uk trends in microgeneration adoptionregensw.s3.amazonaws.com/1278416160_253.pdf · biomass heating...

UK Trends inMicrogeneration Adoption

Robert Harper

Sustainable Technology Manager

2 RWE npower, RWE Group 26.11.08

Microgeneration, a GlobalPerspective The fastest growing energy technology

in the world is grid-connected solar PV,with 50% annual increases in cumulativeinstalled capacity in both 2006 and2007, to an estimated 7.7 GWe.

Rooftop solar thermal collecting capacityincreased by 19% in 2006 to reach alevel of 105 GWth globally.

Biomass and geothermal energy arenow commonly employed for both powerand heating, with recent increases in anumber of developed countries.

Mandates for incorporatingmicrogeneration into new constructionrepresent a strong and growing trend atboth national and local levels.

Global

1.5 million homes have rooftop solar PV feeding intothe grid worldwide.

Rooftop solar thermal collectors provide hot water tonearly 50 million households worldwide.

There are more than 2 million ground-source heatpumps in use across 30 countries providing buildingheating and cooling.

Source: [Renewables-Global Report, www.REN21.net]


Annual Growth Rates of Renewable Energy Capacity, 2002-2006

0% 10% 20% 30% 40% 50% 60% 70%

Solar PV, grid-connected

Biodiesel (annual production)

Wind power

Geothermal heating

Solar PV, off-grid

Solar hot water/heating

Ethanol (annual production)

Small hydropower

Large hydropower

Biomass power

Geothermal power

Biomass heating

Microgeneration, a GlobalPerspective Geothermal direct-heat utilisation is

growing much faster than geothermalpower, with recent growth rates of 30-40% annually. This trend will acceleratewith the commercialisation of air sourceheating units, and combined HVACsystems for residential markets.

The largest country shares of renewableannual investment were in Germany,China, USA, Spain, Japan and India.Investment in Germany increased toover $14 billion in 2007, mostly in windand solar PV, and investment in Chinawas $12 billion, mostly in smallhydropower and solar thermal systems.

Global

Global renewable energy capacity grew at rates of 15-30% annually for many technologies during the five-year period 2002-2006. The growth of grid-connectedsolar PV eclipsed all of these, with a 60% averagegrowth rate. All technologies in light blue arepredominantly microgeneration systems.

Source: [Renewables-Global Report, www.REN21.net]


UK Microgen Industry, Reality or Rhetoric?

0

20,000

40,000

60,000

80,000

100,000

120,000

2005 2006 2007

Fuel Cells

dCHP

Solar PV

Biomass

GSHP

Hydro

Wind

Solar Hot Water

Wind Hydro GSHP Biomass

Solar Hot Water Solar PV dCHP Fuel Cells

Microgeneration growth in the UK hasbeen slow despite introduction of variousgovernment measures

Solar thermal is the only technology witha mature supply chain

Certain technologies still very muchcottage industries; only several hundredsystems installed every year

Slow Growth… Not All Technologies Commercial

Limited growth (exc SHW) has beendriven by government capital grantincentives, a blunt policy instrument

What are the challenges?

Scale, 15% Renewables by 2020

Cost-effectiveness, commercialviability with other industries


Renewables Directive – ProposedNational Targets


Commercial Drivers – Political &Environmental

DTI Microgeneration Strategy (Mar ’06)

Option to have target

Research into behaviour

Support for £80m LCBP

Link Ofgem & ENSG

Identify non-tech barriers

2006 2010200920082007

CC&SE Act 2006 (Jun ’06)

Changed EEC to CERT

Obligation for export £

Fuel poverty alleviation

Promotion of microgen

GHG reduction targets

HMG Energy Review (Jul ’06)

Demand-side options

2020 statement on EE

Fiscal incentives

Planning & Energy Bill (May 2007)

Allows LA to set higherEE ratings than B.Regs

Merton Rule commitment

April ’07,microgeneration in PDR

Suppliers Obligation Post 2011

Future of CERT

ESCO options

Hybrid options

Develop energy services

CO2 targets

£RAB Zero Carbon Homes (2007)

CSH 4-6 growth forecast

Strong PV outcome

Need for fiscal incentives

B.Reg changes in 2010

Gearing-up period


Commercial Drivers – Economic

HMT 2006 Budget

VAT reduction 5%

LCBP funding £80m

ECA for B2B microgen

2006 2010200920082007

Feed-In Tariff consultation

Significant debate

Step change in support

Cost recovery?

