pg-city university chpa

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City University

CHP & the Role of theCHPA

Paul Gardiner BSc CEng

Policy Advisor

9th

October 2012



BRITISH SUGAR



AB Sugar: Our geographic footprint



AB Sugar: the facts today ….

• AB Sugar is a substantial and core business within ABF

• Operations in UK, Iberia, Africa, and China with a capacity of ~ 5mtpa;

current production c. 4.1 – 4.4 mtpa

• Largest purchaser of agricultural products for processing (c. 34m tonnes)

• Sole UK producer of beet sugar; c. 12 mt of beet processed in Europe

• 19mt of cane processed by the Group, 6.1 mt of which is produced on our

own estates by Illovo in Malawi, Zambia, Mozambique, Tanzania and

Swaziland

• World-class agricultural productivity - Illovo for cane and UK for beet

• Lowest cost sugar processor in regions; exceptionally high asset

utilisation in the UK

• Co-products not by-products, increasingly value-added; animal feed, co-

generation, betaine, tomatoes, furfural and cropguard

• UK‟s first Bioethanol refinery operational at Wissington

• Leading retail brands; Silver Spoon, Billington‟s (ABF Grocery),

Azucarera, Illovo



THE CHPA



CHPA Mission statement

To promote a greater awareness and understandingof CHP and district heating and to create a strong,

dynamic and sustainable environment for its

members and the communities, businesses and

households they serve.

Areas of focus:

Combined heat and power

Sustainable energy servicesDistrict heating and cooling



Industrial CHP Buildings CHP MicroCHP District Heating & Cooling

PolicyFormation

EU Energy Efficiency DirectiveDECC Development of Heat Policy following publication of Heat Strategy • Ofgem RIIODECC Electricity Systems Programme • Committee on Climate Change DECC Energy Efficiency Delivery Office • Smart Grids Forum

Incentives & Measures

EMR: CHP Feed-in tariff, capacity mechanism

Gas-Fired Carbon Price SupportReplace value of CCL LECs

Gas-Fired Feed-in Tariff

Gas-Fired Support for non-renewable low-carbon heat sources

Renewable Renewables ObligationRenewable Heat Incentive

Renewable Renewables Obligation (for CHP)Renewable Heat Incentive

Networks Embedded benefitsLicence-Lite

MarketMobilisation

Investment GIB Non-Domestic Energy Efficiency competition

Investment Green Investment Bank

Consumer Mobilisation and Supplier Compliance Schemes Green Deal and Energy Company Obligation

Building Regulations Zero carbon buildingAllowable SolutionsSAP 2012 & Building Regulations Part L

Planning

Planning policiesWaste management strategies

Purchasing & Procurement Public procurementOff-balance sheet fundingProcurement frameworks

Facilitation & Capacity Building Capacity building in localauthorities

ConsumerProtection & Regulation

CHPQA Compliance MicrogenerationCertificationScheme

Consumer Protection & Regulation Consumer CharterConsumer protectionTechnical standards

Standards



Forum structure

Strategy forum – Full members

Building

CHP forum

District Heating

& Cooling forum

Domestic

CHP forum

Energy

Management

Alliance

Local authority capacity

working group

Finance working group

Quality assurance & customer

protection working group

EMR working

group

Industrial

CHP forum



Organogram

DirectorGraham Meeks

Deputy Director,Head of Development

Ian Manders

Policy & Development

ManagerNicky Butterworth

Membership ManagerBrian McGuire

Head of Policy

Tim Rotheray

Research &

Communications ManagerCraig Dennett

Policy ManagerTo be appointed

Office ManagerDina Kamourieh

Senior Policy AdvisorPaul Gardiner

(secondee British Sugar)



Responsibilities

Staff Member Level Responsibilities Contact forGraham Meeks Director All areas Strategic issues: Political,

policy or CHPA issues

Ian Manders Deputy Director, Headof Market Development

District heating, building scaleCHP and microCHP

District heating queries

Tim Rotheray Senior Manager, Headof Policy

Industrial CHP Long term policy queries

Nicola Butterworth Policy and DevelopmentManager

Energy management, districtheating, building scale CHPand microCHP

Energy ManagementAlliance queries

Craig Dennett CommunicationsManager

CHPA communications – policy announcements andgeneral intelligence

Jonathan Graham Policy Manager Industrial CHP

Brian McGuire Membership Manager Membership, forums andsector workshops

Dina Kamourieh Office Manager General enquiries includingappointments



A few of the CHPA members…



CHP & DISTRICT HEATING (DH)



What is CHP and what is it for?

