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RENEWABLE ENERGY VIEW

A RENEWABLE ENERGY ASSOCIATION PUBLICATION

2014

RENEWABLE ENERGY VIEW THE AUTHORITATIVE ANNUAL REPORT ON THE UK RENEWABLE ENERGY SECTOR

2014


R E N E W A B L E E N E R G Y RVEI NE EWW A 20 B L1 4E E N E R G Y V I E W 2 0 1 4

F O R E WO R D : D R N I N A S KO R U P S K A CH I E F E X E C U T I V E , R E A

STABLE POLICIES WILL SECURE GROWTH IN GREEN ENERGY

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enewable energy is a major business opportunity for the UK. Clean energy is one of the fastest growing industries in the world, and significant work is needed to upgrade our energy infrastructure for the challenges of the 21st century. Renewable Energy View (REview) builds on our 2012 report ‘Renewable Energy: Made in Britain’. Once again, we have teamed up with Innovas to produce robust employment data, technology by technology. We’ve also collated Government deployment data and projected near term future growth, mapped against Government’s 2020 projections. Each technology chapter is brought to life with case studies and articles from industry practitioners. In the final section of REview, we’ve asked PwC to scope out the historic and projected investment trends. Taken together, this is the most complete assessment to date of the UK renewable energy market. We’ve found that the private sector has invested almost £30 billion in renewable electricity, heating and transport fuels since 2010, growing the industry to over 100,000 jobs and supplying 4.2% of UK energy. This is excellent progress, but there’s a long way to go. The IPCC recently issued their starkest warning yet of the costs of inaction on climate change. But they also made clear that it’s not too late. The necessary expansion of clean energy is both possible – and affordable. We hope this paves the way for an open debate about both the costs and the (often overlooked) benefits of decarbonisation, including the new jobs being created in renewables. Not just a new generation of highly skilled engineers, but the biochemists in the labs, the legal and financial service providers in the City and the installers and construction workers in your community. Furthermore, the ongoing crisis in Ukraine reinforces the importance of www.r-e-a.net

WE’VE FOUND THAT THE PRIVATE SECTOR HAS INVESTED ALMOST £30 BILLION IN RENEWABLE ELECTRICITY, HEATING AND TRANSPORT FUELS SINCE 2010, GROWING THE INDUSTRY TO OVER 100,000 JOBS AND SUPPLYING 4.2% OF UK ENERGY.’

reducing our dependence on imported gas. The UK is blessed with excellent renewable resources, from wind, water and sunshine to underground hot rocks and energy from waste. Then there are sustainable bio-based fuels that offer flexible heat, power and transport fuel when and where we need them. We can grow some of these ourselves and also buy them from trusted trade partners in the USA and Europe. Renewable energy puts us firmly in control of our energy security. The Government deserves credit for delivering supportive and stable policies. The UK currently looks to be on track for its 2020 renewable electricity ambitions and its renewable heat policies are truly pioneering. However, the lack of clear support for renewable transport has seen this sector stagnate. Where there has been uncertainty or drastic changes in policy, the results have been hugely damaging to many in the renewables industry. The message is clear: supportive, stable policies are vital. The stronger the policies, the greater the growth, and the faster the costs come down – as we’re seeing right now with onshore wind and solar power. Several technologies, from small ana erobic digestion to mid-scale solar to large biomass power, still need work to unlock their full potential. There are looming uncertainties too, such as new EU State Aid rules and the final details of Contracts for Difference for large scale power. At the same time energy is becoming increasingly politicised ahead of next year’s general election. So there are challenges ahead and outstanding issues to tackle, which we will face head on to support our members. But the opportunities outweigh the challenges by far. There has never been a better time to invest in UK renewables. This investment creates jobs, brings down costs, improves our energy security and helps us preserve a safe environment. REview Renewable Energy View 2014

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Supported by:

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Foreword

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Policy Overview

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Executive Summary

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Dr Nina Skorupska, Chief Executive, REA

REA Focus Feature: Built Environment

The incorporation of renewable energy devices into existing sites and buildings is incentivised primarily by the Feed-in Tariff (FIT) for electricity and the Renewable Heat Incentive (RHI) for heating.

REA Focus Feature: Community Renewables

In recent years, communities have engaged with renewable energy in two distinct ways. Some communities have seen renewables as a way to tackle climate change, take control of their energy costs and build social value.

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The Future of Biomass Combustion

Bio energy experts blaze a trail with industry leading biomass solutions.

The Potential of Biomass Heat

The industry must speak with one voice and pool its resources to drive take-up, says Forever Fuels’ MD Bruno Prior.

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Affordable Financing for Renewable Energy Equipment

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Mixed Energy From Waste Overview

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Britain leads the way in biogas developments for sewage industry

‘Carbon Smart’ On-site Digesters

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The Heyday of Green Heat

Following the successful commercial Renewable Heat Incentive (RHI) scheme, biomass boilers will surge with the launch of the domestic RHI, Natasha Bowler says.

REA Focus Feature: Public Opinion

The UK is home to a lively public debate on energy at the moment, and especially energy prices.

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031

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Biomass CHP Overview

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Anaerobic Digestion Overview

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REA Focus Feature: Electricity Market Reform

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Purpose Designed Biogas Components

UK farmers should be encouraged to take up biogas technology.

Since 2002, large scale renewable power projects have been incentivised in the UK via the Renewables Obligation (RO).

Businesses who want to invest in renewable energy can realise their goals through the EEF scheme says Darren Riva, Head of Green Finance, Energy Efficiency Finance Scheme.

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Biomethane to Grid (BtoG)

Grid Entry Units (GEU’s) Uncovered.

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Biomethane ‘Most Effective’ Use of Biogas

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Reducing the Carbon Footprint

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Policy makers should recognise the benefits of on-site AD processing plants, says Clearfleau’s Richard Gueterbock.

Tanking Solutions

Bespoke precast concrete tanks are the way forward for AD.

e-power: Get the Best Deal for your Power

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Investing in the Future of Energy

Greater investment into renewables sees rapid growth for solar PV in the UK.

Saving Money on Heating Bills with Biomass Installations

Turn Up the Heat

2014 promises to be an exciting year for the renewable heating industry, says Innasol’s Colm Lawlor.

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Onshore Wind Overview

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Offshore Wind Overview

In an industry full of complexity, e-POWER is proving to be a popular route for independent generators looking to get the best deal for their power.

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Biomass Boilers & Wood Stoves Overview

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REview Renewable Energy View 2014

The Power of Poo

DPS Environmental are supplying the core technology for an innovative, flexible and mobile solution that will convert sewage sludge to power.

Wood-fuelled boiler systems offer a cheaper method of heating that will benefit from the government’s new Renewable Heat Incentive Scheme.

New Anaerobic Digestion Solution

Anaerobic digestion (AD) technology to combat rising water effluent and energy costs is being made available to the processing industry at no capital cost.

World Class Fully Integrated Energy Solution

Balcas is enjoying increasing success with its leading brand of premium quality brites fuel.

Thermal hydrolysis will radically alter the process of producing biogas through waste treatment, Natasha Bowler says.

British companies have been taking a lead in developing smaller scale on-site AD systems. Chesterfield Biogas upgrades AD facilities to reduce carbon dioxide in biogas as much as possible.

Biomass Power Overview

Catch Those Rays

Solar power will benefit farmers throughout the UK regardless of location.

Solar Photovoltaic Overview www.r-e-a.net


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Maximising the Contribution of Renewable Technologies

Paul Joyner, Managing Director of Sustainable Building Solutions (SBS), part of the Travis Perkins Group, claims a fabric first approach must be taken to maximise the potential for energy savings from renewable technologies.

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Harvesting Affordable Heat

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Low Cost Heat and Hot Water

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Let it Shine

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Wave & Tidal Overview

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Riding The Waves

Mark Wozencroft, Managing Director, of Minus 7 explains how the Minus 7 hybrid energy harvesting system can make economical, energy saving, heating and hot water an everyday reality. Green heating benefits landlords and tenants alike. The solar photovolatic industry is on its way to grid parity but it still faces obstacles.

The marine power sector has progressed beyond proof of concept to focus on the economics of delivering the first wave and tidal power arrays.

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Hydropower Overview

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Stemming The Tide

Marine Current Turbines continues to develop tidal current turbine technology against the backdrop of a tough financial climate.

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Liquid Biofuel Overview

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Using Bio-LNG as a Transport Fuel

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Supermarket giant Tesco realised that its demanding carbon emission targets required a radical approach.

Heat Pumps, a Route to Zero Carbon

Now is the time to market the domestic RHI to the end user, says Brian Biggs Managing Director and Jonathon Foxbatt Technical Director of Verdelec.

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Heat Pumps Overview

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REA Focus Feature: Renewable Energy Targets

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Deep Geothermal Overview

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PwC: Investment in the Renewables Industry

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Analysis covering renewable electricity, heat and transport.

Methodology

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Solar Thermal Overview

VIEW

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Cutting edge technology and the right business model are vital.

2014 is a pivotal year for the industry and REview is the key source of information on all the changes taking place. Encompassing the REA’s authoritative annual report on the UK’s renewable energy sector, it also addresses several key issues currently in the spotlight. In each section we have not just the key facts and figures, but also articles and case studies from industry practitioners sharing their experience of doing business in this industry. Opinion pieces cover topics ranging from the new domestic Renewable Heat Incentive to exciting new technologies for harnessing wave power. The REA has produced its overarching annual survey on the state of the industry, and PwC’s executive report analyses investment in the renewables sector from 20102013, forecasting the expenditure required to reach 2020 targets of renewable electricity and heat. Thank you to all our contributors for their thoughtprovoking insights, and especially PwC and Innovas. The REA team have also been helpful beyond measure. We’ll be repeating REview annually, and zeroing in on key issues in REview’s quarterly sister publication – REq. Do get in touch if you’d like to contribute to future issues – we’d love to hear from you. ENERGY

Revolutionising Solar Power Generation

Welcome to REview – the new publication from the Renewable Energy Association.

RENEWABLE

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IMAGE: ROBERT GRESHOFF

CO N T E N TS & E D I TO R I A L

RENEWABLE ENERGY VIE W THE AUTHO RITATIV E ANNUAL REPOR T ON THE UK RENEW ABLE ENERGY SECTO R

Sarah Cartledge, Editor REA REview

Editor Sarah Cartledge 020 8492 5881 sarah@tpggroup.co.uk

2014

Printed in the UK by The Magazine Printing Company, using only paper from FSC/PEFC suppliers. www.magprint.co.uk

Features Editor Judith Baker judith@tpggroup.co.uk Features Writer Natasha Bowler natasha@tpggroup.co.uk Art Editor Nadia Nelson nadia@tpggroup.co.uk Sales Director Karen Hart 020 8492 5885 karen@tpggroup.co.uk Advertising Manager David Williams 020 8492 5884 dave@tpggroup.co.uk

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inspire* publishing Published by Inspire Publishing Fergusson House, 124-128 City Road, London EC1V 2NJ part of

Sales Executives Amanda Bookatz amanda@tpggroup.co.uk Amanda Flatt 020 8492 5882 amanda.flatt@tpggroup.co.uk Publisher Steve Gardner 020 8492 5887 steve@tpggroup.co.uk

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A RENEWABLE ENERGY ASSOCIATION PUBLICATIO N

© Inspire Publishing All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without prior written permission of Inspire Publishing. Information carried in this publication is checked for accuracy but the views or opinions do not necessarily represent those of Inspire Publishing. It is for information purposes only and Inspire Publishing dœs not endorse any of the companies, products or services contained within.

REview Renewable Energy View 2014

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POLICY OVERVIEW

POLICY OVERVIEW Renewables Obligation (RO) The RO is the oldest of the current UK financial incentives, having started in 2002. It obliges electricity suppliers to source a proportion of their electricity from renewable sources. Renewables Obligation Certificates (ROCs) are awarded to renewable generators, who then sell them to suppliers. Support lasts for 20 years, but the actual value of ROCs depends on the outcome of commercial negotiations rather than being fixed by the policy. When introduced, all renewable electricity received the same level of subsidy, regardless of the technology used. This changed in 2009, when ‘banding’ was introduced – meaning that support varies depending on the cost of the technology. The RO is due to close to new participants in 2017.

Electricity Market Reform (EMR)/ Contracts for Difference (CfDs) EMR covers a package of measures including a carbon floor price, an emissions performance standard to rule out new coal generation and a capacity mechanism to try to ensure the system has sufficient back up capacity. Contracts for Difference are the new mechanism to replace the RO – although they will also be available for nuclear and carbon capture and storage. Most policies give a more or less fixed income to renewable generators but leave them free to sell the power itself on commercial terms. One drawback of this is that, if market prices go up then the total income for the generator will be higher than expected and they may be over-rewarded – and therefore the impact on consumer bills will be higher than it should be. By the same token, falling power prices would see generator income and consumer bills being lower than expected. CfDs will seek to address this by setting a figure for the total income for a project – i.e. both the renewables subsidy and the value of the electricity. This total figure is called the ‘strike price’. Government will also take a market average for the power price, known as the ‘reference price’. Rather than being a fixed price, the subsidy paid to the generator will be the difference between the strike price and the reference price.

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REview Renewable Energy View 2014

In theory, this gives the best of both worlds, as the generator has certainty over total income and the subsidy – and therefore the impact on consumers – is no higher than necessary. The policy is due to be implemented by the end of 2014 and large areas of detail are still to be resolved. At the time of writing, it is not clear how successful this policy will be. Concerns include how funding will be allocated and strike prices set if there are more applications for support than funding available, and ensuring that independent generators are fully able to take part.

Feed-in Tariff (FIT) The FIT started in April 2010. It supports anerobic digestion, wind, hydro and solar PV up to 5MW, as well as small scale fossil CHP. There are also proposals to support community FIT projects up to 10MW in size.

MOST POLICIES GIVE A MORE OR LESS FIXED INCOME TO RENEWABLE GENERATORS BUT LEAVE THEM FREE TO SELL THE POWER ITSELF ON COMMERCIAL TERMS.’ Building on successful policies elsewhere, the FIT aims to be much simpler for the end user than policies such as the RO. It pays a fixed income on all generation with no need to enter into complex commercial negotiations. The FIT also gives a guaranteed minimum income for electricity not used on site – although projects are free to seek better prices elsewhere. In 2011/12 solar PV was the major beneficiary, overshooting the estimated budget by a large margin. Cost control mechanisms have been introduced for both the FIT and the RHI for all technologies, in which tariffs reduce for new entrants to a scheme if deployment reaches particular levels. Although the PV market is more stable, tariff reductions for the other technologies will happen for the first time in 2014, and could lead to severe market disruption.

Renewable Heat Incentive (RHI) The RHI builds on a similar approach to the FIT, although is available at all scales. Unlike electricity, excess heat generation cannot simply be exported onto a grid, so the policy aims to ensure that only useful heat is supported. The RHI opened in November 2011, initially only for ground source heat pumps, biomass, solar thermal, smallscale biogas and injection of biomethane to the gas grid. Single domestic installations were not included. To date, the scheme has been dominated by biomass boilers. Despite having a slow start, the policy is beginning to grow at a faster rate. Major changes were consulted on in 2012/13 and are due to be implemented in the first half of 2014. These included adding some tariffs and increasing others, with the highest profile change to be the inclusion of households*. Unlike the renewable electricity policies - which are funded by consumer bills - the RHI is paid for out of general taxation. The budget is fixed to the end of March 2016, with further funding to be set after the general election.

Renewable Transport Fuel Obligation (RTFO) The RTFO was introduced in April 2008. It is similar in principle to the RO, in that it obliges fuel suppliers to replace a proportion of supply with renewable fuels. Targets were scaled back in 2009. The Government has yet to set out a trajectory for meeting the binding 2020 targets contained in the Renewable Energy Directive, and has made this conditional on EU-level resolution of controversy over sustainability. This has undermined confidence in the sector – not only has future investment been scaled back but recent data show that even the reduced targets are not being met. This is particularly frustrating as UK-produced fuels have an excellent sustainability record, significantly exceeding expectations in environmental protection and greenhouse gas savings. *From 9 April 2014 households are now allowed to participate in the RHI, although we are still awaiting confirmation of the other changes.

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

EXECUTIVE SUMMARY

WHERE THE POLICIES ARE SUPPORTIVE AND STABLE, RENEWABLE ENERGY IS GROWING RENEWABLE ELECTRICITY GENERATION ACHIEVED TO DATE AND PROJECTED BY DECC TO 2020 120,000

Q Q Q Q Q

Geothermal Energy From Waste Biomass Anaerobic Digestion Marine

Q Q Q Q

Projected by DECC 2014-2020 (UEP)

Hydropower Solar PV Offshore wind Onshore wind

100,000

GENERATION (GWh)

80,000

60,000

Achieved to date 40,000

20,000

0 2005

2006

2007

2008

2009

The UK is currently broadly on track to meet its legally binding 2020 target of 15% renewable energy. Overall growth in renewable energy deployment must continue at an average 17% per annum to achieve the target – one of the most demanding

2010

2011

2012

2013

2014

2015

growth rates across the whole EU. Renewable electricity generation (supported by the Renewables Obligation and Feed-in Tariff) has grown steadily, increasing on average by 20.3% yearon-year between 2009 and 2013. Renewable heat generation has also

RENEWABLE HEAT PRODUCTION ACHIEVED TO 2012, RECENT GROWTH EXTRAPOLATED TO 2014 AND NREAP PROJECTION BY DECC FOR 2020 80,000

70,000

Q Geothermal Q Heat pumps Q Solar Thermal

Q Anaerobic Digestion Q Energy From Waste Q Plant Biomass

Q Wood combustion: industrial Q Wood combustion: domestic Q Recent growth trend continued Q NREAP projection

GENERATION (GWh)

60,000

50,000

2017

2018

2019

2020

grown steadily, increasing on average by 11.3% year-on-year between 2009 and 2012 (the last full year for which data are available). Biofuel consumption has increased on average by 3.8% between 2009 and 2013, although this growth has been erratic, with consumption actually decreasing in some years. Projecting current growth rates forward, the UK looks likely to achieve its indicative 2020 ambition of 30% renewable electricity. It has introduced policies to accelerate growth towards its indicative 2020 ambition of 12% renewable heat, but looks very unlikely to meet its legally binding 10% renewable transport sub-target.

£30 billion invested since 2010, with twice that amount needed by 2020

40,000

30,000

20,000

10,000

0 2005

8

2016

2006

2007

2008

2009

2010

2011

REview Renewable Energy View 2014

2012

2013

2014

2015

2016

2017

2018

2019

2020

Data provided by PwC £30 billion was invested in UK renewables between 2010 and 2013, of which £28 billion was invested in renewable electricity; £1.4 billion in renewable heat (up to 2012, the last full year for which data are available) and £0.7 billion in

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CAPITAL INVESTMENT IN RENEWABLE ENERGY 2010-2020 20.0

15.0

£bn

11.8 8.6

10.0

8.2

9.1

9.2

10.6 10.1

9.2

Renewable transportation fuels 6.7

5.0

6.9

Renewable heat Renewable electricity

4.0

-



Jobs down since 2011 due to policy changes, but new job growth expected Data provided by Innovas 103,000 people were employed across the UK renewable energy value chain in 2012/13, which is down by approximately 7,000 since 2010/11 (when the REA commissioned the UK’s first industrywide assessment of employment in renewable energy, ‘Renewable Energy: Made in Britain). This is mainly due to job losses in the small scale solar industry (down by approximately 10,000), partially offset by continued job creation in the wind industry (up by approximately 4,000). It is expected that recent growth in anaerobic digestion and large scale solar power, along with anticipated growth in small scale renewable heating, will boost job numbers above 2010/11 levels in subsequent years. The analysis forecasts between 109,900 and 123,600 jobs in three years’ time. The market value of the renewable energy industry has increased since 2010/11, from £12.5 billion to £14 billion.

Conclusions A generally supportive policy framework has led to impressive investment, job creation, deployment and cost reductions across a range of renewable energy technologies. This is particularly impressive when set against a backdrop of ongoing economic austerity. A strong correlation can be seen between stable policies and investment, job creation, deployment and cost reductions. The effects of unclear policies (renewable transport deployment) and dramatic policy changes (solar job losses) are also clear. The overall policy framework, and resultant outcomes, improved markedly since the adoption of the EU’s 2020

For full explanation of terms, methodology and growth projections see pages 114-115

SUMMARY FOR THE RENEWABLE ENERGY SUB SECTORS FOR 2012/13 Renewable Energy Sub Sectors

2012/13 £'millions

Air & Ground Source Heat Pumps

2012/13 Employment Numbers

2012/13 Company Numbers 381

1,058

7,345

Ana erobic Digestion

358

2,635

141

Biofuels

525

3,509

200

Biomass Boilers

600

4,510

210

Biomass CHP

368

2,180

137

Biomass Dedicated Power

498

3,320

166

Deep Geothermal*

10

200

23

Energy from Waste

832

6,545

341

Hydro

577

4,955

261

Offshore Wind

2,469

18,280

790

Onshore Wind

2,278

17,071

726

Solar PV

2,166

15,620

2,178

Solar Thermal

941

7,533

337

Wave & Tidal

97

570

33

1,307

8,960

519

14,084

103,233

6,443

Production of biomass including wood for fuel Totals

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renewable energy targets. Across all sectors, the 2020 targets offer significant and enduring opportunities for investment and employment. Further into the future supportive 2030 energy and climate frameworks, at both EU and national level, are essential for the continued growth of the industry in the 2020s.

REview Renewable Energy View 2014

* Data provided by REA

renewable transport fuel production. The projected expansion of renewable electricity and heat will require future investment of approximately £64 billion to 2020, of which £41 billion in electricity (from 2014) and £24 billion in heat (from 2013). In the absence of clear renewable transport policies, it is envisaged that the UK will continue to depend mainly on imports of biofuels if it is to achieve its legally binding 10% renewable transport sub-target.

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R E A F O C U S F E AT U R E

RENEWABLES IN THE BUILT ENVIRONMENT:

RETROFIT RACES AHEAD AS NEW BUILD STALLS The incorporation of renewable energy devices into existing sites and buildings is incentivised primarily by the Feed-in Tariff (FIT) for electricity and the Renewable Heat Incentive (RHI) for heating.

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he FIT (launched in 2010) pays a fixed rate for electricity generated by solar panels, small wind turbines, small hydropower systems and small and medium-scale biogas units. The FIT is banded at different scales but both domestic and non-domestic sites are covered within the same scheme. The RHI pays a fixed rate for useful heat generated by on-site biomass boilers, air and ground source heat pumps and solar thermal systems. It also supports the injection of biomethane from anærobic digestion (AD) into the gas grid, as well as district heating networks and combined heat and power (CHP) projects with renewable inputs. Unlike the FIT, the RHI was introduced for non-domestic applications first (in 2011) and has only just launched for households this spring, with different support levels. Changes to the non-domestic RHI – including new technologies, some increases to support levels and revised cost control mechanisms – will be implemented very soon. Helping secure the FIT and RHI are two of the REA’s landmark successes. Between them, they give the UK one of the most supportive policy frameworks in the world for on-site renewable heat and power generation. That is not to say they have not had their problems. Most notably, the FIT for

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REview Renewable Energy View 2014

solar PV was cut drastically in the winter of 2011/12, resulting in thousands of job losses in the short term, and new cost control mechanisms for both the FIT and RHI in the medium term. The incorporation of renewable energy devices into new buildings is driven primarily by regulation rather than incentive schemes, specifically Building Regulations. This is the vehicle for implementing the Government’s ‘Zero Carbon Homes’ objectives. However, the tightening of carbon standards in Building Regulations has been slower than expected, and they are currently ineffective at driving the use of renewables in new properties. Many in industry doubt that Government will achieve its objective of making all new homes ‘zero carbon’ by 2016. Another policy driver for new build renewables is the Planning & Energy Act, which enables local authorities to specify on-site or connected renewable energy systems for new properties – also known as the ‘Merton Rule’. Government consulted on removing the Act in its 2013/14 Housing Standards Review, but following pushback from the REA, STA and colleagues from other groups, has maintained these local authority powers. (The Review did however remove the same powers for higher energy efficiency standards, claiming these should be driven by national Building Regulations only.)

THE REA VIEW The UK is an attractive market for retrofitting on-site renewable technologies. DECC is learning from its experiences with the FIT and the RHI. For instance, while many, the REA included, have raised concerns about the design of new cost control mechanisms in these policies, most would agree that small, phased tariff reductions, broadly in line with deployment, are preferable to rushed, dramatic tariff reductions (as suffered by solar PV in 2011/12). While several technology-specific issues need resolving, what the sector as a whole needs most is time for the policies to bed in without further disruption.

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The policy framework is not as strong for new build properties – although the recent decision to uphold the Merton Rule will ensure that current activity in this sector continues. Work still needs to be done to persuade DCLG and house builders that renewable energy is an opportunity – not a burden – in new properties. After all, most people would prefer to live or work in a building that gets its heating and electricity from renewables, as this helps insulate energy costs from rising fossil fuel prices. Small scale renewables have particularly good cost reduction potential as there are gains to be made through learning best practice, economies of

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THE INCORPORATION OF RENEWABLE ENERGY DEVICES INTO NEW SITES AND BUILDINGS IS DRIVEN PRIMARILY BY REGULATION RATHER THAN INCENTIVE SCHEMES, SPECIFICALLY BUILDING REGULATIONS. THIS IS THE VEHICLE FOR IMPLEMENTING THE GOVERNMENT’S ‘ZERO CARBON HOMES’ OBJECTIVES.

scale and market competitiveness, as well as technical innovation. The costs of solar power in particular have fallen rapidly in recent years, partly due to experience under the FIT and partly due to reduced manufacturing costs. As biomass boilers, heat pumps and solar thermal systems deploy under the RHI, they too can bring down costs and help make the economic case for the incorporation of renewables in new build properties ever more compelling.

REview Renewable Energy View 2014

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R E A F O C U S F E AT U R E

ENGAGEMENT, OWNERSHIP, DEVELOPMENT:

THE ROLE OF COMMUNITIES IN UK RENEWABLES In recent years, communities have engaged with renewable energy in two distinct ways. Some communities have seen renewables as a way to tackle climate change, take control of their energy costs and build social value.

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hese communities have formed community energy companies and developed community renewables projects. On the other hand, some communities have opposed local renewables developments, either because of concerns over æsthetic impacts, or because the developer ‘ has not fully consulted the community or explained the benefits of the project. Community opposition to renewables gets much more attention in the press than communities who accept or embrace renewables. Government intervened on this issue first, and last year mandated an increase of RenewableUKs’s community benefit protocol for onshore wind, up from £1,000/MW to £5,000/MW for new projects. This community benefit fund is shared among groups and businesses in host communities. In January, the Government published the UK’s first ever Community Energy Strategy. This document sets out more holistic thinking about how communities can engage in the energy system. It pulls together evidence on topics ranging from collective switching schemes to community led developments. It also maps out some actions for industry, Government and community groups to help grow the contribution of community renewables in the energy mix. The Strategy states that “by 2015 it

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REview Renewable Energy View 2014

will be the norm for communities to be offered the opportunity of some level of ownership of new, commercially developed onshore renewables projects.” The Government envisages two possible means to achieving this objective. Firstly, the Strategy sets an industry taskforce the challenge of “identifying measures to increase community ownership of new commercial developments [and working] with community energy groups to set an overall level of ambition for community ownership of new renewables developments”.

THE STRATEGY STATES THAT ‘BY 2015 IT WILL BE THE NORM FOR COMMUNITIES TO BE OFFERED THE OPPORTUNITY OF SOME LEVEL OF OWNERSHIP OF NEW, COMMERCIALLY DEVELOPED ONSHORE RENEWABLES PROJECTS.’ THE GOVERNMENT ENVISAGES TWO POSSIBLE MEANS TO ACHIEVING THIS OBJECTIVE.”

The Strategy then outlines the second option: “We will review progress in 2015 and if this is limited, we will consider requiring all developers to offer the opportunity of a shared ownership element to communities.” This raises several interesting questions for the taskforce. One can encourage developers to offer community ownership options, but one cannot force communities to take up those options. What happens if a project’s community share offer target is not met? How wide should the net be cast? Should the community be defined geographically or by interest? What about communityled projects? The experience here of developers who already offer community share options is key. Another fundamental question is: what is the scope of community renewables? Wind and solar farms spring instantly to mind, but what about renewable heat and transport fuels? Should geothermal heat networks and biœthanol refineries, for example, also have to make this offer? And if so, why is it only the renewables industry that is affected? Why should other energy projects or even other infrastructure projects not also go down this route?

THE REA VIEW The REA and STA are active and enthusiastic members of this taskforce. Both associations are seeking to

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OVESCO

achieve the delicate balance of boosting the role of communities in delivering renewable energy without imposing a costly burden on industry which might slow down deployment and the associated benefits of emissions reduction and job creation. Over the long term, it is expected that facilitating community ownership will increase public acceptance of renewables projects and hence accelerate deployment. The REA is also keen to promote community engagement across the

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SOME COMMUNITIES HAVE OPPOSED LOCAL RENEWABLES DEVELOPMENTS, EITHER BECAUSE OF CONCERNS OVER AESTHETIC IMPACTS, OR BECAUSE THE DEVELOPER HAS NOT FULLY CONSULTED THE COMMUNITY OR EXPLAINED THE BENEFITS OF THE PROJECT.�

full spectrum of renewable technologies, and at all stages of project development and operation. There are economic opportunities not just at the point of investing in project development, but also in the production of renewable energy inputs (such as bio-based resources and wastes) and the distribution of renewable energy outputs. These include electricity, heating, biofuels with animal feed coproducts and green gas with fertiliser and chemical co-products.

