Balancing carbon reduction with affordability and supply security in the UK
|The Swedish city of Borås|
The often-quoted ‘trilemma’ of energy policy in the UK and elsewhere is to successfully balance environmental, security and affordability pressures. But the energy scene is changing, writes Tom Fern from the UK CHP Association, and the CHP industry needs to both understand that change and react to it.
Most readers will be all too aware of the fact that, in simple terms, energy is changing – both rapidly and dramatically. The cogeneration sector, regardless of whether we fully realize it yet, will increasingly find itself playing a key role at the heart of this change as fundamentals shift around us. How then do we ensure the sector is best placed to take advantage of the opportunities that will present themselves along the way?
THE SHAPE OF CHANGE
The change we see around is ultimately driven by three key factors: the drive to address climate change through carbon abatement, increasing concerns about security of supply and efforts to preserve affordability of energy supplies – a set of variables often termed the energy trilemma.
Globally, and even locally, the balance and tensions between these three drivers of change will of course vary. Yet, regardless of how they play out, they will all be present to some degree.
The weak economic outlook that currently affects many markets means cost and affordability are now higher up the agenda than they have been for some time. This is certainly the case in the UK.
On the surface, the coalition agreement of our still relatively new government looked similar to the commitments of the previous administration. Yet, as we move forward, it becomes increasingly obvious that this is not the case. Many items still retain their place on the ‘to do list’ – a drive to meet stringent renewables targets and to achieve a vision of a decarbonized energy system come 2050 are just two examples. But a change in emphasis is also certainly evident.
Energy saving is now also at the fore. The ‘Green Deal’ seeks to drive both supply and demand side efficiency savings across the domestic sector. All Government departments are now working to secure 10% carbon dioxide savings across their own estates, with a deepening of this target seemingly only a matter of time.
The ideological embrace of localism is reflected in a genuine desire for local delivery of energy services. And, across the board, cost effectiveness has shot back up the list of priorities – after all, as senior politicians have reminded the country, with the UK facing the largest deficit in public finances since the 1940s along with a sluggish economic outlook, there is no money.
This reassessment of priorities prompts a reappraisal of what combined heat and power brings to the table. Cost-effectiveness is an obvious selling point. The cost and resource efficiency message the sector has consistently been delivering is now generating new interest. And about time too. But this is only half the picture.
As we struggle to address all aspects of the energy trilemma, against the backdrop of unprecedented challenge, we can also see the fundamentals of the energy sector change around us. The way we generate and use energy, alongside the systems and market arrangements to facilitate this process, are all facing fundamental change. In the UK, this is evident in the proposed programme of Electricity Market Reform. Those who believe that it will be driven by the traditional interests and priorities need to think again.
THE NEED FOR A FRESH PERSPECTIVE
The challenges we face are equally substantial, complex and pressing. They are not going to be addressed by repeating the approaches of the past, or by hoping for a simple, technological fix.
It isn’t enough to say ‘we will need everything’. A combination of different technologies and approaches will need to work in harmony. This change also prompts a reappraisal of the relevance of CHP. In a future constrained by capital, the energy system is going to have to work harder and smarter, full stop. Fundamentally, the entire energy system will need to be far more integrated across the board. And there lies the opportunity: a drive to integration.
Be it the integration of a greater diversity of energy generation technologies into systems, combining generation with energy management to add greater flexibility as a whole, or the integration of energy into our communities, ‘integration’ as a trend is increasingly evident.
As such, it’s feasible to start thinking of ‘integrated energy’ as both a concept and approach in its own right – an opportunity to join dots and make the most of synergies where they arise during a period a change that will be shaped by the decisions we take over the coming decade; an opportunity to start creating a smarter, flexible and more optimized energy system; a route to creating a comprehensive energy system greater than the sum of its parts.
When the challenges we face are viewed through this perspective it becomes increasingly apparent that CHP – and associated technologies, infrastructure and market approaches – offers far more than cost-effectiveness alone. Considering the drive towards integration highlights the benefit it brings through enabling lynchpin technologies. By placing CHP and district heating (DH) at the heart of an increasingly integrated future energy system, it’s possible to envisage a range of benefits above and beyond the primary energy efficiency and cost savings.
