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City University
CHP & the Role of theCHPA
Paul Gardiner BSc CEng
Policy Advisor
9th
October 2012
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BRITISH SUGAR
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AB Sugar: Our geographic footprint
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AB Sugar: the facts today ….
• AB Sugar is a substantial and core business within ABF
• Operations in UK, Iberia, Africa, and China with a capacity of ~ 5mtpa;
current production c. 4.1 – 4.4 mtpa
• Largest purchaser of agricultural products for processing (c. 34m tonnes)
• Sole UK producer of beet sugar; c. 12 mt of beet processed in Europe
• 19mt of cane processed by the Group, 6.1 mt of which is produced on our
own estates by Illovo in Malawi, Zambia, Mozambique, Tanzania and
Swaziland
• World-class agricultural productivity - Illovo for cane and UK for beet
• Lowest cost sugar processor in regions; exceptionally high asset
utilisation in the UK
• Co-products not by-products, increasingly value-added; animal feed, co-
generation, betaine, tomatoes, furfural and cropguard
• UK‟s first Bioethanol refinery operational at Wissington
• Leading retail brands; Silver Spoon, Billington‟s (ABF Grocery),
Azucarera, Illovo
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THE CHPA
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CHPA Mission statement
To promote a greater awareness and understandingof CHP and district heating and to create a strong,
dynamic and sustainable environment for its
members and the communities, businesses and
households they serve.
Areas of focus:
Combined heat and power
Sustainable energy servicesDistrict heating and cooling
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Industrial CHP Buildings CHP MicroCHP District Heating & Cooling
PolicyFormation
EU Energy Efficiency DirectiveDECC Development of Heat Policy following publication of Heat Strategy • Ofgem RIIODECC Electricity Systems Programme • Committee on Climate Change DECC Energy Efficiency Delivery Office • Smart Grids Forum
Incentives & Measures
EMR: CHP Feed-in tariff, capacity mechanism
Gas-Fired Carbon Price SupportReplace value of CCL LECs
Gas-Fired Feed-in Tariff
Gas-Fired Support for non-renewable low-carbon heat sources
Renewable Renewables ObligationRenewable Heat Incentive
Renewable Renewables Obligation (for CHP)Renewable Heat Incentive
Networks Embedded benefitsLicence-Lite
MarketMobilisation
Investment GIB Non-Domestic Energy Efficiency competition
Investment Green Investment Bank
Consumer Mobilisation and Supplier Compliance Schemes Green Deal and Energy Company Obligation
Building Regulations Zero carbon buildingAllowable SolutionsSAP 2012 & Building Regulations Part L
Planning
Planning policiesWaste management strategies
Purchasing & Procurement Public procurementOff-balance sheet fundingProcurement frameworks
Facilitation & Capacity Building Capacity building in localauthorities
ConsumerProtection & Regulation
CHPQA Compliance MicrogenerationCertificationScheme
Consumer Protection & Regulation Consumer CharterConsumer protectionTechnical standards
Standards
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Forum structure
Strategy forum – Full members
Building
CHP forum
District Heating
& Cooling forum
Domestic
CHP forum
Energy
Management
Alliance
Local authority capacity
working group
Finance working group
Quality assurance & customer
protection working group
EMR working
group
Industrial
CHP forum
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Organogram
DirectorGraham Meeks
Deputy Director,Head of Development
Ian Manders
Policy & Development
ManagerNicky Butterworth
Membership ManagerBrian McGuire
Head of Policy
Tim Rotheray
Research &
Communications ManagerCraig Dennett
Policy ManagerTo be appointed
Office ManagerDina Kamourieh
Senior Policy AdvisorPaul Gardiner
(secondee British Sugar)
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Responsibilities
Staff Member Level Responsibilities Contact forGraham Meeks Director All areas Strategic issues: Political,
policy or CHPA issues
Ian Manders Deputy Director, Headof Market Development
District heating, building scaleCHP and microCHP
District heating queries
Tim Rotheray Senior Manager, Headof Policy
Industrial CHP Long term policy queries
Nicola Butterworth Policy and DevelopmentManager
Energy management, districtheating, building scale CHPand microCHP
Energy ManagementAlliance queries
Craig Dennett CommunicationsManager
CHPA communications – policy announcements andgeneral intelligence
Jonathan Graham Policy Manager Industrial CHP
Brian McGuire Membership Manager Membership, forums andsector workshops
Dina Kamourieh Office Manager General enquiries includingappointments
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A few of the CHPA members…
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CHP & DISTRICT HEATING (DH)
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What is CHP and what is it for?
