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Alternative energy generation for building owners

With energy demands for many businesses rising, Deputy Managing Director Chris Evans was recently featured in Energy World in an article exploring the energy challenges currently facing organisations. Within, he makes the case for building owners and operators to take control of the situation and encourages the consideration of decentralised energy sources.

2nd February 2018    |     Chris Evans: Deputy Managing Director

The UK is currently facing a daunting number of challenges when it comes to its present and future energy supply. With an ageing National Grid, increasing power demands, rising energy costs and the “green agenda”, building owners and operators are having to radically re-think the way that they generate and consume energy.

The capacity challenge

According to National Grid, Britain’s spare electricity capacity in the winter of 2017/18 will be squeezed down to just over 10%. This kind of safety margin has improved due to new generation systems being brought on line recently. However, as time progresses, this margin will reduce. Currently the equivalent loss of load expectation (LOLE) is 0.01 hours per year - this will be unacceptable to some organisations. What’s more, it’s estimated that by the end of this decade around £110bn will be needed to replace or renew our ageing energy infrastructure.

At peak times, companies are already being asked to reduce their energy usage to meet demand. This, can have a huge impact on business operations and plans for expansion and increasing energy costs and the impact of green tariffs are also hitting companies’ bottom lines.

The green agenda

Against this backdrop is the inexorable move towards low-carbon energy generation. Building owners will already be aware of the raft of government targets and levies on businesses, complete with heavy fines for transgressors. Lest they think that Brexit will deliver a get-out clause, the government will remain committed to energy targets un-related to the EU, such as the Paris climate agreement, as reinforced in the recently issued Clean Growth Strategy document.

Challenge = opportunity

Building owners and operators could view all of this as a huge burden but, with Brexit on the horizon, UK plc needs to find new ways of competing successfully on the global stage. Going “off-grid” and creating increased energy generation and storage could be key to a more sustainable future – both economically and environmentally.

First and foremost, there is a compelling financial case for building owners to decentralise their energy supply. Not only would this reduce some of the variables in terms of costs, making it easier to plan and budget, but localisation of power would also exempt them from several “green” levies.

However, perhaps more convincing is the potential for businesses to create an additional income stream through the sale of surplus energy – either back to the grid or direct to adjacent customers. The gap between retail and wholesale prices for power is up to 58%, making local generation a significant opportunity. This difference is, of course, a non-commodity charge that is predicted to increase by 60% over the next five years and will in all likeliness continue to rise, creating an even larger gap between retail and wholesale supply.

With a degree of lateral thinking and strategic planning, this potential threat could be turned to commercial advantage.

So, what are the options?

There are a variety of methods for generating energy that remove reliance on the grid. These include biomass and biogas-fuelled plants, energy-from-waste facilities, geothermal sources, hydro, tidal, solar arrays and fuel cells, to name but a few. Such methods can also be used as energy sources for combined heat and power (CHP) and district heating systems, which use steam to deliver power and distribute low temperature waste heat to the end user through a network of insulated pipes.

One example of a company proactively taking its energy requirements into its own hands is a well-known automotive manufacturer in the West Midlands which is looking to connect its manufacturing plant to a new renewable energy centre. It is anticipated that the connection will provide power via a private wire network and heat which will connect to its existing heat network via heat exchangers. Once completed, the business will reap numerous benefits, including discounted retail price electricity and a reduction in green tariffs, as well as the increased ability and flexibility to support the total electrical and heat load of the plant.

Similarly, our Camden project – in which we provided an integrated energy solution for a mixed-use residential and commercial development - sources off-site waste heat from the gas turbine at its local hospital. This provides efficient, “green” heating and hot water to the residents.

But not all technologies can provide a secure supply alone. For instance, wind and solar power are obviously both heavily reliant upon the weather, meaning that the power supply from these generators is intermittent.

Our advice to building owners looking to ensure a consistent energy supply would be to consider a broad mix of energy generation technologies. A factory roof can be an ideal location to house solar PV panels that generate power, reduce expenditure and provide a second income stream with sales back into the grid; but this could be supplemented with other technologies. Some organisations, for instance, have moved from a model where they pay to have their rubbish removed, to one where they use the landfill element to generate power, create income and protect their own energy supply for the future.

Where to start?

Before realising these opportunities, building operators and owners need to get to grips with their energy costs, measure their performance against best practice and develop a long-term energy strategy.

The first step is to do an holistic site-wide survey, asking themselves these three key questions:

1. What are the site’s characteristics?

Look at your current and future base and peak load profile, locations with significant energy requirement and CO2 emissions. What developments are planned (both organisational developments and in terms of physical built assets)?

2. How can overall energy consumption be reduced?

All organisations should explore whether there are areas where energy consumption is already too high. Are there internal steps that can be taken to reduce energy consumption? Think about how efficient use, perhaps paired with energy storage, could help reduce energy use.

3. Would the site benefit from decentralised energy generation?

If organisations find that they use a lot of power - as efficiently as possible but still find themselves with large energy bills - decentralised energy generation may be a worthwhile consideration. So, what energy generation technologies would suit the site best? What natural resources are around the site or in the local community? Are there any opportunities to generate capacity from waste, and even provide surplus energy generation to local businesses, communities or, as last resort, export to the national grid?

Building owners and operators that consider energy usage, generation and storage as part of their plan will benefit from taking a proactive approach. For instance, manufacturers don’t always work at the weekend and owners should seek to understand if it is feasible and cost effective to export any excess generated energy back to the grid. If building owners can successfully store power generated at such off-peak times, they will be able to use it during peak hours when demand is at its highest – reducing their energy bills in the process, particularly if they are on varying time of day tariffs.

The future of energy generation is already here

Putting energy generation at the forefront of development will require a shift in mindset for many companies. However, there are already examples of where organisations are forging ahead, demonstrating the way forward for other progressive businesses to follow in their footsteps.

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