Combined Heat and Power (CHP) or cogenerationis not a specific technology, but a range of technologies that apply the same principle:

Combustion of any fuel is at its most efficient whenit delivers heat and power simultaneously.

Plants that are compliant with the Cogen Directive

provide primary energy savings of at least 10%

Enabler of a Low Carbon Economy



Energy Supply InefficiencyIs a Huge Opportunity

Energy Flows in

the Global

Electricity System

Source: IEA,

CHP: Evaluating the Benefits of Greater Global Investment (2008).

2/3 of the fuel “we” use to produce power is wasted --CHP can more than double this efficiency



Business As Usual or CHP plant



Thames Gateway Heat Network



CHP and DH Options

Scale

District, Micro, Industrial or Utility

Single or multi Heat Hosts

Heat led or Power led philosophy

Grid connected or Embedded

Fuel type

Biomass / Biogas, Nat Gas, Oil, Coal, Physical

Waste stream or Waste Heat

Enabler of a Low Carbon Economy



The prime mover - Types

Type of prime mover Type of CHP in

which it is found 1. Internal combustion engines Packaged CHP

2. Steam turbines Custom CHP

3. Gas turbines Custom CHP

(microturbines, arepackaged)

4. Combined Cycle Gas Turbines Custom CHP

5. New and emerging technologies, Custom CHP or

such as Stirling engines, fuel cells, packaged CHP

and Organic Rankine Cycles (ORCs)



The prime mover – Attributes (1)

Gas-engine CHP Small-scale

gas turbine

CHP Elec. output (kW) 60 100 300 600 1,000 60 100

Heat output (kW) 115 130 430 880 1,300 100 150

Fuel input (kW) 215 310 990 1,950 3,000 280 350

Gas-turbine CHP CCGT CHP

Elect. output (MW) 1.1 4.9 9.7 31.0 53.0 99.8 316.0

Heat output (MW) 1.8 7.2 14.5 36.5 40.5 99.3 205.3

Fuel input (MW) 4.3 16.3 34.0 96.1 134.3 271.6 686.4



The prime mover – Attributes (2)

Heat / pwr Heat System Space Capital Cost Maintenance

Ratio Grade Capacity Efficiency per unit of Period

Capacity

Reciprocating engine 1.3:1 Low Small Average Low Short intervals

Gas turbine 2.5:1 Very high Large Excellent High Long intervals



Estimate of Capital Cost

Packaged Schemes

5KWe Micro £2,000/kWe

50kWe £1,250/kWe

1MWe £800/kWe

Custom Schemes

1MWe £1,300/kWe (Gas Turbine)

>200MWe £700/kWe (CCGT)

Based on 2008 survey



CHP INENERGY POLICY



Fossil fuel CHP - energy security and

competitiveness

Quote from Edward Davey of 04/10/12

P a g e 2 3 © 2 0 1 1 B r i t i s h S u g a r

Natural gas remains “absolutely central” to efforts to curb U.K. emissions,

Energy Secretary Ed Davey said today at the opening of a heat pipe

connecting an EON AG power plant to a National Grid Plc (NG/) gasterminal.

Davey said in Kent that he wants “obstacles” removed for investors as part of a

government plan to deliver gas to U.K. customers at a more affordable price.

EON U.K. Chief Executive Officer

Tony Cocker, left, and Energy

Secretary Ed Davey, pose for a

photograph following the opening of

a joint venture with the National Grid

Plc at the company's plant on the

Isle of Grain. Photographer: Chris

Ratcliffe/Bloomberg

http://topics.bloomberg.com/ed-davey/

http://www.bloomberg.com/quote/NG/:LN





http://topics.bloomberg.com/ed-davey/



Policies applying to CHP etc.

