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IET POWER AND ENERGY SERIES 55

Local Energy Distributed generation

of heat and power



Other volumes in this series:

Volume 1 Power circuit breaker theory and design C.H. Flurscheim (Editor)Volume 4 Industrial microwave heating A.C. Metaxas and R.J. MeredithVolume 7 Insulators for high voltages J.S.T. Looms

Volume 8 Variable frequency AC motor drive systems D. Finney Volume 10 SF6 switchgear H.M. Ryan and G.R. JonesVolume 11 Conduction and induction heating E.J. DaviesVolume 13 Statistical techniques for high voltage engineering W. Hauschild and W. MoschVolume 14 Uninterruptible power supplies J. Platts and J.D. St Aubyn (Editors)Volume 15 Digital protection for power systems A.T. Johns and S.K. SalmanVolume 16 Electricity economics and planning T.W. BerrieVolume 18 Vacuum switchgear A. GreenwoodVolume 19 Electrical safety: a guide to causes and prevention of hazards J. Maxwell

AdamsVolume 21 Electricity distribution network design, 2nd edition, E. Lakervi and E.J. HolmesVolume 22 Artificial intelligence techniques in power systems K. Warwick, A.O. Ekwue and

R. Aggarwal (Editors)Volume 24 Power system commissioning and maintenance practice K. HarkerVolume 25 Engineers’ handbook of industrial microwave heating R.J. MeredithVolume 26 Small electric motors H. Moczala et al.

Volume 27 AC–DC power system analysis J. Arrillaga and B.C. SmithVolume 29 High voltage direct current transmission, 2nd edition J. ArrillagaVolume 30 Flexible AC Transmission Systems (FACTS) Y-H. Song (Editor)Volume 31 Embedded generation N. Jenkins et al.

Volume 32 High voltage engineering and testing, 2nd edition H.M. Ryan (Editor)Volume 33 Overvoltage protection of low-voltage systems, revised edition P. HasseVolume 34 The lightning flash V. Cooray Volume 35 Control techniques drives and controls handbook W. Drury (Editor)

Volume 36 Voltage quality in electrical power systems J. Schlabbach et al.Volume 37 Electrical steels for rotating machines P. Beckley Volume 38 The electric car: development and future of battery, hybrid and fuel-cell cars

M. Westbrook Volume 39 Power systems electromagnetic transients simulation J. Arrillaga and N.

WatsonVolume 40 Advances in high voltage engineering M. Haddad and D. WarneVolume 41 Electrical operation of electrostatic precipitators K. ParkerVolume 43 Thermal power plant simulation and control D. FlynnVolume 44 Economic evaluation of projects in the electricity supply industry H. KhatibVolume 45 Propulsion systems for hybrid vehicles J. MillerVolume 46 Distribution switchgear S. Stewart

Volume 47 Protection of electricity distribution networks, 2nd edition J. Gers andE. HolmesVolume 48 Wood pole overhead lines B. WareingVolume 49 Electric fuses, 3rd edition A. Wright and G. Newbery Volume 50 Wind power integration: connection and system operational aspects

B. Fox et al.

Volume 51 Short circuit currents J. SchlabbachVolume 52 Nuclear power J. WoodVolume 53 Condition assessment of high voltage insulation in power system equipment

R.E. James and Q. SuVolume 905 Power system protection, 4 volumes



Local Energy Distributed generation

of heat and power

Janet Wood

The Institution of Engineering and Technology



Published by The Institution of Engineering and Technology, London, United Kingdom

© 2008 The Institution of Engineering and Technology

First published 2008

This publication is copyright under the Berne Convention and the Universal CopyrightConvention. All rights reserved. Apart from any fair dealing for the purposes of researchor private study, or criticism or review, as permitted under the Copyright, Designs andPatents Act, 1988, this publication may be reproduced, stored or transmitted, in any form or by any means, only with the prior permission in writing of the publishers, or inthe case of reprographic reproduction in accordance with the terms of licences issuedby the Copyright Licensing Agency. Enquiries concerning reproduction outside thoseterms should be sent to the publishers at the undermentioned address:

The Institution of Engineering and Technology Michael Faraday House

Six Hills Way, StevenageHerts, SG1 2AY, United Kingdom

www.theiet.org

While the author and the publishers believe that the information and guidance given inthis work are correct, all parties must rely upon their own skill and judgement whenmaking use of them. Neither the author nor the publishers assume any liability toanyone for any loss or damage caused by any error or omission in the work, whethersuch error or omission is the result of negligence or any other cause. Any and all suchliability is disclaimed.

The moral rights of the author to be identified as author of this work have beenasserted by her in accordance with the Copyright, Designs and Patents Act 1988.

British Library Cataloguing in Publication DataA catalogue record for this product is available from the British Library

ISBN 978-0-86341-739-9

Typeset in India by Newgen Imaging Systems (P) Ltd, ChennaiPrinted in the UK by Athenaeum Press Ltd, Gateshead, Tyne & Wear



Contents

1 Developing the UK’s energy infrastructure 1

1.1 The development of electric power 1

1.2 Regulating the industry 2

1.3 Coordinating the supply 3

1.4 Centralizing power stations 41.5 Managing the expansion 6

1.6 The Central Electricity Generating Board 6

1.7 Monopolies and private companies 7

1.8 Breaking up the monopoly 9

1.9 The effect of competition 10

Panel 1.1 Generators 12

Panel 1.2 AC/DC 13

Panel 1.3 Transformers 13

Panel 1.4 Power units 14

2 The electricity system 17

2.1 Supplying and delivering power 17

2.2 Generating power for the market 17

2.3 Power-station characteristics 18

2.3.1 Coal 18

2.3.2 Gas 18

2.3.3 Nuclear 19

2.3.4 Hydropower 202.3.5 Wind power 20

2.3.6 Coping with grid variation 21

2.4 The balancing market 24

2.5 Distribution network operators 25

2.6 Regulating the markets 26

3 The heat connection and cogeneration 29

3.1 Energy use in the UK 303.2 Support for heat and power 30

3.3 Energy crops 31

3.4 Domestic heating 32

3.5 Combined heat and power 32



vi Local energy

3.6 Heat technologies 34

3.6.1 Biomass 34

3.6.2 Solar water heating 35

3.6.3 Ground-source heat 36

Panel 3.1 Ground heat in Cornwall 38

4 Wind power 41

4.1 Wind-turbine components 41

4.2 Assessing the wind resource 43

4.3 Installing a wind turbine 43

4.4 Rooftop turbines 44

4.5 Making the connection 46

Panel 4.1 Off-grid turbines 46

Panel 4.2 Wind across the Mersey 48

5 Hydropower 51

5.1 Power from water 52

5.2 The UK’s hydropower potential 53

5.3 Assessing hydro sites 54

5.4 Environmental effects 55

5.5 Adding hydro to the system 56

5.6 Extracting the energy 56

Panel 5.1 Reviving old mills 57Panel 5.2 Hydropower in Snowdonia 58

6 Marine renewables 61

6.1 Wave and tidal power 61

6.2 How much energy is there? 61

6.3 Distributed generation? 62

6.4 The route from research to industry 62

6.4.1 Marine Current Turbines 63

6.4.2 PowerBuoy 646.4.3 Pelamis 65

6.4.4 Fred Olsen 65

6.4.5 Limpet and Osprey 66

6.4.6 Stingray 66

6.5 Development issues 66

7 Solar photovoltaics 69

7.1 Photovoltaic power 69

7.2 Assembling the PV panels 707.3 Off-grid applications 71

7.4 Street applications 71

Panel 7.1 Sustainable Lambeth 74

Panel 7.2 Experience in Grimsby 75



List of contents vii

8 Combined heat and power 77

8.1 The UK CHP programme 77

8.2 EU Directive support 78

8.3 Domestic CHP 79

8.4 Developing domestic technologies 80

8.5 Development issues 80

8.6 Who would buy? 82

Panel 8.1 Good projects on paper 83

Panel 8.2 London housing 85

9 Biomass 87

9.1 Biomass fuels 87

9.2 Heating programmes 88

9.3 Wood-energy strategies 89

9.4 Wood for Wales 90

9.5 Wood-fuel research 91

9.6 What is pyrolysis? 92

10 Energy storage 95

10.1 Diverse energy in the network 95

10.2 Pumped storage 96

10.3 Gas storage 98

10.4 Batteries 9810.5 Centrifuges 99

10.6 Moving to a hydrogen economy 99

Panel 10.1 Norway’s hydrogen experiment 100

Panel 10.2 Hydrogen in Iceland 102

Panel 10.3 Battery powered 103

11 Fuel cells 105

11.1 How fuel cells work 105

11.2 Fuel-cell configuration 10611.3 Solid-oxide fuel cells 106

11.4 Fuel-cell applications 108

11.5 Developing the industry 109

12 Interacting with the electricity grid 111

12.1 Voltage and frequency 111

12.2 Voltage 111

12.3 Frequency 112

12.4 Reactive power 11212.5 Maintaining the supply quality 113

12.6 Bringing on the reserve 114

12.7 Demand response 115

12.8 Dealing with transients 115



viii Local energy

12.9 Transmission/distribution interaction 117

12.10 Adding microgeneration 119

13 Making progress on policy 12113.1 Government strategy 121

13.2 Planning progress 122

13.3 Domestic changes 124

13.4 Scotland and Wales approach 125

13.5 A microgeneration strategy 126

13.6 Re-examining the remaining barriers 128

13.7 Licensing 129

13.8 Distribution and private wires 129

Panel 13.1 How planning works 130

14 Embedded benefits 135

14.1 Costs 135

14.2 Embedded benefits 136

14.3 New incentives 137

14.3.1 Innovation funding incentive 137

14.3.2 Registered power zones 137

14.4 Small generators 138

14.5 Consolidation 138

15 Connecting and exporting power 141

15.1 Connection standards 141

15.1.1 Step 1: Decide on your system 141

15.1.2 Step 2: Get a connection agreement 142

15.1.3 Step 3: Install suitable metering 142

15.1.4 Step 4: Install a ROC meter 142

15.1.5 Step 5: Arrange a tariff with your electricity supplier 143

15.2 The connection agreement 143

15.3 Rethinking the network 144

15.4 Shallowish connection 145

15.5 New charging regimes 146

15.6 Constraining connection? 147

16 Finance and local generation 149

16.1 Renewables Obligation 150

16.2 Electricity trading arrangements 152

16.3 Climate Change Levy 153

16.4 Grants 154

16.5 DEFRA support 155

16.6 DTI grants 156



List of contents ix

17 Changing the industry: ESCos and cooperative power ownership 159

17.1 Energy-services companies 159

17.2 The 28-day rule 159

17.3 The affinity deal 162

17.4 The energy club 162

17.5 The CHP scheme 162

17.6 Thameswey 163

17.7 The legal framework 163

17.8 Community Interest Companies 164

17.9 Incorporation 164

17.10 Not-for-profit 165

17.11 Full cooperation 165

Panel 17.1 Baywind 166

Panel 17.2 Cooperative wind 167

18 Output and generation 169

18.1 Load factors and variability 169

18.2 Micropower efficiency 170

18.3 Progress of the field trial 171

18.4 MicroCHP for homes 171

18.5 Small-CHP for business 172

18.6 Replacing generation? 173

18.7 Saving carbon 17418.8 Changing energy patterns 174

19 Putting a price on carbon 179

19.1 The EU Emissions Trading Scheme 180

19.1.1 Results from Phase 1 181

19.1.2 Setting up the ETS Phase 2 182

19.2 Trading outside Europe 183

19.3 Carbon trading for commerce and industry 184

19.4 Making the case for local energy 185Panel 19.1 Greenpeace’s wish list 186

Bibliography 187

Index 189



Chapter 1Developing the UK’senergy infrastructure

1.1 Thedevelopment of electric power

Scientists first began to understand fully and make use of electricity generation inthe late nineteenth century. Experimenters had been investigating the phenomena ofstatic electricity and magnetism for more than 200 years up to that point and hadreported on a variety of interesting results. Their names are commemorated in someof theunits used to measuretheeff ectsthey discovered – theohm, tesla and ampere.The IET commemorates one of the most important scientists, Michael Faraday, whoexplored electromagnetic induction during aseriesof experimentsbegun in 1831. Hefound that, if he moved a magnet through a loop of wire, an electric current f lowedin the wire. The current also flowed if the loop was moved over a stationary magnet.

This is the basic principle of electricity generation: the three ingredients are amagnetic f ield, an electric current and movement. Any two of these componentstogether will produce the third, so that moving a conductor in a magnetic field willproduce a current, and, equally, passing an electric current through a conductor ina magnetic fi eld wil l make the conductor move – the principle by which an electricmotor works.

With these three components electricity can be generated – or an electric motorset up – using very simple apparatus and at small or large scale. As a result, once itwas clear that electric current was a useful tool and could beemployed in an electric

circuit to produce light or heat, first experimenters and then industry quickly beganto make use of it and, in its very early days, i t was produced domestically, in shedsor cellars.

Of course, to generate electricity in a reliable way it was necessary to find a forceto move the conductor within the magnetic f ield. One way would be to attach theconductor directly to an object moved by some other force. This might be water,for example, falling through a mil l wheel, a method that had been directly usedfor centuries to move grindstones for milling flour. In fact, there are mills still inexistence with nineteenth-century electricity-generation apparatus. Using a mil l wasparti cularly valuable because many had mil lponds in place, allowing water to beconserved so that it was available at times when the river would otherwise have toolittle water to allow thewater-wheel to operate. Dams, ponds and adjustable gates orsluices, used to direct thewater and provideareliablesupply for grindstones, could beequally effective at ensuring electricity generation was reliable. Alternative motive



2 Local energy

forces for electricity generators could include wind (‘harvested’ by wi ndmil ls). Butfor industry, which wanted a 100 per cent reliable source if it was to use electricpower, the most attractive motive force to use to generate electricity was steam.

The steam engine had been invented and developed by Thomas Newcomen andJames Watt, and was already used by many i ndustries. Almost any kind of fuel, butmainly coal or wood, could be used to boil water and produce steam under highpressure, which was originally, in Newcomen’s and Watt’s engines, used to drivepistons. But in 1884 Charles Parsons proposed a steam turbinein which vanes ratherlike those of a windmil l (the turbine blades) are connected to a central shaft. Thesteam turns the blades as i t expands through them, turning the centre shaft. Thisarrangement can be very efficient, because additional sets of turbine blades can beadded, with each set sized according to how far the steam has expanded. The entiresteam turbine is in a cylindrical casing.

The steam turbine was far more useful for the fledgling electric-power industrythan the earlier steam engines because the result is a rotating shaft ideal for using ina stationary magnet to produce an electric current.

In fact, Parsons’sfirst model wasconnected to adynamothat generated 7.5 kW ofelectricity. That first turbinewassoonscaledup, andwithin Parsons’sl ifetimeturbineswerebuilt with generatingcapacity thousandsof timesbigger. Steam turbinesarestillby far themost common method of generating power, whether in so-called ‘ thermal’stations, where the steam is produced by burning coal or biomass fuel, or i n nuclearstations, where the steam i s produced using the heat from nuclear fission. In some

cases they are used in conjunction with a gas turbine – known as a combined-cycle plant , or in configurations where waste steam iscaptured at somepoint in theprocessand used for direct heat in a so-called combined-heat-and-power plant . The namesof Parsons and his US competi tor George Westinghouse are sti ll to be seen in thecompanies active in the power industry.

The relative simplicity of the electricity-generation process and the use of thesteam turbine meant they were quickly employed i n both industrial and domesticapplications. Most were dedicated for use by a single industri al concern, or domesti-cally wereused for afew customersof asinglesite. Initially therewasno consistency

betweenthedifferent generators: eachoperatedat itschosencurrent andvoltage. Mea-sured in amps, current describes theamount of electric charge moving in theelectriccircuit, while the voltage (measured in volts) describes how much energy each unitof charge has – similar to thedifference between thenumber of cars travelling alonga road (current) and the speed at which each is travelling (voltage).

1.2 Regulating theindustry

Generation began to come under legislative regulation in the 1880s and 1900s. Thefirst Electricity Act in 1882 allowed the setting up of supply systems by persons,companies or local authorities, and amendments in 1888 made such new enterpriseseasier to set up. A further Act in 1909 regulated planning consent for new powerstations, but by 1914 there were hundreds of independent undertakings, private and



4 Local energy

the energy remains the same, ahigher voltage must result in a lower current, and viceversa. At lower current, less energy i s dissipated and there is potential to transportmuch more power.

Power designers took advantageof thisrelationship in designing electricity trans-port networks, along with another well-known property of electricity: the fact that achangingelectric current passingthroughacoil of wirethat generatesamagnetic fieldcould induce an electric current in asecond, unattached, coiled wire (see Panel 1.3) – an arrangement known as a transformer . The transformer could be used to vary thevoltage and current to produce a very high voltage and therefore a very low current – ideal when power had to be transported long distances – and a second transformercould be used to reduce the voltage and increase the current to the levels used topower appliances.

Theresult wasthecomplex ‘ grid’ that began to takeshapeafter the1926 report and

has been expanding ever since. Now there is a national grid with some long-distancelines operating at 440 000 V (440 kV) and others at 275 000 V (275 kV) that is usedto transfer ‘ bulk’ supplies from major power plants to the major load centres, and anetwork of local connections that carry electricity at 110 kV for local distribution.Transformers are used to ‘ step up’ power to high voltages for transmission and to‘ step down’ the voltage to feed i t into the local network. Finally, more step-downtransformers are used to reducethe voltageto a level suitable for domestic users.

Domestic power supply was standardized at 240 V for many years, althoughrecently theUK voltagehas been standardized at 230 V to beconsistent with therest

of the European power network. Large industrial energy users may take power fromthe network at higher voltagelevels depending on their requirements.

1.4 Centralizing power stations

Why was it necessary to develop the high-voltage grid? Even back in 1926 it wasclear that, astheelectricity industry wasdeveloping, theneed to transmit power longerdistances was growing. This was not just to allow power to be transferred between

neighbouring companies among the 400 or so selling electricity: it also enabled thenetwork as a whole to take advantage of economies of scale. Steam turbines couldbe made to work more eff iciently as the size of the boiler and turbine increased, sothe cost of a unit of electricity produced decreased. At the same time, economies ofscale could be made, once again reducing the capital cost per unit of electricity.

Other pressures also drove the trend for larger power stations sited f urther fromthe areas where electricity was used (the ‘ load’ centres). For steam turbines, onereason for the shift was the need to transport huge amounts of fuel to the big newstations.

Oneof thevaluable characteristicsof coal isthat it can bebought, andtransported,from many suppliers worldwide. But the downside is that there can be huge financialandenvironmental costsin transportingcoal fromthemineto thepower station. If thepower stationowner is wil lingtolink theplant closely toasinglemine, it is muchmoreeff icient to build so-called ‘ minemouth’ power stationsto minimizethedistance that



D evelopi ng the UK ’s energy i nfrastr ucture 5

thecoal has to betransported. There are other potential benefits to the‘ mine mouth’plant. First, the plant operator can contract for l ong-term fuel supplies and, second,thedetailed design of the plant can be optimized to fit with the characteristics of thecoal, which can vary considerably from deposit to deposit.

China has come up against this issue recently, during its rapid growth in the lasttwo decades and resulting need to supply power to its burgeoning industries. Whilemost of thecountry’s coal deposits are in thenorth and west of thecountry, themajorload centres were, and still are, the fast-growing industri al centres and cities of thesouthwest. Instead of choking the country’s train system by transporting mil lions oftonnes of coal each day, thecountry announced a ‘ coal-by-wire’ policy to site powergeneration closer to the mines and build high-voltagetransmission lines instead.

The recognition that power stations can cause local environmental degradationand emit pollutants that affect its immediate surroundings has also tended to aid the

shift towards using sites far away from centres of population and hence areas wherethe power load is highest.

While for coal-fired power stations choice of site is a balance between transport-ing power and transporting fuel, other types of power-generating plant may haveless flexibility in deciding on a site. Traditional water (hydro) power, for example,is immediately restricted to sites on a suitable river or near enough to allow waterto be diverted or stored. What is more, the amount of electricity that can be gen-erated depends on the amount of energy available from the moving water, whichusually requires either a significant drop, or a large volume of water moving through

the turbines. Mountainous terrain is where suitable hydropower sites are most oftenfound, which are seldom theareas where major load centres are found. That can leadto significant power-management requirements in countries that are heavily relianton water power. Norway, for example, which meets upwards of 90 per cent of itselectricity needs from hydropower plants, has to transport most of its electricity fromthe north of the country to the major cities in the south.

The UK is a windy country, and average wind speeds are favourable for build-ing wind farms in many areas of the country. But good winds ‘ on average’ are notnecessari ly good enough for a wind farm to make economic sense. Instead, power-

generating companies have to search out the sites that offer the best possible windspeeds on the maximum number of days each year – maximizing ‘ fuel’ availabil ity.That tends to drive major wind-farm development to particular parts of the country,such asWalesand thefar north of Scotland. Theseareas tend to bethose where fewerpeople live and where farming or other low-density activities are more common thanindustry, so theelectricity system in these areastends to be on arelatively small scaleand low in capacity – built to serve a few small users.

TheWestern Isles of Scotland and theisland of Lewis are a good example. Theseareas have among the UK’s best wind resources but have in the past been home to

farming and fi shing communities. It is thought that Lewis alone could host severalhundred windturbinesproviding electricity equivalent to acoupleof theUK’slargestpower stations. But transmitti ng the electricity to places where it will be used inEngland requires some new high-capacity transmission l ines to be built – ‘ windby wi re’ .



6 Local energy

New types of water power will also have the problem of location, to a varyingextent. Some devices rely on a so-called ‘ tidal race’ , which is typically a channelbetween two areas of sea where the eff ect of the tideis very pronounced, so that thewater moves much faster through thechannel. These are of course entirely restri ctedon their location. However, some other tidal devices will have much broader appli-cation and could be used to abstract some energy from less dramatic tides along thecoast and in river estuaries. Wave-powered devices will also beless constrained. Forthese power sources it wi ll be a matter of f inding the best possible sites and costingthe transport of power back to shore; the chosen sites will be an economic balancebetween the two.

1.5 M anaging the expansion

Building ever-larger and more complex networks to subdivide and deliver the elec-tricity output to users did carry significant cost, and still does. What is more, itrequires transmission lines to be installed across both public and private property.Building new lines is always contentious. But the overall effect of the increasingscale of electricity generation and interconnected systems steadily reduced the costof electric light and motive power.

The National Grid was developed rapidly after the 1926 recommendations. By1933some4 000 milesof transmissionlineshad been completed andby 1935 thegridwasregardedascomplete. Ratedat 110kV,it wasmuchsmaller andoperatedat al owervoltagethan thegrid in operation today. But it signalled aradical shift in managing theelectricity supply. Thefact of thegrid’s existence meant that all electricity generatorsand electricity users were connected. For it to work successfully, power generatorshad to supply (‘ export’ ) power to the network within strictly controlled current andvoltage li mits. What is more, the power stations could no longer operate entirelyindependently. Part of the intention of the grid was to allow electricity to be movedaroundthenetwork to meet users’ needsandto providebackup, for examplefor powerstations that had to shut down. But, in return for access to supplies from the grid,power-plant operators had to accept that part of their own supply could be diverted

to other parts of the network as required, and, what was more, they had to be willingto accept a measureof control from thegrid.

In 1939this wasformalized when thegrid becameanationally integrated networkwith a National Control Centre under the CEB’s direction.

The savings arising from the grid were large and demand grew rapidly. In 1914electricity salesper head of population had been 77 kWh. By 1939 it was486 kWh. Atthat timetheinstalled capacity of power stationswas9 712MW, most new generatorsbeing 30 or 50 MW capacity.

1.6 TheCentral Electricity Generating Board

In April 1948 theentirei ndustry in Great Britain (except theNorth of Scotland Hydro-Electric Board, already a public board) was nationalized when the assets of 200




companies, 369 local authority undertakings and the Central Electricity GeneratingBoard (CEGB) werebrought together under theBritish Electricity Authority (BEA) – whichwasknown astheCentral Electricity Authority (CEA) after 1954 – and 14 areadistribution boards.

At this timework started on buil ding the 275 kV high-voltage grid (known as the

supergrid ) that operates today.Theareadistribution boardsaccepted bulk supply from thesupergrid and stepped

it down to providepower to domestic properties. Thepower stationsandtransmissionnetwork were run by a central authority within the BEA.

In January 1958, following examinationof theindustry by theHerbert Committeeand legislation, the CEA was replaced by an Electricity Council, whose function wasto act as a central policy-making body for the whole of England and Wales; and aCentral Electricity Generating Board, which wasto beresponsible for generation and

main transmission in England and Wales, owning such assets as the power stationsand the grid.

TheCEGB inherited 262 power stations with a capacity of 24.34 GW, and annualsales of 40.3 TWh and it split the country into five operating regions.

Output increased rapidly in the1960s and was catered for by a huge programmeof power-station and transmission-line construction. By 1971 the CEGB owned 187power stations with a total capacity of 49.28 GW and had annual sales of 184 TWh.At this time power-station sizes were increasing, and some of the country’s largestcoal-fired and nuclear stations came on line. Within each power station there may

be several ‘ generating sets’ or units, each producing several hundred megawatts ofpower.

The largest power station of all was Drax, a coal-fired station in the north-eastwith atotal rating of 2 000 MW from itssix units, but therewereseveral sitespumpingover 1 000 MW into thegrid. In the1970stheincreasing demand and thelarger powerstations in operation required still more power to be transferred around the country,and in this decade the 400 kV supergrid was completed.

The largest single-turbine generating set on the grid is currently at Sizewell B,which came on li ne in 1994 and is rated at 1 200 MW.

1.7 M onopoliesand private companies

From its earliest days the electricity supply system was seen as a ‘ natural monopoly’and it was still being described in this way in the 1980s. This assumption wasboth a cause and effect of the i ndustry’s development. Economies of scale meantthat building large power stations was more cost-efficient for the electricity gen-erator. But bigger power stations meant more customers were required, with

ever-greater costs for installing and maintaining an extensive fixed network ofwires.The industry was capital-intensive: building the generating stations and the net-

work was relatively expensive, while producing and delivering the product oncetheinfrastructure was in place were relatively cheap. A power-generating company had



8 Local energy

to be able to rely on customers over terms of many years to make a return on thecapital invested – and, in any case, electricity supply was quickly seen as a ‘ publi cgood’ , and a requirement almost as basic as a water supply. The result was that it wasassumed that power companies should be awarded monopoly supply rights withintheir areas.

In the UK, that meant a single supplier over the whole of England and Wales – eventually known as the Central Electricity Generating Board – and two othermonopoly suppliers in Scotland: the South of Scotland Electricity Board and theNorth of Scotland Hydro-Electric Board. Within these power monopolies were gen-erating stations, a high-voltage transmission network and local ‘ area boards’ thatoperated the low-voltagenetwork and supplied power to domestic customers.

This industry structure was largely replicated worldwide. Local or nationalmonopolies generated and suppli ed electricity within a defined area and many

were owned by the national or local government corresponding to theirservice area.

Since they were monopolies, their investments and customer pricing were over-seen by the government. In some cases – notably in the USA – power companieswere privately owned, but their abil ity to decide investment and set customer priceswaslimited by independent Public Utility Boards, who scrutinized utilities’ work andinvestment programmes and agreed what prices were allowable.

The monopoly structure helped determinethe industry’s development. It workedextremely well and customers – especially domestic customers – could assume that

a reliable and unlimited supply of electricity was available at all times. Once areliable supply of electricity could be assumed to exist in every house, appliancescould be developed to make use of it. From fridges and i rons, to PlayStations andhome cinemas, there was no restriction on domestic electricity use. Demand couldgrow ever higher, while suppliers with large service areas tended to invest in ever-larger power-generating stations, to meet their customer needs, and build them atthe most economic site, generally near the fuel source and away from populationcentres.

A simil ar development had been under way in the supply of gas. A network

of pipes had been i nstalled, supplied at first by local ‘ gas works’ and later directfrom North Sea and other reserves. As with the electricity network, a state-ownedmonopoly – Bri tish Gas – was set up to procure gas and supply it to domestic andindustrial customers. TheUK’s gas network is still less extensive than theelectricitynetwork, thanks partly to the high cost of burying pipes to serve small groups ofisolated customers, but also partly because once an electricity supply is i n placeit can provide the heat that the gas would supply, both for space heating and forcooking, whilealso poweringall kindsof other appliances. With an electricity supplyin place the arguments for a gas supply become still less favourable. Nevertheless,

the UK’s gas network is very extensive, and this is an important factor in electricitydecentralization.The monopoly paradigm began to change at the end of the 1980s. In the UK ,

a series of publicly owned industries had already been sold to private investors,including the gas network. The CEGB was next on the list.




1.8 Breaking up themonopoly

As well as privatizing the CEGB, the Conservative government under Prime Minis-ter Margaret Thatcher also wanted to shake up its monopoly supply function, on thegrounds that competition would bemore eff icient, would lower prices and encourageinnovation. Clearly, there would be limited areas where competition was possible:building new wires alongsidethose already existing and inviting customers to switchbetween them was no eff iciency improvement. Nor could thegovernment achieve itsaimsby simply splitting theCEGB geographically: that would result in apatchwork ofmonopoly suppliers instead of just one. Instead, thegovernment spli t the industry byfunction. Electricity generationandsupply to customersweretwo areaswherecompe-tition could beintroduced. Operating thehigh- and low-voltagenetworks constitutedmonopoly activi ties and would remain so.

The result was a split into generation, transmission, distribution and supply thathas been widely copied among other countries that have also been changing theoperating model of their power industri es. This model conceives the industry not asunique, but asvery similar to other industrieswheremanufacturers sell their productswholesale to retailers who supply individual customers. I n this model, products aretransferred from manufacturer to retailer to customer via road, rail, post, etc., using,but not owning, other freight infrastructure.

Similarly, in theso-called ‘ deregulated’ electricity industry, agroup of generatingcompaniesbuild and operate electricity-generating plants to manufacture electricity.

They sell their electricity in bulk to supply companies with thousands or millionsof small customers (or sometimes direct to very large users such as heavy industry).The supply companies, or electricity retailers, are the industry face that domesticusers see, and customers can switch between them without needing to make physicalchanges to their supply.

The electricity networks play the role of, say, the road network. Bulk power istransmitted across the high-voltage ‘ motorways’ – owned (in England and Wales)and operated by a company now called National Grid Electricity Transmission(or just National Grid) – and is then stepped down on to the distribution net-

work. These l ocal, low-voltage networks are owned and operated by so-calleddistribution network operators (DNOs), which step down the power still furtherand distribute it to individual premises and houses. The National Grid and theDNOs are monopolies, whose income is from ‘ tolls’ paid by the generating andsupply companies and who supply various other services to keep the networkrunning.

The result is that what were parts of the same industry now have very diff erentfunctions and operate i n very different ways. The companies that retail electricityare more like other major consumer companies such as banks, f ocused on providing

services for thousands or mil lions of customers. Among their major functions ascompanies are managing their customer information, billing and collecting payment.In the 1990s this reinvention as ‘ home service’ companies led them to expand intoother services, such as providing vehicle-breakdown cover or financial servi ces. Atthat timethe strategy was not very successful, except in closely related industri es so



10 Local energy

that most energy retailers supplied both gas and electricity. Now, however, themodelhas been revived, as other consumer companies such as supermarkets have begun tooffer electricity supply deals.

The transmission and distribution companies remain superficially simil ar asbusinesses. They maintain, and where appropriate expand, a f ixed network andare paid via toll ing fees that are governed by an i ndependent regulator, the Officeof Gas and Electricity Markets (Ofgem). The transmission operator National Gridhas additional roles i n balancing supply and demand and managing an active net-work, whereas the local networks are passive, as we will see (Chapter 5). Bothare seen as relatively stable industries with low risk and relatively low returns oninvestment.

The generation companies have operations that are still rather similar to thoseof the corresponding section of the CEGB, but the market i n which they operate is

very different. Building generating plants under a monopoly supplier was a low-riskactivi ty, centrally planned and with assured customers for the life of the plant. Nowgenerators compete on price to sell their supplies to retailers, and their investment i sdriven by a market that may providevery l ittle information about trading conditionsover thelife of any new plant built. So-called ‘ forward prices’ give some indicationof whether the electricity price is likely to rise (responding to a shortage of powerstations) or fall (in response to overcapacity). But this indication extends only a fewyears ahead, whereas power stations are immense capital investments that requirecustomers over two to four decades to provide their owners with a return on invest-

ment. Sincea number of companies are making investment decisions in response tosimil ar market conditions, the industry tends to swing from boom to bust and backagain. The UK generating market was described as ‘ bust’ by one generating com-pany in 2002, for example, but by the winter of 2005–6 generating capacity was verynear demand, leaving little margin for emergencies, and prices had risen to recordlevels.

Although companies are required to keep activi ties in the different parts of theindustry separate, many largeutility companies now have interests in both retail andgenerating sectors. A stakein the generating sector ensures that companies will have

sufficient electricity to meet their customers’ needs even i n times of shortage, andthe peaks and troughs of retail and generating businesses wi ll be different, givingcompanies more surety over their long-term return.

1.9 Theeffect of competition

The industry privatization was successfully completed in the early 1990s, and com-petitiondid, asplanned, take eff ect in thegeneratingand retailing of electricity. What

it did not do was open the industry to different forms of generation and models ofelectricity supply – in fact, the reverse happened. With a customer base of mil lionsand guaranteed income in perpetuity, the CEGB had an enormous research budgetand could – in theory – invest in new forms of generation that might not providean economic return for many years. One continuing complaint against the company,




however, wasthat public-sector inertiaandan institutional belief in theexistingmodelof ever-larger central power stations combined to stifle innovation.

But when the private electricity generators took over, the basis on which theycould compete for customers among the retail companies was mainly the price ofthe electricity they supplied. This drove down electricity prices for the whole of thelate 1990s and the early years after 2000, partl y because efficiency improvementsmeant there were savings to be made, but also because oversupply drove pricesdown further. Investment decisions were driven not by the possibil ity of changingthe power system but by the need to build any new power-generating capacity asfast as possible, and at as low a capital cost as possible, so it could start earningincome for the company immediately. The result was a so-called ‘ dash for gas’ dur-ing the 1990s. Gas-fired electricity generation was very well understood, but hadnever been favoured – in fact was under a moratorium – under the CEGB, which

considered that gas was far too expensive and useful i n direct supply to beconvertedto electricity. But for private electricity generators gas was ideal. The gas-turbinestations could bebuilt extremely quickly – within 18 months, onceplanning permis-sion had been obtained – so they began paying back on their investment very fast.The investment was relatively low, as gas-fired stations were cheap to build. Whatwas more, gas was a ‘ clean’ fuel: it did not produce the emissions associated withcoal-fired plants, including sulphur dioxide and particulates, that were thesubject ofincreasingly stringent regulations, requiring ‘ cleanup’ technologies to befitted to theplant and both incurring new capital costs and reducing the plant efficiency. I t was

true that running costs of gas plant could be high, and it was very vulnerable to highgas prices, but the plants could be started up and switched off fairly quickly, so itwas possible to stop operating them at times of oversupply when electricity priceswere low.

As with the electricity generators, so with the retailers. They compete on price,and, what is more, their domestic customers traditionally had l ittl e interest in orunderstanding of how or where their electricity was generated. The retailers wereunlikely to f ind much take-up for diff erent supplies, and this was borne out by theexperience of so-called ‘ green’ tariff s, which offered customers access to electricity

produced from renewable sources– but at ahigher price. Theproporti onof customerstaking up the option was vanishingly small.

Elsewhere, an alternative model for electricity generation was being exploredthat went right back to the UK’s early electricity industry. Countries where therewas no electricity infrastructure already existing were developing one that lookedrather like the UK’ s early industry, with local electricity generation for local use, andgradual linkages forming between local areas to exchange supply and supply backupwhere necessary. This ‘ distributed’ model was somewhat different from the earlydays in the UK. First, with standards in placeacross thedeveloped world, electricity

systems tended to be able to link. Second, new f orms of electricity generation werebeing developed, and old ones updated, that could be employed at very small scaleand wi thout the drawbacks of previous technologies. Solar photovoltaic panels andbattery storage, for example, offered clean generation and minimal running costs,compared with using a diesel generator.



12 Local energy

There was a second benefit to generating and using electricity locally: transmis-sion, at high or low voltage, necessari ly involves significant energy loss throughthe wires. Using the electricity at or near the generation point could balance out theeconomies of scale and be more efficient. What is more, if a heat process was used,such as a steam turbine, the excess heat that would otherwi se have to be dissipatedvia a cooling tower or other ‘ heat sink’ could beused. It was available for industrialprocesses, if some were or could besited near thepower plant, or it could be used tosupply heat to local buildings. This type of combined-heat-and-power (CHP) plantwas overall much more eff icient.

Neither the UK’s privatized system nor its power market supported this type oflocal generation. By 2000 it was clear that government intervention would beneededto changethemarket structureto forceit to invest not only in new typesof generationsuch as renewables, but also to shift the balance in the UK away from a centralized

system so that electricity could be generated at whatever scale and site it was mostefficient. That would mean that, as well as central power stations, there would beelectricity fed into the system from a huge variety of local projects ‘ embedded’ intothelower-voltagepartsof thenetwork. It could makethenetwork moreeff icient, morereliable andcheaper to operate– but it would clearly requiregovernment interventionand financial incentives to make the shift.

Panel 1.1 Generators

Most metals have electrons that can detach from their atoms and move around.The loose electrons make it easy for electricity to f low through these materi-als, so they are known as electrical conductors . They conduct electricity. Themoving electrons transmit electrical energy from one point to another.

Electricity needsaconductor in order to move. Therealsohasto besomethingto make the electricity flow from one point to another through the conductor.One way to get electricity f lowing is to use a generator.

A generator worksby electrical i nduction. It consists of acoil of wi re rotated

between thepoles of amagnet. Becausethecoil is rotating, it produces an elec-tri c current that varies regularly, known as an alter nating current . As the coilmakes one revolution, one cycle is produced, so that the frequency of the cur-rent equals the number of revolutions per second madeby the coil. In practicethe coils are wound in a soft iron cylinder known as an armature . In a powerstationthearmaturecontaining thecoilsremainsstationary andisknown asthestator , and instead the magnetic f ield is rotated around it and is referred to asthe rotor . A turbine turned by steam pressure, falling water, wind, etc. i s usedto provide the rotation, which in large power stations can be at 50 turns per

second, the sameas the grid supply (‘ synchronized’).In an AC generator the current is supplied to the external circuit by twoso-called ‘ brushes’ , spring-loaded graphiteblocksthat pressagainst two copper‘ slip rings’ , which rotate with the axle.




In power stations the stator coils are in three sets and the rotor coils are inthree sets at 120 degrees to each other. This effectively produces three varying

supplies that when superimposed provide a steadier power supply, which i sknown as a three-phase supply .