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R E A F O C U S F E AT U R E

ELECTRICITY MARKET REFORM:

CHANGING THE WAY RENEWABLE POWER PROJECTS ARE SUPPORTED Since 2002, large scale renewable power projects have been incentivised in the UK via the Renewables Obligation (RO). 14

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enewable power funders and developers have become familiar and comfortable with the RO. However, the RO is set to close to new applicants in 2017. A new mechanism will be introduced this year to replace it: Contracts for Difference (CfDs). The enabling legislation is contained within the Energy Act 2013. The overall package of reforms is known as Electricity Market Reform (EMR). There are several differences between the RO and the CfD scheme. The most obvious difference is that CfDs are also available to non-renewable technologies: nuclear power and fossil fuels with carbon capture and storage (CCS). Another important difference is in the way funding is delivered. The RO scheme gives a set number of Renewables Obligation Certificates (ROCs) to generators for every unit of power they deliver. Energy suppliers have to buy ROCs in order to demonstrate compliance with the

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obligation to procure a proportion of the electricity they supply from renewable sources. This gives suppliers a reason to negotiate with generators, who have typically been able to arrange commercial terms for the sale of both electricity and the ROCs. The result is that ROCs are seen as reliable, bankable instruments. Projecting ROC income streams is as simple as projecting the power output of your generating station. CfDs on the other hand set strike

FUNDING FOR NUCLEAR HAS, TO DATE, BEEN DECIDED BY NEGOTIATION, WITH HINKLEY POINT C THE ONLY NUCLEAR PROJECT SO FAR WITH A CONFIRMED STRIKE PRICE.”

prices for generators, which is the total income the Government deems necessary to make projects financially viable. The level of subsidy the Government pays out is the difference between the strike price and the reference price, which is derived from average market power prices. This means the level of subsidy will depend on market prices. As market prices rise, the level of subsidy given reduces. This gives potential benefits for both industry and Government. Industry should have a higher level of certainty over total income and Government knows that the subsidies being provided are no more than absolutely necessary. However, this system relies on generators being confident they can sell their power at a reasonable market price. Where there is a risk that this may not be the case, it becomes extremely difficult to finance projects. Another major change is that the Government intends to allocate CfDs for ‘established’ technologies via a competitive, auction-based process, rather than Government setting the price. At the time of writing, it is not yet clear how this system will operate. The details of this mechanism could have profound implications for the ability of individual renewable technologies to access CfDs. Funding for nuclear has, to date, been decided by negotiation, with Hinkley Point C the only nuclear project so far with a confirmed strike price. It is not yet clear how funding for CCS will be administered as no projects have yet sought to apply to the scheme.

THE REA VIEW EMR has brought great upheaval to the renewable power industry, which had very few complaints about the RO, and the uncertainty has seen investment slow down. However, the transition to CfDs and even to auction-based allocation dœs have the potential to incentivise investment, provided it is well managed. This means ensuring that independent generators and less mature technologies can access the market and deploy projects under the CfD scheme. The REA is currently focusing on measures to ensure independent generators can achieve a fair market price and that all renewable power technologies are effectively supported within the auction system.

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R E A F O C U S F E AT U R E

PUBLIC OPINION:

WHAT DO THE BRITISH PEOPLE THINK ABOUT RENEWABLES? The UK is home to a lively public debate on energy at the moment, and especially energy prices.

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enewables get sucked into this debate, as public investment in renewables is one factor in rising bills. However, the contribution of renewables to price increases has often been overstated. Funding for the Feed-in Tariff (FIT) and Renewables Obligation (RO) is levied on consumer electricity bills. Likewise for the Contracts for Difference (CfD) scheme when it kicks off later this year. Ofgem estimates this funding adds £4 a month to the typical household energy bill in 2014. This figure is in stark contrast to the much inflated estimates and projections often reported in newspapers. The newspapers which complain the most about the costs of renewables, such as the Daily Mail and Daily Telegraph, also tend to be the ones which complain the most about the visual impact of renewables and give voice to deniers of climate change. This media coverage, combined with damaging rhetoric from Conservative backbenchers and even Ministers on occasion, might suggest that renewable energy is experiencing a backlash in the UK. DECC tracks public opinion on energy issues in a quarterly ‘Public attitudes tracking survey’, which is now in its third year with eight “waves” published to date. All eight waves of the survey ask whether respondents support or oppose biomass, offshore wind, onshore wind, solar, wave & tidal and renewables overall. From Wave 3 onwards, the question is also asked of nuclear power. Overall support for renewables consistently outweighs opposition by far, with 18 supporters for every opponent, on average (78% vs 4%). In contrast,

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the average number of respondents in favour of nuclear is only about 50% higher than those opposed (38% vs 25%). Support for CCS (only surveyed in Wave 5) is high, with eight supporters for every opponent (57% vs 7%), but views on shale gas (only surveyed in Wave 8) are very mixed, with only 30% more in favour than opposed (27% vs 21%). Renewables are the most popular family of energy technologies by far. Within renewables, onshore wind typically has about five times as much support as opposition, biomass and offshore wind about 10 times, and solar and wave & tidal roughly 20 times. Averaging these ratios for each technology gives 14:1 support vs opposition. This is around four points lower than the average support/ opposition ratio for renewables overall (18:1). This suggests people are more in favour of what renewables represent than the individual technologies – or in other words, that renewable energy is greater than the sum of its parts!

THIS MEDIA COVERAGE, COMBINED WITH DAMAGING RHETORIC FROM CONSERVATIVE BACKBENCHERS AND EVEN MINISTERS ON OCCASION, MIGHT SUGGEST THAT RENEWABLE ENERGY IS EXPERIENCING A BACKLASH IN THE UK.”

DRILLING DEEPER INTO THE INDIVIDUAL RENEWABLE TECHNOLOGIES: OOnshore

wind consistently has the highest level of opposition (12% average). O Wave & tidal consistently have the lowest level of opposition (3% average). OBiomass consistently has the lowest level of support (61% average). OSolar consistently has the highest level of support (82% average). It is also worth noting that these figures have changed very little over time, despite intensifying media debate and greater levels of deployment, with no significant upward or downward trends arising.

THE REA VIEW Despite hostility from some quarters, renewables remain very popular. However, we shouldn’t trivialise the arguments of those who oppose renewables. Partly because these groups are powerful, and partly because some factors influencing public opinion are subjective and justifiable. It is important to correct misrepresentations about renewables when they appear, but industry must also work hard to continue to earn this public support. This means continuing to bring down costs and create jobs while helping protect the environment. It also means engaging actively and openly with communities hosting renewables projects to ensure their concerns are heeded and that the benefits of renewables are shared – for instance, by increasing community ownership of projects.

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SIEMENS FINANCE

AFFORDABLE FINANCING FOR RENEWABLE ENERGY EQUIPMENT Businesses who want to invest in renewable energy can realise their goals through the EEF scheme says Darren Riva, Head of Green Finance, Energy Efficiency Finance Scheme.

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n recent years, energy prices in the UK have significantly increased for consumers and businesses alike. According to the latest statistics from the Department of Energy and Climate Change (DECC), some businesses have seen an average increase of electricity prices by 10-12% and gas price rises at an average of 9-11% from 2012-2013. Therefore, finding ways to cut down on energy usage should be a key focus for any business. Forward thinking companies that understand the strain that rising energy bills put on the profit and loss statement (P&L) will be looking at ways to turn | to renewable energy. Evidence from the DECC Renewable Energy Roadmap 2013, shows that the electricity generation from renewable sources for the period July 2012 to June 2013 reached 47.5 TWh, increasing by 24% compared to the same period the year before. Renewable energy’s share of electricity generation was a record 15.5% in Quarter 2 of 2013. This shows that the generation of renewable energy is on the rise - a promising outlook

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for renewables equipment vendors. Despite this positive trend, acquiring these technologies can be a challenge, especially since most businesses often do not have enough access to working capital to finance the equipment. Bank of England statistics have consistently shown in recent years that business lending volumes are in decline. For businesses that want to invest in renewable energy equipment but do not have the necessary funds, the Energy Efficiency Financing (EEF) scheme may be a way to realise

their renewable energy goals. The EEF scheme, a joint initiative between the Carbon Trust and Siemens Financial Services Limited (SFS), is designed to provide finance for a wide range of energy-efficient equipment (from LED lighting and refrigeration systems to biomass boilers and solar PV panels) to all types of businesses and organisations. Designed to offset monthly equipment finance costs with the expected savings in energy costs – effectively making the investment

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EEF CASE STUDY Jo and Cass, founded in 1996, has established itself across the NorthWest of England as a leading salon group that offers hair and beauty treatments from experienced stylists and beauty therapists. Through the EEF scheme, their equipment supplier Solarlec (a solar PV specialist) organised a 7-year financing solution on the £15,000 solar PV renewable energy project, consisting of the deployment of 40 mono crystalline solar panels covering an area of around 65m2. Taking into account the upward trend of electricity prices, the initial evaluation showed that the green investment could save the salon over £35,000 in electricity costs over a 25-year period. Adding in the expected payments from Feed-inTariffs (FITs), the total savings could be up to £73,000. Ged Rowbottom, Director of Solarlec, commented, “The EEF scheme ticks a lot of boxes for us. Since becoming an EEF-recognised supplier, we have already increased our business with commercial clients by 20%.”

zero net cost or even cash positive – the scheme has already successfully provided green financing to over 1,500 projects. For customers that wish to invest in such equipment, there are certain criteria: the customer has to be established and trading for a minimum of 3 years, and financing is then offered subject to a normal credit assessment. Prior to finance being approved, Carbon Trust Implementation Services conducts an independent energy savings assessment

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in order to verify that, with the installation of the new equipment, the expected energy savings will match or exceed the equipment finance payments. This independent audit gives the customer the additional assurance that the projected energy saving figures provided by their approved suppliers can be realised. Payments term depend on the equipment financed, and they generally range from 1 to 7 years, or in some cases even longer and the scheme provides the flexibility for customers to specify

payment amounts to suit individual requirements and budgets. With the value of financing offered starting from £1,000 and with no upper limit, the monthly payments are arranged over the agreed financing period so that the expected energy savings equals the cost of financing the equipment, which means the equipment pays for itself. As businesses now have the possibility to acquire energy-saving equipment without having to pay up front, suppliers are no longer restricted by customers’ available capital budget and can instead focus on offering the technology that is best suited to the customers’ needs. The ability for EEF-recognised suppliers to incorporate financing into their sales proposition not only makes the equipment acquisition process a convenient, one-stop-shop experience for customers, but also helps suppliers close deals more quickly.

FOR FURTHER INFORMATION For more information on the Energy Efficiency Financing Scheme, please visit www.energyefficiencyfinancing.co.uk or call us on: 01753 434476

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ANAEROBIC DIGESTION - BIOGAS ( P O W E R , T R A N S P O R T, B I O M E T H A N E I N J E C T I O N , C H P )

Industry development in the last years has started from a very low base and so particular caution should be used when projecting forward based on past growth rates. Deployment correlates closely (with an 1824 months lag) with changes in Government financial incentives, such as the introduction of increased RO support in 2009 and uncertainty over both the RO and Feed-in Tariffs in 2012. This would suggest that significant reductions in tariffs in 2014 will have a similar impact.

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PwC estimate that £500m was invested in the sector between 2010 - 2013

OOver

the period 2014 - 2020 PwC forecast a further £1,900m could be invested in the sector

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A N A E R O B I C D I G E ST I O N CO N T E X T OUnique

in that eligible for all the financial incentives for power, heat and transport fuel

OBiogas

can also be cleaned up and injected into the gas grid as ‘biomethane’. Green Gas Certification Scheme tracks sales of the gas to support green claims by end users

OCan

use food waste, animal manures and slurries, residues from food processing and crops

OSolid

outputs (‘digestate’) can replace mineral fertiliser, providing nutrients and improving soil fertility. Biofertiliser Certification Scheme certifies digestate so farmers can be confident in quality and safety

OFeed-in

Tariff will see dramatic reductions in support in 2014, particularly hurting smaller-scale developers. High risk that a boom in 2014 will be followed by a bust in 2015

OUse

of non-crop feedstocks a priority for Government, but regulatory barriers get in the way

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ANAEROBIC DIGESTION ELECTRICITY GENERATION

SIZE OF THE UK A N A E R O B I C S E C TO R

TO DATE AND PROJECTED BY DECC 3500

Q Annual electricity generation QDECC 2013 UEP projections

2,972

3,067

3.121

2010/11

2012/13

320

360

No. of people employed across UK supply chain

2,650

2,640

No. of UK companies across supply chain

140

140

Sector Turnover (£’millions)

3000

ANNUAL GENERATION (GWh)

2,674

2500 2,231

2000 1,763

1500 1,257

1000 676

JOBS IN ANAEROBIC D I G E ST I O N

523

500

276 151

MANUFACTURING Design engineer; Electrical systems designer; Environmental engineer; Environmental consultant; Power generation engineer; Electrical engineer; Welder; Metal worker; Machinist; Skilled assembler; Materials engineer; Mechanical engineer; Biochemist; Biologist.

43

20 20

20 19

20 18

20 17

20 16

20 15

20 14

20 13

20 12

20 11

20 10

20

09

0

ANAEROBIC DIGESTION INSTALLED CAPACITY AND PROJECTED GROWTH TREND NREAP includes and is dominated by LFG so is not shown here

600

INSTALLED CAPACITY (MW)

500

502

422

400

387

300

200 129 110 129

PLANT OPERATION Waste collector; Farmer; Feedstock loader; Truck driver; Plant operator; Maintenance technician; Laboratory services; Quality Assurance. BIOGAS APPLICATIONS Vehicle design and manufacture; Pump attendant at fuelling stations; Biomethane-injection plant construction and operation; CHP construction and operation; Digestate packaging and distribution.

233

100

CONSTRUCTION AND INSTALLATION Planning and environmental consultant; Project manager; construction worker; Electrical engineer; Mechanical engineer; Laboratory technician specialising in digestion and digestates; CHP technician.

129

66 38 12

20 20

0 20 2

20 20

20 15

20 14

20 13

20 12

20 11

20 10

20

09

0

Q Recent growth trend continued

QLatest DECC 2020 projection (EMR)

Q Installed capacity

QDECC UEP 2020 projection

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For full explanation of terms, methodology and growth projections see pages 114-115

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CLEARFLEAU

‘CARBON SMART’ ON-SITE DIGESTERS

British companies have been taking a lead in developing smaller scale on-site AD systems.

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naerobic Digestion (AD) is a biological process in which micro-organisms break down organic matter - in the absence of oxygen, into biogas (mainly methane, plus carbon dioxide) and residual biosolids (or digestate). To date Britain has lagged behind other European countries in adopting this technology and the initial drivers for its deployment in the UK came from the larger waste management companies that only build very large plants. This affected the perception of the ana erobic digestion industry with stakeholders, regulators and politicians, plus the wider public. However, due to factors like problems with disposal of the residual material, the impact of some larger plants on their neighbours and the realisation that such biological processes may be better exploited at a smaller scale, there is growing interest in local plants that can treat materials close to where they are produced on factory sites, plus farm and community plants. In the last few years, British companies have been taking a lead in developing smaller scale on-site AD systems. In addition to producing biogas, the digestion process provides residual biosolids that can be used as a fertiliser/soil conditioner. With multiple on-site plants, AD should make a major contribution to British targets for renewable energy and emissions reduction. A number of technology suppliers in the on-site sector have formed the informal British Biogas Group, now working alongside the REA to influence government thinking, trying to ensure that smaller scale technology is

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understood by policy makers. In addition to a healthy UK market, there is potential in export markets. The perception that AD only works at large scale is a misrepresentation. Also, the economics of larger ‘merchant’ AD plants are sensitive to ‘waste miles’ for feedstock delivery. Concerns with centralised plants can include planning, cost, footprint, process efficiency and process risk. But the main issue is disposal of digestate (also involving a transport cost), as AD only removes degradable solids (reducing feedstock volume by about 5%). Centralised plants need sufficient land area for digestate spreading, to manage these volumes and prevent nutrient overloading in soils. As residual digestate should be returned to land, it makes sense to site AD plants on or close to farms. AD can help mitigate the impact of nitrous oxide (NOx), ammonia, methane and odour emissions, as well as nitrate and phosphate run-off, caused by storage and spreading of slurries and manures. But digesters should be sized to fit the farm (or farms), not become a major imposition on rural communities. With careful design and the right scale of technology, ‘Carbon Smart’ on-farm digesters can: O Cut emissions from nitrogen application to farmland (80% of UK NOx emissions (2010)). OReplace carbon based fertiliser with digestate (nutrients more readily available to plants). OReduce emissions of ammonia from housing livestock and spreading of farm manures.

OCapture

fugitive methane emissions from storing manure for longer, due to nitrate rules. OReduce odour from manure application to land, while cutting irrigation and herbicide use. In Britain, farm manures have a methane potential of 10 billion kWh of thermal energy per year. But, if not digested, estimated GHG potential is 3m tonnes CO2 equivalent. Although 1m3 of cattle slurry only produces in the region of 20m3 of biogas, slurry based digesters are subject to many complex regulations and there is little incentive for farmers to tackle emissions and eutrophication problems associated with 100m tonnes per annum of farm manures. In the UK, AD should be more widely adopted on livestock farms with plants run by farmers. Germany recognises the value of AD for on-farm pollution control and nutrient recycling, with enhanced incentive payments for on-farm slurry based digesters. The UK should do the same. While smaller German farm AD plants are permitted for food waste, UK farm plants are discouraged

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from taking local food residues. It is not just manures and farm residues that are suited to ana erobic digestion. Also, more household and catering food residues must be excluded from landfill. Large centralised AD plants may be a viable solution for waste from our urban conurbations, but we should not be looking to impose urban solutions on our rural communities. Suitably sized AD plants can provide local solutions. A number of such plants have been built (e.g. at Llangadog in Wales and Warminster in Wiltshire) but more plants to serve local communities are needed. The commercial viability of farm scale (slurry based) digesters would be enhanced by allowing addition of pasteurised organics (from local food waste collections). Supplying these materials to community AD plants based on farms would also reduce transport costs. However, regulations inhibit the use of such energy rich materials in farm scale AD. It should be possible for farm AD plants to handle food waste from their local area. One solution is pasteurisation at a centralised facility

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and delivery of high-energy ‘soup’ to local farm digesters. This Hub and PoD (Point of Digestion) system conceived by Prof. Charles Banks of Southampton University, has generated some interest but needs government support. In addition, the food processing and other industrial sectors produce a significant volume of production residues that are suited to digestion on the factory site, with the potential to cut the carbon footprint of the site and provide renewable energy which can then be used in production processes. This is another emerging on-site AD sector, with a number of new AD plants producing under 500kWe of energy from factory residues. AD plants are operating on sites producing dairy products, confectionery, ready meals, vegetables, plus distilleries and breweries. In 2014, a number of new plants are being built, but all this and the emerging farm AD sector is being put at risk by mistaken policy at DECC on the degression of FIT incentives for smaller plants. If this is not sorted urgently the on-site AD sector will be undermined. Small or micro-AD has the potential

to provide flexible, lower-risk, local, robust solutions for organics treatment and GHG/pollution mitigation not just on farms but also food factories and in communities. Exemplar sites include Blackmore Vale Dairy (Clearfleau) and HMP Guys Marsh (React Environmental). Also small scale plants treating household residues (Llangadog - React Environmental and The London Borough of Camden - Community by Design and Methanogen UK). These on-site installations treat biodegradable residues where they are created, making better use of unwanted resources on a local basis. Government must maintain support for this sector of the market at the time when it is starting to take off. We are creating a dynamic, indigenous AD industry that dœs not rely on imported technology. It should be supported by regulators and policy makers as it will create jobs and boost economic growth.

FOR FURTHER INFORMATION www.clearfleau.com Tel: +44 (0) 844 477 6292

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CHESTERFIELD BIOGAS

BIOMETHANE ‘MOST EFFECTIVE’ USE OF BIOGAS Chesterfield Biogas upgrades AD facilities to reduce carbon dioxide in biogas as much as possible.

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he number of recently announced projects receiving the go-ahead is a clear indicator that the biomethane-to-grid market in the UK has finally gained true momentum. The most commercially efficient use of biogas produced by anaerobic digestion (AD) is to upgrade it to biomethane and inject it into the national grid (BtG). Regulatory issues - in particular the allowable oxygen content of the gas have been settled and the pace of AD projects has quickened. ‘Efficient ’ is the key word, meaning the best unit return in converting the energy in the raw biogas and the amount of energy wasted. When used to generate electricity - usually in CHP systems - it is about 40% efficient. When upgraded to biomethane and used in the grid, this rises to 90-95%. There is no doubt that extra investment is required to turn an AD facility into one which is enabled for BtG, with the product gas fully compliant. Yet many site owners and developers have done their sums are making the commitment.

What have they learnt and what needs to be considered? Every project is different because feedstocks and site conditions vary. To have a commercially viable project for gas-to-grid, enough feedstock for a continuous supply is essential. The economics of gas-to-grid are less tolerant if the system is under-utilised. Importing more feedstock is not as simple as it sounds because different blends (and a blend is often a good idea) produce small volumes of different constituents in the raw biogas. These may require some extra treatment before upgrading to achieve the necessary properties. One example is undesirable hydrogen

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sulphide (H2S). Volatile organic compounds (VOCs) include siloxanes which can be more prevalent in food waste and derive from a number of sources including traces from cosmetics. But the upgrading industry now has data to anticipate and resolve such questions of chemistry and remove H2S and VOCs before the biogas is scrubbed. A polishing unit will take care of the problem.

Obtaining a suitable end product There are various methods of upgrading, the most popular in the UK so far - and for 20 years around the world - being the water-wash process of gas scrubbing, as developed by the Greenlane® technology. The diagram shows the process. Other methods include pressure swing adsorption (PSA), membrane and chemical systems. But additional kit to the upgrader will be required and, regardless of flow volumes, the process sequence is usually the same: AD - Upgrader - Propane & Odour injection - Gas analysis - Flow Monitor - Grid entry connection Whatever the upgrading method, the prime object is to remove CO2 which forms about 35% of the biogas, reducing it to no more than 2% of the final composition. Oxygen content is now achievable because a general derogation now applies in the UK of 1% at -10° Celsius for low-pressure systems. Even so, this remains more rigorous than in some countries. Additional treatment may be required because not all gas in the UK grid is the same. After the gas is upgraded, propane injection may be needed to achieve a

target calorific value (CV) in order for the biomethane to be injected into the grid. CV in different parts of the system varies, so a cap was placed to limit the extent. For a project to be accepted, a Network Entry Agreement (NEA) is needed with the regional transporter who will set a target for the CV of the gas. CV dictates the amount of energy extracted from the gas when burnt. Gas users pay according to the CV of the gas they receive. CV varies between the various North Sea and other primary inputs to the National Transmission System, including the new renewable source biomethane. The distributors bear the cost of the difference in the price they give to the shipper (as part of an NEA) and that which they receive when selling it to the domestic suppliers. This is known as CV shrinkage. A complex formula calculates whether the cap is likely to be triggered. Under a recent agreement brokered by OFGEM and the REA, the solution to avoid the trigger is to enrich the upgraded biomethane with propane.

Safeguarding gas quality The 1974 UK Health & Safety at Work Act still applies to this technology. If siloxanes are not efficiently removed, when burnt by the consumer, they can convert to silica. This may build up on the gas appliance and impair its operation over time. As shown above, H2S and other VOCs will need to be removed. The Wobbe Index is one yardstick used to define suitable interchangeability of gas from different sources inputting a network. It relates to heat output when the gas is burnt and its potential for sooting. Wobbe sets an envelope within which the gas must fall. Oxygen and hydrogen present in the CO2 in the biogas will condense into water at their dew point. This varies according to temperature. The new 1% allowance does not remove the need for the gas to be dried. In summary, meeting the range of uniform national requirements means various processing equipment must be added to the basic upgrading plant. But none of it should be viewed as optional extras and costs can be accurately assessed in advance.

FOR FURTHER INFORMATION Tel: 0114 242 7500 www.chesterfieldbiogas.co.uk

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CLEARFLEAU

REDUCING THE CARBON FOOTPRINT Policy makers should recognise the benefits of on-site AD processing plants, says Clearfleau’s Richard Gueterbock.

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s pressure increases to develop the circular economy, the British food and drink processing sector is being urged to reduce energy use, cut its carbon footprint, limit water consumption and become more aware of its wider environmental impact. As businesses look for sustainable solutions to boost resource efficiency, deployment of on-site anaerobic digestion (AD) plants should increase. Clearfl eau is a British company that designs and builds on-site plants for treatment of bio-degradable production residues.  Their innovative AD technology converts liquid production residues into energy that is used to replace fossil fuels in the factory, while providing increased treatment efficiency. Cost savings are combined with a reduction in the site’s carbon footprint. The process can be extended to allow cleansed water to be discharged to a water course or even recycled. Defra and bodies like WRAP are taking a greater interest in the potential for smaller scale AD plants to be installed where bio-degradable residues are generated - on farms and community sites as well as on industrial sites. These co-located AD plants provide a range of benefits, including more efficient handling of residues and ease of access to the energy generated. Policy makers and regulators want to reduce the volume of bio-degradable materials sent to landfill but to date have not paid enough attention to the versatility of smaller on-site solutions, which are particularly well suited for rural areas. In January 2014, Scotland introduced a ban on food residues being sent to landfill. By 2016 all bio-degradable wastes will be excluded. The ban also extends to sewer discharge of liquid

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production residues. Policy makers in England should introduce similar measures to minimise the use of landfill. On-site AD plants for food and drink processors are part of the solution. They can be tailored to the available feedstocks and will reduce the site’s treatment and disposal costs. Energy generated from biogas qualifies for renewable energy incentives and, combined with savings on the purchase of fossil fuels, contributes to an attractive return on investment. Clearfl eau and other emerging British AD technology providers are focused on building smaller on-site plants. Clearfl eauhas operational digesters in the dairy, distillery and food processing sectors, which are supplying energy to the production process. In December 2013, Clearfl eau was recognised with the Project of the Year Award at the Scottish Green Energy Awards, for its bio-energy plant on Diageo’s Dailuaine distillery in Speyside.

The plant treats over 1,000m3 per day of dilute whisky co-products to produce cleansed process water for river discharge and renewable electricity and heat for the distillery. In 2014, the company is building plants on dairy, distillery, food and biofuel sites, all of which will make use of the energy generated. It is time that the benefits of smaller scale, on-site AD were more widely recognised by policy makers and regulators. Handling residues where they are produced facilitates local access to green energy. Multiple AD plants on factories (as well as on farms and in rural communities) will generate growth and jobs and help the UK to meet its renewable energy and emissions reduction targets.

FOR FURTHER INFORMATION www.clearfleau.com Tel: +44 (0) 844 477 6292

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A - C O N S U LT

TANKING SOLUTIONS Bespoke precast concrete tanks are the way forward for AD.

A

s anaerobic digestion becomes more commonplace, solutions are being found to ensure these plants meet with planning and environmental restrictions. Unlike steel tanks concrete tanks can be buried, they can also offer solutions in areas where challenges are difficult. Precast concrete tanks enable companies like A-Consult, the market leader in their design, manufacture and installation, to complete installations in record time. “We can build faster than everyone else and the way that we build means we are incredibly busy at the moment,” says Jason Parker, UK Director. “We manufacture the precast wall panels at our facility near Newark in Nottinghamshire; the units are produced in a factory-controlled environment which allows for daily production to be unaffected by inclement weather conditions.

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These controlled off-site conditions allow for the use of high strength concrete which in turn delivers an extremely durable concrete unit enabling all our tanks to be offered with a 50 year Design Life.” The A-Consult group consists of three companies operating out of the UK, Germany and Denmark. It has seen 3,000 digesters and storage tanks commissioned around Europe in 25 years and Jason attributes this success to the quick and robust construction of the tanks along with a design life of 50 years as opposed to 25 years for steel tanks. Their tanks range from 4.5m to 60m in diameter. “Our wall heights range from 3 to 12m and can be designed to accommodate all the processes found on a typical AD facility, from Primary and Secondary Digesters, to Pre-Mix and End

Storage tanks,” adds Jason. Recent developments have seen the introduction of a composite sectional precast concrete gas-tight roof incorporating internal insulation to help maintain the digester’s operating temperature; this also provides openings to support mixers and pressure plates, allowing safe and easy access for maintenance. Other developments include the introduction of a cast-in PE Liner to protect the concrete walls of the tanks within the gasification zone, leakage detection systems to fulfill EA requirements; this along with tank base and wall insulation allows A-Consult to satisfy their clients complete tanking requirements.

FOR FURTHER INFORMATION www.aconsult.co.uk/biogas

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

ENER-G

NEW ANAEROBIC DIGESTION SOLUTION LAUNCHED Anaerobic digestion (AD) technology to combat rising water effluent and energy costs is being made available to the processing industry at no capital cost.

B

iogas utilisation specialist ENER-G has launched a complete outsourced ana erobic digestion service. This includes the design, installation and operation of ana erobic digestion renewable energy facilities. Biogas created during the digestion process fuels a CHP engine to create renewable heat and electricity immediately reducing the user’s energy costs and carbon footprint. In addition, the digestion process can reduce the Chemical Oxygen Demand (COD) content of effluent by 80 to 95%, dramatically reducing effluent costs and offering potential for water recycling once solids are removed. ENER-G’s complete AD package is suitable for a variety of industrial processors, such as brewing, distilling, soft drinks, dairy, bakery and many other sectors. It is open to processing facilities of all sizes, but the minimum requirement to qualify for funding is a liquid effluent stream of at least 3,000 kg of COD per day. Stephen Kemp, Head of AD at ENER-G, says: “The increasing cost of waste

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and effluent disposal, coupled with rising energy costs and environmental legislation is prompting renewed interest in AD. Our outsourced build-own-operate model means that our clients can benefit without utilising their own capital or trying to raise finance themselves. “We will design, install, operate and own the complete anaerobic digestion plant, shouldering all the financial risk and sharing operational savings with customers over an agreed contract term of 10, 15, 20 or 25 years. This provides businesses with a steady and attractive income stream.” ENER-G recovers its investment by sharing savings with the customer over the contract period, with the customer receiving 20-50% of the annual savings. UK-based renewable energy group ENER-G has extensive experience of designing, manufacturing, installing, financing and operating combined heat and power (CHP) systems for AD plants across the UK. As an independent company, ENER-G can partner with the best digester equipment suppliers to provide the optimum solution for the front-end of the process. All elements of the project are managed by ENER-G, starting with an assessment of the client’s process waste by an independent laboratory to ascertain the type of AD technology best suited to the waste stream.

