Robert Peston (BBC) tells building industry ‘life will be tough’

26/05/2009 by David Slade.

The BBC’s business editor Robert Peston has told the property and construction industry that the economy will not recover until the end of 2010.

Addressing the British Council for Offices annual conference he said: “The challenge for the UK is convincing the rest of the world that we can live within our means.

“Yes we are going to recover, your sector will recover. It is not a disaster but it is going to be pretty tough.”

He told conference delegates in Edinburgh that the private sector should assume more of the burden of driving recovery to relieve the public sector, which has been propping up the banking system.

Mr Peston said the recovery would be slow. “When the recovery comes it may be a bit sluggish as households and companies follow banks in paying down debt.”

He added that the downturn was worse in Germany and Japan but added: “The big question is will there be a semi-permanent reduction in the British economy? We will have to tighten our belts for several years.”

Conference chair Mike Hussey, senior vice-president at Land Securities, said: “We need to look at how we do things in the property industry to see if there is anything we can do [to help the global economy].”

Posted in Buildings, General | No Comments »

Doing business in healthcare: Lifetime Homes Standards - what is required?

26/05/2009 by David Slade.

The Government has laid out its mandatory Lifetime Homes Standards for all public sector housing by 2011.

The Government intends that private developers will do this as well so that by 2013 all new homes will be built to the same standard.

Research done by the Housing and Older People Development Group outlines the needs of older people:

• Well designed with growing older in mind and should meet the needs of all ages.

• Space is important, with extra room for visitors or a carer.

• Low maintenance and safe housing design with downstairs bathroom, and affordable to heat.

• Access to green private space and accessibility to transport is important.

• A reliable repairs service.

• Older people want to be listened to and be involved in all stages of planning and policy.

Different homes

• Nursing homes are for people who can require 24 hour care.

• Extra care homes are for people who live independently and own or rent their homes but they have on-site support. Also known as sheltered housing from the 1960s. Housing associations
are the main clients for this market and other private operators are on the increase.

• A care village is a collection of extra care homes. It can be a gated community, which has full care facilities for people planning for old age.

• Hospices are for those whose conditions may not be curable.

• Day centres may be part of hospitals and serve a variety of purposes.

• Elderly persons’ homes may be those which are specially adapted but they don’t have to be, and may be designated due to location or other reasons.

Posted in Healthcare, Lifetime homes | No Comments »

Shortlist revealed for £4bn academies framework

26/05/2009 by David Slade.

Partnerships for Schools has shortlisted 22 contractors for the hotly contested £4 billion academies ‘super framework’.

Construction giants including Balfour Beatty, Carillion and Kier are joined by firms scattered throughout the construction top 100.

Scunthorpe-based Clugston and Sheffiled-based Henry Boot – both of which have turnovers in the region of £125 million – made the 18-strong North and Midlands shortlist.

Abingdon-headquartered JB Leadbitter and East Sussex-based Rydon made the cut for the Southern and Eastern section. They are joined by Educinq, a joint venture of Osborne and Midas.

A total of 14 companies are shortlisted for both frameworks, including Willmott Dixon, Interserve and Wates.

A maximum of 12 contractors will be named on each framework, both of which are expected to be up and running by the end of the year.

Pre-qualification questionnaires were completed by a mammoth 57 companies. Contractors are desperate to be on the broadly-scoped framework, which has double the value of its predecessor at a time when work is hard to come by.

Partnerships for Schools chief executive Tim Byles said: “The interest in the new Contractors’ Framework from large and medium-sized companies across the country demonstrates how all sectors of the construction industry see this as a great opportunity, particularly at a time when conditions are challenging.

“With more than 127 Academies being delivered through BSF currently, and more than 100 more in the pipeline, the new Framework will enable contractors and suppliers from across the country to get involved in a scheme that has a predictable flow of work, supported by direct grant Government funding.”

The shortlisted companies:

Sector 1: North and the Midlands
Apollo
Balfour Beatty
BAM
Bovis
Bowmer & Kirkland
Carillion
Clugston
Galliford Try
Henry Boot
Interserve
Kier
Miller
Morgan Ashurst
Shepherd
Sir Robert McAlpine
Vinci
Wates
Willmott Dixon

Sector 2: London, the South and the South and East of England
Apollo
Balfour Beatty
BAM
Bovis
Carillion
Educinq
Galliford Try
Interserve
JB Leadbitter
Kier
Miller
Morgan Ashurst
Rydon
Sir Robert McAlpine
Vinci
Volker Fitzpatrick
Wates
Willmott Dixon

Posted in Education, Buildings | No Comments »

Heaviest falls on record in UK construction

26/05/2009 by David Slade.

With the amount of bad news that has been coming out, it is tempting to become desensitised to any new bad figures.

Indeed, some commentators do appear to be seizing on any bits of positive news so they can be the first ones to call recovery.

However, as tempting as it is, we are nowhere near the upturn. Within housing there have been recent rises in mortgage approvals and house prices.

Yet transactions have fallen to such depths that monthly changes are likely to be erratic and the increases have been high as percentage changes but high percentage changes but on low levels.

Homebuilders have been discounting heavily and once destocking has finished, we may expect a slight increase to match demand levels.

But these demand levels are still extremely low by historical standards and the bigger picture highlights a concerning story with construction expected to endure historic falls in 2009.

Macroeconomic forecasts keep being revised down each month that goes by despite government and central bank intervention.

With the fall in economic activity, and unemployment set to break the three million barrier by early 2010, construction is anticipated to fall further.

The latest output and new orders highlighted the worst falls since 1980 and 1983 respectively.

The Association’s latest forecasts published this week highlight a fall of 12 per cent for construction in 2009, the largest fall in construction output on record - and the records go back to 1955.

Private housing and industrial already fell in 2008 and are set to endure further falls this year.

Offices and retail are set to fall as private sector construction suffers a 20 per cent drop in 2009 alone.

Private housing starts are set to fall to 70,000 in 2009, the lowest figure since 1924 and contrasts sharply with 181,000 starts in 2007.

Prospects are that 2010 will not be much better and the Association anticipates starts of only 77,000.

Industrial properties also felt sharp falls following the economic slowdown and by the end of 2010, warehouses and factories construction are expected to be 50 per cent and 39 per cent lower respectively than in 2007.

The falls in offices and retail are just as shocking with expectations that by 2011, the new build offices market will be 56 per cent lower than in 2007 and retail new build will be 43 per cent lower in 2007.

Public growth

It is not all bad news, thankfully. Construction work driven by public funding such as education and rail is expected to grow significantly over the next five years.

On the rail side, the regulator has agreed funding with Network Rail at £28.5 billion between 2009 and 2014, which should provide consistent double-digit growth.

Programmes such as Building Schools for the Future, Building Colleges for the Future and Primary Capital Programme are helping education work but with public borrowing expected to reach unprecedented and unsustainable highs over the next few years, government spending will be cut in the medium term.

In the near term, Building Colleges for the Future has already experienced funding problems.

With the worst fall in construction on record anticipated this year, it is difficult to be anything other than pessimistic.

Posted in Buildings | No Comments »

NHBC stats show private home starts are down 72pc

26/05/2009 by David Slade.

The NHBC’s latest housebuilding statistics show 14,537 applications to start new homes in the combined private and public sectors in the three months to February.

The applications are 59 per cent down on the same period a year earlier when 35,733 applications were made.

Of the 14,537 applications to start new homes, 7,931 related to private sector activity – 72 per cent lower than the 28,533 in the same three-month period a year ago.

Public sector figures for the three months to the end of February totalled 6,606 – 8 per cent lower than the 7,200 in the same period a year ago.

New build completions in the combined private and public sectors totalled 26,918 in the three months to the end of February – 32 per cent lower than the 39,499 in the same period a year ago.

The average number of daily sales of new homes in the UK from December 2008 to February 2009 was 333 – 37 per cent lower than the 525 a year earlier.

NHBC chief executive, Imtiaz Farookhi, said: “With the number of applications to start new homes in the public sector remaining broadly consistent in recent months, our statistics suggest that house builders are increasingly relying on public sector work in the downturn.”

The Housing Forum today called for a radical shake-up of housebuilding and planning priorities to better accommodate current market conditions and better insulate for future market recovery.

Unveiling the findings of its Reaching for Recovery report, the Forum highlighted the need to review funding and planning models, re-evaluate land value and quality standards and ultimately reinstate a stronger sense of realism about the short and long term challenges facing the house building industry.

The report summarises the findings of four cross-industry working groups to investigate several key areas of housing industry reform including.

Each group produced a set of proposals which will be further developed in collaboration with The Housing Forum members and taken to Government.

Housing Forum chairman Jeffrey Adams said: “The need to increase housing volumes and improve existing homes does not lessen in the wake of the financial crisis – rather the challenges and timescales for delivering reform simply become tighter and shorter.

Posted in Housing, Buildings | No Comments »

Applications to build new homes up 10 per cent in the three months

26/05/2009 by David Slade.

The housebuilding industry has received a boost with applications to build new homes up 10 per cent in the three months to April, figures from the National Housebuilding Council have revealed.

The National Housebuilding Council statistics show 17,859 applications to build new homes were received in the three months to the end of April 2009.

The amount is 10 per cent higher than the previous rolling quarter January to March 2009 when 16,232 applications we received.

Some encouragement can be taken from April’s figures, which show applications to start new homes in the combined private and public sectors rose for the fourth successive month in a row to 6,379.

But activity levels during the three months to the end of April were still severely depressed, with a 53 per cent reduction compared to the same period a year ago.

NHBC chief executive Imtiaz Farookhi said: “While it is still too early to assume that these are definite signs of a recovery, some positive indicators are emerging which suggest that the severe downturn in house-building activity may be beginning to turn a corner.

“Anecdotal evidence from house-builders and developers also suggests that conditions are easing slightly on site, no doubt boosted by the Government’s recent £1 billion budgetary pledge to help the housing market and the Homes and Communities Agency’s (HCA) Kickstart initiative to open up mothballed sites.”

Posted in Housing, Buildings | No Comments »

Clean coal technology: How it works

21/05/2009 by David Slade.

When burned, coal is the dirtiest of all fossil fuels but a range of technologies are being used and developed to reduce the environmental impact of coal-fired power stations. Collectively, they are known as clean coal technology (CCT).

CARBON CAPTURE AND STORAGE

Despite the improving efficiency of coal-fired power stations, CO2 emissions remain a problem.

Carbon capture and storage (CCS) involves capturing the carbon dioxide, preventing the greenhouse gas entering the atmosphere, and storing it deep underground.

OPTIONS FOR CARBON CAPTURE AND STORAGE 1. CO2 pumped into disused coal fields displaces methane which can be used as fuel 2. CO2 can be pumped into and stored safely in saline aquifers 3. CO2 pumped into oil fields helps maintain pressure, making extraction easier

A range of approaches of CCS have been developed and have proved to be technically feasible. They have yet to be made available on a large-scale commercial basis because of the costs involved.

COAL PREPARATION

Coal arriving at a power plant contains mineral content that needs to be removed before it is burnt. A number of processes are available to remove unwanted matter and make the coal burn more efficiently.

Coal washing involves grinding the coal into smaller pieces and passing it through a process called gravity separation. One technique involves feeding the coal into barrels containing a fluid that has a density which causes the coal to float, while unwanted material sinks and is removed from the fuel mix. The coal is then pulverised and prepared for burning.