Panel 1.2 AC/DC

Current describes the drift of electrons (and in some cases other charged parti -cles) under the influenceof an electric field. For many of the electrical eff ectswe require, such as the heat and li ght produced by the current in a wire, thedirection of movement of theelectrons is not important. Thedrift can be in onedirection, which is known as direct current (DC), and is produced, for exam-ple, by a battery in a circuit. However, electricity is more usually generatedand transmitted as an alternating current (AC). When necessary AC can be‘ rectified’ to produce DC.

AC has at least three advantages over DC in a power-distribution grid:

• Large electrical generators generate AC naturally, so conversion to DCwould involve an extra step.

• Transformers must have alternating current to operate, and the power-distri bution grid depends on transformers.

• It is easy to convert AC to DC but expensive to convert DC to AC, so, ifyou were going to pick one or the other, AC would be the better choice.

Panel 1.3 Transformers

A transformer changes an alternating voltage from one value to anotherusing the mutual-inductance principle. It can be used to increase (step up)or decrease (step down) the voltage and current. Electricity substations gen-erally house transformers that are stepping down the supply for domestic orcommercial use.

In a transformer two coils called the primary and secondary windings arewound around an iron core. When an alternating current passes through onecoil, known as the primary, it results in a fluctuating magnetic field, whichinduces an alternating current in theother, secondary, coil.

The amount of voltage induced in the secondary coil depends on the num-ber of turns in the two coils. I f they have equal numbers of turns, the voltageinduced in thesecondary coil isequal tothat in thefirst. If thenumber of turnsinthe secondary coil is twice that i n the primary, then the voltage induced will be

Continues



14 Local energy

Panel 1.3 Continued

‘ stepped up’ and will be double that in the primary coil. If the number of turnsin the secondary coil i s half that in theprimary coil the voltage induced in thesecondary coil will be‘ stepped down’ to half that of the primary coil.

Panel 1.4 Power units

How much work can you get done in a second? If you are a car, how far can

you drive? If you are an electric current, what kind of appliancecould you run?For an engineer, power is defined as the energy available to get work done ineach second. Now werefer to it in watts (shortened to W), although it may havebeen easier to understand when it was referred to as horsepower .

For electricity, the power available depends on two characteristics: the ‘ cur-rent’ through the wires, which measures how much electricity is flowing; andthe‘ voltage’ , which measureshow much ‘ push’ it has. Compareit to thetraff icon its way around the M25: the current is more or less the number of cars pass-ing at a single instant and thevoltageis more or less their speed. To get an ideaof the amount of power available, you need to know both. Simil arly, you cancalculate electrical power by multiplying the voltageand the current together.

A watt is a fairly small unit – there are around 750 W to the horsepower. Toget an idea of how much power you are using, consider theexamples here.

The amount of power that can be provided by an electric generator varieshugely. The large power stations that dot British coalfields are each sendingseveral hundred million watts into the grid. Local renewable-energy projectsare often sized at a few thousand watts, while new wind turbines are up to amill ion watts.

Another way of looking at power i s not how much is being used at any one

second, but how it adds up over time. This is also the ‘ unit’ on your electric-ity bil l – kWh, where k is just shorthand for 1 000. I t’s a measure of the totalelectricity you have used – and how much you are paying, so it’s something toremember when you want to saveenergy. A low-energy light bulb doesn’t seemto draw much less power than an old-fashioned one. But multiply that by thenumber of hoursit operates and you will see significant savings over a year.

1 W (calculator)40 W (light bulb)

100 W (TV)1 000 W (iron)1 000 000 W (factory)80 000 000 W (UK capacity)




In scientific text there is a standard shorthand, accompanied by a standardsymbol, so that engineers and researchers from Moscow to Manchester can be

quite confident that they are talking about the same size.

p pico trillionthn nano bi ll ionthµ micro millionthm milli thousandth0k kilo thousandM mega milli onG giga billion

T tera trillion

Once you start to pick it apart, it becomes fairly easy to work outthat 1 kg is 1 000 grams, 1 MW is 1 000 000 watts, and so on. Andalthough teramay seem like a lot, the UK uses several hundred terawatt hours of electricityevery year and the USA uses nearly 3 500 TWh, so it is barely big enough.

Mega is theone representative of this group that has infiltrated nontechnicalspeak to any extent.



Chapter 2 The electricity system

2.1 Supplying and delivering power

The UK’ selectricity supply system works in much thesameway as thesupply of anyother commodity. Electricity is ‘ manufactured’ at power stations, and bulk suppliesare transported across the high-voltagetransmission network. Retailers (‘ suppliers’ )buy the bulk power and sell it on to domestic and commercial customers, to whomit is supplied via a low-voltage local network operated by a distribution networkoperator (DNO).

The generators, high-voltage network operator (National Grid), DNOs andretailers are very different companies.

2.2 Generating power for themarket

Thegeneratorsandretailersoperateinacompetitivemarket, makingcontractsdirectlywith one another to buy and sell power. The amount of electricity that is required canvary markedly. Generally the highest demand is in the winter, when people tend tobeinside and it is dark for longer, so they are using more appliances. Although thereare heavy industries that require large amounts of power continuously, it is usuallydomestic use that governs the peak load. So the highest peak is on winter eveningsbetween 6 p.m. and 9 p.m., when most people are arriving home, making dinner and

using domestic appliances, and there is a smaller peak in the early morning.Theoverall load in summer islower than in winter but theincreasein hot summers

andthegrowinguseof air conditioninghavemeant that thesummer peak isincreasing.This has important implications for the way the UK electricity system is managed. Inthepast, major repair andmaintenanceprojectswere planned for thesummer months,when demand for electricity was traditionally low, so some plants could be out ofaction for weeks or months.

In July 2006, electricity demand increased dramatically in response to a weeks-long heat wave, as homes and businesses turned up existing air conditioning and

stripped DIY stores of new air-conditioning units and electric fans. With avail-able capacity at its summer low, the National Grid had to warn that the systemwas dangerously close to its l imit and appeal for demand reductions. In the longterm, this may require generating companies to alter their traditional maintenancestrategies.



18 Local energy

While the electricity being used varies dramatically, from up to 60 GW on awinter’ s evening to around 30 GW at low-demand periods, theamount of electricitybeing supplied to the system is also changing.

2.3 Power-station characteristics

Different types of power station have different characteristics. This diversity is gen-erally regarded as a benefit, as it helps the system to meet the varying demand. It isalso an economic benefit, as it meansthesystem as a whole does not rely on a singlefuel such as gas, and there is some protection from price rises of a single fuel.

So-called thermal power stations are those that rely on burning to turn a gas orsteam turbine.

2.3.1 Coal

Coal was for many years the most common thermal fuel and still provides up to athird of the UK’s power generation and around half of all the electricity generatedworldwide. It is attractive to power companies for several reasons. First, it is arelatively flexible form of generation, meaning that most plants can operate at lessthan their full capacity if required (at ‘ part load’ ), and theamount of fuel burned andthe electricity output can be varied from hour to hour to foll ow changing demand.Fuel is fed in constantly during the operation.

A second attribute valuable for generating companies is that coal can be boughtfrom a wide variety of suppliers and transported by ship and rail. What is more, thecoal can be stockpiled so there is a reserve in case of need.

Coal, however, produces the most carbon dioxide emissions of all generatingtypes, along with other harmful emissions such as sulphur dioxide, nitrogen oxides,mercury and parti culates. New coal plants will include additional systems to reducemost of thoseemissions, and simil ar cleanup systemshave been ‘ backfitted’ to exist-ing stations. However, they do affect the economics of running the plant, as theyreduceoperating efficiency, meaning that more coal hasto beburned to produceeach

unit of electricity.

2.3.2 Gas

TheUK generatorsbegan building gas-fired turbinesin the1990s, andgasnow meetsnearly half of UK electricity demand. Gas and compressed air are combusted directlyinto a turbine, which works on the same principle as a steam turbine, connecteddirectly to a generator. The gas turbine is much more eff icient than a steam turbine,both because it is operating at a much higher temperature and because there is no

‘ steam raising’ where energy can be lost. Gas turbines can be started up and shutdown, if necessary, over aperiod of several hoursto less than an hour, so they can bebrought onlineto meet peak loads, andin fact someareused specifically to meet peakloads, being started up and shut down twice each day. They have been less flexiblethan coal plants oncein operation, although more recent versions are being designed



The electr ici ty system 19

to operate more economically at part-l oad, but they can be sized at between one andseveral hundred megawatts, so they can allow mid-scale additions or removals ofcapacity from the system. They require constant fuel feed-in during operation.

In recent years so-called ‘ combined cycle’ gas-fired plants have been used. Theseplants make use of the ‘ waste’ heat f rom a gas turbine. Although it i s referred to aswaste, becausetheconventional gas turbineburnsgasat such ahigh temperature(theturbine inlet temperature is around 1000 ◦C), the gas being expelled is hot enoughto produce steam that, in its turn, can be used in a steam turbine. This dramaticallyincreases thepower availablefrom theplant. Thereis somelossof flexibility in oper-ation as there are more processes to manage, so combined cycle plants are generallyused in constant operation (known as base load ).

In recent years other fuels have been used to produce thermal power, i ncludingbiomass (e.g. wood and straw), or methane gas produced from sewage or abstracted

from landfi ll .

2.3.3 Nuclear

Nuclear stations vary in size but some are among the largest power stations on thegrid –Sizewell B, thelargest, isratedat 1 400MW –sothey provideanenormousinputof power. What ismore, they can providethat power over al ong period, asf uel loadingisinfrequent. They canoperatefor oneor two yearsbetween shutdowns, dependingontheoperating regime, and at very predictablecost as thefuel is arelatively minor part

of their operating cost. But they are extremely inflexible in operation. Although it ispossible in somecases to vary their output slightly, it is technically and economicallyundesirable. It is a favourable option in countries where there are energy-intensiveindustries with continuous high demand, such as Sweden and Finland, or wherethere are neighbouring markets where oversupply can be exported, as happens withFrance’slargenuclear capacity. TheUK hasaround20per cent nuclear onthesystem.Nuclear plants are also the slowest option to bring into operation, as they can takeseveral days to bring up to full power.

Thermal and nuclear generators include l arge rotating machinery (the turbine)

that produces the electricity; in the context of the grid, this means they add stabilityto theoperation. In theory, electricity fl owsthrough thegrid at asteady frequency of50 Hz and maintainsa constant voltage. In practice, these parameters are maintainedthanks to painstaking management and balancing actions, and by ensuring that, asfar as possible, all the generators and loadsconnected to thesystem tend to return tothat steady stateafter any disturbance. In practice, theflow of electricity isfrequentlychanged, not just by new loads or generators connecting to or disconnecting fromthe grid but also by any number of disturbances on various scales. The result can besudden changes in frequency or voltage and they can affect large power equipment

as much as domestic-scale appliances such as PCs (computer shopssell sockets withbuilt-in protection against such ‘ spikes’ and disturbances in the supply). This issueof ‘ power quality’ is discussed in Chapter 8.

Power plants are often set up to detach automatically from the grid if there arelarge disturbances in thegrid supply, as a self-protection measure. Disconnection, in



20 Local energy

turn, creates a new disturbance, so faults can propagate and the effect can spread.However, the heavy rotating machinery in thermal and nuclear plants has a certainamount of momentum that wi ll carry them through grid disturbances (this is knownas fault r ide-through ) and this adds stabil ity to the grid as a whole.

2.3.4 Hydropower

Hydropower has among thefastest responses in thesystem. There is no fuel to burn,so as long as there is water in the associated reservoir or river it is only a matterof opening the gates within the plant, so water passes through the turbines, andgeneration is available within seconds to minutes. This is the attribute employed bypumped-storage plants: water is pumped uphill to a reservoir at times when there isexcess power available on the grid, and released to generate at peak times. However,

from a ‘ fuel’ point of view, over the year there are periods when water levels are lowand this can force so-called run-of-river plants – those where there is no reservoir – out of operation. Operators of hydro plants with water stored in reservoirs have todecide whether to use their stored water to generate now, or save it for a later datewhen it may be needed more.

Thisisamainly financial decisioninamixedsystemsuchastheUK’s, but far moreimportant in countries such as Norway that have a very high reliance on hydropower.Elsewhere it has led to accusations that hydro companies are ‘ gaming’ the market – holding back water supplies unnecessari ly to exacerbate a power shortage and force

up the price of electricity.

2.3.5 Wind power

Wind power now provides a small proportion of the UK’s power. Since it is availableonly when the wind is blowing, it is impossible to guarantee that power is availablewhen it is most needed (at peak times, for example). Thepower has to beaccepted onto thegrid whenever thewind blows, and other forms of generation haveto becycledupor down to adapt. IntheUK thisiseasily acceptedontothegrid, aswindpenetration

is very low and wind forecasting is very good, not least because in the current marketdecisions on how much power is availableand required are calculated within an hourof dispatch, and over such timetables short-term prediction is extremely reliable.

Wind farmscan offer fast response in somecircumstances: if a large wind farm isin operation and expected to be so for the next hour, it can provide an extremely fastresponse to changes in demand on the grid over the short term. In that case thewindfarm would begradually ‘ turned down’ in advanceof an expected peak by alteringthepitch of the blades so less wind is ‘ caught’ , and then turned up quickly by returningtheblades to maximum pitch, then kept there as slower-response forms of generation

such as coal stations are brought up to power.However, predicting whether the wind farm will operate over days, weeks ormonths is progressively less reliable. Recent work has confirmed that there is almostnever a situation when there is no wind blowing anywhere in the UK, but there arefrequent periods when smaller regions have no wind. As a result, there is a limit




to how much conventional generation they can replace on the system and, althoughestimatesvary dependingonother grid characteristics, itsvaluemay begin to decreaseabove 10 to 20 per cent wind. In recent years the National Grid has estimated that,although the natural variabil ity of wind power would eventually add to the cost ofoperating the UK system, the technical eff ect of the variability is insignificant up toat least 10 per cent wind penetration, as the variability is barely detectable withinthe natural variability of the mixed system as a whole. Grid stability may also beaffected at high wind penetration because wind is generally designed to disconnectin the event of a fault, although the ‘ fault ride-through’ of conventional generationcan now be replicated using electronic systems.

2.3.6 Coping with grid vari ation

The UK’s power system is well placed to cope with all these different sources, andindeed their diversity gives system operators a useful set of different options to meetthe system’s varying needs.

Power plants do not operate continuously. As we have seen, some are designedto operate only during peak periods and are expected to shut down twicea day. Thereare other types of planned closure: they have to be shut down at regular intervals toallow maintenancework to becarried out, for example. Maintenanceshutdownsvaryin frequency and length depending on thetypeof plant involved, but can vary from afew daysto afew weeksif thereismajor work to bedone. Most of thesemaintenance

‘ outages’ are currently planned for the low-demand periods in the summer, whichalso means that the total amount of electricity available to the system at such ti mesis much lower. This can mean demand surges are difficult to meet, even though thesurgeisstill muchlower than thewinter peak: thiswasthecasein summer 2006, whendemand for air conditioning during July’s hot weather meant thesystem operator hadto send out an emergency call for more power.

Aswell asplannedoutages, plantscansuffer unplannedshutdownsfor anumber ofreasons. They may beshut down asaself-protectionmeasureif therearedisturbanceson the grid that could affect the power station. Alternatively, problems inside the

power station or in the switchyard (which connects the station to the power lines)could shut theplant down.

As well as plants coming in and out of service, they also have different operatingcharacteristicsdepending on local conditions. Wind is themost obviously aff ected: itdoesnot generateif thewind doesnot blow. But it isnot theonly plant whereweatherhas an important role to play. Gas turbines, for example, are greatly affected by theexternal temperature. They work by burning natural gas or a fuel oil with a fixedvolumetric rateof compressed air, so aturbine’spower output isdirectly proportionalto the mass rate of the compressed air that enters the system. When the weather

gets hotter, the mass rate of the compressed air decreases because warmer air has alower density, so theturbine’spower output decreases. Theeff ect ismarked when thesurrounding air temperature is above 30 ◦C. If surrounding temperatures are above40 ◦C – unli kely in the UK but common in other countries – power supplied can dropby 35 per cent.



22 Local energy

This characteristic of combustion turbines is very unattractive f or the powerproducers because they have less power to sell, just when the i ncrease i n outsidetemperature creates more power demand for air conditioning and the market priceofpower is also high.

The weather may also have indirect effects. Power stations that abstract waterfrom neighbouring water sources suchasrivers to provide cooling arestrictly limitedin theheat they can release to theriver. In hot weather and especially at times of lowriver flow, when the river’s ambient temperature is high, it may not be possible toadd any heat at all without breaching the upper permissible limit. In 2004 and 2007several of France’s largepower stations were unable to operate for this reason.

Similar temperature-dependent effects are felt throughout thesystem. In just twoexamples, the capacity of the transmission line alters depending on the temperaturebecause the high-tension cables expand and sag more at higher temperatures – a

400 kV line currently has a capacity of 2 190 MVA in summer and 2 720 MVA inwinter.

Faults on the grid can also i nterrupt supply. Extreme weather events also placestressesonthesystem, andNational Grid identifieshigh winds(in excessof 40 knots),highiceloads, low temperatures(andconsequent fogandicing), heavy rain, lightningand salt pollution as likely to contribute to weather-related faults. Managing thesefaults requires investment in the high-voltagetransmission system.

Lightning strikes are relatively frequent, and their effect can be partl y designedout by using autoreclosers, which can trip and then reclose either automatically or

on instructions from the control room. Some protection is built in. For example, thewest coast is subject to salt pollution from high winds. Protection takes the form of aspray that is released when thesalt burden gets too big.

Electricity is bought and sold in the UK through a system known as the BritishElectricity Trading and Transmission A rrangements (BETTA). As National Gridexplains, thearrangementsarebased onbilateral tradingamonggenerators, suppliers,traders and customers, in any paired combination, across a series of markets operat-ing on a rolli ng half -hourly basis, which means that it is managed in half -hourly timeslots. Electricity can bebought and sold up to an hour beforethestart of thehalf-hour

in question – known as gate closure . There are three stages to the wholesale market.The bilateral-contract markets for firm delivery of electricity allow contracts to

be signed from a long time – a year or more – in advance of dispatch (i.e. the actualpoint in timeat which electricity is generated and consumed) to as close as 24 hoursahead of real time. The markets provide the opportunity for a seller (generator) andbuyer (supplier) to enter i nto contracts to deliver or take delivery of, on a specif ieddate, a given quantity of electricity at an agreed price.

This includes long-term contracts between the generators and the large users orretailers. Thesecontractsmay includespecial conditionsthat givegeneratorsflexibil -

ity in return for a discount. Buyers that are willing to accept ‘interruptible’ contracts,for example, accept a risk that, if demand exceeds supply, they will stop receivingelectricity to reduce demand. Contracts may also take account of the time at whichelectricity isused: fillingdemandoutsidepeak periodsismuchcheaper, so companieswho are able to draw most of their power at other times can negotiate a discount, in




much thesameway as theEconomy 7 domestic tariff offered cheaper electricity overthe nighttime period to encourage users to run washing machines, dishwashers, etc.during low load times when power was cheaper.

There is also a short-term market, sometimes known as the spot market , whichoperates through power exchanges. These are screen-based exchanges whereby par-ticipants trade a series of standardized blocks of electricity (e.g. the delivery of aspecified number of units over a specified period of the next day).

Power exchanges enable generators and buyers to fine-tune their rolling half-hour trade contract positions as their own demand and supply forecasts becomemoreaccurate as real time is approached. In theory they can operate over long timescalesof up to a year but in practice most trading is done in the last 24 hours before gateclosure as companies check their supply and demand positions.

Thethird timeframeoperatesfrombetweengateclosureandthesecond-by-second

dispatch of electricity on to the system. It is known as the balancing market and ismanaged by National Grid in its role as Great Bri tain System Operator (GBSO). I texists to ensure that supply and demand can be continuously matched or balancedin real time. The mechanism is operated with the system operator acting as the solecounterparty to all transactions.

This market is required because demand and supply on the system are changingall thetime, and certainly in timescales shorter than half an hour. Some of thebiggestchanges happen when domestic consumers are all watching the sameTV programmeand there are commercial breaks. This kind of ‘ TV pickup’ typically means that

people leaving their sofas to turn on the kettle during the mid-programme break forCoronation Street can increase demand by 800 MW. The biggest TV pickup everrecorded wason4 July 1990following asemifinal World Cup football gamebetweenEngland and Germany. The game went to penalties, and, within minutes of theirfinishing, demand rose by 2 800 MW.

The high-voltagegrid that National Grid manages reaches very few of the coun-try’s individual users. But that does not mean National Grid can leave questions ofload to theDNOs. Changesin consumption requirethegrid to bring extrapower ontothe system and it can be very sensitive. On a summer’s day a shift from clear sky to

thick cloud adds an additional 5 per cent demand – requiring power from, say, four500 MW gensets. An increase in wind adds 2 per cent to winter and 0.7 per cent tosummer demand.

That means that, although theDNOseach supply an area with around atwelfth ofthe UK users, National Grid has to know about the load in far moredetail. To assessdemand it looks at the substation level and the individual grid supply points, whichmay supply a small town or half a larger city. That has a resolution of a 5–15-mileradius.

As l ocal temperatures change and more extreme weather events occur, human

behaviour changes and the electricity supply system has to be able to respond. Onebig effect in the long term wil l be from additional air-conditi oning loads, which wil ladd to both peak and 24-hour demand.

National Grid saw growth of 5 per cent in air conditioning in the commercialsector in thefive years to 2002 and expects to see a further 6 per cent in the period to



24 Local energy

2010. Thereisalso likely to bearisein theresidential market. Often overlooked isthata 1 per cent risein external temperaturesincreases therequirement for refrigeration – it increases cold-appliance consumption by 1.8 per cent, and some appliances doubletheir energy use when external temperatures increase from 18 ◦Cto26 ◦C.

2.4 The balancing market

As demand and supply fluctuate, National Grid manages the system through anothermarket known as the balancing mar ket .

To this end, all market participants are required to inform National Grid of theirnet physical flowsin all theforward markets in so-called ini tial physical notifi cations (IPNs), submitted at 11 a.m. at the day-ahead stage. These are continually updated

until gate closure, when they become the final physical notifications (FPNs).Power flows are metered in real time to determine the actual quantiti es of elec-

tricity produced and consumed at each l ocation. The magnitude of any imbalancebetween participants’ contractual positions (asnotified at gate closure) and theactualphysical flow is then determined.

National Grid hasoffersto supply electricity intothebalancingmarket that can bemade available at extremely short timescales. This may behydropower, for example,from the pumped-storage plants at Dinorwig and Ffestiniogg in Wales, which takeadvantage of low electricity demand and low price period to pump water to a high

reservoir, which can then be released to generate power when required. Such plantsarenet energy usersoverall, but arean important tool in matchingdemandandsupply.Other sources of short-notice power may be ‘ spinning reserve’ , essentially thermalstationsoperating in asimilar way to acar in neutral. National Grid also hasoffersforshort-notice demand reduction, such as the interruptible contracts mentioned above.Insomecasesthesystemmay havetoomuchelectricity available. Inthat caseNationalGrid has offers in the balancing market f rom generators who will cut off their plant.

The cost of buying or laying off power, or paying for demand reductions, variesdepending on how far out of balance the system is, and on the cost of power during

the half-hour timeslot concerned, and is known as the system buy price (SBP) orsystem sell price (SSP) depending whether thesystemneedsto add or subtract power.The cost is charged back to suppli ers whose physical supply was either more or lessthan they had contracted for and informed National Grid in their FPNs. This was animportant change from the previous market structure, and was designed specif icallyto encourageparticipantsto match closely their demand and supply. Sincethemarketstructurewasi ntroducedtheamount of power bought andsold onthebalancingmarkethas decreased, meeting one objective in the market design. However, in penalizinggenerators who do not match their supply and demand accurately, it takes in those

generators whose supply is partly beyond their control. This includes companiesoperating wind farms, whose abil ity to predict is limited, but it also includes CHPplant operators, for whom theelectricity available to besold may vary depending onhow muchheat issold. Asthegovernment wishesto encourageboth windandCHP, itsposition with regard to BETTA and thebalancing market is under discussion. Partial




protection from the costs of being out of balance i s most often gained at presentfrom joining other generators and acting as a single trader: this should mean theunpredictabil ity of thegroup is less than that of each individual member. Companiesknown as consolidators offer this service.

TheBalancing andSettlement Code(BSC) providestheframework within whichparti cipantscomply with thebalancing mechanism and settl ement process. TheBSCis administered by a non-profit-making entity called Elexon.

2.5 Distribution network operators

The distribution companies (which may be a subsidiary of a util ity with generatingand supply businesses) operate in defined areas (see Panel 2.1).

The companies hold separate licences for each area and are governed by theterms of their distri bution licences. They are under a statutory duty to connect anycustomer requiring electricity within a defined area and to maintain that connec-tion and they have other statutory duties to f acil itate competition in generation andsupply, to develop and maintain an eff icient, coordinated and economical system ofdistribution and to benondiscriminatory in all practices.

Embedded gener ation refersto thefact that theserelatively small sourcesof powerare ‘ embedded’ within the low-voltage network, rather than supplying power f romthe high-voltage grid through a grid supply point , or substation. It is at the DNO

level that most of thenetwork development must takeplacethat will allow embeddedgeneration to becomea significant component of the electricity supply network, andthese extensive changes will be required in both company structure and fi nancing,and in the grid itself.

The structure of the DNOs is not very friendly towards embedded generationbecause they are ‘ regulated’ businesses. Because they do not operate under com-petitive pressure, their costs and profits are examined by Ofgem to ensure that theirfinancial returns are reasonable. That has implicationsfor theway theDNOsmanagetheir business. Since the DNOs are monopolies within their own area, the regulator

(in this case Ofgem) tries to mimic the effect of competition on the business. EachDNO can manageits own operating methodsand capital structure, and theregulatorprovides for a return on the capital invested and eff icient operating costs, subject tocertain outputs being achieved.

Theamount of incomethat DNOsareallowed to receiveisset by theregulator, anddepends on how much work has to bedoneto maintain and extend theinfrastructure,and how much profit is allowed by the regulator. The DNOs can make additionalprofit by reducing their costs, provided they meet their commitments to theregulatoron maintenance, network development and other ‘ hardware’ operations, as well as

a variety of targets on customer service. Reducing costs may mean an improvementin operations, or in some cases can be the result of introducing new technologiesthat make a step change in eff iciency. In company and investor terms, the DNOs arelow-risk businesses. They have well -determined income and expenditure for severalyears, as work programmes and pricing are set on a five-yearly basis with Ofgem,



26 Local energy

so investors have a reliable return. But the returns are relatively low – high returnsaccompany high risk – and will continue to be limited by the regulator, so theDNOmust take a very cautious approach to new investment.

To encompass the changes that will be required to include significant embeddedgeneration, however, thenatureof theDNOs’ networks must becompletely changed.This is clearly a high-risk activi ty, as it is not clear where embedded generation maybeadded to the system, what type of generation will beadded, or how much will beused. No DNO wants to take the gamble of upgrading part of its network to acceptembedded generationunder thecurrent regulatory framework because, if theexpectedgenerationdoesnot appear aspredicted, theinvestment will bewasted – andtheDNOis unlikely to be allowed to charge the cost back to its customers.

The changes that must be made to the DNO’s local grid are extensive. As wehave seen, on the high-voltage network, National Grid balances varying input f rom

generatorsastheir power plantsstart upandshut down, with demand from thebuyersthat alters throughout the day and across the country. It is managed with constantfeedback from all parts of thesystem. The low-voltage network is much simpler. It isdesigned to accept power from the local substation and transmit it to domestic users.In some areas there are links between neighbouring areas, which allows flow to betransferred if, for example, work isrequired onthesystem. But thesystem isdesignedon the assumption that flow will be one way and will be sized for the likely load, sothat, while the supply along the high street will be through relatively high-capacitycomponents to provide power for commercial premises, residential street wires will

besmaller and the supply to remote, single premises smaller still.The effect of this is twofold. First, day-to-day operation on the network is carried

out on the assumption that flow is one way, and this can be reflected in operations assimple as working on a single-network connection – once the connection is broken amaintenance technician assumes there is no possibil ity of power f rom the householdside. The other eff ect i s on the network capacity. Remote areas are often the mostattractive as potential sites for embedded generation, but, if the existing connectionat that point has very low capacity, the cost of upgrading it may make the embeddedgeneration uneconomic.

2.6 Regulating the markets

Ofgem is theorganization that regulates theUK’s energy markets and thecompaniesinvolved in them. The way in which it regulates varies depending on the type ofactivi ty involved and the market structure.

For functions where there is a competitive market, Ofgem has no role in settingprices: i t i s assumed that the effect of the market will bethat customers can seek out

the most economic product. So, in the generation and retail market, Ofgem ensuresthat themarket isoperating eff ectively, licensescompaniesto tradewithin themarketand helpsarbitrate disputes.

In areas where competition is not possible, such as thedistribution and transmis-sion networks, Ofgem scrutinizes the monopoly suppli ers and sets how much return




on their investment the companies are all owed to make, and how much they areallowed to charge to customers. As part of this process it examines what investmentis required to maintain or extend each network and what the operating costs are. Itthen sets a broad range of performance standards for companies. Provided the com-panies meet their performance standards and are within their price limits, they canmake eff iciencies in operation and improve their level of profits, as an incentive.

The allowed prices and performance targets are set in five-yearly distributionprice control reviews and it is at this point that theoperatorsand theregulator decideon likely major developments in the networks, such as developing them to acceptembedded generation, and how these developments should be funded at reasonablecost to users and retail customers. For example, the distribution pricecontrol reviewthat came into effect on 1 A pril 2005 included a specific i ncentive mechanism f orthe connection of generation to distribution networks. There were two additional

incentive mechanisms – the Innovation Funding Incentive and Registered PowerZones – that encourage innovation in the connection and operation of distributedgeneration (DG). An additional development changed the basis on which generatorspay to connect and use the distribution system.

Ofgem also administers some of the government’s support and regulationschemes, including the Renewables Obligation and exemptions from the ClimateChange Levy.

Ofgem itself describes its first priority as ‘ protecting consumers’ , and its otherpriorities as helping secure Britain’s energy supplies by promoting competitive gas

and electricity markets, and regulating so that there i s adequate i nvestment in thenetworks helping gas and electricity markets and industry achieve environmentalimprovements as eff iciently as possible, taking account of the needs of vulnerablecustomers, parti cularly older people, thosewith disabil itiesandthoseonlow incomes.

Ofgem is governed by an authority, consisting of a chief executive and manag-ing directors, along with nonexecutive members who bring various other types ofexperience to the authority.

The authority determines strategy, takes all major decisions and sets policypriorities.

Ofgem is funded by the energy companies who are licensed to run the gas andelectricity infrastructure.



Chapter 3 The heat connection and cogeneration

So-called ground-source heat allows heat from beneath the earth’s surface to be abstracted.



30 Local energy

So far we have discussed the UK’s electricity supply industry, how it works and itsmajor players, and how embedded generation fits into that system.

However, this refers entirely to the electricity we produceand use, and it shouldnot be overlooked that this is only part of theUK’s energy industry.

3.1 Energy use in the UK

When the UK’s Department for Business, Enterprise and Regulatory Reform(BERR) – formerly the Department of Trade and Industry (DTI) – publishes i tsregular ‘ Digest of UK Energy Statistics’ (‘ DUK ES’ ), i t examines how much energyin the form of oil, gas, coal, etc. has been imported into the UK, and how much hasbeen produced here, again as gas or oil (from the North Sea) or coal, but also f rom

home-grown sources such as wind power, hydropower, nuclear power and smallersources such as waste gases from landfill and energy crops.

DUK ES figures also examine the fate of these primary energy sources. Some ofthegas, oil andcoal isused in generatingstationsto produceelectricity, but even whenadded to the hydro, nuclear and wind power generated domestically this representsonly around 40 per cent of the total energy used. A large part of the oil import is usedas petroleum for transport, but oil, gas and coal are also used to provideheat, and thisis as important a part of the UK’s energy balance as is the electricity industry.

Gas is a very important heat provider, for example. The UK’s domestic gas net-work is not as extensive as that for electricity but nevertheless has been expandingsince the1960sand now serves nearly 20 mil lion domestic users – more than 80 percent of the whole. This network is almost entirely dedicated to heating and cookingand there is also a market in gas canisters for those who do not have access to thenetwork. A high-pressure gas network delivers gas to large-scale industrial users toprovide process heat to industrial customers, as well as to the gas-fired electricitygenerators.

Theheat and electricity markets are intimately connected, becausesomefuelsareused for both purposes and, equally, because electricity is also used to provide heat,although domestically electric space or water heating is often the most expensive

option.

3.2 Support for heat and power

Theheat f actor has seldom received much notice from UK policymakers, despite itsimportance and the efforts of, for example, advocates of renewable energy and CHP,whichoften provideenergy asheat. Thelargest support programmesfor embedded orrenewable energy arein practiceavailable only for renewable-sourced electricity. The

largest, theRenewables Obligation, requires electricity suppliers to sourcea growingproportion of the electricity they sell (the ‘ aspiration’ is to reach 20 per cent of theelectricity suppli ed by 2020) from renewable sources or pay a fine.

Efforts to persuade the government to introduce a similar ‘ heat obligation’ havefallen on stony ground, as the government has argued that the market is too complex



The heat connection and cogeneration 31

and there is no small group of providers, similar to theelectricity supply companies,on whom the obligation could be placed.

Why is heat an important issue for embedded generation? There are two rea-sons. Of more direct concern is that, as we have seen (Chapter 1), heat and powerare often produced together. Sometimes this is deliberately planned, with a use foreach product, in the CHP plants we have discussed, and sometimes the heat is sim-ply regarded as a waste product that must be dissipated in a way that does notcause problems elsewhere. The second, broader, reason is one of poli cy. Embed-ded generation i s encouraged because it allows energy to be generated as close aspossible to where it is used, reducing the losses incurred in transporting it long dis-tances and giving customers a far better understanding of how much energy they useand why.

Together, this should greatly improve the efficiency of our energy use, both

because there are fewer losses in the system and because greater customer under-standing is seen as likely eventually to translate into lower consumption. This canhardly happen effectively i f the energy being used for heat is left out of theequation.

Because policies on renewable and small-scale energy have focused almostentirely on electricity, hugeopportunities to switch to different forms of energy pro-duction and, in the process, reduce the energy – and carbon dioxide – bill of thecountry as a whole have been lost.

3.3 Energy crops

Take for example the opportunities to plant and sell energy crops. These crops aregrown not for food, but to provideenergy. There are a number of reasons why energycrops may be encouraged. They can be combusted to provide electricity or heat inpreference to fossil fuels such as coal and gas. Burning theenergy cropsdoes releasecarbon dioxide into the atmosphere, but it is carbon that was absorbed by the cropwhile it was growing. Over the cycle the carbon balance is not zero, as there aresome emissions from processing and transporting the crop and so forth, but thetotal

emissions are far smaller than they would be if coal, oil or gas were used. Energycropsare also interesting as a new opportunity for farmers and agriculturein general:it is a relatively small step from providing energy crops to using energy crops toprovide heat and/or power for local businesses.

The government has attempted to promote energy crops but was most interestedin using them to generate electricity, and at theturn of thecentury it invested millionsin an experimental power station that would use a new process called gasification asthebasis of awood-fuelled power station. TheNational Farmers’ Union joined otherwood-energy organizationsto arguethat theproject wastooambitious: thetechnology

was unproven, while the wi llow fuel would require farmers to take a seven-yeargamble on replacing arable land with coppice. Opponents argued that developingboth an energy-crop industry and a new generating plant together introduced toomany uncertaintiesandit would bebetter to useenergy cropsin wood-fuelled heatingboilers, replacing gas- or oil -fired boilers, unti l the industry was more developed.



32 Local energy

But there was a long-term support mechanism already in place for electricity fromrenewables, so theproject went ahead but washalted within ayear or two by technicalproblems, setting back development of embedded generation from energy crops byseveral years.

3.4 Domestic heating

Domestic heating is another example. Gas is currently regarded as one of the mostefficient ways of heating the average domestic property in the UK, but althoughthe gas network reaches more than 80 per cent of properties, that sti ll leaves up to5 million properties without access to gas. Those properties may use oil or electricityto meet their heating needs– both expensive options. There are small heat-generating

technologies that can be used to fulfil the need for space heating or hot water, such asground-source heating and solar water heating. Neither provides electricity, but bothdisplaceelectricity or primary fuels suchasoil, and they generatetheheat directly onsite with no transport requirements. Although individual projects of both types canapply for partial grants, thefunding available to support these and other heat projectsis very limited i n extent and in the application window, being allocated every fewyears as part of the government departmental budget. The Renewables Obligation,which supports power projects, however, is expected to provide a subsidy for eachunit of electricity generated unti l at least 2027.

3.5 Combined heat and power

The disparity is revealed most clearly in projects designed as highly eff icient CHPplants. Well-designed CHP where there is an adjacent heat requirement to make useof otherwi se ‘ waste’ heat can raise efficiencies dramatically, increasing the overallefficiency of a steam turbine from less than 40 per cent to nearer 90 per cent, forexample. This is clearly beneficial and poli cymakers have argued that CHP shouldbemuch more widely employed, with a government target of 10 GW.

Inpractice, CHPisoftenemployedwhereheat isthe‘ premiumproduct’. Industrialprocesses where there is a high and continuous requirement for heat, such as papermanufacturing, havegenerally installed their ownboilersor turbineson siteto provideheat directly andtheseprojectscan beaslargeastensof megawatts. At asmaller scale,commercial or officebuildingshave acontinuous demand for heat to warm buildingsin winter and to drive chillers or air coolers in summer, which can be provided by anon-site CHP at the kilowatt level. Public buildings such as sports centres, hospitalsand schools also clearly have a very large heat demand. In all these cases, heat wouldbe the major product of the CHP plant, with electricity produced as a by-product

either for use on site, or to be sold back to thelocal electricity company.CHP clearly offers huge potential for i mproving energy eff iciency, yet the gov-ernment’s10GW target hasbeen receding. Thepolicy focuson supportingembeddedgenerationof electricity isonereason, andso isaUK electricity market that penalizesgeneration that is unpredictable.




CHPoperatorsf aceconsiderableburdensif they want to supply their electricity tothegrid. In most casestheir output would besold to an electricity retail company, sincesupplying electricity directly to customers requires the generator to meet stringentconditions to qualify for a licence and sign up to the BSC, the agreement underwhich electricity companies settletheir contractsandreconcilethem with theamountof electricity physically delivered. These administrative measures are generally toocostly for companies with relatively small amounts of electricity to sell, and this isusually the case for CHP plant operators, since for most CHP the heat is the mostimportant product and the amount of electricity produced is governed by the needsof the heat customer.

