What a brilliant idea! I had forgotten quite what an astute financial wizard Gordon was; yet another excuse for a stealth tax. Dress it up as a support measure for the fuel poor and bingo, another £750 million he does not have to find from his social budget. Of course this will in no way affect our energy bills. Of course not; the good old energy suppliers will take it on the chin and tell their shareholders that, due to the UK Government's inability to plan energy policy more than six months ahead, they will just have to accept lower dividends this year. So that means the pension funds will have less money, which in turn means that the pensioners will just have to accept less...all very diluted by that stage so no-one will notice. On the other hand they might just stuff it on the bills of those of us who pay our own, so that the increase is compounded rather than mitigated.
In the meantime, the Government is silent on where we are going to find £100 billion the energy companies say they will need to invest to keep the lights on over the next decade or so. Maybe we just won't bother closing our dirty old coal power plants...or maybe we will cover every roof in the country with PV. (Actually that would cost more than £200 billion, but at least it would make the PV industry obscenely rich).
Whilst this debacle unfolds, the debate around FIT (Feed In Tariffs) continues its perverse way. Already the obligation on suppliers to offer fair terms for export has resulted in a bunch of apparently attractive, but hopelessly unsustainable offerings including one where you get paid 18p/kWh for all you produce from microgeneration. So if you are rich enough to cough up £10,000 for a PV system, you can get the UK taxpayer to subsidise you to the tune of £2,500 (is that all the PV industry cries?), then your fellow tax/bill payers will subsidise you another 13p/kWh (around £200 per year) so you can demonstrate your eco-bling credentials. On the other hand if you install a £3,000 micro CHP system, you will get a more sensible payment of around 5p/kWh, more or less what it should be worth on the wholesale market. When I say, "should be", the sad reality is that it is currently worth nothing at all as there is no system in place for suppliers to trade export from microgeneration; the proposed infrastructure changes would have swallowed the entire value of any electricity produced by householders using any microgeneration technology. So the notion of introducing a FIT which would reward each and every technology at a different rate and, according to some proponents, would include heat (even though you cannot conceivably export heat), would raise a few interesting challenges for all concerned. Never mind, as long as the PV gravy train carries on. Of course, the FIT advocates are perfectly well aware that a FIT based on the German model is a no-hoper logistically, so what are they really after? It turns out that they are actually proposing a "deemed" FIT which takes an assumed output from each microgeneration technology over its entire life and capitalises it up front. This FIT (aka capital grant) should encourage microgeneration, well PV at least; based on the German levels of subsidy, a typical PV system producing 1600kWh annually would attract a grant of £12,800. Not bad for a system that costs £10,000; you could be paid (by your neighbours) to take it! Last one to sign up is a cissy!
Wednesday 3 September 2008
Monday 2 June 2008
Microgeneration gets the green light
The UK Government (BERR) today published the results of an extensive market study into microgeneration. They seem to think the potential is fantastic, 9 million systems installed by 2020, as much power as 5 nuclear power stations and, going on, enough to save 30 million tonnes of CO2 by 2030.
The research was undertaken in support of the commitment in the Climate Change Act last year to establish binding targets if the potential could be demonstrated; now it has. So will Gordon bite the bullet? After all it is not his money and yet another stealth tax will hardly be noticed. Oh, sorry, forgot to mention that this fantastic microgeneration roll-out would be funded by a feed-in tariff like the German one which may deliver products into the market, but is probably one of the most expensive and bureaucratic subsidies ever invented, as popular as the Common Agricultural Policy with proponents and about as unpopular with those who have to pay-the consumer! Supporters point to the impressive growth in PV in Germany, conveniently forgetting that PV is one of the most absurdly over-subsidised technologies ever, with a payment of 40p/kWh (that is four times what you currently pay for conventional power and ten times what micro CHP costs), the subsidy being inversely proportional to the viability of the technology. That is, the less cost-effective the technology, the bigger the subsidy, a perverse incentive to invest in the least effective generation option.