- CHP underpinning district heating and cooling schemes to facilitate the integration of renewables with fossil fuels across communities – managing risks and maintaining reliability – to help drive acceptance of change and to deliver opportunity to deploy zero carbon technologies where they otherwise wouldn’t have been feasible, or as efficient or robust.
- Grid operation made simpler and more optimized. An integrated system with CHP, heat storage and heat networks can contribute to managing the rise in variability – the peaks and troughs – we will face in electricity supply as we bring increasing and necessary amounts of intermittent renewables on stream (in the UK at least). Over time, the link of power generation with heat supply can enable system operators to use CHP plants to provide localized electricity grid balancing services, ensuring an increasing electricity demand can be met with reliable supplies at an acceptable cost. Furthermore, at the larger scale, industrial CHP plants can modulate their heat-to-power ratios, which will enable them to offer additional low carbon capacity to the networks.
- Using carbon capture and storage (CCS) with CHP to help improve the utilization of CCS plants, increasing their economic viability and helping ensure manufacturing sectors can thrive in a low-carbon economy. Work by the UK’s Committee on Climate Change has highlighted the difficulty in decarbonizing the manufacturing sector. The high grade heat and significant electricity demands will need to be met with a decarbonized energy source. By co-locating thermal generation plants such as gas, coal or biomass CCS next to industrial sites, ultra-low carbon, even carbon-negative, heat can be delivered to these users. As well as improving the system efficiency, UK manufacturing will stay remain competitive, especially in the absence of a global carbon price.
- Driving genuine opportunities for new market entrants – for example through the delivery of CHP as part of an energy service approach to securing efficiency, carbon and cost savings across the public sector. Money saved on energy means more resources for front-line public services.
- Ensuring localized energy generation through CHP and district heating, alongside other complementary technologies, is used to support the best use of local primary energy resources – be they waste streams through to sources of virgin biomass – from within a community for their own benefit, maximizing efficiency and return for the stakeholders in question. The delivery of power near to the point of demand can minimize energy losses in transmission and distribution.
The fundamental cost, environmental and efficiency benefits of CHP still stand, as evident even in the examples above. These benefits will also become increasingly accentuated over time. But, importantly, the value of making energy go further is enhanced by the role CHP and district heating will also increasingly play as enablers of a more flexible and diverse energy system overall.
In many ways, of course, this is nothing new, either in theory or practice. Many of the examples above are already evident in practice and have been for some time. The experience and approach to energy adopted in northern European countries such as Denmark, Sweden and Germany very much fits this mould. Indeed, the theme at the heart of this article may seem somewhat self-evident to a large portion of readers. ‘Been there, done that’ and importantly seen the benefit as a result.
In the majority of instances, however, the offer of cogeneration and trigeneration is yet to be fully understood and embraced by government and other stakeholders in relevant countries. This is certainly the case in the UK even though progress is being made. Examples of innovation and best practice certainly exist – with many more in the pipeline – but they remain the exception rather than the rule.
In this sense by looking at the issue of energy in the round through the lens of integration and specifically ‘integrated energy’, we are as a sector able to demonstrate increasing relevance to other agendas and help highlight solutions to issues where CHP or DH may otherwise not be in the frame, joining dots to illustrate outcomes and benefit in a broader context.
Here the concept of ‘integrated energy’ in turn becomes about adopting a more comprehensive approach to the energy issues we face – a neat way of bundling together the principles and defining elements that sit behind the array of exemplar schemes and policies already evident in practice.
STRENGTHENING OUR MESSAGE
Taken together, the value of a defined, flexible and inclusive perspective, combined with evidence-based examples is hard to ignore.
Maybe the challenges we face will then seem a little less daunting to policymakers. Through a more holistic approach, they can put in place smarter solutions and we secure our role as a vital and transformative element of this process.
