The industry will have to deliver a rapid increase in on-site microgeneration capacity to make up for the country's looming electricity shortage, says David Shaw.
Our national electricity generation and transmission infrastructure is running out of time and money. The electricity regulator Ofgem has already announced that there is 'reasonable doubt' about the ability of our current power infrastructure to meet increasing demand for electricity in the future. Some energy suppliers have already predicted rolling blackouts across the UK from as early as 2013 as some of the older fossil-fuel and nuclear power stations are de-commissioned.
As part of the Government's energy strategy, unveiled in December, Energy Minister Charles Hendry admitted it would cost £130 billion to make our energy supplies more secure and sustainable. The price will have to be paid by consumers through higher fuel bills.
Sustainable power generation
According to the Minister, £100 bn will be spent on creating a 'sustainable' power generation system to meet our pledge to cut carbon emissions by 80 per cent by 2030. The remaining £30 bn will go towards rebuilding and upgrading existing transmission infrastructure by 2020.
Ultimately, the Government would like to de-carbonise the National Grid and convert buildings to all-electric systems powered by renewable and nuclear generated electricity. This is a commendable strategy, but enormously expensive and still a very long way off.
In fact, electricity is getting more carbon intensive. The Department for Energy and Climate Change (DECC) has increased - by a significant 30 per cent - the carbon emissions factor used to calculate the impact of electricity generated by large power stations and distributed via the Grid. This will have to be accounted for in the designs used by building services engineers to comply with Part L of the Building Regulations.
Therefore, any technology that generates electricity 'off-Grid' looks even more attractive both from a financial and carbon saving perspective. The more Grid generated electricity our industry can displace the better, which is why we are seeing more interest in alternative power sources like combined heat and power (CHP).
There is also growing interest in 'marrying' more technologies to reduce carbon intensity. For example, electricity generated by on-site CHP can be used to power electric heat pumps - so increasing the already significant energy and carbon emissions benefits of each technology.
Aside from the carbon intensity, centrally generated electricity is only about 35 per cent efficient. A large part of the useful energy is thrown away in the waste heat rejected via a power station's cooling towers and still more is lost during the process of transmitting the electricity from the station to the point of use. If an energy inefficient technology is at the end of the supply chain in a building you are throwing away even more power.
It is clear, therefore, that we need a mixture of solutions to improve energy security in the UK. We will continue to depend on significant amounts of centrally generated electricity, but we can no longer rely on the Grid to provide everything we need.
We also have to move more quickly and more cost-effectively than the process of upgrading the Grid will allow. The first new nuclear power stations will not come on stream until 2018 at the earliest and, while eight new nuclear sites have now been approved, experts predict we will need double that number to plug our energy shortage by 2030.
So, the spotlight swings back to the building services sector to come up with solutions that are more affordable and can be delivered in a much shorter time
period. Microgeneration that takes the pressure off the Grid and produces electricity in a more efficient, low carbon way is the most realistic and reliable approach. CHP has the added benefit of providing useful heat as a byproduct of the generation process exactly where it is needed.
We can also deliver a network of thousands of microgeneration installations quickly - well ahead of the massive power infrastructure programme - and if a large proportion of the programme is CHP we can also support the development of community heating networks that are also urgently needed to produce low carbon heat.
Delivering value for money will increasingly be the key for all microgeneration solutions during the current period of austerity. CHP has stolen a march over many carbon saving alternatives because it is tried and tested and able to be retrofitted to a wide range of buildings with minimal disruption - so reducing upfront costs as well as delivering long-term energy savings and carbon cuts.
Financially, CHP ticks most of the boxes. The configuration of modern mini-CHP packages means they can be speedily integrated with existing services, while simultaneously reducing a building's carbon footprint by between 30 and 35 per cent.
The cost of buying and installing the CHP engine is also subject to a lower VAT rate of five per cent - another increasingly important consideration with the new 20 per cent rate in mind - and the CHP owner can also claim Enhanced Capital Allowances to reduce their tax bill. The electricity produced and the fuel consumed are also exempt from the Climate Change Levy.
The National Grid is under pressure and the more solutions we can find to reduce that pressure the better. We need a better balance to our national power generation including more off-Grid solutions that can take part of the strain as the Grid goes through its painful transformation.