GASIFICATION

Coal gasification plants are favoured by some because they are flexible and have high levels of efficiency. The gas can be used to power electricity generators, or it can be used elsewhere, i.e. in transportation or the chemical industry.

INTEGRATED COAL GASIFICATION COMBINED CYCLE PLANT 1. Coal burnt to produce syngas 2. Syngas burnt in combustor 3. Hot gas drives gas turbines 4. Cooling gas heats water 5. Steam drives steam turbines

In Integrated Gasification Combined Cycle (IGCC) systems, coal is not combusted directly but reacts with oxygen and steam to form a “syngas” (primarily hydrogen). After being cleaned, it is burned in a gas turbine to generate electricity and to produce steam to power a steam turbine.

Coal gasification plants are seen as a primary component of a zero-emissions system. However, the technology remains unproven on a widespread commercial scale.

REMOVING POLLUTANTS

Burning coal produces a range of pollutants that harm the environment: Sulphur dioxide (acid rain); nitrogen oxides (ground-level ozone) and particulates (affects people’s respiratory systems).

There are a number of options to reduce these emissions:

Sulphur dioxide (SO2)
Flue gas desulphursation (FGD) systems are used to remove sulphur dioxide. “Wet scrubbers” are the most widespread method and can be up to 99% effective.

A mixture of limestone and water is sprayed over the flue gas and this mixture reacts with the SO2 to form gypsum (a calcium sulphate), which is removed and used in the construction industry.

Nitrogen oxides (NOx)
NOx reduction methods include the use of “low NOx burners”. These specially designed burners restrict the amount of oxygen available in the hottest part of the combustion chamber where the coal is burned. This minimises the formation of the gas and requires less post-combustion treatment.

Particulates emissions

Electrostatic precipitators can remove more than 99% of particulates from the flue gas. The system works by creating an electrical field to create a charge on particles which are then attracted by collection plates. Other removal methods include fabric filters and wet particulate scrubbers.

Posted in clean coal technology (CCT) | No Comments »

Carbon Reduction Commitment

21/05/2009 by David Slade.

The Carbon Reduction Commitment

Starting in April 2010, the Carbon Reduction Commitment is the UK’s first mandatory carbon trading scheme. The initial phase of the Carbon Reduction Commitment will be compulsory for organisations that consume over 6,000 MWh (6,000,000 kWh) of half-hourly metered electricity during the period from January 2008 to December 2008. At today’s prices, this is roughly equivalent to total half hourly electricity bills of approximately £500,000 per year.

The aim of the Carbon Reduction Commitment is to reduce the level of carbon emissions currently produced by the larger ‘low energy-intensive’ organisations by approximately 1.2 million tonnes of CO2 per year by 2020. As a Climate Change Bill commiment, the scheme is aiming for a 60% redution in CO2 emissions by 2050.

The Carbon Reduction Commitment will cover both public and private sector organisations. At present, the carbon reduction scheme is expected to affect approximately 5,000 organisations in the UK. In doing so, it is anticipated that the scheme will affect 25% of total business sector emissions within the UK.

The scheme will work in tandem with the existing European Union Emissions Trading Scheme and Climate Change Agreements. As a result, where emissions have been captured by the EU ETS and CCA, these emissions will not be captured by the CRC. In essence, the CRC is targeted at low energy-intensive users.

The Climate Change Bill also sets the enabling powers for the Carbon Reduction Commitment and sets out the role of the Climate Change Committee that will oversee much of the CRC scheme.

While the scheme doesn’t officially start until April 2010, many organisations will need to make preparations before that date to ensure that they comply with all legal requirements and fully participate in the scheme.

Carbon Reduction Commitment Timeline

2008 — the period from January 2008 to December 2008 will be used to identify which non-energy intensive organisations in the UK have consumed more than 6,000 MWh of half hourly metered electricity.

July 2009 - The Environment Agency will issue letters to the billing address of all half hourly metered properties asking organisations to identify whether or not they qualify for the Carbon Reduction Commitment

April 2010 - The Carbon Reduction Commitment scheme officially begins. This date will be used as both the start ot the 1st compliance year and the start of the ‘Footprint Year’

April to September 2010 - This is the official ‘Registration Period’

April 2011 - The 1st sale of allowances will take place in April 2011 and act as a ‘Double Sale’ to cover both the previous year emissions (actual), and the following year’s emissions (forecasted)

July 2011 - Each organisation must submit their Footprint Report by July 2011 and allowances must be surrended by this time.

October 2011 - The 1st Recycling Payment will be made with companies receiving their allowances plus/minus the bonus/penalty payment depending on their performance in the league table

 

The Benefits of the Carbon Reduction Commitment

The carbon reduction commitment presents a number of benefits to organisations that fall within the scheme.

Financial

The carbon reduction commitment sets out a clear risk to organisations that fail to reduce their carbon emissions. The financial implications could result in penalties of thousands, or even millions, of pounds for large organisations. However, there is also the opportunity for the best performing organisations to receive similarly large bonus payments as reward for their efforts.

Brand and Marketing

With the carbon reduction commitment league tables being published each year, the media will have full access to the performance information of all organisations that fall within the scheme. As such, the best performing organisations will benefit from recognition of their achievements.

Corporate Social Responsibility

Over time, organisations that make significant savings in the first few years will find it more and more difficult to achieve such high-level percentage savings on their carbon emissions. This could be considered as a negative aspect of the carbon reduction commitment scheme, as there will be less incentive for organisations to continue their commitment to reduce CO2. However, having reduced their carbon emissions, these organisations will enjoy long-term financial benefits from reduced energy costs.

What Is the Aim of the Carbon Reduction Commitment?

The British government is committed to reducing carbon emissions within the UK by 60% by 2050, in comparison to 1990 levels. As part of this commitment, in 2001 the government targeted energy intensive organisations to reduce their level of carbon emissions under the Climate Change Agreement. Subsequently, from 2010 the largest non-energy intensive organisations will be targeted via the Carbon Reduction Commitment.

What is the Cap and Trade Scheme?

The the carbon reduction commitment will use a cap and trade scheme will enable companies to start buying carbon allowances to cover their carbon emissions, and that will involve measuring and recording energy use and calculating carbon dioxide (CO2) emissions (not including transport emissions).

The revenue generated from carbon auctions will be redistributed between the scheme’s participants. Each company will receive a larger or smaller amount than they originally paid for their carbon allowance, according to their performance in the CRC league table.

CRC Compliance

The carbon reduction scheme is currently aimed at approximately 5,000 of the UK’s largest organisations, including supermarkets, banks, property management companies, government departments, hotel groups, food retail chains and local authorities.

Essentially, the carbon reduction commitment will affect organisations whose half hourly electricity consumption totals more than 6,000 MWh per year (equivalent to approximately £500,000 annual spend). Any organisation that falls within this category will be required to record account for all energy (other than transport fuels), including electricity, gas and oil.

Energy consumption during 2008 will be used as the qualifying year to identify if an organisation will be subject to the Carbon Reduction Commiment. Records of electricity use will be taken from mandatory half hourly meters, voluntary half hourly meters, remote read meter readings and pseudo hal hourly meters.

If the total of all of these half hourly meter readin exceeds 6,000,000 kWh during 2008 then you wll fall within the scheme. Either way, if you have any half hourly meter readings, you will have to declare whether or not you qualify for the scheme during April to Septeber 2010 (updated date).

During summer 2009, the environment agency will issue a letter to the billing address of every organisation in the UK that has an electricity meter that records half hourly readings. The letter will ask for these organisations to identify whether the entire organisation uses more than 6,000 MWh of HH electricity and therefore be required to enter into the carbon reduction commitment scheme, or not.

Organisations may be exempt from the Carbon Reduction Commitment scheme if they have a large Climate Change Agreement. Declarations of exemption due to CCA will need to be made by 31st July 2011 (revised date from 31st July 2010).

Organisational Structure

In identifying the organisational structure, it should be a relatively simple process where the organisation and/or subsidiaries are owned and operated in the UK. However, where a qualifying organisation has a foreign owner, the owner will be required to appoint of an agent to act on behalf of the subsidiaries within the UK. In doing so, regardless of whether or not the agent has direct control over the subsidiaries, they will be able to act as a representative to group all subsidiaries as one.

CRC Definition of an Organisation

Under the carbon reduction commitment, an organisation is defined as the ultimate parent company.

Where the parent company is located outside the United Kingdom, the organisation must nominate one of its UK sites to be responsible for compliance to the carbon reduction commitment for all of its UK subsidiaries.

CRC and State-funded Schools

The government has proposed that state-funded schools (including academies) within Great Britain, will participate within the carbon reduction commitment scheme under the umbrella of their local authority. In doing so, it is the carbon footprint of the local authority that will be legally and financially responsible for participation in the carbon reduction commitment scheme, rather than the individual schools.

It is also the local authority that will be positioned within the carbon reduction commitment, rather than the individual schools.
The local authority will be subject to a number of obligations and duties including:

* Responsibility for calculating all local authority missions including state funded schools and academies
* Purchasing allowances to Cover the above permissions
* Monitoring and reporting annual energy consumption and surrendering allowances where appropriate
* Maintaining the evidence pack for auditing

However, while the local authority will be legally responsible under the carbon reduction commitment, a duty will be placed on schools to require them to supply the local authority with annual energy consumption data. At a minimum, the data will need to be provided to the local authority at least once a year and would typically take the form of complete energy invoices for all non-transport electricity and fuel consumption.

Local Authorities should be prepared to provide advice and services to schools, to ensure that they collectively reduce energy consumption, secure a high place in the CRC league and avoid penalties and fines.

CRC Benefits for Schools and Local Authorities

Under the carbon reduction commitment, local authorities will be held legally and financially responsible for state funded schools within their geographical area. As such, the CRC aims to increase energy management practice between local authorities and the schools that fall under their umbrella.

Local authorities will be incentivised to assist schools with resources and energy management advice so as to ensure lower carbon emissions and a higher place in the CRC league table. In doing so, the local authority will benefit from better corporate social responsibility and reduced financial impact of the CRC, with the potential to receive substantial funding from bonus payments when allowances are recycled.

Schools will be required to provide their local authority with the necessary energy and emissions data for the carbon reduction commitment. While there will be an administrative cost and time associated with these tasks, it should be significantly outweighed by the benefits of increased energy efficiency.

In receiving energy management advice from the local authorities, schools should be able to significantly reduce energy consumption and costs. In most circumstances, it is considered likely that schools should be able to reduce energy consumption by over 20% by adopting no-cost or low-cost measures to reduce energy consumption.

CRC Reporting for Schools

Under the carbon reduction scheme, local authorities will be responsible for reporting at least 90% of their total emissions, including state-funded schools and academies.

Indicator 185, of the new Local Government Performance Framework in England, will require schools to provide their local authority with the necessary emissions data to fulfil this obligation.

The statutory local government performance indicator EEF/001a will require schools in Wales to report their emissions data to their local authority.

Local authorities should already be collecting information from schools that fall within their responsibility to the CRC.

CRC and Private Schools

Independent (writer) schools will be required to enter into the carbon reduction commitment if their highest parent organisation consumes more than 6000 MWh of half hourly metered electricity per year. Electricity consumption within private schools will not be included in any local authority involvement in the carbon reduction commitment.

CRC and Half Hourly Meters

Organisations will be required to participate in the carbon reduction commitment, if their total half hourly metered electricity exceeds 6,000 MWh from 1 January 2008 to 31 December 2008.

