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Archive for the ‘ESCO’ Category

Last year the Energy Technologies Institute launched the £100m  Smart System and Heat Programme, which “aims to design a first of its kind Smart Energy System in the UK.” As part of this programme, they’re doing a £3m piece of research into consumer behaviour on heat networks.

A member of the research team got in touch this week to ask if she could come in for a chat about what behaviour trends we’re seeing at Insite, our metering and billing company that looks after around 7k customers on community heating schemes. She was really nice about it and we began to talk about potential dates for the meeting.

Then, as we talked on the phone, some other details began to emerge. Would ETI agree to show us interim results? No, interim results are typically only reported internally to ETI. What about final results? Well, maybe, it depends on whether the ETI members choose to release the results to the public – but there’s a good chance the results will not be released.

I was stunned. For clarity ETI is 50% funded with public money from BIS, DECC, TSB and EPSRC.

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As summarised in earlier posts, license light is pretty much the only tool in OFGEM’s toolbox to allow small scale generation schemes to get value for the electricity they generate. It’s nothing to do with subsidies or guaranteed prices or feed in tariffs. Instead license light is trying to redress the fact that our electricity market just isn’t a level playing field. The big companies can afford to play, while small time (usually low carbon) generators are squeezed out.

I noted in the earlier post that the GLA were working on a pilot to trial license light. They had hoped to get the license light toolkit and sample contracts published by end of March 2012. This hasn’t happened.

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On-site generation only works if you get good value for the energy you produce. For example, the viability of CHP (and the resulting cost of heat) depends on the price you get for the electricity you generate.

So what are your options? You could export to the grid under an offtake contract with a licensed electricity supplier. But as a small generator your electricity is almost worthless to them so they won’t pay much for it: maybe 2 or 3p. So unless you’re able to negotiate a particularly sweet contract, this is usually a non-starter.

The obvious route should be to sell energy directly to people on the site where the energy is generated. That’s supposed to be the point of distributed energy, right? (more…)

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In Whitehall, advocates of PAYS and an expanded suppliers obligation are clashing over which mechanism should be used to refurb existing housing. This is the second post of two. If you missed it, read the first part here.

Here’s a quick summary of the two mechanisms:

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Hitting the 80% carbon reduction by 2050 has huge implications (and costs) for the residential sector. Two strategies are emerging for dealing with these costs, each with its own potentially severe side effects.

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Wrong. Unless they include extra charges.

The Code for Sustainable Homes, upcoming changes to building regs, and national emissions targets are all driving the industry towards much wider use of on-site generation.

Reducing carbon with on-site generation (also called “distributed energy” or just “DE”) brings extra costs relative to the business-as-usual approach of individual gas boilers and grid electricity. Cyril Sweett and others put the additional cost of building a zero-regulated-emissions house at £10k – £13k per dwelling, and some recent projects at work have borne this out.

This £10k – £13k is a massive problem for developers and housing associations, in some cases making projects infeasible.

There’s a widespread misconception that ESCOs can make the problem disappear. Some of this misconception has been fostered by ESCOs  keen to get deals on the books (I’ll come back to this in a minute), but I think most of the problem is down to a poor understanding of distributed energy and how ESCOs make money.

So how much capital cost can ESCOs take on? Here’s an example: (more…)

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As Phil Clark pointed out in a comment on my last post, there’s a very good piece in Building on the disappearance of ESCOs. This is a subject near to my heart as I’m part of  Fontenergy, an independent ESCO.

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