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The Carbon Reduction Commitment (CRC) will have a positive impact on the market for CHP in buildings, when it comes into effect next April, a message reinforced at the Heat & Energy 09 conference.
The impact of the compulsory carbon cap and trading scheme was one of the messages delivered by speakers at the Heat & Energy 09 conference attended by a large audience of government departments and public sector specifiers.
Delegates were also urged to take advantage of interest-free loans now available to support investment in low carbon technologies with CHP (Combined Heat and Power) identified as a particularly important retrofit solution.
The conference, which was chaired by William Jordan, chief sustainability officer for the Office of Government Commerce, also debated standardised contracts and framework agreements to simplify efforts to green public sector buildings.
“CHP is treated very favourably under the CRC,” said speaker Ian Manders of the CHP Association. “It is perfect for hard-to-treat buildings. Once you have done all the easy stuff – insulation, changing light bulbs and getting people to switch things off – it is very hard to get more savings from older buildings without CHP.
“It is a proven technology, there is an established industry to back it up and it can be retrofitted to existing heating systems easily…giving you control over your energy costs while also immediately cutting carbon emissions by at least 10%.”
Manders used the low energy refurbishment of 18 London fire stations featuring Dachs mini-CHP systems supplied by Baxi-SenerTec UK as an example of how CHP is being used to reduce the carbon footprint of public sector buildings. In just four months, the Dachs CHP unit installed in the station at Battersea generated 4,100 kW of electricity.
Battersea, which registers the energy produced and carbon saved by the CHP system in real time on a prominently displayed digital panel, has reported a £2,500 annual saving on fuel costs. This means the payback on the purchase cost of the CHP system will be less than six years.
Hospitals are also increasingly adopting CHP, the conference heard, with one in Birmingham reporting annual running cost savings of £650,000 for heating and cooling after replacing its old coal-fired boilers with a tri-generation system powered by a CHP engine.
Government departments were encouraged to take advantage of loans provided by the finance firm Salix, which has been set up to help public sector organisations invest in energy efficiency.
Salix has created a model which shows how £45,000 spent on CHP plant would lead to carbon savings of 120 tonnes, annual energy savings of £20,000 so giving a payback of just over two years.
“We have to start thinking completely differently about how we use energy,” said Richard Scott, E.ON’s head of marketing development, who also called for increased adoption of CHP among a mix of technologies required to plug the country’s growing energy gap.
“Unless we reduce consumption and get more of our energy from decentralised sources…our lights will start going out in 2016.”
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As a lawyer specialising in the energy sector, I deal with this issue on a daily basis and it’s unfortunate that once again there has been a disjunct between an existing ‘carbon reduction’ initiative and the CRCEE. Companies within the CRCEE are deemed to consume ‘grid averaged’ electricity i.e., mainly brown fossil-fuel produced electricity even if they actually purchase low carbon or renewable electricity. It is crazy that the sourcing of renewable energy is not taken into account in the performance league tables which are to be produced at the end of each Scheme year although DECC have sought to appease complainants with the announcement that there will be a separate table produced alongside the performance table showing renewables utilisation – recognition for those who are investing in renewables projects and supplies, but no further financial incentive for so doing. In fact through the CRCEE they are being penalised because they are investing in low or zero carbon technology to reduce their carbon emissions but will be penalised financially under the CRCEE because this cannot be taken into account in relation to their compliance with the CRCEE scheme.
This may well affect renewables development at the smaller end when companies realise that they will be financially worse off for “trying to do the right thing” and many potential projects may well founder.