Combined Heat and Power (CHP) or cogenerationis not a specific technology, but a range of technologies that apply the same principle:
Combustion of any fuel is at its most efficient whenit delivers heat and power simultaneously.
Plants that are compliant with the Cogen Directive
provide primary energy savings of at least 10%
Enabler of a Low Carbon Economy
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Energy Supply InefficiencyIs a Huge Opportunity
Energy Flows in
the Global
Electricity System
Source: IEA,
CHP: Evaluating the Benefits of Greater Global Investment (2008).
2/3 of the fuel “we” use to produce power is wasted --CHP can more than double this efficiency
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Business As Usual or CHP plant
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Thames Gateway Heat Network
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CHP and DH Options
Scale
District, Micro, Industrial or Utility
Single or multi Heat Hosts
Heat led or Power led philosophy
Grid connected or Embedded
Fuel type
Biomass / Biogas, Nat Gas, Oil, Coal, Physical
Waste stream or Waste Heat
Enabler of a Low Carbon Economy
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The prime mover - Types
Type of prime mover Type of CHP in
which it is found 1. Internal combustion engines Packaged CHP
2. Steam turbines Custom CHP
3. Gas turbines Custom CHP
(microturbines, arepackaged)
4. Combined Cycle Gas Turbines Custom CHP
5. New and emerging technologies, Custom CHP or
such as Stirling engines, fuel cells, packaged CHP
and Organic Rankine Cycles (ORCs)
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The prime mover – Attributes (1)
Gas-engine CHP Small-scale
gas turbine
CHP Elec. output (kW) 60 100 300 600 1,000 60 100
Heat output (kW) 115 130 430 880 1,300 100 150
Fuel input (kW) 215 310 990 1,950 3,000 280 350
Gas-turbine CHP CCGT CHP
Elect. output (MW) 1.1 4.9 9.7 31.0 53.0 99.8 316.0
Heat output (MW) 1.8 7.2 14.5 36.5 40.5 99.3 205.3
Fuel input (MW) 4.3 16.3 34.0 96.1 134.3 271.6 686.4
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The prime mover – Attributes (2)
Heat / pwr Heat System Space Capital Cost Maintenance
Ratio Grade Capacity Efficiency per unit of Period
Capacity
Reciprocating engine 1.3:1 Low Small Average Low Short intervals
Gas turbine 2.5:1 Very high Large Excellent High Long intervals
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Estimate of Capital Cost
Packaged Schemes
5KWe Micro £2,000/kWe
50kWe £1,250/kWe
1MWe £800/kWe
Custom Schemes
1MWe £1,300/kWe (Gas Turbine)
>200MWe £700/kWe (CCGT)
Based on 2008 survey
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CHP INENERGY POLICY
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Fossil fuel CHP - energy security and
competitiveness
Quote from Edward Davey of 04/10/12
P a g e 2 3 © 2 0 1 1 B r i t i s h S u g a r
Natural gas remains “absolutely central” to efforts to curb U.K. emissions,
Energy Secretary Ed Davey said today at the opening of a heat pipe
connecting an EON AG power plant to a National Grid Plc (NG/) gasterminal.
Davey said in Kent that he wants “obstacles” removed for investors as part of a
government plan to deliver gas to U.K. customers at a more affordable price.
EON U.K. Chief Executive Officer
Tony Cocker, left, and Energy
Secretary Ed Davey, pose for a
photograph following the opening of
a joint venture with the National Grid
Plc at the company's plant on the
Isle of Grain. Photographer: Chris
Ratcliffe/Bloomberg
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Policies applying to CHP etc.