The specification process also involves calculating the potential heat and electricity yield and specifying and supplying an appropriately sized CHP system. As part of the after service, ENER-G manages the process of connecting to the national network for the export and sale of electricity, and manages claims for renewables incentives, such as the Feed-in Tariff. “The UK processing industry has been slow to adopt anaerobic digestion, largely because of high capital cost and lack of knowledge. By removing both these barriers, we hope to accelerate deployment of AD in the sector,” Stephen Kemp adds. “After all, the client shares in the benefits for next to no risk.” A recent ENER-G anaerobic digestion project at North British Distillery in Edinburgh, implemented in conjunction with HydroThane UK, won a recent AD & Biogas Industry Award. Other anaerobic projects completed by ENER-G include a 190 kW unit at a dairy in Dorset, on-farm AD facilities and projects in partnership with Local Authorities and water treatment companies. Additional projects in the confectionery, dairy and drinks sector are under construction.

FOR FURTHER INFORMATION www.energ.co.uk/biogas

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

e-POWER AUCTIONS

e-POWER: GET THE BEST DEAL FOR YOUR POWER In an industry full of complexity, e-POWER is proving to be a popular route for independent generators looking to get the best deal for their power.

I

n today’s renewable electricity market there’s a growing number of independent generators looking for new ways to maximise the value of their power. At the same time, electricity suppliers are keen to have access to a portfolio of generating assets across different renewable technologies. Enter ‘e-POWER’ - an online auction platform designed to service the requirements of both buyers and sellers. e-POWER was developed by The NonFossil Purchasing Agency (NFPA) in 2000. Auctions for six month Power Purchase Agreements (PPAs) are held twice a year, providing a simple and straightforward route to market for independent generators under the RO or FIT schemes, selling electricity and associated renewable benefits to the highest bidder. The team behind e-POWER has a strong track record in the energy market. Founded over 20 years ago, the NFPA administers the Non- Fossil Fuel Orders (NFFO), the first Government backed support scheme for the renewable electricity market. In 2000, following the opening up of the energy market, the NFPA developed its unique online auction trading platform initially to sell the NFFO contracts to the electricity suppliers. Generators and suppliers who trade via the e-POWER platform value the simplicity of the model; it is proving an

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attractive option for smaller generating companies too. Rod Edwards of Bro Dyfi Community Renewables, a 500 kW wind turbine in Powys, Wales says selling their electricity on the platform helps manage cash flow and eradicate laborious reporting requirements. “We are a community owned generator, run by volunteers.  The renewable energy market is complex, and it can be quite difficult for smaller, largely nonprofessional volunteers to understand and operate within it. We have found that the e-POWER auction offers us a service that has made it relatively easy to understand and use,” he says. Testament to this popularity, the recent e-POWER auction completed in January 2014 sold over 500 MW from 105 generating sites, with commercial PPAs – as well as the statutory NFFO contracts - now accounting for around one third of contracts auctioned. NFPA commercial director Stuart Stephens explains that e-POWER covers all renewable technologies and sizes of plants, from 85 kW right through to 45 MW. “We cover the whole market, meaning we are able to service the small

independent generator right through to the bigger players,” says Stuart. He adds that generators are attracted by NFPA’s full-service offering, and particularly the ease of access they have to the whole supplier market. Industry commentators Cornwall Energy have highlighted e-POWER as an excellent route for generators looking to maximise the value of their electricity. “The winter 2013-14 e-POWER auction continued the strong performance of recent auctions, with the vast majority of sites achieving over 95% of typical maximum values,” they say. e-POWER attributes this success to the large number of suppliers taking part in

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the auction, thus creating competitive tension. In its most recent auction, 19 suppliers took part with an average of 11 bids received per generator. This led to many of the generators achieving well in excess of £100 per MWh for their power (assuming 1 ROC per MWh). Triodos Renewables has a 62 MW portfolio and uses the e-POWER platform for some of its renewable projects. Managing director Matthew Clayton says that as the company continues to grow its portfolio of projects, it’s important they have a range of options to access the power purchase market. “The e-POWER auction has enabled us to access the short-term PPA

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market efficiently, and at a price that’s presently higher than what we were offered on fixed term contracts. That means we can deliver better returns to our shareholders,” says Matthew. He adds that the fixed price per kWh from e-POWER means they do not need to wait for the ROC and LEC transfers before the settlement takes place. “This is very helpful from a cash flow management perspective,” he says. In an important development for the e-POWER platform, generators under the Feed in Tariff (FIT) scheme can now also auction their export power. FIT generators that are half hourly metered

and over 30 kW are able to opt out of the standard scheme fixed rate export tariff. Via the e-POWER auction, it is estimated that these generators could receive in excess of £55 per MWh, a significant premium to the administered fixed rate. Another bonus is that although financiers of new FIT projects may require the security of a long term electricity off-take arrangement, they are usually able to provide finance off the FIT Generation tariff only. This allows the generator to take full advantage of the higher export prices available via e-POWER by opting out of the standard export tariff. Assynt Hydro is a small communityowned 240 kW hydro plant on the North Lochinver Estate in the Scottish Highlands. Company secretary John Mackenzie acknowledges that it has been a major challenge to operate their project in such a remote community. “The e-POWER auction operated by NFPA is of considerable benefit. It enables us to access the widest possible potential market for our energy output at a price we know to be competitive,” he says. As well as securing better prices, sellers report other benefits. The cost and time - of negotiating bilateral PPAs with suppliers is saved as e-POWER operates under a standard PPA already accepted by all suppliers. Also the PPA includes no financial penalties or minimum requirements for generation as the supplier guarantees to buy at the auction price, all that the plant produces. Any internal administration costs are reduced by e-POWER managing the whole billing and settlement process. In addition, for schemes under the RO (Renewables Obligation) there are significant cash flow benefits as the generator is paid for their ROCs two months before they have even been issued by Ofgem. Similarly, there are several benefits for the electricity supplier: entering the e-POWER auction means it’s a convenient and flexible route to buy power without having to commit to longer term PPAs. So for any organisation looking to maximise the value of their renewable electricity, the e-POWER auction offers a simple and commercially effective route to the market and looks well worth investigating.

FOR FURTHER INFORMATION Tel: 0191 245 7330 Email: e-power@nfpas.co.uk or visit www.nfpas-auctions.co.uk

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

B I O M A SS B O I L E R S & WO O D STOV E S

( H E AT )

Unlike DECC’s electricity and biofuel data, heat data is only published annually, so the heat data in this report covers 2012 rather than 2013. In 2012, this sector was only showing modest growth under the Renewable Heat Incentive, but interim 2013 figures show growth ramping up significantly and there is no reason to believe this cannot continue if the policy remains supportive. It is also worth noting that this is already a highly cost effective technology, with further cost reductions possible as the UK supply chain matures. OInvestment

is expected to increase significantly with the introduction of the RHI

B I O M A SS B O I L E R S CO N T E X T O

Wood stoves already popular without subsidy, particularly off gas grid

OSmall

and medium boilers (below 1MWth) make up more than 90% of Renewable Heat Incentive, far higher than Government estimates – these will be updated from spring 2014

OStringent

air quality controls introduced in September 2013

OSustainability

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criteria to be introduced 2014/15

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BIOMASS BOILERS HEAT GENERATION

SIZE OF THE UK BIOMASS B OILERS SECTOR

TO DATE AND PROJECTED BY DECC (NREAP) 50000

Q Wood combustion - industrial Q Wood combustion - domestic Q Plant biomass

2012/13

540

600

No. of people employed across UK supply chain

4,530

4,510

No. of UK companies across supply chain

210

210

Sector Turnover (£’millions)

Q NREAP solid biomass heat production 42,008

40000

32,157

30000 23,865

20000

18,003

13,502 2,974

3,140

3,355

3,199

20

2,645

6,408

20

06

20

20

20

20

2,256

5,306

20 19

1,313

4,947

20 16 20 17 20 18

1,198

4,010

4,414

20 11 20 12

1,075

3,679

JOBS IN BIOMASS BOILERS

8,106

09 20 10

3,861

08

3,475

07

3,089

05

0

1,128

10,514

2,599

1,177

1,083

3,527

20 15

2,562

3,278

20 13 20 14

10000

20

ANNUAL GENERATION GWh)

2010/11

BIOMASS HEAT GENERATION AND PROJECTED GROWTH TREND 50000

42,008

INSTALLED CAPACITY (MW)

40000

MANUFACTURING Design engineer; Boiler maker; Welder; Electrical engineer; Chemist; Agricultural specialist; Microbiologist; Biochemist, Building Services engineer, Electrical engineer, Mechanical engineer; Quality assurance. INSTALLATION AND MAINTENANCE Project manager; Electrical engineer; Boiler engineer; Pipefitter; Welder; Electrician; Heating engineer; Service engineer; Construction worker; Electrical/electronic technician; Plant operator; Mechanic, Project manager, Technical sales manager; Service engineer; Chimney sweep.

For full explanation of terms, methodology and growth projections see pages 114-115

30000

20000

10000

9,253

10,529

12,033

11,580

1,101 12,033

2,302

12,033

Q Recent growth trend continued

20 20

20 14

20 13

20 12

20 11

20 10

20

09

0

QUK NREAP projection for 2020

Q Energy generation

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Biomethane – Complete Solution OFuture

BioGast makes use of proven reliable technology with an uptime of our equipment greater than 95%, OWe can provide a range of commercial solutions depending upon the individual project requirements in terms of RZQHUVKLSDQGĂ°QDQFH OBioGast Sustainable Energy operate 16 biomethane to grid plants in Europe and in the UK Future BioGast currently are building 3 Bio2Grid injection stations to be completed this year, OEquipment supplied can be offered with long term maintenance contracts.

Future BioGast is a joint venture between BioGast Sustainable Energy, a producer of biomethane in the Netherlands and Future Energy Group, an established utility infrastructure provider (U.I.P) in the UK. The knowledge and expertise of the joint venture enables us to offer a complete biomethane production solution.

For more information on Future BioGast services call 01924 918900 or email sales@futurebiogast.com. Future House, Pheasant Drive, Birstall, Batley, West Yorkshire WF17 9LT


R E N E WA B L E E N E R GY V I E W 2 0 1 4

O R B I TA L

BIOMETHANE TO GRID Grid Entry Units Uncovered.

O

ver the past six years the concept of cleaning up Biogas to Biomethane and injecting into the Gas Distribution Network (GDN) or NTS has been a gas industry journey of initial pessimism, unsustainable and prohibitive costs to an optimistic, profitable, green business sector, culminating in the green “dash for gas”. On the back of the government incentivised scheme Biomethane to Grid (BtoG) subsidy, a considerable number of applications have been posted and there are now seeing many plants looking to come on line this year to qualify for the current RHI. For over 25 years Orbital have designed, delivered and innovated many solutions for the UK Natural Gas Industry, including virtually all of the Network Entry Points (60+) which receive gas from many various sources. The concept of the GEU was originated by Orbital, bringing together our integration expertise into a single building, assembled and tested off-site. Orbital delivered the first two operational installations in the UK at Didcot WwTW (2010), which was regarded as a development engineering stepping stone, followed by the UK’s 1st commercial scale engineered GEU (competitively engineered solution) at Poundbury (Rainbarrow Farm, 2012). Both of these projects were delivered on behalf of Scotia Gas Networks (SGN) and both used different types of clean up technology, waterwash and membrane respectively. As we move forward through the early stages of implementing UK BtoG schemes, new techniques and technologies are becoming available for implementation to enhance the plant performance, reduce CAPEX /OPEX, for example Ofgem approval of the GasPT2.

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THERE ARE MANY INITIATIVES IN ADVANCING TECHNOLOGY, WHICH WILL REDUCE COSTS AND INCREASE AVAILABILITY AT THE SAME TIME. THE BtoG SECTOR IS STILL YOUNG, BUT HAS A VERY BRIGHT FUTURE.’

GasPT2 is an instrument developed by GL Nobel Denton that has been sponsored for Ofgem approval by a Gas Transporter (GT). It is anticipated that testing will be complete this summer and if successful the instrument would then be an alternative to the Gas Chromatograph used in the FWACV model. A reduction in CAPEX and considerable OPEX savings over the life of the installation could be realised, circa £50k+ over 10 years. The GasPT also brings significant technical advantages with its speed of response (<10 secs). GDN’s monitor compliance against statutory HSE regulations (GS(M)R). To allow out of specification gas to flow into the GN is against the law and it is the GT’s legal responsibility to ensure this dœs not occur. To prevent gas excursions the GTs have control of the ROV, either the DFO or the GT can close the ROV, but only the GT can re-open

THE NUTS & BOLTS OF A GEU INCLUDE: OFiscal

Metering (IGE/GM/8) and Calorific Value (ISO6976) measurement compliant with the regulated Flow Weighted Average Calorific Value Ofgem model, Validated and Evaluated to T/PR/ME/2 and ISO10723 OGas Quality Analysis, Compliant with GS(m)R and Gas(COTE)R Regulations OOdourisation compliant with IGE/SR/16 OPressure Reduction and Control, compliant with IGE/TD/13 OFlare / Reject Gas System OPropane Vaporisation, Injection and Control ORemotely Operated Valve (ROV) OEquipment Room – Hazardous Area Compliant with IGE/SR/25 OControl Room – Safe Area including Flow Computer, Target CV Control, Telemetry etc. (Note not all relevant standards listed above)

the ROV once satisfied the gas to be received is compliant. However is the ROV closed fast enough? It should be highlighted that a Gas Chromatograph (GC) which reports Wobbe (GS(M)R), CV (FWACV) and Volumetric correction data is relatively slow and an excursion, of say Wobbe, would not be detected for over 3 – 5 minutes assuming a fast sample system is used. This duration dœs not seem long at all however a BtoG system that flows say 1500 scmh at 3 barg would typically have a gas velocity of 20 m/s, therefore a GC based (reject gas) system with a response time of 4 mins + could allow out of specification gas to flow into a network as far as 5 Km downstream of the ROV, typically right into the GT’s network before alarming. As a result of this issue SGN have strived to provide a BATNEEC solution, to comply with their statutory obligations as a GT and as such utilise fast monitor systems at both the GEU’s mentioned above. There are many initiatives in advancing technology, which will reduce costs and increase availability at the same time, the BtoG sector is still young, but has a very bright future. Orbital are at the forefront of innovation and are striving to reduce costs, improve efficiency and reduce deliveries.

FOR FURTHER INFORMATION www.orbital-uk.com

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

AG R I KO M P

PURPOSE DESIGNED BIOGAS COMPONENTS UK farmers should be encouraged to take up biogas technology.

T

he creation of efficient biogas plants represents one of the most significant innovations in the agricultural sector for many years, says Quentin Kelly-Edwards of UK firm agriKomp and the industry should be getting the support it deserves. agriKomp is focussed on producing purpose designed agricultural biogas plants and offers a complete service to farmers all the way from design, manufacture of the components through construction, to service and support. Producing biogas from renewable raw materials places highly specific demands on the technology used and agriKomp has developed purpose-designed biogas components that have proven themselves in use for many years. The company has built over 600 plants throughout Europe, agriKomp UK currently have three plants up and running in the UK, with a total of 14 due for completion by the end of 2014. The plants range from 200 to 500 kilowatt plants. ‘They are all running well with one

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plant in Shrewsbury recently being upgraded from 380 to 630 kilowatts‘ says Quentin, who adds that the smaller sector of below 500 kilowatt is being prevented from embracing the

technology by the current tariffs. Most of the plants are predominantly run on mixed farms which use blended feed stock of energy crops, cattle and pig slurry and chicken manure. ‘The

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AGRIKOMP BIOGAS PLANT IN SHREWSBURY

technology ticks all the boxes for the agricultural sector, both in renewable energy terms and in usage of on farm waste’. As most of agriKomp’s consultants are from agricultural backgrounds themselves, they are well placed to advise farmers on the best type of biogas plant for them. Because the process of building a plant takes time and the long project life, potential developers need to know that their commitment is going to be supported in the long term. ‘Some decisions need to be made on possible short term solutions, currently being put forward, to resolve the problem and support this particular section of the market’ says Quentin, adding that the

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U Turn by the government to review the degression of the Feed-in Tariffs earlier this year has caused uncertainty in the market which will probably remain until next year. This will have a negative impact of the growth of the sector if not urgently addressed. The brakes have been applied too soon, with only 150 plants in operation, a long way off the target for 2020, stressing the need for measures to be put in place which will not only resolve this issue but allow more farmers to embrace it.

FOR FURTHER INFORMATION

agriKomp UK Ltd installed a biogas plant in Shrewsbury that has proved successful after meeting all operational expectations in its first year of operation. The agricultural biogas plant has been built on a farm, with its initial installation capable of producing 380kW of electric power. The plant was built for Longner Energy Ltd and became operational in May 2013, and over the past six months has been operating at full capacity. In addition to this, the owners recently decided to upgrade the plant from 380kW capacity to 630kW with the addition of a 250kW unit. The plant is made up of one primary and one secondary digester, both with Biolene Gas Storage, an open digestate storage tank, Veilfrass Top Solids Feeding Unit, a Liquids Reception tank and a Digestate Solids Separator. Power is generated from one Agrogen 380kW CHP & one 250kW BlueRail Schnell CHP. The installation and commissioning ran smoothly and the plant was built within the expected timeframes. However, the start-up process took slightly longer than expected. Generally it is faster to ramp up a plant utilising active digestate from another plant to seed it; this speeds up the process compared to starting on slurry. As more plants are constructed in the UK this will become a common part of the start-up process, making everything run more smoothly. The facility produces 100% renewable energy, allowing its owners to transform waste materials from their own farm - chicken litter and a mixture of cattle and pig slurry in addition to maize silage, grass silage, whole crop silage and more recently beet - into energy “We are very proud of this facility. It is a fine example of an efficient biogas plant that is well managed by the operator,” says Quentin. “These factors together have helped achieve good results, which in turn have given the owners confidence to increase the capacity of the plant.”

www.agrikomp.co.uk Tel: 0121 374 2610

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

RES

ANAEROBIC DIGESTION: THE FUTURE ENERGY SOLUTION FOR BUSINESSES Changes in energy policy are making AD solutions increasingly attractive for process businesses around the country.

B

usinesses are being urged to reduce energy use, their carbon footprint, water consumption and their wider environmental impact. Those businesses with ‘organic wastes’ can utilise an Anaerobic Digestion (AD) solution to address these issues. On-site digestion allows processing businesses (including food and drink manufacturers), to embrace the potential benefits of managing effluent disposal and reducing energy costs whilst at the same time cutting CO2 emissions.  There is often a perception that AD only works on a large scale.  However, smaller scale on-site digestion is just as effective and deserves full consideration

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by businesses. Moreover, the issues that need to be considered in developing AD projects - including securing planning, project cost, project footprint, process efficiency and assessing policy risk - are the same regardless of the scale of the plant. From a business efficiency and corporate sustainability perspective, businesses should consider the benefits of developing their own AD plant.  Doing this in partnership with an experienced renewable energy developer offers significant benefits, such as early and comprehensive identification of needs and project delivery options, as well as support through planning and

construction with minimal impact on existing business activities. RES is a leading renewable energy developer with an enviable track record of delivering renewable energy projects, and is currently working on a range of wind, solar and AD projects throughout the UK.  RES is one of the only companies in the UK with the capability to manage the entire process of constructing a renewable energy project from start to finish, including liaising with consultants, the planning authority, the public, media and construction contractors.

FOR FURTHER INFORMATION www.res-group.com

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BIOMASS CHP

( H E AT & P O W E R )

SIZE OF THE UK BIOMASS CHP SECTOR 2010/11

2012/13

331

370

No. of people employed across UK supply chain

2,190

2,180

No. of UK companies across supply chain

140

140

Sector Turnover (£’millions)

Combined heat and power projects have generally been seen as electricityled. They are therefore more sensitive to the policy environment on poweronly projects and tend to be more challenging to develop. As well as the straightforward costs, there is the added need to ensure a long-term heat customer – both for the direct income and to secure enhanced levels of Government support. A number of initiatives are being put in place – such as the introduction of a biomass CHP tariff in the Renewable Heat Incentive and the setting up of a Heat Network Delivery Unit within DECC. Time will tell whether this is able to speed up deployment.

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J O B S I N B I O M A SS C H P

B I O M A SS C H P CO N T E X T OCombined

Heat and Power can have significant energy savings compared to generating heat and power separately

OFinancial

support linked to demonstrating those savings, which can often be very complex

OFinding

a customer for the heat is a big challenge – not just initially but for the lifetime of the project

DESIGN AND DEVELOPMENT Design engineer; Project manager; Materials engineer; Electrical systems designer; Mechanical engineer; Environmental engineer; Environmental consultant; Fuel handling systems designer; Heat network design engineer. MANUFACTURING Design engineer; Project manager; Welder; Labourer; Sheet metal worker; Chemist; Electrical engineer, Mechanical Engineer. CONSTRUCTION AND INSTALLATION Planning consultant; Rigger; Environmental consultant; Project management and construction workers; Electrical engineer; Power generation engineer; Heat network specialists; Health and Safety manager; Pipefitter; Welder; Electrician. OPERATIONS AND MAINTENANCE Agricultural specialist; Microbiologist; Biochemist; Fuel sourcing manager and negotiator; Electrical engineer; Power generation engineer; Heating engineer; Energy trader; Boiler engineer; Welder; Electrician; Service engineer; Electrical/ electronic technician; Plant operator; Mechanic; Fuel and ash supervisor; Labourer; Maintenance manager.

For full explanation of terms, methodology and growth projections see pages 114-115

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

ASHWELL BIOMASS For commercial, local authority or domestic systems please call us now on 0116 260 4050.

THE HEYDAY OF GREEN HEAT

Following the successful commercial Renewable Heat Incentive (RHI) scheme, biomass boilers will surge with the launch of the domestic RHI, Natasha Bowler says.

A

s the world’s first long-term financial support programme for renewable heat becomes available for British homeowners, landlords and self-builders, domestic consumers can play a greater role in reducing climate change by opting for a biomass heating system. Biomass heating either works through a standalone stove burning logs or pellets to heat a single room or by a boiler burning pellets, wood chips or logs that is connected to a central heating and hot water system. Ashwell Biomass, a leader in the UK biomass boiler industry, began working with domestic customers to design, manufacture, install and service their RHI qualifying installation on April 9th when the government scheme went into operation. As the partner covering Central England and Wales for KWB, a leading Austrian manufacturer using award winning technology, Ashwell Biomass are able to offer MCS accredited product for systems from 8kW through an approved installer network. The RHI pays participants that generate and use renewable energy to heat their buildings. The scheme is targeted at, but not limited to, homes off the gas grid. Originally established in 1879, Ashwell Biomass is now one of the UK’s leading biomass boiler manufacturers and installers and has worked on over 400

biomass installations across England, Scotland and Wales covering commercial, industrial and domestic sectors. “Besides the traditional biomass fuels of logs, wood pellet and wood chip, we also engineer solutions for alternative fuels such as agricultural crops, waste food and waste wood,” says David Coyne, Ashwell Biomass director. “We were an early entrant into the UK biomass market in 1998 and this meant we were well placed to work with RHI companies in 2011, just as we are today.” The non-domestic RHI scheme, which opened to commercial, industrial, public sector and heat networks in November 2011, was designed to bridge the gap between the cost of fossil fuel heat installations and renewable heat alternatives through financial support for owners. “Our extensive engineering experience means we offer our customers a full biomass manufacture, installation and service capability, which is highly unusual in the sector. For example, our service, maintenance and breakdown recovery can be offered across all makes of boilers,” says David. “All our skills are in-house, enabling us to control both quality and costs and allowing us to deliver turn-key solutions.” ASHWELL BIOMASS SERVICES INCLUDE: Consultancy; Design; Manufacturing; Fabrication; Supply; Installation; Commissioning; Service & Maintenance Ashwell Biomass offers 15 products across five manufacturers with a total of 121 size options. The boilers range from 8kW to 10MW allowing the company to cover projects with an output of up to 20MW

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including hot water, steam, CHP and thermal oil. This ranges from simple single boiler installations through to large-scale district heating schemes and industrial process applications. Ashwell Biomass can also offer fully funded solutions where the customer simply pays for the heat used while we supply all the equipment, fuel, servicing and maintenance. “We are the UK manufacturer of our brand GreenTec wood pellet boiler range which we manufacture in-house in Leicester. “Key advantages include their small footprint, high efficiency and exemption under the Clean Air Act,“ says David. An example project is a brand new, riverside residential development in Kingston-upon-Thames. Like all new residential buildings, they are required to meet certain levels of sustainability and because the location fell within a smokecontrolled area, the biomass equipment needed to be classed as an ’exempt appliance’ under the legislation. Ashwell Biomass fulfilled this criterion and was able to offer the contractor a bespoke biomass solution. Low carbon, low cost, renewable heating is now available in the flats, which satisfies local planning, its new tenants and the housing developers. With the implementation of the second phase of the RHI, the opportunity to take advantage of biomass heating solutions is available to domestic consumers more than ever; customers will benefit in more ways than one if they do.

FOR FURTHER INFORMATION www.ashwellbiomass.com Email: info@ashwellbiomass.com

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SAXLUND

THE FUTURE OF BIOMASS COMBUSTION

Bioenergy experts blaze a trail with industry leading biomass solutions.

A

s the biomass market changes the way it manages its business models, in order to maximise profits and encourage more growth, more companies are investing in building smaller heat and power electrical centres. These are based at the site of, rather than away from, industrial scale heat and power consumers. With the Renewable Heat Incentive (RHI) fully underway, heat for industry – whether for on-site heating or industrial processes – is now a major driver for investment, and combining heat with electrical power production means that the efficiencies in terms of generation and investment are very attractive to developers. Saxlund International is an acknowledged leader in the international biomass combustion industry, with an enviable track record spanning more than 60 years and impressive project portfolio across Europe. Bioenergy has been at the heart of the business since it was founded in the 1940s, which saw the first Saxlund Combustion systems designed to burn wet chipped wood and also the creation and patent of the first flat bottom silo in 1947: making the Saxlund name synonymous with combustion, in addition to fuel and ash handling equipment specifically designed for the biomass industry. Today with Managing Director Matt Drew at the helm, Saxlund provides customers with a wide range of specialist patented bio energy technologies, from biomass combustion plants to materials handling systems, which improve feed and combustion efficiency thereby reducing fuel costs and carbon emissions. The UK subsidiary of Opcon – the

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energy and environmental technology group – has become a major player delivering projects for more than 3,500 plants worldwide. Within the bio energy sector, Opcon is already established as a pathfinder for a spectrum of technology solutions and offers a full range of services from the design of complete combined heat and power (CHP) plants to handling systems and incineration plants under the Saxlund brand. Whether the project requires full EPC contract delivery or the provision of key component technology such as the TubeFeeder®, from its specialist bio energy and Materials Handling Centres of Competence, Saxlund has the experience, reputation and depth of knowledge to provide clients with robust solutions to their bioenergy challenges worldwide. To date, the company has designed, manufactured and installed more than 100 major biomass projects alone across Europe. Its prestigious contract for the RWE npower renewables biomass combined heat and power plant (CHP) at Markinch in Fife is evidence of Saxlund International’s capability to tackle largescale bio energy projects and deliver innovative solutions. Saxlund, working for Jacobs UK Ltd, was tasked with project managing the biomass fuel handling system for the £200 million build, the largest of its kind in Scotland. The biomass CHP, which lies in the grounds of the Tullis Russell Paper Makers, replaces the existing coal-fired power plant and reinforces the company’s position as one of the world’s leading environmentallyfocussed papermakers. Using a mixture

of reclaimed and virgin woods, the 49.9 megawatt plant supplies both steam and electricity to Tullis Russell. The Saxlund fuel reception and storage system for the 50MW dedicated Biomass CHP project comprises wood chip reception units, disc screens, three 19m diameter concrete silos with rotary TubeFeeder® dischargers and chain conveyors. Other projects include a 2.4MWe biomass CHP project for Land Energy’s wood pellet production facility located near Girvan in Scotland, and a complete turnkey biomass CHP using Organic Rankine Cycle technology to produce electricity and heat for district heating in Falko-ping, Sweden. “The biomass industry is an important sector, as bio energy assists with the drive to decarbonise the European economy, and so we’re proud to be one of the pioneers in delivering both large and smaller scale combustion products to our customers,” says Matt Drew. “With a global focus increasingly on renewable energy to provide more sustainable and efficient energy solutions, we’re excited to see how the industry will continue to adapt to meet the changing climate.”

FOR FURTHER INFORMATION www.saxlund.co.uk Tel: (0)2380 636330

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

FOREVER FUELS

THE POTENTIAL OF BIOMASS HEAT The industry must speak with one voice and pool its resources to drive take-up, says Forever Fuels’ MD Bruno Prior.

