'Perfect storm approaching' for UK microgeneration - Westminster Energy Forum.

Friday, 19 December 2008

By Paul Garett, Energy Editor. 

'Energy microgeneration is going to go mainstream', according to British Gas New Energy Director  Gearoid Lane. But several things had to happen if the millions of microgeneration installations needed were going to happen.

These included feed-in tariffs and smart meters.  There were several competing technologies available – photovoltaics, micro-wind, heat pumps, biomass and solar hot water.

Challenges were economics, legislative/planning  and consumer ignorance. 

But a ‘perfect storm’ for microgeneration may be approaching, with high energy prices and falling technology costs addressing the economic challenges. Also new planning legislation, renewables targets and feed in tariffs addressing legislative issues and housebuilders and corporate  social responsibility advances leading consumer knowledge forward. 

Lane said that ultimately long term uptake of microgeneration could be very high. Energy companies must be in the vanguard of this energy revolution because they had the expertise, technologies and consumer contact to make microgeneration succeed. British Gas also had the scale and the skilled workforce, as has been shown in exercises such as the North Sea gas conversion. 

Another emerging technology, smart metering, was examined by Richard Barton, Partner at Deloitte. He said that smart metering had already been successfully deployed in Canada, California, Texas, Italy, the Netherlands, Turkey, Australia and New Zealand. 

In the UK he said the drivers for smart metering were climate change, reduced energy bills, customer empowerment and the facilitation of decentralised local and microgeneration. But there were questions about who paid for smart meters, where they sat in the energy value chain and how there success should be measures. Hurdles included the fact that potentially 26 million households might be involved in smart meter conversion, interoperability, the need for a smart grid and the potential mix of centralised generation assets with emerging microgeneration. 

Barton outlined a delivery scenario with three options – the existing competitive energy model, rationalisation to new franchise groups, and the centralisation of smart services. But the objectives were clear – to reduce energy wastage, move peaks in energy use, and enabling microgeneration.

All three would empower customers – and help reduce carbon emissions. 

In the final presentation Professor Stuart Haszeldine from the Scottish Centre for Carbon Storage at the University of Edinburgh took the meeting through UK and world carbon capture and storage (CCS) delivery – or as he put it, ‘ready, steady slow’.

CCS, he contended, had to be on the agenda as fossil fuels will still provide most of the world’s energy in 2050. Britain had a lead role to play, as it had lots of fossil fuel power stations, and lots of world class CCS sites, primarily in the North Sea. 

There were three CCS technologies – post combustion, pre combustion and oxyfuel combustion. All were expensive – CCS typically doubled the cost of a coal or gas power station.

One notable CCS site exists in the North Sea already, at Utsira. CCS plants were already built or planned in Germany (Vattenfall, coal) and Abu Dhabi (Masdar, gas).

The EU planned to have 12 CCS pilot plants operational by 2015, and it was likely that the UK would have more than one of these.

One scenario was for the UK to have three CCS plants, Norway (although not in the EU) two, Germany two, Poland two, the Netherlands two and Denmank one. 

CCS had the potential to be rapid, big and commercial. The biggest risk was not, as often raised, leakage - but funding.

And in answer to a question from Pathfinder Business as to whether CCS – and smart metering and microgeneration too – were on a shopping list from more prosperous times which would founder in the recession that now engulfs us, Professor Haszeldine said that investing in low carbon energy technologies like CCS was ‘better than shopping our way out of a recession’.   

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