CoGen Directive

Energy Efficiency Directive

EUETS

CHP QA

CCL exemption

LECs

CPS (fuel for elec. only)

ECAs

Rates reduction

Renewable Obligation & RHI

CRC

Section 36 & Section 14



Affordability

ClimateChange

Security

of Supply

Energy

three policy

areasMaking Fuel

go

Further



Affordability

ClimateChange

Security

of Supply

Energy

three policy

areas

CHP



Policy objectives

• Fossil and Biomass

/ Biogas

• Optimise use and

type of energy

• Rational, economic

appraisal of options

Implication Objective

Security & diversity

of supply

Climate change

Cost to consumers



The Cost of CO2 Abatement 1

Source: DTI



The Cost of CO2 Abatement 2

Measure Carbon Abatement Cost

(£/tonne carbon)

Energy Efficiency Commitment Negative to £60

EUETS (based on 2006 EUA

prices)

£12 - £70

Climate Change Levy £18 - £40

CCL Exemption for CHP £29 - £40

UK Emissions Trading Scheme £66

Renewables Obligation £184 - £441

Sources: Ofgem, NAO, CHPA



The Wissingtonbio refinery Flue gas pipe

Feed dryerCHP Plant

Sugarprocess

Sugar beet

Lime kiln

Bioethanol



CHP, the heart of the biorefinery...



Air

110 MWth

Fuel

42 MWe

Electricity

Gas

Turbine

Boiler

Steam

Turbine

24 MWe

Electricity

82 MWth

Fuel

Efficiency = MW (Out) = (42+24+85+8) = 82.8%

MW (In) (110+82)

LP Steam

85 MWth

Gas Turbine Based CHP

Including 8 MW heatrecovery to glasshouse

CO2 & heat

to glasshouse



THE CONFUSING WORLDOF ENERGY POLICY

Discussion



British

Sugar

UN

Framework Convention

on Climate Change

Kyoto

Copenhagen

Cancun

European Union

20% emission by 2020 - 30%

20% Renewables

20% Energy Efficiency

“Roadmap for a low carbon

Economy by 2050”

Climate Change

Act 2008:

Carbon Budgets

Committee on

Climate Change

UK

„Energy Tax Directive‟

Green Deal

Green

Investment

Bank

GHG Reporting?

Renewable

Obligation

Certificates

Feed in

Tariffs

Renewable

Heat

Incentive

Reform of

Climate Change

Agreements?

Reform of Climate

Change Levy

Carbon

ReductionCommitment

Coalition Government 2010

Climate Change and Energy Policy•June Budget

•July Energy Statement – 2050 Pathway

•October National Energy Policy

•October Spending Review

•Energy Security and Green Economy Bill

•CCL Reform Cons ultat ion

•DECC-Marland-Simplif icat ion

Emissions

Trading

Scheme

Burden Share

Renewable

Energy

Directive

Energy

Efficiency

Action

Plan

Cogen

DirectiveReview

Industrial

Emissions

Directive

Electricity

MarketReform

Carbon

Price

Support

Fuel Quality

Directive

Renewable

Transport Fuel

Obligation

PAS 2050 Carbon

DisclosureProject



BoilerHouse

ManufacturingProcess

LimeKiln

Pulp Process

Electricity

Stone

CO2

C O 2

Bulk Sugar Other Sugar Bioethanol

Betaine Co products

Animal Feed

Beet Chemicals

CO2

Electricity

Electricity

Steam

Fuel

Fuel

Fuel

Burnt Lime

P u l p

Condensate Electricity

CO2

GlasshouseTomatoes Hot Flue Gases

Inputs and Outputs:



BoilerHouse

ManufacturingProcess

LimeKiln

Pulp Process

Electricity

CO2

C O 2

CO2

Electricity

Electricity

Steam

Fuel

Fuel

Fuel Condensate Electricity

CO2

Glasshouse Hot Flue Gases

Apply EUETS,CCL & CPS



Site input & output foran industrial process

CHPPlant

Plant 1

Fuel

Plant 2

Power Exported

Power On-site

Heat

Heat

Heat

ParasiticPower

Fuel

Fuel

CO2

Electricity

Fuel

BioFuel

Widget1

Widget2

RawMaterials

Choices for site operator:

Type of products

Type of raw materials

Layout of manufacturing plant

Choice over provision of energy

Configuration of onsite generation

Fuel type(s)

All of the above are informed by

Energy Policies.

To be effective, policies must be:

sufficient, long term & stable.



Policies with renewable

CHPPlant

Plant 1

Fuel

Plant 2

Power Exported

Power On-site

Heat

Heat

Heat

ParasiticPower

Fuel

Fuel

CO2

Electricity

R enewab

le

Fuel

RO &

LECs

RO &

LECs

RO &

LECsIEDROCPFEMRCERTCESPECO

ProjectTransmit

IED

SustainabilitySamplingReporting

CHPQA

RHI ?