Fiscal support level p/kWh

Strong NGO / Tory support

Stern Review (Oct 2006)

CC represent realeconomic risk

10% impact in the future,1% GDP impact now

Engages money-men

Significant stakeholder

HMT 2007 Budget

Tax exempt earning onexport reward and ROpayments for electricity

0% VAT on self-buildhousing for microgen

BERR 2020 Renewable Energy Strategy

32% of bulk electricity fromrenewables. Massive growth

Introduction of renewable heatand transport

Significant drive for on-sitegeneration in built environment


Commercial Drivers – Social

Day After Tomorrow (2004)

Mainstreammovie

Impact of climate change

Discussion of Carbonemissions

Raises CC profile

2004 2008200720062005

Al Gore’s Inconvenient Truth (Jun ’06)

Mass media fall out forclimate change awareness

High level of consumerreaction

Significant stakeholderimpact

Power to the People (Feb ’06)

FT economic editor

Discusses decentralisedgeneration in terms of securityof supply

Raises the question of biastowards large scale generation

npower Retail Position on Green (Nov ’07)

Strong consumer messageson green in all sectors

Sustainability is the keycommercial word, M&S Plan A

Green is now mainbusiness, not just CSR

FPAG Annual Report (2007)

It remains the case thatthe only sustainable way toend fuel poverty is throughenergy efficiency

Includes microgeneration

BERR Defra Fuel Poverty Strategy (2007)

The low Carbonbuildings programme ishoping to attract bids fromsocial housing providersseeking to installmicrogeneration


Commercial Drivers – Technology

CLG Changes to PDR

All on roof solutions ofless than 200mm aboveroof surface to be PDR,exceptions of listedbuildings and areas ofoutstanding natural beauty

2007 2016201420122010

Net Zero New Build (2014)

60% of new buildsshould comply with CSHlevel 6, net zero carbon

100% CSH Level 6 forSH/HA


25% of new buildsshould comply with CSHlevel 6, net zero carbon

Eco-towns begin roll-outacross UK. 8 tests sitesacross England & Wales


100% of total new buildsshould comply with CSHlevel 6, net zero carbon

Potential for off-settingoptions in non-conduciveconditions e.g. urban


0

1,000

2,000

3,000

4,000

5,000

6,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(In

sta

llati

on

s)T

ho

usa

nd

s

High growth scenario

Current Growth Scenario

Low growth scenario

Market forecasts

Introduction ofCSH level 6

2020 RES Targets

Introductionof FIT?

Doublebanded ROCs

2020 RESconsultation


UK Market 2008 – 2050Total Installations

0

5

10

15

20

25

30

35

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

2043

2045

2047

2049

Mill

ion

s

Model Description

Calculate Scurve

ApplyLogisticgrowthmodel

DetermineKey

milestonesStakeholder

forecast

Understandsplit of

technologies

Calculatetechnologybreakdown

s

Calculatetechnology

Outputs

Technology breakdow n 2050

6.44%

23.46%

33.78%

13.40%

0.80%

0.01%

13.57%

7.20%

1.34%

A SHP Biomas s dCHP Fuel Cel ls GSHP

Hydro Solar Thermal Solar PV Wind

Determine MilestonesBreakdown by

technology

Calculate Outputs

kWp, kWh, £s, tCO2

t1xn = t2

xn = t2/t1

x = n√t2/t1

Technology Breakdown 2008- 2050

2005 2006 2007 2008 2009 2010 2011 2012 2013 201 4 2015 2016 2017 2018 201 9 20 20 2021 2022 2023 20 24 20 25

