Make your building work for you

Published:  04 April, 2013

Renewable Energy Association, heat pump, Solar PV, Solar thermal, biomass, RHI, FiT, renewable energy

Renewable energy has a key role to play in enabling businesses to take control of their energy future. Mike Landy of the Renewable Energy Association takes up the story — and it’s a wide-ranging one.

The Department of Energy & Climate Change (DECC) is currently trying to decarbonise the UK energy system, whilst also ensuring security and affordability of supply. This is the so-called ‘energy trilemma’ which the Energy Bill, currently making its way through Parliament, seeks to address. On the surface, it’s an unfathomably complicated policy mission. However, by focusing on the contribution of on-site renewables, we can hopefully peel away some of the complexity.

Mainstream analysts project that onshore wind will compete subsidy-free with fossil fuels within the next decade. This generator is from Quiet Revolution. (Photo: Phil Clarke-Hill).

Security and affordability go hand in hand. The closer you are to your energy generation, the higher your level of energy security. This is as true at the level of a single organisation as it is for the country as a whole.

Security and affordability are closely related. Energy bills have soared in recent years, and contrary to what you might read in some newspapers, these increases have been driven by volatility in international gas markets, and not by Government support for renewables. See, for example, analyses by the energy market regulator (bit.ly/sUgSLy) and the Government’s climate advisors (bit.ly/Yn463G) — both independent bodies.

On the contrary, renewable energy is part of the solution. By generating your own heat and power, you can take control of your energy future. You can produce a budget for your business’s energy expenditure which is much less susceptible to the volatility of international gas markets. Fuel costs from Sun, wind and streams are zero, and the costs of wood chips and pellets are unlikely to sky-rocket in the same way as gas from the Middle East.

Detractors point to the relatively high costs of renewable energy. While it is true that most renewables remain behind fossil fuels on price (which have the benefit of nearly a century of market maturation), they are catching up rapidly — not least because of financial incentives from the Government driving industry learning, innovation, and cost reductions.

Solar PV is a classic example. Unaffordable to most Britons as recently as 2011, the Feed-in Tariff (FiT) has created a market for solar that has spurred innovation and efficiency in both manufacture and installation — cutting the costs more than 50% in just two years, and putting the technology within reach of millions more homes and businesses. Mainstream analysts project that solar PV and onshore wind will compete subsidy-free with fossil fuels within the next decade.

On-site renewable electricity (from solar PV, small scale wind and hydro, and even anaerobic digestion on farms and factories with high organic waste outputs) is supported by the Feed-in Tariff (FiT). The FiT pays out for every unit of electricity generated, not just what is sold back to the grid. There is an additional, smaller ‘export tariff’ for electricity sold back to the grid.

Solar PV leads the renewable-energy market. This Dulas installation is at Cheapside in London. (Photo: Phil Clarke-Hill)

Some people think that the FiT used to be attractive, but that the Government ‘slashed’ it and now it’s not. In fact, while there were excessive returns temporarily available for solar PV in 2011/12, the Government’s cost-control mechanism now ensures a broadly constant rate of return for investors, ensuring tariff reductions are approximately in line with cost reductions. There is also an automatic reduction mechanism triggered after nine months of tariff stability. This is not helpful, and the Renewable Energy Association (REA) is currently challenging this with DECC.

While the solar PV market has slowed, it remains the market leader.

For the full range of technologies and tariffs, visit: bit.ly/Yn6yaB

Moving onto heat, which accounts for roughly double the carbon emissions of electricity and half of UK total energy use. The UK is home to the world’s firstR enewable Heat Incentive (RHI), intended to support solar-thermal hot water, heat pumps for space heating, on-site biomass systems and injection of biomethane (also known as ‘green gas’) from anaerobic digestion into the gas grid for both space and water heating.

The use of the Renewable Heat Incentive is dominated by biomass boilers. (Photo 3G Energi).

The scheme was launched for a limited number of technologies in the non-domestic sector in 2011. Growth has been fairly limited to date and is dominated by biomass. However, DECC will introduce more technologies this year and will also expand the scheme into the domestic sector — which should help raise awareness, drive up sales, and drive down our carbon footprint.

For the full range of technologies and tariffs, visit: bit.ly/sqDOil

While the REA has plenty of meaty issues to be dealing with (not least worrying manoeuvres at EU level which could seriously undermine solar PV just as it is poised to break through), we can confidently say that the retrofit renewables policy framework is broadly stable and that businesses and homes should consider retrofit renewables a safe and very sensible investment.

As polluting fossil fuels become ever-more expensive, now is the perfect time to get your energy costs under control while helping to tackle climate change. Offices and factories are not just where we work; they can work for us too.

Mike Landy is head of on-site renewables at the Renewable Energy Association.



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