B

iomass heat is delivering on its potential. By March 2014, biomass heat had delivered 767 GWh, out of a total of 800 GWh produced under the Renewable Heat Incentive (RHI). It is accelerating. 293 GWh were produced in the first 19 months, and 474 GWh in the following nine months. And it is cost-effective for the taxpayer. Those 767 GWh cost 4.6p of RHI support per kWhRES. The 33 GWh from other renewable heat technologies cost 8.8p/ kWhRES. PV receives 6.6-14.9p/kWh, and offshore wind gets around 9p/kWh. The government is increasingly recognising the potential and value of biomass heat. The RHI tariff degression triggers have been increased to allow small and medium non-domestic biomass to triple between October 2013 and January 2016. We should see more large biomass projects, now that the tariff has been doubled to 2p/kWh. Many large biomass heat projects will incorporate some power generation, to claim the new biomass CHP tariff of 4.1p/kWh (plus 1.5 ROCs for the electricity). The domestic RHI will finally introduce biomass to the largest sector of the heat market. The two main threats are quality and policy. Understanding of biomass heat has improved significantly at DECC in recent times, but policy risks remain. Last year’s air quality mis-drafting demonstrated the ramifications of a small bureaucratic mistake. The contract to manage the Biomass Suppliers List – which will ensure fuel sustainability – has been awarded to a consortium with good biomass expertise, but the details still need to be finalised, along with a practical implementation programme. If it is done well, it should address most of the sustainability concerns.

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The greatest policy risk surrounds the RHI budget. The domestic and largecommercial biomass-heat budgets are inadequate. The increased degression triggers provide some breathing space for small and medium biomass, but the technology has been growing faster than the budgeted growth rate, and there are drivers (e.g. from the poultry industry) that may see growth accelerate. Degression may bite just as the lowest-hanging fruit is cherry-picked, locking in high yields for projects in the 199 and 999 kW sweet spots, and leaving lower support for the less economic projects that remain. No budget has been allocated to the RHI after March 2016. There is little risk of default on existing RHI contracts, but continued growth will depend on budget increases from the incoming government. Fortunately, we have to meet our 2020 EU obligations. Our National Renewable Energy Action Plan assumes that renewable heat increases from 518 ktoe in 2010 to 1,186 ktoe in 2014, and to 6,199 ktoe in 2020. In practice, the RHI delivered 63 ktoe from April 2013 to March 2014, of which biomass delivered 60 ktoe. To hit the target, the RHI needs to double its contribution every year to 2020. For biomass heat to supply only half of that 2020 target, it would have to increase by 75% every year, i.e. a fiftyfold increase over the period. The other technologies would have to multiply onethousand-fold. We would require around 40 TWh of biomass fuel - the equivalent of around 8.3 million tonnes of wood pellets, or approximately one-third of the non-gas heat in the UK. Biomass power should have primed the pump. 8.3 million tonnes of pellets is less than they expect to consume annually. It would deliver around 6% of our 2020 target in coal-fired power stations, and around 15% of our target if used for heat. A gradual switch from power to

heat would go a long way to address the concerns over the pressure on the forest resource and the sustainability of biomass energy. To maximise the economic and environmental benefits, the power stations should be allowed to fill the gap partly with clean, recovered wood. Recent estimates suggest that around five million tonnes of waste wood is available. The next government will be even more focused on taxpayer value. Biomass heat is already one of the most costeffective low carbon sources of energy, but with some achievable improvements, it can really help to minimise the cost of delivering our renewable energy targets. Without subsidy, biomass fuel is cheaper than oil, LPG, electricity and (increasingly) gas. The RHI is required because the capital cost is higher than for the fossil alternatives. The net capital cost may not be as expensive as it looks, considering the cost and longevity of the alternatives. Critically, the cost of the boiler is only a fraction of the overall cost. Whilst boiler costs are unlikely to reduce much, there is significant scope to reduce the cost of installation and operation. Biomass fuel is cheaper in the UK than in established European markets, but biomass systems are more expensive. A professionalised industry would get more efficient at installation and make fewer mistakes, whose rectification costs have to be built into the price. The future is bright for biomass heat if the industry works together to address the challenges. Fuel quality is already being addressed through ENplus accreditation for wood pellets (managed by the UK Pellet Council) and WoodSure for other wood fuels, but there is no comprehensive quality scheme for biomass installations. MCS is limited in scale and scope. HETAS training courses teach installers about biomass heating systems, but installers also need expertise in other aspects, such as fuel-handling and storage and project management. The UKPC is helping address this challenge for wood pellets, e.g. by funding regional training courses for installers on pellet storage and handling, provided by the Wolfson Centre at the University of Greenwich. However, a recent study commissioned by Innasol showed how little the public are aware of renewable heat. There is a big job of promotion and education to be done.

FOR FURTHER INFORMATION www.forever-fuels.com Tel: 01628 509 690

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

BIOMASS POWER

(POWER)

Biomass power usually involves a small number of relatively large projects, so projecting future deployment from historic patterns is not meaningful. Significant expansion beyond conversion of existing coal powered stations is unlikely in the current policy environment. This is likely to be a significant missed opportunity for 2020 targets and longer-term carbon reductions as biomass power is highly costeffective. Given high load factors for bioenergy technologies, the actual generation is far higher than for an equivalent amount of installed capacity from wind or solar PV.

B I O M A SS P OW E R CO N T E X T Wide range of applications from small scale to conversions of existing coal-fired power stations

O

OCost-effective

compared to other options. Like other bioenergy technologies, provides power that can be delivered when needed â&#x20AC;&#x201C; complementing technologies such as wind and solar

OCoal

conversions supported by current policy, but Government has turned against stand-alone new projects in last 3 years. Support capped in the Renewables Obligation and not included at all in Contracts for Difference. Deployment likely to be far below potential in medium term

OSustainability

regulations to be introduced in 2014/15. Many details still to be resolved, but should provide independent assurance to the public

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BIOMASS POWER ELECTRICITY GENERATION

SIZE OF THE UK B I O M A SS P OW E R S E C TO R

TO DATE AND PROJECTED BY DECC 25000

Q Annual electricity generation 21,655

20000

ANNUAL GENERATION (GWh)

18,538

15,145

15000

11,462

10000

2012/13

450

500

No. of people employed across UK supply chain

3,330

3,320

No. of UK companies across supply chain

170

170

Sector Turnover (£’millions)

22,676 22,780 22,826

QDECC 2013 UEP projections

2010/11

9,275

5,881 4,713

5000

J O B S I N B I O M A SS P OW E R

3,927 2,952

DESIGN AND DEVELOPMENT Design engineer; Project manager; Materials engineer; Electrical systems designer; Mechanical engineer; Environmental engineer; Environmental consultant; Fuel handling systems designer.

20 20

20 19

20 18

20 17

20 16

20 15

20 14

20 13

20 12

20 11

20 10

20

09

0

BIOMASS POWER INSTALLED CAPACITY AND PROJECTED GROWTH TREND Note that NREAP does not differentiate between Biomass and Energy from Waste

3500

Note that the projections for 2014 and 2015 are based on average growth over 2012 and 2013

3000

3,366 3,140

CONSTRUCTION AND INSTALLATION Planning consultant; Rigger; Environmental consultant; Project management and construction workers; Electrical engineer; Power generation engineer; Health and safety manager; Pipefitter; Welder; Electrician.

INSTALLED CAPACITY (MW)

732

2500

2,505 336 2,024

2000

2,024 1,487

1500

2,024

OPERATIONS AND MAINTENANCE Agricultural specialist; Microbiologist; Biochemist; Fuel sourcing manager and negotiator; Electrical engineer; Power generation engineer; Energy trader; Boiler engineer; Welder; Electrician; Service engineer; Electrical/electronic technician; Plant operator; Mechanic; Fuel and ash supervisor; Labourer; Maintenance manager.

1,406

1000 492

MANUFACTURING Design engineer; Project manager; Welder; Labourer; Sheet metal worker; Chemist; Electrical engineer, Mechanical engineer.

581

500

20 20

20 20

20 20

20 15

20 14

20 13

20 12

20 11

20 10

20

09

0

Q Recent growth trend continued

QLatest DECC 2020 projection (EMR)

Q Installed capacity

QUK NREAP projection for 2020

For full explanation of terms, methodology and growth projections see pages 114-115

QDECC UEP 2020 projection

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

RURAL ENERGY

WOODLAND ENERGY Dumfries & Galloway NHS award-winning heat pods installation.

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n order to meet its carbon reduction targets, Dumfries and Galloway NHS has committed to reducing its oil, gas, butane and propane usage annually by 3% to 2014/15. To achieve this goal the Dumfries and Galloway Health Service is aiming to use local woodlands and in 2012 contracted Rural Energy to provide six Heat Pods to different hospitals to provide renewable biomass heating. Heat Pods are an ‘all-in-one’ structure housing a plant room and a fuel store. The hospitals include Thornhill Hospital, Kircudbright Hospital, Castle Douglas Hospital, Newton Stewart Hospital, Moffat Hospital and Lochmaben Hospital.

For the project, Rural Energy provided project management services and six 199kW Heat Pods. The Heat Pods consist of a 199kW Herz Firematic in a plant room, a v-profile pellet store and a purpose-built prefabricated modular building in which the store and plant

room were constructed. The NHS requested a high spec finish at the design stage, so Rural Energy’s technical design teams were able to specify high quality finishes with a considerate plant room. As part of this a freestanding flue adjacent to the Heat Pod was installed upon delivery. The package was prefabricated by specialist modular builders and delivered to each site in a short turnaround time. Some of the deliveries were particularly challenging due to the urban settings and phone lines; in two instances the Heat Pods had to be craned over the buildings. After delivery the installations were connected to the existing heating system and commissioned. The project is now shortlisted for the Heating and Ventilation News Awards in 2014 in two categories; the Retrofit Project of the Year and the Renewable Project of the Year.

FOR FURTHER INFORMATION Tel: 0203 189 0654 Email: info@ruralenergy.co.uk www.ruralenergy.co.uk

Inspiration at the heart of everything we do. Customer focussed publishing, events, online, content, digital media From the team that brought you "Global Opportunity 2014" www.inspirepublishing.co.uk

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

BALCAS

WORLD CLASS FULLY INTEGRATED ENERGY SOLUTION As the UK and Ireland’s largest wood pellet manufacturer and supplier, Balcas is enjoying increasing success with its leading brand of premium quality brites fuel.

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ntil recently, apart from domestic heating systems, the main commercial users of brites have been hotels, nursing homes, schools, hospitals and leisure centres to fulfil their space heating and hot water requirements. However Balcas has diversified its supply service offering to include a fully integrated solution for industrial and commercial customers who use steam in their production process. This new world-class solution is set to help manufacturing in the UK to be more sustainable and support a low carbon economy going forward. Through their unique proposition, Balcas is giving industrial customers the opportunity to reduce energy costs significantly over oil and reduce carbon emissions by up to 100%, while enabling them to benefit from the Renewable Heat Incentive (RHI) for the next twenty years. “With our established track record in the renewable energy industry and vast technical experience, this integrated steam solution was a natural progression for us, especially when we have a dedicated team in place for business development through to technical support for these large customers,” says Ian McCracken, Business Development Director, Balcas. Balcas also provides finance to each of

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Pictured at the launch of the new fully integrated energy solution at Tomatin Distillery is (l-r) Geoff Jackson, CEO, Equitix; Lord Smith of Kelvin, Chairman of the Green Investment Bank and Ernest Kidney, Managing Director, Balcas

these projects and their experienced team manages the maintenance of the system and fuel supply. “This in turn removes the risk and hassle for the customer as there is no capital investment for them to make - they simply pay for the heat

TOMATIN AT A GLANCE… Up to 90,000 tonnes of CO2 saved by the distillery over the course of the contract OSecurity of fuel supply from the largest wood pellet manufacturer in GB and Ireland OSignificant financial savings from early in the project OCustomer isolated long term from the price fluctuations in the fossil fuel market OExperienced engineering team to deliver a 4MW installation in 6 to 8 months including planning permission O

FAST FACTS ABOUT BRITES OQuantity

of brites supplied to the market each year equals 750 million kwh of heat OThis displaces 750 million litres of oil OReduces Co2 emissions by 225 thousand tonnes OEach year brites customers achieve a staggering cost savings of £15 million

energy used as part of an Energy Supply Contract (ESCO),” Ian explains. “The solution also delivers energy savings from day one of the system going live, as well as carbon savings on a large scale. For example, a distillery will use the equivalent of many hundreds of homes in oil and so can deliver these carbon savings more quickly than hundreds of smaller installations.” The distillery business in Scotland is one of the sectors that Balcas is currently helping with their industrial steam solution, including Tomatin Distillery which has already achieved the 2050 carbon reduction targets of 80% as set out by the Scotch Whisky Association – 37 years ahead of schedule. However the proposition is also set to benefit other industrial manufacturing sectors that use process steam loads including food processors, chemical manufacturers, animal feed producers and dairies based in non-gas areas throughout the UK. “Given that the RHI is in place for the next 20 years we believe that having a world class solution for the supply of steam in an industrial or commercial setting, backed with the security of supply of fuel for the next twenty years, has and will be a decisive factor for many customers in this marketplace,” adds Ian.

FOR FURTHER INFORMATION www.brites.eu Email: enquiries@brites.eu

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

M I X E D E N E R G Y F R O M WA S T E ( C O M B U S T I O N , P Y R O L Y S I S , G A S I F I C A T I O N , L A N D F I L L G A S - C H P, H E A T A N D P O W E R )

Energy from waste includes a range of different technologies and feedstocks, with differing potential for deployment. The picture is further complicated as the technologies are, to some extent, in competition for the same raw material. Landfill gas continues to make a substantial contribution to renewable electricity generation, but is likely to decline rather than grow as policy moves away from supporting new projects, and existing sites produce less gas over time. These technologies offer a range of benefits beyond electricity generation, including enhanced greenhouse gas savings from avoided landfill methane emissions.

M I X E D E N E R GY TO WA ST E CO N T E X T O Includes

landfill and sewage gas, conventional incineration and advanced treatments such as gasification

OPlanning

issues remain a significant barrier

OAvailability

of feedstock an issue, with concerns over impact of exports of UK waste to Europe

OFinancial

incentives for renewables pay on the renewable content of waste. Difficult to demonstrate for solid waste without being overly burdensome ENERGY FROM WASTE - HEAT PRODUCTION 2000

1,658 392

1500

1,577

1,563

370

367

1,600

384

375

301

392

392

366

416

533 470

445

469

1000 839 144

266

769 672 575

579

158

158

593

158

158

158

20

08 20

20 07

06 20

20 05

158

20 12

158

20 11

158

20 10

513

615

0

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1,738

1,329

1,309

500

52

1,727

09

HEAT PRODUCTION (GWh)

PwC estimate that ÂŁ1,700m was invested in the sector between 2010 - 2013 OOver the period 2014 - 2020 PwC forecast a further ÂŁ3,700m could be invested in the sector O

Q Biodegradable EfW

QSewage sludge digestion

Q Animal biomass

QLandfill gas

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ENERGY FROM WASTE ELECTRICITY GENERATION

SIZE OF THE UK ENERGY FROM WASTE SECTOR

TO DATE & PROJECTED BY DECC 15000

ANNUAL GENERATION (GWh)

12000

QLandfill gas Q DECC 2013 UEP projections

Q Animal biomass Q Energy from waste QSewage sludge digestion

14,189 13,590

12,297 11,478

10,060

9000 7,679 637

6000

8,795

8.708

642

666

2,279

2,070

764

720

809

5,092

5,154

5,162

8,210

7,959

615

627

8,807

7,786

1,739

1,597

1,509

604 4,929

697 5,037

2012/13

786

830

No. of people employed across UK supply chain

6,020

6,550

No. of UK companies across supply chain

330

340

Sector Turnover (£’millions)

J O B S I N E N E R GY F R O M WA ST E

3000

20 20

20 19

20 18

20 17

20 16

20 15

20 14

20 13

20 12

20 11

20 10

20

09

0

ENERGY FROM WASTE INSTALLED POWER CAPACITY AND PROJECTED GROWTH TREND NREAP does not distinguish between Biomass and Energy From Waste

3000

2,508

2,507

2500

INSTALLED CAPACITY (MW)

2010/11

MANUFACTURING Design engineer; Boiler engineer; Welder; Electrical engineer; Metal worker; Quality assurance; Chemist. INSTALLATION AND MAINTENANCE Planning consultant; Environmental consultant; Project manager; Construction worker; Electrical engineer; Boiler engineer; Pipefitter; Welder; Electrician; Heating engineer; Electrical/ electronic technician; Plant operator; Mechanic; Waste collection operative; Ash supervisor; Site supervisor.

2,125

2000

1,902

1,938

1,942

For full explanation of terms, methodology and growth projections see pages 114-115

2,031 89

183 1,942

1,739

1,942

1,620

1500

1000

500

Q Recent growth trend continued Q Installed capacity

www.r-e-a.net

20 20

20 20

20 20

20 15

20 14

20 13

20 12

20 11

20 10

20

09

0

QLatest DECC 2020 projection (EMR) QDECC UEP 2020 projection

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

EDINA

BRITAIN LEADS THE WAY IN BIOGAS DEVELOPMENTS FOR SEWAGE INDUSTRY Thermal hydrolysis will radically alter the process of producing biogas through waste treatment, Natasha Bowler says.

T

he production of biogas in the sewage industry to produce fuel for cooking, lighting or generating electricity is long established, but the advantages of combining this with the technology of thermal hydrolysis is a recent development and one particularly embraced in the UK. Thermal hydrolysis (TH) is a twostage process combining high-pressure boiling of waste or sludge (wet organic matter such as animal manure, human sewage or food waste) followed by rapid decompression; this makes the sludge more biodegradable improving digestion performance. Combining TH to produce biogas in the sewage industry means the sludge post-treatment is more malleable, doubling the load of resulting digestate going to the anaerobic digestion tanks thus reducing odour. The change in the structure of the sludge also increases the amount of methane released from it, thereby enabling the process to power itself from the biogas. It is also less energy demanding overall than previous methods used in the industry. Leading renewable power generation specialist Edina’s installation at Howdon for Northumbrian Water was the first in the UK to use all the sludge after treatment for renewable energy. Based in Dublin, Cork and Stockport, Edina is a leading renewable power generation specialist and has been involved with 13 TH projects through providing the Combined Heat and Power (CHP) units installed in conjunction with the TH plant. Northumbrian Water estimates that their two sites using advanced anaerobic digestion to produce biogas have reduced their annual electricity bill

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Supplying biogas power generation equipment at Crossness for sludge treatment upgrade

by £8 million, and that by 2015, 20% of its energy requirements will be selfgenerated from renewable sources. The project highlights one of the benefits of “going green”. Other than reducing a company’s carbon footprint, renewables save money and often more than consumers or operators might think. With 30 years experience in gas and diesel powered generation, Edina consistently maximises a company’s energy savings and provide security of power supply. The Edina package covers a range of systems from 400kWe to 4.3MWe, making it ideally suited for the application of CHP; this versatility has meant sewerage companies, waste water treatment companies, universities, hospitals and district heating schemes are all setting up CHP units.

One of Edina’s major projects at Beckton and Crossness in conjunction with Tamesis for Thames Water will produce enough energy to power 24,000 homes in 2014. This will make it the largest sewage works in Europe and a showcase for the rest of the industry. With fossil fuels expected to run out by the end of the century and increasing pressure on consumers to adopt more renewable energy sources, all power generation specialists should be doing their part; processes like thermal hydrolysis are a great way to start in the sludge treatment industry.

FOR FURTHER INFORMATION www.edina.eu Tel: +44(0) 161 432 8833

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

D P S E N V I R O N M E N TA L

DPS Environmental are supplying the core technology for an innovative, flexible and mobile solution that will convert sewage sludge to power.

S

anitation is a growing global problem with expanding populations placing additional strain on developing cities where there is little existing infrastructure or treatment facilities. With this in mind, through bringing together specialists in their respective fields, Unilever has secured a grant to create Oya, a community scale sanitation treatment system to serve up to 2,500 people. Whilst the original design intent is aimed at the developing world, this small scale localised sewage treatment system may have many broader sector

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and geographic applications. The overall premise is to take in and process human waste, alongside solid waste streams that causes harm to the community, such as clinical, household and industrial waste. These waste materials are then converted to useful by products, namely water, thermal energy, ash and (potentially) soil improver.

TRIALS A key aim of the current trials is to prove that by mixing different kinds of waste with human waste, the calorific value (CV) of the overall mixture can be made high enough so that pyrolysis generates enough energy for the whole system. The goal is to find the highest ratio of human waste to supplementary waste for each different combination. Trials will be carried out in the UK on a sewage treatment works in 2014 using real human waste. The supplementary waste streams will be acquired in the UK and we will ensure that the characteristics of this waste are as close to those found in developing cities as possible.

WASTE CHARACTERISTICS Three key characteristics were identified for the pyrolysis process: dry solids content, net calorific value, and density. REview Renewable Energy View 2014

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W

THE POWER OF POO

This is based around the modification of a commercially available pyrolysis unit (from DPS) to process human waste streams. However, human waste currently contains too much water to be pyrolysed directly and so an additional dewatering technology (from Natural Synergy) is being used to unlock the use of this technology.


R E N E WA B L E E N E R GY V I E W 2 0 1 4

D P S E N V I R O N M E N TA L

For each waste stream a data search was conducted to gather these characteristics both for the listed study cities, where possible, and also globally to provide reference values where specific city data was not available. The data is being used for design of the dewatering system and its trials, as well as to create a test matrix for mixing the dewatered faecal sludge with the supplementary wastes for the pyrolysis trials. Cranfield University has completed a market assessment of the wastes that can be found in developing cities. This concluded that the following list of waste streams are readily available and can be pyrolysed alongside human waste to provide extra energy: O Municipal Solid Waste OSawdust OHard & Soft Plastics OTextiles A list of six study cities was compiled in order to provide a global perspective and address potential regional variations. From the UN regional groupings, it was decided that the study will focus on the regions on Sub-Saharan Africa, Southern Asia, South-Eastern Asia and Latin America as the key regions for improving data records of waste management strategies, and potential locations for roll-out of pyrolysis technologies in the future. For each city in the study, a qualitative waste availability assessment has been conducted to determine which waste streams could potentially be used for supplementing the faecal sludge feed and improving the energy balance of the pyrolysis process. The different supplementary waste streams were identified as common solid wastes generated globally, and more detail can be found on each stream in the full waste report.

CORE TECHNOLOGY 1 – DEWATERING In order for the pyrolysis unit to work efficiently, the moisture content needs to be no greater than 40%. To achieve this the sludge needs dewatering. Pre-treatment Human waste is emptied into the pretreatment tank. A hot water boiler is used to raise the temperature of the waste to 70 degrees Celsius to kill pathogens in the waste. A solar panel is used to offset the use of fossil fuels. The human waste is recirculated through a pipe connected to an ultrasound unit. The ultrasound unit breaks apart cells in the faecal matter

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and releases water from them to make the dewatering step easier. Dewatering The pre-treated waste is emptied into large electrokinetic bags. These have a metal lining which acts as an electrode. A current is passed through the bags which forces the water out. Water treatment The water removed from the electrokinetic bags is filtered through a membrane or biological water treatment unit. The filtered water can be used in industry or agriculture. The remainder can be concentrated into a nitrate and phosphate rich product, potentially suitable for use as a soil improver.

CORE TECHNOLOGY 2 – PYROLYSIS & GASIFICATION Pyrolysis is the decomposition of organic material using heat in the absence of oxygen and has been around for hundreds of years. The dewatered human waste is combined with other high calorific value waste streams (such as household or industrial waste) and passed into the pyrolyser. Waste enters the pyrolysis chamber where it is heated to about 800 degrees Celsius and thermally decomposes to create a carbon char and syngas. Char passes into the gasifier chamber where steam and air are injected to further react and reduce the char volume. Syngas enters the combustion chamber. By introducing oxygen to the syngas an exothermic reaction takes place and the additional heat generated

PYROLYSIS IS APPROPRIATE TO TREAT HUMAN WASTE AS THE HIGH TEMPERATURES MEAN THAT THEY ARE VERY EFFECTIVE AT REMOVING PATHOGENS. THEY ALSO CAN PROCESS A WIDE VARIETY OF WASTES AND SO CAN HANDLE ‘SANITATION INCIDENTALS’.

is used to maintain the high temperatures in the pyrolysis chamber. Excess heat, equating to over 600 kW of thermal energy at over 900 degrees Celsius can be used directly for heating, hot water or to generate steam, or can be converted to a small amount of electricity for local utilisation. Pyrolysis is very well suited to meet the challenges of destroying waste in developing cities. The small footprint and quiet operation of pyrolysis unit makes them ideal for operation in developing cities. Pyrolysis is appropriate to treat human waste as the high temperatures mean that they are very effective at removing pathogens. They also can process a wide variety of wastes and so can handle ‘sanitation incidentals’. As a process it is being adopted more and more on a larger municipal scale, but even now it gives something back to the local community.

FOR FURTHER INFORMATION npalmer@dps-global.com www.dps-global.com

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

LOW C A R B O N

LOW CARBON: INVESTING IN THE FUTURE OF ENERGY

Greater investment into renewables sees rapid growth for solar PV in the UK.

O

ver the last decade, we’ve seen the concept of sustainable or “green” investment increasingly gain traction, as it has moved from a niche interest for engaged retail investors to an integral part of the investment strategy of major institutional investors. With the progression of this new investment class, the investor community at large is demanding not just strong returns on their initial investment, but also clear indications of the benefits of such activity. At the same time, the UK government’s challenging future climate change goal of an 80% reduction in greenhouse gas emissions by 2050 is also encouraging investment opportunities in new renewable energy projects.1

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Low Carbon is a privately-owned UK investment company which invests in, owns and operates renewable energy projects. In so doing, we are committing to making a positive and significant impact on the causes of climate change. In pursuit of a global low-carbon future through carbon emissions reduction, we seek ways of leveraging all current and emerging technology advances in renewables. Low Carbon also enjoys a high competency in asset management in the renewables space with 114MW currently under management. Our unique investment model embraces solar photovoltaic (PV), concentrated solar power, wind and anaerobic digestion technologies. Enabling the investment of more than £200 million in capital, we are pledged to building capacity efficiently and cost-effectively. And we’ve funded and built and/or are operating over 200MW of solar assets; enough to power more than 60,000 three-bedroom homes annually.

Low Carbon continues to build scale in its development and management of renewable energy. A recent agreement with Macquarie Capital will deliver a portfolio of up to 300MW of solar PV projects in the UK; an arrangement that relates to the funding required to construct a portfolio of solar projects that could power up to 100,000 homes per year. With strong backgrounds in renewables and financial services, our team has an excellent track record in developing and managing solar assets. We expect to continue to increase our portfolio of assets as needs for renewable energy grow and its opportunities for our investor partners gather pace. 1 Climate Change Act 2008 (http://www. legislation.gov.vuk/ukpga/2008/27/contents)

FOR FURTHER INFORMATION www.lowcarbon.com

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

ECO AN GUS

SAVING MONEY ON HEATING BILLS WITH BIOMASS INSTALLATIONS Wood-fuelled boiler systems offer a cheaper method of heating that will benefit from the government’s new Renewable Heat Incentive Scheme.

F

or houses such as Avalon House in Somerset, a large property with 13 rooms which is very exposed to the elements, it was the ideal solution for the owner’s considerably high heating bills. The house was occupied throughout the day as the owner had a young family and consequently hot water was required on demand. A key requirement was that the heating could remain on at a constant temperature for the young baby. The owner had access to a small area of woodland along with wood off cuts from a workshop and wanted to utilise this fuel source, supplemented by buying bulk uncut logs. Eco-Angus, the sole UK contract distributor of wood burning boilers for EKO-VIMAR ORLANSKI, carried out a heating assessment and a 40kW Angus Super Gasification Log Boiler with two 1,000 litre water cylinders was selected. Within two weeks the delivery was made, along with the accumulation tanks and additional elements of the heating package including Laddomat 21-60 Mixing/Layering Valve,Thermo Safety Valve, Wilo Pump and three Way Valve. Situated in a covered area at the back of the property, the boiler was covered from direct rainfall with a small pitched roof, but the unit remained open to the elements. However, the water cylinder tanks were accommodated inside the property, creating a large room used for drying clothes and storing linen and an

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existing open vented heating system was installed. It was estimated that an average of twelve tonnes of wet wood would be required annually (mixed variety hard and soft wood). The property could generate 50% of this capacity and had an existing store of wood to accommodate the first year of operation made up of seasoned wood off-cuts ready to be used immediately. An additional supply of unseasoned hardwood was purchased, split and dried on site in the log store for a minimum of one year. Wood was collected at regular intervals from the owner’s own source and unseasoned wood was left to dry for a minimum of twelve months. Wood was chopped to size using an Angus log splitter just once a year over the course of one week and logs were

stored at the correct size to dry out. Installation and commissioning took just three days. The break-even point covering the initial investment period was achieved during year three of operation. Although difficult to extrapolate over a long period of time, life expectancy of the boiler is twenty years and this project could deliver net fuel savings of over £40,000 over this period. The property owner summarised his decision to install a wood burning boiler as, “a simple decision that has made a huge change to the way my family can live in our home without worrying about heating bills”.

FOR FURTHER INFORMATION www.ecoangus.co.uk Tel: 01934 862642

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INNASOL

TURN UP THE HEAT

2014 promises to be an exciting year for the renewable heating industry, says Innasol’s Colm Lawlor.