Hydr o

Wind

GSHP

Solar PV

ASHP

Fuel Cells

Solar Ther mal

Biomass

dCHP

Total Wind Install ations

0

20

40

60

80

100

120

140

160

180

2005

2006

2007

2008

2009

2010

2 011

2 012

2013

2014

2015

2016

2017

201 8

201 9

2020

2021

2022

2023

2024

2025

Tho

usa

nds

Forecast

5 per.Mov. Avg. (Forecast)

Apply Growth Multiplier


npower Forecast ModelMicrogeneration Market Adoption Model (MMAM)

Primary Assumptions:

npower growth model based on logistic ‘S’ growth curve model

Introduction of Code for Sustainable Homes Level 6 signals beginning of significant growth for microgeneration.

Technology Breakdown 2008 - 2050

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Hydro

Wind

GSHP

Solar PV

ASHP

Fuel Cells

Solar Thermal

Biomass

dCHP

Actual figures

Introduction of CSHLevel 6

2020 RES Targets

Introductionof FITs

J1

J1 Alpha model usedJAMEC03, 20/08/2008


Model Breakdown: Power TechnologiesHydro Wind

Solar PV

Total Wind installation volumes

0

20

40

60

80

100

120

140

160

180

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Thou

sand

s Growth in solar PV not expected to ‘take-off’ until post 2011

Cost remains significant barrier to growth

Current legislation will not be enough totransform and grow the market

Solar PV is expected to be a technology ofthe masses but generate less than wind

Wind will not see high volumes anticipatedby BWEA:

High volume micro-wind stillencountering problems;

Growth seen in larger (10kWp+)systems, but;

Planning still remains an issue

Hydro will always remain a fringetechnology and growth will be negligible

However, significant potential for hydro –more than 20,000 water mill sites

Total PV installation volumes

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Total Hydroinstallation volumes

0

100

200

300

400

500

600

700

800

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Electricity technologies

Installations (Stock) 2010 2020 2030 2040 2050Solar PV 7,297 1,525,000 1,586,992 1,651,505 1,718,640Hydro 134 500 855 1,462 2,500Wind 2,916 132,610 191,604 276,842 400,000


Model Breakdown: Heat TechnologiesASHP Fuel Cells

Heat pumps will see anticipated growthlevels:

Requirement for on-site generation

Match with heating systems

Electricity prices

Fuel cells will also not see anticipatedvolumes- technology not yet commerciallyviable

Main growth of heat technologiesexpected dCHP:

Take share of boiler replacementmarket

twin generation – Efficiency gains

Skill set already available withinworkforce

Solar thermal will see significant growthbut not expected to meet previous forecastexpectations

Heat technologies

Installations (Stock) 2010 2020 2030 2040 2050ASHP 595 139,000 333,540 800,351 1,920,497GSHP 7,565 60,000 95,242 151,185 239,986Biomass 74,287 3,200,000 4,153,995 5,392,399 7,000,000Fuell Cells 21 5,000 46,416 430,887 4,000,000dCHP 4,063 2,400,000 3,872,154 6,247,324 10,079,416Solar Thermal 162,740 1,705,000 2,275,054 3,035,702 4,050,667

Total ASHP installation volumes

0

50

100

150

200

250

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

Tho

usan

ds Total Fuel Cell installation volumes

0

2

4

6

8

10

12

14

16

18

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Thou

sand

s

Total dCHP installation volumes

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2007200

82009

2010

201120

122013

2014

2015

2016

2017

2018

2019202

02021

2022

202320

242025

Total Solar thermal installation volumes

0

500

1,000

1,500

2,000

2,500

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

Tho

usan

ds

dCHP Solar Thermal


Conclusions

Problem is that growth is dependent on government legislation:

– not all technologies are commercially viable,

– significant investment in the supply-side is needed.

Difficult to forecast where the microgeneration industry is headed:

– significant growth in the sector is expected, although

– current economic climate introduces considerable risk to planning.

The industry needs to deliver on Government’s expectations:

– whether or not the industry will generate the environmental and commercialsavings expected, is yet to be decided

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