You would assume that this meant PV must have some pretty impressive environmental credentials. You would be wrong. Solar PV (polycrystalline silicon) uses vast amounts of energy to produce, so that it takes around 12 years just to pay for the energy consumed in manufacture and delivers electricity at about 0.25kg/kWh, about half the UK average mix, but higher than fossil fuelled micro CHP at 0.22kg/kWh! So then would you assume that micro CHP gets an even better subsidy? Oh no, it is proposed that micro CHP gets a mere 5p/kWh, one eighth of PV. Now I have often argued that micro CHP does not need subsidy, just a level playing field, so I am not particularly upset about the lower subsidy to micro CHP. The problem is that we have finite resources (yes it is YOUR money that will be collected through higher electricity bills to subsidise the PV industry, but then you probably think the UK taxpayer should be supporting poor start-up companies like...er...BP, Sharp, Kyocera...) and if we are all forced to subsidise PV, with a whole lot more going to nuclear, there will not be much left to invest in sensible technologies.
Parliament voted against feed-in tariffs the other day, so maybe they have seen sense, but then again, Gordon might decide it is just too tempting to get the Greens and the motorists off his back when he knows that a coherent energy taxation strategy is just too difficult to implement.
Microgeneration does have its place and great potential, but we should not be wasting our limited resources on irrelevant technologies. The last thing the microgeneration industry needs is more misguided government intervention which squanders resources, alienates the taxpayer and which will never be enough to keep the PV industry happy anyway.
For further information on various microgeneration technologies, visit the micro CHP website and see the paper on Microgeneration and micro CHP.
The research was undertaken in support of the commitment in the Climate Change Act last year to establish binding targets if the potential could be demonstrated; now it has. So will Gordon bite the bullet? After all it is not his money and yet another stealth tax will hardly be noticed. Oh, sorry, forgot to mention that this fantastic microgeneration roll-out would be funded by a feed-in tariff like the German one which may deliver products into the market, but is probably one of the most expensive and bureaucratic subsidies ever invented, as popular as the Common Agricultural Policy with proponents and about as unpopular with those who have to pay-the consumer! Supporters point to the impressive growth in PV in Germany, conveniently forgetting that PV is one of the most absurdly over-subsidised technologies ever, with a payment of 40p/kWh (that is four times what you currently pay for conventional power and ten times what micro CHP costs), the subsidy being inversely proportional to the viability of the technology. That is, the less cost-effective the technology, the bigger the subsidy, a perverse incentive to invest in the least effective generation option.
You would assume that this meant PV must have some pretty impressive environmental credentials. You would be wrong. Solar PV (polycrystalline silicon) uses vast amounts of energy to produce, so that it takes around 12 years just to pay for the energy consumed in manufacture and delivers electricity at about 0.25kg/kWh, about half the UK average mix, but higher than fossil fuelled micro CHP at 0.22kg/kWh! So then would you assume that micro CHP gets an even better subsidy? Oh no, it is proposed that micro CHP gets a mere 5p/kWh, one eighth of PV. Now I have often argued that micro CHP does not need subsidy, just a level playing field, so I am not particularly upset about the lower subsidy to micro CHP. The problem is that we have finite resources (yes it is YOUR money that will be collected through higher electricity bills to subsidise the PV industry, but then you probably think the UK taxpayer should be supporting poor start-up companies like...er...BP, Sharp, Kyocera...) and if we are all forced to subsidise PV, with a whole lot more going to nuclear, there will not be much left to invest in sensible technologies.
Parliament voted against feed-in tariffs the other day, so maybe they have seen sense, but then again, Gordon might decide it is just too tempting to get the Greens and the motorists off his back when he knows that a coherent energy taxation strategy is just too difficult to implement.
Microgeneration does have its place and great potential, but we should not be wasting our limited resources on irrelevant technologies. The last thing the microgeneration industry needs is more misguided government intervention which squanders resources, alienates the taxpayer and which will never be enough to keep the PV industry happy anyway.
For further information on various microgeneration technologies, visit the micro CHP website and see the paper on Microgeneration and micro CHP.
Sunday 25 May 2008
Europe conspires against micro CHP?
The COGEN Europe conference last week was an almost surreal event. In attendance, all the major players in the CHP industry complaining for almost two days about how unfair the market was to large scale CHP and bemoaning the lack of financial support (aka subsidies) to make the industry viable. Tacked on at the end of the conference, a concession to the micro CHP interests with a "workshop" on micro CHP; but the micro CHP industry was not whingeing about subsidies, just asking to be allowed to play on the same field as other microgeneration technologies, even if the field was tilted rather steeply against them.