The supply of electricity can be variable and at times of very high heat demandthe electricity production may be very low. This means first that under the BETTAelectricity market structure CHP plant owners would be in danger of being ‘out of

balance’ on contracts to supply electricity, supplying either too much or too little totheir customers, andwould thereforebeat risk of beingcharged balancingcostsby theNational Grid. Selling to an electricity retailer meansthis risk is somewhat reduced,as theretailer will betrading electricity constantly and will have a variety of sourcesof power and demand reduction, so i t can balance its own supply and demand andwill seldom beout of balanceon its contracts. This makes therisk moremanageablebut it does not remove i t, and of course the electricity retail company has to bearthe costs of managing the risk. That is reflected in the price paid to the CHP plantowner for its exported electricity: slightly discounted if the potential exports are well

defined and largely guaranteed, but much lower if the export is less predictable.The cost of exporting power into the market was recognized by the government

when BETTA was introduced and in response it allowed for companies known asconsolidators , whowould bring together supply fromanumber of smaller generators.Several such companies exist but they have found trading conditions difficult in amarket dominated by a few major electricity-generation and retail companies.

The result of this penalty on unpredictability is that i t is diff icult to obtain a goodprice for electricity being exported from CHP. There is an exception, if the CHPplant is fuelled by biomass and is thereforeproviding renewable energy. This means

that it receives a subsidy vi a the Renewables Obligation for each unit of electricityproduced. Once again, however, this is not free of charge. Qualifying the CHP plantasa renewable generator and provingthat theelectricity qualifies for theRenewablesObligation again involve significant and continuing administration costs, which insome cases have been high enough to convince operators that the available subsidyfrom small export does not outweigh the cost of qualifying.

Calculatingthecost andbenefit of beingable to export electricity, and theincomeavailable from doingso, more and more potential CHPoperatorsseem to bedecidingthat the scale falls on the cost side. The added expense of producing and exporting

electricity is not justifi ed by the price available for the electricity, and operators aremore likely to use a very simple boiler with a relatively low capital cost but lowerpotential eff iciency over its lifetime.

Heat advocatesarguethat thisproblemcould besolved if theproductionof heat athigh-eff iciency sources such as CHP or from renewable fuels received an additional



34 Local energy

subsidy. As i t stands, many potential embedded generation projects that could begenerating heat and electricity at very high efficiency have been cancelled in favourof traditional boilers and electricity supplies that are much less eff icient over theirlifetimes and offer the electricity system none of the benefits of DG, relying insteadon electricity from the grid.

3.6 Heat technologies

What aretheheat technologiesthat could beused in theUK to reducetherequirementfor oil or cut electricity usage?

3.6.1 Biomass

Burning coal or oil to provide heat and electricity depletes a nonrenewable resourceand produces carbon dioxide. But other fuels can be substituted for these fossil fuelsthat arecarbon-neutral over their lifecycle. They arearenewablesourceof energy thatthe UK’s Department for Environment, Food and Rural Aff airs (DEFRA) describesas ‘ offering a new opportunity for rural areas’ .

Five dedicated types of biomass are at various stages of development.Willow and miscanthus are at the stage of commercial availabil ity and they are

being grown now, and there are now several thousand hectares of these crops undercultivation – mostly willow, but some miscanthus.

Willow (and sometimes poplar) is planted as short-rotation coppice (SRC) – densely planted, high-yielding varieties where the rootstock or stools remain in theground to produce new shoots after harvesting. Wil low is cut back i n the first yearand then harvested every threeto four years. A plantation could beviablefor up to 30years beforereplanting becomesnecessary, although thisdependson theproductivityof thestools.

Miscanthus is a woody, perennial, rhizomatous grass. On most sites it will takearoundtwo yearsto producea stable crop. After that timeit can beharvested annuallyfor at least 15 years. Miscanthus is not native to the UK – it comes from South

East Asia – and the current l ines being planted in the UK are sterile hybrids, whichcannot seed.

Work on using willow and miscanthushas been under way for some timeand thetwo cropsarebeing promoted by DEFRA, with grantsavailableboth for planting andfor developing producer groups.

Reed canary grass may be next in li ne for development. It is native to the UK andit is already planted as game cover. In Scandinavia, reed canary grass is being usedboth as an energy crop and to produce fibre (for paper making, for example). So far,canary grass is a rather less attractive crop than willow or miscanthus. It has a lower

yield and a shorter productive life, and there are potential problems in removing itbecause it is spread both by rhizome and through seed dispersal.Switchgrass – also known as prairie grass – is a native of the USA, where

it is the most interesting energy grass. In the UK a R& D programme has beenstarted.




Described as ‘ having potential, but still furthest from the market’ , the finalenergy crop under investigation is Ar undo donax – known variously as bamboo reed,Danubian reed, donax cane, giant reed, Italian reed, Spanish reed and Provence cane.Until now, this plant’s main claim to fame has been that i t i s the source of reeds forwoodwind instruments. It offers high yi eld, but there are mechanical and technicalproblems to beovercome.

All the new energy cropscould be grown on set-asideland.Biomass may also refer to various types of wood waste, such as bark chippings,

or recycled wood from urban areas. This type of recycled wood, however, has to bevery carefully selected, as if it is contaminated it will come under EU directives onwaste incinerationandmust beburned in adedicated andqualified incinerationplant.

3.6.2 Solar water heating Energy from the sun warms water left in a bucket on a sunny day. In fact, most oftheextra warmth in the water does not come directly f rom the sun but via the bucketitself: the sun heats up the bucket, which in turn heats the water. A black bucketwill heat thewater up faster because it is better at trapping theheat from thesun andpassing it on. This is a ‘ passive’ system – it has no moving parts and does not requireelectricity or other external power.

The simplest solar hot-water systems, also known as solar thermal systems (and not to be confused with solar photovoltaic systems, which produce electric-

ity directly – see Chapter 4) are pretty close to being black buckets. These ‘ batch’collectors are black-coated containers or tanks that are housed in an insulated metalbox and covered with a solar glass or glazing material, and are larger than buckets.Usually batch collectors are filled with pressurized water.

Batch collectors operate without the need of ‘ active’ pumps or controls, so theydon’t need much maintenance. Also, because they don’t have many parts, they canbe the cheapest system to purchase or build. But their effectiveness is limited, andthey are at risk of freezing, so during cold weather they may have to be drained.

The efficiency of the collectors was increased by using flat plates, usually made

out of a set of parallel copper pipes on a thin copper ‘ fin’ that runs the length ofthe tubes. The ‘ fins’ increase the heat absorption. Water, or one of various otherkinds of fluid that may have better heat-transfer characteristics or are not prone tofreezing, i s circulated through the tubes. The solar absorber plate is then installed inan aluminium-framed box surrounded on the bottom and sides with insulation andcovered with tempered glass. Flat-plate solar panels require a constant f low of fluidthrough the panels.

There are two types of panel setup. Open-loop systems directly heat the water.Circulation of the fl uid through the solar collector is accomplished via a small pump

mounted on a solar storage tank. The solar pump is activated by a differential ther-mostat controll er that senses when heat is available in the solar collectors. Thesolarstorage tank connects to the existing hot-water heater and feeds the preheated solarwater intothegasor electric hot-water heater ashot water isused. Thesolar collectorsand feed lines are protected from freezing by automatic drain-down controls, which



36 Local energy

allow the water in the pipes and panels to fall safely back out of the solar collectorsand feed pipes. These types of system get the description ‘ open-loop’ because theenergy-collection loop is not separate from therest of the hot-water system – i.e. it is‘ open’ to using the samewater.

Activesolar hot-water heatingsystemscan also employ theuseof heat exchangersthat circulate heat-exchange fluids through the panels and feed pipes. This type ofsystem is call ed a closed-loop system , because the solar exchange fluid is closed offfrom theexternal atmosphereor isolated fromthepotable water throughutil izationofaheat exchanger. In aclosed-loop system theheated solar fluid ispumped throughthesolar collectors. The heated solar fluid flows through a copper or stainless-steel heatexchanger located near the solar storagetank. The heat from the solar fluid transfersto thepotablewater within thesolar storagetank. Another small circulator pumpmaybeused to circulate the water through thepotable side of the heat exchanger.

There are several advantages to these systems. One is that the anti-freeze heat-exchange fluidscan withstand freezing temperatures, allowing thesystem to operateduring periodswhen there isthegreatest temperaturedifferencebetween cold incom-ing water, and temperatures reached in the solar collectors. Thesystem can have thegreatest performancebenefits at thistime. Also, if maintained properly, thesesystemswill not corrodeor scalethepassagewaysinthesolar collectorsandpipes. Closed-loopsystems tend to have the lowest overall operating costs, other than passive systems,since they do not have to bedrained and maintained, but they tend to have the high-est installation cost. They heat water slightly less efficiently than direct open-loop

systems, but can work moreandlonger when it isrisky to operate open-loopsystems.Ther mosiphon systems areakindof ‘ passive’ solar hot-water heatingthat employs

flat-plate solar coll ectors. The solar panels are usually mounted at a lower elevationthan the storage water to be heated. Thermosiphon systems can circulate potablewater or utilize a heat exchanger and heat-exchange fluid.

For potable water systems, the cooler water at the bottom of the storage tank isthermally siphonedto thehotter water near thesolar collector by theri singtemperatureand volume of thewarmer water, initiating a circulation of thestorage water throughthecollector’ sfluid passagewaysback intothetop of thestoragetank. Thecirculation

continues unti l the temperature at the bottom of thestoragetank is about thesameasthe temperature of theoutlet pipeat thetop of thesolar collector.

Since the early 1970s, the efficiency and reliabil ity of solar heating systems andcollectors have increased greatly and costs have dropped. Low-iron, tempered glassis now used instead of conventional glass for glazing.

Improved insulation and durable selective coatings for absorbers have improvedeff iciency and helped to reducelife-cycle costs.

3.6.3 Ground-source heat

In the winter, scraping ice off the car and seeing frost on the grass, it is hard to thinkof theground asasourceof heat. But in fact theearth isbeingbombarded with energyfrom thesun all day – even in winter – and it absorbsmuch of it. That energy is storedin the earth’s huge mass, so, while thesurface may be frosty in winter or cracked and




dry in summer, even at depths of just a few feet thetemperature is fairly constant allyear round. It varies, depending on where you are on the earth’s surface, between5 ◦C and 28 ◦C.

Ground-sourceheat takesadvantageof thisconstant temperature – and very oftenit can be used all year round, so that it helps keep a building cool in summer andwarm in winter.

Ground-source heating has three main components. Within the building there isa heat-distribution system, which can be very simil ar to the radiators that distri butehot water around the house in a conventional heating system. Air ducts that can beused for heating or cooling flows are another possibility.

Outside the building is the heat-exchange system. If this is a so-called ‘ closed’system, it consists of loops of pipe in which water is circulated. Sometimes anotherfluid with better heat-transfer properties is used. Depending on thecharacteristicsof

the site and the requirements of the building, the pipework is buried horizontally orvertically, in wellsbored for thepurpose. In somecaseshorizontal tubesneed beonly2 m or so under the surface. Cold water i n the tubes is warmed by the surroundingsand pumped back to the house. Horizontal tubes are cheaper to i nstall, but verticaltubes are likely to have better performance because, at greater depth, thetemperatureis more stable.

In someareasthere is freewater deep below theground – known asan aquifer . Inthis case an ‘ open’ system can be installed. Warm water from the aquifer is pumpedupthroughonetube, andcooled water ispumped back to theaquifer throughasecond

pipe.The internal and external systems are joined by the third part of the system, the

heat pump. This transfers the energy between the water pumped through the earthand theinternal distribution system. Theheat pump can ‘ step up’ theheat that comesfrom the ground, concentrating the energy to increase the temperature. To do this,it uses a property of gases as they are compressed and vaporized. The principle issimilar to the systems used to extract heat from inside a refrigerator, turning it fromcold to icy insideand ‘ dumping’ the energy as heat at the back of the fridge.

In the summer the system can work in reverse (and exactly l ike the fridge). The

heat insidethe building is reduced and is ‘ dumped’ through the underground pipes.Thesystem doesrequire an energy input for pumping and theheat exchanger. But

generally the energy required to run the system is only a quarter of the energy thatcan be produced – and that may be supplied by PV cells or a turbine. Typically 1 kWof electricity used to drive the equipment wi ll produce between 3 and 4 kW of heatoutput – very energy-efficient.



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Panel 3.1 Ground heat in Cornwall

When Penwith Housing Association (PHA) took over the housing stock ofPenwith District Council in 1994, it took on many homesin need of renovation,and had an energy policy aimed at providing aff ordable warmth for all itstenants. However, the association had sti ll to deal with small groupsof houseswith ageingheatingsystems, and, whileaffordable, low-carbon dioxideheatingcan be provided with gas-condensing boilers, mains gas is not always avail-able. Conventional electrical heating (e.g. storage heaters) does not provideaffordable warmth, and the largeamount of mains electricity used is responsi-ble for quite high levels of carbon dioxide. Oil-fi red heating is becoming moreexpensive as fuel costs rise, and recent legislation on fuel tanks has increasedinstallation costs. In any case, Cornwall had begun to build solid experience inrenewables projects and PHA wanted to build on this.

Trials of ground-sourceheating cameabout becauseit was a practical optionfor the Association’s pattern of small groups of housing.

PHA’s first experience with ground-source heating was in 1998 on a new-build project – four bungalows for elderly people. A more ambitious projectto fit the system to existing houses was initiated when the government’s ClearSkies grant programme started up in 2003 (see 16.6).

The site was carefully chosen. PHA has many existing homes in outlying

areas with no mains gas that require central-heating systems. Many of these,however, have quite high heating requirements. It was felt that i t would bebet-ter to start with homes that have a lower heating requirement that would matchthe 3.5 kW or 5 kW output of the type of heat pump to be used in the project.

Some 14 homes at Chy An Gweal formed one of several sites that hadsmall, reasonably well-insulated bungalows that lacked efficient modern heat-ing. There were concerns about whether the technology could be installed inthese existing buildings. Of particular concern was installing geothermal bore-holes in the gardens. In part this was because on new-build sites drilling uses a

big rig, and it i s traditionally a messy operation.A dril ling rig around 2.5 m high dril led two holes in each garden that are

200 mm wideand 40 m deep. Then a plumber took over to install Calorex heatpumps supplied by Powergen as part of its HeatPlant kits. These kits includeground loop components, a heat pump and ahot-water cylinder matched to suitthe heat pump.

The heat pump is simil ar in size to a small fridge. This sort of space canbe diff icult to find in a small home, particularly because the position mustbe accessible to the ground loop pipes, so the heat pumps were installed in a

purpose-built timber enclosurefixed to theexternal wall of the properties. Thisallowed easy connection to the ground loops and a simple connection of theheating pipes through thewall to the plumbing inside.




Insidethehousetherewasalso somework required. Geothermal heat isoftencombined with underfloor heating but that could not beinstalled in theexisting

homes. By and large, it emerged that radiators were the best solution.There are some changes in operation: a conventional boiler wants to deliverheat quickly and then turn off, and the latest components are designed for thatapproach, like radiators with low water content that heat quickly to providea ‘ quick hit’ . With a heat pump, temperatures are more like 60 ◦C instead of80 ◦C and it is better for it to run longer. So the new radiators had the highestpossible water content to provide thermal storage and there were fewer ther-mostatic valves because of the lower temperature.

The householders were delighted to get rid of their old coal-fired heating,which was fairly expensive and dusty.

The PHA project was made possible by the Clear Skies grant and addi-tional funding from thel ocal authority. Thetotal contract cost was£136 861, ofwhich the Clear Skies Community Programme provided £47000 and PenwithDistrict Council £25000.



Chapter 4 Wind power

Wind turbi nes are becoming a famil iar sight, both as large wind farms and singly,as here.

So far, wind has been the most visible form of embedded generation, as small-scalewind farmshavebeen developed acrosstheUK in thelast fiveyears. But wind powerhas many other guises that make it fit a variety of embedded generation needs, fromsingle houses to largeindustri al users.

4.1 Wind-turbinecomponents

Thewindfarmsgenerally being installed share athree-bladed design that hasbecomethe standard offering from major suppliers. Thousands of turbines of this style have



42 Local energy

been installed worldwide, and it has undergonemany refinementsand been scaled upto as large as 5 MW. The main components are as follows:

• Tower . Made of cylindrical steel sections or open steel latti ce, the tower can be

from 25 to 75 m high. In most cases the wind conditions improve with towerheight. At the top, a ‘ yaw’ mechanism turns the tower head, along with the rotorand nacelle, so it f aces thewind.

• Rotor . There are three rotor blades, or two or one – most often three – madeof fibreglass-reinforced polyester or wood epoxy. New designs are increasinglyusing blades reinforced with carbon fibre. The blades rotate around a horizontalhub that is connected to the electrical equipment in the nacelle (see below). Theamount of energy produced by the turbine depends on thelength of thebladeandthe area it ‘ sweeps’ as it turns. Blades can be from 30 to 65 m long. The power

output f rom the turbine can be controlled by adjusting the angle of the blades asthe wind changes – this is called pitch control . More common is stall control ,which relies on the aerodynamics of the blade. As the wind speed increases, sodoes theturbulence behind the blade, and this acts to slow the blade down.

• Nacelle . At the top of the tower, the nacelle contains the electrical components.Driven by the wind turning the blades, the rotor hub turns a low-speed shaft atabout 20–30 revolutionsper minute. In most casesthis isconnected viaagearboxto a high-speed shaft, which turns at about 1 500 rpm. This drives an induction orasynchronousgenerator that produces the electrical power. Staff enter the nacelleto maintain these components.

• Anemometer . This instrument attached to the nacelle measures wind speed anddirection. This provides information to the computer controller, which starts theturbine operating when there is enough wind, operates the yaw mechanism andcontrols the electrical equipment.

Wind farms and industrial users will usually install larger turbines, on the 1 MWscale, so as to extract most power from a single site. Smaller turbines, sized at a fewhundred ki lowatts, were more usual in the 1990s and are seen in their thousands intheNetherlands and elsewhere in Europe. However, turbines are available in smaller

sizes aimed at thedomestic and small commercial market. A long-lived UK supplier,Proven Energy, for example, supplies a range of turbines. The smallest, rated at600 W, is described by the company as being the same height as a telegraph pole,providingenough electricity to power lightingcircuitsin astandard three-bed houseinthe UK. More commonly however, the 600 W is used by telecoms companies to feedpower into batteries for telecoms repeater/booster stations and has been used by theMOD (Ministry of Defence), BT, Orange and T-Mobile. Proven’s largest turbine, incontrast, is 1.5 kW and is aimed at light industrial, light commercial and agriculturaluse. With thissort of power youcan power about six or seven typical three-bed houses

in the UK.The British Wind Energy Association (BWEA) notes that small wind turbineshave traditionally been used to generate electricity for charging batteries to run smallelectrical applications, ofteninremotel ocationswherei t isexpensiveor not physicallypossibleto connect to amainspower supply. Suchexamplesi ncluderural farms, island



Wind power 43

communities, boats and caravans. Typical applications are electric livestock fencing,small electric pumps, lightingor any kindof small electronic system needed to controlor monitor remote equipment, including securi ty systems.

4.2 Assessing the wind resource

The first stageof any wind-energy project is finding out the available wind resourcebase. Proven Energy, for example, assumes a wind resource averaging 5 metres persecond (m/s).

The ideal site would be on top of smoothly rising ground and away from treesor other obstructions – both characteristicswill reduce wind turbulence and improveoutput. The effect of location can be dramatic, and sites just a quarter-mile apart

may have very different characteristics. Location is also important for the turbineconnection: it should beas close as possible either to thehouse, if connected directly,or to a point where it can be connected to the low-voltage grid.

To assess the average wind speed at a particular site, a general indicati on canbe established by using the UK wind-speed database (which can beaccessed via theBWEA’s website at www.bwea.com/noabl). This returns an estimated annual meanspeed for agiven Ordnance Survey grid reference. If thewind characteristics appearfavourable they must be assessed over as long a period as possible – several monthsat least, and ideally a year – by installing an anemometer, an instrument that records

wind speed mounted at the planned turbineheight.The BWEA notes that the electricity produced by a wind turbine over a

year depends critically on the annual mean wind speed at the site – higherwind speeds produce more energy. It says that, in general, small-scale wind tur-bines start to generate electricity in wind speeds of approximately 2.5–4 m/s andtheir rated optimum wind speed is 10–12 m/s. For instance, a 6 kW turbine ata wind speed of 5 m/s will generate an average of 11 000 units of electricitya year.

4.3 I nstalling a wind turbine

The BWEA’s guide, ‘ Install ing a Small Wind Turbine– in a nut shell ’ , can be foundon a web page called ‘ Small Wind Technologies’ at http://www.bwea.com/small/ technologies.html (accessed 21.10.07). This is how it summarizes the steps.

1 Get a reliable estimate of the wind speed at the proposed site. Turbine manufacturersshould be prepared to help. The generator must get acceptance for connection to theelectricity distribution network. (if applicable).

2 Mount the turbine on as high a tower as possible and well clear of obstructions, butdo not go to extremes. Easy access will be required for erection, and foundations forthe tower may be needed depending on the size and tower type. It is also important toensure that the wind turbinecan beeasily lowered for i nspection and maintenance.

3 Try to have a clear, smooth fetch to the prevail ing wind, e.g. over open water, smoothground or on a smooth hil l.



44 Local energy

4 Use cable of adequate current carrying capacity (check with the turbine supplier. Thisis particularly important for low-voltagemachines). Cable costs can besubstantial.

5 Consult your local council as to whether you need planning permission. You should tryto minimize the environmental impact of the turbine, and it wil l be helpful to inform

your neighbours of your plansat an early stage.6 For larger machines you may have to pay rates. This can make a big difference to the

economics of the installation, again you should f ind this out by consulti ng your localcouncil . Once the machine is under construction, ask your chosen supply companywhether they need youto beaccredited for ROCs[RenewablesObligation Certificates],LECs [Levy Exemption Certi ficates], and REGOs [Renewable Energy Generation ofOrigin] and what type of onsite and/or export metering they require you to have (ifapplicable).

4.4 Rooftop turbines

Integrating wind turbines into the built environment poses some formidable chal-lenges. In urban areas generally, winds are slower, more turbulent and show greaterdirectional variation than in rural areas nearby. But these effects are smaller for thetops of buildings that are taller than their surroundings. A ppropriately placed, windturbines can benefit from the ‘ venturi’ or concentrator effect created by buildings,which produces higher wind speeds. Noiseand flicker, considered anuisancein ruralareas, will not betolerated at all in towns, and vibration can threaten theintegrity of abuilding if a turbine is placed inappropriately on a rooftop, which is usually the most

viable site for it.London has a particularly low average wind speed of about 4 m/s, and is unlikely

to be the f irst-choice location for wind turbines, but some have already appearedand in the long term may contribute significantly to its energy needs. HammersmithCouncil recently shelved aproject to build an Enercon E66 turbineon asiteadjoiningWormwood Scrubs, because it was believed the scheme would fail at the planningstage. Undeterred, thecouncil was, at thetimeof writing, pursuing aschemeto installsmall 6 kW wind turbines on the roof of a 22-storey residential block.

Tall buildings funnel wind, and architects have to keep this within acceptable

limits i f people are present. But a building’s shape can be used to force the windthrough a turbine. Ambitious plans for another residential scheme in west Londonanticipated wind turbines installed not only on theroof of two lozenge-shaped towerblocks, but suspended between them. The project is along simil ar lines to an aero-dynamically shaped building called theWEB Twin Tower Building, which has three30-m-diameter integrated wind turbinessuspended between kidney-shaped twin tow-ers designed by the University of Stuttgart in 2000 as part of the EU-funded WindEnergy in theBuilt Environment (WEB) project. Field tests conducted at RutherfordAppleton Laboratory showed that placing the wind turbines between the building’s

two towers, acting asaconcentrator, produced considerably more power than mount-ing them conventionally at the sameheight on an open site. It increased wind speedby a significant 1 m/s. The kidney-shaped towers also directed wind into the fixedyawed turbine even when the wind was coming in at a 90-degree angle to the towers.The results suggested that a scaled-up version of the WEB design would produce a



Wind power 45

50 per cent increase in annual energy yield in a typically urban setting over a freelyyawing, stand-alone machinewithout the building.

Inrecent yearsnew designsfor small-scaleturbineshavebeendeveloped, intendedfor rooftop installation on domestic and commercial buildings. BT, for example,which consumes some 1.8 per cent of the non-domestic electricity generated in theUK and i s struggling to reach i ts renewable-energy targets, is planning to installrooftop turbines on one of its telephone exchanges in Cornwall and, if the projectis successful, plans to replicate i t at other sites. The insurance company CIS hasalso invested in roof-mounted turbines for its flagship CIS Tower in Manchester,complementing one of the largest PV installations in Europe. CIS is using smallWindsave turbines, which start to generate electricity at wind speeds of 4.0 m/s andreach the rated output of 1 kW at 12.5 m/s.

Oneof themain problemswith installing propeller wind turbineson arooftop had

been vibration, but now a new generation of turbines has been designed specif icallyfor buildings. One of the most exciting designs is the 1.5 kW Swift Rooftop EnergySystem, from Edinburgh-based Renewable Devices.

The Swift’s design engineers, Charlie Silverton and David Anderson, claim itis the world’s first truly silent wind turbine. Research on the design began in 2002,on the back of a DTI Smart Award. Advanced aerodynamics make the rotor moreeff icient, whilereducingthenoiseemissionssignificantly, whileacircular rim aroundtheoutside of the blades holds on to the radial flow of air at thetip of each blade thatcreates a ripping noise with conventional turbines.

Renewable Devices has also developed an electronic control system that safe-guardstheturbinein high winds and ensures eff icient power extraction under normaloperating conditions

Renewable Devices won a Scottish Power Green Energy Trust Award to fi t SwiftRooftop Wind Energy Systems to f ive primary schools in the Fife area to provideelectricity, hot water, lighting and computing equipment. Thecompany also won theScotti sh Green Energy Award for Best New Business in 2003.

The Wind Dam system uses the inherent strength of a building to intercept andcollect wind energy using a vertical-axis turbine. The unit is caged for safety. I t is

this design that BT has chosen to mount on its exchanges in Cornwall. The systemcan be incorporated into a large number of building types and also has considerableretrofit potential. The Wind Dam concept has completed a UK Smart feasibil itystudy.

The patented combined augmented technology turbine (CATT) from Stratford-upon-Avon-based FreeGEN is another Bri tish design that has been designedspecifically for use in thebuilt environment.

Li ke the Swift, the CATT’s three rotors are enclosed, but in this instance with ashort aerodynamic duct, which works with an air-flow controller to boost the energy

potential of wind speedsof l ess than 5 m/s.There are other innovative designs. Developed by the University of Strathclydein 1999, the ducted-wind Windsideis another vertical wind turbinebased on sailingengineering, thewind rotor of whichisrotated by two spiral-formed vanes. Developedin 1979 by Risto Joutsiniemi, Windsideturbineshave been madeto order since1982,



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mainly for use at sea. Their spiral construction makes them able to utilize windsof 1–3 m/s.

4.5 M aking the connection

For a small or domestic i nstallation, wind-turbine connection is relatively simple.Depending on the wind turbine’s size and the demand for power at the property, itmay be connected directly into the house’s main distribution board or connected viaa battery.

A battery-charging system provides you with acontinuous power sourcefor yourhouse via an inverter, which makes the power from the turbine usable.

The inverter converts the DC power provided by the turbine to the AC on

which most household appliances and the domestic electricity system are designedto operate. Battery-charging wind turbines normally operate at low voltages suchas 12 or 24. Batteries are usually essential in off-grid systems, but are expensiveand will deteriorate over time. They store low-voltage DC electricity, and need tobe protected from over- and undercharging. Lead-acid batteries are the most cost-effective, although other types are available. For a renewable-energy system, ‘ deepcycle’ batteries are used, which are designed to have up to 80 per cent of theircharge removed and repeatedly replaced over a period of 5–15 years (or 1 000 to2 000 times).

An inverter transforms the low-voltage DC power produced by a wind turbineinto high-voltage AC power that meets the quality requirements of the electricitynetwork.

To install agrid-connected system, youwill need permissionfromthel ocal DNO.This is thecompany that operates thedistribution network in your area, and may notbe your electricity supplier.

DNOshavedifferent policieswhen it comesto connectingsmall-scalerenewable-generation systems to their networks. If you have an off -grid site, you wouldhave a diesel generator on standby to cover periods when you had no wind

at all for a few days (because batteries are typically sized to provide around2–3 days’ worth of storage). Grid-connected turbines do not operate when themains supply is interrupted: they are designed to shut down for electrical protectionreasons.

Panel 4.1 Off-grid turbines

Thesupermarket chain Waitroseispart of theJohnLewisPartnership. Although

the Partnership produces few of its goods for itself, in rural Hampshire thefounder’s private estate is still part of thecompany’s portfolio. Theestate alsohas working farms: two 200-cow production dairies, orchards, a mushroom



Wind power 47

farm, a mil k-processing plant and a plant-propagation nursery as well as cerealproduction.

The farm also acts as a test bed for new methods, both in production and indevelopingthesupply chain. Thecompany put thisintopracticewhen it decidedthere was a market for chickens that were free-range, traditionally reared andmaize-fed.

The company produced a shed that opened at the sides, so that the chickenscould movefreely in and out. The shed is on skids, so that it could be moved tofresh ground if necessary – to help avoid disease build-up, and allow the grassto recover. Then the issue of heat and light arose, and, although there was apower connection running down thefield that would besuitable, that would notalways bethe case, and the company wanted a demonstration project. Anotherfarmer might want to use a similar system in an area where there was no powerconnection.

The answer was to combinewind and solar power to run thesheds.The birds arriveas day-old chicks and for the fi rst six weeks they arehoused

in the shed. They have a 12-week life cycle and at six weeks, when they arefull y feathered, they can move in and out of the shed during the day and areclosed up at night.

The energy requirement is fairly small. The shed is l it at low level for24 hours a day during the first six-week period, as the chicks tend to flock

and can becrushed if they are in darkness. A small motor is required to trans-fer feed from an exterior hopper to feeding points in the shed. Each shedhouses 1 250 chickens and draws 26 A . As the birds grow they require lesslight, but more food, so the power requirement remains fairly stable over the12-week cycle.

The power supply is very simple. Each shed is supplied by a single turbineand solar panel combination, which feedsan array of six standard 12 V batter-ies. The turbines are around 10 m high and can be easily moved along with thesheds. Becausethey are portable, and theshedsare moveable, thecompany did

not need any kind of planning permission.The 13 sheds were installed in mid-2001 and the first birds were installed in

October of that year. Theturbines and thesolar panel tri ckle-feed thebatteries,and the company found that it got power from the solar panels for about 15hours in midsummer and about 4 hours even in midwinter. The wind turbinesoperate more or less continuously, although at only 10 m above ground thewind is gusty and even within a single field the 13 turbines can be turning atdifferent speeds. Thebirds also require heat, but that is supplied from propaneburners.

Thesimplerenewable-energy installationsareasmall proportionof thesetupcost. The total cost of each shed was around £21 000, and, of that, the turbineand solar panel cost around £1500 to buy and install.



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Panel 4.2 Wind acrossthe M ersey

Mersey Docks and Harbour Company’s site had been identified in the early1990s as having a good wind resource, but the wi nd company that firstapproached thedocksdid not takeuptheoption. Instead, Mersey Docksdecidedto develop its own wind cluster.

Mersey Docksapproached thewi ndcluster asit would any industrial project.To reduce the inevitable risks in any construction project the company chosewell-proven technology i n theform of 600 kW Vestas turbines. Mersey Dockswastheproject manager, asit isexperienced in theproject-management processand it felt the wind cluster was a small project by Mersey Docks standards. Itsprincipal risk at that time(beforetheRenewablesObligationwasimplemented)was the selling price, but it was eventually awarded a contract under the Non-Fossil Fuel Obligation (NFFO), which gave it a 15-year contract for electricitysales at an index-linked fixed price.

The company decided to go ahead with six turbines, Vestas-supplied V44-600s with a 50 m hub height and a blade diameter of 44 m.

TheM ersey Docksisa2 000-acresite andobtaining planningpermissionforthecentre of this highly industrial area might be thought relatively simple, butin fact feelings beforetheturbines were installed were very mixed. Objectionscame from a group of houses that are about three-quarters of a mile along the

coast, who were concerned over noise, dust, interference with TV receptionand bird strike on the turbines.

There was also a concern about local wildlife. The turbines are installed ona road along reclaimed land on the shore and reclaiming that land had createdartificial mud flats. The flats have become a nature reserve and more recentlya site of special scientif ic interest. But the issue was resolved by altering thespacing of the turbines either sideof the flats.

As for the local councils, Wirral, on the opposite bank of the Mersey, senta letter of support as it thought the turbines would improve the environment.

But theplanning authority was Sefton Borough Council and it denied planningpermissionwhen it wassought in 1995. Permissionwasgranted onappeal, withtheconditionsthat turbinepositioningandcolour had to beapproved. Uniquely,becauseSefton feared theperceived risk of bird strike, eachturbinehad to standinoperative for two weeks. In practice, serial construction and commissioningtook up most of that time.

Construction began in late 1998 and – bird-education period notwithstand-ing – the turbines were in operation by March 1999. The company says theyhave operated with hardly any problems. External grid faults sometimes shut

them down – it is an automatic protection system – but the company’s ownelectrical engineer can reset them, so they can restart.As Mersey Dockswasmanaging theproject itself, it used itsown expertisein

theinstallation. Theturbinesareright ontheseawall andvery exposed, aswaves



Wind power 49

frequently break over the road. That called for some additional weatherprotection. Normally the transformers would be in a separate buil ding, but

Mersey Docks sited them in thebase of thetower. They are designed so that, ifa transformer needs replacing it can be removed through the access door. Thecontrol gear that would normally be at thebase has been raised to a mezzaninelevel. It also needsextraprotectionagainst corrosion, so thereisamarine-gradecoating on theoutsideand theinsideispainted, wherenormally it would beleftunpainted.

The project cost around £2.5 million. That included £1.8 million for thetur-bines, £400 000 for civi l works and £300 000 for electrical works. Connectingto thegrid wasrelatively straightforward for alargeuser such asMersey Docksasthel ocal grid issized for largeindustry andthecompany haselectrical workson site and regular discussions with thelocal DNO. Theconnection was madesimpler, because it was entirely within thedocksarea, as Mersey Docks has itsown substation at theport entrance, which is connected to theDNO’s medium-voltage system.

Mersey Docks dealt with the maintenance risk by taking out a fixed-pricecontract with the manufacturer that includes performance guarantees. Thefixed-price contract is not for the li fe of the turbine, and Mersey Docks isalready considering what to do when it ends. Maintenance requirements areestimated at about a half-day each quarter f or each turbine.

The company expects to get payback on the turbines in about ten years. I tsNFFO contract runs for 15 years. Al though the delays in getting planning per-mission lost it about six months of the contract, the turbines generated slightlymore than expected.

The power the turbines have generated has varied a lot over the first twoyears. M ersey Docks estimated that during the first year they produced 10 percent more than was predicted and the second year produced 15 per cent less.But the prediction was slightly conservative. The dock as a whole has a goodsense of wind because it also affects shipping delays, downtime for the cranes

and so on. The result is downtime in windy years – just the opposite to theturbines – and variability from year to year was anticipated.

The company was so pleased with its turbines that it is planning to installlarger ones in another part of the dock.

The turbines would be 1.8 MW or more but they must be optimized aroundthe site. They must get the spacing right. The manufacturers are concernedabout turbulenceso they need to beaway from buildings in an open area.

Mersey Docksisplanning thisnext phaseat alikely cost of around £7 millionwithout a long-term NFFO contract. The price of ROCsmeans the power from

the turbines will be exported, not be used at the docks, which has a maximumpower demand of about 35 MW.



Chapter 5 Hydropower

Small hydropower plants use fall ing water to gener ate electri city.



52 Local energy

Water power has been a familiar sight for thousands of years. Most peoplein the UK probably know an old water mil l – whether or not it stil l has i tswater-wheel – that has been converted to another use. But the water that pow-ered a threshing machine or grindstones can be used equally well to generateelectricity.

5.1 Power from water

The power available from a hydro-turbine depends on two things: the distance thewater fallsto theturbine(known asthehead ) and theamount of water flowing throughthe turbine.

The combination of these factors means that power can begenerated from manytypes of river, from small but fast-flowing hill streams to large, slow-moving rivers.It also meansthat hydro-generation equipment has becomefar more varied than, forexample, wind turbines, as developers have tried to abstract power eff iciently from avariety of watercourses.

High-head schemes generally use Pelton turbines (named after the A mericanengineer L.A. Pelton). These bear some resemblance to water-wheels, in that thewater flows intoaseriesof vessels(known asbuckets ). They aredescribed as impulse turbines : theimpulseistransferred directly from thefalling water, turning theturbine

and a central shaft that i s attached to a generator.Pelton turbines can range from several centimetres to several metres across,

depending on head and flow, but they cannot be used for low-head schemes. Instead,a reaction turbine is used. In this system, the water is passed through a pipe con-taining a turbine shaped like a propeller. The water turns the propeller as it passesthrough i t. Propeller-type schemes can be used for heads as low as 1 or 2 m ifthere is enough flow volume, making the UK ’s many weirs and sluices potentialhydropower plants.

Between the Pelton turbine and the propeller, two other types of turbine known

as Francis and Turgo turbines allow mid-range head and flowsto beused eff iciently.The skill of the hydro engineer l ies in assessing which type and size of turbine areappropriate for each site.

Small hydro schemes are unlikely to require a dam of any size to be built. Theymay have a storage or settling pond similar to a millpond, which evens out the flowrateat theplant intake, and protectstheturbinesfromdamagefromsolidsin thewaterby allowing them to settle out. Alternatively, they can operate as so-called ‘ run ofriver’ with no storage at all.

Once installed, hydro plants are several times more eff icient than solar or wind

power and with regular maintenance some may operate for up to 100 years. What ismore, their operation can be predicted with some accuracy, because for some riversrecords of river levels are available over several decades or even longer, and this,combined with rainfall measurement in theriver’ s catchment area, allowsdrought orlow flows to be anticipated.



Hydropower 53

5.2 The UK’s hydropower potential

How much small hydro can be developed in the UK? The general impression fromassessments of renewable options i s that almost all the UK’s capacity has beenexploited. But there are new sites that can be considered and there are many millsites – some dating back a thousand years – in various stages of decay. There arealso existing weirs where it may be possible to install turbines to take advantage ofthefall.

The most important factor affecting the economics is the head , or water drop,because i t has the biggest effect on the amount of energy that can be produced.Halving the head means that just a third of the power output can be produced, forthe samecapital cost. Thetotal volume of water f low is also important, but, becauseof physical constraints and environmental requirements, the total flow may be very

different from the amount that can flow through the turbine. In a wide but shallowriver, for example, extensive works would be needed to divert flow through a narrowchannel.

