In good company – local government as ‘private wire’ energy supplier

Through its energy services company, and as part of an energy efficiency and carbon reduction strategy, one UK local authority now supplies heat, power and cooling from CHP, photovoltaic and fuel cell installations, to a range of buildings in the borough using its own heat distribution network and private electricity wires. Lara Curran reports.

Woking Borough Council is located in the south-east of England, covers a geographical area of approximately 65 km2 and services a population of 90,500. For over 15 years it has been committed to environmental issues and its agenda has enjoyed both corporate and cross-party political support. Certainly, this long-term commitment has been a major factor in enabling the development of this agenda in Woking.


A fuel cell CHP unit fulfils the energy needs of the Woking Park pool and leisure centre all year round
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In the early 1990s, the Council analysed its energy bills, tariffs and consumption and recognized that significant savings could be made if simple energy efficiency measures were installed. A report was received by the Council’s Executive Committee requesting that à‚£250,000 (€368,000) be set aside for the installation of such measures and for savings attributed to them to be ringfenced and ploughed back into the fund. This was agreed and energy efficiency measures, such as changing tungsten lamps to compact fluorescents and installing presence detectors so that lights shut down when the room is empty, were installed across Council buildings as part of a replacement programme. At this stage, the work to achieve savings was very much driven by financial benefits.

Going forward, the Council wanted to explore more progressive methods of reducing consumption and began looking at small-scale combined heat and power (CHP), condensing boiler projects and community heating.

ENERGY SERVICES COMPANY APPROACH

Although Woking had been successful in implementing small-scale local community energy systems, to fully capitalize on its sustainable energy innovation, it needed the finance and expertise of the private sector to fund and implement large-scale projects. Therefore, in 1999 the Council formed its own energy services company (ESCO) – Thameswey Limited – in order to develop larger projects in partnership with others.

Generally, an ESCO is a vehicle through which energy and environmental services can be delivered. In Woking’s case, Thameswey Limited is wholly owned by Woking Borough Council. It enters into public-private joint ventures to deliver energy and environmental projects. Thameswey Energy Limited (TEL) is a joint-venture ESCO between Thameswey Limited (90% share ownership) and its Danish partner contractors, Xergi Ltd (10% share ownership). It is designed to deliver Woking’s climate change ambitions and to work in partnership with others to deliver projects outside of Woking. Thameswey Limited and Thameswey Energy Limited have enabled the Council to increase its distributed generation capacity.

Each project by TEL is based on a 20- to 30-year project business plan with an internal rate of return of about 8%. The economics of a project rely upon being a generator, distributor and supplier of energy with retail sales income (plus renewable energy credits where applicable) being critical to financing projects. Energy prices are tracked to give affordable ‘market comparable’ charges to businesses and 5% below a basket of major energy company dual-fuel tariffs to residential customers.

The Council’s approach to local sustainable energy systems is to supply customers on private wire CHP and/or renewable energy networks, as well as implementing energy and environmental services in both the public and private sectors. The key to the Council’s success is the combination of technical innovation (such as CHP, absorption cooling and private wire systems), partnership with the private sector, financial/commercial innovation, and the use of a local electricity balancing and trading system.

The Council has partly overcome the regulatory barriers to sustainable energy, namely the high costs and levies incurred on electricity bills under the UK’s New Electricity Trading Arrangements, by taking advantage of the Electricity Order 2001 (Class Exemptions from the Requirement for a Licence). However, the exempt licensing regime limits supply capacity to domestic customers over private wires (1 MW) and also limits exports over public wires (2.5 MW). The council continues to make representations to the Government to remove these barriers. (New Electricity Trading Arrangements were introduced in 2001 to replace the previous electricity ‘pool’ whose centralized, inflexible arrangements for setting wholesale electricity prices meant that prices failed to reflect falling costs and increased competition. The new arrangements are based on bilateral trading between generators, suppliers and customers.)

At the time, the creation of Thameswey Limited and Thameswey Energy Limited involved a complex legal process. However, the Local Government Act 2003 saw a change in regulation and made it easier for local authorities to trade, and therefore made the process of setting up an ESCO simpler.

Thameswey Energy Limited also has the ability to operate outside of the Borough of Woking. In 2006, Thameswey Central Milton Keynes, a subsidiary of TEL, was formed. The company is currently installing the first phase of a CHP district heating private wire network to service the town centre extension. The first phase of 6 MWe is expected to be completed in 2008.

CLIMATE CHANGE AND CARBON DIOXIDE

The Council adopted its Climate Change Strategy (CCS) in December 2002. Seeking to achieve the Royal Commission on Environmental Pollution’s targets of 60% reduction in CO2 equivalent emissions by 2050 and 80% by 2100, it has three overarching themes:

  • reduction of CO2 equivalent emissions
  • adaptation to climate change
  • promotion of sustainable development.

As at March 2006, a reduction of 21% in CO2 equivalent emissions Borough-wide was achieved (1990 baseline). In the same period, the Council has seen a reduction in CO2 emissions of 82% across its own buildings.

The adoption of the Strategy saw a change in thinking from financial savings to CO2 equivalent emissions savings. While recognizing that paybacks associated with larger projects going forward would not be realized for 20-30 years, the CO2 equivalent emissions savings were immediately evident.

The Strategy covers all of the Borough’s energy uses and is categorized into eight themes, one of which is Energy Services. Under this theme, the Council seeks to purchase 100% of the Council’s electrical and thermal energy requirements from sustainable sources by 2010-11.