T

he Renewable Heating Incentive (RHI), a government scheme that will give financial support to homeowners who adopt renewable heating, has started this spring and is predicted to change both the domestic market for renewable heating and our carbon footprint on the Earth. The scheme will pay homeowners a set rate for every unit of renewable heat they generate for the next seven years. Consumers can choose between heat pumps, biomass boilers and solar thermal depending on what best suits them; support rates will vary depending on which type of technology is installed. Innasol, the UK’s biggest provider of renewable heating, helps householders and businesses save money by setting up clean and cost-effective renewable energy systems. Colm Lawlor, UK operations manager for Innasol, says: “Domestic users will benefit from the scheme in two ways; heating costs will be reduced and the government will contribute payments towards the installation cost. It can be far more economical than heating by fossil fuels. We’re extremely excited about it; it will hugely change the domestic market which has naturally been quite quiet up to now.” The RHI began in 2011 but only

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IN NEW HOMES, HEAT PUMPS ARE BETTERSUITED BECAUSE YOU CAN DESIGN THE PROPERTY TO ACCOMMODATE THEM. THE PROBLEM IS WITH BUILDINGS THAT WERE BUILT PRIOR TO 2000, WHEN BETTER INSULATION WAS INTRODUCED, AS THEY BURN GAS AND OIL TOO RAPIDLY.” Colm Lawlor, UK operations manager, Innasol included non-domestic users such as businesses, schools and hospitals; the second phase began in April. Innasol works with partners and professionals (not consumers), corporates and utility companies to change bad heating habits through proven renewable heating technologies, such as biomass boilers and heat pumps. Currently, biomass technology has proven more popular in the UK’s commercial market but Colm predicts that when the domestic market gets going later this year, heat pumps will become more common. He adds: “In new homes, heat pumps are better suited because you can design the property to accommodate them. The problem is with buildings that were built

prior to 2000, when better insulation was introduced, as they burn gas and oil too rapidly. These emissions need to be reduced by using something more eco friendly like biomass or heat pumps; the Government needs to continue to provide incentives so we meet the carbon emissions target of 2020.” Innasol is doubling the size of its training centre in Essex this year to cater for the expansion of the renewable heating market over the next few years. Colm Lawlor’s long experience in renewable heating and energy efficiency in Ireland made him the ideal candidate to bring the UK forward to European standards and to improve the lack of skills and knowledge in the industry. The challenge facing British renewable energy now is ensuring consumers are informed about the changes taking effect in the industry and to encourage them to take full advantage of the options available. Innasol are reflecting this by changing their main focus from building new partnerships to increasing awareness in the public arena. If all gœs to plan, this could be a turning point for the renewable heating industry in Britain; our European neighbours will no longer be able to say we’re lagging behind.

FOR FURTHER INFORMATION Tel: 01621 892613 Email: info@innasol.com www.innasol.com

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ONSHORE WIND

(POWER)

Onshore wind has grown strongly in recent years. The geographical spread is not even, with a strong concentration in Scotland. If recent trends were continued, it would be well on course for the 2020 deployment anticipated by Government. This is by no means certain, as growth has slowed recently: rates of planning consent have fallen significantly and the full impact of increased requirements on community engagement – including increased payments to local residents – has yet to be seen. Onshore wind is one of the cheapest technologies for generating renewable electricity, so the implication of attempts to reduce future deployment is that other, more expensive, technologies will be needed to meet renewable and climate change targets. O

PwC estimate that £6,900m was invested in the sector between 2010 - 2013

OOver

the period 2014 - 2020 PwC forecast a further £8,100m could be invested in the sector

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O N S H O R E W I N D CO N T E X T O

Cost-effective technology, should continue to play key role with policy focussed on value for money

OSignificant

contributor to Renewables Obligation. Also supported in Feed-in Tariff

OPolitically

controversial. Focus of sustained criticism in media and Parliament. Industry seeking to address through community engagement and sharing economic benefits of developments

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ONSHORE WIND ELECTRICITY GENERATION

SIZE OF THE UK O N S H O R E W I N D S E C TO R

TO DATE AND PROJECTED BY DECC 30000

28,036

Q Annual electricity generation 26,627

QDECC 2013 UEP projections

25,384

25000

24,108

ANNUAL GENERATION (GWh)

22,953 20,909

20000

18,678

2012/13

2000

2300

No. of people employed across UK supply chain

15,200

17,070

No. of UK companies across supply chain

730

730

Sector Turnover (£’millions)

16,533

15000 12,121 10,384

10000 7,553

7,140

5000

JOBS IN ONSHORE WIND DESIGN AND DEVELOPMENT Design engineer; Lawyer; Project manager; Financial planner; Economists; Electrical systems designer; Physics engineer; Environmental engineer; Environmental consultant; Meteorologist; Programmers and modellers; Aeronautical engineer; Communications expert.

20 20

20 19

20 18

20 17

20 16

20 15

20 14

20 13

20 12

20 11

20 10

20

09

0

ONSHORE WIND INSTALLED CAPACITY AND PROJECTED GROWTH TREND 15000 14,890 13,915

12000 11,681

INSTALLED CAPACITY (MW)

2010/11

3,252

CONSTRUCTION AND INSTALLATION Planning and environmental consultants; Project management and construction workers; Electrical engineer; Power generation engineer; Project manager; Turbine specialist engineer; Tower erector - crane operator; Health and safety manager.

9000 1,476 7,280 7,280

5,893

6000

MANUFACTURE Electrical engineer; Welder; Metal worker; Machinist; Skilled assembler; Test technician; Quality controller; Chemical engineer; Materials engineer; Mechanical engineer; Semi and non skilled workers.

7,280

4,638 4,045

OPERATIONS AND MAINTENANCE Electrical engineer; Power generation engineer; Energy traders.

3,477

3000

20 20

20 20

20 20

20 15

20 14

20 13

20 12

20 11

20 10

20

09

0

Q Recent growth trend continued

QLatest DECC 2020 projection (EMR)

Q Installed capacity

QUK NREAP projection for 2020

For full explanation of terms, methodology and growth projections see pages 114-115

QDECC UEP 2020 projection

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

OFFSHORE WIND

(POWER)

As with onshore wind, there is good recent growth, although from a lower base. Continued support is dependent on further cost reductions being achieved, with a number of government/industry initiatives to remove barriers and drive improvements across the supply chain. It may be significant that the Government’s more recent projections scale back anticipated deployment compared to the original 2020 National Renewable Energy Action Plan. O

PwC estimate that £7,700m was invested in the sector between 2010 - 2013

OOver

the period 2014 2020 PwC forecast a further £12,000m could be invested in the sector

O F F S H O R E W I N D CO N T E X T O

Strategic industrial priority, given opportunity to build UK leadership

ORequires

far higher subsidy than many other options. Industry committed to significant cost reductions in medium term

OContracts

for Difference mechanism vital to delivering intended deployment and cost reductions

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OFFSHORE WIND ELECTRICITY GENERATION

SIZE OF THE UK O F F S H O R E W I N D S E C TO R

TO DATE AND PROJECTED BY DECC 25000

21,667

20000 18,371

ANNUAL GENERATION (GWh)

2012/13

2100

2500

No. of people employed across UK supply chain

16,200

18,280

No. of UK companies across supply chain

790

790

Sector Turnover (£’millions)

22,985

QDECC 2013 UEP projections

15000

13,756

10,879

11,435 10,469

10000 7,463

5,126

5000

JOBS IN OFFSHORE WIND

3,044 1,754

DESIGN AND DEVELOPMENT Planner; Lawyer; Financial planner; Economist; Electrical systems designer; Physical engineer; Project manager; Environmental engineer; Meteorologist; Programmer and modeller; Aeronautical engineer; Communications expert.

20 20

20 19

20 18

20 17

20 16

20 15

20 14

20 13

20 12

20 11

20 10

20

09

0

OFFSHORE WIND INSTALLED CAPACITY AND PROJECTED GROWTH TREND

MANUFACTURE Design engineer; Electrical engineer; Welder; Metal worker; Machinist; Skilled assembler; Semi and nonskilled worker; Test technician; Chemical engineer; Materials engineer; Mechanical engineer; Quality assurance.

15000

12,990

12000

INSTALLED CAPACITY (MW)

2010/11

24,304

Q Annual electricity generation

10,400

9000 7,286

8,011

3,590

6000 5,189 1,493 3,696 2,995

3,696

3000 1,341

CONSTRUCTION AND INSTALLATION Planning and environmental consultant; Underwater diver; Project management and construction worker; Marine Engineer; Electrical engineer; Power generation engineer; Turbine specialist engineer; Tower erector; Crane operator; Health and safety manager; Specialist shipping and port personnel. OPERATIONS AND MAINTENANCE Electrical engineer; Sea and air transport personnel; Power generation engineer; Energy trader.

3,696

1,838

951

20 20

20 20

20 20

20 15

20 14

20 13

20 12

20 11

20 10

20

09

0

Q Recent growth trend continued

QLatest DECC 2020 projection (EMR)

Q Installed capacity

QUK NREAP projection for 2020

For full explanation of terms, methodology and growth projections see pages 114-115

QDECC UEP 2020 projection

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

LIVOS ENERGY

CATCH THOSE RAYS

Solar power will benefit farmers throughout the UK regardless of location.

“P

V solar panels are now also an option for Northern and Scottish farmers”, says James Madigan, CEO OF Livos Energy, a specialist in renewable energy projects. “Solar power is one of the most fast moving of energy technologies. 10 years ago its use in the UK was used almost exclusively in off-grid applications and street furniture such as parking meters and signage. Now its price has fallen beneath that of

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offshore wind and it’s still coming down.” PV started in Cornwall initially and is now a common sight throughout the UK, extending to increasingly northern locations. 106MWs have been registered in Scotland, but that is just the tip of the iceberg as Ofgem, the regulator, is around 9 months late in adding projects to its register. And the nature of projects is changing: only 4 years ago a typical installation was sub 50kW; today’s solar farms are multi MW – some are now even 30MW or larger. Farmers further north in the UK may assume that the weather up there is never going to justify investment in PV – but he or she should think again. The difference in output between Cornwall

and Fife is only around 15 percent. To give an idea of scale, a solar farm of 10MW would require around 70 acres of land. “You’ll still be able to graze sheep beneath your panels, and they will benefit more from the shelter they give than animals in the south, “ says James. “Whilst there are no scientific studies to reference, farmers with PV say that the combination of lower light tolerant grass and less stressed animals means that there is no productivity drop whatsœver in combining solar farming with sheep farming. See the Solar Trade Association’s 10 commitments1 or the National Solar Centre’s advice2 on appropriate siting.” Enterprising farmers will need to move swiftly, however, if they are to benefit from this diversification opportunity, as renewables policy is in transition. The rent you could expect to earn on a PV project is currently up to £600 per acre, depending on site conditions, but the subsidies are falling year on year and in future the contracts for the cheapest technologies – and that will include solar – will be awarded on a competitive basis. Livos is working with farmers who are finding that the revenue and energy produced from renewable energy can make a real difference to their viability. With long-standing experience and expertise, Livos is able to work effectively to manage largescale solar PV projects from conception to completion. Service includes a full feasibility assessment, technical studies, public consultations, managed planning applications, grid connection, installation management of potential solar or wind development, and financing of all the costs, so there is no cost to the farmer. Users will receive index linked rental income for 30 years. Once a site has passed the initial checks, the company aims to have it producing energy within 12 months, subject to planning consent. 1 http://www.solar-trade.org.uk/media/STA%20 10%20commitments%20v%2010.pdf 2 https://www.bre.co.uk/filelibrary/pdf/other_ pdfs/KN5524_Planning_Guidance_reduced.pdf

FOR FURTHER INFORMATION If you are a farmer or landowner interested in finding out more about generating income from solar PV, please call 08000 787962, email info@livosenergy.co.uk or visit the website: www.livosenergy.co.uk.

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

S O L A R P H O T O V O LTA I C S

(POWER)

Of all the technologies featured, solar photovoltaics (PV) is the most dramatic case of exceeding expectations, as comparison with the original modelling for 2020 shows. This is a useful reminder of the limitations of modelling deployment scenarios. Modelling the recent growth rate forward makes the Government’s revised estimates for 2020 look plausible – and possibly even over-cautious. Much of the current growth is driven by larger-scale projects. These are currently viable under the Renewables Obligation but may have a less certain future under the new Contracts for Difference. For comparison purposes, it is always worth looking at the generation figures rather than installed capacity, as load factors for solar PV are far lower than for other nonbaseload technologies, such as wind. O

PwC estimate that £5,900m was invested in the sector between 2010 - 2013

OOver

the period 2014 - 2020 PwC forecast a further £11,000m could be invested in the sector

S O L A R P H OTOVO LTA I C S CO N T E X T O

Huge beneficiary of Feed-in Tariff, growth of nearly 1000% in 2011

ODramatic

recent cost reductions. Large scale forecast to be competitive with onshore wind by 2018. Likely to require little or no subsidy after 2020

OEU

has imposed additional duties on Chinese panels on grounds of unfair competition – pushing up deployment costs to end 2015

OPopular

on buildings but ‘solar farms’ considered controversial by Government. Industry has developed codes of practice, community engagement and biodiversity guides

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SOLAR PV ELECTRICITY GENERATION

SIZE OF THE UK S O L A R P V S E C TO R

TO DATE AND PROJECTED BY DECC (NREAP)

2010/11

2012/13

1800

2200

No. of people employed across UK supply chain

15,650

15,620

No. of UK companies across supply chain

2,200

2,180

10000

Q Annual electricity generation

9,904

QDECC 2013 UEP projections

9,243

Sector Turnover (£’millions)

8.763

ANNUAL GENERATION (GWh)

8000

8,001

6,738

6000 5,261

4000

4.109

2.015

2000

JOBS IN SOLAR PV

1,188

20

MANUFACTURING AND DESIGN Design engineer; Systems engineer; Production manager; Production supervisor; Electrical engineer; Laboratory technician; Quality assurance; Assembler line personnel; Chemist; Surveyor; Materials scientist; Warehousing/logistics personnel.

20

20 19

20 18

20 17

20 16

20 15

20 14

20 13

20 12

20 11

20 10

09 20

244

40

20

0

SOLAR PV INSTALLED CAPACITY AND PROJECTED GROWTH TREND 12000

11,089

10000

INSTALLED CAPACITY (MW)

9,884

8000

GENERAL MANAGEMENT, SALES & ADMIN Sales/purchase administrators; Sales and business development team; Logistics - drivers, packers, warehouse staff; Marketing team.

4,631

6000

4000

1,749 2,680

2,698 1,706

2000

2,698

For full explanation of terms, methodology and growth projections see pages 114-115

2,698

20 20

0 20 2

20 20

20 15

20 14

20 13

20 12

20 10

20 11

94

20

27

09

993

0

INSTALLATION AND MAINTENANCE Planning and environmental consultant (ground mounted schemes); Roofer; Electrician; Instrumentation engineer, Controls and electrical systems technician; Installation engineers; Installation supervisor; Scaffolder; Service engineers; Panel cleaners; Security.

Q Recent growth trend continued

QLatest DECC 2020 projection (EMR)

Q Installed capacity

QUK NREAP projection for 2020 QDECC UEP 2020 projection

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

T R AV I S P E R K I N S G R O U P

MAXIMISING THE CONTRIBUTION OF RENEWABLE TECHNOLOGIES Paul Joyner, Managing Director of Sustainable Building Solutions (SBS), part of the Travis Perkins Group, claims a fabric first approach must be taken to maximise the potential for energy savings from renewable technologies.

W

ith over half a million households in the UK now featuring solar PV, thermal or air source heat pump systems, it is clear that renewable technology is now playing a key role in bringing both new build and ageing housing stock closer to the low carbon future. However, Paul Joyner, Managing Director of Sustainable Building Solutions (SBS) part of the Travis Perkins Group, claims a fabric first approach must be taken to maximise the potential for energy savings from renewables. A fabric first approach is vital if a significant impact is to be made on the UK’s carbon reduction targets. Fabric first provides a solution which is not only permanent, but through the support of companies such as SBS requires just small changes to products and construction methods to achieve genuine sustainable construction. The main driver to success for the fabric first approach must come from builders’ merchants. We need to fill the knowledge gap, provide support and guidance and not expect buyers to understand the technical specifications of each individual product. Since the acquisition of Solfex in 2013, recently combined with PTS Renewables, the Travis Perkins Group has become a major supplier of renewable technologies to the UK market and, backed by the strength of leading brands throughout the Group, now has a good understanding of the entire marketplace and have the necessary solutions to meet any requirement. SBS offers further specialist help, support and expert technical assistance to the construction industry. Technical specifications and installation planning

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can be provided to help maximise the energy efficiency of any new build or retrofit project.

T

he team has developed a set of standard construction drawings with the objective of being an information resource and advice service to customers with the ultimate aim of ensuring the highest levels of efficiency. All of the drawings are completed in partnership with the BRE and are LABC-registered and provide a flexible approach to meeting the 2013 Part L regulations. If a house is constructed using these high-quality guidelines and using correctly specified products, it will last for hundreds of years and remain as efficient as possible - bolting technology onto an unprepared shell won’t achieve the required levels of energy efficiency. If we want to assist in sustainable buildings

IF A HOUSE IS CONSTRUCTED USING THESE HIGH-QUALITY GUIDELINES AND USING CORRECTLY SPECIFIED PRODUCTS, IT WILL LAST FOR HUNDREDS OF YEARS AND REMAIN AS EFFICIENT AS POSSIBLE.’ becoming a way of life, we need to start with a fabric first approach and then we can maximise the impact of renewable technologies.

FOR FURTHER INFORMATION For further information on SBS visit www.tpsbs.co.uk. Alternatively, call SBS on 0800 688 8388 or email helpline@tpsbs.co.uk. REview Renewable Energy View 2014

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ENPHASE

REVOLUTIONISING SOLAR POWER GENERATION Cutting edge technology and the right business model are vital.

2

013 has been a record year for solar PV in UK, which is now among the three top markets in Europe. At the end of the year the new PV installations reached 1.45 GW and cumulative PV was at the 3 GW level. To grow in this vibrant market depends on the right technology and the right business model. Enphase Energy, which entered the UK market only 18 months ago, grew to significant levels and in a very short period of time has achieved several key milestones, ending Q4 2013 with a market share of 6% in the UK residential market*. Cutting edge technology comes together with no compromises in quality, which meant that Enphase defined the microinverter from the ground up. In the past, the accepted industry standard was to install string inverters. They operate by combining the voltage and current of all solar panels in an array into a single output that is fed into a central inverter. But this approach does not yield the maximum efficiency possible from solar PV systems. An alternative approach is to look at each solar panel individually; microinverters convert direct current into alternate current directly at the panel level rather than through a string. This system offers increased productivity, reliability and ease of installation. The idea has been around since the 1970s but took a while to get off the ground, mainly due to manufacturing cost, unit reliability and power conversion efficiency. That is until Enphase Energy co-founders Martin Fornage and Raghu Belur addressed the

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challenges head on and rebuilt the solar inverter. It was 2006. Two years later the company was ready to introduce the world’s first microinverter system. Since then many things have changed. Growth has been continuous, consistent and substantial. It was the end of 2011 when Enphase shipped the first system in France and Benelux, and at the beginning of 2012 Italy followed. In 2012 the company has been listed at NASDAQ under ENPH. In 2013 Enphase got impressive results, highlighted by continued gross margin expansion that has improved 350 basis points year-onyear. The company increased the overall financial performance and substantially improved the cash flow from operations for the year close to the break-even level. For the full 2013 total revenues were $232.86 million representing 355MW (AC); finally, to date, Enphase has shipped over 1GW (AC) or approximately 5 million microinverters, and the Enphase systems have produce more than 1.38 TWh of clean energy worldwide. Moreover in 2013 the company was named #1 residential inverter supplier in the Americas for 2012 by share of revenue (IHS Research); named #1 power electronics monitoring provider in the world by number of new sites in 2012 (GTM Research); and named #1 fastest growing cleantech company for percentage fiscal year revenue growth from 2008 to 2012, with a 12.890 percent revenue growth in 2013 (Deloitte’s Technology Fast 500™). While Enphase continued to grow in the US residential market, where it increased the market share to become the number 1 inverter company (45%

market share by megawatts and over 50% by revenue) in 2013, Enphase has strenghtened its European footprint staffing over 40 people in 2013 and reaching 15% of the worldwide revenue in Q42013. The growth continues in 2014 with a plan to increase the workforce by 25% in Europe by the end of 2014. But Enphase doesn’t only provide the ultimate technology and a very well structured sales organization to the UK market. Enphase goes along with solar professionals, designers, installers and system owners with a full range of unique services, highly qualified and free for the entire lifetime of the Enphase system. Services include product training courses, which guarantee an adequate technical development and skills to help from the design phase and throughout the life of the system. Plus UK-based Customer Service, easily accessibile, very close to the market and its players and their diferent needs, always available, and fully integrated in EMEA and within the international network of the Enphase Customer Service. All these ingredients are making Enphase successful in the UK market. As a result, the company exited 2013 with strong business momentum, a very solid business and operational foundation that enable continuous success. *using the latest government data for residential market size provided by DECC.

FOR FURTHER INFORMATION www.enphase.co.uk.

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SOLAR THERMAL

( H E AT )

Solar thermal is another example of being too confident of the reliability of modelling projections. Analysis for the Renewable Heat Incentive has consistently predicted minimal deployment, yet solar thermal was popular before this incentive was introduced and continues to grow. The published 2020 figures should be updated – we are unable to explain why the estimate for 2020 (published 2010) is lower than the actual generation in 2007. O

During the period 2010 - 2012 PwC estimate investment in the sector totalled £220m

OOver

the period 2013 - 2020 PwC forecast investment in the sector could total £100m*

S O L A R T H E R M A L CO N T E X T O

Deployed in the UK for many years, but growth slowed since 2010

ODomestic

Renewable Heat Incentive should make a difference and industry is forecasting significant growth

OMain

UK market likely to be domestic, but has been used in other countries at larger scale

*Based on 2010’s NREAP projections. Since this the policy position has improved

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SOLAR THERMAL HEAT GENERATION

SIZE OF THE UK S O L A R T H E R M A L S E C TO R

TO DATE AND PROJECTED BY DECC (NREAP) 2000

Q Renewable heat production 1,781

ANNUAL GENERATION (GWh)

1500

QNREAP heat projections (2010)

1,424

2012/13

830

940

No. of people employed across UK supply chain

7,550

7,530

No. of UK companies across supply chain

340

340

Sector Turnover (£’millions)

1,134

1000

896

522

500

544

422

395 395 395 395 395 395

395 395

341

JOBS IN SOLAR THERMAL

20

20

05

06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20

0

SOLAR THERMAL - HEAT GENERATION AND PROJECTED GROWTH TREND 3000

1,035

459

LOGISTICS Driver; Packer; Warehouse Staff.

2000

1,781

1,781 1,781

For full explanation of terms, methodology and growth projections see pages 114-115

1,424

1500 1,134

1000

500

MANUFACTURING AND DESIGN Component manufacture; Solar energy systems designers; Systems engineer; Electrical engineer; Laboratory technician; Quality control technician; Collector assembly worker; Chemist; Surveyor; Materials scientist. INSTALLATION AND MAINTENANCE Roofer; Electrician; Plumber; Instrumentation, controls and electrical systems technician; Scaffolder; Installation engineer; Installation supervisor; Service engineer; Semiskilled labourer for cleaning collectors.

2500

RENEWABLE HEAT PRODUCTION (GWh)

2010/11

896

422

544

522

341 395

Q Recent growth trend continued

20 20

20 19

20 17 20 18

20 16

20 13 20 14 20 15

20 12

09 20 10 20 11

20

08 20

07 20

20

05 20 06

0

QUK NREAP projection for 2020

Q Installed capacity

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

MINUS 7

HARVESTING AFFORDABLE HEAT Mark Wozencroft, Managing Director, of Minus 7 explains how the Minus 7 hybrid energy harvesting system can make economical, energy saving, heating and hot water an everyday reality.

A

s part of the EU, the UK is being tasked to meet challenging energy saving targets by 2020 and 2050. The EU aims to get 20% of its energy from renewable sources by 2020. Use of renewable energy will enable the EU to cut greenhouse emissions and make it less dependent on imported energy, cutting the risk of energy blackouts. However to hit these targets we need to increase the use of low-carbon technologies. The main purpose of any renewable energy system is to reduce the amount of energy used. The Minus 7 hybrid energy harvester is incredibly economical. The system not only reduces the quantity of hydrocarbon required to deliver a particular thermal load but will also deliver that heat at a significantly lower unit cost (typically at 40% - 50% of the equivalent gas fired cost). This is in line with government strategy to provide low carbon solutions and affordable warmth. How the System Works The Minus 7 hybrid energy harvesting system is made up of an endothermic roofing system, a solar energy processor and a large thermal store. The system uses an endothermic tile planks to form a weather-tight interlocking roofing system, made from a uniform profile, aluminium extrusion, dressed in a powder-coated, hard-wearing finish. The endothermic tile planks are flooded with a heat transfer fluid that absorbs heat energy and solar thermal energy. There are no unsightly bolt-on panels so the system is visually unobtrusive and can’t be readily distinguished from any other normal roof from the street. Also, because it’s primarily harvesting thermal energy, it does not require a south facing roof. It is classified as a solar-assisted heat pump technology, within the

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TOP ENERGY SAVING ATTRIBUTES OF THE MINUS 7 SYSTEM O Harvests energy 24 hours of the day from 360o - does not require a South-facing roof OSystem sized to give maximum efficiency, even in worst case scenario of midnight in mid-winter OThermal store gives consistent supply of heat and hot water reducing peaks and troughs OThermal store has 200mm of insulation, minimising heat loss to just 2.5kWh per 24 hours OPumps that run the system are ultra-efficient - just 70W OThe operation of the heat pump is decoupled from the heat demand of the building OIt does not suffer from the UK’s winter humidity issues - no need to defrost OThe system is particularly adaptable to ‘smart grid’ applications

National Calculation Method (Standard Assessment Procedure). The identifier for this product is: Minus 7 SEP3G10 1/2/3.

Solar Energy Processor

Tested by the Building Research Establishment The Minus 7 System is proven to work incredibly effectively. We have run tests and discovered that, with our system, for an average 50m2 apartment operating at a constant temperature of 23.5°C during the winter months, with hot water as well, heating bills would cost as little as £6 a week throughout the year. The system is at its most effective in spring and autumn – the weather

might only be partially sunny but (as a solar collector) the system can harvest between 8.0kWh – 10.0kWh, and over a 4 hour period for example this would be enough to top up the heat store without ever running the heat pump. It can provide heat and hot water for up to four dwellings and even in the middle of January the heat pump would typically only run for around 6 hours per day, per dwelling. This costs less to run than the average heat pump. Running several dwellings from one system reduces the proportionate capital outlay, making it highly suitable for housing developments. Also when putting the system under extreme load, the running costs, do not rise proportionally. A True Hybrid - Multiple Heat Sources Perhaps the single most impressive energy saving feature of the Minus 7 system is that it is a true hybrid. Primarily it harvests solar thermal and thermal energy but it can also harvest heat energy from other sources such as a back boiler fitted to a log, or multi-fuel, burner, or waste heat from other sources. The system runs on the principle of always trying to reduce carbon and energy costs. It is fully autonomous and when connected to various heat sources the solar energy processor intelligently senses that there is heat being made available to it and will prioritise harvesting heat from low carbon or lower cost energy sources, therefore not using electricity.

FOR FURTHER INFORMATION Mark Wozencroft, Minus 7, Units 1 & 2 Ivy House Farm, Wolverhampton Road Cheslyn Hay, Staffordshire WS6 7HX

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LOW COST HEAT & HOT WATER

Green heating benefits landlords and tenants alike.

T

he Minus 7 hybrid energy harvesting system has recently been switched on at a new housing development in Norfolk. Local property developer David Lomax completed the renovation of an 1897-built Victorian school building, creating eight two-bedroom apartments, and is delighted with the results. To gain planning permission Lomax had to commit to using at least 10% renewable energy sources. “I’m very pleased with the Minus 7 roofing system. It looks like any other normal roof and matches with the slates we have used,” says Lomax. “The benefit of this for a house builder or landlord is that I can charge a higher rate of rent for my properties, but include heating and hot water within the costs to the tenants. My running costs are greatly reduced and the tenants benefit from set rates and increased levels of comfort. Minus 7 estimate an average weekly cost of £6 per week, per apartment, and I’m pleased with that cost,” he says. The tenants moved into the apartments in February 2014. Lomax categorises his development as something similar to a ‘condensed housing estate.’ The outlay for the Minus 7 systems, including installation by the company, was £80,000 but the Renewable Heat

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Incentive (RHI) scheme swayed him to invest in it. Over 20 years the RHI will pay out £100,000, which he explains, made the decision much easier. “When energy savings and the benefits to the tenants are factored in the payback period is effectively reduced to 12-15 years, as running the Minus 7 system is around 50%-60% cheaper than using a gas boiler,” explains Mark Wozencroft, Managing Director, of Minus 7. “The development is now, to an extent, futureproofed against the rising costs of fuel bills. The purpose of the RHI is to support the developer’s capital expenditure on renewable energy systems and make it cost effective to use renewable systems.” The property has 100m2 of active Minus 7 endothermic tile planks, plus a 20m2 solar fence that is used to top up the system’s solar and endothermic harvesting capacity in extreme weather conditions. Using the Minus 7 system means that the apartments do not require conventional gas boilers reducing maintenance and service charges. “We are effectively running two mini district heating systems; each floor has a 9kW solar energy processor designated to it together with a 4.5m3 thermal store. The whole development is serviced by a single 3m3 cold store. Each system delivers up to 200kWh/day,” says Wozencroft. The heat from the thermal stores is fed to the building through insulated pipes running underground. As it enters the building it is spilt into two rings: one for the ground floor and one for the first

floor. Each apartment is fitted with a heat transfer unit (HTU) that extracts heat from the thermal ring main and distributes it through the underfloor heating circuits. The HTU also has a hot water generator. Incoming water, usually at an average temperature of 10°C from the mains, passes through a UV steriliser, then through a preheat heat exchanger heating it to around 30°C before it passes through an inline immersion heater which heats it to between 40°C-45°C (settable). The system is also designed to cope in extreme weather conditions in winter. “The system provides affordable and sustainable heat with low whole-life cost benefits and low maintenance costs. This project demonstrates that renewable energy systems, that can reduce the environmental impact of heating and hot water provision, are economically viable,” says Wozencroft. “We developed the Minus 7 system as we wanted to create a visually pleasing renewable energy system for developers that was highly efficient and provided low cost heat and hot water for end users. The system is perfect for new developments, especially where several dwellings are located in proximity, as using the system to service up to four properties at once increases the cost effectiveness for developers.”