CoGen Directive
Energy Efficiency Directive
EUETS
CHP QA
CCL exemption
LECs
CPS (fuel for elec. only)
ECAs
Rates reduction
Renewable Obligation & RHI
CRC
Section 36 & Section 14
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Affordability
ClimateChange
Security
of Supply
Energy
three policy
areasMaking Fuel
go
Further
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Affordability
ClimateChange
Security
of Supply
Energy
three policy
areas
CHP
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Policy objectives
• Fossil and Biomass
/ Biogas
• Optimise use and
type of energy
• Rational, economic
appraisal of options
Implication Objective
Security & diversity
of supply
Climate change
Cost to consumers
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The Cost of CO2 Abatement 1
Source: DTI
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The Cost of CO2 Abatement 2
Measure Carbon Abatement Cost
(£/tonne carbon)
Energy Efficiency Commitment Negative to £60
EUETS (based on 2006 EUA
prices)
£12 - £70
Climate Change Levy £18 - £40
CCL Exemption for CHP £29 - £40
UK Emissions Trading Scheme £66
Renewables Obligation £184 - £441
Sources: Ofgem, NAO, CHPA
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The Wissingtonbio refinery Flue gas pipe
Feed dryerCHP Plant
Sugarprocess
Sugar beet
Lime kiln
Bioethanol
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CHP, the heart of the biorefinery...
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Air
110 MWth
Fuel
42 MWe
Electricity
Gas
Turbine
Boiler
Steam
Turbine
24 MWe
Electricity
82 MWth
Fuel
Efficiency = MW (Out) = (42+24+85+8) = 82.8%
MW (In) (110+82)
LP Steam
85 MWth
Gas Turbine Based CHP
Including 8 MW heatrecovery to glasshouse
CO2 & heat
to glasshouse
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THE CONFUSING WORLDOF ENERGY POLICY
Discussion
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British
Sugar
UN
Framework Convention
on Climate Change
Kyoto
Copenhagen
Cancun
European Union
20% emission by 2020 - 30%
20% Renewables
20% Energy Efficiency
“Roadmap for a low carbon
Economy by 2050”
Climate Change
Act 2008:
Carbon Budgets
Committee on
Climate Change
UK
„Energy Tax Directive‟
Green Deal
Green
Investment
Bank
GHG Reporting?
Renewable
Obligation
Certificates
Feed in
Tariffs
Renewable
Heat
Incentive
Reform of
Climate Change
Agreements?
Reform of Climate
Change Levy
Carbon
ReductionCommitment
Coalition Government 2010
Climate Change and Energy Policy•June Budget
•July Energy Statement – 2050 Pathway
•October National Energy Policy
•October Spending Review
•Energy Security and Green Economy Bill
•CCL Reform Cons ultat ion
•DECC-Marland-Simplif icat ion
Emissions
Trading
Scheme
Burden Share
Renewable
Energy
Directive
Energy
Efficiency
Action
Plan
Cogen
DirectiveReview
Industrial
Emissions
Directive
Electricity
MarketReform
Carbon
Price
Support
Fuel Quality
Directive
Renewable
Transport Fuel
Obligation
PAS 2050 Carbon
DisclosureProject
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BoilerHouse
ManufacturingProcess
LimeKiln
Pulp Process
Electricity
Stone
CO2
C O 2
Bulk Sugar Other Sugar Bioethanol
Betaine Co products
Animal Feed
Beet Chemicals
CO2
Electricity
Electricity
Steam
Fuel
Fuel
Fuel
Burnt Lime
P u l p
Condensate Electricity
CO2
GlasshouseTomatoes Hot Flue Gases
Inputs and Outputs:
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BoilerHouse
ManufacturingProcess
LimeKiln
Pulp Process
Electricity
CO2
C O 2
CO2
Electricity
Electricity
Steam
Fuel
Fuel
Fuel Condensate Electricity
CO2
Glasshouse Hot Flue Gases
Apply EUETS,CCL & CPS
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Site input & output foran industrial process
CHPPlant
Plant 1
Fuel
Plant 2
Power Exported
Power On-site
Heat
Heat
Heat
ParasiticPower
Fuel
Fuel
CO2
Electricity
Fuel
BioFuel
Widget1
Widget2
RawMaterials
Choices for site operator:
Type of products
Type of raw materials
Layout of manufacturing plant
Choice over provision of energy
Configuration of onsite generation
Fuel type(s)
All of the above are informed by
Energy Policies.
To be effective, policies must be:
sufficient, long term & stable.
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Policies with renewable
CHPPlant
Plant 1
Fuel
Plant 2
Power Exported
Power On-site
Heat
Heat
Heat
ParasiticPower
Fuel
Fuel
CO2
Electricity
R enewab
le
Fuel
RO &
LECs
RO &
LECs
RO &
LECsIEDROCPFEMRCERTCESPECO
ProjectTransmit
IED
SustainabilitySamplingReporting
CHPQA
RHI ?