BioFuel

Widget1

Widget2


CCL

EBCRC?

CRC?

DraftEED

DraftETD

GHGreporting ?all 6 GHGgassesECA &

WDA

RHI ?

RHI ?



Policies with fossil

CHPPlant

Plant 1

Fuel

Plant 2

Power Exported

Power On-site

Heat

Heat

Heat

ParasiticPower

Fuel

Fuel

CO2

Electricity

Fuel

BioFuel

Widget1

Widget2

IEDCHPQA LECsLECs

CPS

CCL

CCL


CCA 2

EUETS

CarbonLeakage

Non-CarbonLeakage

EB

GHGreporting ?

all 6 GHGgasses

CCL

CRC?

IED

ROCPFEMRCERTCESPECOProje

ctTransmit

ECA & WDA

CCA 1

Fossi

l

DraftEED

DraftETD



Policy Position

Draft Energy Tax Dir. Under discussion in EU

Draft Energy Efficiency Dir. Under discussion in EU, very pro CHP, fast track timetable envisaged by Commission

IED Completed EU processes, awaiting transposition into UK law

EMR (CPS/F, Capacity, FiT etc.)Under discussion in UK, subject to consultation, expected to be implemented in April 2013

CRC Phase 1 implemented, phase 2 rules being further revised under simplification agenda

RO Awaiting last “banding review” for implementation post April 2013

CPS/CPF (also see EMR above) Detail discussion s / consultations on application of CPS to fuel used in CHP plants

CCL To continue except for changes for fuel used in CHP

CHPQARecently reviewed and adjusted, to be changed in light of CPS & consultation (autumn „11) possible furtherchange due to EED

CCA To be renegotiated under new structure (yet to be agreed)

LECs (CHP) EMR process threatens to reverse previous HMG position and remove CHP LECs from April 2013

EB National Grid Ltd. constantly seeking to erode Embedded Benefits

RHI (industrial)Existing RHI is long term but funding limited in each year and capped for 4 years so potential value in futureyears (post 2015) is too uncertain for mid/large scale investments. Interface with RO for CHP unclear

RO / RHI Interface Value of “new” RO & RHI Vs existing RO “uplift” to be resolved for CHP

GHG Reporting Currently applies to all GHG gasses (not just CO2) and is Voluntary but might become Mandatory from 2012/3?

EUETS ph 3

New rules agreed and guidance finalised 15/09/11. Levels of declining free allocation for each installation is

subject to a consultation to be published by HMG in Autumn „11 – Spring „12 for start on 1st Jan 2013

Sustainability rules / Biomass Under discussion with Ofgem, based on RED and specific guidance from Commission

Sustainability rules / Biofuels Under discussion with DfT, based on RED and specific guidance from Commission

CERT / CESP To be phased out and replaced with ECO, Green Deal, Green Investment Bank from 2013

ECO To be phased in with Green Deal etc. from 2013, rules yet to be finalised

Project TransmitNot finalised and continues but may be overtaken by guidance / rules from ACER / CEER / EB will not beconsidered under this project

ECA /WDA Enhanced Capital Allowance / Writing Down Allowance for capital investment. These rules are currently underconsultation



CHP WITHCARBON CAPTURE & STORAGE



Graphic courtesy of U.N. Intergovernmental

Panel on Climate Change

Prudhoe Bay compressors

Opportunities for CO2 capture



CHP as an enablerof CCS

Aggregate heat demands

shut down dispersed boiler plant

Build heat led centralised CHP

reduces overall CO2 emissions

Fit CCS to CHP

acts as a CO2 “Hoover” for previous industrial emissions allows for larger CCS plant

allows for future gasification plant to benefit from that CCS

E l f i d t i l l t



Example of an industrial clusterwith potential for CCS

ConocoPhillips

Immingham

CHP

ConocoPhilli

ps Humber

Refinery

Total

Lindsey

Refinery

Associated

British Ports

Theddlethorpe

Gas Terminal 50km

Acetic acid plant +

1100 MW CCGT 11km

2 CCGTs (1,600

MW total) 3 km

1,100 MW CCGT

10 km

Coal Stocks



Can we stop now?

My head is full!

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