For the purpose of determining the scheme qualification, the government has proposed that the definition of “half hourly metering” will include all meters that monitor electricity consumption on a half hourly basis. To this end, half hourly metering will include voluntary automatic meters that produce half hourly data. The definition will also include pseudo half hourly meters (irrespective of whether or not they are settled on the non-half hourly market).

The above approach has been implemented to address the risk of large organisations choosing to settle half hourly metered electricity on the non-half hourly market, and thereby falling outside the Carbon Reduction Commitment.

Carbon Reduction Commitment Exemptions

In particular circumstances, some organisations in the UK will not be affected by the carbon reduction commitment. Where an organisation already has 90% of its emissions covered by the EU Emissions Trading Scheme or the Climate Change Agreement, it may be exempt from being included in the carbon reduction commitment.

Direct emissions covered by the European Union’s emissions trading scheme are exempt.

Under the climate change agreement, a subsidiary will be exempt if more than 25% of the total energy is covered by the CCA.

Transport fuels are excluded from the carbon reduction commitment.

CRC and CCA

The carbon reduction commitment (CRC) will be exempt from organisations that have more than 25% of their energy and emissions covered by a climate change agreement (CCA). However, these organisations will still be required to register under the CRC in order to set out their legal position.

During the initial stages of registration for the carbon reduction commitment, organisations that are subject to a CCA should still report all half hourly to figures for 2008 in order to be assessed for exemption. Where exemption applies to part of an organisation, the remainder will still be liable to report under the carbon reduction commitment if the total remaining half hourly metered electricity consumption was over 6000 MWh during 2008.

Landlord And Tenant Responsibilities

Where a landlord and tenant arrangement exists, regardless of who owns the property, who occupies the property or ultimately who uses the energy. In all situations, the responsibility to report under the CRC will lie with whichever organisation has a direct contract with the energy supplier.

This arrangement exists for both the half hourly electricity consumption liability and preliminary reporting, as well as the CRC’s requirement for annual compliance.

Significant Subsidiaries

A significant subsidiary is any part of a larger organisation that in itself consumed more than 6000 MWh of half hourly electricity during 2008. In this circumstance, the significant subsidiary may be able to enter into the carbon reduction commitment scheme in isolation from the rest of its parent or group organisation.

By entering any significant subsidiaries into the carbon reduction scheme as an entity in their own right, the parent or group organisation may benefit by separating itself from the subsidiary and brands, marketing, financial or practical implications that would otherwise exist.

CRC Management

As the Carbon Reduction Commitment continues to develop, it is clear that organisations involved in the scheme will need to set aside significant resources if they are to maximise the benefits of the CRC.

Even where the desire is only to obtain legal compliance, businesses will still need to invest time in ensuring that they have identified the entire organisational structure and accounted for a minimum of 90% of all emissions.

Carbon Reduction Commitment Action Plan

In developing a Carbon Reduction Commitment action plan, the first thing that any organisation will need to do is to understand their liability.

The ‘Organisation’

The full organisational structure of any company will need to be ascertained to identify whether or not it will be required to enter into the carbon reduction commitment scheme.

Total Half Hourly Electricity Consumption

Organisations will need to assess all the consumption from their half hourly electricity meters during 2008 to calculate whether or not they exceed the 6,000 MWh threshold.

Exemptions

Further investigation will be needed to look at areas of the organisation may be exempt under CCA, EUETS, or ‘Significant Subsidiaries’ rules, to better identify the organisation’s total liability to the Carbon Reduction Commitment scheme.

90% Emissions Rule

The next stage of the process will be to identify a minimum of 90% of the organisation’s total emissions covered by any combination of Climate Change Agreements, EU European Trading Scheme and core sources of non-transport energy consumption. Where all of the above do not account for the minimum threshold, non-core sources of energy will need to be accounted for and submitted to reach the required is 90% mark.

Identify Opportunities

organisations will need to investigate had opportunities to reduce energy consumption. A marginal abatement cost curve can help in this process by providing a tool to communicate investment required to reach compliance with the carbon reduction commitment and demonstrate that priorities have been investigated.

Targets

In developing the action plan it is important to identify what you aim to achieve. To this end, you may be simply looking for compliance with the law. However, you may be looking for the potential financial rewards that can be gained from the bonus payments. Additionally, you may be especially interested in the brand and marketing potential of being a leading organisation in the Carbon Reduction Commitment league table.

Early Action Metrics

The early action metrics form 100% of the league table assessment criteria during the first year of the carbon reduction commitments scheme. Essentially are two areas in which an organisation can qualify for bonus payments under the early action metrics. The first of these can be obtained by achieving the Carbon Trust Standard.

Carbon Trust Standard

The Carbon Trust Standard essentially requires an organisation to calculate its carbon footprint (including transport), demonstrate absolute or relative reduction in carbon emissions by more than 2.5 percent per year, and demonstrate good carbon management.

In order to qualify as an early action metric, an organisation must have received the Carbon Trust Standard by March 2011. By obtaining the Carbon Trust Standard, the organisation will be eligible to receive half of the 10% bonus payment that can be awarded at the end of the first year of the Carbon Reduction Commitment scheme.

Automatic Meter Reading

Automatic Meter Reading forms the other half of the early action metric, and in doing so it provides the opportunity for organisations to receive half of the available bonus payment during the first year. In order to qualify, the automatic meter readings to cover both electricity and gas. The equipment must also meet a minimum standard in its ability to capture, store and retrieve data at half-hour intervals, and provide software to manipulate the data into usable data.

To do well in the Carbon Reduction Commitment, participants will need to:

Implement Automatic Meter Readers before March 2011
Sign up to the Carbon Trust Standard
Establish comprehensive monitoring and targeting mechanisms
Collect and record procedures
Assign repsponsibilities and ownership for energy reduction tasks
Carry out regular reviews of data collection
Reduce emissions within the scheme
Proactively develop a strategy to identify and implement future energy savings

First Year Action Plan

To the first year of the carbon reduction commitment, organisations should carry out a number of actions to make best use of the scheme.

The organisation should forecast its business as usual emissions.
Cost-effective abatement options should be identified and implemented at the first opportunity. During the first few years of the carbon reduction commitment, the fixed price of £12 per tonne of CO2 provides a simple costing of opportunities.
Organisations should also monitor all included sources of emissions, to identify the potential future opportunities and risks.
During the first year, organisations should decide on a strategy for purchasing allowances with consideration for the perceived cost of allowances in future years. Having bought allowances in April 2011 the organisation will then need to report and surrender the year one allowances by the end of July 2011.

Organisations will need to make careful allowance for the cash flow implications of purchasing allowances that are subsequently tied up approximately 6 months before they are returned with either bonus payments or penalty deductions attached.

During the second year of the carbon reduction commitment scheme, organisations will need to carry out similar operations as those outlined above. However, they will also need to make either balancing sales all purchases on the secondary market to adjust their allowances before reporting and surrendering by the end of July 2012.

 

90 Percent Emissions Rule

The Carbon Reduction Commitment’s 90 percent emissions rule, otherwse known as the ‘flexible de minimis’ rule, requires all particpants to account for at least 90% of their total carbon footprint emissions. The 90% rule aims to focus attention on the largest, and most cost effective, opportunities to reduce carbon emissions.

The 90% emissions rule can include all energy reported through the Climate Change Agreement, European Union Emissions Trading Scheme, as well as all ‘Core Sources’ of non-transport energy consumption.

Where any organisation has identified all of the above, but is still unable to reach the 90% minimum, it will be required to identify enough ‘Non-core’ non-transport sources of energy to reach the required 90% threshold.

During the initial energy assessment for the Carbon Reduction Commiment, particpants must attempt to report 100% of emissions. Beyond this period, opportunities exist for organisations to opt-in the non-core sources of energy consumption if they wish to do so.

By opting-in, organisations have the opportunity to include existing energy consumption that may have considerable potential to be reduced in the future. Naturally, this would increase an organisations total carbon liability, but it may still be a worthwhile option if the reductions are made in the future.

Core and Non-Core Sources

Within the carbon reduction commitment, energy consumption is divided into ‘core sources’ and ‘non-core sources’.

Core sources will typically include all electricity and non-transport fuel those provided as a constant supply and invoiced on a regular or monthly basis. It will be mandatory for all organisations to report their core sources of energy,

Non-core sources will generally include more ad hoc energy supply, including some bulk fuels. Organisations will only be required to record their non-core sources if they are unable to identify a minimum of 90% total carbon emissions from the core sources.

Automatic Meter Reading Standards

As of January 2009, the required standards for automatic meter reading equipment have not yet been published. However, during summer 2008 the government published draft consultation on the Carbon Reduction Commitment and it is considered that the standards published in that document will not change with regards to Automatic Meter Reading equipment.

In essence, Automatic Meter Reading equipment will need to meet minimum standards in the way that it collates and stores data, including the frequency with which it carries out this process (at least every half an hour). The Automatic Meter Reading system will then need to manipulate and present the data (probably via a software package) so that it can be easily understood and used to reduce energy consumption.

The official standards for Automatic Meter Reading equipment are due to be published in the first quarter of 2009

Core and Non-Core Sources

Within the carbon reduction commitment, energy consumption is divided into ‘core sources’ and ‘non-core sources’.

Core sources will typically include all electricity and non-transport fuel those provided as a constant supply and invoiced on a regular or monthly basis. It will be mandatory for all organisations to report their core sources of energy,

Non-core sources will generally include more ad hoc energy supply, including some bulk fuels. Organisations will only be required to record their non-core sources if they are unable to identify a minimum of 90% total carbon emissions from the core sources.

Emissions Factors

In calculating the carbon emissions with regards to electricity consumption within organisations and subject to the carbon reduction commitment, a five-year average emissions factor will be applied to all electricity. To this end, the same factor will be used to measure emissions from all organisations regardless of whether or not they purchased their grid electricity supply from a wind power, nuclear, coal powered or any other form of electricity generation scheme.

However, if you produce your own on-site renewable electricity and you do not claim renewable obligation certificates, then you will be able to submit this use of electricity as zero emissions.If you claoim ROCs you will have to apply electriicty emissions at grid emission ratings.

Evidence Packs

All participants in the Carbon Reduction Commitment will be required to produce evidence packs in case of an audit. The evidence pack must include:

Structural Records - with clear definitions for the structure of the organisation. Information on implmentin early action metrics and growth metric across all subsidiaries.

Data Records - to show the annual organisation-wide energy consumption. Estimated bills can be used, but they must be idenitifed in the evience pack. Standard unmetered supplies UMS billing methodology is considered to be ‘estimates’. An upward adjustment factor of 10% will be applied to estimated consumption. The evidence pack must also provide evidence of actual readings for at least 6 consecutive months of the year.
Special event records - to identify unusual activity from, such as acquisitions

The evidence pack must be signed by a Director of the company

What type of energy is included in the Carbon Reduction Commitment?

Whilst qualification for the Carbon Reduction Commitment determined by electricity use, it aims to capture all non-transport energy consumption. As a result, if you’re in the Carbon Reduction Scheme, you will be required to report on electricity, gas, oil, diesel etc.

Core sources in the CRC includes all half hourly metered electricity, profile class 5 to 8 electricity, daily metered gas and non-daily metered gas over 73,200kWh per annum.