FOR FURTHER INFORMATION Mark Wozencroft, Minus 7, Units 1 & 2 Ivy House Farm, Wolverhampton Road Cheslyn Hay, Staffordshire WS6 7HX

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

LG SOL AR

The solar photovolatic industry is on its way to grid parity but it still faces obstacles.

LET IT SHINE S

olar technology is becoming increasingly popular across Europe for a number of reasons; homeowners and businesses are looking to remove themselves from increasing energy prices, and are seeking more environmentally friendly energy solutions. With the feed-in tariff system and support programmes currently in place

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in the UK, changing to solar energy has become more attractive. In combination with the expected compensation users can make from balancing increased electricity cost in the winter with excess energy from the summer, using solar energy can translate into substantial savings for households. However the energy market faces two prominent obstacles to reaching a bigger audience; firstly there is a high level of uncertainty among potential customers and secondly, the persistent belief that photovoltaic energy is expensive. On the contrary, over the last few years solar panels have become much more efficient, providing an improved price-to-value

ratio, which has almost closed the gap to grid prices. For example, bi-facial cells capture the light reflected from the back sheet onto the cell back side. Double antireflective coating and the use of antireflective glass increases efficiency even further. These high-performance cells not only increase solar energy yield but also the financial return for the user. The second obstacle, uncertainty, is mainly caused by the differing political environments across Europe. Governments have rolled back support for renewable energies in general and the photovoltaic industry in specific. The varying speed and extent of change

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across the markets in Europe is a particular source of uncertainty. “While the British government too has reduced its feed-in tariff subsidy, this dœs not mean confidence in the solar industry is waning. Rather this development should be seen as a sign that the industry is now robust enough to need less and less government support to survive,’ says Sven Armbrecht, Area Sales Manager at LG Solar. He adds: “Solar power has been the biggest source of new electricity generation for two consecutive years and further growth is on the horizon. This shows that the market is in good shape already. With the growing markets, we can expect further consolidation resulting in more competitive prices and ultimately, cheaper solar panels.” With more affordable systems, higher return on investment and innovative products shaping the photovoltaic future,

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power storage will become increasingly important. Taking it one step further, power storage systems will allow customers to achieve true independence from the grid. Solar electricity storage systems enable consumers to use their solar power exactly when needed and are an important step towards another innovative development in the world smart homes. The internet means consumers are growing accustomed to operating everything from their mobile devices. This is also true for controlling energy consumption in their homes. From automatically closing the blinds to adjusting the heating, homes are becoming more and more automated. Now the solar industry is looking to combine environmentally-friendly solar solutions with home automation. This provides home owners with the benefit

of a single platform to not only manage their energy consumption but also their home appliances and devices. “Although there is still a need for subsidies in some of the markets, the photovoltaic industry is fast becoming independent from financial support and its impressive pace of growth shows that it is robust enough to survive in the future,” says Sven. “Further consolidation, price competition, innovative research and development will lead to higherefficiency products that are more affordable than ever for businesses and home-owners. Thus overcoming one of the most challenging obstacles at the moment, the persistent believe that solar modules are expensive, and allowing the market to continue to thrive.”

FOR FURTHER INFORMATION www.lg-solar.com/uk/

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

WAV E & T I D A L

(POWER)

The industry is moving from technology development to deployment. Much of the Governmentâ&#x20AC;&#x2122;s support has been directed at funding innovation to date, with progress in commercial-scale deployment not being as rapid as Government anticipated. The step-change required to deliver the levels modelled to 2020 depends on progress with initial demonstration array projects and the ability to ease grid blockages and raise further funding on the back of them. O

PwC forecast that this nascent sector could see investments totalling ÂŁ700m being made in the period 2014 - 2020

WAV E & T I DA L CO N T E X T O

Still at an early stage of deployment

OUK

has large resource as well as leadership in developing devices

ORelatively

high levels of support in Renewables Obligation and Contracts for Difference, but needs clear policy beyond 2020

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WAVE & TIDAL ELECTRICITY GENERATION

S I Z E O F T H E U K WAV E & T I DA L S E C TO R

TO DATE AND PROJECTED BY DECC

2010/11

2012/13

86

100

No. of people employed across UK supply chain

570

570

No. of UK companies across supply chain

33

30

500

Q Annual electricity generation

Sector Turnover (£’millions)

QDECC 2013 UEP projections 403

ANNUAL GENERATION (GWh)

400

300

267

267

200 128

J O B S I N WAV E & T I DA L

97

100

2

1

09

20 10

20 11

20 12

20 13

1

6

PLANNING AND DEVELOPMENT Environmental and planning consultant; Marine biologist; Marine surveyor; Subsea engineer.

27

25 4

20 20

20 19

20 18

20 17

20 16

20 15

20 14

20

0

DESIGN AND MANUFACTURE (INCLUDING TECHNOLOGY R&D) Design engineer; Electrical systems designer; Project manager; Environmental engineer; Environmental consultant; Oceanographer; Programmer and modeller; Fluid dynamics specialist; Communications and control engineer; Electrical engineer; Power generation engineer; Marine engineer; Electrical engineer; Welder; Metal worker; Machinist; Skilled assembler; Test technician; Materials engineer; Mechanical engineer.

WAVE & TIDAL STREAM INSTALLED CAPACITY AND PROJECTED GROWTH TREND 1500

1,300

INSTALLED CAPACITY (MW)

1200

CONSTRUCTION AND INSTALLATION Planning and environmental consultants; Project management and construction workers; Marine Engineer; Electrical engineer; Power generation engineer; Quantity surveyor; Turbine specialist engineer; Health and safety manager; Specialist shipping and port personnel; Divers; Controls engineer; Project manager; Marine installation crew; Health and safety manager.

900

600

300 149

3

7

8

20 10

20 11

20 12

20 13

10

14

20 15

3

20 14

2

09

140

20 20

0 20 2

20 20

20

0

Q Recent growth trend continued

QLatest DECC 2020 projection (EMR)

Q Installed capacity

QUK NREAP projection for 2020 QDECC UEP 2020 projection

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SUPPORT SERVICES AND OTHER Device maintenance crew; Electrical engineer; Marine engineer; Power generation engineer; Energy sales people; Divers.

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PELAMIS

RIDING THE WAVES I

t has now been almost ten years since we generated our very first kWh from the waves off Billia Croo in Orkney. The journey from that momentous milestone to the present day has been as challenging and rewarding as it was to get there. We have now amassed a total of almost 12,000 hours at sea, with some 200,000kWh of electricity generated, a wealth of real operational experience and learning, and a mountain of parallel fundamental research and development data. We now have a deep understanding of the resource, our environment and our technology, of how to make it work, how to make it work better, and how to make it cheaper. All

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of these are the essential signals that we have moved from the first critical step of demonstrating that marine power is possible, towards proving that the Pelamis technology can be commercially viable, investable, and suitable for large scale production and deployment. And of course we are not alone in making good progress. A number of the leading wave and tidal technologies have delivered similar step advances and success stories. The challenge so far has been harder than anyone in the industry, including me, initially anticipated, but our hard won experience has made us realistic and we now understand what we need to do to succeed. For Pelamis, the first generation P1 machines gave us ‘proof of concept’ but were a long way from being suitable as the basis for a commercial system. Armed with this experience, the second generation P2 demonstration programme

currently ongoing in Orkney, has been invaluable to provide us with a solid proven technical platform on which we can build. We have been operating the two 750kW P2 machines at EMEC in Orkney for a number of years within a risk-controlled, progressive test programme that has given us a thorough understanding of the Pelamis system and its safe and cost effective operation. This programme has advanced almost all elements to a ‘Technology Readiness Level’ of 7 or 8 and given us the knowhow and experience to specify a new enhanced machine, dubbed ‘P2e’. This new P2e machine will be a genuine commercial ‘First of a Kind’ unit, and be the basis of array deployments in the future. The P2e machine will introduce a number of changes and enhancements to improve survivability, reliability and durability, while boosting power absorption and reducing both REview Renewable Energy View 2014

89

W

The marine power sector has progressed beyond proof of concept to focus on the economics of delivering the first wave and tidal power arrays, explains Richard Yemm, Chief Executive of Edinburghbased Pelamis Wave Power.


R E N E WA B L E E N E R GY V I E W 2 0 1 4

PELAMIS

capital and operational costs. The machine is designed to give the best opening cost of energy possible for our system, and hit the investment hurdles required to trigger the move to array deployment. Optimising the Cost of Energy trajectory has been, and still is, key to the business case for marine energy. A project commissioned and funded by the Energy Technologies Institute (ETI) has allowed us to validate our assumptions on cost and performance and allowed us to quantify uncertainties. This work is being further advanced thanks to support from the Marine Renewables Commercialisation Fund (MRCF) from the Scottish Government. A vital step to achieving and demonstrating commercial viability for all marine energy technologies is successful demonstration of a small array. A number of tidal demonstration arrays are working toward financial close and we have advanced plans in wave energy as well. For Pelamis, with MRCF support, we have been able to accelerate the development and consenting of our Farr Point site up on the north coast of Scotland. Within our Agreement for Lease

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THE CHALLENGE SO FAR HAS BEEN HARDER THAN ANYONE IN THE INDUSTRY, INCLUDING ME, INITIALLY ANTICIPATED, BUT OUR HARD WON EXPERIENCE HAS MADE US REALISTIC AND WE NOW UNDERSTAND WHAT WE NEED TO DO TO SUCCEED.’ for 50MW on the site the first stage would be a demonstration array of up to 7.5MW, for which we have a signed grid connection agreement in place. This would be the springboard for scaling up at Farr Point and for initiating parallel deployment programmes with our utility partners on their sites in Scottish waters and around the globe. But all this work progress needs sustained investment. It’s been a tough road for all in the sector but so far we have managed to keep sufficient investment flowing to maintain progress. However, it is widely recognised that with

the other challenges in the wider market funding the marine sector is becoming even harder. There is now a clear risk that the sector will stall if we cannot keep it flowing. Government maintains a key role in underpinning confidence and levering investment into the sector. Solid and indeed enhanced support from the UK and Scottish Governments will remain critical over the next five years if we are to see the wave and tidal sectors successfully make the commercial transition and start to deliver a real contribution to UK CO2 reduction and strong value return to the UK economy. So in summary we, and the whole industry, have come a long way from our first, inspirational and hard won kWhs from the waters off Orkney in 2004. We still have far to go of course, but for the first time I think we can say: ‘We know what needs to be done, and we know how to do it’. A major step forward indeed.

FOR FURTHER INFORMATION www.pelamiswave.com enquiries@pelamiswave.com

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

HYDROPOWER

(POWER)

As the graphs show, there is a substantial contribution from historic plant, but recent growth rates have been very low, at less than 1%. Activity is focusing on smaller-scale schemes and the overall picture looks unlikely to change to 2020. PwC estimate that ÂŁ200m was invested in the sector between 2010 - 2013 OOver the period 2014 - 2020 PwC forecast a further ÂŁ600m could be invested in the sector O

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H Y D R O P OW E R CO N T E X T O

Significant contribution from historic installations. New deployment mostly small-scale

OLimit

to cost reductions that can be achieved as no two installations are identical

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HYDROPOWER ELECTRICITY GENERATION

SIZE OF THE UK H Y D R O P OW E R S E C TO R

TO DATE AND PROJECTED BY DECC Q Annual electricity generation 6000

5,690 5,284

5,241

4,989 5,067

5000

ANNUAL GENERATION (GWh)

QDECC 2013 UEP projections 5,327 5,229 5,285

5,152

5,366

4,719

4000

2010/11

2012/13

544

580

No. of people employed across UK supply chain

4,970

4,960

No. of UK companies across supply chain

260

260

Sector Turnover (£’millions)

3,575

3000

2000

J O B S I N H Y D R O P OW E R 1000

MANUFACTURE AND DESIGN Design engineer; Hydro geologist; Marine biologist; Electrical engineer; Machinist; Welder; Metal worker; Structural engineer; Marine engineer; Reservoir engineer; Resource manager.

20 20

20 19

20 18

20 17

20 16

20 15

20 14

20 13

20 12

20 11

20 10

20

09

0

HYDROPOWER INSTALLED CAPACITY AND PROJECTED GROWTH TREND

INSTALLATION AND MAINTENANCE Planning and environmental consultant; Project management; Construction worker; Project Manager; Electrical engineer; Power generation engineer; Maintenance engineer; Installation technician; Supervisor; Environmental and planning consultant; Environmental scientist; Ecologist; Service engineer.

2500

2,130

INSTALLED CAPACITY (MW)

2000

1,637

1,640

1,675

1,686

1,693

14

28

1,693

1,693

1,801

1,792

For full explanation of terms, methodology and growth projections see pages 114-115

1500

1000

500

0 20 2

20 20

20 20

20 15

20 14

20 13

20 12

20 11

20 10

20

09

0

Q Recent growth trend continued

QLatest DECC 2020 projection (EMR)

Q Installed capacity

QUK NREAP projection for 2020 QDECC UEP 2020 projection

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

MCT MARINE

This page: SeaGen S 1.2MW tidal turbine in Strangford Lough, Northern Ireland Right: Narec, The National Renewable Energy Centre, Blyth

STEMMING THE TIDE Marine Current Turbines continues to develop tidal current turbine technology against the backdrop of a tough financial climate and a period of uncertainty during the development of the Electricity Market Reform.

T

he UK is currently the undisputed global leader in tidal current energy development and demonstration, with more tidal current devices installed than the rest of the world. If Marine Current Turbines (MCT) succeeds in its plans, this gap is set to widen further in the next 2-3 years. Tidal currents are generated from the tidal motions in the sea that are influenced by the phases of the moon. One of the key unique selling points for tidal current energy is the predictability of

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the electricity yield from a tidal device, which is as predictable as high and low tide itself. This then offers grid operators the benefit of being able to schedule generation from a wide energy mix including all forms of renewable such as solar, wind, tidal and wave. MCT has proven the energy conversion technology (water to wire) which is an environmentally sustainable solution to zero carbon energy generation and is now ready for deployment in commercial scale tidal energy projects. With the support of government, this

innovative tidal technology may prove transformative not just for tidal energy but the renewable energy sector as a whole with a potential to supply around 8-10% of the UKâ&#x20AC;&#x2122;s energy needs. As with any form of clean energy, investment in tidal current energy technology will help decarbonise the UKâ&#x20AC;&#x2122;s energy supply, increase its energy security and reduce its dependence on imported fossil fuels. MCT has pioneered the development of tidal technology since 1992 with a proof of concept technology device in Loch Linnhe and the 300KW Seaflow device installed near Lynmouth in Devon in 2003. The current SeaGen S 1.2MW tidal turbine has been generating power

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in Strangford Lough, Northern Ireland since 2008. SeaGen was the world’s first installed commercial scale tidal turbine, which has been demonstrated to be uniquely capable of meeting the technological and environmental challenges of operating in an offshore underwater environment; SeaGen is capable of generating clean energy to supply 1,400 homes. According to the Ofgem website, in April 2014 SeaGen had produced over 9GWh of electricity into the grid, which is 90% of the declared output of all wave and tidal devices currently installed and operating in the UK. MCT is also involved in developing a demonstration array in the Skerries located off Anglesey in Wales which should be operational in 2016. This is the first project in a potential 500MW UK project pipeline that could be operational by 2025 in addition to an international portfolio including Canada and France. All of these projects will depend on MCT’s uniquely demonstrated Energy Conversion Chain (ECC). With over 6 years of operating

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MCT HAS PROVEN THE ENERGY CONVERSION TECHNOLOGY (WATER TO WIRE) WHICH IS AN ENVIRONMENTALLY SUSTAINABLE SOLUTION TO ZERO CARBON ENERGY GENERATION AND IS NOW READY FOR DEPLOYMENT IN COMMERCIAL SCALE TIDAL ENERGY PROJECTS.

experience in Strangford Lough MCT has now developed a new 1MW ECC that has been on accelerated life cycle test at Narec test centre in Blyth since the latter half of 2013. This new 1MW ECC will be deployed on various “foundation platforms” which will enable MCT to offer products to a wide range of market requirements. The products include the existing SeaGen S surface piercing structure to be deployed in the Skerries; a floating SeaGen F variant for high tidal range locations which will be deployed in the Bay of Fundy, Canada; and the extensively submerged variation SeaGen U which will be used for locations sensitive to surface navigation restrictions. With a clear vision of market demands and ongoing product development to meet potential customer requirements MCT will continue to be leader in innovation in tidal current turbines.

FOR FURTHER INFORMATION www.marineturbines.com

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

LIQUID BIOFUELS

Patterns in consumption of biofuels – including the relative proportions of bioethanol and biodiesel – have changed rapidly, in response to Government policy and other external factors. Since biofuels are traded globally, there is not necessarily a correlation between production and consumption of biofuels in the UK. The figures show that locally-produced fuels have made up between 8-22% of UK consumption, with no clear trend emerging. This implies that a more favourable policy environment would enable the UK to source a significantly increased proportion of its consumption from UK production – thereby maximising the economic benefits. 96

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(TRANSPORT)

B I O F U E L S CO N T E X T O

Renewable Energy Directive imposes sector-specific requirement for 10% of energy used in land transport to be renewable by 2020. In practice will be met by renewable liquid biofuels

OUK

has not set out how it will meet target, pending EU resolution of indirect land use change. Very controversial, and still unclear when or whether this issue will be achieved, although other comprehensive sustainability criteria have been in UK law since 2008

OBiofuels

traded globally, unlike power and heat which can only be transported shorter distances. Consumption in UK therefore no guarantee of economic benefits to UK. These will only occur if there is confidence in UK market and policy supporting this

OUK-produced

fuels have excellent sustainability record, significantly exceeding expectations in environmental protection and greenhouse gas savings

OUK

wishes to support ‘advanced’ biofuels, although this will require far more supportive policy environment than at present

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SIZE OF THE UK LIQUID BIOFUELS SECTOR 2010/11

2012/13

485

530

No. of people employed across UK supply chain

3,500

3,510

No. of UK companies across supply chain

200

200

Sector Turnover (£’millions)

UK BIOETHANOL & BIODIESEL CONSUMPTION TO DATE AND PROJECTED BY DECC 5000

Q Biodiesel consumption Q Bioethanol consumption

Q NREAP projections (2010) 4,205

ANNUAL CONSUMPTION (ktœ)

4000

3,877 3,544 3,205

3000

JOBS IN LIQUID BIOFUELS

2,861

DESIGN AND DEVELOPMENT Design engineer; Project manager; Economist; Electrical systems designer; Environmental engineer; Biotechnologist; Chemist; Agriculturalist; Environmental consultant; Feed-stock handling systems designer.

2,510 2,153

2000 631

652

819 774

320 206

1000

1,044

1,045

886

153

925 631

766

95 85 33

347

20 20

20 19

20 18

20 17

20 16

20 15

20 14

20 13

20 12

20 11

09 20 10

08

20

20

20

20

20

07

06

169

05

0

CONSTRUCTION AND INSTALLATION Planning consultant; environmental consultant; Project management and construction workers; Electrical engineer; Power generation engineer; Project manager; Health and safety manager; Pipefitter; Welder; Electrician; Service engineer.

UK BIOETHANOL & BIODIESEL CONSUMPTION TREND

5000

4,205

BIOFUELS CONSUMPTION (ktœ)

4000

3000

819

652

1,646

1,709

774

320 206

1000

1,044 153

1,045

886

925 631

FEED-STOCK PRODUCTION Farmer; Agricultural operative; Waste operative; Civil engineer; Water engineer; Irrigation engineer; Process engineer; Chemical engineer; Electrical engineer; Field technician; Tanker driver; Warehouse manager. OPERATIONS AND MAINTENANCE Chemist; QC Laboratory staff; Electrical engineer; Power generation engineer; Energy trader; Boiler engineer; Pipefitter; Welder; Electrician; Service engineer; Construction worker; Electrical/electronic technician; Plant operator; Mechanic, Project Manager, Fuel and ash supervisor; Labourer; Maintenance manager.

2000 631

MANUFACTURING Design engineer; Project manager; Welder; Sheet metal worker; Chemist; Agricultural specialist; Microbiologist; Biochemist, Electrical engineer, Mechanical Engineer.

766

95 85 33

347

20 20

20 19

20 18

20 17

20 16

20 15

20 14

20 13

20 12

20 11

09 20 10

20

20 07 20 08

20

20

06

169

05

0

Q Biodiesel consumption

QTrend continued 2014-2015

Q Bioethanol consumption

QUK NREAP projection for 2020

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DISTRIBUTION Distribution manager; Tanker driver; Blend operative; Forecourt operative.

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

TESCO

USING BIO-LNG AS A TRANSPORT FUEL

Supermarket giant Tesco realised that its demanding carbon emission targets required a radical approach.

T

esco is committed to reducing its impact on the environment and has set demanding targets to cut carbon emissions in its own operations. Between 2006 and 2012, Tesco in the UK achieved a 50% reduction in the transport carbon emissions per case of goods delivered. Tesco now has a new target to achieve a further 25% reduction by 2020. The 50% reduction in emissions came from three main initiatives: optimising its network of distribution centres to bring products closer to the stores and remove road miles; moving goods by rail for long journeys rather than road; introducing double deck trailers which can hold 60% more cages than a standard trailer. With all the low hanging fruit of operational efficiency increases gone, Tesco realised that to meet its new target, an alternative to mineral diesel was needed. Research identified switching to gas as one of the most effective strategies for GHG reduction for heavy goods vehicles (HGVs), with well-totank savings of up to 65% when using biomethane and 16% for natural gas. In addition, gas produces less nitrogen oxides, often referred to as NOx, and particulate matter than diesel, which brings benefits for air quality as well. At the same time as this, the Technology Strategy Board launched a Low Carbon Truck Demonstration trial, inviting applications to access part funding for projects involving such technology. Tesco had a successful project application and in 2012 converted 35 Mercedes Axor tractor units using Hardstaff technology to run on dual-

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RESEARCH IDENTIFIED SWITCHING TO GAS AS ONE OF THE MOST EFFECTIVE STRATEGIES FOR GHG REDUCTION FOR HEAVY GOODS VEHICLES.â&#x20AC;&#x2122;

fuel, both diesel and liquid gas. Dualfuel conversions can be made to run on both liquid and compressed gas, but Tesco chose liquid gas as it has a higher storage density and so is a more viable alternative for heavy-duty vehicle applications and long-distance transport. The Tesco dual-fuel vehicles operate out of its frozen food distribution centre at junction 18 of the M1, trunking frozen products to our regional DCs in the south of the UK, with an average journey distance of 110 miles. By mid-April 2014, the vehicles had driven over 3.5 million miles, with an average gas substitution rate of around 60% and carbon reduction of around 15%. They refuel at the first large-scale public gas refuelling station, operated by Gasrec. The Gasrec station runs on

a blend of liquefied natural gas (LNG) and liquefied biomethane, called BioLNG, but can also dispense compressed gas as well. The standard blend contains 15% liquid biomethane which is produced at Gasrecâ&#x20AC;&#x2122;s production plant at Albury in Surrey, using biogas collected from a municipal landfill site and can produce the equivalent of over 5 million litres of diesel per month. Currently government policies such as the Renewable Heat Incentive provide a much greater incentive for biomethane producers to inject into the grid for heating and electricity, rather than further upgrading the biomethane and liquefaction at an anaerobic digestion plant for use as a transport fuel. The freight sector has limited opportunities to decarbonise, with the use of biomethane identified as a key strategy. For more companies to have the confidence to invest in this technology, it is important that a future pipeline of biomethane is secured for use in transport.

FOR FURTHER INFORMATION Caroline Sindrey Group Distribution Environmental Manager caroline.sindrey@uk.tesco.com

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

VERDELEC

HEAT PUMPS, A ROUTE TO ZERO CARBON Now is the time to market the domestic RHI to the end user, says Brian Biggs Managing Director and Jonathon Foxbatt Technical Director of Verdelec.

T

he long awaited domestic Renewable Heat Incentive (RHI) was finally launched in early April 2014, amidst virtually no fanfare whatsĹ&#x201C;ver. The much anticipated Green Deal received more publicity but has proved to be somewhat of a damp squib some say due to the bureaucracy involved. Only the expected tsunami of emails for those of us in the trade from suppliers and CPD providers heralded the arrival of this new scheme. But the industry must not be selfcongratulatory over the development; the job is only half done. Now is the time to market the Domestic RHI to the end user; otherwise this potential growth generator for the industry will be as useful as a chocolate fireguard, or Green Deal some might say. Yet again it falls to the industry to promote government initiatives. However, those who would seize this opportunity with both hands may well come up trumps, especially with UK climate strategy expecting 600,000 heat pump installs by 2020. Looking forward, central government has launched a fund to help self-build schemes get off the ground, using money

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to provide serviced plots through local authorities. This in part puts the end user in control of the countryâ&#x20AC;&#x2122;s building future, in part. This will provide home owners with a unique opportunity to push their architects and specifiers to achieve zero carbon targets for their homes, ahead of the industry deadline of 2016 for domestic and 2018 for commercial. Switched-on house designers will already know that, with a fabric first approach, it is possible to achieve code 6 sustainable homes at only a relatively small increase in the cost over a standard build. Combining mechanical ventilation with heat recovery (MVHR), along with low carbon and renewable technologies, it is

now possible with the cash incentives to reduce energy bills to near zero. No single technology can run a building. Complimentary technologies are the key. Heat pumps will be at the centre of this polyvalent system. The heat pump will control the inputs to the thermal stores, be it from solar thermal arrays or excess electricity production used in immersion heaters, or the heat pump itself. These technologies will work symbiotically, creating a system that runs more efficiently than the sum of its parts. Energy storage is key for renewables, be this thermal or electrical storage. Thermal stores are becoming increasingly advanced, using heat pumps as the brains for the system. Designers need to start making allowances in homes for more commercial style plant rooms. These will future proof the homes for new technologies, such as fluid flow batteries; will allow excess electricity generated to be stored in tanks of organic fluids, and can be scaled according to the overnight demand. With thermal and electrical storage at the heart of the energy system, a true solar home could be created. Heat pumps will remain the beating heart of these systems due to the sophistication of their controls and capacity to manage other renewable sources efficiently.

FOR FURTHER INFORMATION Tel: 08455 195104 www.verdelec.co.uk info@verdelec.co.uk

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

H E AT P U M P S

( A I R , WAT E R & G R O U N D S O U R C E H E AT )

Recent deployment is a long way behind that originally envisaged for 2020. Heat pumps have undoubtedly been held back by the delays of the launch of the domestic Renewable Heat Incentive (RHI), making the NREAP projections a challenge to meet. Not all the output from heat pumps is counted as renewable. Since they require electricity to operate, the Renewable Energy Directive essentially nets off this input electricity – this explains the reference to ‘renewable heat’ in the accompanying graphs and why these do not match the gross output figures used in the RHI.

H E AT P U M P S CO N T E X T Has been held back by Renewable Heat Incentive to date. OHigher levels of support for ground source heat pumps OSupport for air source heat pumps O Domestic RHI scheme launched before Easter O

OSome

deployment to date, driven by policies to reduce costs and carbon emissions in buildings

OInstallation

During the period 2010 - 2012 PwC estimate investment in the sector totalled £400m OO  ver the period 2013 - 2020 PwC forecast investment in the sector could total £3,500m O

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requires sophisticated understanding of heat demands of building and existing heating systems. Without this, consumer electricity bills and GHG emissions will be far higher than expected

ORenewable

Energy Consumer Code and Microgeneration Certification Scheme working to ensure good practice in installers and equipment. Critical to long-term reputation

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HEAT PUMPS HEAT GENERATION

SIZE OF THE UK H E AT P U M P S S E C TO R

TO DATE AND PROJECTED BY DECC (NREAP) 30000

Q Heat pump renewable heat QNREAP ASHP heat projections QNREAP GSHP heat projections

26,214

20,073

20000

11,583

15,933

15000

7,025 12,025

5,303

10000

935

1060

No. of people employed across UK supply chain

7,320

7,340

No. of UK companies across supply chain

380

380

Sector Turnover (£’millions)

11,083 9.013

6,373

3,884

5,036 4,117

3,175

20 20

20 19

20 16 20 17

20 15

20 14

2,512

20 13

652

20 11 20 12

20 10

20

09

08

31

07

0

20

06 20

20

05

0

0

20

0

455

J O B S I N H E AT P U M P S

2,256

1,745

1,372

275

131

8,490

6,722

4,919

5000

8,909

3,977

20 18

ANNUAL GENERATION (GWh)

2012/13

15,131

25000

HEAT PUMPS - HEAT PRODUCTION AND PROJECTED GROWTH TREND 2000 1,903

1,251

RENEWABLE HEAT PRODUCTION (GWh)

2010/11

MANUFACTURE AND DESIGN Design engineer; Heat pump engineer; Electrical engineer; Skilled and semiskilled assembler; Welder; Machinist; Metal worker; Hydro geologist; Geologist; Mechanical engineer. INSTALLATION AND MAINTENANCE Project manager; Construction worker; Electrical engineer; Pipefitter; Electrician; Heating engineer; Electrical/ electronic technician; Plant operator; Plumber; Drilling engineer; Drill rig operative; Operations maintenance engineer; Heating engineer; Pipefitter; Service engineer.

