK electricity.

So once, as an industry, we have clarity of direction, we will deliver it at a lower cost with more British jobs.

The UK’s coal power stations are at least 40 years old and nearing the end of their natural lives. By 2030 there should be no coal left on the system.

Gas Gas is the cleanest fossil fuel and offers flexible generation. But the most environmentally friendly of today’s combined cycle gas turbine (CCGT) plants produce around 400g of CO2 per kWh. So if we give all of our CO2 allowance to efficient gas plants, we can use them for no more than 25 per cent of our electricity.

Nuclear Most of the existing nuclear fleet is due to close before 2030. By then we could realistically have three new nuclear stations in operation, plus Sizewell B, together generating 7.5GW, around 13 per cent.

Biomass, hydro and marine renewables These will each contribute around 2.5 per cent of the 2030 energy total, together generating around 11GW. These new technologies can’t scale up for significant deployment before 2030.

Solar Our weather in the UK limits the potential of solar. If cheap enough, solar could deliver up to 10 per cent of our energy, around 35GW, seven times as many panels as today. Any more generation requires large-scale storage.

Onshore and offshore wind are the two renewable sources available to the UK on a large scale. We will need a mix of both. Onshore wind is one of the lowest-cost forms of generation and with 68 per cent public support, more popular than many realise. Offshore has a higher, but reducing, cost and delivers higher output. Last year wind supplied 10 per cent of all the UK’s electricity. In 2030 this could easily be 40 per cent.

Matthew Knight is director of energy strategy, Siemens Plc www.siemens.co.uk/energy-mix

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Inspector Dogberry

and projects. Recent posts are on how iPads help pilots fly planes and why two-thirds of workers care about saving energy in the workplace.

By Matt Smith, web editor

www.yougen.co.uk/blog

FOR MOST people the

encourage community groups,

and solar PV to achieve energy

businesses and organisations

self-sufficiency and, in some

to generate their own heat and

cases, even sell surplus energy

electricity – together with their

to the grid.

up images of big power large-scale privatised utility

own profits all at the same time

The approach, which has

companies, namely the big six,

as helping the UK save energy

its origins in the 1970s anti-

but The Inspector is pleased to

and cut its carbon emissions.

nuclear energy movement in

note that DECC (Department

Germany, it seems, has been

Germany, has seen renewables

of Energy and Climate Change)

doing this for a while. Under a

grow 10 times faster than the

has recognised that small can be

movement called Energiewende,

OECD average from 1990 to

beautiful. Touché.

the country has seen a rapid

2010. Reports reveal that

With last year’s launch of

http://thegreenenergyblog.com This blog showcases emerging green technologies and ideas, exploring new ways of generating electricity, like new wind farm designs, and smaller projects like Samsung’s solar-powered internet schools, which use smart boards and tablets and have been deployed in nearly 100 countries around the world.

development of local power

renewable energy now accounts

its new Community Energy

generation. Villages have come

for 20 per cent of electricity

British Gas Business blog

Strategy, DECC is hoping

together to combine multiple

output in Germany. The

that the right combination of

sources of generation such as

government’s target is 35

www.britishgas.co.uk/ business/blog

incentives and freedoms will

micro-hydro, bio-mass, wind

per cent by 2020.

President Obama, top American dog (or should that be Hot Dog?) chose #climatechange as the topic of his first live Twitter Q&A session.

The President is an enthusiastic member of the twitterati @POTUS – he had about 2.5 million followers in only 10 days, so just a few more than Dogberry. After fielding a question on climate denial he took on the controversial issue of Arctic oil drilling. He pointed out that his administration had shut off the most sensitive area of the Arctic but, while it was impossible to stop oil exploration in the area completely, they had set the highest-possible standards for drilling.

Pole power When is a turbine not a turbine? When it’s a pole. Scientists in Spain have come up with what seems like an odd idea to reduce the cost of wind energy by removing the blades from wind turbines. Vortex, a start-up from Spain, has designed the tall sticks known as Bladeless – white poles jutting out of the ground – to shake in the wind. As the sticks vibrate the

YouGen Blog

The Green Energy Blog

energy debate conjures stations, rising fuel bills and

11

movement is converted into electricity by an alternator.