Other issues that can greatly affect the economics are the cost of grid connec-tion and its distance, access to the site (for cranes, diggers and ready-mix lorries),fish-screening requirements and disposal of trash. These issues are all consideredin the design, and decisions on one area of the design will affect other areas. Forexample, spending more on theturbinemay save thecost of civil works, as a siphonor submersible turbine would require less building work.

Low-head hydropower equipment in Europe generally falls into three cost bands.In general, the high-cost band can be attributed to large-hydro manufacturers scal-ing their sophisticated equipment down for small hydro, whereas the middle- andlow-cost bands tend to be companies whose major business is small hydro. Thereare also European manufacturers specializing in micro-hydro technology who havedeveloped simple and robust technologies that can bring down costs for small-scaleschemes.

The choiceof design capacity (i.e. the power rating of the installation) is largelydictated by economics. The investment cost per kilowatt is generally lower for a

larger installation, but sizing theturbine to the maximum may mean it cannot operateduring low-water periods. A smaller scheme will allow theturbines to run flat out formore of the time and so may lead to a quicker return on the investment.

Most small hydro schemes have lifetimes of more than 50 years. However, debtfunding generally requires a payback of 7–10 years.

A 1989 study – ‘ Small Scale Hydroelectric Generation Potential in the UK’ – by the Energy Technology Support Unit (ETSU) illustrates how past hydro assess-ments have been made. It picked out 157 sites in the south-east, but rejectedall but 13 as uneconomic. Those 13 had a joint projected installed capacity of

3.186 MWe.The study rejected all sites under 2 m head and less than 25 kWe projectedinstalled capacity – even where an on-site demand existed. Its rejections includedsuch sites as Sonning Lock and Whitchurch Silk Mill, sites that later came underserious consideration for development.



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Agency said it would ‘ takeapositiveview of reasonable andwell-designed proposalsfor hydro power schemes’ .

Oncein operation, hydro plantsare welcomeadditionsto thesystem becausetheyhavemostly predictablepower generationandcontroll abil ity. They arealso extremelylong-lived – at least 50 yearsof reliablelife isexpected if theplant iswell maintainedand some have had much longer lives.

5.5 Adding hydro to the system

Small hydro is not just about dedicated plants in remote areas. There are slots in ourextensivewater supply network whereaturbinewould bea positiveaid to thesystem.

Thewater sourcefor our tapsmay behighuplandareasthat havehigh rainfall and

awidecatchment area. Thewater ispiped fromitssourceto thewater-treatment worksnear the users and that means that at the treatment works it is under high pressure – in hydro terms, thehead may be hundreds of metres. A t this point the water may beunder too much pressure and it has to pass through special pressure-reducing valves.

But head and flow are the components for hydropower and the eff ect of ahydropower turbine is to remove energy from the water and turn i t into electricity.Why not replacethe pressure-reducing valve with a hydro-turbine?

This idea is not new. For many years hydro engineers have looked at the energywasted in pressure-reducing valves and considered how best to extract it. According

to the British Hydropower Association (BHA ), schemes already in operation in thewater system provide over 25 MW of electricity capacity and, overall, theBHA saysthe potential nationwide is likely to be around 100 MW.

5.6 Extracting the energy

Energy from the water system may seem like easy pickings. But there are prioritiesto beconsidered.

All electrical components in the water-supply system have to conform to verystrict, internationally agreed standards to ensure they do not adversely affect thewater. For example, they have to ensure that there is no possibil ity of contaminationby paint, oil or grease. The turbine is being added to an existing system, so there willusually be very tight physical constraints on the site, and in many cases the existingpipework is very old.

Thetreatment workshaveto runconstantly so therecan beno shutdown when theturbineisinstalledor maintained. Onceit isinoperation, thewater fl ow must betightlycontroll ed so that water quality is maintained. This usually requires a sophisticated

control system for theturbineand special control arrangementsthat allow water to beswitched to bypass the turbine when necessary. A bypass system will be used if theturbine needsto beshut down for maintenance, or during normal operation to ensurethat the flow is constant. Switching between the turbine and bypass route must be‘ bumpless’ , i.e. it must not create surges in thesystem.



Hydropower 57

Elsewhere in the water system, water companies have installed turbines at reser-voir outlets and have examined the possibility of including them at the inlet towater-treatment works wheregravity-fed wastewater arrives. That isatechnical chal-lenge because solids in the wastewater can foul or degrade the turbine, and a newturbine design may be required.

Panel 5.1 Reviving old mills

Mill owners i n Somerset combined with the district council to investigateelectricity generation. South Somerset District Council decided they wanted10 per cent of the energy used within the district to be generated from renew-

able sources within the district.That tall order was thought most likely to be met by wind turbines. But the

region also has many historic water mills that were now simply picturesquetourist features, or falling into disuse, that could be used to generate electricity,and bring theowners additional income.

Thecouncil began to investigatethemillsat thebeginningof 2001andfoundaround 15 potential sites, but owners were daunted by the planning process,and by dealing with theEnvironment Agency, researching thebest technology,and all the other aspects.

The answer was to bring the mill owners together. Each pledged £100, andwith matching funding from the district council the next step was to carry out afeasibil ity study to look at the sites and thefinances. The Energy Saving Trust(EST) stepped in with a grant for the feasibility study.

The study looked at the catchment area of each river, the flow, the potentialdesignoutput and thetotal energy capturethat would bepossible. With thehelpof a further £2 000 from theEST, that led to the development of abusiness planfor each mil l.

All the sites are diff erent. The energy available from each site varied, and,

although each has remnantsof a mil l building and some are in good condition,theamount of work required at each site was different. In some theleat (whichcarrieswater from theriver to themill wheel) wasstill in existence, whilesomeneeded to berecut, for example.

The varied capital costs and energy available meant that payback time foreach mil l was different. At one mil l a 19-year payback period was likely andthat was too long for the owner, who dropped out of the project. Other mil ls,including two at Clapton, were also too expensive, while some produced lessthan akilowatt of power and werethought to be too small to pursue. In the end,11 mills went forward to the implementation phase.

At this stage South Somerset District Council and the mill owners wentback to the EST for an implementation grant. The group won the maximumgrant from the Trust – some £88,000 – which will cover around 30 per cent of

Continues



58 Local energy

Panel 5.1 Continued

the project i mplementation. The rest will come from the owners themselves,whether in cash or in kind. Loan financing would be available from banks,but several project owners invested their own time and did some of the worksthemselves.

Thegroup negotiated with several electricity companies to get thebest pricefor the electricity that mill owners will feed onto the grid. There were veryfew embedded generators in the region, so they have not had to put in placea standard arrangement for export. At present they wi ll either make an annualpayment based on an estimate of the ki lowatt hours exported, or accept thegenerator privately installing their own meter.

The owner is expected to read the meter every six months and a six-monthlypayment for export will be made. The payment for the electricity exported willdepend on the sizeof the generator.

Eventuall y, the price on offer from the util iti es was sli ghtly higher than themil l owners assumed in their calculations. That meansmost of theowners willbe moving into profit earlier than they had anticipated. While some had workto do to get their mil ls working again, by 2010 they should all be reaping therewards.

Panel 5.2 Hydropower in Snowdonia

Developing small hydro in a National Park called for sensitive design and con-struction. Ty Cerig is a small hydro plant built in theSnowdonia National Parkby Wales-based renewable-energy specialist Dulas Ltd.

The Ty Cerig scheme, sited near Dolgellau, took several years to come tofruiti on. Since it is sited in a national park, there were several powerful orga-

nizations to convince, including the Snowdonia National Park. Consultationswere required with theRSPB and theWelsh archaeology serviceCadw, as wellas planners. Finally there were the landowners: Forest Enterprise and a privatelandowner, in the case of Ty Cerig. But by the time Dulas got around to TyCerig several of the other projects were well under way and the company saysit had built up a good relationship with all the stakeholders.

Nevertheless, planningfor thisproject requiredcareful assessmentsin anareaso dependent on tourism. The main area of concern was the potential impactof the abstraction on populations of mosses, liverworts, fish and invertebrates.A detailed environmental assessment wascarri ed out using experienced ecolo-gists, to demonstratethat therewould benegligibleimpact. Luckily, thesitewasmostly i n a commercial conifer forestry area, so it i s not a high-grade habitatand there was less conservation interest.



Chapter 6 M arine renewables

6.1 Wave and tidal power

So-called marine renewables encompass devices that tap theenergy of either tides orwaves. Theterm is also used sometimes to refer to offshore wind as they share somedevelopment issues, such as making the equipment suff iciently robust to withstandthemarine environment or transporting thepower from an offshore generation site tothe users on land. This chapter focuses on the wave and tidal sectors.

Although the possibility of generating power from these natural resources hasbeen recognized for decades, it is only in the last decade or so, with the growth ofinterest in renewables in general, that large-scale deployment has been regarded asmore than a remote possibil ity.

In the last few years, however, the view has changed. A largenumber of deviceshave been proposed that could abstract power from waves or from either the regularmovement of thetidesor so-called tidal races , wherethetideforcesseawater througha narrow channel between two areas of sea.

6.2 How much energy isthere?

The UK has been investing in this developing sector for several years, driven by thelarge energy resources that are almost certainly available to be tapped from areas in

the North Sea. The region has been an energy powerhouse for the UK for severaldecades, thanks to its extensive gas and oil reserves, but the end of production isalready i n sight: in the next f ew years the majors will begin to abandon worked-outsources, and the remainder will be the preserve of minor companies able to makereturns on smaller or less accessible deposits.

As oil and gas production begins to taper off, the UK’ s aim is to transfer theextensive offshore experti se to new energy industri es, and especially those that willabstract power fromthewaveandtidal resourcesin theregion. Waveandtidal streamshold tremendous energy potential – but abstracting the power and getting it to shore

call for significant engineering development. That means estimates of the usableenergy from these sources vary wi dely.In Scotland, for example, Professor Ian Bryden, based at Robert Gordon

University’sCentrefor Environmental EngineeringandSustainableEnergy, put somepreliminary estimates on the energy available from the North Sea. With the caution



Marine renewables 63

and measure their potential output in realistic conditions. Its aim is to stimulateand accelerate the development of marine-power devices in Scotland, providinghome-based companies with a head start in exploiting wave- and, later, tidal-energytechnologies.

EMEC is centred on two main sites on Orkney. One is a control and switchgearcentreat Bil li a Croo, which is connected to both the UK electricity grid and four off-shoretesting berths, whileEMEC’smain officesand datacentrearesituated in theOldAcademy, in Stromness. EMEC offered several offshore test berths for wave-energyconverters, along with connections to onshore laboratory and analysis facilities. Thewave test area is now being followed by an area to test tidal-energy devices off thenearby island of Eday.

The step from research to deployment of full-scale devices at near-commercialscale is a daunting one for any developer, but in the absence of new initiatives from

the UK central government i t was a local enterprise agency in the far south-west ofthe country that took the initiative. The South West Regional Development Agencyproposed to install an offshore connection for wave and tidal projects that wouldenable several arrays of different devices to be operated for a restricted period thatwould enable them to prove their commercial viability. Although i t is far from thenorthern shores where wave and tidal projectswere initially demonstrated, thesouth-west has some of the country’ s most energetic tidal and wave areas, and the projectis consistent with an existing commitment in the region – one traditionally i ll servedby the existing power network – to develop renewable energy experti se.

Wavehub, as the project is known, would enable developers to install demon-stration arrays at a much lower capital cost, because one of the major costs – connectionbetweenthearray andtheshore-based power off taker – wouldberemoved.Instead, theprojectshad only to make a connection to Wavehub. Theproposal wouldalso greatly reduce other barriers to deployment, notably the requirement for time-consuming and costly environmental-impact reports, andtheneed to wrestle with theUK’s notoriously obstructive planning process. Instead, Wavehub would carry mostof the burden of these two processes, and the projects themselves would providelimited environmental-impact statementsand would not require planning permission

for any dedicated onshore facil ity.Preliminary work began onWavehub in 2007, andthegovernment pledged to pro-

videaquarter of thenecessary £20mil lioninvestment, subject to planningpermission.It is expected to be in operation by 2010.

Here are some of thedevices where work is most advanced.

6.4.1 M ari ne Current Turbines

Thetidal-stream generatorsunder development by MarineCurrent Turbines function

similarly towindmills. They will beinstalledinareaswi thhightidal current velocities,which thecompany notes have theadvantageof being ‘ as predictable as thetides thatcause them, unlike wind or wave energy’ .

Thetechnology under development consistsof axial-flow rotors15–20m in diam-eter, eachdrivingagenerator viaagearbox. Thepower unit of eachsystem ismounted



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on a tubular steel monopile some 3 m in diameter, which is set into a hole drilledinto the seabed from a jack-up barge. The company has dealt with the problem ofmaintaining undersea turbines by a hoist system: the turbines will be lifted clear ofthe water to enable maintenance to becarried out from surface vessels.

The submerged turbines, which will generally be rated at from 600 to 1 000 kW,will be grouped in arrays or ‘ farms’ under the sea, at places with high currents.Compared with wind turbines, marine-current turbines of a given power rating aresmaller and can bepacked closer together, so the company says they have little landuse or other environmental impact. The rotors turn slowly (10–20 rpm) – aroundone-tenth the speed of a ship’s rotors. The risk of impact from the rotor blades isextremely small.

Marine Current Turbines completed its first grid-connected marine-currentturbine, rated at 300 kW, in 2002 at Lynmouth off theNorth Devon coast. It benefited

from being adapted from well-known wind-turbine designs and from the ability toraise the turbine above the sea’s surface to carry out maintenance.

MarineCurrent Turbines has won support from Northern Ireland and from Walesfor Seagen, an underseaturbinerated at over 1 MW. In Northern Ireland, thecompanyis planning to install a 1 MW experimental turbine in Strangford Lough Narrows inthe spring of 2006. This is a research project involving a single-monopile-systemtidal turbine to be installed for aperiod of between two and five years; it will then beremoved.

The Northern Ireland government hopes that in the long term arrays of turbines

can eventually be deployed in the open sea off the coast of the province. Thecompany has also announced plans to investigate the potential for a commer-cial tidal-energy farm in waters off the Anglesey coastline. The project hasreceived £700000 of grant support from the Welsh Assembly Government’s Objec-tive 1 programme. A seven-turbine energy farm in waters off Anglesey shouldproduce10 MW.

Thecompany also has plansfor a 12 MW array off theNorth Devon coast.

6.4.2 Power Buoy

Ocean Power Technologies plans to i nstall a 5 MW project at Wavehub, based onits PowerBuoy wave-energy converter. ThePowerBuoy system consists of a floatingbuoy-like device loosely moored to the seabed so that it can freely move up anddown in response to the rising and falling of the waves. The sealed unit also containsa power-takeoff device, an electrical generator, a power electronics system and acontrol system.

Asthebuoy’s float movesupand down onthecentral spar, themechanical move-ment drives a hydraulic pump that forces hydraulic fluid through a rotary motor

connected to the electrical generator. The power-takeoff device converts the move-ment into rotational mechanical energy, which, in turn, drivestheelectrical generator.The40 kW PowerBuoy system hasamaximum diameter of alittleunder 4 m (12 feet)near thesurface, and isaround 16 m (52 feet) long, with approximately 4 m (13 feet) ofthesystem protruding abovethesurfaceof theocean. Therewill bel arger PowerBuoy




systems. For example, a planned 500 kW system, oncedeveloped and manufactured,is expected to have a maximum diameter of 13 m (42 feet) and be approximately19 m (62 feet) long with approximately 5.5 m (18 feet) protruding above the oceansurface.

6.4.3 Pelamis

Ocean Power Delivery’s Pelamis system is described by the company as a semi-submerged, articulated structure composed of cylindrical sections linked by hinged

joints. The wave-induced motion of these joints is resisted by hydraulic rams, whichpump high-pressure oil through hydraulic motors via smoothing accumulators. Thehydraulic motors drive electrical generators to produce electricity. Power from allthe joints is fed down a single umbilical cable to a junction on the seabed. Several

devices can be connected to shore through a single seabed cable.A typical full-scale Pelamis machine would be 150 m long and 3.5 m in diameter

and have an output of 750 kW.OPD secured £6 million funding from an international consortium of venture-

capital companies that included Norsk Hydro Technology Ventures, 3i and Zuri ch-based Sustainable Asset Management for its first full-scale preproduction prototype,tested at theUK MarineEnergy Test Centre on Orkney (see below).

Ocean Prospect Ltd, aBristol-based company andsubsidiary of theWindProspectGroup, will trial up to ten Pelamis P750 devices developed by Ocean Power Delivery

of Edinburgh at Wavehub.

6.4.4 Fred Olsen

The third berth at Cornwall’s Wavehub wi ll be taken up by Fred Olsen Ltd, whichwill install a multiplepoint-absorber system for energy extraction. The fourth will beOceanlinx, an Australian company. Oceanlinx has installed a prototype of its device,which uses an oscil lating water column driven by the waves to generate power, atPort Kemble in Australia. The Wavehub connection will allow it to demonstrate the

technology in UK waters.A number of floating buoys attached to a l ight and stable f loating platform

manufactured in composites convert the wave energy to electricity.The UK’s biggest stumbling block is the support it provides for new technolo-

gies making thejump from demonstration to commercial technologies. In theory, allrenewable-energy technologies are supported by the ‘ technology-blind’ RenewablesObligation, which forces electricity suppliers to source a growing proportion of theirpower from renewable generators or pay a per-megawatt hour fine.

TheObligationwassupportedby tradable electronic RenewablesObligationCer-

ti ficates (ROCs) generated along with each megawatt hour of renewable electricity.But the Obligation was designed to bring themost developed technologies – in prac-tice, onshore wind – on stream as quickly as possible: there is no incentive to usenewer options that wi ll be necessari ly more expensive before they have achievedeconomies of scale and passed the uncertainties of new deployment.



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6.4.5 Li mpet and Osprey

Two similar devices developed by Wavegen, known as Limpet and Osprey, use apartially submerged shell. As the water enters or leaves the shell, the level of water

in thechamber rises or falls in sympathy. A column of air, contained above thewaterlevel, is alternately compressed and decompressed by this movement to generate analternating stream of high-velocity air. Theair passes through a Wells turbine, whichturns in the same direction regardless of which way the air is flowing across theturbine blades.

TheLimpet version of thetechnology is sited on theshoreline. A 75 kW demon-stration devicewas in successful operation for 10 years and is now decommissioned.A larger version using two 250 MWe generators – known as the Limpet 500 – wasinstalled in 2000.

The Osprey 2000 is Wavegen’s offshore version of the oscil lating-water-columntechnology. It rests directly on theseabed and is designed to operate in thenear-shoreenvironment in anominal mean water depth of 15 m. Rated at 2 MW, it isexpected tofeed into an existing grid or, with a standby support, be used as a prime power sourcefor remote island communities.

In May 2007, Wavegen won a £2.3 million grant from the UK’ s DTI (now theDepartment for Business, Enterprise and Regulatory Reform) to support the devel-opment and demonstration of aseries of three Osprey devices, which will besited offthe Western Isles of Scotland, using thenew test facilities on Orkney.

6.4.6 Stingray

Stingray wasdeveloped by theEngineeringBusiness, acompany that providesequip-ment andservicesto offshore businessesincludingsubmarinecabling, andtheoil andgas industry.

Stingray consists of a hydroplane that moves in an approaching tidal waterstream. This causes the supporting arm to oscillate, which i n turn forces hydrauliccylinders to extend and retract. The high pressures are used to drive a generator.Following a feasibil ity study on the design, which began in August 2001, the DTIawarded the company a £1.6 million grant to allow a demonstration project to becarried out.

The site chosen for the project was at Yell Sound, where a current meter installedon the seabed showed a peak spring-tide velocity in excess of 5 knots. A t this site aStingray 24 m high, using ahydroplanesome 15 m across, would berated at 150 kW.

6.5 Development issues

Stingray isonetidal power designwhosedevelopment hasbeenhalted. UK developerscomplained that, although the UK government has provided support for wave andtidal technologies at the research-and-development phase, its support in making theleap to a commercial technology was inadequate.




TheUK initially offered limited capital grantsand ROCs– theUK ’smajor supportprogrammefor renewables – for all energy exported. Developers argued that this wasinadequate for this phase. One problem was that the ROC payment was simply nothigh enough to support these technologies. What is more, because of the structureof the Renewables Obligation the value of a ROC could vary considerably, makingfinancing more difficult. In addition, most technologies would provide relativelylow amounts of power from each single device. A chieving economies of scale, andthereforelower prices, would not comein thef irst commercial deploymentsbut whenthey were being installed in the hundreds or thousands.

Incontrast to theUK, windandwavetechnologiesinPortugal receiveaguaranteed‘ feed-in’ tariff. It is an arrangement that is popular in several countries because itprovides the developer with a fixed and certain return – provided that the projectgeneratessuccessfully. What is more, better performance means a better return.

Consistent lobbying for additional support in the UK was successful, but it isnot clear how effective the extra support will be. The UK government, followinga proposal taken forward by the Scottish Executive, will give additional ROCs foreach megawatt hour of electricity generated by the wave and tidal projects – doubleROCs if the Scottish Executive’s model is followed fully. This should double theamount of subsidy provided for generation, especially in the light of other changesplanned for the Obligation that would maintain ‘ headroom’ between the amount ofrenewables available in the UK and the Obligation (target) that had to be met byelectricity suppliers. That change should maintain the value of a ROC. Developers,

however, have argued that such a change, although welcome, may not be enough toconvince potential project developers, and it must be accompanied by higher capitalgrants.



Chapter 7 Solar photovoltaics

Solar power can be used both for water heating, as at this project, and to produce electricity directly.

Solar power sometimes causes confusion because there are two ways of using thesun’s energy directly. If what you want is heat – for warm rooms or hot water – youneed solar thermal as described in Chapter 3. But if you want to generate electricityyou need photovoltaics– PV for short.

7.1 Photovoltaic power

PV panels turn sunlight directly into electricity, thanks to a property of their majorcomponent – silicon, the most abundant element on earth.



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Metals conduct electricity if the outer electrons on each atom are attached tothe atom so lightly that they can drif t away under the influence of a magnetic field.This electron drif t is the electric current. Sil icon atoms hold on to the electrons thatsurround them, but some are held less tightly than others and the right-sized hit ofenergy can knock them loose. Sunlight provides that energy hit, so when light shineson it some electronsare freed.

Oncetheelectronsarefreed they can flow around acircuit – and that isan electriccurrent. Note that it is the light , not the heat , from the sun that enables the electricityto f low, so photovoltaics are just as effective in cold countries as in hot – providedthere are long hours of sunlight.

7.2 Assembling the PV panels

The principle is fairly simple, but turning a few stray electrons into usable electricityrequires somecomplex engineering.

First thesilicon: although it is available almost everywhere in rock form, to takethe best advantage of sil icon’s PV property it i s best grown as a single crystal. Thecrystal is cut into very thin wafers, and each forms the basis of a PV cell. Usually thewafer is treated to improve its photovoltaic property (known as doping ).

To extract the electricity, the wafer is printed with a fine metal grid and thencovered with an antireflection coating. It is sometimes placed on a second material

– a substrate that improves its photovoltaic properties. The bottom is coated withaluminium and fi red.

These assemblies are the ‘ cells’ , the characteristic circles seen inside many PVpanels. Between 36 and 72 cells are connected into a ‘ mat’ and then embedded in aplastic material that protects the cells against damage from humidity and UV light.It is then laminated using a specially hardened, highly transparent glass in front ofthe cells and layers of foil behind the cells. The array is framed and connectors areattached.

PV cellshavebeen described asanexpensivetechnology reliant onvery expensive

materials and clearly the manufacturing is a complex process. But they have manyadvantages.

All the indirect ways of turning the sun’s energy into electricity need turbines,generators and other equipment, whereas PV can be set up and connected directlyinto your supply. Once installed, it can l ast for decades and maintenance is almostnonexistent.

Development is moving very quickly, both to reduce the cost of famil iar single-crystal panels, and to use the same principle in a variety of different f orms. An earlystep wasto usecheaper multicrystallinesilicon instead of singlecrystalsin somepan-

els. Instead of thecircular silicon wafers, multicrystallinepanelsare generally squareor rectangular, but close up it can be seen that the substrate is made of small piecesof silicon. Multicrystalline panels are much cheaper to produce, because ‘ growing’large silicon crystals is energy-intensive.



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Panel 7.1 Sustainable Lambeth

The London Borough of Lambeth thinks councils play an important role ingetting renewables into all the UK’s streets. It spends around £50 million onconstruction every year, which means there is enormous potential to integraterenewables.

In L ambeth, the Housing Directorate has taken a lead on sustainability. Itfits with the council ’s sustainable construction strategy and cli mate-changeagenda, and it promotes good practice in construction. Lambeth Housing hashad very positive publicity from sustainable construction and this was anotherbest-practice element to the programme.

Lambeth allocated £50 000 each year from the Lambeth capital fund – seedfunding that enabled theteam to start planning projectsand bid for aPV grant.

The first project to benefit from this approach was at a sheltered housingscheme with 45 dwellings, called Tomkyns House, owned by the council. PVwas installed along with solar thermal to reduce carbon emissions and energycosts. The housing department spent around £30 000 on the PV panels andinstallation and leveraged a further £20 000 to fund the solar thermal fromother sources. The PV panels, incorporated into the roof’s safety guardrail,now power communal areas, while the solar thermal will feed i nto a projectthat will give residents better and more controllable heating.

Lambeth Housing’s first integrated PV roof i s a much larger project at War-wick House on theAngel Town Estate. This extensive regeneration project hasbeen under way for many years and residents support a sustainable agenda forthe project. Warwick House incorporates high i nsulation, passive stack venti-lation and condensing boilers.

Communal lighting within Warwick House wi ll be powered from the PVarray on thebuilding’s pitched roof. A l ocal company, Solarcentury, is thepre-ferred PV supplier for the council . The array at Warwick House, suppli ed bySolarcentury, provides 11 775 kWh/year, roughly equivalent to the communal

lighting load. The PV has been partly funded by a £71 614 grant from the (for-mer) Department of TradeandIndustry’ sMajor PV DemonstrationProgramme.

Lambeth’s third project is part of a £600000 refurbishment at LangholmClose, a sheltered housing block with 43 dwellings. Once again, the projectaims to introduce sustainable construction techniques and the housing depart-ment plans to use solar shingles, provided by Solarcentury. This project hasan unusual design, with the conversion of seven flat roofs to pitched roofs.The system is likely to cost £160 000 and is li kely to generate in the region of238 000 kWh/year.

Major solar PV schemes are being backed up by thermal projects under thecouncil ’s Health and Housing scheme, where theenergy strategy officer, ColinMonk, is expanding a scheme to install solar thermal as part of a project toprovide central heating for older residents. Feedback from residents has beengood and 25 further installations now have secured funding under the ClearSkies programme.



Chapter 8 Combined heat and power

A common method of generating electrical power involves a process known as the

Rankine cycle . A working f luid (often water) is placed in a system at high pressure

and is passed through a boiler. Thefluid is heated, but, because of thehigh pressure,it does not boil but instead becomes ‘ superheated’. The superheated l iquid is thenexpanded through a turbine, which it turns to produce electrical power. Theresultinggas is then condensed into a liquid and returned to the circuit.

The process produces electricity, but most of the heat generated to drive theprocess is wasted – for power stations dispersing this waste, heat is a real problemand requires cooling towers or large heat sinks such as rivers or thesea.

But heat is a basic requirement for both industrial and domestic uses – in fact,some 40 per cent of theUK’s energy requirement is for heat. Using theheat from the

power station – for example, by piping hot water to local homes and businesses in adistrict heating scheme – makes very little difference to the operation of the powerstation but can increase the proportion of the fuel that is transformed into usableenergy from 30–40 per cent to upwards of 80 per cent.

8.1 The UK CHP programme

Theidea of regarding both thepotential heat and power outputs of a power station as

useful productsisneither new nor unusual, but thepotential hasoftenbeendisregardedin the UK, even though there are plenty of existing projects that could take accountof its opportunity. Combined heat and power, or CHP, has been of most interestto industry that has a high heat demand (see Panel 8.1). It has huge potential forsmaller organizationsin theindustri al andcommercial sectors, andequally in housingdevelopments.

The UK government’s strategy for CHP development is managed by theDepartment f or Environment, Food and Rural Aff airs, or DEFRA.

In 2004 the government published a target to achieve at least 10000 MW of

‘ good-quality’ CHP by 2010. Progress has been extremely slow, partly because ofchanges in electricity-trading arrangementsthat did not favour CHPplantsand madethem less attractive to commercial companies.



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Since 2000, the government has i ntroduced a package of measures to supportCHP. These measures, as reported on in the CHP Strategy, included:

• exemption from the Climate Change Levy for all good-quality CHP fuel inputs

and electricity outputs;• Cli mate Change Agreements to providean incentive for emissions reductions;• eligibility for Enhanced Capital Allowances (ECAs) to stimulate investment;• business-rates exception for CHP power generation plant and machinery; and• a reduction in VAT on certain domestic microCHP installations.

Grant support was available from the Community Energy programme to encour-age CHP in community heating schemes and the bioenergy capital grants scheme.Both are now closed to applicants.

DEFRA also lists a series of supporting easures in the regulator f ramework:

• changes to the licensing regime, benefiting smaller generators;

• working with Ofgem, to ensure level playing field under the British Electric-ity Trading and Transmission A rrangements (BETTA) for smaller generators,including CHP;

• emphasizing CHP benefits when planning or sustainable development guidanceis reviewed or introduced;

• reviewing procedures on power-station consents applications to ensure fullconsideration of CHP;

•

exploring opportunities to i ncentivize CHP under any future Energy EfficiencyCommitment (EEC); and

• encouraging thetake up of CHP through thebuilding regulations.

Take-up was extremely low and the government decided to set an example bysetting a new target, to source15 per cent of energy at government offices from CHP.

In 2006, the government also commissioned Cambridge Econometri cs to assessthepotential for a CHPObligation, and a number of other support schemes have alsobeen proposed.

8.2 EU Directive support

CHPreceived additional impetusafter theEU passed theDirective on thePromotionof Cogeneration (Combined Heat and Power) in the EU.

The overall objective of the Directive is to create a framework to facil itate andsupport the installation and proper functioning of cogeneration where a useful heatdemand exists or is foreseen.

Themain measures contained within the Directive are:

• a ‘ guarantee of origin’ to be readily available for electricity produced fromcogeneration;

• obligations on member states to analyse national potentials for high-efficiencycogeneration and barriers to their realization;



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Once the gas has expanded into the hot side it would stay put, except that thepiston is pushed back up by the crankshaft as it continues to turn. And it continues toturn because it is attached to a heavy ‘ flywheel’ . This is also the reason why Stirlingengines are slow to start up, as the flywheel is storing energy and it takes a fewrevolutionsto get it started.

Some Stirling engines can run on very small temperature differences – AmericanStirling Company offers educational versions that can berun on a cup of coff ee. Butthecompany explainsthat, as thetemperaturedifferencebecomes smaller, thesizeofthe Stirling engine that would be needed to get them to do anything useful becomesunfeasibly large. So the best versions use high temperatures – such as gas burners – on the hot side.

8.4 Developing domestic technologies

Over thelast few yearscompaniessuch asBG Grouphavebeen investigating Stirlingengines as combined-heat-and-power plants for domestic and commercial uses. Twoproducts based on very different applications of the cycle were investigated.

TheNew Zealand company Whispertech began work on Stirling engines in 1989and released its first commercial DC units in 1998. Whispertech says its versioncombines four piston-cylinder sets in an axial arrangement, with the hot end of onecylinder attached to the cold end of theadjacent cylinder.

The company says that, if the power from the pistons was transferred to a rotarymotion by a traditional crank type of mechanism, it would put considerable sideloadingonthepistonsandcauserapid guideandseal wear –traditionally al ife-limitingfactor in Stirling engines. Instead, it hasdeveloped a‘ wobble-yoke’ system to convertthel inear motionof theengine’sfour pistonsintotherotary motionnecessary to drivea generator, while putting very little side load on the piston seals and guides. Thewobble-yokemechanism connectsthepistonsto asinglerotating shaft andalternator,which are sealed into the compact housing.

The Microgen microCHP was based on a design by US-based Sunpower andbased on a linear-free motor. The CHP unit is started up in synchronization with the

grid and aplanar springactswi th thecontrol system to maintain itsfrequency at 50Hz.

8.5 Development issues

Development of both microCHP units has been problematic. The target is a toughone: it is hoped the technology will replace conventional boilers, but that meansreducing its size to fit a standard kitchen spacing. It is unlikely that capital cost andinstallation charges will ever be as low as standard boilers, so customers will have

to be convinced that the benefi t of lower electricity bil ls over ti me will outweigh theupfront cost.The opportunity to export excess power to the grid could be a major selling

point for such products. But the grid structure in England and Wales is notoriouslyunprepared for such small-scale export.



Combined heat and power 83

This type of arrangement is common in apartment blocks in many Europeancountries. In the UK it is a relatively rare arrangement but far from unique. In fact,around1per cent of Britain’shousingisserved by joint heatingandhot-water systems.Replacing these with CHPwould make a real contribution to cutting energy use andtherefore carbon dioxideemissions.

Switching is not necessarily technically complicated, but it does require under-standing from those who own and manage properti es. Once again, the capitalcost is almost certainly higher, but whole-life costing makes the CHP option moreattractive.

CHPisan option at themoment that iseasy to ignoreor dismissin thecommercialsector as not offering a return on investment. Two major poli cy changes may shif tthat perception. First is the work of local council s. Since 2000, upwards of halfthe UK ’s 300 or so local councils have added new requirements to their planning

standards that make it mandatory for new developments to include energy-efficientor renewable-energy sources that would cut carbon emissions by up to 20 per cent(see Chapter 13). In that case CHP is a well-proven step on from boilers. The othernew policy, proposed in 2006, would see energy users in the smaller commercial,industrial and public sectors given carbon dioxide emissions allocations in a tradingschemeintended to parallel that used for largeemitters across theEU (theEmissionsTrading Scheme, or ETS – see Chapter 19). That would also make CHPan attractiveoption because any additional cost for the CHP, compared with a standard boiler,would be balanced by the potential for extra income from reducing carbon dioxide

emissions and selling excess allowances. At the start of the ETS several companies,notably in the pulp and paper industry, switched to CHP in exactly this fashion(see panel).

Panel 8.1 Good projects on paper

A new CHPplant at M-real’ sHall ein mil l in Austriawi ll providei t with 21 MW

of process heat in the form of steam, along with 5 MW of electricity to exportto the power grid at favourable rates.The decision to build the new plant was an economic one, says man-

ager Erich Feldbaumer, and it seems the carbon dioxide ETS tipped thebalance.

The mill currently uses a variety of sources for its heat and steam supply.The main boilers produce steam at 100 t/h using process liquor and these areaugmented by a dual-fuel plant, running on heavy fuel oil or gas, that suppliessteam at 75 t/h. Four additional fossil-fuelled steam blocks provide 30 t/h anda reheat boiler has 1.5 t/h available as backup.

Thenew CHPplant wil l replacethefour steam blocks. It wil l befuell ed withsludge, bark and other residualsbacked up by wood fromlocal forests. Fuellingthe new plant will require the plant to process some 250 000 m3 of residuals

Continues



Combined heat and power 85

Panel 8.2 London housing

The London Borough of Tower Hamlets says it has nearly alleviated fuelpoverty ontheBarkantinehousing estate thanksto theBarkantineCHPproject,which it built andoperatesin partnership with LondonElectricity Services(partof EDF). The CHP unit provides hot water and electricity to 540 householdson the estate, as well as the local school and leisure centre.

The scheme received Private Finance Initiative (PFI) funding of more than£6 million and agrant of £12 500 from theEnergy Saving Trust (EST) to inves-tigate legal issues, becausethe schemeis set up as an energy-services company(or ESCo – see Chapter 18).

The 1.4 MWe CHP unit, which has the potential to supply 1 000 houses, isin a refurbished substation on the estate.

Thepartnership will operate and managetheBarkantineproject for 25years.After the third year of operation, the council will receive a share of the profitsevery second year to invest in energy-saving measures on the estate.



Chapter 9 Biomass

Wood is one of the oldest biomass fuels and still has an important role to play.

9.1 Biomassfuels

Wood fuel can comefromconifer forests, broadleaved woodlands, urban androadside

trees, clean by-products and off cuts from wood processing. It may be purpose-grownas short-rotation coppice (SRC), where high-yielding species such as willow andpoplar areplanted at highdensity andharvested at three- to five-year intervals. A widevariety of forest products can beused: early thinnings, small-dimension roundwood,poor-quality crops, thesidebranches and tops of trees harvested for their stem wood.



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From an environmental point of view, burning wood from sustainably managedforests – that is, forests where harvested trees are replaced – has l ittle net impacton carbon dioxide emissions. In Britain, a f uel market for currently unsaleablesmall roundwood could bring many small and derelict woodlands back into activemanagement with benefits for wildli fe and rural employment.

Wood has provided heat for millennia, but only recently has modern technologyincreased efficiency and automation. In northern Europe and North America, wood-burning technology is widely used and markets are large and well developed. Innorthern Europe, medium-sized, automated central-heating systems underpinned bycapital-grant schemes were used to develop the markets, after which large-districtheating, combined heat and power (CHP) and power schemes were built.

Wood now accounts for up to 40 per cent of space heating in rural areas insome countries. Britain’s Forestry Commission exports timber for this purpose. The

Commission recently supplied 2 000 tonnes of timber via a merchant from its NorthYork Moors forests to Denmark for use in wood-burning power plants.

9.2 Heating programmes

In Britain there are comparatively few (perhaps a hundred) automated, wood-fi redcentral-heating systems, mostl y in businesses that produce considerable volumesof waste wood that they can use themselves, or on l arge rural estates. A handful of

wood-fired-power or CHPschemeswerealso in operationasof mid-2002. Indigenoussuppli ers of both fuel and burners are small and few in number. Scotland, Wales, EastAnglia and the south-west of England are out in front, with the West Midlands closebehind.

The Forestry Commission is working with private forest owners, potential cus-tomers and government departments to identify opportunities f or wood fuel. TheCommission has produced a draft wood-fuel policy, which looks at the obstaclesto developing a wood-energy industry and outlines ways to overcome them. Eng-land, Wales and Scotland are developing their own wood-fuel strategies to meet their

parti cular pressures and conditions, but the Commission has also outlined a broadthree-phase framework strategy as a guide for moving forward.

In Phase 1, theCommission will seek to stimulate and promote markets for woodfuel by focusing on existing or low-risk technologies. It hopes that development ofmarkets for heat and co-firing with coal for electricity generation will demonstratethat a market for wood fuel exists and improve the knowledge base and operatingsystems, which will in turn lead to areduction in costsand an increasein profitability.

Phase 2 will attempt to develop wood-fuelled production of CHP, evaluatenew technologies and systems (especially co-firing with gas, pyrolysis and ethanol

production), and improve perceptions of wood fuel.Finally, Phase 3 will build on pil ot projects by introducing the most successfultechnologies and systems identified at the pilot stage. At the same time, the sustain-abil ity of various levels of wood-fuel removal will be monitored and, where levelsare unsustainable, practices adjusted to ensure sustainable forest management.