The UK representative from DEFRA had earlier declared financial support for micro CHP under the UK's Low Carbon Buildings Programme, despite the fact that it has taken so long to agree the accreditation process for micro CHP that there is unlikely to be any money left for micro CHP. He seemed either unaware or unconcerned that, whilst micro CHP is analysed to the nth degree to see just how much better it is than conventional solutions, other microgeneration technologies have been "nodded through" on the basis that they were already on the market and already being subsidised under the Clear Skies Programme. There is still no agreed common baseline (i.e. what you are comparing it with) for performance of microgeneration technologies, so you have no idea whether your investment is worthwhile or not...except for micro CHP. In the meantime, you can buy a micro wind turbine, for example, get your grant (subsidised by me) and then generate next to nothing. Does this mean that the taxpayer will get a refund when the truth is known, or will the misguided owners of micro wind turbines be given a refund for buying products endorsed by the Government accreditation scheme? Neither I suspect.
It might have been nice to get some financial support for micro CHP, but that is not the point. The point is that the UK Microgeneration Certification Scheme, whilst being the gateway for obtaining grants under LCBP, will effectively be the only scheme for accrediting micro CHP at all, even for compliance with Building Regulations, so unless you comply with the MCS scheme, you will not be able to sell your micro CHP products.
And now we see the same thing again at European level. The EU expert responsible for drafting the list of compliant technologies for inclusion in the database for the Directive on energy efficient building products, was not even intending to include micro CHP on the list! He conceded that "this might disadvantage micro CHP" with regards to market access; yes, rather like not issuing passports "might disadvantage" somebody wishing to enter a country! His justification was "that there are so few micro CHP products on the market". It seems to have escaped his notice that there never will be any on the market if they are not included in the list of compliant products. Catch 22!
So, is this a conspiracy, or just incompetence? You decide.
The UK representative from DEFRA had earlier declared financial support for micro CHP under the UK's Low Carbon Buildings Programme, despite the fact that it has taken so long to agree the accreditation process for micro CHP that there is unlikely to be any money left for micro CHP. He seemed either unaware or unconcerned that, whilst micro CHP is analysed to the nth degree to see just how much better it is than conventional solutions, other microgeneration technologies have been "nodded through" on the basis that they were already on the market and already being subsidised under the Clear Skies Programme. There is still no agreed common baseline (i.e. what you are comparing it with) for performance of microgeneration technologies, so you have no idea whether your investment is worthwhile or not...except for micro CHP. In the meantime, you can buy a micro wind turbine, for example, get your grant (subsidised by me) and then generate next to nothing. Does this mean that the taxpayer will get a refund when the truth is known, or will the misguided owners of micro wind turbines be given a refund for buying products endorsed by the Government accreditation scheme? Neither I suspect.
It might have been nice to get some financial support for micro CHP, but that is not the point. The point is that the UK Microgeneration Certification Scheme, whilst being the gateway for obtaining grants under LCBP, will effectively be the only scheme for accrediting micro CHP at all, even for compliance with Building Regulations, so unless you comply with the MCS scheme, you will not be able to sell your micro CHP products.
And now we see the same thing again at European level. The EU expert responsible for drafting the list of compliant technologies for inclusion in the database for the Directive on energy efficient building products, was not even intending to include micro CHP on the list! He conceded that "this might disadvantage micro CHP" with regards to market access; yes, rather like not issuing passports "might disadvantage" somebody wishing to enter a country! His justification was "that there are so few micro CHP products on the market". It seems to have escaped his notice that there never will be any on the market if they are not included in the list of compliant products. Catch 22!
So, is this a conspiracy, or just incompetence? You decide.
Wednesday 30 January 2008
WhisperGen set up micro CHP manufacturing Joint Venture with MCC
Three years after announcing their 80,000 micro CHP unit deal with Powergen (now E.ON) in the UK, WhisperGen have finally managed to set up a JV with Spanish white goods manufacturer Mondragon CC to produce their 1kWe Stirling engine microCHP unit for the European market.