1500

For full explanation of terms, methodology and growth projections see pages 114-115

1,114 462

1000

652 652

652

455

500 275 131

Q Recent growth trend continued

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20 14

20 13

20 12

20 11

20 10

20

08 20

07 20

06 20

20

05

0

09

31

Q Installed capacity

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

R E A F O C U S F E AT U R E

RENEWABLE ENERGY TARGETS:

2020 PROGRESS AND THE 2030 FRAMEWORK

The core elements of the EUâ&#x20AC;&#x2122;s 2020 energy and climate change framework were binding targets for greenhouse gas (GHG) reductions and renewable energy and an indicative target for energy efficiency.

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T

he binding 20% target for renewable energy was divided proportionally across Member States – the UK’s target is 15% - and a 10% sub-target for renewable energy in transport was applied equally across all Member States. There is broad consensus that the binding renewables targets (enshrined in the 2009 Renewable Energy Directive) have been extremely effective at driving both Government policy to support renewables and subsequently the growth of the industry itself. The share of UK renewables has grown from 3% in 2009 to 4.2% in 2012 –

a 40% increase in three years. There is also broad consensus that this progress would not have been achieved in the absence of binding targets. The targets have helped reassure investors of the market opportunity in UK renewables at times when unfavourable policy decisions and damaging rhetoric from Government have risked undermining investment. While the EU is broadly on track for its binding 2020 targets, the nonbinding energy efficiency target has not delivered the same impetus in that sector. The EU is currently developing a framework for 2030. The Commission published its white paper in January, which again recommends a binding greenhouse gas target and a binding renewable energy target of “at least 27%”. However, the white paper recommends against binding renewables targets for individual Member States. It is difficult to see how a simple EU-wide target could be enforced. Under the 2020 framework, fines can be (and are) levied against Member States failing to achieve the required progress levels, but this would not be possible under the proposed 2030 framework. Furthermore, the 2020 EU-wide renewables target set an increase from 8% in 2005 to 20% in 2020. The white paper’s suggested target of 27% in 2030 is therefore a reduction in ambition compared with the 2020 framework. Finally, the white paper recommends against a renewable transport sub-target and against extending the Fuel Quality Directive, suggesting a much reduced focus on reducing GHG emissions in the transport sector. The UK Government has, to date, opposed binding national targets for

THE EU IS CURRENTLY DEVELOPING A FRAMEWORK FOR 2030. THE COMMISSION PUBLISHED ITS WHITE PAPER IN JANUARY, WHICH AGAIN RECOMMENDS A BINDING GREENHOUSE GAS TARGET AND A BINDING RENEWABLE ENERGY TARGET OF “AT LEAST 27%”.

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RENEWABLE ENERGY PROJECTS TEND TO BE MANY AND MODULAR, MEANING THEY HAVE A UNIQUELY HIGH POTENTIAL FOR COST REDUCTION AND JOB CREATION.’

renewables in favour of a technologyneutral approach. The white paper was debated by Energy Ministers and Heads of State in March and final proposals are expected to be decided by October.

THE REA VIEW Nationally binding 2030 targets for renewable energy would deliver the most effective framework for driving the growth in renewables that is r equired to decarbonise the energy mix at lowest cost while bringing maximum benefit. Binding renewables targets would not undermine investment in other low carbon technologies, such as nuclear power and fossil fuels with carbon capture and storage (CCS), as these technologies have the institutional backing of the established energy incumbency. The renewables industry is younger and, given its often decentralised nature, can actually be disruptive to the established energy incumbency. This puts renewables at a disadvantage to nuclear and CCS, suggesting that renewables investment could suffer under a technology-neutral 2030 framework. Renewable energy projects tend to be many and modular, meaning they have a uniquely high potential for cost reduction and job creation. The more confidence investors have in the market opportunity for renewables, the quicker these economic benefits will accrue. Finally, targeted measures for renewable transport are essential for achieving cost-effective emissions reduction in this sector. Given that transport accounts for a quarter of overall greenhouse gas emissions and has historically proven difficult to decarbonise, it would be unwise to remove the direct measures for decarbonising transport that exist under the 2020 framework.

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SIZE OF THE UK DEEP GEOTHERMAL SECTOR

R E N E WA B L E E N E R GY V I E W 2 0 1 4

D E E P G E OT H E R M A L

( H E AT & P O W E R ) 2010/11

2012/13

10

10

200

200

No. of UK <25 companies across supply chain

<25

Sector Turnover (£’millions) No. of people employed across UK supply chain

The graphs tell their own story. Commercial deployment for power is unlikely in the current policy environment, although there are hopes for a demonstration project. There are opportunities in the medium term for heat. These are dependent on relatively large heat loads such as industrial users or district heating schemes. The latter is particularly relevant, as both district heating and deep geothermal have high upfront costs but last a long time once built. O

MANUFACTURE Design engineer; Electrical engineer; Welder; Metal worker; Machinist; Skilled assembler; Test technician; Chemical engineer; Materials engineer; Mechanical engineer.

D E E P G E OT H E R M A L CO N T E X T

The introduction of a dedicated RHI tariff for Deep Geothermal should see an increasing level of investment enter the sector in the run up to 2020

SCHEME DESIGN AND DEVELOPMENT Project manager; Planner; Lawyer; Financial planner; Economist; Electrical systems designer; Physical engineer; Reservoir specialists; Geologist; Environmental engineer; Environmental consultant; Drilling engineer; Pump designer; Programmer; Modeller; Communications; Academic staff.

OVery

limited experience in UK, although more widely used elsewhere in Europe

OE  asier

to deploy for heat only as electricity generation requires higher grade heat. Several projects being developed for heat, but recent decisions make deployment for power generation unlikely before 2020

For full explanation of terms, methodology and growth projections see pages 114-115

CONSTRUCTION AND INSTALLATION Project manager; Construction workers; Drilling manager; Geologist; Drilling crew; Hydro geologist; Electrical engineer; Geophysicist; Power generation engineer; Drilling services manager; Drilling services staff; Generator engineer; Pump installer; Health and safety manager. OPERATIONS AND MAINTENANCE Heat and electrical engineer; Power generation engineer; Geologist; Hydro geologist; Academic staff; Service engineer.

OM  ay

be caught up with fracking in public and political perceptions

DEEP GEOTHERMAL ELECTRICITY GENERATION TO DATE & PROJECTED BY DECC 250

J O B S I N D E E P G E OT H E R M A L

DEEP GEOTHERMAL INSTALLED POWER CAPACITY AND PROJECTED GROWTH TREND 30

Q Annual electricity generation 218

QDECC 2013 UEP projections

QLatest DECC 2020 projection (EMR)

27

QDECC UEP 2020 projection

164

150

110

100

56

NREAP does not include heat or power figures for Deep Geothermal 20

20

15

10

56

44

50

INSTALLED CAPACITY (MW)

ANNUAL GENERATION (GWh)

25 200

5

15

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20 20

20 20

20 20

20 15

20 14

20 13

20 12

20 11

09 20

20 19 20 20

20 15 20 16 20 17 20 18

20 14

20 13

20 12

20 11

20 10

09 20

104

20 10

0

0

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R E N E WA B L E E N E R GY V I E W 2 0 1 4

PwC

INVESTMENT IN THE RENEWABLES INDUSTRY

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of investment is required in both renewable electricity and heat to meet the UK’s 2020 target. Of this, £40.8bn of investment is required in renewable electricity. Investments are expected to be dominated by investment in wind and solar PV. Based on DECC modelling, investments are projected to peak in 2014 and thereafter decline in the run-up to 2020. For renewable heat, if the UK is to meet the target levels of installed capacity as set out in the 2010 National Renewable Energy Action Plan (“NREAP”), then an estimated total investment of £23.6bn is required across a range of

technologies. Investment in renewable transport capacity has not been estimated due to uncertainty around whether targets will be met using imported or home-produced biofuels. The biggest variability around these forecasts are the costs of the technologies themselves, which in general are expected to reduce over time, and the underlying forecast levels of deployment, which are particularly sensitive to overall levels of demand for electricity and heat. Overall investment continues to be dependent on clear and consistent energy policy and on government continuing to provide a

FIGURE 1: CAPITAL INVESTMENT IN RENEWABLE ENERGY 2010 – 20201 [£BN] 20.0

Forecast

Historical 15.0 11.8

10.6 £bn

This report analyses investment in renewable energy in the UK electricity, heat and transport sectors over the period 2010 to 2013 and forecasts the expenditure required to reach UK 2020 targets of renewable electricity and heat. Figure 1 summarises total historic investment by sector, i.e. transportation fuels (2010-2013), heat (2010-2012) and electricity (2010-2013), and projected investment through to 2020. In total, there was an estimated £29.8bn of investment in the renewables sector over the period 2010-2013, with most of the investment in renewable electricity (£27.7bn). In the renewable electricity sector, investments have mainly been focused on wind, solar PV and biomass. In the renewable heat sector, there was an estimated £1.4bn invested during 2010-2012. The majority of this investment (£0.8bn) was in bioenergy technologies, which also saw the largest amount of added capacity (1.7GW out of 2.2GW in total). By contrast, solar thermal and heat pumps saw an estimated combined investment of £600m over the period in c 530MW of capacity. There has been comparatively little investment in the UK’s renewable transportation fuel production capacity in recent years. During 2010 to 2013 an estimated total of c. £740m was invested in fuel production capacity, spread across 3 biofuels production facilities. With the majority of biofuels imported into the UK, this has reduced the need to build production capacity. Looking forward to the investment required in renewable electricity and heat to reach the UK’s 2020 targets (based on government’s deployment forecasts), electricity is expected to attract the main share of the capital, although the investment in renewable heat is also expected to increase in importance relative to historical levels. In the years from 2014 to 2020 it is estimated that an additional £64.4bn

10.0

8.6

8.2

9.2

9.1

10.1

Renewable transportation fuels

9.2 6.7

6.9

Renewable heat Renewable electricity

4.0

5.0

-

FIGURE 2: DEPLOYMENT OF RENEWABLE ELECTRICITY CAPACITY TO REACH 2020 TARGETS [GW] 37.8 36.0 34.3 31.8 28.6

30 26.1 22.4

GW

1. OVERVIEW

19.5 15.7

15

12.6 9.5

Co-firing Biomass power Anaerobic digestion Mixed Waste-to-Energy Large scale solar, >5MW Small scale solar, <5MW Off shore wind On shore wind Tidal and wave Hydropower

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W

Analysis covering renewable electricity, heat and transport.


R E N E WA B L E E N E R GY V I E W 2 0 1 4

PwC

FIGURE 3: YEARLY INVESTMENTS IN RENEWABLE ELECTRICITY [£BN] AND PROJECTED ADDITIONAL CAPACITY [GW], 2010 – 2020 10

Historical 8.1

8

8.7

5

Forecast

Biomass power

8.4

7.8

Anaerobic digestion

4

7.2

Mixed Waste-to-Energy

6.7 5.9

5.8

Large scale solar

3

Small scale solar

GW

£bn

6

4

3.3

3.1

3.5

Off shore wind

2

On shore wind 2

Tidal and wave

1

Hydropower Co-firing

0

0

Capacity additions

portfolio of adequate support measures across all sectors.

2. INVESTMENTS IN RENEWABLE ELECTRICITY Investment in renewable electricity has been driven by the support schemes put in place by the Government to implement climate change policy and meet targets for renewable energy out to 2020. The primary support schemes are the Renewable Obligation (RO) and the Feed-in Tariff (FiT) scheme for small scale generation, with a new Contracts for Difference (CfD) scheme due to be launched later this year. DECC publishes quarterly data on the deployment of renewable electricity. This has been used in figure 2 below which plots historic capacity additions over the period 2010 to 2013. The chart also uses DECC projections of potential renewable electricity capacity additions which are consistent with meeting the UK’s 2020 target for renewable energy2 out to 2020. Average annual growth of renewable

electricity capacity during 2010 - 2013 was 27%, while the expected growth between 2014 and 2020 is lower, averaging c. 10% per year. The estimated costs associated with forecast capacity additions in the period 2014-20 have been derived by combining DECC’s projections of annual capacity additions with forecast technology capital costs. Technology cost data has been estimated from a number of sources. These are summarised in Appendix B. Figure 3 shows historical and projected investment up to 2020.

Historical investments 2010 - 2013 From 2010 to 2013, the investments in the UK renewable electricity sector totalled £27.7bn. Investments have been concentrated on offshore wind (£7.7bn), small scale solar3 (£5.5bn), onshore wind (£6.9bn) and biomass (£4.7bn). Combined, investments in these technologies made up c. 90% of the investment. The remainder of the investment was spread across mixed

FIGURE 4: ESTIMATED INVESTMENT IN RENEWABLE ELECTRICITY BY TECHNOLOGY [£BN] AND ADDED CAPACITY, 2014 - 2020 [GW] 15

2.1. Future investments 2014 – 2020

15 12.0

12

12

6 3

8.1

9

3.7

6 2.9

2.0

1.9 0.7

0

106

GW

£bn

9.0 9

3 0.6

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£bn GW

-

waste-to-energy (£1.7bn), large scale solar (£0.4bn), anærobic digestion (£0.5bn), hydropower (£0.2bn) and tidal and wave (£15m)4. Annual investment has shown considerable variation, both in terms of magnitude and relative share of individual technologies. Irregular investment in biomass and offshore wind has contributed to the year on year variability of total investment. For example, the lumpy character of biomass investments have been driven by large scale conversion projects from coal to biomass: RWE’s conversion of Tilbury power station contributed approximately 742MW of the United Kingdom’s 834MW additional biomass capacity in 2011. The biggest year on year change in investment occurred between 2010 and 2011. This was driven primarily by capacity additions in small scale solar PV, with a £2.2bn share of investment, which benefited from the introduction of the Feed-in Tariff scheme in April 2010. Although capacity additions in 2012 were greater than in 2011, total investment dipped by 4% in 2012, reflected in the different mix of technologies. Investment rose again in 2013 by 11%, reaching approximately £8.7bn. 2013 was the first year to see significant volumes of large scale solar PV (projects over 5 MW in capacity) being commissioned, amounting to approximately £0.4bn invested in 318MW of capacity. The largest individual contributions came from Wymeswold Airfield (34MW), Home Farm in Merton (18.3MW), Chediston Hall Solar Park (12.3MW), Spriggs Farm (12MW) and Crinacott Solar Farm (11.6MW). Biomass also increased significantly with £2.2bn of investment, of which Drax’s biomass conversion project was a significant contributor.

Future investments in renewable electricity in the years 2014 to 2020 will continue to be driven by current support systems and the new FiT CfD scheme which gœs live this year. Figure 4 shows total investment by technology over the period 2014-2020 in 2013 prices, based on DECC’s UEP projections for deployment. Total investments during 2014-2020 are projected to reach a total of £40.8bn. Four technologies dominate investments being offshore wind (29%) and onshore wind (19%), small scale solar (23%) and

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per year. Offshore wind deployment is also forecast to decline in 2014 and 2015, before peaking in 2017 and then declining again to 2020.

FIGURE 5. INVESTMENT AND CAPACITY IN ONSHORE AND OFFSHORE WIND POWER, 2010-2020 [£BN, GW]

2.1.2. Small and large scale solar PV

mixed waste-to-energy (9%). A smaller share of the investments are expected to come from biomass (7%) anærobic digestion (5%), hydropower (1%) and tidal and wave power (1%).

2.1.1. Onshore and offshore wind From 2010 to 2013, a combined total of £14.6bn was invested in onshore and offshore wind capacity, equal to 53% of total investment in renewable electricity capacity. During this period, 47% of investment in wind power has been dedicated to onshore capacity (£6.9bn), while 53% was invested in

From 2010 to 2013 c £5.9bn was invested in solar PV technology, equating to 21% of total investment in renewable electricity capacity. The majority of investment in solar PV capacity has been focused on small scale schemes (under 5 MW capacity per installation), accounting for £5.5bn, or 93% of total investment in solar PV capacity. (figure 6) Investment in 2010 was comparatively low and consisted of £160m of investment in small scale solar (<5MW). Investment picked up significantly recording the highest level during the period of £2.2bn in small scale solar in 2011. In 2012 and 2013 investment in small scale solar decreased to £1.7bn and £1.5bn respectively. Investment in large scale solar PV has only become a factor relatively recently, with 39 installations larger than 5MW coming online in 2013, with approximately £0.4bn investment. The level of investment in small scale solar is projected by DECC to peak in 2014 before declining thereafter through to 2020. After the initial peak in 2013, large scale solar is forecast by DECC to decline in 2014 before increasing slowly thereafter through to 2020 when it peaks at c£0.5bn.

offshore capacity (£7.7bn). (figure 5) £2.1bn was invested in wind power in 2010, rising by 19% in 2011 to £2.5bn. 2012 saw particularly high investment in wind power, equal to £5.5bn in total, consisting of £3.2bn in offshore wind and £2.3bn in onshore wind. In 2013 investment dropped to £4.4bn, with onshore wind investment higher than investment in offshore wind as a large number of onshore wind farms were commissioned. Onshore wind deployment, based on DECC’s data, is projected to decline to 2017 and then stays broadly stable at c.0.5GW

FIGURE 6. INVESTMENT IN SMALL (<5MW) AND LARGE SCALE (>5MW) SOLAR PV, 2010-2020 [£BN, GW]

FIGURE 7. ANNUAL INVESTMENT IN RENEWABLE ELECTRICITY BY REGION, 2011-2013 [£BN]

10.0 8.7 8.1 8.0

7.8

6.0

Bn

N. Ireland Wales

4.0

Scotland England

2.0

2011

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2012

2013

Investment between regions differs significantly over the period as shown in figure 7 based on regional data from DECC. In 2011, c £8.1bn was invested in UK renewable electricity capacity, split c £7.0bn in England, £870m in Scotland, £225m in Wales and £150m in Northern Ireland. In England, the majority of investment, £2.3bn was allocated to biomass, followed by £2.0bn small solar PV and £1.4bn in offshore wind. In Scotland, £600m was invested in offshore wind. In Wales, £150m was invested in small scale solar PV with smaller amounts invested in other technologies. In Northern Ireland, £144m was invested in offshore wind, with approximately £7m invested in other technologies. Total UK annual investment declined to £7.8bn in 2012, comprising £5.6bn in England, £1.9bn in Scotland, £0.2bn in Wales and £0.1bn in Northern Ireland.

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FIGURE 8: INVESTMENT IN RENEWABLE ELECTRICITY CAPACITY BY REGION, 2011-2013 [£BN]BY REGION, AND £ PER CAPITA

19.0

£bn

20.0

300

Anaerobic digestion

200

Mixed Waste-to-Energy

150 10.0

Biomass power

250

100

£ per capita

30.0

Solar Off shore wind On shore wind

4.3 50

0.8

England

Scotland

Wales

This decline in annual investment in 2012 was largely due to a considerable decline in biomass investment in England. Investment in Scotland rose c125% to £1.9bn, largely due to £1.7bn investment in offshore wind. In 2013 c£8.7bn was invested across the UK. The value of investments rose to £6.7bn in England, which included £1.7bn in solar PV, £2bn in biomass power and £1.9bn in offshore wind. Investment in Scotland declined by 23%, to £1.5bn. Of this, £1.4bn was in onshore wind. Combined investment in Wales and Northern Ireland grew considerably, albeit from a low base and in both cases driven by onshore wind investment. From 2011 to 2013 the largest proportion of renewable electricity capital (77%) was invested in England, followed by Scotland (17%), Wales (3%) and Northern Ireland (3%). Scotland has been the biggest investor in hydro (88%5), tidal and wave (88%), and onshore wind (66%), whereas England leads in offshore wind (97%), solar (88%), mixed waste to energy (92%), anaerobic digestion (83%) and biomass power (94%). If investment is compared on a per capita basis, investments in Scotland are more than double the investment per head in England, and three times the investment per head in Wales and Northern Ireland.

Hydropower

N.Ireland

small number of generally large coal to biomass conversions.(figure 9) In the period 2014 and 2020, the top 5 technologies by investment are projected to make up approximately 87% of total investment. The largest recipient of investment is expected to be offshore wind (29%), followed by small scale solar (22%), onshore wind (20%), mixed waste-to-energy (9%), biomass power (7%) and large scale solar (5%).

3. Investments in renewable heat New investment in renewable heat has in part been driven by the Renewable Heat Incentive (RHI), a government scheme designed to incentivise investment in renewable and low carbon heating systems such as solar thermal panels, biomass boilers and ground- or airsource heat pumps. The scheme, which sees participants receive a support payment for each kilowatt hour of heat produced, was launched in 2011 for the non-domestic sector, including industry, businesses and public sector organisations, with roll-out of a domestic scheme commencing in spring 2014. Since 2011, the domestic sector has been supported through the Renewable Heat Premium Payment (RHPP), which

FIGURE 9. SHARE OF INVESTMENTS PER TECHNOLOGY, COMPARISON BETWEEN HISTORICAL (2010-2013) AND PROJECTED PERIOD (2014-2020)

2.3. Comparison of historical and future technology share of investment A comparison between the historical and future portfolios of investment shows some movement in the investment per technology. The main changes relate to increases in large scale solar and mixed waste to energy, as well as a decrease in investments in biomass power. Biomass is expected to receive less investment overall with investment concentrated in a

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Tidal and wave

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offered home-owners a one-off grant towards the costs of installing renewable heat systems in their home, but ended in March 2014 with the launch of the domestic RHI. There is currently limited available data on the state of the UK’s renewable heat sector. Unlike for renewable electricity, the UK government dœs not currently publish data on the capacity of renewable heat deployment. However, it dœs publish data on renewable heat generation (the latest data are for 2012; data for 2013 will be published in July 2014). The deployment of the installed capacity of renewable heat in this report has therefore been estimated using the available DECC data on renewable heat generation. Where possible, this has been validated against other sources of publically-available data. More detail on these sources can be found in Appendix B. Total current installed capacity of renewable heat is estimated to be approximately 8.7GW, the vast majority of which was installed before 2010. Biœnergy technologies represent 85%6, with the remaining capacity provided for by heat pumps (10%) and solar thermal installations (5%). Unlike with renewable electricity generation, DECC dœs not currently provide updated annual projections of potential deployment scenarios of renewable heat capacity through to 2020 and beyond. Projections of potential required capacity additions have therefore been estimated by referring to the UK’s 2010 National Renewable Energy Action Plan (“NREAP”)7. On the basis of the data contained in the NREAP, it is estimated that an additional 27GW of renewable heat capacity would be required to meet NREAP’s forecasts of renewable heat generation in 2020. (figure 10)

7%

2014-2020F

1%2%

5% 1% 0%

20%

17%

9%

25% 2%

5%

6%

Hydropower Tidal and wave On shore wind

2010-2013

Off shore wind

2%

Small scale solar Large scale solar 20%

Mixed Waste-to-Energy

28% 22%

29%

Anaerobic digestion Biomass power

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FIGURE 10. CUMULATIVE DEPLOYMENT OF RENEWABLE HEAT CAPACITY AND GAP

GTOWARDS ] 2020 TARGETS [GW]

40.0 35.7

3.1. Historical investment 2010-2012 20.0

10.0

7.3

8.7

8.2

Based on the deployment of additional heat capacity over the period 2010-12, estimated total investment across different renewable heat technologies is summarised in figure 118. Over the period 2010 to 2012, c£1.4bn has been invested in UK renewable heat capacity which was allocated as follows: £760m in bioenergy heat, £370m in heat pumps and £220m in solar thermal. In 2010, c. £500m was invested in renewable heat, of which £280m was in bioenergy. In 2011, despite this being the year in which the non-domestic RHI and the RHPP were launched, investment in renewable heat remained flat at c. £500m. Of this, c. £300m was invested in bioenergy technologies, £70m in solar thermal and £123m in heat pumps. Annual investment growth slowed to £350m in 2012, with total investment falling in both bioenergy and solar thermal. A more detailed analysis of historic investment in bioenergy is provided below.

Heatpumps

Gap towards 2020 NREAP targets: c. 27GW

Solar thermal Bioenergy

-

FIGURE 11. HISTORICAL AND PROJECTED ANNUAL INVESTMENTS IN RENEWABLE HEAT [£BN] 1.0

1.0

0.8

0.8

£bn

0.5

Heat Pumps

0.6

0.5

GW

0.6

0.4

0.4

Solar Thermal Bioenergy

0.4

Capacity additions 0.2

0.2

-

2010

2011

3.1.1. Bioenergy

2012

FIGURE 12: INVESTMENTS AND ADDED CAPACITY IN BIOENERGY HEAT 2010-2012 [£BN, GW] 0.4

1.6

Energy from waste Plant Biomass

0.3

1.2

0.7

0.7

0.2

£bn

0.8

Animal Biomass Wood combustion - industrial

0.4

Wood combustion - domestic 0.1

0.4

3.2. Future investments 2013 – 2020

Sewage sludge digestion Landfill gas -

2010

2011

2012

Capex

FIGURE 13. FORECAST INVESTMENT IN RENEWABLE HEAT BY TECHNOLOGY, 2013-2020 [£BN, GW] 25 20.1 20

£bn, GW

GW

Anaerobic digestion

15 Total investment (£bn) Total capacity additions (GW)

10

5

3.5 0.1

0 Heat Pumps

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Solar Thermal

The category ‘Bioenergy’ comprises a number of different technologies and applications, ranging from household open log burning fires to anaerobic digestion. As shown in Figure 12, the £760m invested in bio energy equated to an estimated 1.8GW of new capacity installed over the period 2010-12. Of this, 1.2GW is categorized by DECC as ‘domestic wood combustion’. Other key areas of investment included industrial wood combustion (0.3GW) and commercial plant biomass (0.2GW).

Bioenergy

Looking ahead at potential renewable heat deployment by 2020, the UK’s 2010 NREAP projects a total of 6,199ktœ (or 72 TWh) of final energy consumption coming from a range of renewable heat sources in 2020. By applying DECC’s estimates of load and efficiency factors as set out in its 2013 RHI Impact Assessment9, this report estimates total required renewable heat capacity of 35.7GW, an increase of c27GW over the estimated 2012 installed capacity. By applying the cost assumptions as also set out in the Impact Assessment, an estimated £24bn of investment would be required. Figure 13 summarises this required investment in the bioenergy, solar thermal and heat pumps sectors. As indicated in the chart, the majority

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capacity and the level of investment required to support future capacity additions. With the launch of both the non-domestic RHI (and more recently the domestic RHI) schemes, the total volume and relative share of future installations by technology group could therefore be significantly different to that set out in the NREAP.

FIGURE 14. RELATIVE MIX OF RENEWABLE HEAT INVESTMENT UK, 2010-2020 [%] 2014-2020F 15% 0% 27%

2010-2013

4. RENEWABLE TRANSPORTATION FUELS

56% 16% Bioenergy Solar thermal

85%

Heatpumps

of investment (£20bn) is assumed in the NREAP to be undertaken in the bio energy sectors. NREAP also assumes some growth in the heat pump sector (ground and air-source). However, it assumes that there would be no growth in solar thermal capacity. It is important to note that compared to the renewable electricity sector, renewable heat is less mature. There is therefore significant uncertainty in relation to both current and future volumes of installed renewable heat

4.1. Consumption and supply of renewable fuel

The consumption and supply of renewable transportation liquid fuels during 20102013 has lagged significantly behind investment in renewable electricity. Consumption is mainly driven by the Renewable Transportation Fuel Obligation (RFTO) scheme which obligates fossil fuel suppliers to produce evidence showing that a percentage of fuels for road transport supplied in the UK comes from renewable sources and is sustainable, or that a substitute amount of money is paid. All member states have a 2020 renewable transport target of 10%. Consumption of renewable transport fuels has been decreasing by 8.3% YoY between 2010 and 2012 partly down to

FIGURE 15. 2010–2013 CONSUMPTION OF BIOFUELS AND GAP TOWARDS 2020 TARGETS [MILLIONS LITRES] 8,000 6,673

Million Litres

6,000

Bioethanol

4,000

Biodiesel

2,000

1,676

1,577

1,409

1,585

2010

2011

2012

2013F

Gap towards targets

2020

a drop in overall fuel consumption. The estimated projection for 2013 shows a positive trend but the gap towards the 2020 target is significant, a total of c. 5,100 million litres. (figure 15).

4.2. Investments in biofuels Investment in biofuels have to date been limited to a small number of refinery investments. The economics of biofuels are such that it has generally been more economical for fuel suppliers to meet their obligations through imports than through investing in UK production capacity. In the period analysed, investment is limited to three projects11. The graph (figure 16) shows the size of the investments during 2010-2013. Total investment during 2010-2013 amounted to £740m. In 2010, Ensus opened a bioethanol plant in Wilton, Teeside with a production capacity of 400 million litres per year and an investment cost of £332m (2013 money - £310m in 2010 value). 2011 saw no investment, followed by a minor investment by Olleco in 2012, opening a 16 million litre biodiesel plant, at an estimated investment cost of £9.4m. In 2013, Vivergo Fuels opened a £350m bioethanol plant in Hull capable of producing 420 million litres. The plant has started production and is expected to be fully operational in 2014. The intention is to retrofit the plant to produce biobutanol in the future, once the biobutanol conversion has been proven. There were several failed biœthanol initiatives in 2011 including two 190 million litre plants proposed by Ethanol Ventures Ltd and a 139 million litre plant proposed by Green Spirit Fuels Ltd. Vireol also planned a £200m bio ethanol investment in Grimsby but this has also been cancelled (2014). The Ensus plant opened in 2010, has been shut and reopened several times, due to technological and commercial issues. It

FIGURE 16. HISTORICAL AND FUTURE ESTIMATED INVESTMENT IN BIOFUELS [£BN]

450

400

450

300

150

150

£bn

300

-

9

2011

2012

Bioethanol Biodiesel Added capacity [Million litres]

0

2010

110

Milion Litres

332

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2013

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5%

Bioethanol 37%

Biodiesel 58%

was bought by CropEnergies AG in mid2013 who have invested an additional £50m in the site (not shown in the graph above due to the capacity of the plant remaining unchanged.)12.