Biomass 91

possibil ity for a community heating system. A feasibil ity study funded by the ESTshowed this to be viable. The idea was presented to the community through openmeetings and a questionnaire, the results of which showed interest from 30 localhouseholds.

Following two years of project development, the tender process and selectionof energy supply company took place between December 2002 and M arch 2003.The boiler was installed in August 2003 and commissioned in November 2003. Theschool and community centre now receive heat from the 520 kW Compte wood-chip, remote-automated boiler. The houses are connected to the boiler by a hot-water pipe referred to as a heat main . Hot water will continue to be avail able in thesummer, when there is little demand for space heating. There is a 350 kW backup oilboiler.

The project involves a number of partners including Ysgol Vyrnwy, Llanwddyn

Community Council , Antur Vyrnwy, Severn Trent Water, Powys County Council(legal, education, planning, community development, etc.), Forestry CommissionWales, Forest Research Board, Powys Energy Agency and Dulas Wood Energy.The system is owned by Powys County Council and Powys Energy A gency. I t wasinstalled, and is now operated and maintained, by Dulas Wood Energy.

9.5 Wood-fuel research

As part of its broader nationwidestrategy, the Forestry Commission has scientists atthegovernment-funded researchbody Forest Research workingonastudy to quantifythevolumeof wood fuel available from woodlands, purpose-grown energy cropsandother sources.

The programme has established a UK-wide network of more than 50 trial sitesand aims to produce defi nitive data on the SRC yield of more than 30 varieties ofenergy crop. Thenetwork of trial sites is funded in partnership with thepredecessorsof BERR andDEFRA (theDTI andMAFF), theDepartment of AgricultureandRuralDevelopment in Northern Ireland and industrial members of British Biogen.

Thestudy summarizes existing information to givetemporary guidanceon estab-lishment, indicative yields, harvesting operations and approximate costs to help theevaluation of these types of crop as sources of renewable biomass. Results from thetri al are posted on the Forest Research website.

Theproject is thelargest fi eld trial in theUK, and in Europe, of poplar and wil lowspeciesgrown ascropsfor theprovisionof biofuels. Itsmain aim isto develop modelsthat wi ll forecast growth and yield performancein diff erent climates and sites.

Fast-growing willow and poplar are among the most promising tree species forSRC, andthewebsitesharestheresultsof researchtrials. It alsopullstogether practical

informationoncultivationandongrant support, intendedto helpexistingandpotentialgrowers as well as thepolicymakers.At present, economic andlogistical factorsarethemain constraintsto thesuccess-

ful development of Britain’s wood-fuel industry. Thecostsof felling, transportinganddrying wood fuel mean that current pricesfor wood fuel do not offer much in the way



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of a profit margin to the producer. Moreover, the potential market for wood fuel isas yet undeveloped. Although some companies in a few locations have found nicheswhere they can operate at a profit, these developments are still at an early stage, andlarge-scale markets have not yet been proven.

Logistical constraints may be a larger obstacle to development. Britain does notcurrently have enough biomass to generate the expected proportion of the govern-ment’s renewable-energy targets (about 1 GW by 2010). In order to increase supply,new planting – either f or wood fuel alone or f or mixed objectives of wood fuel andtimber – is essential.

The regional availabil ity of resources is also uncertain. National figures estimatethat by 2010 available wood-fuel resources will be around 4 million m3, but it ismore diff icult to say what is available in a particular area and at a particular price. Adetailed breakdown of present and future resources is therefore needed to determine

what isavailable within arealistic radiusof apotential wood-fuel development point,and this will hopefully emerge from the trial results.

9.6 What ispyrolysis?

When biomass breaks down it does not transform directly from wood into carbondioxide. During theprocessavariety of smaller organic compoundsareproduced andthen broken down further. At some points in the process the intermediate products

can be abstracted, potentially in a more usable form than the initial biomass. Li quid,solid or gas forms are all potential products and share many characteristics with gasand liquid (e.g. oil or diesel) produced from fossil fuels. As a result, they may beavailable as replacements, or to mix with fossil equivalents.

In pyrolysisthefirst stageof thebreakdown involvesheat but no oxygen. In someaspects it is a process that has been known for hundreds of years, as when charcoalburners heated wood in insulated burners over a slow f ire. The charcoal is light tocarry and has good clean-burning characteristics. What the charcoal burners did notknow was that the natural gases and oils produced during the process could also be

burned, as we use fossil-sourced gas and oil.Some process conditions, including low temperature, favour the production of

charcoal. Hightemperatureandlonger residencetimeincreasethebiomassconversionto gas. Moderate temperature and short vapour-residence time produce liquid oils.In effect, pyrolysis converts biomass to products that can replace those used in ourconventi onal fossil-based processes.

Pyrolysis is always thefirst step in combustion and gasification processes, whereit produces a gas that can be used to operate gas turbines. Fast pyrolysis for l iquidproduction i s currently of parti cular interest, as the liquids are transportable and

storageis relatively simple. Fast pyrolysis occurs in a timeof a few seconds or less.That means that developing it as an industrial process requires work not only on thechemical reaction but also on transporting the feedstock to the reaction process andon removing the heat produced. The reaction takes place at a temperature of around500 ◦C and residence times of typically l ess than 2 s.



Biomass 93

In fast pyrolysis, biomass decomposes to generate mostly vapours and aerosolsand some charcoal. After cooli ng and condensation, a dark-brown l iquid i s formedthat has a heating valueabout half that of conventional fuel oil . Bio-oil can substitutefor fuel oil or diesel in many static applications, including boilers, furnaces, enginesandturbines. Therearearangeof chemicalsthat canbeextracted or derived, includingfood flavourings, specialities, resins, agrichemicals, ferti lizers and emission-controlagents. Upgrading bio-oil to transportation fuelsisnot economic, although technicallyfeasible.

While it is related to thetraditional pyrolysis processes for making charcoal, fastpyrolysis is an advanced process, with carefully controll ed parameters to give highyields of li quid.

The main product, bio-oil, i s obtained in yields of up to 75 per cent wt on a dry-feed basis, together with by-product char and gas, which are used within theprocess

to provide the process heat requirements, so there are no waste streams other thanflue gas and ash.

A fast-pyrolysis process includes drying the feed to typically less than 10 percent water in order to minimizethe water in the product liquid oil (although up to 15per cent can be acceptable), grinding the feed (to around 2 mm in the case of fluidbed reactors) to give sufficiently small particles to ensure rapid reaction, pyrolysisreaction, separation of soli ds (char), quenching and collection of the liquid product(bio-oil).

Virtually any f orm of biomass can be considered for fast pyrolysis. Whil e most

work has been carried out on wood dueto its consistency, and comparability betweentests, nearly 100 different biomass types have been tested by many laboratories rang-ing from agricultural wastes such as straw, oli ve pits and nut shells to energy cropssuch as miscanthusand sorghum, forestry wastes such as bark and solid wastes suchas sewagesludge and leather wastes.



Chapter 10 Energy storage

Part of thereasonwhy theelectricity system requiressuch careful management isthatelectricity is not a storable commodity. If a peak in demand is on the way, or may be

on the way, it is not possible to store up a pil e of electricity and release it at the rightmoment.

This has i mportant implications for managing the electricity grid. Electricitydemand is not constant. It tends to go up and down depending on thetimeof day andof year, asdifferent groups’ electricity requirementsbegin and end. Thebiggest peakis generally on a winter evening, when domestic demand for heating, lighting andother uses is highest. A summer night has the lowest energy use.

Sinceit isnot possibleto storeelectricity, theaimfor anelectricity supply companyhasto beto invest in adiverserangeof generation that wil l give it thebest opportunity

to match supply and demand.

10.1 Diverse energy in the network

A mixed system makes the best use of the different types of generation. Some formsof generation are slow to start up and have little flexibility in operation, but in con-tinuous generation they are cost-effective. These plants would typically be operatedcontinuously to supply ‘ baseload’ – theelectricity required even onasummer’ snight,maybe 30 per cent of the average load. Forms of generation that can be started up

within minutesor hoursand cycled up and down to providemoreor lesspower wouldbe brought on to the system as load increases during the daytime and the industrialload increases. Finally, power would beadded fromvery flexiblegenerationto supplymorning or evening peaks.

Within this scenario different forms of renewables also have different character-istics. Wind energy is predictable in broad terms over a few days and in more detailover a few hours. Wave energy relies in part on the weather and so i s aff ected byexpected weather patterns over days and hours, but is also a function of the physicallandscape. Tidal power is very predictable but not constant, as it will comeon to the

grid in regular peaks whose timing varies in a predictable way with the tides.The grid operator cannot predict demand in perfect detail , so ‘ spinningreserve’ – effectively plants operating in neutral, or instantly available power suchas hydropower – has to be available to feed i nto the system at any moment. This isone reason why a large proportion of a single form of generation can be costly for the



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system. France, for example, has an extremely high proportion – some 77 per cent – of nuclear generation operating at base load. This has inconveniences for the Frenchgrid operator, which are alleviated by selling excess power at times of low Frenchdemandto itsneighbouringcountries. Countrieswith highproportionsof windpowersometimes find that additional spinning reserve is used, either because more windthan expected results in additional wind generation, so other forms of generation aretaken out of supply, or to be ready for a potential loss of wind generation if windspeedsare forecast to drop in the next few hours.

Clearly, any form of energy storage is beneficial in managing such a system,and especiall y one where large amounts of renewable energy may become availableat times when the system cannot use it. Since the electricity cannot be stored, thealternative is to store a proxy – for example, by charging a battery. The biggest formof energy storageused worldwide is water.

10.2 Pumped storage

Hydropower plants, where water is stored behind a dam or, at smaller scale, in amill pond, are already offering an opportunity to store energy in the form of water. Ifit is not necessary to generate at full capacity, or at all, because other generators aremeeting the system needs, water can be allowed to collect in the reservoir or pooluntil the power is needed. In fact, in some countriesthis is an important featureof the

projects. In Norway, for example, reservoirs are fi ll ed during the spring by snowmeltand receive little additional water during the year. Similarly, in tropical countries,monsoon rainsannually fill the reservoir.

Hydro-turbines can be brought i nto operation within seconds or minutes whennecessary, and water can be moved from one area to another by pumping. Thesecharacteristics have led to the development of pumped-storage plants.

On first glance, it may bedifficult to seethebenefit of apumped-storageplant. Inthis type of plant there are two (or more) water reservoirs at different elevations andone(or more) generation/pumpingstation. Water ispumped upto thehigher reservoir

and released when necessary to flow down through the hydrogenerator to thebottomreservoir.

It is a net energy user: it always takes more energy to pump the water up to thetop reservoir than can be gained from generating on the way down. And it may beexpensiveto build – requiringtwo setsof water-storagecapacity andsomevery robusthydro pumps/turbines in between. But the pumped-storage system adds so much totheoverall eff iciency of theelectricity supply system that it isalmost alwaysworththeinvestment, and in a privatized industry there are plenty of opportunities to operatethe plant at a profit.

Pumping is done at times when there is excess power on the system and lowdemand, soaking up base-load power and the intermittent generation. Then, whendemand peaks, the stored water is released. It is immediate. One of hydro’s greatstrengths is that it starts up in seconds, reducing the spinning-reserve requirement.And, although it may have high capital costs, the avoided cost of generation is very



Energy storage 97

low andi t knockscarbon dioxide-producinggas, oil or diesel plantsout of therankingsat peak times.

Theeconomic potential of pumped storagehas been fully realized in deregulatedmarkets, where price differentials between ti mes of low and peak demand are veryclear. The UK built two pumped-storage plants in Wales in the 1970s, expected topump and generate on a twice-daily cycle to meet peak demand. They fulf illed thatrole until privatizationof thei ndustry at thestart of the1990s, but now they pump andgenerate up to 100 times a day, and thereason is thenew marketplacefor electricity.The UK’ smarket, li ke many others, sees prices ten or a hundred timeshigher in peakhours than it does at low load, and electricity bought and sold in half-hourly slotsoffers many opportunities to buy or sell.

Similar possibilities have been picked up by Tasmania, which has hugehydropower and wind resources and a volatile privatized market across the Bass

Strait in mainland Australia. Hydro Tasmania now plans to install an undersea cableacross the strait so it can operate what will effectively be a pumped-storage systemwithout the pumping.

With some 2 260 MW of installed capacity and a peak load of only 1 600 MW,Tasmania hasamorethan comfortable reserve margin – theresult of along-term viewthat led to the creation of reservoirs far in excess of needs, an awareness that rainfallto feed the reservoirs could vary by 30 per cent from year to year, and a recognitionthat long-term storage may be required. It is also beginning to develop another ofits natural resources: the high wind speeds that arise because of its position in the

latitude of theso-called ‘ roaring forties’ . Hydro Tasmania estimatesthat wind speedson its west coast average 8–9 m/s – a ‘ world-class wind resource’ – and it believesit has 1 000 MW of wind potential in the area. But the peak demand of the island’shalf-mill ion population is growing fairl y slowly and Hydro Tasmania is anticipatingderegulation and looking for new markets to grow its business. Theanswer is to shippower across the Bass Strait to the national electricity market to f eed the growingneeds of Victoria and South Australia. In this market base prices are low, thanks totheready availability of coal, but summer peak pricesare much higher andhave beenknown to hit thousands of dollars for some short periods. Hydro Tasmania hopes to

arbitragethis market.Thecompany will save its water reserve at times when prices are low, providing

perhaps 600 MW and importing power from Australia to meet demand. At Aus-tralian peak times it wil l generate up to 2 000 MW to supply its own customers andthe Australian market. The wind turbines will feed into the grid whenever they aregenerating, allowing Hydro Tasmania to conserve its water so that it has maximumcapacity available when the price is high.

Roger Gill, general manager of Hydro Tasmania’s generation division, describedthe combination of the hydro reserve, the export link and the wind capacity as a

‘ quasi-pumped storage system’. It may not be classical pumped storage, but it usesthe concept i n a way that allows the company to get all the energy management andeconomic benefits of pumped storagewithout having to invest in the real thing.

These are large-scale projects. But, as we have seen, small hydro offers many ofthebenefits of large hydro, and the sameis true in pumped storage.



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As might be expected, water companies have made most of the running in this,because almost all thecomponentsfor small-scalepumped storageare already on thesystem. Water companies have a large number of reservoirs where water is storedbeforeit is sent out to users. Maintaining supplies often requires water to bepumpedfromaquifers, riversor other sourcesintothereservoirs. Meanwhile, water companiesare increasingly installing hydro-turbines in theoutfall from reservoirs, where in thepast there would have been a pressure-reducing valve or settl ing pond to remove theenergy from the water.

These are the components of a pumped-storage system. It only remains for thewater companies to operate them as such for the benefit of the electricity system – something that water companiesare increasingly taking on board.

10.3 Gasstorage

A situation analogous to pumped-water storage also exists in the gas transmissionand distribution network. When fed into the network, gas has to be pressurized fortransport, and on arrival that pressure has largely to bereleased for delivery.

It hasbeen proposed that turbinesinstalled at decompression stationscan recoversome of the energy from the system by generating electricity.

Onceagain, the compression and decompression processisanet energy user. Butit allows energy that would otherwise belost to be at least partially recovered.

10.4 Batteries

In many cases simply using a battery storage system in conjunction with anintermittent electrical source may provide enough control.

SustainableEnergy Ireland(SEI) published theresultsof afeasibility study for theimplementationof awind-energy storagefacil ity at SorneHill WindFarm, Buncrana,Donegal.

The study, which was jointly funded by SEI and Tapbury Management Limited,which oversees the management of Sorne Hill Wind Farm, examined the costs andbenefitsof integratingabattery-based power storagesystem with a6 MW windfarm.

Thefeasibility report provided an initial technical and economic validation for anumber of the key revenue streamsthat had previously been identified in relation tothe integration of wind power and storage.

The analysis of the feasibility of using an energy-storage system showed thatcombining the turbine with a battery system could support an uninterrupted sup-ply of wind-generated electricity to the National Grid and significantly improve the

efficiency of the energy produced.The purpose of the report was to determine the optimum size for such a systemin order to deliver an optimum return on investment, and to review the main benefitsthat this system would offer. The report concluded that the optimum battery is a2-MW-capacity battery delivering six hours of electricity storage.



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10.5 Centrifuges

At a medium-voltage scale, and more closely associated with the end-user thanpumped-storage projects, energy storage can be combined with power-quality man-agement. UrencoPower Technologies’ kinetic-energy storagesystem(KESS) isbeingselected to resolve a range of power- and energy-management problemsencounteredin applications such as wind farms, uninterruptible power supplies (UPSs), mining,heavy l ifting gear and mass transit.

At the heart of the system is a patented high-speed composite flywheel, whichtakes advantageof the basic physical laws whereby kinetic energy is proporti onal tothe square of the speed. Thedesign comprises a tubular rotor 900 mm long and withan external diameter of 330 mm, which is made up of carbon-fibre and glass-fibrecomposite weighing 110 kg. The bore of the rotor is lined with a patented magnetic-

loaded composite, impulse magnetized, to produce the poles of the motor generatorandthepassivemagnetic bearing. Thetop speed is630 Hz, with asurfacespeed equalto 1 400 mph.

It can also act as a power-levelling device, or as an energy sink. In its basic con-figuration, KESS off ers an alternative to large battery banksused in UPS systems. Itoffersprotectionfromarangeof disturbances, includingvoltagedips, short blackoutsandbrownouts. For usersrequiringcontinuousoperation, it providesabridgebetweenmainspower andbackup generation. In this mode, thecontrol system operatesin sucha way as to maintain a constant voltage at the DC bus. The system is able to supply

thechangesassociated with varying loadswhile maintaining this constant voltage, incontrast to battery systems, where the output voltage decreases with increasing loadand as the battery discharges.

In Japan, thesystem has been used to improveoperation at a wind farm at MountObu, Oki island. A single 200 kW unit has been fitted to a 600 kW wind turbine tosmooth the output. The overall variabil ity of the turbine output (due to wind gustingand thepitching and yawing of theblades) has been significantly reduced.

Other applications include a 1 MW system installed on New York City Transit’stest track to support track voltageandsaveenergy. Thesystemconsistsof 10×100kW

machines and has now been operational for 10000 hours, reinforcing the voltage ofthetest track during testing of thenew trainsbeing supplied to New York City Transit,as well as of the adjacent revenue line during normal operation.

10.6 M oving to a hydrogen economy

An alternative method of energy storage is to use excess electricity at times of lowdemand to produce hydrogen. The hydrogen can bestored and used for fuel cells or

other types of generation at times when demand is higher than generation.This potential role for hydrogen has found much favour among poli cymakers,although work on developing systems has proceeded very slowly. The reason is thepossibil ity that hydrogen could eventually replace gas or petroleum products and beused in the transport industry.



Energy storage 101

The rough weather at Utsira plays an important role in the process ofsupplying the island with power. The windy situation makes Utsira and its 240

inhabitants a natural choice for wind-power production, and the wind turbinesinstalled will produce a significant excess of power under optimal conditions.When there is too li ttle or too much wind the turbines wil l not run. But on

Utsira, excess power is being stored as chemical energy in the form of hydro-gen. On windy days electrolysers produce hydrogen for storage, and, when itis calm, a hydrogen engine and a fuel cell will convert the hydrogen back toelectricity. Thehydrogen plant isdimensioned to produceenough electricity fortwo days with no wind at all – circumstances that are extremely rare on Utsira.

TheUtsira project is outstanding in that ten householdswill receive all theirelectricity from renewable sources in a closed system. The power consump-tion of the islanders varies, but the stored hydrogen will ensure that sufficientrenewable power can be generated at any time – even when consumption ishigh and wind activity is minimal.

The hydrogen that will ensure stable power supply is produced from waterand the electricity from one of the wind turbines by means of an electrolyser.The excess power from the turbines is sold on the electricity market.

Norsk Hydro is l eading the project. The German wind-turbine companyEnercon isalso apartner in theproject and thesupplier of thewindturbines, net-stabil izing equipment and the control system. Hydro Electrolysers will deliver

the hydrogen plant, including electrolysers and the hydrogen-storage facil ity.Haugeland Kraft is the net owner for the ten households in the project, andhas signed an agreement with the project on the handling of electricity supplyfor customers and the use of the ordinary net. It has financial support fromEnova (a government body set up to promote environmentally friendly energyconsumption and production in Norway), the Norwegian Pollution ControlAuthority (SFT) and the Research Council of Norway.

Thenecessary infrastructurein thef ormof roads, water andelectricity supplyand the foundations for the wind turbines was set up in 2003.

Hydro’s project organization, Hydro Technology andProjects, isresponsiblefor thedevelopment, contractsandcoordinationof technical solutions. Hydro’spower production department will be responsible for day-to-day operationsof the whole plant. Enercon contributes both technology and a consider-able workload.

The most innovative aspect of this project is the way it puts it all togetherin a system. One of the challenges is the number of interfaces between theautonomous system and the rest of the net system. The demand for electricityvaries both through the year and through the day, and these variations have to

bemet despite the fact that the wind is unpredictable.Kraft also points out that the hydrogen engine and the fuel cell are the onlycomponentsthat the partners Hydro and Eneron have no experience of. One ofthechallengesin earlier hydrogen projectshasbeen delays caused by problemswith fuel-cell deliveries.

Continues



102 Local energy

Panel 10.1 Continued

The island’s chief council lor, Robin Kirkhus, said that, in its fi rst period ofoperation, the Utsira plant has already achieved production 97 per cent of thetime. He is hoping theproject will becomea permanent energy solution for theisland.

Panel 10.2 Hydrogen in I celand

Commercial hydrogen fillingstationsin Reykjavík, Iceland, will beused to fuelthree DaimlerChrysler buses, which will beoperated on a commercial basis inReykjavík by themunicipal transport company Straeto. Private hydrogen vehi-cles are expected to follow in the future, and the Icelandic authorities havealready issued all thepermits necessary for thestation to operate on a commer-cial basis.

At present, the hydrogen is being supplied from geothermal and hydroelec-tric energy sources. Iceland hasan abundant supply of geothermal energy, usedfor power production and heating, plus considerable hydroelectric resources.In addition, however, there are excellent opportuniti es for exploiting windenergy.

The Icelandic Al lting committed itself to making Iceland the world’s firsthydrogen-based society, becoming fossil-fuel-free between 2030 and 2050.It set up a limited company, Icelandic New Energy (Islensk NyOrka, INE),in 1999 to spearhead the programme. The company is j ointly owned bythe Icelandic VistOrka, with a stake of 51 per cent, plus DaimlerChrysler,Norsk Hydro and Shell Hydrogen. INE’s goal is to promote opportunities forthe production and use of hydrogen and f uel cells for different purposes in

Iceland.As hydrogen is stored energy, there has been a discussion in Iceland regard-

ing the possibil ity of producing hydrogen renewably for theEuropean market.EURO-Hyport is a project pre-study looking into opportunities for large-scalehydrogen production, based on electrolysis and renewable power production,and how this can becomea new, green export to Europe.

INE will also look into the possibil ity of the use of hydrogen by Iceland’sfishing fleet, as the fuel currently used by the fleet adds greatly to the coun-try’s carbon dioxideemissions. However, the technology has not yet advanced

sufficiently to allow this.



Energy storage 103

Panel 10.3 Battery powered

A hybrid PV (photovoltaic) andwind-power system onBullerö, themain islandof a national park in the archipelago of Stockholm, uses Saft Sunica batteriesto provide a reliable supply of electricity.

Bull erö Island is remotefrom thenearest electricity grid and in 1986 thecostof i nstalling an undersea cable to provide power for the visitor facilities andthepark ranger, who liveson theisland all year round, wasestimated at aroundUS$100000. Instead, in 1988, a low-cost combined PV and wind system wasinstalled. This was upgraded in 1996 with more PV modules and a new com-bined regulator and monitoring system.

ThePV modulesare mounted on an old air forcetower and have an installedpeak power of 1.45 kW. The modules are connected by a 100-m cable to thebatteriesin abattery room next to thepark ranger’shouse. A RutlandFurlmatic1800 wind generator with a nominal power of 0.25 kW is install ed on a mast atthe back of the house. During the short periods when there is li ttle sun or wind,a backup petrol generator with a nominal power of 0.75 kW is used to chargethe battery bank.

The battery bank comprises Saft Sunica rechargeable nickel-cadmium bat-teries with a nominal capacity of 571 Ah at 48 V. The system voltage of 48 VDC is converted to 12 V DC before being fed into the house. The electricity

powers lighting, a refrigerator and freezer, a radio, a television and a 1 kVAinverter for a few small appliances that need AC power. The Sunica batteriesare designed specif ically for photovoltaic applications.

Photovoltaic systems require efficient batteries with a long cycle life anda potential for both shallow and deep cycling. The nickel-cadmium batteriesinstalled on Bullerö Island are designed specifically to meet key requirementsin this type of application, namely:

• constant charging efficiency over time;• continuous operation at any state of charge;• minimal self-discharge rates;• a high available performance even at very low states of charge; and• sustained efficiency even at high or low temperatures.



Chapter 11Fuel cells

Fuel cells can provide heat and power, and a huge variety of fuel-cell devicescurrently being tested and demonstrated are l ikely to hit the market in the next

decade.

11.1 How fuel cellswork

Unli ke other electricity generators discussed in this book, fuel cells produce theirpower asaresult of a chemical reaction. Chemical reactionsoften involvethetransferof electrons from one atom to another, leaving one positively charged and the othernegatively charged. If acarefully chosen reaction ismadeto takeplacein an electrical

circuit, with a source of electrons at one ‘ pole’ and a substance that absorbs theelectronsto complete the reaction at the other ‘ pole’ , theelectronsmove around thecircuit.

A fuel cell operates a li ttle like a battery. But a battery is a sealed unit containingits own fuel, in which the two poles are gradually consumed as a chemical processcreates electricity. As a result it ‘ runs down’ as the constituentsare consumed.

In contrast, a fuel cell provides the site f or a chemical reaction that produceselectricity and water, but the fuel cell does not contain the chemicals that react: theyare fed in during the reaction so the fuel cell can continue to produce electricity and

heat as long as fuel is supplied.The principle of the fuel cell was discovered by the German scientist Christian

Friedrich Schönbein in 1838. Based on this work, the first fuel cell was developedby the Welsh scientist Sir William Robert Grove in 1843, using similar materialsto today’s phosphoric-acid fuel cell. It was in 1959 that the British engineer Fran-cis Thomas Bacon successfull y developed a 5 kW stationary fuel cell. In 1959, ateam l ed by Harry Ihrig built a 15 kW fuel-cell tractor for Allis-Chalmers usingpotassium hydroxide as the electrolyte and compressed hydrogen and oxygen asthe reactants. Later in 1959, Bacon and his colleagues demonstrated a practical

5 kW unit capable of powering a welding machine. In the 1960s, Pratt and Whit-ney licensed Bacon’s USpatents for use in thespaceprogrammeto supply electricityand drinking water (hydrogen and oxygen being readily available fromthespacecrafttanks).



106 Local energy

11.2 Fuel-cell configuration

The reaction that generates the power in a fuel cell will happen whenever thecomponents are brought together: the key to producing useable power and heat fromthe cell is to manage the steps of the reaction so the products can be tapped at theright point.

Therearerelatively few componentsi n afuel cell. Oneof themost commontypesuses a ‘ proton exchange membrane’ (PEM).

• The anode, the negative post of the fuel cell, has several jobs. It conducts theelectronsthat are freed from the hydrogen molecules so that they can be used inan external circuit. It has channels etched i nto it that disperse the hydrogen gasequally over the surface of the catalyst.

• The cathode, the positive post of the fuel cell, has channels etched into it thatdistribute the oxygen to the surfaceof thecatalyst. It also conducts the electronsback from theexternal circuit to thecatalyst, where they can recombinewith thehydrogen ions and oxygen to form water.

• The electrolyte is the proton exchange membrane. This specially treated mate-rial conducts only positively charged ions. The membrane blocks electrons. Fora polymer electrolyte membrane fuel cell (PEMFC), the membrane must behydrated in order to function and remain stable.

• Thecatalyst isthematerial that helpsthereaction of oxygen andhydrogen to take

place. It may bemadeof platinum nanoparticles very thinly coated on to carbonpaper or cloth. Thecatalyst isroughandporousso that themaximum surfaceareaof the platinum can be exposed to thehydrogen or oxygen. The platinum-coatedside of the catalyst faces thePEM.

Hydrogen fuel diffusesto theanodecatalyst, whereit later dissociatesintoprotonsand electrons. The protons are conducted through the membrane to the cathode, buttheelectrons are forced to travel in an external circuit (supplyi ng power) because themembraneis electrically insulating. On thecathodecatalyst, oxygen molecules reactwith the electrons (which have travell ed through the external circuit) and protons to

form water. In this example, the only waste product i s water.The hydrogen/oxygen PEMFC used to be called a soli d polymer electrolyte fuel

cell (SPEFC) and is now known as a polymer electrolyte membrane fuel cell (PEFCor PEMFC, same as the short form for proton exchange membrane fuel cel l ).

In addition to pure hydrogen, there are hydrocarbon fuelsfor fuel cell s, includingdiesel, methanol and chemical hydrides. The waste products with these types of fuelare carbon dioxide and water.

A typical fuel cell produces a small voltage. To create enough voltage, the cellsare layered and combined in series and parall el circuits to form a fuel-cell stack.

11.3 Solid-oxide fuel cells

A solid-oxide fuel cell (SOFC) i s a fuel cell that generates electricity directly froma chemical reaction, yet, unlike normal fuel cells, an SOFC is composed entirely of



Fuel cells 107

solid-state materials, typically ceramics. Their composition also allows SOFCs tooperate at much higher temperaturesthan conventional fuel cells.

They aremainly usedfor stationary applicationswith anoutput betweenafew kilo-watts and 1 MW. They work at very high temperatures, typically between 700 and1000 ◦C, so the gases produced can be used in a turbine to improve electricalefficiency.

In these cells, oxygen ions are transferred through a solid-oxide electrolytematerial at high temperature to react with hydrogen on the anodeside.

Thehigh operating temperature of SOFCspromotes thefuel-cell reaction so theyhave less need for catalysts (the platinum in the cell described above).

SOFCshave so far been operated on methane, propane, butane, fermentation gas,gasified biomass and paint fumes.

Thermal expansion demands a uniform and slow heating process at startup.

Typically, eight hours or more are to be expected. Unlike wi th most other typesof fuel cell, which are stacked, thegeometry of an SOFC can bemore varied.

SOFCscan also bemadein tubular geometries, where either air or fuel is passedthrough the i nside of the tube and the other gas is passed along the outside ofthe tube.

An SOFC is made up of four layers. A single cell consisting of these four layersstacked together is typicall y only a few mill imetresthick. Hundreds of these cell s arethen stacked together in seriesto formwhat most peoplerefer to asa‘ solid-oxidefuelcell’ . The ceramics used in SOFCs do not become electrically and ionically active

unti l they reach very high temperature and as a consequence the stacks have to runat temperatures ranging from 700 to 1 200 ◦C.

The ceramic cathode layer must be porous, so that it allows air flow throughit and into the electrolyte. The electrolyte is the dense, gas-tight l ayer of each cellthat acts as a membrane separating the air on the cathode side from the fuel on theanode side. There are many ceramic materials that are being studied for use as anelectrolyte, but themost commonarezirconium-oxide-based. Besidesbeingair-tight,theelectrolyte must also beelectrically insulating so that theelectronsresulting fromthe oxidation reaction on the anode side are forced to travel through an external

circuit before reaching the cathode side. The most important requirement of theelectrolyte, however, isthat it must beableto conduct oxygen ionsfromthecathodetothe anode.

The ceramic anode layer must also be very porous to allow the fuel to flowto the electrolyte. Like the cathode, it must conduct electricity. The most commonmaterial used is made of nickel mixed with the ceramic material that is used for theelectrolyte in that particular cell. The anode is commonly the thickest and strongestlayer in each i ndividual cell, and is often the layer that provides the mechanicalsupport.

A metallic or ceramic layer sitsbetween individual cells. Itspurposeisto connecteachcell in series, so that theelectricity eachcell generatescan becombined. Becausetheinterconnect is exposed to both theoxidizing and reducing sideof thecell at hightemperatures, it must beextremely stable. Ceramicsaremost useful but areextremelyexpensive. Researchisfocusingonlower-temperatureSOFCs, which will allow metallayers to beused.



Fuel cells 109

resource is not necessari ly available when power is required, by using excess powerto producehydrogen that can beused when, for example, wind power is becalmed.

Hydrogen can beextracted fromnovel feed stockssuch aslandfill gasor anaerobicdigester gas from wastewater treatment plants, from biomass technologies or f romhydrogen compounds containing no carbon, such as ammonia or borohydride.

11.5 Developing the industry

Fuel cells are unlikely to reduce overall energy consumption – the generation anddelivery of hydrogen fuel have their own energy requirement – but they do offer thepossibility of using that energy more eff iciently. That is why both theUS and EU areinvesting in developing fuel cells, as are potential users. The transport industry has

been particularly interested in the technology and has been backed by governmentfunding.

A total of 45 companies from across Europe have joined forces to push for thecreationof aJoint Technology Initiative (JTI) for fuel cellsandhydrogen technology.The companies, which include Rolls-Royce Fuel Cell Systems from the UK andItaly’s SOFC Power, have formed an association called theJTI Industry Grouping asa first step to creating a JTI. The group is now pressing the European Commissionto accelerate plans to create the JTI (a public–private partnership) on fuel cells andhydrogen.

TheEuropean Commission has also launched a thematic call for proposals in theareaof component development andsystemsintegrationof hydrogen andfuel cellsfortransport and other applications. The call covers fuel-cell and hybrid-vehicle devel-opment and the integration of fuel-cell systems and fuel processors for aeronautics,waterborne and other transport appli cations.

Elsewhere, European boiler manufacturers are developing fuel-cell units that canprovide heat and power on a near-domestic scale, offering on-site generation for anapartment block or small commercial or industrial units. Using both the heat andpower output makes such units extremely efficient. Demonstration units have been

in operation for several years, and manufacturers believe they wi ll be commerciallyavailable in the next decade.

In Japan, Nuvera Fuel Cells and Takagi Industrial Co. have announced an agree-ment to develop commercial fuel-cell-based cogeneration systems for the Japanesemarket. Nuvera’sAvanti system usesnatural gasto generate hot water and electricity.Takagi’s heat-management system wi ll store the hot water and interface it with theend customer’s thermal demand.

America’s President George W. Bush announced that the US Department ofEnergy was investing more than $350 million in hydrogen research projects, along

with $225 mill ion in private-sector cost share, over the five years to 2010.



112 Local energy

levels of resistance. This is a very useful material property: theheat and light causedwhen a charge passes through a high-resistance material are the basis of the lightbulb, heating elements and so on. In such situations theelectrical energy provided bythe generator is converted into usable heat and light. But no material is entirely f reeof electrical resistance, and, as current flows along a wire or cable, some part of itsenergy is dissipated as the wire warms. This can be minimized by choosing the bestmaterial for thecables or wires, and by stepping up thevoltage when transfer i s overlong distances. This has theeff ect of reducing thecurrent – a measureof theamountof current being moved – and the heating effect. The UK’s grid operates at 230 kV or450 kV for bulk transport of electricity across long distances and this reduces losses,but thesupply istoolargefor most purposesexcept direct supply to somehigh-energyindustries. Thecircuits used to supply commercial and light-i ndustrial premises mustbeof lower voltageand those at the domestic scale are at 230 V. Long circuits at this

voltage can experience significant voltage drops along their length as users tap intothe supply.

12.3 Frequency

InanAC(alternating current ) circuit theelectronsareeff ectively beingshunted backand forth, instead of being pushed steadily along thecircuit as they would beby aDC(dir ect current ) sourcesuch asabattery. Generatorsusingrotatingmachinery produce

this pattern and it means the voltage and current ‘ cycle’ from zero to a maximum,back through zero to a minimum, and back to zero again. This provides a regular‘ pulse’ 50 times per second. This is not ideal for large equipment such as motors, soa three-phase supply is used in which there are three suppli es going up and down insequence to give a near-constant output.

‘ Synchronous’ generators operate at a steady frequency locked into that ofthe grid, and because of that they help to maintain the frequency across thenetwork.

12.4 Reactive power

In an alternating current the voltage and current are constantly changing, reversingtheir flow (in the UK system) 50 times a second. As a current passes through acircuit component that hasresistance, electric-field eff ectsresult. When thecurrent isalternating, thesefieldsare constantly changing and reversing along with thecurrent.The consequence for the alternating current is that, instead of alternating in step,the voltage and current start to drift apart. This has important eff ects on the power

available in thecircuit, because at any i nstant thepower available is a product of thevoltage and the current. At some points the current and voltage are exactly out ofphase (i.e. the current is increasing to a maximum while the voltage is decreasing toa minimum) and the effect is that there is no net power flow – although energy isflowing backwards and forwards.



Interacting with the electri city gri d 113

This is reactive power and it must be carefully controlled in the circuit. Byconvention, inductive l oads such as motors are said to ‘ consume’ reactive power.In practice, most loadson the system are consumers of reactive power.

To compensate, reactive power has to be supplied to the system. The concept ofreactive power is a complex one but at bottom the eff ect of injecting reactive poweris to force the voltageand current parts of the alternating supply back into step.

Thisf unctionmay beperformedby addingagenerator to thesystemat avulnerablepoint. But not all forms of generation are able to inject reactive power. Alternatively,dedicated equipment can be added to the system at vulnerable points.

In power transmission and distri bution, significant effort i s made to control thereactivepower flow. During dispatchthisistypically doneautomatically by switchinginductors or capacitor banks in and out, by adjusting generator excitation, and othermeans. There are also financial incentives on customers and suppliers to the system.

Thosethat consumereactivepower – for example, industri al siteswith alargenumberof motors, which are inductive – are penali zed in their tariff. In the UK there is amarket for reactive power, which allows suppliers to offer reactive power to theNational Grid (or local distribution networks).

12.5 M aintaining the supply quality

The transmission system operator National Grid comments that power flows, both

actual andpotential, must becarefully controlled for apower system to operatewithinacceptable voltage limits. Reactive power flows can give rise to substantial voltagechangesacrossthesystem, whichmeansthat it isnecessary to maintain reactivepowerbalances between sources of generation and points of demand. System frequency isconsistent throughout aninterconnectedsystem, but thevoltagesexperiencedat pointsacross thesystem form a ‘ voltageprofi le’ that is uniquely related to local generationand demand at that instant, and i s also affected by the prevailing system networkarrangements.

National Grid is obliged to secure the transmission network to closely defined

voltageandstability criteria, andtheoperatorsof thelow-voltagedistribution networkhave the same responsibil ity for local networks.