90% emissions rule means that of your entire organisaiton’s carbon footprint, you will be to be able to show that 90% has been captured by the EUETS, CCA and/or the ‘core sources’ of the CRC ‘. If the total comes to less than 90%, you will be required to opt-in to reportin on additional non-core sources to reach the 90% level. The first year assessment of the 90% rule will be made during the period from April 2010 to March 2011 (the frist year of the scheme). This reporting must be must be reported by 31st July 2011.

If you’re in the Carbon Reduction Commitment, but you also have liabilities under the Climate Change Agreement and/or European Union Emissions Trading Scheme, then those emission will not be covered by the CRC.

 

 

Carbon Commitment Reduction Enforcement

The environment agency has overall responsibility to enforce the carbon reduction commitment in its capacity as the scheme administrator. Regional regulators will be tasked with carrying out the necessary audit of 20% of participants each year.

Carbon Reduction Commitment Audits

The Carbon Reduction Commiment will operate on the basis of participiants recording and reporting their own emissions to the scheme. As such, their level of emissions will not necessarily be subject to any verification. However, 20% of all particpants will be audited annually; via a rolling programme of desk-based audits that will be carried out throughout the year.

Carbon Reduction Commitment Evidence Packs

Organisations will be required to provide evidence pack’s that will include:

The details of the organisation
Annual energy consumption throughout the organisation
Details of early action metric throughout the organisation
Details of growth metric throughout the organisation
As above for all significant subsidiaries
Structural records, data records and special events

 

What is the Annual Reporting for the Carbon Reduction Scheme?

Annual reporting for the Carbon Reduction Scheme will fall in line with the financial year compliance cycle, from April to March, as opposed to the original reporting that was based on calendar year reports from Januaury to December.

Organisation within the Carbon Reduction Commitment will be required to maintain an evidence pack, and a source list of all emissions included in the CRC.

Additional rules will apply to the reporting on the generation of renewable energy, exporting power from your own energy generation and the use of combined heat and power.

At the end of each reporting year (March 31) you will be required to submit your report by the end of July. At this point he will also be required to surrender allowances that will be equal to your level of emissions, where 1 allowance wil be equal to 1 tonne of CO2.

The carbon reduction commitment scheme is based on audits rather than verification. As such, you will not be required to verify your commission’s statement, which differs from exiting EUETS schemes. However, the audit process wl cover 20% of al participants each year.

 

 

CRC Costs

The Carbon Reduction Commitment will typically result in a range of costs for participating organisations. These could include administration and consultancy advice, implementation of new technology, as well as the potential for fines and penalties due to non-compliance or poor performance.

However, in the long term, it is likely that most organisations will enjoy significant financial benefits due to improved efficiency and lower energy costs.

For some organisation that do well on the CRC league table, the Carbon Reduction Commitment presents the opportunity to benefit from bonus payments that could more than outweigh any financial investment.

 

 

CRC Fines

If a company fails to register by the required deadline it could receive a fine of £5,000, plus an additional £500 per day, until it is successfully registered on the scheme.

Where an annual report is submitted late, the fine looks as though it could be £5,000 + £0.05 per tonne of allocated allowances per working day

Where submitted carbon emission details are more than 5% variation from actual, a fine of £40 per tonne of allocated annual allowances (compared to £12 per tonne of first phase allowance costs).

Where an evidence pack is incomplete or not up to date - £5 per tonne of allocated allowances.

Non conformance will be treated as a civil offence. However, failure to respond to subsequent demands will lead to issue being treated as a criminal offence.

 

Carbon Reduction Commitment Allowances

Having identified their total annual CO2 emissions, participating organisations will have to purchase carbon allowances at a fixed price of £12 per tonne during the first three years. The initial three-year introductory phase of the carbon reduction commitment scheme will run from the beginning of April 2010 to the end of March 2013. However, allowances will not be sold until the end of the first year, at which point all organisations within the scheme can purchase allowances for both the previous and forthcoming years.

When purchasing allowances, organisations will be allowed to purchase unlimited quantity and bank these allowances for future years, but only within each phase of the carbon reduction commitment scheme. To this end, participants may purchase several years allowances in 2011, but cannot be banked beyond the end of March 2013.

There are no free allowances in the scheme. All allowances must be bought and sold, and cannot be borrowed between organisations for any period.

The revenue raised from the sale of Carbon Reduction Commitment allowances will be recycled into the scheme. The income received in April will be issued back to participants, with bonus or penalty adjustments, in October of the same year. As a result, there will be cash flow implications during the period from April to October while all organisations in the scheme wait for the revenues to be recycled.

In April 2013 the carbon reduction commitment will adopt an auction trading mechanism for allowances, using sealed bids.

 

 

Carbon Reduction Commitment Bonus and Penalties

The carbon reduction commitment aims to use a bonus and penalty scheme as part of the incentive for organisations to reduce their levels of emissions. Any bonus for penalty administered to an organisation will be based on their position in the league tables.

During the first year of the carbon reduction commitment scheme, the early action metric will act as the sole indicator of performance for organisations within the league tables, however the end of the third year, the early action metric will be removed from the league table calculation. From that point onward, all organisations will be measured largely (75%) on absolute emissions and partially (25%) on the growth metric.

During the second year the margins for bonus and penalty will increase to 20%, with 30% being applied to the third year and so on. By the fifth year, organisations in the top half of the table will receive a bonus, whereas all the organisations in the bottom half will receive a penalty.

Year 1 - max 10% ./- bonus or penalty
Year 2 - max 20% ./- bonus or penalty
Year 3 - max 30% ./- bonus or penalty
Year 4 - max 40% ./- bonus or penalty
Year 5 - max 50% ./- bonus or penalty

Following the initial five-year period, the bonus and penalty has yet to be established. However, it is expected that the government will continue to take advice from the climate change committee and has not ruled out a 100% bonus and penalty scheme. As such, companies at the bottom of the league table would not receive any of their allowance payments back.

There are no requirements for organisations to reinvest bonus payments to further reduce energy by investing in green technology or services.

 

Carbon Reduction Commitment Emissions Trading Scheme

The carbon reduction commitment emissions trading scheme will target of emissions that are not currently included in the European Union’s emissions trading scheme all climate change agreements. It is anticipated that the trading scheme will affect approximately 5000 of the UK’s largest organisations.

During the initial phase of the carbon reduction commitments emissions trading scheme, starting 2010, all allowances will be sold at a fixed price of £12 per tonne of CO2. However, it is anticipated that from 2013, all allowances will be allocated through auctions that will develop a market price. Over time, the number of available credits will diminish which is likely to drive up the price.

 

 

Carbon Reduction Commitment Recycle Payments

The carbon reduction commitment’s recycle payments will take place over three stages.

First stage - based payment

During the first year, from April 2010 to March 2011, calculations will be made to identify each organisation’s share of the total carbon covered by the scheme. This percentage share will then be used for all subsequent years. The percentage share will then be multiplied by the recycled pot

Second stage - bonus or penalty

During the first year, the organisation at the top of the league table will receive only 10% bonus.

Adjustment factor

The adjustment factor will be applied to all participants of the scheme to ensure that there are enough finances in the total pot to make payment of the recycles

 

Carbon Reduction Commitment Action Plan

Whilst the carbon reduction commitments does not officially start until April 2010, there is still a large amount of work that many organisations may have to do prior to that date.

Identify organisational structure

The carbon reduction commitments operates under special rules that may mean some organisations will be included in the scheme even though they think they are too small and energy user to have two participate. To this end, it is imperative that all companies identify exactly where they fit in with larger parent or group organisations, and where at how each will be liable to the carbon reduction commitment.

The carbon reduction scheme applies at the highest level of the organisation, except where there are significant subsidiaries. Significant subsidiaries are defined as individual energy uses that in themselves consumed more than 6000 MWh during 2008. As such, the significant subsidiary could be included into the carbon reduction commitment scheme in its own right, and made separate from the rest of the organisation.

Organisations will also need to identify which parts of their energy consumption already fall under climate change agreements and the EU emission trading schemes; and therefore be excluded from the carbon reduction commitment. One these elements have been identified, the total needs to be calculated to account at least 90% of the organisation’s total carbon footprint

Electricity consumption

Having identified the organisational structure, the next step will be to ascertain the total amount of electricity consumption from all half hour meters. If the sum exceeds 6000 MWh during 2008 in the organisation will fall under the carbon reduction commitment scheme.

 

 

CRC League Table

The Carbon Reduction Commitment league table will rank all participants in the scheme on the basis of performance in three metrics.

 

Carbon Reduction Commitment League Table

The Carbon Reduction Commitment league table will rank all participants in the scheme on the basis of performance in three metrics.

First metric - Absolute Emissions

The first metric will look at the percentage of carbon emissions reduction for the organisation compared to the previous year. The absolute emissions metric will be based on a rolling average period of the past five years so, on any given year, the organisation will be compared with the previous five years. During the initial five-year period of the scheme, organisations will only be compared against the years that have passed since the start of the scheme. In the first year, ‘Absolute Emission’ will not be included in the league table calculations.

Second Metric - Growth

The second metric will consider the percentage reduction in other carbon emissions per unit of turnover, which aims to recognise the growth of companies. As with the absolute emissions in the first metric, the second metric will operate on a rolling five-year comparison, but fewer years during the start of the scheme and not at all in the frist year.

Third Metric - Early

The early metric will consider early action initiatives made by the organisation to reduce their carbon emissions prior to April 2011. Qualification for the early action metric will require organisations to be assessed for coverage of the carbon trust standard and automatic meter readings. During the first year of the carbon reduction commitment scheme, the early action metric will act as the sole indicator of performance for organisations within the league tables

 

Carbon Reduction Commitment Publish League Tables

As part of the carbon reduction commitment, the Environment Agency will publish publicly accessible league tables of participants performance at the end of each year.

In addition to the published league table positions for organisations within the carbon reduction commitment, the scheme will also publish the responses to three questions:

1. Does your organisation disclose long-term carbon emission reduction targets?
2. Does your organisation disclose carbon emissions performance against these targets?
3. Do you have a named director with responsibility for overseeing carbon performance?

These questions are designed to indicate if participants are actively attempting to reduce their carbon emissions.

 

Growth Metric

As the growth metric is based on the percentage change based on production unit turnover, it may not always be possible to identify a measurable unit of production. In these circumstances, the growth metric will be based on emissions per unit of revenue.

Where the growth metric is based on revenue, the measurement will apply to the organisation’s total revenue, rather than just the area covered by the measured energy consumption.

If an organisation changes its structure or operations, the information will not be updated in the CRC until the start of the second phase.

If an organisation significantly reduces consumption as a result of ceasing operations in some areas of their business, they will be able to benefit from this reduction in the CRC league table.

 

Posted in Carbon Reduction Commitment (CRC), metering | No Comments »

Carbon Reduction Commitment - Update

21/05/2009 by David Slade.

Outline of the Carbon Reduction Commitment (CRC)

The CRC is a mandatory carbon emissions cap and trade mechanism for non-energy intensive businesses. Although not directed specifically at buildings, energy use by and in buildings will represent a substantial part of the emissions that are covered. The policy is aimed primarily at businesses that fall outside the European Emissions Trading System (EU-ETS) and Climate Change Agreements (CCAs) but nevertheless have substantial energy consumption.

Participants will be required to buy emissions allowances at the start of each year, surrendering sufficient to cover their measured emissions at the end of the year. The money collected will be returned to participants, but not equally - there will be a league table of performance, with those at the top of the table receiving more than those at the bottom. Participants will be allowed to buy and sell allowances to each other (or to intermediaries) and to bank unused allowances for future years.