This is really good news for those who have been eagerly awaiting the availability of mass produced units following Powergen's limited roll-out in 2004, since when WhisperGen units have been rather hard to come by! No announcement so far from E.ON as to when they will be offering the mass produced units in the UK, but rumour has it that they should start to become available to the general public in 2009. Meanwhile a number of trials are taking place in Germany and Netherlands, so we could see a real European launch at the same time.
Bearing in mind that WhisperGen units were available in 1998 (as marine diesel, DC variants) it is salutory to see just how long it takes from prototype to commercial product; something to bear in mind when new entrants claim they are "launching next year" when they have yet to install more than a handful of trial units. Still, there could be other micro CHP units out there in the not too distant future with Microgen probably the leading contender.
For more information on this and other micro CHP click here
This is really good news for those who have been eagerly awaiting the availability of mass produced units following Powergen's limited roll-out in 2004, since when WhisperGen units have been rather hard to come by! No announcement so far from E.ON as to when they will be offering the mass produced units in the UK, but rumour has it that they should start to become available to the general public in 2009. Meanwhile a number of trials are taking place in Germany and Netherlands, so we could see a real European launch at the same time.
Bearing in mind that WhisperGen units were available in 1998 (as marine diesel, DC variants) it is salutory to see just how long it takes from prototype to commercial product; something to bear in mind when new entrants claim they are "launching next year" when they have yet to install more than a handful of trial units. Still, there could be other micro CHP units out there in the not too distant future with Microgen probably the leading contender.
For more information on this and other micro CHP click here
Wednesday 23 January 2008
EON partner with EC Power micro CHP
You may have seen the news that E.ON have signed a deal with EC Power to distribute their micro CHP products in the UK. This rather confusing announcement is due to the number of definitions of "micro CHP" floating around.
Micro CHP is an MG (Micro Generation) technology and thus falls within the EU definition of MG which includes anything below 50kWe (for electrical generating technologies) or 45kWt (for heat producing technologies).
Nobody seems very clear about whether this is an "either/or" definition for CHP technologies. Various alternative definitions seek to clarify the situation, including one from the Carbon Trust who categorise what used to be called "micro CHP" as "domestic micro CHP" including only packaged units designed for individual homes, whilst "commercial micro CHP" comprises an assembly of ancillary components such as boilers, heat exchangers etc in a plant room configuration. The EC Power unit, at 15kWe electrical output, is clearly in the latter category, although I would tend to refer to it as "mini CHP".
Whatever the definition, it is good news that E.ON, a major energy company, has set up a deal with EC Power (incidentally a subsidiary of Norwegian oil and gas giant StatoilHydro) and their gas-fired mini CHP technology is being successfully installed in sheltered housing, schools and offices where it provides an excellent payback due to its very flexible operation which allows it to track either electrical or thermal demand.
For more information on the EC Power product range click here.
For more information on other micro CHP products and micro CHP generally, click here
Micro CHP is an MG (Micro Generation) technology and thus falls within the EU definition of MG which includes anything below 50kWe (for electrical generating technologies) or 45kWt (for heat producing technologies).
Nobody seems very clear about whether this is an "either/or" definition for CHP technologies. Various alternative definitions seek to clarify the situation, including one from the Carbon Trust who categorise what used to be called "micro CHP" as "domestic micro CHP" including only packaged units designed for individual homes, whilst "commercial micro CHP" comprises an assembly of ancillary components such as boilers, heat exchangers etc in a plant room configuration. The EC Power unit, at 15kWe electrical output, is clearly in the latter category, although I would tend to refer to it as "mini CHP".
Whatever the definition, it is good news that E.ON, a major energy company, has set up a deal with EC Power (incidentally a subsidiary of Norwegian oil and gas giant StatoilHydro) and their gas-fired mini CHP technology is being successfully installed in sheltered housing, schools and offices where it provides an excellent payback due to its very flexible operation which allows it to track either electrical or thermal demand.
For more information on the EC Power product range click here.
For more information on other micro CHP products and micro CHP generally, click here
Tuesday 15 January 2008
Flavours of micro CHP
Amazing! In the last three days we have had announcements of deals of as many different micro CHP technologies. Firstly Ceres (Solid Oxide Fuel Cells) announced that Centrica (aka British Gas) had bought into 10% of their company, then EON announce a deal with Energetix to trial their Organic Rankine Cycle unit, then Disenco announce another manufacturing deal with Malvern boilers. What does it all mean?