The variation in demand over each 24-hour period has a basic pattern wherebydemand i s l owest during the night and higher during the day, and increases to amorning and evening peak when domestic customers are at home. This is a cross-country aggregate and it varies wi th events where a significant proporti on of thepopulation are involved. Soccer matches in which England are playing are a typicalexample: at half-time and full-time, there is an immediate demand surge as peopleput on kettles. This also happens when storyli nes in long-running soap operas reach

a peak episode and in fact is a good way of assessing viewing figures.Standby power is required for such events. But, as we have seen, the supply isaffected by more than just the demand: the nature of the demand is also important.An industrial sitewith a high demand to run motors, for example, will haveavaryingrequirement for power and for reactive power.



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Other disturbances can also produce transient or short-lived effects on thetransmission or distribution grid. A short circuit is one example caused by an impacton the cable or in the switchyard. This is unlikely in the case of transmission cables,since they are higher, but relatively common on the distribution network. There areregular examples of agricultural or industrial equipment striking overhead lines iftheir drivers misjudgetheir relative heights. Animals are also a frequent cause, espe-cially small cli mbing creatures such as squirrels, or trees and other vegetation canbe blown against theline. Li ghtning strikes are also frequently to blame – one effectthat is important for the transmission network. In many cases now, the network isequipped with automatic circuit breakers that switch in the event of a short circuitand automatically reclose a few seconds later to bring the line back into operation.In this case there is no loss of power (or a loss of only a few seconds) but the effectis to send more ripples across the network. In some cases it can cause a voltage or

frequency ‘ collapse’ .Such transients have an effect. As computer operators know, power electron-

ics systems are very vulnerable to them, so most computer shops sell socket setsthat include surge arrestors, which counter transient changes in the supply. Whichtransients have to bemanaged depends on how sensitive your computer is.

Similarly, equipment connected to the distribution or transmission networks hasto be protected against transients or faults in the grid supply, and the characteristicsof each type of generation determine how much protection is required and when,in certain circumstances, generators can help even out faults and add stability to

the grid.Large disturbances in the grid can affect any generating plant and, beyond set

limits, most will automatically disconnect from the grid to l imit the damage to theplant. But, as we have seen, thesudden removal of supply from thesystem can createits own fault: the result can be a domino effect that propagates faults far beyond theoriginal area and jeopardizes the running of thesystem.

Two such eventshappened within a few months of each other a few years ago. Inthe USA in August 2003 the loss of atransmission linein thenorth required power tobe switched to transport across another part of the network. The unanticipated extra

load caused several power stations to ‘ tri p’, and faults quickly cascaded throughoutthe interconnected system in the north-east USA, eventually causing blackouts thatlasted several hours in New York and many of the surrounding states. Power cutsextended up to Canada. A few months later, similar eff ectscaused blackouts in Italy.In both cases, the original event was a short circuit on one power line caused by atree striking the li ne.

For electricity-system operators, containing such an incident is easier if there aremore connections and an extensive grid: having a lot of transmission and distributionlines gives theoperators different options for switching power around so that no one

part of the system becomes overloaded. Generators (and loads) also ideally havesome abil ity to ‘ ride through’ faults, so they are less likely to disconnect and causethe problem to cascade. Some forms of conventional thermal and nuclear generationare valuable in this respect. Because they includeheavy rotating machinery, theplanthas huge mechanical momentum. A brief fault is not enough to interrupt theturning



Interacting with the electri city gri d 119

power system as a whole. However, the recent rapid development of dispersed generation,mainly wind farms, has changed the situation dramatically. The wind generation in someareas significantly influences theoperation of thepower system due to its high share in thegeneration and intermittent behavior dependent on weather conditions.

In its recommendations, UCTE pointed out that

most TSOsdo not have available real-timedata on the power generated in the distributiongrids. In view of the rapidly growing share of such generation, this has multi-dimensionalconsequences:

• no real-ti meknowledge of the total national balance between supply and demand,• no real-timeknowledgeof thegeneration started in DSO [distributionsystem operator]

grids and possible tripping/reconnection in case of a frequency or voltagedrop,• no real-timeknowledgeof generation started in DSO gridsand possible impact on grid

congestion in thehigh voltage grid.

It also pointed out that at present theTSOshavenocontrol over distribution-levelgeneration, and said this could lead to ‘ serious power balance problemsespecially inover-frequency areas’ . In response, it made three recommendations that would givetransmission system operators far more knowledge of, and control over, generationconnected to the distribution network.

• The regulatory or legal framework should be changed so that TSOs can assertcontrol over generation output (allowing them to change schedules, or to startand stop the units).

•

TSOs should receive data on a per-minute basis on the generators connected tothe distribution system.• Generation units connected to thedistribution grid should have thesamerequire-

ments, in terms of behaviour during frequency and voltage variations, as unitsconnected to the transmission network.

Any such recommendation would likely impose requirements appropriate to thescale of differently sized DG. The effect of connecting or disconnecting a domesticsystemisvery different fromthat of anindustrial generator inputtingtensof megawattsinto the grid. However, as we have seen on thedemand side, the cumulative effect of

aggregating largenumbers of similar systems should not beoverlooked.Developing control and oversight that provide enough management capability

for the distribution network, without overspecifying the generator and making itunnecessarily costly, is a balance that wi ll have to bestruck.

12.10 Adding microgeneration

What wi ll be the effect on grid management of adding extensive microgeneration

to the mix? Optimistic projections have suggested that domestic-scale generationcould meet up to 40 per cent of household electricity consumption. It may havean important role to play in reducing peak loads, but managing import and exportfrom the grid as millions of microgeneration units switch in and out presents its ownchallenges.



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Theproblem isthat domestic demandvaries, not just in aggregatebut in individualhouses, as the Carbon Trust highlighted in a report on early field trials of domesticCHP.

The short-term export/import balance from buildings with any form of micro-generation is critical as electricity demand and supply must be balanced second bysecond. TheCarbon Trust said that theamount of electricity exportedfrom microgen-eration tri al sites was considerably higher than forecast. ‘ The reason for this appearsto be related to forecasting assumptions about electrical loads in homes during heatdemand peri ods.’

Modelling used for some purposes assumes that typical electrical demand inhomesduringahalf-hour issimilar to theaveragedemandin that half-hour. However,the Carbon Trust says that

trial data shows that for most of the timedemand is much lower than the average and alsolower than typical microCHP output. Superimposed on this low demand are short periodsof very high demand. This is consistent with event-based modelling which builds up totalelectrical load from the predicted operation of electrical equipment. Typically a base-loadof 100 to 500 watts is present much of thetime due to equipment including clocks, videos,televisions on standby, fridges and freezers. A dded to this are intermittent, short durationpeak loadssuch askettles(2 kW to 3 kW), electric showers(7 kW to 10 kW) and hair dryers(500 watts to 2 kW).

The Trust warns,

By averaging over a half-hour or longer these peaks are blurred into an average value of

around 1 kW that ignores thesignificance of peaks and troughs. Thereality of thesituationis that low-voltagenetworkswil l haveto bedesigned to copewith potentiall y highlevels ofexport in additi on to full load import when theunits are not running and this needscarefulconsideration.



Chapter 13 M aking progresson policy

The need to rethink the UK ’s electricity network to accommodate local energyprojects was already exercising the minds of the industry at the start of the new

century. In 2001 Callum McCarthy, then chief executive of the regulator, the Officeof Gas and Electricity Markets (Ofgem), said that government targets on renewablesand CHPwould requirethebiggest revolutionin thedistributionnetwork for 50years.Hetold distribution network operators(DNOs) they must ‘ bringtheseissuesto thetopof thesenior management agenda’ and said that for Ofgem, too, it was ‘ emphaticallynot business as usual’ .

‘ Today a DNO might have 300 embedded generatorswithin its entire network. Ifthe government’s targets are to be met, by 2010 a DNO could have 300 generatorsconnected to every substation,’ McCarthy said.

Even then, hesaid, meeting the 2010 targets – 10 per cent renewable generationand 10 GW of CHP – would require 3 000 new renewable installations, 1 000 CHPplants and up to 3 mil li on domestic CHP installations.

Technically, passive local networkswould haveto becomeactivemanagers– and,financially, DNO investment planning would be more demanding and take on morecommercial dimensions.

13.1 Government strategy

In 2003 the government set out a strategy for developing the energy sector, in aWhite Paper titled Our Energy Future , that would give local energy projects andmicrogeneration an important role in the UK’s energy provision. It said,

Weenvisagetheenergy systemin 2020beingmuchmorediversethan today. At itsheart willbe a much greater mix of energy, especially electricity sources and technologies, affectingboth the means of supply and the control and management of demand.

There wil l be much more local generation, in part from medium to smalllocal/community power plant, fuelled by locally grown biomass, from locally generatedwaste, f rom local wind sources, or possibly from l ocal wave and ti dal generators. Thesewill feed local distributed networks, which can sell excess capacity into thegrid. Plant will

also increasingly generate heat f or local use.There wi ll be much more microgeneration, for example from CHP plant, fuel cells

in buildings, or photovoltaics. This will also generate excess capacity from time to ti me,which wil l be sold back into thelocal distributed network.

New homes will be designed to need very li ttle energy and will perhapseven achievezero carbon emissions. Theexistingbuildingstock will increasingly adopt energy eff iciency



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measures. Many buildingswill havethecapacity at least to reducetheir demandonthegrid,for example by using solar heating systemsto providesome of their water heating needs, ifnot to generate electricity to sell back i nto thelocal network. Gas wil l form a largepart ofthe energy mix as the savingsfrom more eff icient boiler technologies are offset by demand

for gas for CHP(which in turn displaces electricity demand).

In order to achieve that vision, the White Paper noted that

the nationwide and local electricity grids, metering systems and regulatory arrangementsthat werecreatedfor aworldof large-scale, centralisedpower stationswill needrestructuringover the next 20 years to support the emergence of far more renewables and small-scale,distributed electricity generation; thef utureenergy system will requiregreater involvementfromEngli sh regionsandfrom local communities, complemented by aplanning system thatis more helpful to investment in infrastructure and new electricity generation, particularlyrenewables.

Over the last half-decade changes have been made that were intended to helppromote local energy projects. But progress has been mixed.

13.2 Planningprogress

Therehasbeen progressonmakingit easier to get planningpermissionfor renewable-energy projects, including local wind farms. Planning had been a huge barrier forprojects from domestic systemsand up.

In 2004, Planning Policy Statement 22 (PPS22) for the first time set a positiveplanning framework for renewable energy. It said,

• Renewable-energy developments should be capable of being accommodatedthroughout England in locations where the technology is viable and environ-mental, economic and social impacts can beaddressed satisfactorily.

• Regional spatial strategies and local development documents should containpolicies designed to promote and encourage the development of renewable-energy resources. Regional planning bodiesand local planning authoritiesshouldrecognise the full range of renewable-energy sources.

• At the local level, planning authorities should set out the criteria that will beapplied in assessing applications for planning permission for renewable-energyprojects. Planning policies should not rule out or constrain the development ofrenewable-energy technologies.

• The wider environmental and economic benefits of all proposals for renewable-energy projects, whatever their scale, are material considerations that should begiven significant weight in planning decisions.

• Regional planning bodies and local planning authorities should not makeassumptions about the technical and commercial feasibility of renewable-energy

projects.• Planning authorities should not reject planning applications for energy projects

simply because the level of output is small.• Local planning authorities, regional stakeholders and local strategic partnerships

should foster community involvement i n renewable-energy projects.



Making progress on policy 123

For the first time, PPS22 insisted that the environmental benefits of renewablesandlocal energy projectswereagoodin themselvesandshould haveapositiveimpacton theplanning decision.

Theguidancewashelpful but local energy projectshit frequent barriersin gainingplanning permission. As a result, the government published additional guidance tounderpin and extend its support for local energy generation, making it a fundamentalrequirement for all new development in a revision of Planning Policy Statement 1(PPS1).

Published in 2007, PPS1 – on planning and climate change – took low-carbongeneration principles more fully into account, including not just renewable-energyprojects but all local energy generation that would reducecarbon emissions overall.

This PPS encourages regional planning bodies (RPBs), as part of their approachto managing performance on carbon emissions, to produce regional trajectories for

the expected carbon performance of new residential and commercial development,based on ‘ average units/amounts of floor space’ .

PPS1 said in its ‘ Key Planning Guidance’ that all planning authorities shouldprepare and deliver spatial strategies that make a full contribution to delivering thegovernment’s climate-change programme and energy policies.

In preparing a regional spatial strategy, RPBs ‘ should work with all stakeholdersin theregion andalongsidetheir constituent planningauthoritiesto developarealisticand responsible approach to addressing climate change’ .

That would include‘ ensuringthespatial strategy isin linewith applicablenational

targets, in particular for cuttingcarbon emissions, andwith regional targetson climatechange’ . It would also require regional planning authorities to:

• ‘ ensureopportunitiesfor renewable and low-carbon sourcesof energy supply andsupporting infrastructure are maximised’; and

• ‘ set regional targets for renewable energy in linewith PPS22’ .

What is more, local planning authorities ‘ should assess their area’s potentialfor accommodating renewable and low-carbon technologies, including micro-

renewables to be secured i n new residential, commercial or industrial developmentand pay parti cular attention to opportunities for utilizing and expanding existingdecentralized energy supply systems, and fostering the development of new oppor-tunities for decentralized energy from renewable and low-carbon energy sources tosupply proposed and existing development’ .

Theplanningauthority should look favourably onproposalsfor renewableenergy,and it should not require applicants to demonstrate either theoverall need for renew-ableenergy or for aparticular proposal for renewableenergy to besited in aparticularlocation.

In an important development, PPS1 said that planning authorities should ‘ ensurethat a significant proportion of the energy supply of substantial new development isgained on-site and renewably and/or from a decentralized, renewable or low-carbon,energy supply andshould consider thepotential for on-siterenewable energy suppliesto meet wider needs’ .



124 Local energy

This change arises from the pioneering work of theLondon Borough of Merton.Merton Council was first to introducea new planning policy that required developersto build renewable energy or energy eff iciency into the fabric of new factories, ware-houses and off ices. If the proposed building is larger than 1 000 m2 and is not locatedin a conservation area, council planners will expect photovoltaic panels, solar waterheaters or other energy-producing equipment to beinstalled. The council will expectthis equipment to reduce the occupant’s carbon footprint by 10 per cent.

The policy emerged from the council ’s review of its Unitary Development Plan.In spite of challenges from objectors who claimed that the policy would make i ttoo costly for developers to construct commercial buildings in the borough, it wasstrongly supported by theappointed inspector. Theidea quickly began to spread. TheMayor of London included a similar policy in his Plan for London, and several otherLondon boroughsredrafted their Unitary Development Plansto follow Merton’slead.

Thef irst buil ding in Merton to bedesigned and built to comply with thepoli cy wasa3000-m2 light-i ndustrial andstorageunit in Durnsford Road. But an early showcaseis a new office building planned for the site of the Odeon Cinema in WimbledonBroadway. Here the Chartered Institute of Personnel Development has been grantedpermissionto develop5 000 m2 of off icespacefor itsown use, provided that it installsrenewable-energy systems of sufficient capacity in the building. This will also givethe building engineers an incentive to minimize the energy use of the building.

TheLondon Borough of Merton was applauded by Friends of theEarth for ‘ mostinnovativeaction’ in its introduction of thepolicy. And, although developersinitially

argued that i t was impossible and of dubious legality, the policy came successfullythrough all its challenges. Simil ar policieshave already been adopted by upwards of50councilsandtheprovisionsof PPS1 will requireasimilar provision by all planningauthorities.

13.3 Domestic changes

The support of PPS22 was useful at larger scale but of littl e help for the smallestprojects, especially at the domestic scale. For such projects the cost of applyingfor planning permission was enough to stop a potential purchase. B& Q, for example,which started selling domestic micro wind turbinesthat could bemounted onahouse,reported that, although it had received several thousand enquiries, around one-thirdof all potential sales had been halted by the cost of planning permission – which i tsaid had shown huge variation from £150 up to over £1000 – or the opposition ofplanning committees.

In2007thegovernment department now known simply asCommunitiesandLocal

Government (CLG), which hasjurisdiction over planning policy, finally took forwardplansthat would allow domestic energy projectsto become‘ permitted development’ ,i.e. changes that can be made without requiring planning permission, so long as theinstallation meets building codes. The proposals covered solar, wind, CHP, biomassand heat pumps.




Solar : CLG suggested that there should be a general presumption in favour ofthe domestic installation of solar microgeneration equipment – photovoltaic or solarthermal. The principal restri ction would relate to both solar on building and solarstand-alone technologies and reflect the potential visual impact that could occur i n aconservation area or a World HeritageSite.

It recommended that solar technologies should bepermitted, subject to their pro- jecting no more than 150 mm from the existing roof plane or standing off no morethan 150 mm from a wall. In addition, in order to ensure that the visual impact isminimized, no part of the installation should be higher than the highest part of theroof (which will generally be the ridgeline). It also proposed there should be no limiton theroof area involved.

Wind tur bines : Micro wind turbines would be permitted with blades 2 m in diam-eter at a height of 3 m above the roof or 11 m above ground level (for stand-alone

turbines). They would besubject to noise and vibration restrictions.CHP and biomass : The CLG recognized that most biomass installation occurs

insidethe property i n the form of new boil ers etc. It added a 1 m fl ue for such boilersto the permitted development scheme but did not extend the permit to a store forbiomass fuel.

Heat pumps : Ground- or water-source heat pumps would require assurance fromthe Environment Agency that no contamination of groundwater was possible. Allheat pumps would be subject to noise restrictions.

In 2006 the then Department of Tradeand Industry and Ofgem jointly consulted

on the barriers to DG that had stil l to be tackled.

13.4 Scotland and Walesapproach

The devolved administrations in Scotland and Wales have planning responsibil itiesand both have produced planning policies to support renewables and local energygeneration.

Wales set out its approach to renewables in a planning Technical Advice Note(TAN8) publishedin 2005. TAN8 discussedall formsof renewableenergy but focused

onwindfarms, reflecting thecontentiousnatureof such projectsin Wales. TAN8 said,

the need for wind turbines is established through a global environmental imperative andinternational treaty, and is a key part of meeting the Assembly Government’s targets forrenewable electricity production. Therefore, the land use planning system should activelysteer developments to the most appropriate l ocations. Development of a few large scale(over 25 MW) wind farmsin carefully located areas offers thebest opportunity to meet thenati onal renewable energy target.

TheWelsh Assembly identif ied areas in Wales that,

on the basis of substantial empirical research, are considered to be the most appropriatelocations for large scale wind farm development; these areas are referred to as StrategicSearch Areas (SSAs). Smaller (less than 5 MW), domestic or community-based wind tur-bine developmentsmay besuitable within and without SSAs, subject to material planningconsiderations. Onurban/industrial brownfield sites, small or medium sized (up to 25 MW)developments may be appropriate.




microgeneration becomes a realistic alternative or supplementary energy generationsource for the householder’ . It could also help reduce fuel poverty for those withhard-to-heat homes that could not be insulated.

The government blamed cost constraints and the high price of microgenerationtechnologies, along with inadequate promotion, so that take-up even of the cheapesttechnologies had been slow. There were also technical issues, and the DTI cited arange of issues surrounding metering, connection to the distribution network andbalancing and settlement arrangements that could be preventing widespread take-up of electricity-generating technologies, and there were regulatory issues such asplanning.

The DTI pointed out that it had already supported the microgeneration sector byreducing theVAT level applicable to most microgeneration technologiesto 5 per centand by its grant programmes (see Chapter 17). In 2007 it also reduced stamp duty for

the purchase of zero- or low-carbon housing.The microgeneration strategy promised a range of additional measures.

• There will be research into consumer behaviour and what drives early-adopterpurchase decisions.

• DTI and Ofgem will produce a clear guidance document covering ROCs, LECsand REGOs, including thebenefits of each and how to claim them.

• Energy suppli ers will develop a scheme that will reward those microgeneratorsexporti ng excess electricity.

• DEFRA will consider whether electricity-generating technologies (other thanmicroCHP) could be included within the framework of the Energy EfficiencyCommitment.

• The department wi ll develop an accreditation scheme for all microgenerationtechnologies.

• It will undertake a thorough review of existing activi ty in this area to assesseffectiveness and identify gaps.

• The department will actively investigate the possibil ities for microgeneration onits own estate.

• It wil l work with CLG and planning officers to identify their informationneeds, assess whether these are being met adequately and, if not, develop acommunicati onspack.

• The department wi ll lead work with other government departments and localauthorities to publish a report on measures that local authorities can take toimprove energy efficiency and levels of microgeneration installations.

• It will work in partnership with the energy-supply companies, distributednetwork operators and Ofgem to ensure that network and market sys-tems are able to cope with growing numbers of microgenerators exporting

electricity.• It will continue to work with Ofgem, the distribution network operators, energy

suppliers and the microgeneration industry to ensure that existing contractsbetween domestic customers and their electricity suppliers are not hindering thetake-up of microgeneration.



128 Local energy

• It will work with Ofgem, the distribution network operators, energy suppliersand themicrogeneration industry to ensurethat wiring regulations do not form anunnecessary barrier to take-up of microgeneration.

• It will investigatefield trialsthat bringtogether smart metersand microgeneration.

• The department and elements of the old DfES – the Department for Innova-tion, Universities and Skills (DIUS) – will work with industry and other keystakeholders to develop a scheme for installing microgeneration technologies inschools.

13.6 Re-examining theremainingbarriers

In late 2006 the regulator Ofgem and the then DTI jointly published a new call for

evidence on the barriers still remaining for DG. The report said,

Some argue that Government should do more to promote DE primarily because of itspotential to reducecarbon emissions, but also ongroundsof reliabil ity andcost…. However,the Government has to ensure that theinterests of electricity consumers are properly takenintoaccount. Cost implicationsof any changeswi ll beakey consideration, aswi ll preservingthe integrity of electricity networks.

In this document, DG was defined broadly, as:

• all plant connected to the distribution network rather than the transmissionnetwork;

• small-scaleplant that supplieselectricity to building, industrial siteor community,potentially selling surplus electricity back through thelocal distribution network;

• microgeneration, i.e. small installations of solar photovoltaic panels or wind tur-bines that supply one building or small community, again potentially selling anysurplus;

• large CHP plants (where the electricity output feeds into the higher-voltagedistribution network or the transmission network, but theheat is used locally);

• building- or community-level CHP plants;

• microCHP plants that effectively replace domestic boilers, generating both

electricity and heat for thehome; and• non-gas heat sources such as biomass (particularly wood), solar thermal water

heaters, geothermal energy or heat pumps – which generate heat from renewablesources for use locally.

It was pointed out that this definition included many plants whose output was notused locally – for example, wind farms sited where wind conditions are favourable,rather than near demand. I t also includes plants that are not necessari ly l ow-carbon,such as CHP plants using fossil fuels. For such plants there may be diversity and

efficiency benefits, the document says.It cautions that

growth and i nvestment in distributed electricity generation wi ll not avoid the need forcontinued investment in thetransmission system. Thetransmission system will continuetoplay a role longer term. For example, investment will be needed for the foreseeable future




to ensurewe have continued interconnection between the distribution networks to providebackup and security of supply. Moreover, many of therenewable projectsthat wi ll bebuiltin thecoming yearswill necessarily besited in remote areas, away from centresof demand.

13.7 Licensing

Most electricity generators previously had to become licensed to operate in the UKelectricity supply industry. That meant they had to be party to the BSC and hadto enter into an agreement with the transmission system operator National GridElectricity Transmissions (NGET) for using the system. There are significant costsassociated with both. Small generators have been accommodated in this system bybecoming unlicensed generators. Some large distribution-connected sites have to

meet transmission standards, which is an unwarranted cost.Unlicensed distributed generators also potentially have access to what are knownas embedded benefits . These reflect thefact that distributed generatorshave a shorterdelivery path to consumers. Under current arrangements, an unlicensed generator iseffectively treated asnegativedemandonthesystem andtheelectricity it generatesisnot subject to NGET’scharges. By purchasingthisoutput fromadistributed generator,an energy supplier reduces the overall charges it faces from NGET. Energy supplierscan choose to pass back some of these savings to distri buted generators or pass themon to consumers in the form of l ower prices.

The then DTI noted in 2007 – in a programme taken on by BERR – claims thatthese embedded benefits are not sufficient to recognizethevalueof DG. Some arguethat exports should bevalued close to the retail price and that suppliers should havean obligation to purchase. Others arguethat the export valueshould belinked to thewholesale price of electricity.

13.8 Distribution and private wires

Redeveloping distribution networks so they can accommodate widespread local

energy projectsisstill ‘ areal dilemma’ , said theDTI. Expanding thenetwork in areaswhere DG is expected could promote new projects; alternatively, i t could become a‘ stranded asset’ with no function that still has to bepaid for by customers.

Oneoption isto useso-called privatewires – alocal energy network with asingleunlicensed operator, suppli ed by unlicensed suppli ers and with up to 2.5 M W ofdemand. The DTI asked whether this should continue unchanged, whether private-wire networks should have measures to encouragethem, or whether a new regime isnecessary.

The DTI noted that the unlicensed operator i s able to avoid a number of costs

that would usually apply to a licensed energy supplier, including the RenewablesObligation, theCli mateChangeL evy andtheEnergy Efficiency Commitment, aswellas some costs associated with the use of the transmission and distribution systems.Some of these savings can be used to help the financial viability of the often lower-carbon DG that connects into these private-wire networks and partly passed on to




The system is administered by planning off icers within theLPAs. In an attemptto speed up and make thedevelopment plan’s preparation processmore certain,

inspectors’ recommendations following local-plan inquiries will bebinding onlocal planning authorities.Applications for power plants over 50 MW are dealt with directly by the

secretary of state and are known as Section 36 applications.Central government in each of theadministrationsof theUK (England, Scot-

land, Wales and Northern Ireland) has retained for itself the ultimate power todetermine planning applications. Applications may be ‘called in’ for deter-mination by the relevant administration. Appeals against refusal of planningpermission are heard, and often decided by, inspectors or recorders appointedby the central administration.

The appli cation

The construction of a new building or structure nearly always needs an appli-cation for planning permission. The development plan in force in an area willindicatewhether aproposal islikely to beacceptable, so it isalwaysworth talk-ing to a planning off icer at the council before submitting an application. Tryto arrange a face-to-face meeting for this discussion. If there are difficulties,officers may be able to suggest ways to make your proposal more acceptable.

Planning applications are decided in l ine with the development plan unlessthere are very good reasons not to do so. Points that will beconsidered includethe number, size, layout and appearance of the proposed structures; access tothe development; landscaping and impact on the neighbourhood.

It is not necessary to make the application yourself. A planning consultantwill be aware of local land issues and can make the application for you.

Theplanning off icer will tell you how many copiesof theform you will needto send back and how much the application fee will be. Some councils are nowoperating an online applications service.

Decide what type of application you need to make. In most cases this willbe a full application but there are a few circumstances when you may wantto make an outline application – f or example, you may wish to see what thecouncil thinksof the buil ding work you intend to carry out beforeyou go to thetrouble of making detailed drawings (but you will sti ll need to submit detailsat a later stage). Outlineapplicationsmay require a different form.

Consultations

Beforemaking an application for a renewable-energy project, it is advisable to

consult any neighbours who might be affected by your proposal, and the localparish, town or community council. Provideinformation about predicted noiselevels, and images of what the development will look like. Be as open and

Continues



132 Local energy

Panel 13.1 Continued

informative as possible. The results of this consultation will be used in theplanning process.You should also consult other bodies who might have an interest, such as the

Environment Agency or the local water and seweragecompany, to discuss anypotential sewerage, water or f looding problems, and/or the highway authority(usually the county council in non-metropolitan areas or the local council inmetropolitan areas) to discuss road safety and traffic issues (some wind-farmdevelopments have failed to get planning permission because they have beenconsidered a distraction to passing motorists).

H ow l ong does i t take?

Thecouncil should decideyour application within eight weeks. Large or com-plex applications may take longer. Your council should be able to give you anidea about thelikely timetable. If it cannot decideyour application within eightweeks, it should obtain your written consent to extend theperiod.

What does it cost?

Theamount variesaccordingto thetypeof development proposed. Therevenuefrom fees contributes to thecost to thecouncil of handling applicationsand thefee is not refundable unless the application is invalid.

Where the local planning authority fails to determine your application, orwhereyou withdraw it beforeit hasbeen determined, thefeewill not berefund-able. However, i f the local authority fails to determine your application, youcan appeal.

When a previous application has been granted, refused or withdrawn, onefurther application by the sameapplicant for the sametype of development on

the samesite can generally be madefree of charge within 12 months.

Environmental-impact assessment

The local authority will let you know if an environmental-impact assessment(EIA) is needed for your proposal. I t is usually required for renewable-energyprojects. TheEIA isastudy usingscientif ic andother informationabout an areato be developed. It enables decisions to be taken with full knowledge of theenvironmental consequences that would result, in both rural and urban areas.

The planning process

Planning staff at thecouncil should acknowledgeyour application within afewdays. They will placeit on theplanning register at thecouncil offices so that it




can beinspected by any interested member of the public. They will also eithernotify your neighbours or put up a notice on or near the site. In certain cases,

applications are also adverti sed in a local newspaper. This gives the publicthe opportunity to express views. The parish, town or community council willusually be notified; other bodies such as the county council, the EnvironmentAgency and the ODPM may also need to beconsulted.

Anyone can comment on your proposals. Your l ocal council will assess therelevance of comments and, in the light of them, may suggest changes to theapplication to overcomeany diff iculties.

The planning department may prepare a report for the planning committee,which is made up of elected councillors. Or the council may give a senior off i-cer in the planning department the responsibil ity for deciding your applicationon its behalf .

You are entitl ed to see and have a copy of any report submitted to a localgovernment committee, along with any background papers used in its prepara-tion, which will generally include the comments of consultees, objectors andsupportersthat arerelevant to thedeterminationof your application. Such mate-rial should normally be made available at least three working days before thecommittee meeting.

Thecouncil grants/refuses planning permission by sending you a letter noti-fying you of i ts decision.

Refusals and delays

If the council refuses permission or imposes conditions, it must give writtenreasons. If you are unhappy or unclear about the reasons for refusal or theconditions imposed, talk to the planning department.

As we saw above, i f your application has been refused, you may be able tosubmit a modifi ed application free of charge within 12 months. Alternatively,if you think the council’s decision is unreasonable, it i s possible to consider

appealing. The appeal route is also available if the council does not issue adecision within eight weeks.



Chapter 14 Embedded benefits

Generators and electricity suppliers (retailers) directly connected to the electricitytransmission grid pay a series of charges for using the network that can be avoided

by using local generation.

14.1 Costs

Transmission network use-of-system (TNUoS) charges are paid by generators andsuppliersdirectly connected to theelectricity transmissiongrid. TNUoSchargesrelateto the costs of managing and maintaining the transmission network. The chargesvary for both generators and suppliers according to their geographic location and the

demand for grid usage at that location.So, generator TNUoS charges vary by location and are based on the generator’s

capacity. Supplier charges vary by location and are levied on the supplier’s peakdemand, measured at the three half-hours of highest system demand (known as thetriad ).

There is also a charge for transmission losses. Up to 2 per cent of the electri-cal energy generated in England and Wales is lost in the transmission system. Thishappensbecause a proportion of thecurrent flowing in transmission lines, cablesandtransformer windingsisdissipated throughheatingeffects. Theselossesincreasewith

the distance the electricity has to travel. These costs are divided between generatorsand suppliers on a 45/55 split.Generators and suppliers connected to thetransmission network also have to sign

the Balancing and Settl ement Code (BSC), and this is costly, since it requires themto meet certain standards, which i nclude financial reserves, and pay a proportionof the general costs of administering and managing the BSC, as well as their ownparticipatory costs. Signatories to BSC also incur other related charges includingBalancing Servi ces Useof System (BSUoS) charges.

BSUoS charges are paid by suppliers and generators based on the energy takenfrom or supplied to thetransmission network in each half-hour period. Thesechargesarepaid to cover thecosts of keeping thesystem in electrical balanceand maintainingthe quality and security of supply.



136 Local energy

14.2 Embedded benefits

Smaller generatorsthat areembeddedinthedistributionnetwork areneither connectedto the transmission grid, nor signatories to the BSC, so they are not subject to thesecharges. The benefit they gain from this is known as embedded benefi ts .

When transmission-connected suppliers use power from distributed generators,the use of locally generated electricity reduces the extent to which the suppli er hasto use thetransmission system and theenergy-balancing services offered by thegrid.The result is a reduction both in TNUoS and BSUoS charges. Suppliers can pass onthese savings to distributed generators (subject to bilateral negotiation).

In addition, where a generator is embedded within the distribution system, boththegenerator and theassociated demand it supplies benefit from avoiding scaling fortransmission losses.

As with transmission network losses, there are also losses as power is transportedin the distribution network. In fact they are higher, as might be expected since thetransmission network is designed for bulk power transport. Around 7 per cent ofelectricity isl ost inthedistributionnetwork. Theextent to whichembeddedgeneratorshelp avoid distribution losses will vary according to their location. In some casesthere are savings but it is also possible that an embedded generator could increasedistribution losses, especially if there is already substantial embedded generation inthe area.

Embedded generation can be used to reduce a supplier’ s triad demand (and thus

its TNUoS charges), simply by reducing demand on the day in which triad costs aredetermined.

Triad benefit has been potentially the most substanti al of the embedded bene-fits. Generators have normally expected to receive 70 per cent to 90 per cent ofthe total value. But the triad charge will be levied on the supplier’s demand onlynet of the embedded generation. Thus the benefit accrues to the supplier, and anembedded generator will have to claw i t back through its energy contract with thesupplier.

There areother perceived benefits lesseasy to quantify. Onewould bean increase

in the availability and security of supply due to the increased diversity of genera-tion sources. Another might be avoiding the cost of reinforcing the network, whereincreased demand would normally require increased flow down a part of thenetworkthat would therefore need the cables reinforcing. New generation near the demandcould mean bigger cables were not required. The electricity is also delivered eitherat or closer to the correct voltage for distribution. (Electrical output from central-ized generators has to be transformed up to a high voltage, transmitted, and thentransformed back down to thelower voltage).

However, DNOs argued that embedded benefits are small, if they exist at all,

which is why payments for embedded benefits, where they have been offered, havealso been small. They point out that wrongly placed generation can actually increasetheir costs, as it may alter or even reverse the flows down their wires, sometimesrequiring replacement of equipment.



138 Local energy

If a DNO employs genuine innovation in the way that it connects generation,it can seek to register the connection scheme with Ofgem as an RPZ. Ofgem willdecidewhether theschemequalifies as an RPZ. An incentive packageof a maximumof £500 000 per year during theprice-control period is allowed to each DNO for RPZprojects.

The RPZ incentive mechanism combines pass-through and capacity-related ele-ments. The capacity-related element allows a DNO to recover £1.50/kW/annumfor new generation connections for a 15-year period. This element is increased to£4.50/ kW/year in an RPZ for the first five years.

14.4 Small generators

The government recognized early on that the small generators were likely to findexport costly and diff icult. Its solution was to invite companies to become consolidators , who would allow groups of small generators to sell their electricity together.Aggregatingsuppli ers, not necessarily in thesamearea, should reducethevariationinsupply andoffer larger amountsof power, so generatorsshould havemoreopportunityto negotiate better prices.

Consolidation has been of very limited benefit so far, operated in the originalstand-alonemodel by only onecompany, SmartestEnergy, although some other com-panies in effect use a modified form of consolidation. Good Energy, for example,buys power generated from small generators and microgenerators, although its mainbusiness is power supply.

14.5 Consolidation

Generators have to sell their power. It is possible to sell directly – strike a contractwith an electricity user and sign up to the electricity market. But that incurs costs thatare generally too much for a small company to bear.

Getti ng accessdirectly to themarket is an expensive business. There are thecosts

of signing up to theBSC,interfacing with Elexon (thenonprofit entity that administersthe BSC), National Grid Co. and the counterparti es to your supply contracts. Eventhe cost of employing regulatory specialists who understand the BSC is substantial.

Most small generators do not take on any of these issues. They simply sign acontract with a local electricity suppli er, which agrees to take whatever power isgenerated for afixed price. There isacertain amount of competition: in thesamewaydomestic consumers can choose their electricity supplier, a small generator can offerpower to different suppliers and compare prices. But there is another option. Powercan be sold to a consolidator – a specialist trading company that buys power from a

variety of sources and sells it on.Thebasisof consolidationi sthat youtakeontherisk of aportfolioof unpredictablegeneration. This would build to a chunk of power that is more predictable and couldbe sold on to the market. The consolidator can use its several sources of power tomanage the risk of not meeting its commitment.



Chapter 15 Connecting and exporting power

How do you export power from your local energy installation to theelectricity grid?Until recently, connectionwasanotoriously complex business, dependingnot only on

your installationandwhether youhopetoget somei ncomefromtheexport, but alsoonregulationsthat wereintended for very diff erent electricity generatorsanddistributionnetwork operators (DNOs) whose procedures and attitudes vary widely. However, anew connection standard designed for thejob has simplified mattersconsiderably, ashave new regulations that determine the price paid for the connection and that willforce DNOs to offer export tariff s to new generators.

At bottom isanew attitudethat acknowledgesthat, rather than being anuisanceorasideshow, local energy projectscanstrengthenexisti ngenergy-supply arrangements,reduce the need to make expensive reinforcements to the grid when new demand in

the form of new housing or business arrives in the area, introduce efficiency andpersuadepeople to use energy with more care.

15.1 Connection standards

Connection standards are designed to achieve several things:

• the safety of electric appliances and people in thehome;• the safety and reliability of the DNO’s network;• the safety of engineers working on thegenerator and theDNO network.

For DNOs, connecting large numbers of small generators to the network is verynew and it has a number of implications. For example, for engineers, the question ofsafety is paramount: staff working on electrical cabling need to besure that, oncethemain supply is off , the cable is not ‘ live’ due to power input from a small generator.Another i ssueis DNO income: they receive financial penalties if there are too many‘ faults’ in supply and they argue that more generators on the system mean that faultsare more likely. Here are the steps you should take i f you wish to connect yourgeneration system to the network.

15.1.1 Step 1: D ecide on your system

Local energy depends on local resources. Are you planning a small hydro-turbine,photovoltaics, a wind turbine or a combination? Is biomass available and would it be



142 Local energy

best used to provideheat or power – or both? Consider thealternatives: if you are farfrom the gas network the cost of using biomass for heating may not bevery differentfrom the cost of oil or electrical heating. Assess how much energy will be producedand whether it is required as heat or electricity, and look for other local users withwhom you could combine to have a more favourable profile of needs. Look carefullyat your demand to see whether, i n practice, you are likely to have any electricity toexport to the grid.

15.1.2 Step 2: Get a connection agreement

If you are working towards a small project of less than 1 MW your system supplierwill probably be able to deal directly with the DNO on a connection agreement inexchange for a flat fee. Completion may take up to two months under the old G59/2

standard but should bemuch swifter under the new G83/1 standard (see below).