After several years of discussion and consultation, the scheme will get underway in the next year or so. Participation will be based on energy consumption during 2008/9, with an initial, introductory, phase running from April 2010 to March 2013. A second, developed phase will run from April 2013 to March 2016.

In more detail

Participants
Participants are organisations, who may be private or public. Many local authorities will have to participate (and must include all their schools. It is estimated that schools will account for the majority of their liability).

The qualifying requirements are that the organisation (including subsidiaries) must have at least one site with mandatory half-hourly electricity metering, and the organisation’s total annual electricity consumption (on all sites) must have been 6,000 MWh or more in 2008/9. This is estimated to cover 4,000 to 5,000 businesses (some of which will have subsidiaries for which they are also responsible)

Scope
The scheme includes emissions resulting directly from processes and indirectly from energy purchases. It excludes transport energy and energy for onward supply or storage. Emissions already subject to EU-ETS trading or CCAs are not part of the CRC process (but are counted when determining whether an organisation qualifies).

Regulated core emissions - which must be included - are those from half-hourly electricity meters, electricity profile classes 5 to 8, daily-read gas meters and other gas meters if consumption is over 73,000 kWh per year. Organisations may choose to include other energy. There is a policy objective that 90% of emissions from qualifying organisations should be subject to EU-ETS trading, CCAs or CRC. If the core emissions plus those covered by EU-ETS and CCAs do not reach this threshold, non-core emissions must be included to reach at least the 90% level. If 90% of emissions are already covered by EU-ETS or CCAs the organisation is exempt from CRC. Subsidiaries for which at least 25% of their energy is covered by CCAs do not have to be included.

On-site electricity (and presumably heat) generation can be netted off consumption (if it has been metered). Exports gain credit at grid-average intensity. The treatment of off-site renewables depends on whether ROCs have been claimed. If they have, off-site electricity is treated as if it was grid electricity. If not, it is a zero (or low) carbon source. Green tariffs are ignored.

Phase I
Registration of participants will be in April 2010. In April 2011, participants will be required to buy allowances to cover the previous year (2010/11) and the following year (2011/12). This is to ease the cashflow penalty that would be associated with initial purchase a full year before any return. In subsequent years, April purchases will simply cover the following year. In Phase I an unlimited supply of allowances will be sold at a fixed price of £12 per tCO2 - but participants will only be able to purchase them during April. After that, they must trade in the spot market if they have too many or too few. (This means that the minimum possible initial outlay is about £38,000 - it will often be much larger).

Phase II
In phase II, there will be a fixed number of allowances each year, sold via an auction (sealed bids, single strike price). There will be limits on the maximum number of allowances that a single entity may purchase in the auction, and only participants and their agents may bid (though third parties may trade in the secondary market).

Other features
The initial target was for the CRC to deliver about 4.5 MtCO2 but the Committee on Climate change has been asked to recommend the actual cap, and may well set it at a more demanding level.

There will be a “safety valve” - in effect a price limit - in that participants will be able to buy additional allowances form the EU-ETS via the scheme administrator (the Environmental agency)

League table and recycling
The basis of recycling will be that each participant receives cash proportional to their share of total emissions. However, this will be adjusted by a series of penalties and bonuses. Initially the impact of these will be limited: a maximum adjustment of +/- 10% in the first year, rising to +/- 50% in year 5.

The penalties and bonuses will depend on a points system that is based on:

1. The organisation’s % change in emissions from the previous 5-year average and, voluntarily ,
2. In phase I only: “early actions” comprising voluntary use of automatically read meters (not submeters); participation ion CCAs; meeting the new Carbon Trust Standard (which also requires audited evidence of having made emissions savings)
3. Evidence of becoming more carbon-efficient (for example, achieving a higher turnover with no increase in emissions)

These will be weighted 60:20:20. It was pointed out that, in practice, until there is sufficient data to quantify emissions reductions, the only adjustments (limited to 10%) will be for “early actions”

Process and auditing
The process will be one of self-certification with a standard annual report form sent to a central registry, plus “risk-based” auditing. Energy suppliers will produce (on request) annual statements of energy supplied to participating organisations. Guidance on acceptable approximations will be produced. Penalties will be financial and will be “proportionate to the emissions”

Discussion and comments

Awareness
Awareness of the CRC amongst organisations and their advisors and agents is generally low, but it is planned to increase publicity.

Data quality, availability and skills
It is believed that many of the participants will have difficulty collecting reliable data, especially from subsidiaries - and will initially lack the skills to process them. (The financial community seems to be even less aware of CRC than management generally). However, some local authorities have been experimenting with carbon trading and developing their understanding.

Ownership
In many organisations, it will not be clear who has ownership of the process - or whether the “owners” will have power to influence outcomes. Examples include: schools, where local authorities have responsibility but budgets priorities are largely set by schools; and landlords and tenants. The legal responsibility lies with the organisation that holds the contract with the electricity supplier

Impact
Many speakers noted that private organisations, in particular, seemed to be more motivated by the reputational risks from the league table than by the financial penalties or opportunities.

Renewables
Several speakers complained about the treatment of off-site renewables (and CHP). In effect the CRC is constraining energy use rather than emissions. Organisations who are investing heavily in off-site wind generation will not see an advantage in the CRC if they claim ROCs - without which the investment may well not be economically viable. In effect, energy suppliers can account a supply as zero carbon, but consumers cannot. The (not entirely convincing) justifications were: that the purpose of CRC s to incentivise organisations to take actions on their own sites and; allowing off-site renewables to be treated as carbon-free would be double-counting. (Comment: there seems to be a good deal of possible double counting of benefits here. For example, if a new lighting system is installed in a buildings the carbon savings could be accounted as a benefit of Building Regulations, of CRC and of EU-ETS)

Other points
There appears to be potential synergy between DEC and CRC processes and objectives, but no apparent formal links.

Posted in European Emissions Trading System (EU-ETS), Climate Change Agreements (CCAs) | No Comments »

BREEAM or LEED - strengths and weaknesses of the two main environmental assessment methods

21/05/2009 by David Slade.

BREEAM has dominated environmental assessment of UK buildings for nearly 20 years, and now LEED (Leadership in Energy and Environmental Design) in the US Comparing  both schemes to find their strengths and weaknesses.Publically displaying your green credentials is becoming a must for organisations in our new sustainably-aware society. Multi-national companies are keen to show that every part of their business is green, including their buildings.

Environmental assessment of buildings is nothing new, with the first national scheme, BREEAM (the Building Research Establishment Environmental Assessment Method), appearing in 1990. BREEAM has since expanded massively, going from a 19-page BRE report with 27 credits available, to a massive 350-page technical guide (for the office version) with 105 credits.

The principles of BREEAM have also spread across the world. The US Green Building Council launched its Leadership in Energy and Environmental Design (LEED) in 1998. While similar methods have also sprung up, such as Greenstar in Australia and CASBEE in Japan, BREEAM and LEED are the main methods currently in use. And the question on everyone’s lips is: which one is best?

Spot the difference

The main difference between the two methods is the process of certification. BREEAM has trained assessors who assess the evidence against the credit criteria and report it to the BRE, who validate the assessment and issue the certificate.

While LEED does not require training, there is a credit available if an accredited professional (AP) is used. The role of the AP is to help gather the evidence and advise the client. The evidence is then submitted to the US-GBC which does the assessment and issues the certificate.

Both schemes share common components (Table 1). Early involvement of the assessor or AP at the design stage is beneficial to the project and the final rating. Both schemes drive the market to improve building design. The judging criteria also keep pace with legislative developments and current best practice.

LEED in the UK

In the UK, interest in LEED is growing. The Green Building Certification Institute’s website records 66 LEED Accredited Professionals in the UK. This is the fifth highest national total behind the US, Canada, UAE and China.

How LEED and BREEAM compare. The US-GBC also lists ten UK buildings as being registered for one of the LEED schemes. At the time of writing, the list shows that only one UK building - the Herman Miller HQ in Cheltenham - as having gained a LEED rating. This building also had a BREEAM assessment carried out under the offices 2006 scheme, under which it was awarded an excellent rating.

Another building known to have both a BREEAM and a LEED rating is the Van de Kamp Bakery, at Los Angeles City College. The bakery gained a certified LEED rating and a Good BREEAM 2005 rating.

So it appears that BREEAM delivers a higher rating for the same building in both the US and the UK. That said, it would be more accurate to compare LEED with BREEAM 2008, as the latter now has a mandatory post-construction review, something LEED has had for a while. With previous BREEAM schemes most buildings were only assessed at a design stage.

Eszter Gulacsy, a sustainability consultant from MTT/Sustain believes LEED is simpler in its approach, while BREEAM is more academic and more rigorous. “While BREEAM is more relevant in the UK as it uses UK policies, LEED can sit alongside as part of a global corporate policy,” she says.

Gulacsy also believes that the driver for LEED in the UK is often the client’s global corporate policy or, on prestige speculative developments, the needs of global tenants. Germany-based Siemens uses it for all its new buildings worldwide, with several buildings in Europe already registered under the LEED scheme.

While some national green building councils are developing their own environmental assessment methods, some are adapting one of the existing schemes.

The BRE has not been shy about selling BREEAM across the globe. BREEAM International grew out of the BREEAM Bespoke scheme. BREEAM Europe and BREEAM Gulf are similar money-earners. But going global brings BREEAM head-to-head with its rival LEED. Ironically, BREEAM’s director, Martin Townsend, was quoted in Building Design as seeking ways of collaborative working with the US LEED system.

“If an American bank wants to build over here, it understands about LEED and wants the building built to that standard,” he said. “That’s fine, but it might not translate that well into the UK climatic environment, our building legislation or the way that building operates. Providing a client with dual certification has to be a good way of sharing that information.”

The main differences between LEED and BREEAM (courtesy Eszter Gulacsy) Others are more cautious. “Europe thinks that LEED is an easy win, but it isn’t if the paperwork and evidence is not in place,” says Eszter Gulacsy. “There is a danger of complacency,” she warns.

The argument for two schemes

So is the dynamic tension between two competing systems desirable? Clearly, a one-size-fits-all assessment scheme would be difficult to achieve on a global basis. For example, water efficiency is a major issue in Dubai and Australia, but not in Scotland and nor in Wales. So different issues need to be ranked differently to match regional environment and regulations.

While LEED is dominated by the American ASHRAE standards, BREEAM takes it cue from European and UK legislation. The regional versions of both schemes flow from those antecedents.

BREEAM Gulf has been adapted for the local market. Gone are the Good, Very Good, and Excellent ratings, and in comes star ratings. The weightings are changed so that water is the key issue, rather than energy as in the standard UK schemes. In addition to the CIBSE guidance being the measure for certain credits, ASHRAE and other standards are also now referenced in BREEAM Gulf.

BREEAM has long been able to adapt to local contexts. With BREEAM Bespoke, for example, the assessor can work with BRE to develop assessment criteria specially tailored to a building where it doesn’t fit neatly into one of the existing schemes.

LEED, however, has not been created with this level of adaptability and it is not run that way. Instead it is fixed to the ASHRAE standards and the US way of thinking (for example, credits are awarded for having enough car parking spaces, rather than minimising them as in BREEAM).

There are also differences in the way LEED calculates credits. They are generally linked to the US Dollar (especially the energy credits), which means that if the exchange rate is unfavourable, then the building’s rating could suffer.

A key change that may make LEED more exportable is the introduction of regional bonus credits. Six regional priority credits will be available based on what the US-GBC’s regional councils and chapters deem important, environmentally, in that region.