Ceres have been hyping their fuel cell technology which promises to be the answer to a maidens prayer with all kinds of developments including demonstrations of their "wall mounted" micro CHP unit. Much like Microgen and Acumentrics, they have demonstrated only that it is possible to erect very substantial brick walls. Unlike those two developers they have yet to demonstrate a packaged micro CHP product providing heat and power in a live application. Whilst BG may have plenty of cash to squander on promising technologies, I really cannot understand their simultaneous promise to order 37,500 Ceres fuel cell micro CHP units. What on earth are they thinking of? Why not 37,501 units? Ah well, it is their money!
Energetix, on the other hand, with their Genlec unit, have demonstrated a very credible if modestly efficient genuinely wall-mounted micro CHP unit. This product, at first appears rather pointless. It has a nominal efficiency lower than other technologies and is a couple of years behind them. So what is the big deal? Just the fact that it actually exists and might actually deliver what it promises! The Genlec unit uses readily available components so should be relatively cheap or at least predictable cost; it is very flexible in operation, so may have more or less nominal efficiency in the field; it is genuinely wall-mountable, not a 100kg monster like Microgen nor the size of a wall-mounted dishwasher like Acumentrics. Is this important? Some say it is as the majority of boilers sold today are wall-mounted; others say not as this is just a fad and there is nothing wrong with floor-mounted products.
Disenco now have an engine manufacturer and a boiler partner. If their partners can produce the 3kWe products to performance and life requirements it is still quite a challenge to overcome the vagaries of the export reward schemes and recover some value for the electricity produced.
So, plenty of oportunities and plenty of challenges; at least it is good to see micro CHP really making some progress and with luck presenting us with a choice of products to suit our various needs.
Thursday 10 January 2008
Nuclear energy and micro CHP
Today the British Government formally announced that it will permit the major energy companies to squander billions on nuclear. Not a penny of taxpayers money we are assured, although quite how that squares with the current £72 billion clean-up of existing nuclear committed so far I am unsure. Not that this decision will make the slightest difference to the impending energy gap as the current nukes and dirty coal close down over the next decade; after all there is unlikely to be a single kWh of nuclear electric generated much before 2020!
That is the big difference between the megalomaniac nuclear industry and micro CHP. Whilst nuclear takes decades to build before producing any power at all, micro CHP can be installed 1kW at a time, producing power from day one. In terms of capacity, if we replaced all domestic gas boilers (as they reach the end of their useful life) with micro CHP , we could in theory install 1.5 million micro CHP units every year. That is equivalent to 1.5GWe, or not far off the size of one nuclear power station in 2008, another in 2009, in 2010 and ...you get the picture. By 2020, we could have the equivalent of twelve nukes powered by micro CHP. And if it didn't work out for some reason, we could just stop installing them; on the other hand, with nuclear you have to commit to the whole £2billion (or more) price tag for a single station and if, after 10 years construction, it doesn't stack up, you have absolutely nothing to show for your money...which would you invest in?
Against this dismal background, it is encouraging to hear that Ceramic Fuel Cells have delivered yet another micro CHP unit to be tested by E.ON in the UK; that is in addition to the units recently shipped to GdF in France (home of European nuclear) and EWE in Germany. I am pretty sure that they will be producing low carbon electricity some time before 2020.
That is the big difference between the megalomaniac nuclear industry and micro CHP. Whilst nuclear takes decades to build before producing any power at all, micro CHP can be installed 1kW at a time, producing power from day one. In terms of capacity, if we replaced all domestic gas boilers (as they reach the end of their useful life) with micro CHP , we could in theory install 1.5 million micro CHP units every year. That is equivalent to 1.5GWe, or not far off the size of one nuclear power station in 2008, another in 2009, in 2010 and ...you get the picture. By 2020, we could have the equivalent of twelve nukes powered by micro CHP. And if it didn't work out for some reason, we could just stop installing them; on the other hand, with nuclear you have to commit to the whole £2billion (or more) price tag for a single station and if, after 10 years construction, it doesn't stack up, you have absolutely nothing to show for your money...which would you invest in?