The thinking is in contrast to how architects avoid buildings shaking and can be traced to the 1940 Tacoma Narrows Bridge disaster in Washington, when the structure (inset), at the time the world’s third largest suspension bridge, collapsed into the water beneath it.

British Gas looks at the ways in which businesses can improve their efficiency, highlighting inspiring news

National Energy Foundationrun YouGen answers the practical questions on implementing renewable technologies. Where can you find an airtight external door? And what do your neighbours need to know when you’re installing solid wall insulation?

Leonardo Energy www.leonardo-energy org/ energy-blog An in-depth look at energy policy and technology trends. Recent topics covered include niches in hydro power, tests of a zero-emissions refrigeration transport unit and ways to save energy in the dairy and pig farming industries.

JouleBug (FREE – Android and iOS)

A different approach to sustainable energy use, where users earn points and compete with friends to change their habits.

Smart Meters (FREE – Android)

Or for a more conventional strategy, this app allows you to import energy data and keep track of your usage.

Building teams to tackle the energy trilemma

H

ow can the UK guarantee a sustainable energy future? Not only does the UK need to secure its future energy supply, it must do so affordably and in line with carbon reduction commitments. Referred to as the “energy trilemma”, the need to balance considerations of cost, carbon and security of supply, is demanding more creative and collaborative approaches within the energy industry.

One company that is earning itself a name for delivering innovative schemes is Rhead Group, programme management specialists who provide support to manage and deliver complex construction programmes across

the energy, power, defence and infrastructure sectors.

Rhead Group, which last year won the prestigious Queen’s Award for Enterprise, is currently working on a pioneering carbon capture and storage (CCS) project in Abu Dhabi.

The project is the United Arab Emirates’ first CCS project, and will capture up to 800,000 tonnes of carbon dioxide gas each year.

“CCS is a very exciting option,” says Rhead Group chief executive Nigel Curry. “We are working on CCS in the UK and in the UAE. It is ground-breaking schemes like these that are going to prove vital in managing the energy trilemma.“ In a bid to ensure considerations of cost and carbon take place at the front end of project planning, Rhead Group developed National

Grid’s Building Information Modelling (BIM) bank, a free online repository of 3D models for use in the transmission supply chain that has been shortlisted for an award in the highly regarded British Construction Industry awards.

“By pegging cost and carbon data to the 3D models, designers are able to make informed economic and environmental decisions from the very start,” says Curry. “This allows project sponsors and teams to achieve more consistent and predictable outcomes while both reducing costs and carbon.”

With global spend on capital projects and infrastructure to 2025 forecast to hit £78trillion and with UK figures alone set to rise by a staggering 51 per cent, attracting

and retaining the best talent is a huge issue for the industry.

Curry, a chartered engineer who honed his programme management skills delivering a nuclear powered submarine and who was named Ernst and Young Midlands Entrepreneur of the Year 2014, is particularly proud that, in addition to his company’s graduate scheme, it has pioneered a host of talent and training initiatives including an innovative scheme to introduce ex-professional rugby players to the world of project management.

“Providing the right talent and training is hugely important for our industry,” says Curry. “Our ex-rugby players’ scheme builds on work we have done with ex-forces personnel. We have found

that both ex-rugby players and ex-forces personnel are excellent communicators, great motivators and adapt well. Those are some of the raw ingredients you need when working in complex construction.

The technical training can be applied afterwards.

“We are proud to be supporting some of the most complex programmes while investing significantly to attract and retain the best industry talent. We see significant opportunity for Rhead Group with the increasing levels of work over the next decade to support the improvements in the UK infrastructure and energy networks.”

024 7661 2777 headoffice@rheadgroup.com

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INSIDE TRACK

IoT: the smart way to reduce business energy overheads

A Why it’s time to set up an independent Office of Energy E nergy is a topic which guarantees debate. It underpins modern life; how we heat our homes, how we work and how we will protect the future of our planet. As a result, it’s only natural that consumers, investors, politicians and NGOs all have a strong interest in energy.