A downside is that these credits are not available for non-US projects. However, there are national versions of LEED being developed by individual national green building councils. Canada was the first, followed by India. Countries such as Brazil and Italy are looking to have their own versions soon.

The Dutch Green Building Council has also adopted BREEAM as its favoured environmental assessment method.

There is a lot of hype about the battle between BREEAM and LEED in the UK, but this seems to be unfounded. Both seem happy to co-exist and each has their niche areas or countries. They are even borrowing each other’s ideas as they grow.

BREEAM will probably always come out on top in the UK, simply because it is imbedded in the system. Government departments require BREEAM ratings of all their buildings; most local authorities require BREEAM as part of planning approval for developments over a certain size.

Once projects are underway that aim to be zero carbon, the likes of BREEAM or LEED may have developed to become the global default methods of assessment.

Now, who’d bet against that?

Posted in ASHRAE, BREEAM Gulf, LEED, BREEAM | No Comments »

EU Council adopts climate-energy legislative package

21/05/2009 by David Slade.

The Council of the European Union has adopted the so-called climate and energy package which included the following proposals:

• Proposal Directive on the Promotion of Renewable Energy Sources (RES)
• Proposal on the review of the Emissions Trading Scheme (ETS)
• Proposal on to decrease the emissions from sectors not included in the Emissions Trading Scheme (burden shared between the Member States)
• Proposal on Carbon Capture and Storage (CCS)

The vote took place without any further discussion and simply formally endorsed the agreement reached by the Council back in December 2008. The quick adoption of such a package of measures shows how climate change is seen as a critical issue by the Commission but also by the individual Member States. France which was then holding the EU Presidency has indeed made the adoption of the Climate and Energy package a question of national prestige. This package is designed to achieve the EU’s overall environmental target of a 20 % reduction in greenhouse gases and a 20 % share of renewable energy in the EU’s total energy consumption by 2020.

The Council adopted a directive setting a common EU framework for the promotion of energy from renewable sources.
The aim of this legislative act is to achieve by 2020 a 20% share of energy from renewable sources in the EU’s final consumption of energy and a 10% share of energy from renewable sources in each member state’s transport energy consumption.

To achieve these objectives, the directive for the first time sets for each member state a mandatory national target for the overall share of energy from renewable sources in gross final consumption of energy, taking account of countries’ different starting points. The main purpose of mandatory national targets is to provide certainty for investors and to encourage technological development allowing for energy production from all types of renewable sources. To ensure that the mandatory national targets are achieved, member states have to follow an indicative trajectory towards the achievement of their target. Each EU country will adopt a national renewable energy action plan setting out its national targets for the share of energy from renewable sources consumed in transport, electricity, heating and cooling in 2020 and will notify it to the Commission by June 2010. To reach the mandatory targets, member states will apply support schemes or measures of cooperation between different member states and with third countries.
The 10% target for the transport sector is set at the same level for each member state in order to ensure consistency in transport fuel specifications and availability. The new directive also lays down rules relating to statistical transfers between member states, joint projects between member states and with third countries, guarantees of origin, administrative procedures, information and training, and access to the electricity grid for energy from renewable sources.

Finally, the directive establishes sustainability criteria for biofuels and bioliquids with the aim of ensuring, in particular, that biofuels and bioliquids can be counted as renewable energy for the purposes of this directive only when it can be guaranteed that they meet these criteria which relate inter alia to biodiversity, the protection of rare, threatened or endangered species and ecosystems, and greenhouse gas emission savings. Member states are required to transpose the directive into national law within 18 months after its publication in the Official Journal of the EU.

Revised EU Emissions Trading System
The Council adopted a revised Emissions Trading System (ETS) for greenhouse gases in order to achieve greater emissions reductions in energy-intensive sectors. From 2013 onwards heavy industry will contribute significantly to the EU’s overall target of cutting greenhouse gas (GHG) emissions by one-fifth compared to 1990 levels by 20201.
To stimulate the adoption of clean technologies, the new ETS provides that GHG emissions permits will no longer be given to industry for free, but be auctioned by Member States from 2013 onwards. ETS sectors must start by purchasing 20 % of their emissions permits at auctions in 2013. That rate will rise gradually to 70 % in 2020, with a view to reaching 100 % in 2027.
Power producers, on the other hand, are obliged to acquire all of their emissions allowances at auctions so as to prevent windfall profits. To facilitate the energy transition for countries with high dependence on fossil fuel or insufficient connection to the European electricity network, a derogation is available. Ten member states can apply for reduced auctioning rates in power production: at least 30 % in 2013, gradually rising to 100 % in 20202. In order to prevent market distortion, recipient power producers must invest in clean technology to the market value of the permits.
The directive also provides for a solidarity mechanism in order to help less affluent EU states with the transition to a low-carbon economy. They will receive an increased amount of emissions permits to auction, i.e. 12 % more than their actual share in overall EU GHG emissions3. That will give them an opportunity of generating substantial revenues from selling allowances.
1 The ETS covers energy-intensive sectors including electricity generation, coking, mineral-oil refineries, ferrous-metal production, cement, lime, ceramics, bricks, glass, pulp and paper.
2 Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland and Romania are eligible for this derogation.
3 The twelve “new” Member States and Greece and Portugal benefit from this solidarity mechanism.

Each EU state will determine the use of its revenues from auctioning the pollution permits. At least half of the proceeds should be used to fight climate change in the EU and abroad and also to alleviate the social consequences of moving towards a low-carbon economy.
If international negotiations on climate change in Copenhagen, in December 2009, do not lead to a new international agreement on climate change, a number of sectors could be exposed to a risk of “carbon leakage”, i.e. see investments and production move to third countries with lower environmental standards. With that in mind, the Council has introduced the possibility of reducing auctioning for a limited number of sectors.
If an industry can demonstrate that purchasing permits significantly increases its costs (more than 5 % of its gross value added) and that it faces international competition (non-EU trade intensity above 10 %), it can qualify for the free allocation of its allowances. Full free allocation will not, however, exceed the level of an ambitious benchmark corresponding to the 10 % cleanest technologies in the EU. If an installation emits more than that, it will need to acquire allowances up to the level of its actual emissions. Substantial auctioning rates can therefore be expected even in exempt industry sectors. The Commission will determine the list of sectors in question no later than 31 December 2009, after discussions at the European Council.
The overall reduction of auctioning through these provisions could have an impact on the volume of the solidarity mechanism and diminish the redistribution in favour of less affluent EU members. For that reason the “carbon leakage” derogation is subject to further review before the start of the third trading period in 2013.
In addition, up to 300 million emission allowances will be set aside for the financing of clean technologies (estimated value EUR 6 to 9bn). They will contribute to the funding of up to twelve demonstration projects in carbon capture and storage and also innovative renewable energy projects.
Finally, the directive includes provision for its adaptation after the conclusion of an international agreement to fight climate change and for a subsequent move beyond the EU’s overall 20 % reduction target.
The reviewed ETS will apply from the start of its third trading period on 1 January 2013.
Member states must bring the acts necessary for compliance with the directive into force by 31 December 2012.

EU Member States share the effort to make carbon emissions reductions The Council adopted a decision to reduce greenhouse gas emissions across a wide range of activities including transport, agriculture and housing (3738/08). The so-called “effort-sharing” decision sets binding emissions targets for EU member states in sectors not subject to the EU’s Emissions Trading System.

Across the entire EU, greenhouse gas emissions from the relevant sectors are to diminish by 10 % on 2005 levels by 2020, thus contributing to the EU’s goal of a 20 % reduction in CO2 ejects across the entire economy. EU member states have agreed to share this effort in line with the principles of solidarity and equity so that individual countries have different targets. EU states with low GDP per head and strong prospects for economic growth may increase their carbon emissions by up to 20 % whereas those with high national income per head must cut CO2 pollution by up to a fifth.

The national trajectory of carbon emissions until 2020 is binding on member states and enforceable through the usual EU infringement procedure. If a country exceeds its annual objective it must implement corrective measures. In addition, the excess emissions will be multiplied by an abatement factor of 1.08 and deducted from the following year’s CO2 allowance.
To make the reductions more cost-effective, the Council has introduced several flexibility mechanisms, including the possibility of trading emissions cuts among member states and carrying forward excess reductions to future years. EU countries can also use a limited amount of carbon credits from developing countries, through the so-called “Clean Development Mechanism”. The combined effect of the flexibility mechanisms would be to cut costs while ensuring that emissions drop substantially in the EU and abroad.
The decision also includes provision for its adaptation after the conclusion of an international agreement to fight climate change and for a subsequent move beyond the EU’s overall 20 % reduction target.
The decision will come into force shortly after its publication in the Official Journal of the EU.

The revised environmental quality standards as well as the sustainability criteria for biofuels will apply from 2011.
Member states are required to transpose the directive into national law by the end of 2010.

A regulatory framework for carbon capture and storage
The Council adopted a directive setting up a regulatory framework for the geological storage of carbon dioxide. The new act (3739/08; 8036/09 ADD1) is intended to make the deployment of this technology in the EU possible, which could help to mitigate climate change.
Whether to use carbon capture and storage or not is still a matter for independent decision by each EU member state. For EU countries that wish to do so, the directive sets out the conditions for the assessment of storage sites, for authorisation procedures and for the closure of such sites. In order to ensure harmonized application throughout the European Union, the Commission will review draft storage permits and draft decisions on closure prepared by national authorities before their final approval.
Operators are obliged to monitor storage sites and report to the member state’s authorities, both while storing carbon dioxide and after the closure of sites and the cessation of storage activities. Responsibility for a site reverts to a public authority when sufficient proof is obtained that the carbon dioxide will be completely and permanently contained.
Member states are required to transpose the directive into national law within two years.

The climate-energy” legislative package was proposed by the Commission in January 2008. It was adopted at first reading in the co-decision procedure, having been discussed at the European Council of 12 December 2008. In accepting all of the
amendments the European Parliament adopted on 17 December 2008, the Council has now definitively adopted the new acts.

Posted in European Union, Carbon Capture and Storage (CCS), Emissions Trading Scheme, EU Council, Emissions Trading Scheme (ETS) | No Comments »

Schools ‘could do better’ on EPC ratings

21/05/2009 by David Slade.

Details of Energy Performance Certificates (EPC) awarded to new schools reveal the majority of school buildings are not performing sustainably.

More than half of new schools obliged to report their energy performance via an Energy Performance Certificate (EPC) are falling into the lower bands for asset efficiency, writes Roderic Bunn.

In response to a parliamentary question tabled by shadow climate change minister Gregory Barker, the schools minister Jim Knight revealed that 28 secondary schools and 64 primary schools had EPCs at the end of 2008. Of those 92 schools only 43 have performed in bands A-C (see table).

Source: Department for Children, Schools and Families (DCSF). From October 2008 all public buildings with a floor area greater than 1000m² are required to have an annual Display Energy Certificate (DEC) showing their energy performance. This obliges new schools built under Building Schools for the Future programme to have an EPC. This has to be followed by a DEC once 12 months energy data is available.

The certificate has to be publicly visible. Existing schools which are refurbished will also need to publicise their DEC ratings.

School buildings will require an Advisory Report providing recommendations for energy improvements each seven years.

In January, Jim Knight promised that efficiency band percentage splits for DECs will be made available “in the next two weeks”. However, at the time of writing the data were not available.