Against this dismal background, it is encouraging to hear that Ceramic Fuel Cells have delivered yet another micro CHP unit to be tested by E.ON in the UK; that is in addition to the units recently shipped to GdF in France (home of European nuclear) and EWE in Germany. I am pretty sure that they will be producing low carbon electricity some time before 2020.
Wednesday 9 January 2008
Disenco micro CHP
These guys really seem to be making some progress. Not that they don't still have a long way to go to market, but Disenco's announcement of a deal with a manufacturer is a major step forward for this 3kWe micro CHP product.
Admittedly it comes on the same day that the UK Government finally caved in to the nuclear lobby which could screw up the entire energy landscape for the next 20 years, but it does improve credibility for a technology which has suffered from interminable delays in getting products to market.
It is a sad, but unavoidable fact that whilst investors have drip fed micro CHP, the legislators have continually raised the bar by mandating increasingly higher efficiency boilers for all homes; not a bad thing in itself, but it means that model T Ford micro CHP is competing with Polo Blue Motion ICE technology. The good news is that boilers now have nowhere to go; they have hit the peak of their efficiency potential and if micro CHP can deliver benefits against today's boilers, it is all downhill from here. The Carbon Trust report has somewhat belatedly demonstrated the carbon mitigation and economic benfits of microCHP against these high efficiency boilers so hopefully, Disenco's unit will be able to establish itself as another step change in performance for domestic energy systems.
Admittedly it comes on the same day that the UK Government finally caved in to the nuclear lobby which could screw up the entire energy landscape for the next 20 years, but it does improve credibility for a technology which has suffered from interminable delays in getting products to market.
It is a sad, but unavoidable fact that whilst investors have drip fed micro CHP, the legislators have continually raised the bar by mandating increasingly higher efficiency boilers for all homes; not a bad thing in itself, but it means that model T Ford micro CHP is competing with Polo Blue Motion ICE technology. The good news is that boilers now have nowhere to go; they have hit the peak of their efficiency potential and if micro CHP can deliver benefits against today's boilers, it is all downhill from here. The Carbon Trust report has somewhat belatedly demonstrated the carbon mitigation and economic benfits of microCHP against these high efficiency boilers so hopefully, Disenco's unit will be able to establish itself as another step change in performance for domestic energy systems.
Monday 7 January 2008
Micro CHP back in business
A lot has happened since the last entry on this blog, mainly due to my indolence over the past nine months. However, an update on an impressive range of micro CHP activities over that period:
Two companies, Yanmar (the Japanese Diesel engine manufacturer) and EC Power have both launched a range of improved CHP products in the UK including biodiesel variants.
CFCL (Solid Oxide Fuel Cell CHP) have announced partnerships with a number of European boiler manufacturers and energy companies, whilst Acumentrics (also SOFC) demonstrated their wall-mounted unit to energy companies in Germany.
Baxi, Remeha, Viessmann and eventually Vaillant declared their partnership with MEC (the heir to the Microgen technology) and expect to launch a major trial in 2008.
WhisperGen announced that they have finally struck a deal with MCC to manufacture their unit with mass production for Netherlands and Germany expected by mid-2008.
The Carbon Trust published another interim report on their extensive micro CHP field trial, confirming what most of us already knew, that micro CHP is environmentally viable and produces good economic paybacks for about half the homes in the UK based on current technologies (those with annual heat loss greater than 20,000kWh); they also pointed out that paybacks would be improved if householders could get decent value for their exported power, but that is going to be a tough nut to crack. It is not that energy suppliers are necessarily reluctant to offer a decent export value, indeed many of them are offering silly amounts presumably as some kind of PR initiative, but there is still no cost-effective method of trading exports within the settlement system nor even for ROCs.
Today, Disenco announced that they had successfully demonstrated their high efficiency Stirling based unit; this technology had led the field in the 1990's, but funding difficulties delayed development. Hopefully now they can move towards a commercial product, but the electrical output of 3kWe means they face challenges with capturing value of electrical generation for domestic installations where a substantial part of their output is exported.
All in all, it has been a good year for micro CHP with a number of products suitable for a range of applications reaching the market in UK, Europe, Japan and USA.
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