15.1.3 Step 3: Install suitable meter ing

When you calculated how much electricity you would have to export, you may havefound only a few kilowatt hours. In that case, you may decide you would be payingout more in metering and administration than you can make from electricity sales,and in this case it may suit you to ‘ dump’ those kil owatt hours on to the grid. In thiscase, since you won’t be exporting much energy and you do not want to be paid for ityou do not need a meter to record exported power. Your existing meter will continue

to record imported units.However, bear in mind that some meters have antifraud features and may assumethat electricity passing the‘ wrong way’ throughthemeter isan indication of attemptedmeter fraud. Metersvary in their reactionsbut in somecasesmay disconnect, so checkyour meter f irst, as you may need to get a new one installed.

Once theconnection is complete you will continueto be billed for any power youimport and can change your electricity suppli er in the normal way.

The next step is to install a meter that records imported and exported electricity.This can beobtained from your electricity suppli er or their meter operator.

If you are exporting at a small power level (less than 16 A per phase, or 3.68 kW)you may useaso-called non-half-hourly (NHH) meter. Thissimply recordsthetotalsfor export andimport andwill cost £50–100. It will havetwo meter identificationnum-bers(MPANs), for export andimport registers, even if thereisasinglephysical meter.

Thealternativeis to keep your existing import meter (and itsMPAN number) andfit one new single-direction meter to count theexport and get one new MPAN for it.

If you are exporting at a higher level, a half-hourly (HH) meter will berequired,with substantial running costs. Therenewables industry is currently lobbying to raisethe generator size limit for NHH metering, as the high cost of HH metering is aninsurmountable barrier to many small generators.

15.1.4 Step 4: Install a ROC meter

If you want to qualify for ROCs you wil l need to install a new meter to record thetotal output from your generator.



Connecting and exporting power 143

15.1.5 Step 5: Arr ange a tari ff with your electr icity suppli er

Researchelectricity suppli ersandchoosetheonethat offersthebest deal. Don’t forgetthat you may be offering ROCs and Climate Change Levy (CCL) exemption along

with power.

15.2 The connection agreement

Written agreement is required from the DNO before the generator can be started upand connected. In the past, generators were connected under a standard known asG59/2. But this was written many years ago to connect large power stations (over5 MW) and it was designed mainly for plant with rotating turbines, not inverters.In practice, this means the standard does not fit well with small and renewable

sources.Previous applicants report that connecting small-scale projects often comes up

against a similar lack of experience among DNO staff , as in the past the numbers ofsmall generators connecting to the network have been small.

It is up to the applicant to demonstrate that its scheme complies with G59/2 andwith theassociated guidancedocument, known asETR113, andto convincetheDNOthat theoperating conditions are safe. Each distribution network operator has its ownappli cation form and its own format.

The applicant wi ll have to provide scale drawings of earthing arrangements, an

electrical schematic and a description of operation under normal and network faultconditions. Some DNOs may insist on a site visit to witness tests (costs vary fromzero to several hundred pounds, depending on the DNO).

A new standard – G83/1 – was released in September 2003 and is designed tomake connection easier. It is valid for domestic CHP, photovoltaicsand small hydro,but at present it is not valid for wind. This is because the upper size limit is set verylow, at 16 A (approx. 3.7kW) per phase. This is too low for many small wind turbinesand theindustry is protesting.

The Energy Networks Association indicates that DNOs will accept G83/1 as a

valid connection standard for schemes that producemore than 16 A, but this is at itsdiscretion and it has not been tried yet.

G83/1’s main features are a simplified application f orm and appendices givingspecial requirements for the technologies mentioned above. It assumes that theinter-facebetween thegrid and thegenerator (a grid connect inverter) has undergone ‘ typetesting’ and passed.

Once the paperwork is complete, the DNO must be notified that the project isbeing installed – this can be as simple as a letter to the DNO. A third standard,designated G77, that was in place for PV arrays has now been withdrawn, as G83/1

replaces it. Any devices that were type-approved under G77 are also approved underG83/1. Since G77 allowed up to a 5 kW connection, that level has been carried overto G83/1 and it allows PV installations up to 5 kW.

Morerecently, therehasbeen parti cular focuson connectingdomestic generation.This has been l ed by a surge in i nterest in such projects, grant programmes and the



144 Local energy

easy availability at l east of photovoltaic panels or solar thermal panels and domesticwind turbines in DIY shops such as B& Q.

At one time these had also to be processed wi th the DNO by completing a con-nection agreement, but now the requirement is simply to inform the DNO that theinstallation has been made, so long as no exports are expected. Getting an agree-ment and tariff for the small amounts of electricity exported by such projects is moreproblematic and often will not be worth thetrouble.

In February 2004, for the first time, a standard guide to connecting small gener-ating plants to the distribution network was published. The ‘ Technical guide to theconnexion of generation to the distri bution network’ does not describe in detail therequirements for individual projects, which are specif ied with the appropriate DNO.Instead, it provides background i nformation and a ‘ route map’ of the connectionprocess.

The new guide is just one result of work done by the then DTI’s DistributedGeneration Group to improve theposition for small generators who want to connectto thelow-voltageelectricity system.

Describing the new guide to a Renewable Power Association (RPA) briefing onDG, Stephen Andrews of theconsultantsIlex noted that, in thepast, DNOs’ responseto requests for connection had been very different and there had been no consistentapproach. But now any potential generator could besuretheDNO should haveacopyof the new guide and could work from thesamedocument.

Thedocument was created by just oneof thetechnical work streamsbeing under-

taken under a joint process and a combined ‘ Distribution code review panel’ withmembers from generation and distribution, who will work on developing connectionstandards.

15.3 Rethinking the network

The UK regulator has publi shed proposals that should speed the deployment ofembedded generation.

Times are changing for theDNOs: increasingly, electricity is being generated bylocal schemes that supply power direct to the local network. Overall, the change isgenerally agreed to be a useful one: an extensive series of local power-generationprojectshelpsstrengthen thenetwork, and areaswith their own generationare largelyprotected against theconsequencesof afailurei n thegrid. What ismore, they increasethe overall efficiency of the network, as up to 3 per cent of the power generated atlargeremote stations can be lost during the long-distance transmission process.

But, while generation projects ‘ embedded’ in their networks should ultimatelybe beneficial to DNOs, developing the networks to accept such projects is far from

straightforward. TheDNOshave astatutory duty to offer connection to new projects,but in most cases they also set the price of connection. For developers working onembedded generation projects, such as small onshore wind farms, some DNOs havein recent years gained a reputation for reluctance and obstruction in connecting theirprojects.




BecauseDNOsare local monopolies, their termsof businessand financial rewardare laid down by the industry regulator Ofgem. In a five-yearly distribution pricereview, after consultation with the DNOs and others, Ofgem sets out the investmentto bemadein thesystem and thecosts that can be passed through to customers in theform of pricerises. It also sets out a rangeof penalties for poor performance.

The DNOs argue that their diff iculties with connecting DG arise because theirfinancial constraints are also not designed for the purpose. It may be that a l ocalproject will benefit their network overall, but, becausethey cannot recover thecost ofgrid reinforcement from consumers, it has to be charged to theproject. What is more,the DNOs say that the price involves more than just the cost of connecting a cable:there are practical implicationsto accepting generation on to thelocal network, frompotential faults elsewhere as electricity flow patterns change, to changed workingpractices for engineers working on the system.

As a result, DNOs previously imposed so-called ‘ deep’-connection charges,where the new project bears all the network upgrade costs, rather than ‘ shallow’ -connection charges, which cover just theconnection. Theresulting capital costs havehalted many embedded generation projects. Part of the problem was that it was hardto predict how much reinforcement might be required to complete the connection.The most obvious aspects, such as the distance of the new project f rom the nearestconnection point, may mask other reinforcement required not only in cabling andsubstations on theimmediate circuit but also at distances up to several miles. Also atstake were the other loads and generators already on the system or due to join, and

whether the new install ation would be the point at which the circuit would haveto bestepped up to a new supply-and-demand level.

Projects were expected not only to take on reinforcement costs but also to putasidefinancing at an early stage in theproceedings. And, thanks to the slow processof accepting new projects on to the grid, projects in the queue for connection couldeasily fail to proceed, changing the requirements for reinforcement elsewhere.

Ofgem and the DNOs began work on the charging structure for the operatingperiod 2005–10 with this in mind. The fourth distribution-price review (known asDPR4), which set financial terms for the DNOs from April 2005, contained pro-

posals specifically designed to make connection of embedded generation simplerand cheaper, along with proposals intended to help begin developing more activenetworks.

Ofgem said in its proposals for DPR4 that there is ‘ a general recognition thatinvestment to replace network assets and to improve network performance needs toincrease…[and] thiswill requireinvestment in thedistributionnetworks andchangesto the regulatory regime’ .

15.4 Shallowish connection

To respond to embedded generators, Ofgem proposed revised connection-chargingarrangements for connecting to the distribution network and incentives on DNOs torespond ‘ proactively’ to requests from generators to connect to their network.



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‘ Deep’-connection charging would be replaced by a ‘ shallowish’ system. Here,the new project would still be required to pay the costs of upgrading the system butthepayment would besplit: part would bepaid as a capital sum beforeconstruction,but part would be paid as a toll on each unit of electricity exported. This appears asan addition to the distribution use-of-system charge paid by all users of the networkper unit of electricity transported.

The benefit to the project is that these payments are not made until the powerplant isoperating. In addition, thenew schemewould help reducethecosts of beinga‘ pioneer’ project. Previously, onceoneproject had bornethecost of deep connection,later projects had a ‘ free ride’ , taking advantage of upgrades made to accommodatethe first project. New arrangements will allow some of the reinforcement charges tobe recouped from later projects that benefit from the strengthened network.

Embedded generators have long argued that, far from being a burden to DNOs,

they offer benefits in operating the network. Their power input can help keep thesupply in order where the network is weak, maintaining frequency and voltage, forexample. In thebulk power system thesebenefitsarequantified andrewarded. Ofgemsaid that, as the level of DG penetration increases and the management of the distri-bution networks becomes more active, there may be opportunities for the DNOs toutil izeancillary servicesfrom generation(as well asdemand) to help operation of thenetwork. But it said that, to the extent to which these opportuniti es wil l arise over thenext period of DPR4 (i.e. until 2010), the effect is unlikely to be significant.

15.5 New chargingregimes

The DNOs operated a temporary ‘ shallowish’ charging regime from the DPR4 startdate in April 2005 but it was not intended to be permanent. Instead, DNOs wererequired to develop ‘ enduring’ charging schemes that would be able to develop in apredictable and fair way as thedistribution networks develop, as expected, into fullyactive networks.

Western Power Distri bution, whichownsandmanagesthenetworksin south-west

England, was the first to develop a new charging methodology. Its methodology forhigher voltage networks on its system was implemented on 1 April 2007.

United Utilities, which operates networks in north-west England – Central Net-works, Scottish Power andScotti sh andSouthern Energy – expected to introducenewcharging methodologies in April 2008, while CE, which has networks in Yorkshireand thenorth-east, wasaiming for April 2009. EDF Energy, with networksin Londonand eastern England, expected to make the change at some of its networks in April2008 and some in April 2009.

Thenetworkswerenot expectedto usethesamemethodology –Ofgemrecognized

that conditions in each area vary considerably and in any case the regulator’s aim isgenerally not to impose schemes on theDNOsbut to enable them to be developed bythe operator. A Distribution Charging Methodologies Forum was set up in May 2007to enable the distribution companies to work together to deal with new problems asthey arise and as their networks change.




Among theearly issues identified by Ofgem as likely to require discussion by thenew forum were the foll owing:

• HV/LV generator charging . The new methodologies being developed have

focused on high-voltagelevelsin thedistributionnetworks. Ofgem said theexist-ing chargingmodels for HV andLV generatorsaresimplistic andthenew modelsdeveloped for EHV cannot readily beextended to cover thefull HV or LV networkon the samebasis. There is therefore a need to extend someof the concepts nowbeing developed to providemore cost- (and benefit-) reflective charging.

• Charging products and structures . The distribution companies recognized thatthere is scopeto align definitions of thecharging product (e.g. capacity) and theirapproaches to charging for reactive power. Ofgem said there was scopefor betterreflection of costs of usage at different times and potentially for longer-term or

more f lexible products. In the medium term, it might be valuable to developtariffs reflective of costs at voltagelevels rather than by predetermined customerprofile/class.

• M ethodology statements . A common format for each of the connections and use-of-system methodologies could be used by all electricity distri butors. Work onthe connection methodology will be taken forward in consultation with Ofgem’sElectricity Connections Steering Group (ECSG).

• Existing gener ators : On 31 March 2005, when DNOs switched to interim charg-ing arrangements on a ‘ shallowish’ basis for the first ti me, there was 12.9 GWof generation capacity connected to distribution networks. These generators con-nected under a ‘ deep’-connection-charge regime and were not currently payinguse-of-system charges. But Ofgem said those generators’ decisions may have aneffect in future on network costs, including charges to prospective generators.Ofgem said it had explored various options for introducing charges for thesegenerators, with or without compensation, but had not taken the work forward.Existing generators expected, however, that Ofgem would return to the issue.

It isDNOswho arenow responsible for proposing how to resolve all theseissues.

15.6 Constraining connection?

One reason why connection costs have been so high i s that grid rules say that newgenerators should be able to connect in an ‘ unconstrained’ way, which means thatthe full theoretical output from the plant can be exported at any time. This has alsoresulted in extensive connection queues in areas where there is little or no capacityon theexisting network.

But it has been argued strongly that ‘ unconstrained’ connection i s unnecessary,

especially in thecaseof small or local projects. An alternativewould seenew projectsconnected on a ‘ constrained’ basis. The DNO would be able to take the entire outputwhen it was possible, i.e. when there was capacity on the wires. On occasions whenthe capacity of the wires was fully utilized the generator would be unable to exportpower and would be paid an agreed fee by the DNO.



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It has been argued that experience from other countries – the system is used, forexample, in Norway – has shown that with some forms of generation the constraintis much less than might be expected. Wind is a useful example. A wind farm ratedat 1 000 kW would, under the UK system, have to pay for grid reinforcement thatwould enable it to export 1 000 kW at any time. But wind farms of course operateonly when there is wind, which may be anything from 60 to 90 per cent of the time.When the wind is not at the optimum speed the wind turbine generates a proportionof i ts rated power. Over an averageyear a turbine generates around 30 per cent of itstheoretical maximum over the year, and sinceit does this only when the wind blowsit isclear that it ishardly ever producingthemaximum-rated capacity. Obviously, theoutcome depends on local circumstances, but experience from Norway has been thatthe constrained connection has been very beneficial. It has brought new capacity onlinemuch more quickly and has led to very f ew constraint payments.

This can be still more beneficial if it is operated in conjunction with a nearbydemand, where power can be used if it is not exported. So far, however, constrainedconnections have not found favour in the UK.



Chapter 16 Finance and local generation

U sing the waste heat f rom the electri city-generation process, plants l ike thi s one at Ludl ow can conver t fuel to power and heat at very hi gh efficiencies.

Thecapital cost of local power and heat projectsis often rather higher than providingpower or heat conventionally. Thereareanumber of reasonsfor this: theequipment isrelatively new or supplied in small volumes, so it is more expensive; thetechnologymay benew to itslocation, so alterationsarerequired in existing buildingsto allow for

it; it may simply have had a different cost structurefrom more conventional choices,with high capital costs eventually balanced by low operating or fuel costs.Thegovernment responsehasbeen to try to pump-primethemarket with subsidies

and grantsthat will eventually increasethemarket sizeto apoint when unit costsbeginto fall. That eff ort has been made more difficult because the options for distributed



150 Local energy

energy are so varied and apply at such different scales. Developing a volume marketfor the domestic scale is probably more achievable than it is at mid-scale, whereenergy will always have to be tailored both to the resources available and to theparticular needs of the customer.

Oneproblem at mid-scaleis that companiesoften require payback on new capitalinvestments within a few years. A switch to so-called ‘ life-cycle’ costing, wherebythepurchasing and installation costs are assessed in conjunction with fuel and main-tenance– and often removal at theend of theplant’slifetime– ismorelikely to favourdistributed energy.

16.1 RenewablesObligation

The government’s biggest support scheme for renewable energy is known as theRenewables Obli gation (RO). The scheme was put in place in 2001. It places anobligation on all retailers of electricity to source a proportion of their electricity fromrenewable sources. TheObligation will remain in placeuntil 2027 and therenewableproportiongrowseachyear, fromaround3 per cent in thefirst year to reach20per centof supply.

To prove that the retailer has complied with the obligation, a system of electronicROCs is employed. At the end of each financial year the amount of each retailer’ sobligation i s determined by Ofgem, which administers the RO. The retailers can

then discharge their obligation, either by presenting ROCs to prove that they haveused the required proportion of renewable power, or by paying a ‘ buyout’ (fine) foreachmegawatt hour wherenon-renewable (often called ‘ brown’) power wassuppli edinstead. Thecash in thebuyout fund isrepaid, pro rata , to theretailers who presentedROCs.

The upshot is that each ROC has a value equal to at least the buyout fine, andpotentially considerably more i f there is a shortfall in renewables generation, andmany retailers are forced to pay some buyout fees to fulfil their obligation. This hasbeen the case every year, and i n fact is designed to be so: the Obligation level is

increased each year to ensure that there is a shortfall in the generation achieved, sothat renewables project developers can rely on receiving buying cash.

These three components provide the elevated power price required to make arenewablesproject financially viable. A renewablespower project must first becerti-fied by providing information about theplant to Ofgem. Onceit isaccepted, theplantisawarded oneROC for each megawatt hour of power it produces. Thegenerator cansell the power, the ROC and the likely benefit from the buyout fund.

The Renewables Obligation differs from many support schemes used in othercountries because it does not specify which renewables technologies should be

employed, nor exactly how much subsidy generators will receive. Many Europeancountries have favoured fixed tariffs (often known as feed-in tariffs ), with a differenttariff set for each form of renewable energy and paid for each megawatt hour gen-erated for a specif ied number of years. But the UK favoured ‘ market’ instruments,whereby the government’s role was not to distinguish between technologies but toallow the market to bring forward the most competitive.



Finance and local generation 151

This was partl y because of a general government preference for market instru-ments, and partly because the avowed intention of the Obligation was to bringrenewableenergy on to thegrid asquickly aspossible, at thelowest possibleprice. Inthis it has been successful as well-developed technologies, particularly wind power,ramped up installation rates. The Bri tish Wind Energy Association, for example,notes that it took 14 years for theUK to install 1 000 MW of wind power, but just 20months to install the next 1 000 MW.

However, the structure of the subsidy means that i t i s far l ess useful in bringingnewer technologiesforward, somethingdevelopersof waveandtidal-power projectshave highlighted. It also has very limited usefulness for small and distributed powergenerators, especially those whose business is not power generation but who havean interest in a local power project for other reasons – to provide on-site power,for example, as a community project, or who have a very small source such as

PV panels.What is theproblem?First of all ROCsare cumbersomeand costly to administer.

Registering as a renewable power source is just the start: although Ofgem has sim-plified the forms required f or this process for microgenerators, below 50 kW, theyare still 20 or more pages long and necessarily address technical issues that could bedifficult for this group – who are generally installing domestic systems – to get togrips with. Systems over 50 kW in sizerequire still more information.

Oncethey are registered, it is necessary for generators to prove how much powerthey have generated and to make returns to Ofgem on a regular basis. For micro or

domestic usersthiswill probably requirenew, moresophisticated, metersandthecostcould outweigh any benefit from ROCs. It hasbeen proposed that, instead, generatorsat thedomestic level should have a ‘ deemed’ figure for the averagelikely generationof their installation and receive ROC benefits on that basis, but so far this has notbeen implemented.

Companies are more likely to have half-hourly meters already in place, but wi llhave an additional administrative burden that could mean significant costs.

For this reason, many small generators will rely on an agreement with their elec-tricity retailer to managetheir electricity production. This has its own disadvantage,

which is mainly that thepriceoffered is li kely to be very low and if the install ation isvery small no price may be on offer.

Companies argue that the contingent nature of the Renewables Obligation is thereasonwhy they off er small generatorsl ow pricesfor thepower they haveavailabletoexport. Thebase electricity pricecan vary considerably, as anyone with an electricitybil l knows, andthevalueof therenewablescerti ficatecan also vary because, althoughthebuyout priceis fixed in advance, the amount of buyout fund likely to be recycledis not known, so nor is the full value of the ROC. Some party has to bear the risk ofthis unknown price, so power retailerswhooffer fixed pricesto distributed generators

wil l pitch it very low. In practice, retail ershavenot been obliged to offer export dealsto small generators and often declined them, but, at the time of writing, this seemedlikely to change, with a new requirement on the horizon that would force retailersalso to offer export tariffs.

The cost and complexity of the export process have meant that small generatorswho may havehad power available havesometimesdecided not to export, asthecosts



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are far greater than the benefits. And, although the RO always included an optionof selling ROCs to a consolidator, intended to provide a simpler route to market forsmall generators, this has never been successful.

An interesting variant of theRO that has been used in Australia for several yearscalculates an average lifetime generation for a small renewable energy source suchas domestic PV and calculates thenumber of ROCsthat would begenerated over thelife of the scheme. For domestic PV, in theAustralian version, the lifetime ROCs areawarded to the PV supplier at the outset, who translates them by an agreed formulainto a discount on the purchase price. A similar system has been proposed in the UK.

Finally, a major problem with the RO for many local energy projects is that i t isentirely focused on electricity production. No benefit or subsidy is available for heatproduction using this route. This clearly means that heat-only sources are excludedbut it also dramatically reduces the amount of subsidy available for mixed sources,

which often offer greatly improved eff iciency, such as combined heat and power.CHPhas huge potential in all kinds of projects, industrial, commercial and large-

scale domestic, where both heat and power are required. CHP projects using fossilfuel would not be eligible for ROCs in any case, but some could use local biomassfor fuel and in theory many would be eligible as renewable-energy generators.

But in most projects heat is the most important product – for process heat inindustry, heating in commercial premises, etc. – whereas electricity is a by-product.The amount of electricity produced, even in a large product, may berelatively smalland production can vary dramatically depending on the heat needs of the site. That

puts even large biomass CHP owners in a similar position to small generators: theyhave a few megawatt hours of power to generate, often unpredictably, so the pricethey can get for the power, even with ROCs, is low – and often not enough to justifyinvesting in an eff icient CHP plant instead of a simple boiler that provides only heat.

An Act of Parliament on climate changepassed in 2006 required theUK govern-ment to i nvestigate the possibil ity of a renewable-heat obligation to run in parallelwith the RO. There was a precedent for this: the government had already decidedto introduce a renewable-transport-fuels obligation that would require transport-fuelsuppliers to mix a proportion of biomass-derived fuel with petrol and diesel.

The government had previously resisted the idea of a renewable-heat obligation,saying that, unlike for electricity and transport fuel, where there was a defined groupof retailers, it would be extremely difficult to identify a group of heat suppliers to becharged with theobligation.

16.2 Electricity trading arrangements

The system by which electricity is bought and sold by power-generation companies

and retailers also does not favour renewable energy. The current system was putin place across England and Wales in 2001, under the name New Electricity Trad-ing Arrangements (NETA), and it was renamed the British Electricity Transmissionand Trading Arrangements (BETTA) when it was extended to cover Scotland inApril 2005.




BeforeBETTA, electricity generatorsmadeoff ersof electricity supply at acertainprice for each half-hour of the day. The offers were known as the pool . As the half-hour arrived, thesystem operator would call on thecheapest off ers first until demandwasmet, andall thosecalled on to generate would receivethepricebid by thehighestbid used. Generators have different amounts of flexibil ity over how they operate anddifferent constraintssuch asfuel price, so for someit wasbeneficial to bid ahighpriceand generate only when the price was high enough to cover fuel costs. For others,such as wind farms, it was more effective to bid a zero price and become a ‘ pricetaker’ : they would be called on whenever they had power to supply – i.e. when thewind was blowing – and, because the cost to run was minimal and there were no fuelcosts, they could accept even low prices.

However, it was thought that the pool allowed some electricity companies tomanipulate themarket and produced electricity prices that were too high. Also, there

was no penalty if they were unable to supply for a period in which they had made abid, which was inefficient.

Under NETA and then BETTA, electricity generatorsand retailers madebilateralcontractsfor whatever period suited them. Thepower was still dispatched by thesys-tem operator in half-hourly slotsas it had been before, but theunderlying assumptionwasthat thesum of thecontractsshould mean theelectricity supply anddemand werein balance. In practice, there would always beminor balancing actions required (seeChapter 14), but this is managed by the system operator, who called on previouslyagreed demand and supply ‘ top-ups’ or reductions, with appropriate payments. The

cost of balancing ischarged back to generatorsor retailers who were ‘ out of balance’ .The new arrangements were i ntended to ‘ discover’ lower prices if they were

available and to penalize unpredictable generation. It washugely successful at both.Prices dropped by more than 10 per cent and operators of unpredictable power suchas wind generators and CHP operators selling their excess power found that theywere paying balancing charges that in somecases outweighed theentire incomefromtheir site.

Since the system went live the situation has eased somewhat. Companies havebecome more used to matching their supply and demand and the system as a whole

has seen much less balancing required. Forecasting of wind output has becomemuchmore exact, especially as ‘ gate closure’ – the point at which final contracts have tobe made for each half-hourly dispatch slot – has moved to just one hour in advanceof dispatch. In most cases, forecasting is very reliable at this scale.

In practice now, what BETTA adds to the situation for distributed generators isanother l ayer of risk. That means that, in selling wholesale to a power company, theprice is likely to be discounted again because the power company is taking on themarket risk.

16.3 Climate Change Levy

A further subsidy available to most renewable-energy generators is via the ClimateChange Levy (CCL).



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TheCCL hasbeen in operation since 2001. It is atax on theuseof energy paid byindustry, commerce and thepublic sector, and its underlying aim is to reduce carbondioxide emissions. It was set up in response to the UK’s commitment, under theKyoto Protocol, to reducecarbon dioxide emissions by 12.5 per cent compared with1990 levels. Thelevy is intended to encourageeff icient energy use and to provide anincentive for i ndustry to move towards energy supply that has lower carbon dioxideemissions. That means that using gas or electricity attracts a lower rate of levy thanusing coal. No levy is paid if renewable energy is used.

In practice, because renewable energy is exempt from the CCL, generators canreceive a fixed CCL payment f or each megawatt hour they generate. An importantdistinction between theCCL and RO, however, is that good-quality CHP, however itis fuelled, qualif ies for the CCL.

Administration is relatively simple, especially for those generators who are

already qualifying as renewable-energy sources. The CCL is also administered byOfgem, which hasworked hard to try to combinethepaperwork for thetwo schemes.

16.4 Grants

As we have seen above, the support schemes by which the UK has attempted topromote the large-scale use of renewable energy, and persuade industry to switch tomoreefficient andpossibly site-based formsof generation, havebeen most successful

in persuading the existing power-generation industry to invest in renewables. Theyhavedonelittleto help companies, groupsor individualswhoproposesettinguplocalenergy schemes.

The nature of distributed energy supply does present problemsfor policymakers.Local energy isbest servedwhen local energy sourcesare used, andtheenergy isusedlocally. That means that a huge variety of energy sources have to be encompassedwithin a support scheme that may have very different investment and return profilesandbeat very different stagesof development. What ismore, thesupport schememustbeusable by a widerange of potential suppliers and the benefits must betranslatable

to all the members of a group involved in a scheme.Thegovernment hastaken theview that eventually local energy will bea‘ volume’

industry, wherestandard technologiescan besimply connected – afar moreextensiveversion of the current heating market, where a range of boilers is available off theshelf in domestic or industrial versions that can be fitted, at the domestic scale, bylocal tradespeople. That approach will always be complicated by the need to assessand make use of natural sources such as wind, but, alongside a volume industryfor equipment, a similar volume industry for services such as wind assessment anddesigning mixed systems should develop.

With sources as diverse as small hydro and microCHP to support, at scalesfrom domestic to major industry, the government has fallen back on grant pro-grammes intended to allow suppliers to build a volume business, on the assumptionthat the result should be price reductions, since ‘ off-the-shelf ’ technologies aremass-produced.




The diversity of the potential market has been a problem for the industry andgovernment because it means that responsibility extends across more than onegovernment department.

Support for heating schemes, for example, has comefrom theDepartment for theEnvironment, Food and Rural Affairs (DEFRA), which has also had responsibil ityfor trying to support the growth of the biomass supply industry. Electricity supplysupport schemes have to come from the Department of Trade and Industry (DTI) – now theDepartment for Business, Enterpriseand Regulatory Reform(BERR) – whileCommunities and Local Government (CLG) has some responsibil ity for buildings,and so, although it may not be involved in grant programmes, such programmes dohave to be designed with reference to CLG.

As a result, grant schemes have been slow to materialize, and are sometimesunwieldy and in danger of allowing important potential projects to fall between

schemes. Similar problems have been encountered in dealing with organizationaland legal issues (see Chapter 13).

16.5 DEFRA support

DEFRA’s main area of support is thebiomass industry. It has offered planting grantsfor biomass cropssuch as willow and miscanthus, and a further grant programme forproducer groups that aimsto help farmers make theswitch to these cropsby helping

them form cooperatives and companiesthat can jointly market their crop.Thelargest grant schemeby far, however, hasbeen thecommunity-energy heating

schemeknown as theCommunity Energy Programme. This provided grants for CHPprojects and ‘innovative’ heating, which often meant using biomass fuel instead ofgas or oil for heating purposes.

Thiswasannounced with a£50millionfundingcommitment in 2001, and DEFRAcommitted a further £10 million to the Community Energy Programme in 2004, butdecided that it would end in 2007. DEFRA said thedecisionto extendtheprogrammewas based on initial strong demand and a number of larger schemes with significant

outputs. However, experience has shown that many larger schemes under the initialprogrammecould not complete within the31 March 2007 spend deadlineand did notgo ahead. The smaller schemes that can complete tend to beexpensive in relation totheir outputs. The high dropout rate for larger schemes is the main reason for the lim-ited estimate of spend. DEFRA added, ‘ Thesituation would not improveappreciablyif we extended the spend deadli ne, as these larger schemes cannot complete within atimescale suitable for government funding, in some cases after 2010.’

Theprogramme was said to have spent just £22.4 mil lion of the funds available,and although it had brought around 28 MWe of CHP capacity onlinethis was just 22

per cent of the programme’s original target.Therewasnodirect replacement, althoughtheLow CarbonBuildingsProgramme,administered by theEnergy Saving Trust (EST), encompassed some simil ar projects.

Elsewhere, DEFRA is also responsible for the Energy Efficiency Commitment(EEC), which may eventually provide support for domestic generation. The EEC is



156 Local energy

a duty placed on electricity retailers to reduce carbon dioxide emissions by helpingtheir customers use energy more eff iciently. There are a range of measures withinthe commitment, including loft and cavity wall insulation, more energy-eff icientappliances such as fridges and boilers, low-energy lighting, etc. Retailers can choosehow they meet their commitment, by offering cheap low-energy lamps, or givinggrants for insulation, or reducing the priceof eff icient appliances.

It has been proposed that, in future phases of the EEC, microgeneration wouldbe a suitable addition to the range of measures available. Retailers could providegrants towards the cost, for example, of micro wind turbines or solar water heaters.The proposal is the subject of some debate: there is a question, for example, overhow beneficial it would beto install such technologies on uninsulated houses, wherelarge energy savings are available. There are also questions over the appropriatenessof including energy generation in the programme at all. At the time of writing, that

question had still to beresolved.

16.6 DTI grants

Theformer Department of Tradeand Industry’ s programme of support to small-scalerenewables began with the solar PV demonstration programme, which eventuallyprovided £31 mil lion in grants to PV install ations.

That programme was replaced by a broader-based schemeknown as Clear Skies.This long-awaited capital-grant scheme to encourage UK homeowners, schools andcommunities to take the initiative in developing and installing their own renewable-energy schemes was launched by the then energy minister Brian Wilson at thebeginning of 2003 with an initial £10 million funding. The Scottish Executive put up£3.7 million to fund its own parallel scheme, with shared website and criteria.

For the first time the scheme encompassed projects that provided renewable-sourced heat as well as power and it included solar water heating, wind and smallhydro among the projects it supported.

The scheme focused on flagship and community projects, hoping that their high

visibil ity would act to promoterenewables more generally, with a second stream thatprovided one-off grants for householders. At the time, the DTI said suggestions forlocal projects could include:

• a solar street, where water-heating panels are fitted to the roof of every house ina street;

• a small-scale hydropower project in a school;• a wind turbine to provide electricity to a hospital; and• energy crops, such as willow or poplar, to provideheat for a community farm.

Clear Skies was widely seen as a successful scheme, and it spent £12.5 millionbefore it was ended in 2006. It and the Major PV Demonstration programme werereplaced by a single scheme known as the Low Carbon Buildings Programme(LCBP).




Launched in May 2006, this programme had £30 million to spend and fourmain aims:

• to support a more holistic approach to reducing carbon emissions from build-

ings by demonstrating combinations of both energy-efficiency measures andmicrogeneration products in a single development;

• to see demonstrated on a wider scale emerging microgeneration technologies(with a focus on building integrated technologies);

• to measure trends in costs of microgeneration technologies (it is expected thatthese costs should reduce over the l ifetime of the programme against a 2005baseline); and

• to raise awareness by linking demonstration projects to a wider programme ofactivi ties including developing skills and communicating the potential of micro-

generation to change the attitudes and behaviour of consumers (larger-scaleprojects will seek to engage the construction industry in project replication bydemonstrating the business case for developing low-carbon buildings).

Funding was offered in two streams. Stream 1 for householders, Stream 2 formedium and large microgeneration projectsby public, not-for-profit and commercialorganizations.

The response to the LCBP from the household sector was immediate and fargreater thanthegovernmenthadanticipated. Grantswereinitially availableinmonthlytranches but take-up was so enthusiastic that funding ran out within minutes each

month. In M arch 2007 the government decided to provide a further £6 million forthat part of theschemebut also to suspend it temporarily so it could be‘ reshaped’ .

The second stream, for community schemes, has been less problematic, not leastbecause of additional funding. In March 2006’s budget statement, it was announcedthat there would be a further £50 million f or the programme. This became theLCBP Phase 2 – a £50 million capital-grant stream for the installation of microgen-eration technologies by organizations including local housing authorities, housingassociations, schoolsand other public-sector buildingsand charitable bodies. It isnotopen to private households or businesses. Under Phase 2, purchase and i nstallation

of technologies must be from a specific shortlist of suppliers, and of the follow-ing technologies: solar PV; solar hot water; wind; ground-source heat pumps; andbiomass.

The LCBP was due to end in 2008, by which time it was hoped that the industrycould ‘ stand on its own feet’ , but the industry was not confident that the programmeas it stood would do enough to pump-prime the market and called for more supportover a longer period.



Chapter 17 Changing the industry: ESCosand

cooperative power ownership

At themoment, energy customers buy gasand electricity from their energy suppliers.But electricity and gasarenot what they really want: in reality they want servicessuchas heat, lighting, refrigeration or entertainment. Energy-services companies (ESCos)can operate to take advantage of the mismatch between what customers are buyingnow and what they really want. In the process, it is hoped that providing servicesrather than energy could make it possible to make big energy savings – not leastbecause for most customers energy is an alien concept. That meansit is perceived ascomplicated and of dubious benefit to make energy savings – customers want to besurethey will have theservices they want, and are not necessarily convinced that thatcan beachieved if less energy is used.

17.1 Energy-servicescompanies

The ESCo business model is of great interest to traditional utilities, partly becausethey are customer-servi cecompanieswhosebusinessgrowsby offeringnew productsto their customers, especially services that distinguish them from their competi tors.But they are also of interest because utilities also want to manage their power sup-plies better. For example, buying power at peak times is expensive and, if companiescan reduce that requirement, their costs will be reduced, and so will the risk thatthey will be forced to buy more power than expected at peak times and absorbthe cost.

17.2 The28-day rule

Utilities have also been freed to operate in this way by the ending of the so-called28-day rulefor domesticcustomers. Thisrule, appliedfromthestart of thecompetitivemarket, meant that any domestic customer had to be able to terminate their supply

contract and switch suppliers at 28 days’ notice. The initial aim was to promote acompetitivemarket andmakesurecustomers could switch in responseto power-pricehikes. However, as the market has changed it has limited the abil ities of companiesto develop new supply contracts that would benefit both company and customer.For example, many customers are sti ll using extremely inefficient old boilers for



160 Local energy

heating. Replacing them would reduce energy costs and the capital cost might bepaid back after two or three years but nevertheless the capital cost might be too highfor thecustomer. Energy companies could offer to supply new boilers and, instead ofcharging an upfront fee, could recoup thecost over several years of energy bills. Thedifference between theold cost of heating and thenew cost should mean bills wouldnot rise although the boiler was being paid off , and eventually the bills would drop.But no supplier could invest in a new boiler, or even i n l ower-cost measures suchas insulation, unless it knew the customer would stay with their energy supplier forlong enough for the cost to berecouped. There may have been customers who wouldwelcomesuch deals but, under the 28-day rule, they were illegal.

Now that has changed, the range of tariffs is likely to expand to something morelikethemortgagemarket. It ispossibleto remain onthemortgagecompany’s variablerate with complete freedom to switch lenders. Alternatively, the mortgage company

offers various fixed-rate or fixed-period discount schemes, whereby customers haveto pay a penalty i f they switch suppliers during the term of thedeal.

The ending of the 28-day rule makes it possible for energy companies to act asESCos. It also makesit mucheasier for independent suppli ersor local energy projectsto be set up. M ost would not have had to follow the 28-day rule but the situation insome cases would have been ambiguous. Now it is clear that local energy projectcustomers, too, will not have to be free to switch suppliers on 28 days’ notice.

ESCos are also of interest for local energy generators, because they provide astructure for selling services such as heat, which may be the energy project’s main

product.The 2003 White Paper Our Energy Future laid out government’s view of how

ESCos would work. In one form an ESCo would act as intermediary between energysuppliers and customers. Indeed many industrial companiesusethesetypesof servicecompany. The ESCos manage the electricity contract wi th the supplier, and, at thesame time, enter into a contract with customers to realize potential cost savings byreducing energy use, installing insulation, etc. The benefits are shared so that thecustomer pays less for energy services such as heating, lighting and power, while theESCo makes a profit.

Now that carbon dioxideemissions are a major cost f or many businesses, ESCoscan tailor their offering to cut emissions as well.

Our Energy Future suggested several ways in which ESCos could work at thecommunity level.

• An ESCo either agrees energy-delivery partnerships with i ndividual companiesor housing developers, or seeks ‘ pools’ of buildings such as the collective stockof a local authority or perhapsa street or village.

• Onceit hasassessed apotential client’sneeds, theESCo offers an energy-delivery

contract with attractive terms for the delivery of low-emission heating, li ghting,power, air conditioning and/or refrigeration, over a specif ied period of years.Once the terms have been agreed, the ESCo organizes and oversees all nec-essary works (which may include energy-efficiency measures) and the energysupply.