BioFuel
Widget1
Widget2
SustainabilitySamplingReporting
CCL
EBCRC?
CRC?
DraftEED
DraftETD
GHGreporting ?all 6 GHGgassesECA &
WDA
RHI ?
RHI ?
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Policies with fossil
CHPPlant
Plant 1
Fuel
Plant 2
Power Exported
Power On-site
Heat
Heat
Heat
ParasiticPower
Fuel
Fuel
CO2
Electricity
Fuel
BioFuel
Widget1
Widget2
IEDCHPQA LECsLECs
CPS
CCL
CCL
SustainabilitySamplingReporting
CCA 2
EUETS
CarbonLeakage
Non-CarbonLeakage
EB
GHGreporting ?
all 6 GHGgasses
CCL
CRC?
IED
ROCPFEMRCERTCESPECOProje
ctTransmit
ECA & WDA
CCA 1
Fossi
l
DraftEED
DraftETD
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Policy Position
Draft Energy Tax Dir. Under discussion in EU
Draft Energy Efficiency Dir. Under discussion in EU, very pro CHP, fast track timetable envisaged by Commission
IED Completed EU processes, awaiting transposition into UK law
EMR (CPS/F, Capacity, FiT etc.)Under discussion in UK, subject to consultation, expected to be implemented in April 2013
CRC Phase 1 implemented, phase 2 rules being further revised under simplification agenda
RO Awaiting last “banding review” for implementation post April 2013
CPS/CPF (also see EMR above) Detail discussion s / consultations on application of CPS to fuel used in CHP plants
CCL To continue except for changes for fuel used in CHP
CHPQARecently reviewed and adjusted, to be changed in light of CPS & consultation (autumn „11) possible furtherchange due to EED
CCA To be renegotiated under new structure (yet to be agreed)
LECs (CHP) EMR process threatens to reverse previous HMG position and remove CHP LECs from April 2013
EB National Grid Ltd. constantly seeking to erode Embedded Benefits
RHI (industrial)Existing RHI is long term but funding limited in each year and capped for 4 years so potential value in futureyears (post 2015) is too uncertain for mid/large scale investments. Interface with RO for CHP unclear
RO / RHI Interface Value of “new” RO & RHI Vs existing RO “uplift” to be resolved for CHP
GHG Reporting Currently applies to all GHG gasses (not just CO2) and is Voluntary but might become Mandatory from 2012/3?
EUETS ph 3
New rules agreed and guidance finalised 15/09/11. Levels of declining free allocation for each installation is
subject to a consultation to be published by HMG in Autumn „11 – Spring „12 for start on 1st Jan 2013
Sustainability rules / Biomass Under discussion with Ofgem, based on RED and specific guidance from Commission
Sustainability rules / Biofuels Under discussion with DfT, based on RED and specific guidance from Commission
CERT / CESP To be phased out and replaced with ECO, Green Deal, Green Investment Bank from 2013
ECO To be phased in with Green Deal etc. from 2013, rules yet to be finalised
Project TransmitNot finalised and continues but may be overtaken by guidance / rules from ACER / CEER / EB will not beconsidered under this project
ECA /WDA Enhanced Capital Allowance / Writing Down Allowance for capital investment. These rules are currently underconsultation
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CHP WITHCARBON CAPTURE & STORAGE
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Graphic courtesy of U.N. Intergovernmental
Panel on Climate Change
Prudhoe Bay compressors
Opportunities for CO2 capture
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CHP as an enablerof CCS
Aggregate heat demands
shut down dispersed boiler plant
Build heat led centralised CHP
reduces overall CO2 emissions
Fit CCS to CHP
acts as a CO2 “Hoover” for previous industrial emissions allows for larger CCS plant
allows for future gasification plant to benefit from that CCS
E l f i d t i l l t
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Example of an industrial clusterwith potential for CCS
ConocoPhillips
Immingham
CHP
ConocoPhilli
ps Humber
Refinery
Total
Lindsey
Refinery
Associated
British Ports
Theddlethorpe
Gas Terminal 50km
Acetic acid plant +
1100 MW CCGT 11km
2 CCGTs (1,600
MW total) 3 km
1,100 MW CCGT
10 km
Coal Stocks
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Can we stop now?
My head is full!