Hopefully new light will be shed on many of energy’s hotly debated topics by the current competition investigation – the initial remedies are expected to be produced shortly. But there are other key questions which need to be addressed.

The energy sector is changing quickly and stakeholders with different priorities are pushing for different things. The trilemma of affordability, security of supply and low carbon are clear – everywhere else energy seems to breed complexity.

The resulting debate around how to pursue the three often conflicting trilemma goals can be noisy and difficult. And many voices work from different sources of information to make their case for change. This cacophony can be difficult for policymakers and frustrating for consumers.

What consumers, stakeholders and industry need is a body which can

generate light rather than heat by providing clear, accurate and unbiased information as the foundation of a rational and national energy policy debate. The team at Vivid Economics, an economics consultancy, has recently published a new report proposing that one credible solution could be an independent Office of Energy. It would be shielded from political pressure and tasked with providing expert, highquality analysis on where we are on CO2 reduction, costs and security of supply – a bit like the Office for Budget Responsibility does on the economy.

The main objective of the Office of Energy would be to provide a “balanced scorecard” to help us all keep track of Britain’s energy performance, including to analyse and evaluate the impact of decisions made by legislative and regulatory bodies.

It is for government to take the hard decisions needed to deliver Britain’s energy transition and how it is paid for.

The Office of Energy would provide information to make this role easier.

This wouldn’t be another regulator.

It wouldn’t usurp existing agencies.

Instead, it would be based on similar successful UK institutions like the Office

for Budget Responsibility and the National Institute for Health and Care Excellence. These organisations have helped to depoliticise key debates and have become respected for their impartiality, credibility and authority.

We are not saying that this needs to be a new institution; what is essential is that the functions of an Office of Energy are undertaken in an impartial way.

If these are undertaken by a separate body, it will need to gain the trust of existing organisations; if the role is added to an existing body, it would need to gain stakeholder trust that its analysis isn’t skewed in favour of its own projects. This is the debate we need to have now.

In the increasingly complex and fast-moving energy sector, trusted and reliable information is more valuable than ever. Energy remains a key national and global priority and there is plenty of change on the horizon. We now have the opportunity to produce a factual framework to monitor and aid national decision making, through analysis that everyone can have faith in. gillian.simmonds@rwenpower.com nicholas.mchugh@npower.com

ny company that is focused on increasing margins is concerned by rising energy costs and energy waste, as well the ongoing cost of effectively and efficiently maintaining their facilities. Best-in-class companies that share these concerns always keep an eye on the latest technological advances to help them maintain their competitive edge by overcoming the volatility of these overheads.

A facility’s ecosystem is comprised of energyconsuming assets – though most companies have very little insight into their degradation, how they are optimised and how much energy they consume.

The ability to gather real time energy data cost effectively down to singledevice level enables organisations to identify a tremendous amount of energy waste and operational inefficiencies. Take, for example, a major supermarket chain that saved 30 per cent of its stores’ refrigeration energy costs just by identifying and correcting the compressor-cycle times of the freezers.

Or the fashion retail chain that saved 11 per cent of its £2.4million annual energy bill by alerting store managers of devices left on during out-of-hours. Or the cement company that increased production by 20 tons per hour by being alerted that one

of its conveyor belts was performing badly and causing a bottleneck in production. This fundamental ability to uncover and understand how energy use affects building and system performance helps improve operation processes and addresses financial constraints.

The principle of submetering or device-level energy monitoring is not new.

What is new is the development of innovative and non-invasive, Internet of Things (IoT) technology that now allows companies across all sectors to cost-effectively and seamlessly acquire this unprecedented level of data without the risks and scalability issues associated with deploying older conventional systems. This leading-edge technology by Panoramic Power enables businesses to optimise their energy consumption and improve system-level performance. info@panpwr.com www.panpwr.com

A selfpowered wireless sensor

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UK at the forefront of the solar revolution

H

ow should the UK generate electricity?