The CHP plant at Wissington Source: British Sugar
With a fresh perspective to frame the benefits of a more inclusive and holistic approach, we can more easily demonstrate the value that our sector can bring against a broader range of challenges.
It also affords a focus on outcomes and benefits. Not just in efficiency, but also the wider potential and opportunities the sector helps unlock. All of this helps us to deliver our message to new audiences with added relevance and impact.
It was these very reasons that motivated the UK Combined Heat and Power Association to develop the concept of integrated energy. Outlining this vision and approach in the document ‘Integrated Energy: The role of CHP and district heating in our energy future’ (available at www.chpa.co.uk), we have a tool to help us more effectively outline the value of our sector to others.
Much is, of course, still to be decided about the future of energy both UK and globally. The investment outlook continues to be clouded by uncertainty.
But looking at the fundamentals – a substantial increase in the price of electricity being just one example – our sector stands in a strong position with much to offer.
Integrated energy is in turn a perspective that will help us bring this to the fore, helping demonstrate our relevance and role at the heart of a changing energy future.
British Sugar’s Wissington site is the largest sugar beet factory in the world and one of Europe’s most efficient factories, processing over 400,000 tonnes of sugar. Its highly resource-efficient approach to production also makes the output of each process the input of the next.
At the heart of this truly sustainable approach is a highly efficient 70 MWe CHP plant commissioned at the end of the 1990s that provides low-cost energy and has been a significant enabler to the expansion and diversification of the factory – this includes, for example, a modern bio-refinery that produces 55,000 tonnes of renewable bioethanol per year.
Heat recovery helps to significantly minimize the process’s carbon footprint. The site also hosts one of Europe’s largest glasshouses, which uses significant volumes of low-grade heat – and even the carbon dioxide gases from the CHP plant – to help grow over 80 million tomatoes each year (about 10% of UK demand).
Performance of the CHP plant itself was also recently augmented by the addition of a multimillion-pound water injection system which boosts output from the gas turbine.
This highly efficient husbandry of resources – from sugar beet to energy and then even carbon dioxide – along with the CHP plant and commendable environmental awareness and responsibility not only ensures that the carbon footprint of the site is minimized, but also helps preserve and enhance British Sugar’s competitive advantage.
Borås district heating and cooling networks
Borås is Sweden’s 13th largest municipally. The local authority and BEM – the municipally owned energy company – are progressively realizing the vision of a zero-carbon city. By handling refuse and the production of district heating, cooling and electricity in the municipality, BEM helps the city take a truly integrated approach in generating, using and managing its energy resources. This has enabled the municipality to migrate to a near zero carbon energy system over the last 25 years.
Construction of the Borås district heating network began in 1959 and today there are around 300 km of installed district heating piping. BEM has several power plants connected to its district heating network. The main unit, Ryaverket, is a CHP plant with two biofuel boilers, two waste boilers and generators. Its biofuels are mainly waste forest fuel, essentially leftover materials from the forestry industry. Ash from the boilers is then used as a forest fertilizer. This plant, along with four hydropower plants, also produces electricity fed into the Nordic electricity market.
A waste incineration plant is also connected to the district heating network. It burns the combustible portion of domestic waste and combustible waste from non-domestic sources. Waste material collected by BEM is also used to generate biogas, used mainly for transport, including the fleet of refuse collection vehicles. The waste plant sits alongside a heat pump that extracts heat from sewage water at the local sewage treatment plant. In 1996, BEM also built a district cooling grid to provide industry, offices, shopping centres and the local hospital with an eco-friendly, economically viable alternative to air conditioning. Today it produces up to 7 MW of district cooling, using two absorption chillers and water from the district heating system.
The district heating network and Ryaverket CHP plant is at the heart of the municipality’s energy system. As part of a broader sustainable approach to energy generation and use, Borås has reduced its carbon dioxide emissions by over 84% since 1958, the year before installation of the district heating network.
Tom Fern is communications manager at the UK Combined Heat and Power Association, London.Email: email@example.com
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