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Renewable interest

Author : Tim Fryer

30 September 2012

Energy is arguably the biggest issue on the FMs agenda. Given that companies have a responsibility to go green and yet energy prices are rising in a struggling economy. Maybe this is the time for the FM to look to the opportunities of renewable energy. Tim Fryer tried to find out.

The future is a bit frightening. The cost for getting our energy infrastructure firing out the right number of megawatts stands at £200bn, while the costs of electricity, with an eye to paying for this capacity, is predicted to rise by 80 and 100% by 2020. While this could be a hammer blow for many manufacturing, energy-intense companies, every building – commercial or domestic - will feel the pain.

Is this a time when renewable energy comes into its own, satisfying both corporate environmental goals and electricity supply and cost issues? All of the people I spoke to agreed that there are less glamorous steps that need to be taken first. Geoff Smyth, Head of Technology and Delivery at the Carbon Trust said: “Our experience across a wide range of business sectors has shown that a company’s carbon footprint – and energy costs – can typically be reduced by between 10-20% by improving the standard of energy management of existing lighting, heating and air conditioning systems at little or no cost. Further and additional savings of between 30-70% can often be enjoyed by investing in new, modern, energy efficient equipment such as new boilers, air compressors and luminaires (lighting fittings).”

This theme of starting by ‘managing what you have got’ was taken up by James Thackrah, UK segment manager for Schneider Electric’s green buildings division: “We understand that [energy reduction] can be a daunting prospect without the proper guidance and know-how, so the first port of call for a facilities manager should always be a comprehensive energy audit. This will highlight areas where energy is being wasted, as well as any inefficient existing equipment. Understanding where energy is being consumed first is key. Following this, recommendations can then be made as to how energy consumption can be reduced, with potential energy and cost savings calculated. As a way of initially understanding energy usage, an energy remote monitoring solution could be installed, which would allow the facilities manager to identify the areas where consumption could be reduced. By measuring the energy consumption in specific areas of a building, it is possible to encourage employees to take responsibility for their own energy usage.”

“Something has to change in the way we use energy,” claimed Andrew Bowden, Managing Director of consultancy TEM. “I think we have a window of opportunity where people are taking this more seriously and when energy prices start to rise then they will take it a lot more seriously.”

So, assuming existing premises have been fine-tuned for energy efficient use, what are the options for a facilities manager who still wants to explore the possibilities of renewable energy? There are two main options – one is to buy green energy and the other is to generate it.

Taking the latter first, there are a number of technologies, some of which are included in the box on page XX. There are some very attractive reasons for wanting to generate your own power. One of these is stability of supply. As they found out in California in recent years, being in the most developed of countries doesn’t make you immune from the reality that if there is not enough power then the lights go off. Equally, as our own natural resources continue to wane and we move over to greater dependency on foreign supplies, we have to ask how long those suppliers (and the countries that lie between them and us) can be guaranteed to supply our needs? The other aspect is that once installed a renewable energy generation system will provide you with energy at a fixed price, although those who rely on revenue from Feed In Tariffs may depend on the good nature of the Government of the day.

However, as Bowden comments, it is still far from straightforward: “If you are running a commercial office block you still need to get planning permission, you need the right orientation, the right roof profile, the landlord doesn’t mind you doing it, the roof needs to support the structure – and then the likelihood of being able to provide the full energy you need in a commercial environment is highly unlikely. You could aid the generation of electricity but you certainly couldn’t make enough to make any sizeable difference.”

There will always be the problem with wind technologies that it cannot be counted on to generate electricity when the conditions are still – the grid will always be needed for back-up. Additionally planning regulations for wind turbines will essentially preclude them from being of any widescale use for urban properties.

So solar PV is the most accessible route to renewables for most FMs, and the technology has moved on to such an extent in recent years that a typically cloudy British day means that solar panels are no longer useless. Wolf Dietrich, Commercial Sales Manager of SEG Commercial, commented: “Solar PV is a globally proven technology. It is also a technology with a very fast carbon payback, if the right products are chosen. It is certainly quiet, unobtrusive and non-polluting. Within commercial environments, it can make a substantial contribution to the 24/7 electricity base load – and electricity consumed at the point of production makes sense, economically and environmentally.

“Many commercial clients look at the payback of a PV system and gain the initial impression that it does not match their typical return on investment requirements for capital equipment,” continued Dietrich. “However, a PV system has a lifetime of 25 years with minimal – if any – service and repairs. Combined with a strong likelihood of increasing returns over the years, as energy prices continue to rise. A further aspect to consider is the low maintenance requirement - a PV system does require very little looking after. This keeps cost and time efforts on behalf of facilities managers and their team to a minimum. Within a well formulated sustainability strategy, solar PV can be a major contributor, providing considerable energy savings and excellent long-term paybacks with very little service and management requirements.

The Carbon Trust’s Geoff Smyth added: “For some companies located in areas that benefit from abundant renewable energy sources such as wind, solar and hydro, there may be no technical constraint to them reducing their energy related carbon footprint to practically zero. However, very few companies have actually done so and it is likely that cost considerations would be a limiting factor.”