From onshore wind to the Swansea lagoon, biomass to solar, the options are growing. The energy industry, hardly considered a hotbed of innovation, is definitely trying.

One of the key elements of any debate about meeting the UK’s demand for electricity is decentralisation.

In the energy industry, decentralisation looks to involve people in the production of electricity.

It’s all about making power personal, with a vision of each household becoming its own electricity supplier, producing power on site to cover most of its daily needs.

Of course, in the UK, being an industrialised nation, a decentralised model would still involve generating electricity centrally to provide the all-important base load, the guarantee that no one would ever need to go without the power they need.

But a big shift towards a decentralised model would bring numerous benefits.

A decentralised energy network democratises the energy industry.

Empowering consumers to take control of electricity production makes them an active part of an industry they’ve long felt divorced from. It reduces their reliance on the big energy suppliers they often say they dislike and it can deliver ongoing supply and price security.

Furthermore, it helps the UK as a whole curb its dependence on fossil fuels, their international suppliers and the often high-carbon power stations that sit at the heart of the existing network.

Decentralised energy also has the potential to halve our electricity system’s contribution to climate change within a few decades, reducing overall UK carbon emissions by at least 15 per cent.

I

Making power personal: a modern solution that every customer can embrace The Flow boiler At this point you might expect the discussion to turn to micro wind and solar power. While these technologies, particularly solar, have played a crucial role in seeding the idea of personal power, they are not the whole story, partly because they require significant investment from consumers into what is a discretionary purchase.

At Flowgroup, we’ve long had a vision of making power personal in a very different way, and that’s led us to dedicate more than 10 years of research and development

to producing a microgeneration technology solution that every customer needs and can embrace.

The Flow boiler is a domestic gas boiler that generates electricity while it heats a home. No energy is lost in transmission because all the electricity is used in the home. It can cut a household’s electricity bill in half and reduce its carbon emissions by up to 20 per cent. Every home needs a boiler – it’s a necessity. So embedding microgeneration technology into this essential home appliance means that every household has a

relatively easy opportunity to become its own electricity supplier without the need to buy into technology that has the single purpose of generating electricity, often a big conceptual and financial leap.

Decentralising our electricity network is the way toward securing a better, cleaner energy future for the UK. Groundbreaking yet affordable technology like the Flow boiler is the key to empowering everybody to play their part. www.flowenergy.uk.com

n a week when onshore wind made the headlines, an eye-catching report about another renewable energy technology went largely unnoticed.

In their latest Energy Outlook, Bloomberg predicts that solar energy will be cost-competitive with conventional energy across most of the world by 2026. Furthermore, solar will become so cheap that it will “outcompete new fossil-fuel plants and even start to supplant some existing coal and gas plants, potentially stranding billions in fossil-fuel infrastructure.”

At the same time, Solar Media reported that the UK had installed and connected a remarkable 2.5GWp of new solar capacity in the first quarter of the year alone, taking cumulative capacity to an astonishing 8GWp. That’s enough clean energy for around 1.5 million households.

Sceptics may argue that this has only been possible because of large subsidies. Yet support for solar is dwarfed by the billions in state aid consumed by the fossil fuel and nuclear sectors.

250kWp solar on cold store

Solar is now tantalisingly close to being able to compete without subsidy.

The Solar Trade Association’s policy paper for the government sets out how solar can be subsidy-free by 2020, becoming the only energy source in the UK to exist without it.

It is SMEs such as Lark Energy which have led the UK’s solar revolution.

Established in 2010, Lark Energy has become one of the leading developers and installers of commercial and utility-scale solar.

It has completed more than 800 rooftop and groundmounted projects, providing more than 250MWp of new, clean energy capacity. Lark Energy employs more than 70 highly trained staff directly and many hundreds of sub-contractors. This is typical of the companies in the sector which the government estimates now employ more than 30,000.

