Future proof
December 1st 2007 Environmental concerns combined with high energy prices and future security of
supply are causing many businesses to consider Combined Heat and Power (CHP)
as a low carbon energy efficient route to generating their own electricity supply,
according to Paul Hamblyn, head of market development for Ener-g
This technology is more than
twice as efficient as
conventional power
generation because it captures and
uses the heat that is normally wasted,
and avoids big transmission losses by
producing the energy on-site.
"It's the Toyota Prius of energy
generation", explains Hamblyn."'The
government has set stretching
targets to virtually double CHP
generation by 2010.The
environmental benefits of doing this
would be to reduce carbon
emissions by as much as 1,700
million tonnes, which would equate
to the environmental benefit of
covering the UK in forest. CHP has
the potential to supply a major
share of the UK's clean energy and
we have the technology to do this
right here today".
He added:"The added benefit is,
of course, huge cost saving
opportunities for business."
Uncertainty about long term
energy price rises and fears over
security of supply, combined with
the impact of fossil fuels on climate
change are prompting many large
organisations to review their energy
policies.
Equally importantly, the energy
market is heavily influenced by
political and regulatory factors,
which will, no doubt, acquire still
greater significance as the UK
government and EU pursue bullish
environmental policies.
Two of the more important
drivers are the Cogeneration
Directive and the Directive on
Energy End-Use Efficiency and
Energy Services.While the latter is
now in force, it is not due to be fully
implemented until May 2008.
However, the Cogeneration
Directive is here today and has some
interesting elements. For example, it
establishes the principal of
'guarantees of origin' for electricity
generated from CHP.While currently
not compulsory for operators of
cogeneration schemes, tradable
certificates are a realistic prospect.
Another development with
enormous financial implications is
Defra's consultation document for a
new Carbon Reduction Commitment
(CRC).Ministers aim to introduce the
CRC in January 2010, although the
regime will affect any organisation
whose annual mandatory half-hour
metered electricity consumption is
more than 6000MWh from January
2008 to December 2008.
The CRC is expected to impact on
some 5,000 organisations, notably
large service sector businesses such
as retail chains and financial service
providers, as well as a wide range of
public bodies including hospitals,
local authorities, and prisons.
The CRC will mean a typical
organisation consuming 6000MWh
of electricity and 1,050MWh of gas
would have to buy allowances of
£22,000 per year on top of its utility
bill. Because CHP emissions are
significantly lower, fewer CRC
allowances will have to be
purchased.
Economic factors are also at work
as with high energy prices,
businesses are often looking at a
faster payback. Moreover, an
increase in the electrical efficiencies
of gas engines, coupled with
improved reliability is leading to
improved savings and better
economics for potential projects.A
number of engine manufacturers
have delivered efficiency gains
including Perkins and Caterpillar,
two suppliers we often use in our
CHP sets. Some Perkins units can
now achieve electrical efficiencies in
the region of 38% and some
Caterpillar units as high as 40%.
Ener-g's Discount Energy Purchase
(DEP) agreements are finance
packages that allow customers to
enjoy the benefits of CHP without
needing to find the money upfront.
DEP has proved to be a successful
option, covering approximately half
Ener-g's UK installed capacity.
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