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Archive for the ‘utilities’ Category

I tweeted Tuesday that 1/2 of us don’t take basic actions to save electricity in our homes (citing Greenwise) and wondered whether all that wasted electricity might be equivalent to a nuclear power station. When I got home I took a stab at the numbers.

The verdict? There’s more than just one nuclear power station lurking in that wastage.

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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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Sometimes a tweet just won’t do. Yesterday I tweeted this:

DECC cnsltn out on gas gen. Um, 25% of UK elec gen lost by 2020. 20 yrs to new nuclear. No coherent RE strat. #DoneDeal #Fracking #3Degrees

…but somehow it doesn’t immediately convey the whole point. So here’s an expanded version:

DECC has today published its call for evidence  to “to inform a gas generation strategy to deliver a secure and affordable route to a low carbon economy.”
It’s lovely of them to ask. But consider the backdrop to this consultation:

  • Between a quarter and a third of current UK electricity generation capacity will come offline by the end of the decade. (It’s worth reading that sentence again – the implications are massive.)
  • New nuclear will not fill the gap. It will take at least 8 years to build each new nuclear power station and the stable of new UK nukes is struggling get out of the gates – that 8 year clock hasn’t even started ticking. In a massive setback to new nuclear, last month RWE and Npower abandoned plans for two new power stations in the wake of the collapse of the German nuclear market.
  • Without a radical change in policy, Renewables and energy storage will not grow at a sufficient rate to fill the gap.

So what does that leave us?

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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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I recently subscribed to Building Magazine in an effort to rationalise my media consumption. It’s been a while since I subscribed to a paid source of info and I’m a little wary. In catching up on Feb headlines I came across this one: Cities plan to invest billions in Green Deal retrofit work (£).

Really? Are they? Because we’ve looked pretty closely at Green Deal economics for people like EST and some London RPs and, for anything other than loft and cavity, it’s ropey at best. Even if you do manage to get it to meet the golden rule of payback within the asset life, it’s a massive task getting people to sign up. The hurdles are significant to say the least. A fact that’s not lost on Marks and Spencers, an early entrant who’s now distancing itself from Green Deal delivery.

So the Building headline made me do a double take and have a closer read. (more…)

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In the UK we generate enough heat each year to meet the needs of every home in the country… and then we throw the heat away. So why should we promote the use of precious resources and expensive technologies to generate that heat a second time?

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The proper way to slash carbon emissions is to tax carbon at the point of fuel extraction and let the market sort the problem out.

But because there’s no political appetite for carbon tax, we end up tinkering at the margins trying to address the emissions problem in tortuous and esoteric ways. Here’s a list I jotted down on the train on my way into the office:

  • CERT
  • SHESP
  • CESP
  • PAYS
  • Decent Homes
  • Allowable Solutions
  • Part L
  • RHI
  • FiT
  • CCL
  • CRC
  • ROCs
  • Retrofit for the Future
  • JESSICA, JASPERS, ELENA
  • Expanded Suppliers Obligation

All of this cost and bureaucracy becomes redundant the moment the real price of carbon is reflected in the cost of energy. Is political expediency the biggest obstacle to carbon abatement?

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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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