With the government’s own quarterly surveys consistently showing 80 per cent support for solar from the public, the UK is well and truly entering the solar age. enquiries@larkenergy.co.uk www.larkenergy.co.uk

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Powering up for the years ahead Henri Winand, CEO of Intelligent Energy, on the benefits of fuel cells Fuel cells seem to have jumped onto the scene recently, why is that?

Fuel cells were invented in 1838 and actually have been around in something like their current form since the NASA space programmes in the 1960s, but it’s true that they haven’t been ready to achieve real commercialisation across multiple mass markets until quite recently.

Firstly, there is a misconception that fuel cells are expensive to produce. Fuel cells are not inherently expensive to make, but they aren’t yet made in the same high volumes as other kinds of engines. Work over the last two decades has seen advances in fuel cell manufacturing and decreased the cost of fuel cell production dramatically. As a result, we have seen progress to the extent that major car manufacturers such as Toyota and Hyundai are now offering fuel cell electric vehicles (FCEVs) for sale to the public.

Secondly, the hydrogen infrastructure needed to fuel FCEVs

has, until recently, not been in place.

This has changed with countries like Japan, Germany and the UK actively working to introduce networks of hydrogen refuelling stations.

Hydrogen also does not need to be an expensive fuel – it’s already a global commodity. As the volume goes up, and it is retailed more to customers, the price goes down, so the greater adoption, the more economical this all will become – and it’s already happening. That is a very exciting prospect for Intelligent Energy as we license out technology to car manufacturers, and rather uniquely, we already have four car manufacturers who work with us, the majority of which are Japanese and Asian.

How clean are fuel cells?

Fuel cells are zero emission, totally non-polluting at the point where power is produced. The question really needs to be asked as to how the hydrogen is produced. If it is manufactured via renewable energy and the electrolysis of water, it is carbon-free. But even if hydrogen is produced from fossil fuels, by the reformation of natural gas (the main way hydrogen is produced today),

fuel cell electric vehicles using this hydrogen have about 55 per cent fewer greenhouse gases than a conventional vehicle because fuel cells are much more efficient than internal combustion engines.

Elon Musk said that hydrogen is ‘an incredibly dumb’ fuel for vehicles.

Being the man behind an electric vehicle company, he could have a vested interest in saying that.

Why would you say he was wrong?

Firstly, treating batteries and fuel cells as competing technologies is the wrong starting point entirely. When

we think about the future of energy, we need to really think about the mix – we do not need to favour one technology at the expense of others.

Where does the power that goes into the batteries come from? Fuel cells and batteries are incredibly complementary technologies, particularly when it comes to vehicles as they share the same electric propulsion technology.

A hydrogen fuel cell attached to a battery electric vehicle can nearly double its range – range being one of the greatest issues facing electric vehicle adoption. A fuel cell can charge a battery on the move and refuelling a hydrogen tank only takes a matter of minutes. Hydrogen fuel cell technology is truly unlocking the potential of electric vehicles, similar to, but much cleaner than, the hybrid revolution which brought electric/ petrol vehicles to the market. Toyota, the world’s largest car manufacturer, is launching its first fuel cell vehicle to market now – so when Toyota says the future of cars is fuel cell electric vehicles, I would have to agree.

Twitter: @intellenergy www.intelligent-energy.com

A smarter grid has the power to transform energy across the UK

F

uture-proofing the UK’s electricity network is vital to put the UK on track to meet the European objective of becoming a lowcarbon economy by 2050. Dealing with the country’s distributed generation of energy, an upward trajectory in peak demand and an aging grid is already a tough balancing act. Add to that the growth of renewables and it gets tougher.

Traditionally, the electricity network was designed for a one-way flow of energy, but today it is having to deal with a level of complexity never before seen. At the heart of this energy revolution is an intelligent network that uses a digital communication system to monitor and automatically respond to local power demand in real time, so making it easier to integrate renewable energy sources into the grid.

