ENERGY: Taking Forward The City Region’s Unique Renewable Energy Opportunities

Simon Pringle, head of sustainability, BDO (chair)Mikele Brack, director, public sector at GE, on combined heat and powerRichard Goodfellow, head of energy and utilities, Addleshaw Goddard and member of the LCR Green Economy PanelJohn Carolin, director of business development, Biogen

Download pt 1 contains slides from:Mikele Brack, director, public sector at GE, on combined heat and power

Download pt 2 contains slides from:Richard Goodfellow, head of energy and utilities, Addleshaw Goddard and member of the LCR Green Economy PanelJohn Carolin, director of business development, Biogen

Island mode

11th September 2012

Mikele BrackDirector, Public SectorGE Global Operations

Distributed Generation:The business case for CHP

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Variable generation

Large Generation

Variable generation

Active Distribution Networks

Smart(er) grids & meters, energy storage

Active Demand

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Time of Day

Elec

tric

ity D

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W)

2020 Demand ~ 15GWh (daily) - 1.5million vehicles

Typical winter dailydemand

Peak

Com

mut

ing

Tim

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12,000 miles p.a.

Peak

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Tim

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Optimal Charging Period Time of

use tariffs

Inflexible Generation Distributed Generation

Generation

Demand

Variable Generation

The Changing UK Energy MarketChanging Generation Mix & Demand Profiles

The Changing UK Energy MarketWhat does this mean?

~75GW

Increasingly digitalIncrease in urban population 15% generation low carbonRegulation to support energy efficiencyCarbon pricing

~110GW

Today‘s Energy Market Tomorrow’s Energy Market

Backup generation becoming more important & valuable

8 GW reserve Generation – 7%9 GW Coal Retirements37 GW of renewables on lineResidential bills will double

Significant coal power plantsPredictable demandLow levels of renewable generation

4 GW reserve Generation – 5%

The Power Delivery Model is Evolving

CHP - Cogeneration

Fuel flexibility and tailor-made solutions

Landfill gas

Sewage gas

Associated petroleum gas

Special gases

Biogas Greenhouseapplications

Cogeneration (Natural gas)

Coal mine gas

Island mode

Business Benefits Summary - CHP

CCHP – Combined Cooling Heat & Power – 4 year payback

Reduced Energy OPEX Reduced CO2

Reduced Risk Increased Security

CCHP: coolth, heat & electricity• Energy costs typically

20% • Asset payback is now < 4

yrs• Guy’s & St Thomas’

(6MW): £1M/pa savings • Savings may increase

with new government policies around CHP

Exposure to rising energy prices• Guy’s & Thomas’

savings increased by 30% in last 3 years

• Assuming energy prices rise faster than interest rates, economics continue to improve

>85% efficiency: reduces C02• Hot water and building

heating provided from waste heat, absorption chillers create cooling

• Assuming 1 MW: annual CO2 reduction –1k tonne

• Key part of Government Energy Policy for decentralised energy

GE Confidential - Distribute to authorized individuals only.

Community facilities & developments• CCHP becomes primary

source, grid secondary, significantly reducing risk of delays from DNO outages

Before After DiffPrimary Energy MWh 68434 58699 -9736CO2 tonne 11972 10641 -1331Gas MWh 26572 37913 11341Elec MWh 16101 7994.7 -8106Gas £/MWh 29.0 29.0Elec £/MWh 80.0 80.0

Gas £MM 0.77 1.10 0.33Elec £MM 1.29 0.64 -0.65

Fuel Total £MM 2.06 1.74 -0.32O&M £/MWh 6.00

O&M Total £MM 0.00 0.05 -0.05OPEX £MM 2.06 1.79 -0.27CAPEX £MM 1.00 1.00

Term Years 15Discount Rate 8%PV £MM 2.33

NPV £MM 1.33Simple payback yrs 3.7

1MWe CHP Period '12

Optimising Distributed CHPAdditional Equipment for new or retrofit facility

Gas Diesel BackupGrid BackupExport Electricity

Heat for Building

Electricity for Building

Virtual Power Plant - STOR

GAS ENGINE & CHP MODULE

Balance of Plant – Back Up Generation, Switchgear and UPS

• Optimise CHP Design• Install• Factory & Site Testing• Commission• Maintain

• Optimise BOP Design• Install optional• Factory & Site Testing• Commission• Maintain

Modify existing equipment for synchronisation to grid• Switchgear mods• Synchronisers• Remote Terminal Units

(RTUs) for communications

GE hosted Bureau for the automated management of the customer owned assets. (Communications – via wireless/ethernet etc)

Jointly Optimise Overall System Design & Service Package for Critical Plant

What is STOR?Harnessing existing back up assets to generate new incomeShort Term Operating Reserve (STOR) This is the provision of additional active power from generation provided by ‘Asset holders’ who have installed standby capacity. Asset Holders – Capacity…are paid for making their generating capacity available to the National GridAsset Holders - Generation…are also paid when the generation is utilised by the National Grid (at times of peak load, or where traditional generation has failed). Examples are any industry with currently installed standby generation – eg – water utilities, hospitals, banks, data centres, farming… Aggregator GE Energy manages the aggregation of multiple smaller generation providers (Asset Holders) into 3MW lots which are required by NG.

Why is STOR required?Less Predictable Generation & Changing Demand

Challenges Scenario STOR

Hot sunny day, air conditioning on maximumEngland are in the World Cup FinalEmergency mtc -1 GW generation goes off lineGrid reserve capacity is now critical

Asset Holders spare backup generation sits availableGrid sends signal to generationGeneration comes on until it is not requiredBackup generation goes back into standby mode

New inflexible generation, wind & solarChanging demand patterns from Electric VehiclesChanging customer behaviourIncreasing demand for power

Business CaseGE provide STOR income stream

Also provide guaranteed maintained backup infrastructure

MW Available 1 Available Hours Per Year 7008 Running Hours Per Year 55 Availability Income £ 19,120.75 Utilisation Income £ 10,642.50 Other savings due to STOR (existing service) £ 4,000.00 Total Income £ 33,763.25 Fuel ( aprox 265 litres p/h @ £.63 p/l) £ 9,182.25 Asset owner benefit from STOR £ 24,581.00

GE undertakes service as a turnkey provider, maintain, operate and trade backup asset• Annual health check and

remedial reporting• Annual asset servicing*• 24 hour reactive service • Electronic Management

System• Complete maintenance and

performance history (from date entered into GE STOR)

• Contractual and “bid-in” services