Both DECs and EPCs are recorded on a national register available at www.ndepcregister.com. An EPC or DEC certificate can only be retrieved if the unique Report Retrieval Number (RRN) is known. The database cannot be accessed by building name.

“Individual school energy data are kept confidential, and Communities and Local Government only receive aggregated data from the register,” explained Jim Knight.

“There are no plans to publish individual school energy data although many local authorities and schools hold these data themselves,” adding: “We do not keep records of whether schools have incurred penalties for non-compliance.”

This report is sourced from the BSRIA Website: http://www.bsria.co.uk/news/epc-schools

Posted in Display Energy Certificate (DEC), Energy Performance Certificates (EPC), Buildings | No Comments »

TECHNICAL - Glossary & terms used for electrical supplies

20/05/2009 by David Slade.

GLOSSARY
active power – the multiple of the components of alternating current and voltage that equate to true power. Normally measured in kilowatts (kW) or megawatts (MW).
adoption agreement – an agreement between a developer and a DNO, concerning the transfer into DNO ownership of infrastructure supplied and installed by a third party.
approved contractor – a contractor which has been approved by the DNO for carrying out third party connection work.
Balancing and Settlement Code (BSC) – the code which determines the rules governing the Balancing Mechanism and the settlement process for electricity trading in England and Wales as from time to time amended.
capacity factor – a factor, generally applied to renewable energy schemes, which relates the maximum continuous power output of the generator to the expected long run average power output.
committed network – future network configuration for which financial approval has been given.
condition 4 statement – document published by a DNO outlining the basis of charges for connection to the DNO’s distribution system.
connection agreement – an agreement setting out terms relating to a connection with the DNO Distribution System (excluding any bilateral agreement with the transmission licensee).
Connection and Use of System Code (CUSC) – contractual framework for connection to and use of the NGT transmission system.
connection voltage – voltage level at which a site is connected to the transmission or distribution system.
contestable – that part of the connection works which is open to competition.
CDM Regulations – the Construction (Design and Management) Regulations 1994.
Regulations specifying the duties of designers to minimise health and safety hazards involved in the construction of buildings and other installations.
CD&M Regulations – see CDM Regulations.
Declared Net Capacity (DNC) – declared net capacity: the maximum power available for export on a continuous basis minus any power imported by the station from the network to run its own plant.
determination (of disputes) – any dispute arising under certain sections of the Electricity Act 1989 between a DNO and a person requiring a supply of electricity, can be referred to Ofgem for determination. These determinations are then published as a matter of public record, and then form ‘case law’ on the subject.
distributed generator – a generator which is connected to a DNO’s distribution network rather than to the transmission grid. Distributed generation is generally a lot smaller than plant connected to the transmission grid as the maximum operating voltage of the distribution network is 132kV (and 33kV in Scotland).
Distribution Network Operator (DNO) – a holder of a Distribution Licence.
electronic inverter system – an electronic device placed between a generator and the network it is connected to for the conversion of power at one frequency to another (including dc/ac). The output voltage and frequency may be determined by the control equipment associated with the inverter or by the voltage and frequency of the
network it is connected to.
embedded generator – now generally termed distributed generator (see above), although this term is still used in the Distribution Code of Great Britain and the Grid Codes.
extension – It is sometimes necessary to extend the DNO’s distribution network in order to provide a connection for a new user or generator of electricity. Network extensions are often required for generation schemes in remote locations.
fault contribution – the contribution of an electrical source, such as a distributed generator, to the total fault levels in a distribution network.
high voltage (HV) – any voltage exceeding Low Voltage (ie exceeding 1000volts between phase conductors or exceeding 600volts between phase conductors and earth).
induction generator – a type of rotating electrical generator which operates at a speed not directly related to system frequency. The machine is generally excited by reactive power drawn from the network to which it is connected and the output voltage and frequency are determined by those of the network to which it is
connected.
islanding – islands of supply are discrete parts of a distribution system which are capable of generating and maintaining a stable supply of electricity to the customers within those discrete parts without any connections to the rest of the system.
line drop compensation – a voltage control scheme (used for the control of voltage levels in distribution networks) which compensates for the change in voltage drop in a long line as the current in the line changes.
loss of mains – the loss of an electrical connection between a section of a distribution network and the main grid supply, often due to the operation of circuit breakers.
low voltage (LV) – in relation to alternating current, a voltage exceeding 50 volts measured between phase conductors (or between phase conductors and earth), but not exceeding 1000volts measured between phase conductors (or 600volts if measured between phase conductors and earth).
Long Term Development Statement (LTDS) – (sometimes referred to as the LC25 statement). Statement prepared annually by each DNO as required by Standard Condition 25 of the Electricity Distribution Licence.
mains paralleling – the operation of an electrical generator while connected in parallel with the main grid supply.
negative reactance compounding – a voltage control scheme (used for the control of voltage levels in distribution networks) which allows the voltage–regulated system to be fed from two or more transformers in parallel.
Ofgem – the Office of Electricity & Gas Markets (under the Gas and Electricity Markets Authority, established by the Utilities Act 2000).
point of common coupling – the point in the distribution network where the lines or cables which are used solely to provide the supply to one customer (eg a generation scheme) are connected to infrastructure which is also used to provide supplies to other customers.
primary – generic term used by a DNO to indicate the source of the main 11kV or 6.6kV HV distribution network; eg primary substation – 33/11kV or 66/11kV transformation substation infeed to the 11kV network; 11kV primary busbar – source 11kV busbar for an 11kV network.
protection system – the provisions for detecting abnormal conditions in a system and initiating fault clearance or actuating signals or indications.
reactive power – the product of voltage and current and the sine of the phase angle between them which is normally measured in kilovar (kVAr) or megavar (MVAr).
reactor – wound network component generally used to limit reactive power flows and
hence fault levels.
reinforcement – Reinforcement work is usually required to increase the electrical capacity of those parts of the network which are affected by the introduction of new generation or demand. Other work might include upgrading the switchgear at a substation some distance from the proposed generation scheme, due to the increase in fault level caused by the connection of the generator.
Small Scale Embedded Generator (SSEG) – a source of electrical energy and all associated interface equipment, rated up to and including 16A per phase, single or multi phase 230/400V ac and designed to operate in parallel with a public low voltage distribution network.
Static Var Compensator (SVC) – equipment for injecting or absorbing reactive power (Vars) at the point of connection to assist in control of system voltage.
supplier – a person or company providing a supply of electricity. This could be the
local DNO, a second tier supplier or an exempt supplier.
synchronous generator – a type of rotating electrical generator which operates without slip and at a speed that is directly related to system frequency.
thermal rating – the current-carrying capacity of a cable, an overhead line or any other item of electrical infrastructure, which is determined by the heating effect arising from electrical losses.
third party connection – connection provided by a contractor other than the local DNO.
Use of System (UoS) – the use of a transmission or distribution network by a generator, a supplier, a customer or an interconnected party for the purposes of transporting electricity.

Posted in Small Scale Embedded Generator (SSEG), islanding, embedded generator, DNO, Ofgem | No Comments »

TECHNICAL - Electrical Supply Standards and Other Documents

20/05/2009 by David Slade.

Standards and Other Documents

Electricity Safety, Quality and Continuity Regulations (ESQCR)
The Electricity Safety, Quality and Continuity Regulations 2002 - Statutory Instrument Number 2665 -HMSO ISBN 0-11-042920-6 abbreviated to ESQCR in this document.
[Available FoC on DTI web site: www.dti.gov.uk]

BS EN 50160 Voltage characteristics of electricity supplied by public distribution systems

BS 7671: 2001 Requirements for Electrical Installations IEE Wiring Regulations 17th Edition.

Distribution Codes
a) The Distribution Code of the DNOs of Great Britain

[Available FoC on Distribution Code website www.dcode.org.uk]

b) The Distribution Code for Northern Ireland

Grid Codes

a) The Grid Code for England and Wales
b) The Grid Code for Scotland
c) The Grid Code for Northern Ireland

Engineering Recommendation G5/4-1 (2001)
Planning levels for harmonic voltage distortion and the connection of nonlinear equipment to transmission and distribution networks in the United Kingdom.

Engineering Recommendation G12/3
Requirements for the application of protective multiple earthing to low voltage
networks.

Engineering Recommendation G59/1, Amendment 1 (1995)
Recommendations for the Connection of Embedded Generating Plant to the Regional Electricity Companies’ Distribution Systems.

Engineering Recommendation G74
Procedures to meet the requirements of IEC 909 for the calculation of short circuit currents in three phase AC power systems.

Engineering Recommendation G75/1, (2002)
Recommendations for the connection embedded generation plant to public distribution networks above 20kV or with outputs over 5MW.

Engineering Recommendation G83/1-1 (2003)
Recommendations for the connection of small-scale embedded generators (up to 16A per phase) in parallel with public low-voltage distribution networks.

Engineering Recommendation P2/6
Security of Supply

EM7907
Distribution planning standards of voltage and of security of supply. (Parts of
Scottish Hydro Electric Power Distribution Ltd Area)

Engineering Recommendation P14
Preferred switchgear ratings.

Engineering Recommendation P24
AC traction supplies to British Rail.

Engineering Recommendation P25
The short circuit characteristics of electricity boards low voltage distribution
networks and the co-ordination of overcurrent protective devices on 230V single phase supplies up to 100A.

Engineering Recommendation P26/1
The estimation of the maximum prospective short circuit current for three phase 415V supplies.Engineering Recommendation P28 (1989)
Planning limits for voltage fluctuations caused by industrial, commercial and domestic equipment in the United Kingdom.

Engineering Recommendation P29 (1990)
Planning limits for voltage unbalance in the UK for 132 kV and below.

Electricity Association Engineering Recommendation S34 (1986)
A guide for assessing the rise of earth potential at substation sites, 1986.

Electricity Association Technical Specification (EA TS) 41-24 November 2009
Guidelines for the design, installation, testing and maintenance of main earthing systems in substations,.

Engineering Technical Report No. 113, Revision 1 (1995)
Notes of Guidance for the Protection of Embedded Generating Plant up to 5 MW for Operation in Parallel with Public Electricity Suppliers’ distribution systems.

All Engineering Recommendations are available from:

Energy Networks Association
18 Stanhope Place
Marble Arch
London
W2 2HH
Tel: 0207 706 5100
Fax: 0207 706 5101
www.energynetworks.org.uk

Posted in P29, P28, S34, EA TS 41-24, EA TS 133, P2/5, G74, G83, G59, G75, G54, NDO's | No Comments »

Electrical Grid Connected Generation & DNO’s

20/05/2009 by David Slade.

Grid Connected Generation

Terminology to Start

• Developer

– You!

• Distribution Network Owner/Operator (DNO)

– Owns, maintains, develops and operates the physical network
– SP Manweb, United Utilities in the North West
– Not the slightest bit interested in selling or buying energy from you

• Electricity Supplier

– Party to contract with to buy & sell energy
– Npower, PowerGen, Scottish Power, British Gas, etc…
– Not the slightest bit interested in the physical connection

• Ofgem

– Electricity and Gas Market regulator
– Also administers the ROC process if your technology is eligible

Just Some of the Legal Issues

• If grid connected, then it is a legal requirement to have permission to connect & operate any form of generation

– Needs to have a DNO connection agreement
– Needs to have correct electrical protection
– Needs to have correct earthing
– Needs to have an export meter (if exporting)
– Needs to have a supplier contract (if exporting)

• D-code : Distribution Code for UK Distribution Networks

• G-code : Grid Code for UK Transmission Networks

• Electricity at Work Regulations

Engineering Recommendations

• Technical connection requirements are detailed in the Engineering Recommendations

– DNOs view these as “Rules” rather than just “Recommendations”

• G83: Less than 6kW (16A/phase)

– No connection agreement required but must notify DNO once on

• G59: Less than 5MW and less than 20kV connection

– Must have a connection agreement

• G75: Anything else up to 50MW or transmission connected

– Must have a connection agreement

DNO Responsibilities

• Statutory obligations under the terms of their licence

– Secure operation and development of the network
– Safe & reliable operation of the network
– Ensure fair and equal access to the network
– Least cost options for connection
– Lifetime of network not just your connection

• Must respond to a connection application within 90 days. Remember, they’re not out to get you, but they have responsibilities too!