“As more renewable but intermittent energy sources, such as solar, wind and combined heat and power are introduced to the grid, and as the load becomes more dynamic and difficult to predict, energy distribution companies need high levels of intelligent information to drive operational efficiency and resilience,” said Barrie Cressey, smart grid director at energy management firm Schneider Electric.

A global specialist in energy management, Schneider Electric has won the contract to deliver a new distribution management system (DMS) for Electricity North West, bringing intelligent energy

to 2.4 million properties and more than five million people. The three-year project, which includes design, delivery and integration, will be the foundation of smart grid technology in the region.

The DMS is a suite of applications designed to monitor and control the entire network efficiently and reliably. It will control energy distribution and identify and resolve power outages. For example, it will be able to react to incidents such as storm damage and reconfigure alternative connections to ensure as many customers as possible remain connected to the grid.

“The challenges posed by distributed generation, load growth and an aging grid are immense, but intelligent networks have the power to transform energy throughout the country. There are only a handful of such systems in the UK and we are

hugely excited to be working on a project of this magnitude with Electricity North West,” said Cressey.

The system is also designed to support increasing levels of onsite power generation as well as vastly increased levels of power demand.

The UK is expected to have 10 million homes with solar panels by 2020, and the number of electric vehicles sold will rise as high as 6.4 million by 2023, creating unprecedented challenges in managing consumption and generation across the grid.

“Change of this scale and complexity requires a whole new approach to energy distribution management,” said Cressey. “If every family came home at 6pm in the evening from work and plugged two electric vehicles in, it would have a substantial effect on the grid. The traditional grid would struggle to cope with these changes.

“We need to get smarter at managing those peaks and troughs so we can balance them out.

You can’t do that blind. We need to know what is going on in the network and take decisions accordingly. A smarter grid allows the network to become multi-directional and automated, offering regions the ability to use digital communications to detect and react to local changes in usage as part of a smarter energy strategy.” www.schneider-electric.co.uk

Business Reporter · June 2015 · 15

AN INDEPENDENT REPORT FROM LYONSDOWN, DISTRIBUTED WITH THE SUNDAY TELEGRAPH

Why the UK is a good investment for hydrocarbon projects

U Helping companies adapt to a changing marketplace

A

ir quality control and decarbonisation legislation, combined with a growing trend for decentralised power generation, is changing the landscape of UK and European power generation.

EU targets require a 20 per cent reduction in EU greenhouse gas emissions by 2020 against 1990 levels, while Europe’s current roadmap aims to fully decarbonise the power generation industry by 2050. Earlier this month the G7 also announced plans to phase out the generation of power from fossil fuels by the end of the century.

This poses a particular challenge for operators of coal-fired power plants, which still generate in excess of 20 per cent of the UK’s electricity supply. Their options are to achieve regulatory compliance by the end of 2015, to run at a reduced load factor from 2015 during their transition to compliance by 2020, or to close down completely.

Thankfully a number of advanced technologies are on hand to help, and one of the companies delivering those technologies is UK-based engineering specialist Doosan Babcock. Its chief engineer, John Fogarty explains: “We have been working with our coal plant customers to meet complex and changing emissions regulations since the 1980s. Today we provide both primary emissions control technologies, which reduce NOx during the combustion phase, and secondary controls, which are postcombustion technologies designed to clean up emissions.”

Doosan Babcock is currently installing a secondary control system, called Selective Non-Catalytic Reduction (SNCR), at Drax Power Station in the UK, and has also completed the installation of a Selective Catalytic Reduction (SCR) system for Ratcliffe Power Plant.

But retrofitting emissions reduction systems is not the only answer. Full or partial fuel conversion, for example from coal to biomass, is another way operators can look at reducing emissions. “We have done that in a number of plants in the UK and North America,” says Fogarty. “We are working on a plant in France where we are converting a circulating fluidised-bed boiler (CFB) from coal to biomass, which will reduce the CO2 balance by about 740,000 tonnes per year, as well as fitting the plant with a range of emissions control technologies.”