164 Local energy

• TheData Protection Act 1998 restrictstheextent to which databases can be usedto identify and contact potential customers.

• People on whom data are to becollected have to give their consent in advance.

In addition to these general issues, there are a number of legal issues specif ic tolocal authorities. For instance, local authorities are empowered to supply electricityandheat generatedby CHPschemes, andfreeenergy-efficiency advice; but, aswesawin17.2above, they arespecifically prohibitedf romsupplyinggasor energy-eff iciencymeasures to private households.

Theway round this restriction is to set up a partnership with an energy company.In theappointment of aprivate-sector partner, theCompetition Act and Public SectorRegulationsrequirean open andfair selectionprocess. Theappointinglocal authoritycannot requirethecharging of uniform or minimum pricesfor specified works. Local

authoriti es in England are restricted to 20 per cent of any joint venture company.

17.8 Community I nterest Companies

Community development and investment in renewable energy projects to date havebeen slow. Oneobstacle hasbeen thelack of astraightforward legal structurethat willfoster the entrepreneurial spirit of a project, but keep the assets in the community.The government announced plans in 2003 for a new company structure for social

enterprises, the Community Interest Company (CIC), which will lock in the assetsof an enterprise so that they cannot be transferred out of the publi c interest. TheCIC fi ll s a gap in the legal forms that arecurrently avail able for the development of acommunity renewablesproject, or indeed any social enterprisethat wishesto reinvestits profi ts in the community.

The government defines a social enterprise as ‘ a business with primarily socialobjectives whose surpluses are principally reinvested for that purpose in thebusinessor in thecommunity, rather than being driven by theneed to maximizeprofit for shareholders and owners’ .

Existing social enterprises take on a variety of organizational forms that sharecommon values or ways of working such as cooperatives, development trusts orsocial firms. They also use a variety of legal structures under the Companies Actsand Industrial and Provident Society legislation.

17.9 I ncorporation

Incorporating a renewable-energy project as a company limited by shares (CLS)

or a company limited by guarantee (CLG) can be very simple, especially if youuse standard forms of Memorandum and Articles of Association. However, manyorganizations will want to use a bespoke Memorandum and Articles of Associationto ensurethat their constitutionreflectsthegovernancestructureandnon-profi t natureof the organization.



Changing the industr y: ESCos and cooperative power owner ship 165

Once a constitution i s agreed, an application to incorporate is submitted and isprocessed by Companies House within seven days.

The price payable for limited l iability is public disclosure. The key disclosuresare an annual return, which has to be forwarded to the Registrar within 42 days ofthe annual general meeting, and audited accounts, which have to be filed with theRegistrar within ten months of theend of thefinancial year. If a company’s turnoveris less than £1 million per annum (or £250 000 for a charitable company), it does nothave to produceaudited accounts. However, it may bedesirable to have them auditedanyway to give assurance to external supporters, financiers, etc.

17.10 Not-for-profit

Theimageof aCLSrarely suitsthespirit of acommunity venture, dueto itsassociationwith the commercial world. A CLG is the type of incorporation used primarily fornot-for-profit organizations that require corporate status.

A guarantee company does not have a share capital, but has members who areguarantorsinstead of shareholders. Theguarantorsgivean undertakingto contributeanominal amount towardsthewindingupof thecompany intheeventof ashortfall uponcessation of business. However, the guarantee is nominal, normally being limited to£1. A company limited by guarantee can be established so that its Memorandumstatesthat it cannot distributeitsprofitsto itsmembers. In thiscase, if it hasexclusive

charitable objects it will need to apply for charitable status.CLGs are increasingly used in the not-for-profit world as a flexible and easy-

to-establi sh model. But it should be remembered that, if the organization does nothave charitable status, its constitution can be changed to make it for-profit and theassets distributed to shareholders. It is for this reason that the CIC has been proposedas a way of setting up a company whose assets are locked into the public interest.

17.11 Full cooperation

If an organization wishes to bedemocratically controll ed and avoid therequirementsof company law, and wil l not be aff ected by the lack of a charity number, i t couldregister as a cooperative.

Legal forms that enshrine cooperative principles can be established either asIndustrial and Provident Societies (IPSs) or limited companies.

An IPS is a membership organization in which each member agrees to buy oneor more shares. M embers’ liabil ity is limited to the amount unpaid on the purchaseof the shares.

IPSs are governed by the Industri al and Provident Societies Acts 1965 to 1978,andadministered by theFinancial ServicesAuthority (FSA), asectionof theTreasury,which has absolutediscretion in deciding which organizations are eligible to register.An applicant organization must be able to show why it should be registered as an IPSrather than a company limited by guarantee.



166 Local energy

TheIPSstructurei sappropriatefor voluntary organizationscarryingonabusiness,trade or industry for the benefit of the community, and for bona fide cooperativesocieties. It must have a minimum of seven members and rules that forbid the dis-tribution of its assets among members. The IPS shares some features of a l imitedcompany, namely the acquisition of a distinct legal identity and the consequent limiton liabil ity of its management committee.

In general, theregulationsand formalities governing an IPS are less onerous andcomplex andmoreflexible than thoseimposed by CompaniesHouse. But registrationas any type of IPS is slow and quite expensive.

A charitable IPS, unlike a charitable company, cannot register as a charity withthe Charity Commission (it registers with the Inland Revenue), although it can callitself a charity exempt from registration. As such, it does not have to comply withmost charity legislation and, although eligible for the tax advantages of charitable

status, it i s not subject to scrutiny by theCharity Commission. But the relative unfa-mil iarity of IPSs may make it diff icult to persuadeofficial bodies, such as theInlandRevenue, banks, local authority officers and members of the public that the IPS ischaritable.

Panel 17.1 Baywind

Baywi nd Energy Cooperative is an Industrial and Provident Society formed in1996onthelinesof cooperativemodelspioneered in Scandinavia, thelargest ofwhich is a40 MW offshorewind farm, Mi ddelgrunden, in Denmark, with 8 500members. The first two projects enabled a community in Cumbria to invest inlocal wind turbines. The original board of directors included seven membersof thecommunity from Ulverston and Barrow.

Baywind’s fi rst shareoffer in 1996–7 raised £1.2 mil li on to buy two turbinesat theHarlock Hill wind farm. In 1998–9 thesecond shareoffer raised afurther£670 000 to buy one turbine at the Haverigg I I site. Preference is shown forlocal investors, and 43 per cent of existing Baywind shareholders live in eitherCumbria or Lancaster with a wider number from the north-west region.

Baywind has a minimum shareholding of £300 and a maximum (by l aw) of£20 000. The co-op currently has more than 1 300 shareholders throughout theUK and abroad.

Theseven members who currently make up theboard of directors draw on arange of skills and experience to conduct the business of the cooperative. Theboard is elected by the whole membership at an AGM and is supported by afull-time paid administrator, who is also a director.

All profits derived f rom electricity generation are paid back to the share-

holders. Since the formation of Baywind in 1996 members have received acompeti tive return on their investment: between 5.6 per cent and 6.6 per centgross. Under the government’s Enterprise Investment Scheme, most members



Chapter 18 Output and generation

18.1 Load factors and variability

No form of generation will generate power or heat continuously. This variabil ity ingeneration sources is of benefit to grid operators, because it means that there are anumber of options available to balance supply with demand as it varies during theday, the week and the year. A diverse electricity supply industry with a variety ofsources of electricity supplying the industry at different scales is the most robust.

Utilities use the term load factor to compare the different outputs of power-generation plants. Load f actor is generally the amount of power produced by theplant compared with i ts theoretical maximum output, but this may also be referredto as ‘ capacity factor’ , implying that it measures how much of its total capacity the

plant is supplying.There are many reasons why a generator has a load factor of less than 100 per

cent. They stop generating in the case of renewable energy if there is no ‘fuel’ – itis dark (in the case of photovoltaics), say, or between ti des (for tidal power). In thecase of rotating machinery, even if fuel is continuously fed into thepower-generatingplant then regular stops are scheduled to allow the plant to bemaintained.

Even devices with no moving parts and continuous supplies of fuel – such as afuel cell supplying heat and power – may bestopped, or thepower output varied overtime, depending on the needsof the customer.

This is one reason why measurements of load factor have to be used cautiously:power stations that are operated at part load to meet thedemands of the network willrecord a lower load factor, for example. In response, the industry sometimes uses an‘ availability’ measure instead: this records what proportion of the time the plant is‘ available to generate’ . If a plant suffers an unexpected shutdown it will be reflectedin the avail abil ity, whereas if it is shut down to meet the demands of the grid it wil lnot affect thefigures. Availability is, however, an ambiguous term as it is not clearlydefined. For photovoltaicsand wind, for example, different definitionsof availabilitydo or do not allow theequipment to be ‘ available’ when there is no sun or wind.

Caution should also be used when comparing load factors or availabil ity at dif -ferent times. The demands of the grid are very different at different times, so powerstationsoperate differently. A power station that shuts down unexpectedly in summermay stay out of operation for longer than necessary to complete outstanding mainte-nance work whil e demand – and hence prices – is low. In the winter an unexpectedshutdown would be kept to the minimum possible.



172 Local energy

• In addition, a number of other concerns have been raised during the trial. Thisincludes notably high electricity consumption by theunits during some phases ofoperation and the sensitivity of the units to poor installation.

The reasons for the poorer-than-expected efficiency appear to be related to thedesign and operation of theunits at their current stageof development. A microCHPunit must reach a fairly high operating temperature before it can generate electricity.During itswarm-up period it will providesomeheat to thebuilding, asheated water ispumped through theheating system, but at thisstageno electricity isbeinggenerated.

However, warming up the mass of the unit to operating temperature absorbsenergy, most of which cannot be usefully recovered (this is especially true for unitsinstalled outsidetheliving/working areas of a house/business). If theunit was startedonly onceaday and then ran steadily for many hours, theimpact of thiswould bevery

small, possibly negligible. However, i n many properti es heat demand is intermittentand isrequired for only short periods. In somesitesunitsarecalled to start up asmanyas five timesa day. In such circumstancestherepeated warm-upsabsorb a significantamount of energy, which is not re-released in a useful way, thus resulting in reducedefficiency.

There is less electricity generated than expected simply because the data showthat running hours are lower than previously modelled. In addition, during warm-upperiods units do not generate electricity, as might have been assumed in modelling.This is particularly relevant for summer operation, when the units need to provideonly hot water. In this circumstance, little if any electricity is generated, as thewatertank can reach thedesired temperaturebeforethemicroCHPhasgenerated amaterialamount of electricity.

Ideally, the microCHPindustry needs to design units with the ability to modulateelectrical output much more widely than currently.

While it is still relatively early in the trial, at the current state of developmentof microCHP, the emerging trial data indicate there is unlikely to be a significantcarbon emissions reduction opportunity from wide deployment of the technology atthis stage in its evolution. From the results of the trial to date, carbon savings are intherange of plusor minus 18 per cent. Thereasons ‘ appear to relate to theinteraction

of the devices with the heating system, building and occupancy’ .It is also instructive to note that these effects are also apparent to some degree

in the findings relating to boilers and should be considered in any future support forefficient boilers.

‘ If this trend continues for the full trial, there wil l be a material risk of anincrease in emissions if microCHP is deployed at scale wi thout regard to the dif-ferent performance characteristics of specif ic technologies and the circumstances oftheir installation, maintenance and use.’

18.5 Small-CHP for business

The performance of small-CHP in businesses seems to be much stronger, where anumber of installations appear to offer material carbon savings. The technologies



Output and gener ation 173

being monitored in the Carbon Trust’s field trial appear to have better performancethan themicroCHPunits. Current datasuggest that theelectricity-generatingefficien-cies are considerably higher and that overall thermodynamic efficiencies are good.Running hoursare also longer than for microCHPand less intermittent and so startupand shutdown losses are much reduced. It should be noted that the sample size forsmall-CHP is small at this stageand thereforethis picture may change as more unitscome on stream within the trial.

Overall it appears that worthwhil e carbon emissions reductions can be foreseenfrom therange of internal-combustion enginedevices monitored in thetrial to date ifthey are installed and operated properly, based on current grid carbon emissions.

These results from the field trial support existing modelling results and there aretwo main factors that explain the enhanced performance compared with microCHP.

First, small-CHP units are installed in business premises on the basis of an eco-

nomic business case. This tends to be based on a higher level of analysis than ina home and on long, continuous run hours with few or no starts during a 24-hourperiod. Under these conditions, which have been found in the trials, the units operatein steady-state and hence warm-up losses are negligible. In such circumstances theunits can be expected to exhibit high levels of thermodynamic efficiency throughgood design, which contributes to carbon-saving potential.

Second, theproportion of fuel input converted to electricity is found to behigherin the small-CHP units (20–25 per cent) than in microCHP (5–15 per cent) due totheir design at this electrical output. This is dueto theeff icienciesof thetechnologies

employed in the units and the laws of physics governing their operation.It isby virtueof electricity generated that any CHPsaves carbon because theheat

element will benomoreeff icient than aboiler, andconsequently thesmall-CHPunitswill tend to save more carbon than microCHP.

Evidence from the trial also demonstrates how carbon savings from small-CHPcanbevery lowduetopoor installation, inadequatemaintenanceandpoorly controlledoperation, together with additional electrical loadssuch as fansbeing added in boilerrooms when the CHPunit is installed

18.6 Replacing generation?

The Carbon Trust also raised some larger issues over how widespread microCHPmight aff ect grid operation and what that might mean for reducing carbon emissions.

If Mi cro-CHPunits begin to operateearly in themorning, ahead of themain risein demand,then theeff ect may beto increase therate of risethat occurslater. This may causeproblemsfor managing the grid and, for example, a greater capacity of ineff icient open cycle gasturbine plant may be called on to operate. If substantial numbers of Mi cro-CHP units areinstalled to deliver a capacity of over 1000 MW then investors in new, eff icient plant maydefer construction. Thenet result wil l beold, ineff icient plant wil l continueto generatewithhigh carbon emissions. Many of the plant operating at the margin are steam-raising coalplant. This is because they are the only plant capable of operating part-loaded to providefor thesudden changes in demand/supply balance seen due to, for example, sudden risesindemand when TV programmes end or the unplanned shut-down of a centralised generating



174 Local energy

station occurs. These may betheonly plant avail able to providethis serviceand microCHPwill neither replace them nor reducetheir output.

Published market predictions for Small and Micro-CHP suggest potentially 400,000per year (in atotal market of around1.1mill ion) might beinstall ed fromabout 2010onwards

…The CHP units are intended to have a li fetimeof 10 to 15 years and hence many will beoperating beyond 2020. By 2020, to meet climate-change obligations, it is likely that gridcarbon intensity will have reduced. Consequently, any potential carbon savingsfrom smalland micro-CHPwill reduceaccordingly.

18.7 Saving carbon

As the problem of global climate change becomes more urgent, the life-cycle costof activities, in carbon dioxide emissions, has become a pressing issue. Take wind

power. Although it has no carbon dioxide emissions at the point of generation, theconstructionand erection of theturbinesdo entail emissions. It issimilar for all formsof generation: a lifetime measurement of carbon dioxide emissions from coal-firedgeneration i ncludes not only the emissions from coal being burnt but from otheractivities such as the coal mining and transport and plant construction.

Concretemanufactureishighly energy-intensiveandit isan important componentof most power-plant construction. As all forms of generation i nteract within theelectricity supply system, they also require carbon dioxide emissions in the form ofpeaking power, spinning reserve, etc.

The European Commission is one organization that has tried to quantify thecarbon emissions associated with each form of generation for its entire l ife cycle(see Table 18.1), including removal of the power station at the end of its lifetime.The question is not easy to answer, since judgements have to be made on where itis assumed that the activities end: if coal transport is included, for example, shouldthe emissions involved in constructing coal-transport ships also be included? Inter-ested parties will argue over where those lines should bedrawn; nevertheless the ECestimate is one attempt to producea basis for comparison.

What is clear is that combining biomass fuels with carbon capture and storage

offers theonly opportunity to producea negative carbon dioxide life-cycle balance – that is, to remove more carbon dioxide from the atmosphere than is emitted.

18.8 Changing energy patterns

Changes in the climate are likely to change electricity requirements over the longterm. The UK Climate Impact Programme estimates that ‘ by the 2020s our annualaverage temperature would be between 0.2 ◦C and 0.8 ◦C higher’ . But what that

means in practice is not a slightly warmer environment throughout the country, buta drier and hotter south-east and wetter northern areas, along with more extremeweather events. The basic messageis that the changes are expected to accelerate. Bythe 2080s, the south-east could have summer temperatures as much as 6 ◦C higherthan weexperiencenow – with perhaps60per cent lessrain. Frost dayshavedeclined



176 Local energy

T a b l e 1 8 . 1

C o n t i n u e d

S o u

r c e I E A

T e c h n o l o g y

P r o j e c t e d

E U - 2 7

c o n s i d e r e d

c o s t 2 0 3 0

G H G

i m p o r t

P r o v e n

E n e r g y

f o r t h e c o s t

2 0 0 5 c o s t

( e / M W h w i t h

e m i s s i o

n s

d e p e n d e n c y

F u e l p r i c e

r e s e r v e s / a n n u a l

s o u r c e s

e s t i m a t e

( e / M W h )

2 0 – 3 0 / t C O ) 2

( k g C O 2 e q / M W h )

2 0 0 5

2 0 3 0

E f f i c i e n c y

s e n s i t i v i t y

p

r o d u c t i o n

N u c l e a r

L i g h t w a t e r

4 0 – 4 5

4 0 – 4 5

1 5

A l m o s t

3 3 %

L o w

R

e a s o n a b l e

r e a c t o r

1 0 0 % f o r

r e s e r v e s ,

u r a n i u m o r e

8 5 y e a r s

B i o m a s s

B i o m a s s

2 5 – 8 5

2 5 – 7 5

3 0

N i l

3 0 – 6 0 %

M e d i u m

R

e n e w a b l e

g e n e r a t i o n p l a n t

W i n d

O n s h o r e

3 5 – 1 7 5

2 8 – 1 7 0

3 0

N i l

9 5 – 9 8 %

N i l

R

e n e w a b l e

3 5 – 1 1 0

2 8 – 8 0

O f f s h o r e

5 0 – 1 7 0

5 0 – 1 5 0

1 0

9 5 – 9 8 %

6 0 – 1 5 0

4 0 – 1 2 0

H y d r o

L a r g e

2 5 – 9 5

2 5 – 9 0

2 0

N i l

9 5 – 9 8 %

N i l

R

e n e w a b l e

S m a l l

4 5 – 9 0

4 0 – 8 0

5 – 2 5

9 5 – 9 8 %

( < 1 0 M W )

S o l a r

P h o t o v o l t a i c

1 4 0 – 4 3 0

5 5 – 2 6 0

1 0 0

N i l

N i l

R

e n e w a b l e

S o u r c e : E u r o p e

a n C o m m i s s i o n .



Chapter 19 Putting a price on carbon

The European Commission’s emissions-trading scheme should impose a cost on energy generators that pr oduce carbon dioxide, favour ing renewable generation.

In July 2005 Greenpeace set out a l ist of changes that would have to be made tosupport and encourage DG in the UK. Among its proposals were changes to buildingregulations that would ensure that distributed energy was used in new homes and

business premises, changes in the rules on network access and export tariffs thatwould support the export of excess power from small generators, and tax changesthat would give a financial incentive for installing distributed energy. Progress insome of these areas has been significant, as i s described elsewhere in this book.Many believe, however, that all progress on distributed energy must be underpinned,



180 Local energy

and wi ll be given much more impetus, if the effect of carbon dioxide emissions isfully assessed and costed.

Greenpeaceraisesthispossibil ity in itswishlist asatool to makevisibletheeff ectsof carbon dioxide emissions from large fossil-fuel-generating stations and impose afinancial penalty accordingly. But many believe that ‘ discovering’ a price for carbondioxideemissions will be fundamental to shif ting thebalance of our energy industry.When thepriceof carbon dioxideemissionsisfactored intotheenergy price, it shouldreward companies and individuals who switch to the most eff icient forms of energygeneration, as well as those who use sources that, like renewables, do not producecarbon dioxide emissions.

19.1 TheEU EmissionsTrading Scheme

The European Union has attempted to develop, and impose, a price for carbondioxide emissions with its Emissions Trading Scheme (ETS). In January 2005 theETS commenced operation as the largest multi -country, multi-sector greenhouse-gasemission-trading schemeworldwide. Theschemeis based on Directive 2003/87/EC,which came into force on 25 October 2003. It is a cap-and-trade scheme that isintended to give incentives to all participating companies to reduce their emis-sions, but also to ensure there are ‘ easy wins’ and that the easiest and cheapestemission-reduction activities are completed first.

The ETS requires each of the EU’s now 27 member states to set a so-calledNational Allocation Plan (NAP) – an annual ‘ budget’ for carbon dioxide emissionsfromthei nstallationsin sectorscovered by thescheme. In eachperiod, or phase, eachof theinstallations in each of theparticipating countries has its own annual emissionsallocation.

Theschemei ncludesboth heat- andpower-based carbondioxideemissions, basedas it was on all combustion installations that produced more than 20 MW of ther-mal energy, whether or not that was used to produce electric power. In the firstphase (2005–7), the ETS includes some 12000 i nstallations, representing approxi-

mately 45 per cent of the EU’s carbon dioxide emissions. This phase encompassedenergy activities (combustion installations, mineral-oil refineries, coke ovens), pro-duction and processing of ferrousmetals, mineral i ndustry (cement cli nker, glass andceramic bricks) and pulp, paper and board activi ties. Because it included combustioninstallations it took in industrial sites, but also heating and incineration plants suchas those used in l arge commercial buildings and even social organizations such ashospitals.

The emissions allocations granted to each installation were calculated in the UKby so-called ‘ grandfathering’ – taking an averageof emissions in previous years.

Onceallocations were made, an electronic register of allocations was maintainedin each country. This made the trading part of the cap-and-trade approach possi-ble: companies or organizations that had emitted less carbon dioxide than had beenexpected would berewarded, by beingableto sell their extraallowancesto companiesthat had emitted more carbon dioxide than their allocation allowed.



Putting a pr ice on carbon 181

In theUK areserveallocationwasadded to theNA Pso that new plantsstartingupin thefirst phasewould not haveto buy their allowances. Thisapproachwasalso takenelsewhere, althoughsomeenvironmental groupshad argued that all new plantsshouldbe required to buy allowances to ensure they had strong incentives to i nvest in themost efficient plant andreducetheir emissions– indeed, many groupshad argued thateven existing installations should have to buy all the necessary allowances, possiblythrough an auction method.

19.1.1 Results from Phase 1

Thefirst phaseof theEU TS had mixed success. Theprinciple of theprogrammewasfirmly established: all countries presented NAPs, companies were given allowances,trading platforms were introduced and allowances were traded. However, it had been

argued from thestart that theallowancesgranted in thisphasehad been too generous.The consultants Ecofys, for example, as early as 2004, were noting that the NAPswere not ambitious enough (in limiting emissions). Thepower-generation sector wasseen as most favoured by the NAPs. Ecofys suggested that thecapsfor Phase 1 werelenient. In most countries, thepower sector would not need to reducecarbon dioxideemissions as much as the country as a whole. In other words, the other sectors mustmake more ambitious emission reductions than the power sector under the scheme.Morestrikingly, afew countries(suchastheNetherlands) gavemoreallowancesthanEcofys estimated to be needed under a business-as-usual scenario, implying that no

‘ real’ eff orts to reduceemissions would berequired.When it became clear by 2006 that NAPs had indeed been too generous and

there would be an oversupply of carbon dioxide emission allowances, the priceof allowances fell dramatically, from around e30 per tonne of carbon dioxide inApril 2006 toe1–2.

In addition, the generous allowances given to power-generating stations cameunder fire. Power companies had passed on the supposed cost of parti cipating in thescheme to their customers, but, as Ecofys – among others – had suggested, far frombeing short of allowances, had found themselves with allowances to sell.

Nevertheless, thefact that theETSexisted meant that emittingcarbon dioxidehadaprice. And although that pricehad fallen dramatically in thecourseof thefirst phaseof the ETS it was clear that the European Commission would be more ambitious infuture about setting tight l imits, so it was likely that thepriceof emitting could onlyincrease.

This has clearly i nfl uenced decisions on energy. Large pulp and paper suppliershave in some cases already switched to using biomass fuel instead of gas or oil (seeChapter 11) andmajor power generators, such astheUK’slargest coal-fired stationatDrax, havepursued plansfor co-firingwith biomassandfor eff iciency improvements

that would produce less carbon dioxide for each megawatt of power generated.It could beargued that such switches were on theagendafor thoseplantsanyway,and in somecases, far frombringingthem forward, they could havebeen held back bytheETS. Knowing theETSwould beimplemented, holding back any improvementsunti l after ‘ grandfathering’ had been used to calculate the site’s allowance would



182 Local energy

give it themaximum possible allowance which could then be traded when upgradeshad been completed after the ETS was in operation. That may be so. However, ETSsupporters can argue in response that there will be only one opportunity to benefitfrom the introduction of the ETS. The larger picture is that the ETS has indeed doneits job of altering thebalanceof thedecision-making on how energy is produced, andits weight in the decision can only increase as the cost of carbon dioxide emissionsincreases. That will depend on how thesecond phase of the ETS is managed.

19.1.2 Setting up the ETS Phase 2

The second phase of the Emissions Trading Scheme is longer than the first, lastingfrom2008to 2012. TheEuropean Commissionaimseventually to includeall emitti ng

sectors, including aviation, maritimeand land-transport emissions, but early planstoinclude aviation in the second phase have been delayed.

Following the collapse in carbon prices in the first phase, the EC was determinedto impose stricter limits in Phase 2. It sent back almost all the National AllocationPlanssubmitted by the member states, requiring further cuts in theallocation.

Table 19.1 Suggested car bon dioxide emissions all owances by country for the second phase of the EU Emissions Trading Scheme

2005 verified Proposed cap Cap allowed

Member state 1st period cap emissions 2008–12 2008–12

Austria 33.0 33.4 32.8 30.7

Belgium 62.08 55.58 63.33 58.5

Czech Republic 97.6 82.5 101.9 86.8

France 156.5 131.3 132.8 132.8Germany 499 474 482 453.1

Greece 74.4 71.3 75.5 69.1

Ireland 22.3 22.4 22.6 21.15

Latvia 4.6 2.9 7.7 3.3Lithuania 12.3 6.6 16.6 8.8Luxembourg 3.4 2.6 3.95 2.7

Malta 2.9 1.98 2.96 2.1

Netherlands 95.3 80.35 90.4 85.8

Poland 239.1 203.1 284.6 208.5Slovakia 30.5 25.2 41.3 30.9

Slovenia 8.8 8.7 8.3 8.3

Spain 174.4 182.9 152.7 152.3

Sweden 22.9 19.3 25.2 22.8

United Kingdom 245.3 242.4 246.2 246.2

Source: EU pressreleaseIP/07/459: ‘ Emissionstrading: Commissionadoptsdecision onAustri a’snational

allocation plan for 2008–2012’, 02/04/2007.



Putting a pr ice on carbon 183

19.2 TradingoutsideEurope

In Phase 2 the ETS should also begin to trade with similar schemes outside theEuropean Union. Initially, this will be with European countries closely linked with,but not members of, theEuropean Union – Norway (which began in 2007 to developits own NAP), Switzerland, Liechtenstein and Iceland. In this phase also, the ETSwill allow companiesto takeaccount of carbon reductionsmadeoutsideEurope. Thisis accomplished through two mechanisms set up under the Kyoto Protocol, referredto as the Clean Development M echanism (CDM) and theJoint Implementation (JI).

The CDM allows European companies to invest in emissions-reduction projectsoutside Europe that would not otherwi se have taken place, or provide funding thatwill help replacea high-emissions project such as a new power plant with an optionthat produces lower emissions.

A JI project is similar to a CDM project, but the JI project must be in a so-calledAnnex 1 country that has signed up to l imit its carbon dioxide emissions under theKyoto Protocol. In both cases theproject and its emissionscredits must be validatedby a third party.

Eventually, theETSshould also beable to tradewith similar schemes elsewhere.Oneimportanttarget istheUSA. AlthoughtheUSA hasnot ratifiedtheKyotoProtocoland theBush administration has not supported attemptsto develop a global approachto reducing carbon dioxide emissions, the US picture as a whole reveals much moresupport for theenterprise than might be expected.

US states have considerable autonomy in setti ng taxes and developing their ownenvironmental policiesand, for many, carbondioxideemissionsreductionshavebeena target. California, whose economy i s comparable to that of any European country,has its own plansfor emissionsreductions, and a group of north-eastern states jointlydecided to set reductions targets in the mid-2000s. The cap-and-tradeapproach usedin the ETS was familiar to US regulators, as it had already been used to addressother pollutants, and the north-eastern states planned a cap-and-tradesystem of theirown for carbon dioxide. By 2007 both groupshad taken a more than passing interestin the ETS and had raised the possibility of trades between the US and European

schemes. That is not likely in the near term, but Federal organizations have beenunder pressure to shif t their position on carbon dioxideemissions. The Environmen-tal Protection Agency already runs cap-and-trade schemes to reduce sulphur dioxideand other pollutants, and under a long-running test case was being pushed to declarecarbon dioxideasimilar pollutant, which would require it to beregulated andreducedin the same way. Meanwhile, the Bush administration was also under pressure fromindustry, which feared i t would be subject to a variety of emission-reduction regu-lations set by tens of states. Instead, industry argued i n f avour of a single federalscheme.

It i s unlikely that such an about-turn will be on the agenda for the Bush adminis-tration but an incoming Democrat or even Republi can president would have supportfor taking some measures to fall closer into line with the global consensus onemissions.



Bibliography

Bowers B. H istory of Electr ic L ight and Power , 2nd edn. London: Peter Peregrinus;1991

Carbon Trust. ‘ The Carbon Trust’s Small-Scale CHP field trial update’ . London:Carbon Trust; 2005

DEFRA. ‘ Biomass Task Force Report to Government’ . London: HMSO; 2005

DEFRA. ‘ Consultation on measures to reduce carbon emissions in the large non-energy i ntensive business and public sectors’ . London: HMSO; 2006

Department of Communities and Local Government. ‘ Domestic Installation ofMicrogeneration Equipment, Final report from a Review of the related PermittedDevelopment Regulations’ . London: HMSO; 2006

Department of Tradeand Industry. ‘ Our Energy Challenge: Power from the people’ .London: HMSO; 2006

Department of Trade and Industry/Ofgem. ‘ A call for evidence for the review ofbarriers and incentives to distributed electricity generation, including combined heatand power’ . London: HM SO; 2006

Department of Trade and Industry. ‘ The Energy Challenge: Energy Review Report’ .London: HMSO; 2006

Department of Trade and Industry. D igest of U K Energy Statistics . London: HM SO;2006

ECOFYS. ‘ Ecofys evaluation of Phase 1 NAPs’ . Ecofys; 2004

Energy Saving Trust. ‘ Potential for M icrogeneration: Study and Analysis’ . London:Energy Saving Trust: 2005

Greenpeace. Decentralising Power: An Energy Revolution f or the 21st Century.London: Greenpeace; 2005

Jenkins N., Al lan R., Crossley P., Ki rschen D. and Strbac G. Embedded Generation .London: Institution of Electrical Engineers; 2000

Patterson W. ‘ Electricity In Flux’ . Presented at Uranium Institute 25th AnnualSymposium; London, 2000



188 Local energy

ReFresh (Recent Findings of Research i n Economic & Social History), Network industries and the 19th and 20th century British economy , issue 19, Autumn1994

Union for theCoordination of Transmission of Electricity. ‘ System Disturbance on 4November 2006’ , final report. Brussels: UCTE; 2007



Index

AC/DC 13, 112

affinity deals 162

B& Q, Grimsby, PV scheme 75

backup generation 114

Balancing and Settl ement Code (BSC) 25,

33, 135

balancing costs 33

balancing market 23, 24

Barkantine CHPproject 162–3

batteries, energy storage 46, 98

Baywind Energy Cooperative 166–7

biomass 87–93

li fe cycle costs 176

planning consent 125

projects 31–2, 89–92

types 34–5bio-oil 93

Black Country Energy Services Club 162

British Electricity Trading and Transmission

Arrangements (BETTA) 23–5, 152–3

Bullerö Island, Sweden, scheme 103

capital costs 149–50

carbon emissions 179–85


per MWh for dif ferent energysources 175–6

small scale CHP 172–3

Carbon Reduction Commitment (CRC) 184–5

carbon trading 180–4

Carbon Trust, small scale CHPtrials 171–4

Central Electri city Generating Board 6–7, 8

centri fuges, energy storage 99

Clean Development Mechanism (CDM) 183

Clear Skies 156

cli mate change 174, 177–8

Climate Change Levy (CCL) 143, 153–4coal-fired power generation

centralized power stations 5


operating characteristics 18

combined cycle gas-fired plants 19

combined-heat-and-power (CHP) 11, 32–3,

77–85

Community Energy Programme 155

domestic CHP 79–83

economics 83, 152eff iciency 171–3

ESCo schemes 162–3

EU support 78–9

government support 77–8

grid connection 81

load factor 170, 171

metering output 81

potential markets 82–3

projects 83–5

supply management impact 120,173–4

system suppli ers 82

technology 77, 79–80

wood-fuelled 88

Community Energy Programme 155

Community Interest Companies (CIC) 164

community projects

biomass 90–1

ESCo schemes 160–1

grants 155, 157

wind power 166–8

company formation

incorporation 164–5

not-for-profi t 165

competition 10–11

connecting to thegrid: see exporting power to

thegrid

consolidators 25, 33, 152

contracts

CHP operators 33

consolidators 138–9ESCo’s 160–1

wholesale 22–3, 24

cooperatives 165–6



190 Local energy

costs

compared with conventional projects

149–50

per MWh for diff erent energy sources

175–6see also economics

DEFRA grant support 155–6

demand response 115

demand variation: see load variation

deregulation 9

diesel generators, life cycle costs 175

distributed generation (DG)

benefits 10–11

defi nition 128distribution network operators (DNOs) 9,

25–6, 143–4

distribution networks

impact of embedded generation 26,

119–20, 144–5

private-wire networks 129–30

domestic CHP 79–83

eff iciency 171–2

grid connection 81

load factor 171metering output 81


supply management impact 120


domestic heating 32

DTI grants 156

economics 149–50

combined-heat-and-power (CHP) 83, 152

hydoelectric power 53, 54–5Electricity Council 7

electricity demand: see load variation

electricity supply industry

competition 10–11

before deregulation 2–3, 6–8

deregulation 9

electricity supply system 17–27

eff ect of climate change 174, 177–8

supply management 23, 24, 113–15,

117–20

embedded generation 25benefits 136–7

distribution system impacts 26, 119–20,

144–5

see also exporting power to thegrid

emissionstrading 180–4

Emissions Trading Scheme(ETS) 180–3

energy clubs 162

energy crops: see biomass

energy efficiencycombined-heat-and-power (CHP) 32

energy-eff iciency measures 160, 161–2

gas-fired electricity generation 81–2

ground-source heat 37

heat and power 31

transmission losses 3–4, 11

Energy Efficiency Commitment

(EEC) 155–6

energy mix 95–6

energy reserves 175–6Energy-servi ces companies (ESCos) 159–64

energy sources

li fe cycle costs 175–6

UK energy use 30

energy storage 95–103

EU EmissionsTrading Scheme(ETS) 180–5

exporting power to thegrid

CHP 33, 80–1

connection agreement 143–4

connection charges 145–7

connection standards 141, 143constraining connection 147–8

distribution system impacts 26, 119–20,

144–5

export value 33, 129, 136–7, 144, 146,

151–2

grid connection 46, 80–3

hydoelectric power 67

steps by step guide 141–3

supply management i mpact 117–20

technical guide 144

fault ride-through 116–17

finance, grant support 154–7

Forestry Commission Wales 90–1

forward prices 10

frequency, standard 111, 112

fuel cells

applications 108

development projects 109

types 106–7fuel price sensitivity 175–6

fuel reserves 175–6

fuels: see energy sources

funding, grant support 154–7



Index 191

gas-fired electricity generation 11


operating characteristics 18–19

gas storage 96–8

gas turbines 18–19operating characteristics 21–2

gate closure 22

generating companies 9, 10

eff ect of competition 11

wholesale contracts 22–3, 24

generators 12–13

government grants 154–7

government strategy 121–2, 126–8

grants 154–7

grid connection: see exporting power to the

grid

ground-source heat 36–9

heat generation 29–39

heat pumps 37, 125

hydoelectric power 51–9

assessing hydro sites 53

benefits to the water supply system 56

economics 53, 54–5

energy extraction 56

environmental issues 55–6


load factor 170

location factors 5

operating characteristics 20

pumped storage 96–8

short-term reserve market 114–15

small scale 53

turbinetypes 52

UK’s hydropower potential 53

hydrogen economy 99–102projects 100–2, 109

hydrogen generation 108–9

Icelandic New Energy 102

Industri al and Provident Societies (IPSs)

165–6

Joint Implementation (JI) 183

kinetic-energy storagesystem (KESS) 99Kyoto Protocol 183

licensing 129

load factors 169–70

load variation 17–18, 23–4

demand response 115

eff ect of climate change 177–8

standby power 113–14

supply management 23–4London Borough of Lambeth, PV schemes 74

London Borough of Merton poli cies 124–6

London Borough of Tower Hamlets, CHP

project 85

Low Carbon BuildingsProgramme (LCBP)

156–7

maintenance shutdowns 21–2

marketing alliances 26, 162

market mechanisms 22–5, 152–3Mersey Docksand Harbour Company, wind

cluster 48–9

metering 81, 142, 151

microCHP 80–3

eff iciency 171–2

grid connection 81

load factor 171


supply management impact 120


National Control Centre 6

National Grid 3–4, 6, 9, 10

supergrid 7

supply management 23, 24, 113–15

Norsk Hydro, hydrogen plant 100–2

North of Scotland Hydro-Electric Board 8

not-for-profit companies 165

nuclear power generation

li fe cycle costs 176operating characteristics 19–20

Offi ceof Gas and Electricity Markets

(Ofgem) 25, 26–7

peak lopping 115

Penwith Housing Association 38–9

photovoltaic power 69–75

chemical reaction 106

hybrid PV / wind-power system 103load factor 170

panel types 71

street applications 70–3

planning policies 122–4



Index 193

energy storage 46, 98, 100–3

grid connection 46


load factor 170

location factors 5operating characteristics 20–1

planning consent 125

short-term reserve market 114

turbines

design 41–2

installation 43–4

regulation 114

rooftop 44–6

small scale 42, 45–6

Wood Energy Business Scheme (WEBS) 90

wood fuel 34, 35, 87–92

fuel supply 89–90, 91–2

projects 31–2, 89–92

local energy

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