Through this target, the Council seeks to promote the use of sustainable energy sources in order to reduce emissions. A prime example of this is its use of CHP technology for its own offices and other town centre locations, initially fuelled by low-carbon natural gas. This, in combination with the early energy-efficiency work, has enabled the Council to achieve a 52% reduction in energy use in its buildings since 1990.

A range of sustainable and renewable energy projects has been developed around the Borough up to current capacities of 525 kWp PV capacity, and 2843 kWe and 3862 kWth CHP capacity. These include the following projects.

Town centre CHP station

The town centre CHP station is believed to have been one of the first commercially operating energy stations of its kind in the country. The station uses CHP technology, together with heat-fired absorption cooling to produce environmentally friendly energy services. Electricity is distributed via private wire, and heat and chilled water services via private pipe networks.

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Customers include Woking Borough Council’s Civic Offices, the Holiday Inn Hotel, Big Apple leisure complex and Metro Hotel, HG Wells Conference and Events Centre, Quake Nightclub and Victoria Way Car Park. Energy services from the station will also supply the new Lightbox museum and gallery and the town’s new YPOD YMCA building.

Brockhill sheltered accommodation PV and CHP

Brockhill is an ‘extra care’ sheltered housing scheme operated by Woking Borough Council for elderly residents. There are 52 residential units. It also incorporates community ‘drop-in’ facilities. The building itself was built in the mid-1980s and the CHP and PV technologies were installed as a retrofit in 1998 and 2001 respectively. The technologies combined provide all-year-round heating, hot water services and electricity to the residents and visitors of Brockhill.


The Brockhill housing scheme makes use of PV and gas engine CHP to provide year-round electricity, heating and hot water for residents
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The charges to residents are set in accordance with the Council’s Climate Change Strategy, which seeks to limit the cost of heating to no more than 10% of the household income (15% for a married couple in a three-bedroom house). This is in line with the UK Government’s affordable warmth targets. Currently, Thameswey Energy Limited charges an equivalent of just 7% cost.

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Woking Park fuel cell CHP system

Woking’s ‘Pool in the Park’ installation is believed to be the one of the UK’s only commercially operational fuel cell CHP systems. Launched in June 2003, it provides power and heat all year round, with excess heat used in the summer in heat-fired absorption chillers to provide comfort cooling and dehumidification for the pool and leisure centre.

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A fuel cell is similar to a battery except that fuel is constantly fed into it to generate electricity (and heat) by an electro-chemical process, producing pure water as a by-product. A fuel cell is not, in itself, a storage device, but like a battery, it contains an anode and a cathode insulated by an electrolyte between them. In most types, hydrogen fuel is supplied to the anode while oxygen is supplied to the cathode, which – with the help of catalysts – combines electrochemically in the fuel cell, generating water and producing an electric current and heat.

Like most stationary fuel cells, this one has an integrated steam reformer to produce hydrogen from natural gas, with the oxygen simply extracted from the outside air. Fuel cell technology is clean, even when using natural gas, and the efficiency is very high, resulting in low carbon dioxide emissions, while other pollutants (such as NOx, SOx and particulates) are extremely low and almost undetectable in many cases. The project was installed as part of a five-year demonstration project under the Department of Trade and Industry.

Funding towards the cost of the fuel cell installation was provided by Woking Borough Council, Thameswey Ltd, ESCO International A/S, Hedeselskabet Miljàƒ¸ og Energi A/S, Energy Saving Trust, Advantica, US Departments of Energy and Defense, International Fuel Cells, and the UK Department of Trade and Industry.

Street lighting – hybrid solar PV-wind lighting column

To power street lighting, Old Woking, an area in the southern part of the borough, uses the ‘Hybrolight’, a hybrid system consisting solar photovoltaic panels and a vertical wind turbine. The first column was installed and commissioned in June 2005. This was done as a demonstration project to satisfy planning application requirements. In February 2006, following its success, seven more columns were installed. These lighting columns could be installed in areas across the Borough currently experiencing poor lighting conditions, particularly in order to increase community safety.

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The columns are completely standalone and each one has its own solar battery underground. The battery, once fully charged, stores enough energy to light the column for approximately 3-5 days. The solar battery has a lifetime of about 10 years.


Hybrid PV-wind columns light up the streets of Old Woking
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ENERGY EFFICIENCY IN THE COMMUNITY

Woking Borough Council has recorded a 33% improvement in energy efficiency amongst its housing stock since 1996 (as at March 2006). This is measured as part of the Home Energy Conservation Act (HECA) monitoring carried out by the Council every year. The Home Energy Conservation Act 1995 (HECA) required every UK local authority with housing responsibilities – ‘energy conservation authorities’ – to prepare, publish and submit to Government an energy conservation report identifying practicable and cost-effective measures to significantly improve the energy efficiency of all residential accommodation in their area and to report on progress made in implementing the measures.

About 4500 residents have been provided with free or subsidized insulation through the Winter Warmer scheme financed by Thameswey Limited.

FUTURE PLANS

Woking will continue to work towards its Climate Change Strategy goals and long-terms targets.

Work is to be continued in raising awareness on the importance of energy efficiency amongst householders. This will be extended to cover issues on the increasing need for water conservation and will also investigate the possibility of encouraging take-up of microgeneration technologies. The ultimate long-term goal is to achieve 1000 low-carbon households across the Borough’s existing stock.

Another long-term project is the development of the Council’s wind energy strategy in order to achieve the Climate Change Strategy’s target of purchasing 20% of the Council’s electrical energy needs from renewable sources by 2010-11.

Lara Curran is the Climate Change Officer with Woking Borough Council, Woking, UK.
e-mail: lara.curran@woking.gov.uk

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