Other options to mitigate greenhouse gases from power generation include carbon capture and storage technology (CCS), and improving the efficiencies of existing plant, which can result in substantial CO2 savings. As well as providing technologies for thermal power generation, Doosan Babcock is also a leading provider of life extension services to the UK nuclear sector, which helps further reduce CO2 emissions from power generation.

Turning to decentralisation, Fogarty points to the need to reduce the amount of heat wasted from centralised plants.

“The waste heat from these plants equates to the UK’s heat consumption requirements,” he explains. Greater decentralisation, which could be provided by fuel cell technology for example, could successfully redirect how energy is used and reduce heat wastage.

“In fuel cells, which utilise hydrogen, electricity is generated locally and any waste heat can be used locally,” says Fogarty. “That way you are improving overall energy efficiency and contributing to decarbonisation.” doosanbabcock@doosan.com www.doosanbabcock.com

nion Jack Oil plc (UJO) is a London Stock Exchange, AIM-quoted onshore oil and gas exploration company with a focus on drilling, development and investment opportunities in the UK hydrocarbon sector.

UJO’s directors consider the UK, with an established and well regulated licensing system in place, to be an attractive country for investment in hydrocarbon projects.

With this in mind the company’s strategic objective is to build a successful conventional development and production entity by acquiring and drilling interests in a portfolio of drill-ready prospects.

UJO has adopted a low-cost, nonoperating business model, typically acquiring interests of approximately 10 per cent in projects offering modest costexposure to individual wells, all with excellent scope for commercial discoveries.

One excellent example is the Wressle-1 oil and gas discovery in Lincolnshire, in which UJO holds an 8.33 per cent interest.

Three hydrocarbon zones were successfully tested and the combined production rate was 710 barrels of oil equivalent per day. The Wressle-1 discovery is now undergoing an extended well test to determine commerciality which will lead to a field development plan and subsequent monetisation.

In addition to Wressle-1, UJO is committed to drilling its 12 per cent interest in the potentially high-impact Biscathorpe-2 well, located within PEDL253 licence within the proven hydrocarbon fairway of the Humber basin, on trend with the Saltfleetby gas field and Keddington oil field, which produces oil from the Upper Carboniferous Westphailan-aged reservoir sandstones.

The Biscathorpe-1 well was drilled by BP

in 1987 and encountered a thin oil-bearing sandstone. The sand unit is expected to thicken down-dip from the crest of the structure and there is also potential for stratigraphic trapping to the west, which could increase the gross prospective resources as assessed by Egdon Resources plc, the operator from a best-estimate case of 14 million barrels of oil up to a high case of 41 million barrels of oil.

Planning consent was awarded for Biscathorpe-2 well in March this year and the conventional well is expected to be drilled during Q4 2015.

UJO is relatively cash rich for a junior exploration company and has enough funds to see through its planned drill programme for 2015, also including the North Kelsey well in Lincolnshire where, again, planning consent has been granted and will be drilled in due course.

The North Kelsey Prospect, located on PEDL241, is well defined and mapped from 3D seismic. Potential exists for up to four separate reservoirs with combined prospective resources estimated to be 6.7 million barrels of oil.

The current low oil price environment is challenging for many offshore counterparts, however UJO has been successful in finding itself in a good place during these times, with tangible projects onshore where costs can be controlled and monetisation can be achieved within a relatively short time-frame, using a simple development plan.

UJO has already stated that similar acquisitions are on the cards and it would be of no surprise to read of further material acquisitions in the future. info@unionjackoil.com www.unionjackoil.com

TRANSFORMING POWER

Fuel cell technology has come of age. As the leading developer of alkaline fuel cells for the hydrogen economy, AFC Energy’s strategy is to identify long-term commercial opportunities to grow the fuel cell business at scale in locations such as Korea, Japan, South East Asia and the Middle East with the production of low-cost electricity that is competitive against mainstream forms of electricity generation.

AFC is thinking big. Its goal is to achieve 1GW of fuel cell capacity by 2020, making it the largest fuel cell company in the world.

AFC Energy is listed in London (AFC.L)

www.afcenergy.com +44 (0)1483 276726