4.3. Supply of renewable fuel under the RTFO The RTFO was implemented on the 15th April 2008, and statistics run yearly from this date forward. 1,340 million litres of renewable fuel have been supplied in 2012/13 (15th April 2012 to 14th April 2013). Of this total, 1,334 million litres (99.6%) met sustainability requirements13. The majority of the biofuels used in transport were biœthanol and biodiesel. Other biofuels used were biomethanol, methyl tertiary butyl ether, biomethane and pure vegetable oil. Due to the insignificant size of the ‘other’ category further data on this fuel is limited. There are over 60 smaller companies currently registered in the RFTO Operating System14. Most of these companies produce biodiesel from used cooking oil and tallow and have capacities ranging from a few thousand to over a million litres each year. DfT analysis shows activity among these smaller biofuel companies has decreased sharply in recent years.

APPENDIX A. - SOURCES AEA. (2011). Review of technical information on renewable heat technologies. Retrieved March 2014 from: http://www.rhincentive.co.uk/library/ regulation/1103AEA_Update.pdf ARUP. (2011). Review of the generation costs and deployment potential of renewable electricity technologies in the UK. Retrieved March 2014, from: https:// www.gov.uk/government/uploads/ system/uploads/attachment_data/ file/147863/3237-consro-banding-arupreport.pdf

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Other

BIS. (2014). Building Price and Cost Indices. Retrieved March 2014, from: http://data.gov.uk/dataset/building_price_ and_cost_indices DECC. (2013). Electricity Generation Costs. Retrieved April 2014 from: https://www.gov.uk/government/ publications/electricity-generation-costsdecember-2013 DECC. (2010). National Renewable Energy Action Plan for the United Kingdom https://www.gov.uk/government/uploads/ system/uploads/attachment_data/ file/47871/25-nat-renenergyaction-plan.pdf DECC. (2010). National Renewable Energy Action Plan for the United Kingdom https://www.gov.uk/government/uploads/ system/uploads/attachment_data/ file/42852/5936-renewables-obligation-

consultation-the-government.pdf DECC. (2013, March). Energy trends section 6: renewables. Retrieved March 2013, 20, from DECC: https://www.gov. uk/government/publications/renewablessection-6-energy-trends DECC (2011). Renewable Energy Roadmap. Accessed April 2011. https:// www.gov.uk/government/uploads/ system/uploads/attachment_data/ file/48128/2167-ukrenewable-energyroadmap.pdf DECC. (2013, December). Electricity Generation Costs. Retrieved April 2014 from: https://www.gov.uk/government/ publications/electricity-generation-costsdecember-2013 DECC. (2013). Energy trends section 6: renewables. Retrieved March 2014 from: https://www.gov.uk/government/ publications/renewables-section-6energy-trends DECC. (2013). Digest of UK Energy Statistics. Retrieved March 2014 from

Small Biomass Medium Biomass Large Biomass GSHPs Solar Thermal Small Biogas Biomethane Medium Biogas Large Biogas CHP ATWHPs

Load Factor 15% 16% 23% 19% 8% 68% 93% 46% 46% 74% 21%

Efficiency Factor 83% 83% 83% 350% 100% 85% 100% 85% 85% 85% 320%

TABLE 1: INVESTMENT COST ASSUMPTIONS BY TECHNOLOGY 2010 – 2020 (£K/MW, 2013) p y gy ( / , Anaerobic digestion Bioliquids Biomass power Co-firing Geothermal Hydropower Mixed Waste-to-Energy Off shore wind On shore wind Small scale solar Large scale solar Tidal and wave

2010 4,451 1,050 2,783 134 5,921 3,941 5,245 2,873 1,790 2,572 1,608 4,063

2011 4,417 1,041 2,767 133 5,762 3,911 5,200 2,837 1,809 2,461 1,549 4,063

2012 4,383 1,032 2,751 132 5,603 3,881 5,156 2,801 1,828 2,349 1,490 4,063

2013 4,349 1,023 2,735 130 5,444 3,851 5,111 2,765 1,828 2,128 1,341 4,063

2014 4,314 1,014 2,719 129 5,285 3,820 5,067 2,729 1,828 2,025 1,283 4,063

2015 4,280 1,005 2,704 128 5,126 3,790 5,023 2,692 1,828 1,934 1,228 4,063

Anaerobic digestion Bioliquids Biomass power Co-firing Geothermal Hydropower Mixed Waste-to-Energy Off shore wind On shore wind Small scale solar Large scale solar Tidal and wave

2015 4,280 1,005 2,704 128 5,126 3,790 5,023 2,692 1,828 1,934 1,228 4,063

2016 4,246 995 2,688 127 4,967 3,760 4,978 2,656 1,828 1,853 1,177 4,063

2017 4,144 995 2,637 127 4,733 3,760 4,937 2,555 1,828 1,780 1,130 4,063

2018 4,144 995 2,629 127 4,632 3,805 4,914 2,521 1,811 1,714 1,089 4,063

2019 4,144 995 2,620 127 4,530 3,850 4,890 2,487 1,794 1,655 1,051 4,063

2020 4,144 995 2,612 127 4,429 3,895 4,866 2,453 1,778 1,600 1,016 4,063

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FIGURE 17. SUPPLY OF BIOFUELS UNDER THE RFTO 2012/13


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https://www.gov.uk/government/ collections/digest-of-uk-energy-statisticsdukes DECC. (2013). RHI Tariff Review, Scheme Extensions and budget Management. Retrieved April 2014 from https://www.gov.uk/government/uploads/ system/uploads/attachment_data/ file/263581/Impact_Assessment_RHI_ Tariff_Review_Extensions_and_Budget_ Management_Dec_2013.pdf Ecofys. (2013). UK biofuel industry overview. Retrieved March 2014 from: https://www.gov.uk/government/uploads/ system/uploads/attachment_data/ file/266090/ecofys-ukbiofuel-industryoverview-v1.5.pdf ESTIF (2012) Solar Thermal Markets in Europe. Retrieved April 2104 from: http://www.estif.org/fileadmin/estif/ content/market_data/downloads/Solar_ Thermal_M%20arkets%202012.pdf Nera. (2010). Design of the Renewable Heat Incentive Study for the Department of Energy & Climate Change. Retrieved from: http://www.rhincentive. co.uk/library/regulation/100201RHI_ design.pdf Ricardo-AEA (2012). Renewable Energy Production in 2012 from heat pumps in the UK – Abstract. https://restats.decc. gov.uk/cms/assets/Uploads/Results_2012/ ABSTRACT-energy-production-in-2012from-heat-pumps-in-the-UK-16-July-2013. pdf SWEETT (2013). Research on the costs and performance of heating and cooking technologies. https://www.gov.uk/ government/uploads/system/uploads/ attachment_data/file/204275/Research_ on _the_costs_and_performance_of_ heating_and_cooling_technologies__ Sweett_Group_.pdf SKM Enviros (2011). Analysis of characteristics and growth assumptions regarding ad biogas combustion for heat, electricity and transport and biomethane production and injection to the grid. https://www.gov.uk/government/ uploads/system/uploads/attachment_ data/file/48166/2711-SKMenvirosreport-rhi.pdf

APPENDIX B. - METHODOLOGY Installed capacity and additions Capacity figures for the period 2009 to 2013 have been obtained primarily from ‘Chapter 6: Renewable Sources of Energy’ of the ‘Digest of United Kingdom energy statistics’ (DUKES) published by DECC (201315) with 2013 data from Energy Trends, March 201416. Supporting data has been estimated by applying a number of sources as summarised

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below. Capacity additions are allocated to the year in which the project is commissioned. Electricity capacity Forward looking projections of electricity capacity were obtained from the breakdown of ‘electricity related renewables projections’ from 2010 to 2020 in the ‘Updated Energy Projections’ (UEP) also published by DECC (2013)17. The ‘reference’ scenario has been applied in this report. DECC’s projections include a category named “other renewables” which includes small scale solar PV, non-CHP waste-to-energy, anærobic digestion, small scale hydro, micro CHP and small scale wind power, with no breakdown of capacity by technology within the “other renewables” category. In order to allocate the share proportion of these technologies within the “other renewables” category, small scale solar PV and energy-fromwaste capacity figures have been obtained from DUKES. The individual share of investment of other technologies within the category “other renewables” has been split according to their four year historical average share of installations under the Feed in Tariff. Heat capacity Historic and current levels of renewable heat capacity have been estimated as follows: • Biœnergy: has been estimated from DUKES, table 6.6. DUKES includes landfill gas, sewage sludge digestions, domestic & industrial wood combustion animal biomass, anærobic digestion, plant biomass and energy from waste the following technologies in the category of ‘Bio energy’. • Heat pumps: an estimate of installed capacity in 2010 was derived from and the 2011 UK Renewable Energy Roadmap18. Installed capacity for 2012 was derived from Ricardo-AEA’s 2012 estimates19.

Small Biomass Medium Biomass Large Biomass GSHPs Solar Thermal Small Biogas Biomethane Medium Biogas Large Biogas CHP ATWHPs

Cost (£k/MW) 577 550 357 1,295 1,308 2,000 3,300 2,000 2,733 2,644 877

• Solar Thermal: estimates of installed capacity have been derived from ESTIF’s 2012 report20 Projections of renewable heat capacity have been estimated from projections of heat generation provided in the UK’s 2010 National Renewable Action Plan (“NREAP”)21. Capacity additions have been estimated by applying central Load and Efficiency Factors as set out in DECC’s 2013 RHI Impact Assessment22. These are summarised below: Transport capacity Estimates of consumption of liquid renewable fuels has been estimated from Ricardo-AEA “UK Production of Biofuels for road transport”23 and the DfT’s “Renewable Transport Fuel Obligation statistics”24. Investment costs For simplicity investment costs have been allocated to the year in which capacity additions took place. Renewable Electricity For historical investment costs, individual technology cost data has been estimated by applying the estimates provided in DECC’s Government Response to the Banding Review25. Projections of costs have been estimated by applying DECC’s forecasts as published in its ‘Electricity Generation Costs’ (December 2013)26, which specifies estimates for the years 2016, 2017 and 2020. In order to ensure that historic and future cost estimates are as accurate as possible, use has also been made of more detailed and/or more recent estimates of individual technology costs to validate or replace the aforementioned sources of cost data. The following reports were consulted and from which data was applied in this report’s analysis: Parsons Brinckerhoff’s Update on Solar PV Costs27; Parsons Brinkerhoff’s Update on non-PV data for Feed-in

Source of Cost assumptions Sweett Market Intelligence Market Intelligence Sweett Sweett SKM Enviros SKM Enviros SKM Enviros SKM Enviros Ricardo AEA Sweett

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APPENDIX C. - UK BIOFUEL PLANT PROJECTS

Company

Company Location

Capacity Investment (million Year of operation (£ million) litres)

Fuel type

Current feedstock mix

Operational plant

Argent Energy

Motherwell, Scotland

2005

19

60

Biodiesel

UCO, tallow, sewage grease

Harvest Energy

Seal Sands, Teesside

2006

250

284

Biodiesel

Primarily waste oils

British Sugar

Wissington, Norfolk

2007

-

70

Bioethanol

Sugar beet

Convert 2 Green

Middlewich, Cheshire

2007

-

20

Biodiesel

UCO

Greenergy

Immingham, Hull

2007

50

220

Biodiesel

Waste oils

Gasrec

Aldbury, Surrey

2008

-

5

Bio-LBM1

Municipal Solid Waste

Ensus

Wilton, Teesside

2010

310

400

Bioethanol

Wheat

Olleco

Bootle, Merseyside

2012

-

16

Biodiesel

UCO

Vivergo

Immingham, Hull

2013

350

420

Bioethanol

Wheat

Tariff28 and DECC’s onshore wind call for evidence29.. For those years in which there are no specific cost estimates or forecasts (for example 2018 or 2019), a straight line reducing average calculation has been applied. Estimates have been adjusted for inflation (using the non-housing Resource Cost Index (RCI) inflation index) in order to express investment values in £2013. The table below provides a summary of the cost assumptions applied in this report. Renewable heat Investment costs, load and efficiency factors for renewable heat have been estimated by applying the assumptions as set out in DECC’s 2013 RHI Impact Assessment30 31 32. These are summarised in the table below: Renewable transport Historic investment costs have been derived from the data provided by Ecofys in its 2013 report “UK biofuel industry overview”33. No projections of forecast investment have been made due to a lack of industry data.

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1 Renewable heat data for 2013 is not available until July 2014 2 Updated Energy Projections, Breakdown of renewables, Nov 2013 3 Small scale solar PV includes sites with capacity under or equal to 5MW. Large scale solar PV includes sites above 5MW capacity 4 Annual investment figures are based on projects which came online in that year only. Historical investment is based on published data of new added capacity (DECC, 2013), and capital investment costs are rebased to 2013 real costs (BIS, 2014) 5 The numbers in brackets represent the regional proportion investment of total invested in the particular technology in the UK from 2011 to 2013. 6 DECC DUKES includes the following technologies in the category ‘Biœnergy’: landfill gas, sewage sludge digestions, domestic & industrial wood combustion animal biomass, anærobic digestion, plant biomass and energy from waste. 7 https://www.gov.uk/government/uploads/ system/uploads/attachment_data/file/47871/25nat-ren-energy-actionplan.pdf 9 https://www.gov.uk/government/uploads/ system/uploads/attachment_data/file/263581/ Impact_Assessment_RHI_Tarif f_Review_ Extensions_and_Budget_Management_Dec_2013. pdf 10 The biœnergy numbers contain data on burning wood and logs in open fire places. 11 https://www.gov.uk/government/uploads/

system/uploads/attachment_data/file/266090/ ecofys-uk-biofuel-industryoverview-v1.5.pdf 12 http://www.thenorthernecho.co.uk/business/ news/10952800.Mothballed_biœthanol_plant_ flourishing_under_new_owner/ 13 https://www.gov.uk/government/uploads/ system/uploads/attachment_data/file/279171/ rtfo-2012-13-year-5-report-6.pdf 14 https://www.gov.uk/renewable-transportfuels-obligation 15 https://www.gov.uk/government/collections/ digest-of-uk-energy-statistics-dukes 16 https://www.gov.uk/government/collections/ energy-trends 17 https://www.gov.uk/government/publications/ breakdown-of-renewables-projections-inuep-2013 18 https://www.gov.uk/government/ uploads/system/uploads/attachment_data/ file/48128/2167-uk-renewable-energyroadmap. pdf 19 https://restats.decc.gov.uk/cms/assets/ Uploads/Results_2012/ABSTRACT-energyproduction-in-2012-from-heatpumps-in-the-UK16-July-2013.pdf 20 https://restats.decc.gov.uk/cms/assets/ Uploads/Results_2012/ABSTRACT-energyproduction-in-2012-from-heatpumps-in-the-UK16-July-2013.pdf 21 https://www.gov.uk/government/uploads/ system/uploads/attachment_data/file/47871/25nat-ren-energyaction-plan.pdf 22 https://www.gov.uk/government/uploads/ system/uploads/attachment_data/file/263581/ Impact_Assessment_RHI_Tarif f_Review_Extensions_and_Budget_Management_ Dec_2013.pdf 23 https://restats.decc.gov.uk/cms/assets/ Uploads/Results_2012/ABSTRACTS-UK-BiofuelsProduction-2012-v1.pdf 24 https://www.gov.uk/renewable-transportfuels-obligation 25 https://www.gov.uk/government/ uploads/system/uploads/attachment_ data/file/42852/5936-renewablesobligationconsultation-the-government.pdf 26 https://www.gov.uk/government/publications/ electricity-generation-costs-december-2013 27 https://www.gov.uk/government/ uploads/system/uploads/attachment_data/ file/43083/5381-solar-pv-cost-update.pdf 28 https://www.gov.uk/government/ uploads/system/uploads/attachment_data/ file/42912/5900-update-of-nonpv-datafor-feedin-tariff-.pdf 29 https://www.gov.uk/government/uploads/ system/uploads/attachment_data/file/205423/ onshore_wind_call_for_evidence_response.pdf 30 https://www.gov.uk/government/uploads/ system/uploads/attachment_data/file/263581/ Impact_Assessment_RHI_Tarif f_Review_ Extensions_and_Budget_Management_Dec_2013. pdf 31 https://www.gov.uk/government/uploads/ system/uploads/attachment_data/file/204275/ Research_on_the_costs_and_performance_of_ heating_and_cooling_technologies__Sweett_ Group_.pdf 32 https://www.gov.uk/government/ uploads/system/uploads/attachment_data/ file/48166/2711-SKM-enviros-reportrhi.pdf

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M E T H O D O LO GY

METHODOLOGY – INNOVAS (JOBS DATA)

Standard industrialisation Codes (SIC) are used to classify businesses according to the type of their economic activity. New sectors such as renewables are not currently covered by the SIC categorisation in detail and this has led to a lack of robust data on jobs associated with the sector. Headline data on the low carbon sector has been produced by Innovas for Government, however a detailed breakdown of the renewables sector by technology or geographical area has not been published until now. We would welcome any feedback and comments on the data in this report. Please send any feedback to review2014@r-e-a.net.

Definition of sector The research undertaken by Innovas is based upon a data methodology developed by Knowledge Matrix Ltd and used widely in the UK. This methodology uses a broader definition of the renewable sector than other studies, because it includes the contribution from supply and value chain companies. It relies on ‘bottom up’ data based on what companies actually do, rather than what they are classified as doing under the SIC system. Innovas’s definitions are consistent with (but not limited by) SIC and NAICS codes and extend down to eight-digit code classifications which specify activities. Innovas’s final data levels go beyond SIC code definitions. Data sources The study draws from over 700 sources. It includes activities undertaken by companies across the renewable supply chain including related network activity, commercial R&D1 only, through manufacturing into distribution, retail, installation, and maintenance services. Companies are included in the supply chain where 20% of their turnover is supplied into the sector, but only the sales activity relating to the renewable sector is included in the analysis. In order to limit the risk and error the numbers are informed by multiple sources. Innovas carry out a sensitivity analysis with the aim to provide a confidence level of 60% within a range of +/- 10%. Model The full sector analysis model is a bottom up, multi-staged model that uses econometric techniques sources and methods (such as data triangulation2) to verify and enrich source data drawn from multiple sources. The approach uses data from actual, live and accumulated business cases and computes confidence levels Government and European funded R&D is not included. The gathering of data through several sampling strategies in order to enhance confidence in results. 3 http://www.bloomberg.com/slideshow/2014-04-07/ where-clean-energy-dollars-went-in-2013.html#slide4. 1

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for final reported numbers, based upon a rigorous assessment of the source data. The model also measures activity in the supply chain for each sub-sector, totals are aggregated from 2,300 discrete individual product group lines for the whole low carbon and environmental goods and services sector. Each of these lines uses specific data sources and can be analysed individually, unlike traditional studies which often group together data sources. The methodology mitigates against double counting risks by checking and comparing the numbers over a period of years, with multiple validated and verified data sources. ‘Key facts’ Employment is a measure of the estimated employment numbers across all aspects of the supply chain – these are direct full time equivalent jobs. National, regional and other economic data sources have been used to estimate current employment levels. Where employment information is scarce, or where Innovas are estimating employment for a proportion of a company’s sales, they rely on comprehensive case study materials to provide sensible industry-specific ratios and benchmarks, or for some technologies REA’s sector groups have contributed data (these are set out in additional adjustments). Number of companies is a measure of the total number of companies in the region that match (or fit within) the activity headings for the renewables sector. Due to the limitations of using SIC codes the methodology uses a unique analytical process to allocate companies to the renewables activity headings. The total number of companies in this report has been arrived at by a bottom-up analysis of company stock within the country/region using such sources as: Companies House, European credit agencies, British Telecom, institutional listings and UK credit agencies. Sector turnover estimates are based upon where economic activity takes place i.e. the location of the business rather than the location of the income earner. In the calculation of turnover value Innovas consider: turnover by sub sector within postcode sets; capital asset adjustment by sub-sector within postcode sets; ONS GDP calculations; supply chain procurement value sub-sector by sub-sector by postcode sets; sub-sector specific sales reporting where available. Regional data methodology: Having identified the total company stock in the region, product and service outputs have been identified and verified by accessing further databases that include: institutional data sets, Yellow Pages, proprietary databases, Euromonitor, Dun and Bradstreet and Thompson. The methodology measures where the economic activity actually occurs and is reported, rather than just at the headquarters or main facilities.

Consultation with stakeholders: The analysis and data were then sense checked with industry participants, these included some REA sector groups, REA sector heads, developers of certain technologies, and expert members. Sector adjustments: The adjustments to the data following consultation with stakeholders, or where the Innovas methodology was not used were: Deep geothermal: The REA’s deep geothermal sector group provided the data for this technology using current industry knowledge3. Marine: There is no reliable data for employment in R&D so has not been included in this report. However anecdotal evidence would support an estimate of approximately 300 jobs active in R&D. Solar photovoltaic: Employment has fallen significantly since the previous study as a result of reductions in the Feed-in Tariffs for solar pv that particularly affected labour intensive domestic installations. Heat pumps: The REA has scrutinised the built environment link with heat pumps, where there is a complex overlap with the air conditioning and refrigeration industry. We are satisfied the figures are representative of full time employees. Woodburning stoves: An area of concern for the industry is a lack of reliable data for the wood burning stove industry. It was not possible to separate this technology’s data from the wider boiler data, but there is anecdotal evidence of strong growth in this sector, which is taking place outside the UK policy framework. Onshore and offshore wind data: The supply chains in these two sectors are very closely linked and it is very difficult to separate the two. Innovas have provided their best estimate.

METHODOLOGY – REA (DEPLOYMENT DATA & GROWTH PROJECTIONS)

The intention of this report is to present both historic data and forward projections for renewable energy capacity and generation from authoritative sources, so that the reader can judge progress to date as well as the government’s view of the contribution that might be made in 2020, the year by which the Renewable Energy Directive (RED) requires the UK to have achieved a 15% contribution to energy consumption from renewables. The RED also has a sub-target for all Member States to achieve a 10% renewable energy contribution in the transport sector. We have therefore chosen to draw on official government sources for the graphs in each technology section. The one exception to this is where the average annual capacity growth rate achieved since 20091 has been used to extrapolate what further growth would be achieved in the following two years if this average growth rate were to be maintained: a “trends continued” projection. It must be stressed www.r-e-a.net


that this extrapolation is for indicative purposes only – there is no suggestion that future performance will follow that of the recent past, but the purpose is to show what could be achieved if recent trends were to continue and to further allow comparison with DECC’s various projections for 2020.

The Renewable Electricity Sector Renewable electricity deployment statistics are published by DECC quarterly in Energy Trends and annually in its Digest of UK Energy Statistics (DUKES)2. The first full data for 2013 were published in Energy Trends on 27th March 2014 and were used to produce the graphs for historical capacity and generation from 2009. For capacity deployment in 2014 and 2015 we have shown the 2013 deployment plus the additional capacity that would be deployed if the average annual growth rate over the period 2009 to 2013 was maintained. In order to compare past performance with projections for 2020, we have drawn on three DECC sources, the first of which we consider to be the most authoritative: 1. As part of its Electricity Market Reform Delivery Plan, DECC published National Grid’s EMR Analytical Report in December 20133. The report provides modelled capacity and generation projections for 2020 for a number of scenarios – we have used the reference scenario (described as ‘Scenario 1’). In order to present UK data by technology we undertook the following calculations: a) Data for Great Britain were combined with those reported separately for Northern Ireland to produce UK totals for 2020; b) We obtained from DECC a breakdown of the data classified as “Other renewables” and were therefore able to distribute the capacity and generation by technology. We consider these to be the most authoritative projections as they form the basis of forward planning under EMR. 2. Under the RED, each Member State was required to publish a National Renewable Energy Action Plan and the UK’s was published by DECC in 20104. Although somewhat dated now, it provides the Government’s official statement of how it plans to fulfil the UK’s obligations under the Directive. In particular Tables 10 – 12 provide year-by-year indicative projections of deployment, broken down by technology, from 2010 to 2020 for electricity, heat and transport. 3. Finally every year DECC publishes Updated Energy Projections (UEPs), analysing and projecting future energy use and greenhouse gas emissions in the UK, based on assumptions of future economic growth, fossil fuel prices, electricity generation costs, UK population and other key variables. Renewables are only one part of the UEP, indeed the technology breakdown for renewables was only published in November 2013 following a special request, two months after the initial publication5. We have included the

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UEP projections for comparative purposes. As for the EMR projections, a significant share of deployment is classified as ‘Other renewables’ and this has been broken down by technology using the same split as used for the EMR data. DECC is keen to emphasise that none of its projections constitute targets and they should not be viewed as such. Nevertheless, particularly the most recent ones provide a useful view of how DECC envisages each technology contributing to deployment in 2020 and a benchmark against which to judge progress to date. It must be remembered that the 2020 renewables target is expressed as a percentage share of energy consumption, so the amount of renewable energy required in 2020 will vary according to changes in energy demand; at present DECC is projecting demand to fall between now and 2020.

The Renewable Heat Sector Renewable heat consumption statistics are only published annually in DUKES (in July) so the latest year for which data exist is 20126. There are no data currently published for capacity however these could be inferred by using average load factors. With the advent of the Renewable Heat Incentive DECC has started to publish monthly data on the capacity of accredited installations, however this still forms a very small share of the UK’s total renewable heat capacity. Future annual updates of this report will seek to monitor progress of deployment under the RHI, as this will be the Government’s main measure in support of achieving its ambitious goal of achieving around 72 TWh renewable heat in 2020 (up from 17 TWh in 2012). As renewable heat consumption data are only available to 2012, the two year ‘trends continued’ extrapolations only cover the years 2013 and 2014. We will need to wait until the data for 2013 are published in late July 2014 to see whether the RHI has had a noticeable impact on growth. However, it must be noted that renewable heat consumption is, like heat consumption generally, strongly dependent on seasonal and annual temperature variations. Annual fluctuations in demand will therefore be superimposed on any growth in uptake of renewable heat technologies. In order to compare past performance with projections for 2020 there is only one source to draw on: the National Renewable Energy Action Plan published in 2010. The NREAP’s heat projections to 2020 (Table 11) however, do not correlate well with DUKES for NREAP’s year of publication (6.0 TWh in NREAP versus 13.6 TWh in DUKES for 2010) and there is no clear explanation given for the discrepancy. Equally, the renewable heat production in NREAP dœs rise to 72 TWh in 2020, equivalent to the 12% figure set out in the 2009 UK Renewable Energy Strategy. For the latest year (2012) DUKES suggests that with 17 TWh achieved, the

UK is well ahead of the NREAP trajectory (9 TWh) but this comparison needs to be treated with great caution. We will continue to engage with DECC in the hope that an updated trajectory for renewable heat to 2020 can be provided.

The Renewable Transport Sector Statistics on the UK consumption of liquid biofuels for transport are published quarterly by DECC as part of Energy Trends, drawing on HMRC’s Hydrocarbon Oils Bulletin7. The data in Table 6.2 of Energy Trends published on 27 March 2014 include annual consumption data for biœthanol and biodiesel from 2005 to 2013. The Department for Transport in turn publishes quarterly reports under the Renewable Transport Fuel Obligation, including the national origin of the biofuels supplied under the Obligation8 , from which it can be seen that UK sourced biofuels have varied between 8% and 22% of the total supply since 2008. Projections for 2020 again rely on the National Renewable Energy Action Plan published in 2010 (Table 12). Projected growth is based on achieving the RED’s sub-target of a 10% renewable contribution to transport by 2020 and includes a small but growing contribution from renewable electricity. 1

2009 was the year that the Renewable Energy Directive was implemented and the UK’s Renewable Energy Strategy published. 2 Energy Trends can be accessed at https://www.gov. uk/government/publications/energy-trends-section6-renewables and DUKES at https://www.gov.uk/ government/publications/renewable-sources-of-energychapter-6-digest-of-united-kingdom-energy-statisticsdukes. Data in this report were taken from Table et6_1 of Energy Trends, published 27 March 2014. Data for the Biomass Power chapter are the sum of ‘Plant Biomass’ and ‘Co-firing’. Data for the Mixed Waste to Energy chapter are the sum of ‘Landfill gas’, ‘Sewage sludge digestion’, ‘Energy from waste’ and ‘Animal Biomass (non-AD)’. 3 National Grid’s report and other documents relating to the EMR Delivery Plan are available at https://www.gov. uk/government/publications/electricity-market-reformdelivery-plan 4 The UK’s National Renewable Energy Action Plan is located at: https://www.gov.uk/government/uploads/ system/uploads/attachment_data/file/47871/25-nat-renenergy-action-plan.pdf 5 DECC’s main 2013 UEP page is https://www.gov. uk/government/collections/energy-and-emissionsprojections#documents and the renewable energy breakdown is published at: https://www.gov.uk/ government/publications/breakdown-of-renewablesprojections-in-uep-2013 6 DUKES is located at https://www.gov.uk/government/ publications/renewable-sources-of-energy-chapter-6digest-of-united-kingdom-energy-statistics-dukes. Data in this report were taken from Table 6.6, published 25 July 2013. Data for the Biomass boilers chapter are the sum of ‘Wood combustion - domestic’, ‘Wood combustion - industrial’ and ‘Plant biomass’. Data for the Mixed Waste to Energy chapter are the sum of ‘Landfill gas’, ‘Sewage sludge digestion’, ‘Animal Biomass’ and ‘Biodegradable energy from waste’. 7 The Bulletin is available at https://www.uktradeinfo. com/Statistics/Pages/TaxAndDutybulletins.aspx 8 RTFO statistics are at https://www.gov.uk/government/ collections/biofuels-statistics

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Rea Directory 2014