However, on a more positive note he continued: “The economics of small-scale renewable energy systems such as wind, PV and solar thermal, have been substantially improved with the introduction of the Renewables Obligation and Feed-in-Tariff regime. Also, thanks to the recent introduction of the Renewable Heat Incentive, biomass boilers and other qualifying renewable heating technologies can now attract lucrative payments for the non-fossil fuel heat they produce to serve energy efficient buildings and processes. Many companies and organisations that have utilised the Energy Efficiency Financing Scheme – a dedicated £550m UK fund established by the Carbon Trust and Siemens Financial Services – have been pleasantly surprised to discover that investing in energy saving projects can deliver bottom-line benefits immediately from day one. For example, a distribution company in the NE of England, recently utilised the Energy Efficiency Financing Scheme to upgrade their warehouse lighting to a solution that halved their energy costs. Against a fixed finance monthly finance payment of £1.8k (for 60 months) they are enjoying monthly cost savings of £5.3k. For this company – and for all companies – it truly does pay to be energy efficient.”

Green procurement

Rather than generate your own renewable energy, is an alternative to buy it? Dean McArdle, Technical Engineering Manager of ImtechG&H, stated: “Along with the environmental and social responsibility reasons, green energy procurement in order to reduce the amount of carbon a building emits is one of the fastest, most effective ways for a company to save money. Green energy is exempt from Climate Change Levy charges. With the UK facing difficult economic conditions, businesses in all industries have to reduce costs as a priority. In the medium to long term, green energy procurement will allow cutting costs in energy bills, rather than cutting costs in critical business areas, such as operational costs or even in staff cuts.”

Historically purchasing renewable energy would cost more than standard (brown) energy, where as it is now often possible to secure prices at the same rate or indeed lower rates than brown energy. Paul Cox of consultants pemxq commented: “It is normal for suppliers to offer a Climate Change Levy (CCL) exempt product, which means the cost of renewable energy is cost neutral with the higher p/kWh being off-set by the exemption in CCL. The UK government is working on a range of measures aimed at making purchasing renewable energy a more attractive purchasing option.

“Renewable energy tariffs are available from the majority of suppliers, however; businesses should be sure to analyse the products available carefully to ensure any financial implications are considered and to confirm the true reduction on their environmental impact is calculated accurately. This is particularly relevant when a business may already be participating in Climate Change Levy Agreement, whereby they are already securing a reduction in the percentage of CCL charged.”

This does throw up a slight supply and demand problem. The UK currently only generates under 10% of its electricity through renewable schemes. If every company decided that green energy procurement was the best way to enhance their environmental credentials then there clearly is not going to be enough to go round. Far more generating capacity is going to be required.

It is no surprise that the consensus across contributors to this article is that renewable energy generation could provide part of the solution, as could green energy procurement supply, but the emphasis has to be on using less energy in the first place.

[Box story]
[box headline] Renewable technologies

Puragen, renewable energy specialists, give an overview of some of the most promising renewable technologies.

Solar PhotoVoltaic (PV)
Solar PV is currently one of the most popular forms of renewable technology. They work simply by converting sunlight directly into electricity. To reap the greatest benefits from solar PV a property will ideally have a south facing roof and not be overshadowed by other buildings or trees.

As one of the windiest countries in Europe, wind power is an ideal technology solution with the potential to generate around 40 per cent of a building’s electricity needs. To work effectively, a property needs an average wind speed of no less than 5 metres per second (m/s) and ideally between 6-10m/s. For this reason, they are ideally suited to remote or exposed locations to ensure the greatest wind potential.

Heat based technologies
Heat generation represents nearly half of the UK’s energy use and associated carbon emissions, according to The Department of Energy and Climate Change (DECC). It therefore forms an integral part of the government’s plans to reduce carbon emissions. The Renewable Heat Incentive (RHI) is available to communities and businesses to encourage the use of heat generating technologies. It is expected that by 2020, installations on commercial premises will have increased by seven fold thanks to the RHI.

Air Source Heat Pumps (ASHPs)
Air source heat pumps are up to five times more energy efficient than traditional heating methods helping building operators to reduce both fuel bills and their carbon footprint. An ASHP acts like a refrigerator in reverse, extracting heat from the outside air and then through the principle of vapour compression ramping it up to useable heat for the premises.

Remember however a heat pump actually uses electricity in its operation. It is estimated that every unit of electrical energy required to run a heat pump, is capable of generating around five times the equivalent energy in heat. When compared to electric heating however they are highly effective and therefore ideal for buildings off mains gas.

Ground Source Heat Pump (GSHP)
A GSHP works along the same principle as an ASHP but in this instance taps into the heat stored naturally within the earth itself. There are two potential systems for a GSHP, either a borehole drilled deep into the ground or a series of pipes buried at a shallow depth just under the earth’s surface.

As a rough guide, shallow depth collectors require approximately two and a half times the total floor area of the property to generate adequate heat. A potential downside therefore is the availability of land and equally the disruption that it can bring to premises. For this reason they are ideally suited to new build developments. The second option is a borehole that would be drilled between 30 and 150 metres into the ground. This is more expensive and is dependent on the geology of the ground being suitable. Equally, in larger properties more than one borehole may be required.

The technology has advanced greatly over the last few years and it is now possible to generate much higher temperatures. However, the effectiveness of the heat pump will depend on the thermal properties of the building.

Solar thermal
Where there is a high demand for hot water, a solar thermal system is ideal. The technology works through both direct and indirect sunlight heating a fluid contained within the solar collectors on the roof. There are two main collector types, evacuated tubes and flat plates and if fitted correctly can generate enough hot water to meet around 60 per cent of a property’s needs.

Solar thermal technology is cheaper than Solar PV and customers can also benefit from incentives through the Renewable Heat Incentive (RHI). A suitable property is one with either a south-east through to a south-west facing roof space and generally may need to accommodate a large hot water cylinder in place of the existing one. However, if a property has a combination boiler and therefore no hot water cylinder then an alternative Solar Thermal system can be installed.
[End Box]

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