 Electrical Connection Issues

• Technical issues to be considered during connection study/investigation

– Thermal limits
– Voltage limits & step change
– Reverse power-flows through transformers
– Short-circuit rating of switchgear
– Protection arrangements & co-ordination
– Harmonics & Power Quality
– Transient stability (usually only for larger generators)

• Energy Metering

• There will be the need to provide a reasonable level of data on the generator and the site connections

• The connection and protection will need to be witnessed and approved by the DNO in order to complete the connection process

 Network Capacity Issues

• The Distribution Network has real limits

• Due to load growth and the drive towards maximising use of existing assets, available headroom is often quite limited

– Cable ratings reached during peak load
– Voltage drop/rise reached
– Circuit breaker short-circuit limits reached

• The Capacity Race

– It is not just fiction it is unfortunately real in some locations
– First-come, first-served & Interactive Applications
– There are some solutions but most do add cost and complexity

 Rule of Thumb Connection Capacities

< 6kW 240V
< 1MW 415V (3-phase)
< 1-10MW 11kV
< 30MW 33kV
< 50MW 66kV/132kV
> 50MW 132kV upwards & National Grid interfaces…

As with any project, the bigger the project, it is important that you have the right level of advice or expertise to de-risk the project.

 So, what do I do to get connected?

• Contact your friendly neighbourhood consultant ☺

But seriously:

• Start with a rough idea of what you want to do

– Check that your site can fit it and you can afford it
– Check that all other regulatory issues are okay

• Have an informal “chat” about connection possibilities with DNO generator connections or knowledgeable person

– Check that your initial idea still sounds sensible

 When contacting the DNO

• Contact DNO – generation connections (NOT Demand)

– The connection process will be more likely to be successful with good communication between the developer and the local DNO

• Determine your connection route: G83, G59 or G75
– This may have costs associated with it

• Be prepared for a process not just rubber stamping

– Planning & Information phase
– Detailed Design phase
– Installation phase
– Testing & Commissioning phase

 Working with the DNO

• Seek an early meeting to discuss your project

– Outline the scheme
– Discuss the DNO’s process for connections
– Request an indicative connection design and budgetary cost estimate with a split between contestable & non-contestable works

• Review your project

– Submit the formal connection application
– Remember to accept the connection offer!

• Submission of data to DNO

– Make sure that this is appropriate and timely to avoid delays

• Testing and Commissioning

– Plan in advance to avoid delays as staff will usually be quite busy

 Connection Charges

• Application Fees

– These vary between DNO and size and voltage level of project
– Complex projects may involve additional fees

• Connection Assets

– Developer will be expected to pay full costs for all sole-use assets

• Generation Use of System Charges

– Site dependent & in lieu of network reinforcement costs
– Each DNO has own policy in-line with Ofgem guidance

Competition in Connections

• Developer as two options:

– Get the DNO to do all works necessary for the connection
– 3rd party to provide all contestable works which DNO then adopts

• Contestable Works

– Supply & installation of any new assets up to the point of connection to the existing network. Adoption agreement required.

• Non-Contestable Works

– Any studies, reinforcement or installation on existing network
– Design & specification of any new assets, consents & way-leaves

• Note: The DNO will not get involved in any “on-site” works

 Finally, just when you thought it was too easy

Other non-electrical issues still need to be resolved

– Planning Permission?
– EIA, Emissions?
– Health & Safety?
– Commercial?
– Installation & transport?
– CDM?

Posted in G75, Connection Charges, Contestable Works, Non-Contestable Works, G59, G83, Energy, metering, Ofgem, NDO's | No Comments »

Lost future sales - How stupid can people be?

19/05/2009 by David Slade.

Few industry sectors will be left unscathed by the worldwide economic recession. The UK construction industry seems of reduced by over 25%. With people changing jobs, moving offices,  due challenges that we are all facing.

Taking the long term view. Even if people may disappear for a bit, from your immediate contact network, the majority will pop up back over time. So, what is it about some people, to be so stupid about marketing?

Representatives, investing time and money, always want to meet with you face to face,  to introduce their service or product. Hopefully, leaving enough support information for you think about the offer or product, that has been discussed. With a future followup call later. This is business..nothing this has been going through time.

Over the last 6 months, any one who gave me a business card or business related email.

I’ve been giving them a Linkedin e-mail invite, so we can stay in touch.
I’ve just found that over 150 contacts did not accept the invite!

“Most sales are not made on the first call. Often it takes six or seven attempts to even get your foot in the door. The key to sales success is in the follow-up!”

When ever you speak to them next, you can predict the conversation …
What are you up to now?
I could not get hold of you!
Can we meet up, need to keep in touch with you!
To see what your up too and explore business opportunity’s.

People invest in the time you get to know you, but don’t stay in touch….
The hardest sell is a cold call. Even if you move on to some somewhere new, you’ll still have your Linkedin contacts available for you to use!

All you had to do was accept the invite!

Hey stupid, wake up!
You lost future sales!

“Results are not a product of one day’s work. It is the cumulative effect of your effort over a period of time that produces the greatest return.”

-Doyle Slayton

Rant over!

Posted in Linkedin, Sales, Marketing, Advertising | No Comments »

Biomass residues

19/05/2009 by David Slade.

Byproducts of green plants used for other production purposes can be used as fuel, providing a source renewable energy.

Biomass residues are the organic byproducts of green plants used for things such as food, fiber and forest production.  Food industry residues include grain crops, for instance corn and wheat, as well as waste such as hazlenut shells and fruit stones. Other residues include animal waste and forest harvest; small trees and branches left after felling which can be made into wood chips.

These residues can all be used as a fuel source, fuelling a combined heat and power plant to produce an alternative source of energy to fossil fuels.

Posted in Biomass, Renewable energy, Renewable power | No Comments »

Green tariffs - An introduction

19/05/2009 by David Slade.

Buying renewable electricity from an energy supplier

The average UK household now produces more than five tons of carbon dioxide a year just from gas and electricity. Since 2002 however, electricity companies have had to buy a proportion of their electricity from green power sources. As a result most now offer a green tariff, designed to provide as much electricity as possible from renewable or sustainable sources.

Such sources include Wind power and Solar power and Biomass energy, which avoid the harmful emissions associated with burning fossil fuels, or the risks associated with nuclear power. The electricity supply continues to come from the National Grid, using the same cables and meters, so changing to a green tariff is hasslefree.

There are two types of green tariff currently available:

Renewable tariffs

On these tariffs, every unit of electricity bought by the supply company on behalf of the customer is generated by a renewable energy source.

Eco-fund tariffs

These tariffs involve the customer paying an additional premium which is invested in funds used to finance new renewable energy projects, often based in developing communities.

Posted in Eco-fund tariffs, Renewable tariffs, Energy | No Comments »

Offshore wind

19/05/2009 by David Slade.

Wind turbines can be installed offshore, where there is often more wind resource.

The UK has now started two rounds of offshore wind development and a third is approved in principle.

Some Round 1 sites have now been completed and others are under active development.

The Phase 2 sites are now starting to receive consents and some will soon be under construction.

Both these rounds are illustrated on the map shown.

Posted in Wind energy, Renewable energy, Energy, Renewable power | No Comments »

UK wind energy market

19/05/2009 by David Slade.

Overview of the UK wind market in 2009

The UK was one of the first countries to develop wind turbines in the modern era, and had a strong technological position in the 1980’s. When the commercial markets started to become established in the 1990’s however other counties adopted more business-friendly approaches and the lead was lost to Denmark in the first instance.

The first wind-farm was developed in the UK at Delabole in Cornwall in 1991, under the Non-Fossil Fuel Obligation.

Wind energy market and trends

Because the major driver for the industry is currently the Renewables Obligation, the main market is for merchant bulk generation through onshore wind-farms. Some 55% of the onshore wind capacity is owned by the licensed electricity suppliers on whom the obligation falls, and the vast bulk of this is the ‘big six’.

A further 20% or so is held by wind energy developers, who have retained some of the projects they developed, and the balance by dedicated ownership companies (some of which may in turn be owned by the groups listed above).

The renewable energy sector, including wind, is currently suffering from the economic circumstances common to the entire world economy. In particular there are constraints in obtaining project finance, and this is expected to inhibit growth in the short term. The forward projections in this report assume that this is a short term issue and that credit starts to flow again during the course of 2010, and more normal investment conditions return by 2011. That, however, is not a prediction!

The wind sector is expected to remain the highest growth part of the renewable electricity market for the immediate future, and the targets of 14MW onshore and 14MW offshore should be achievable provided that the planning and grid restrictions are eased.

Structure of the industry

As mentioned above, the UK lost its lead in wind energy technology as the large scale market started to develop twenty years ago. Except in the small wind sector (see below), the majority of wind generation technology is imported, though the UK does have some supply-chain capability in certain related components, such as blades and towers, and has aspirations to increase this capability.

The major domestic capability is in project development, financing, management, operation and maintenance. The UK has several strong project development companies, most of which also operate in international markets, such as the McAlpine subsidiary Renewable Energy Systems. It also has some of the leading international consultancies on wind energy technology, such as Garrad Hassan.

All leading wind turbine manufacturers supply into the UK market. Siemens was the largest supplier in 2007 and 2008, and is now second in terms of cumulative capacity behind Vestas. Other major suppliers in the last two years have been Nordex, Repower and Enercon.

Offshore wind

In 2001, eighteen companies successfully pre-qualified for Round One site development options and to date five windfarms have been completed: North Hoyle off northern Wales, Scroby Sands off Great Yarmouth, Barrow off the South Cumbrian coast, Burbo Bank off The Wirral and Kentish Flats in the Thames Estuary. Two more, Inner Dowsing and Lynn are nearly complete and delivering energy to the grid. There are a number of others either under construction or planned for the future.

In 2003 Crown Estate announced a competitive tender process for Round Two sites. The Crown Estate announced fifteen successful Agreements for Lease amount to 7.2 GW and including sites within and beyond territorial waters. The largest of these was the 1GW London Array in the Thames Estuary, originally developed by a partnership between E.On, Shell and Dong. In 2008 Shell pulled out of the project and sold its interest to the other two partners, and Masdar subsequently acquired part of E.On’s stake. There is still no firm information on when the project will proceed.

The competitive tender process for the licensing of Round Three offshore windfarms closed in March 2009 and, the Crown Estate announced it had received multiple bids for each of the nine zones, confirming the potential capacity to achieve 25 GW of offshore wind energy by 2020. There were a total of 40 zone bids from 18 different consortia, including international companies from at least nine different countries

Small wind

The UK has an increasing number of producers of small wind turbines in the range up to 50kW. The best established of these is Proven in Scotland. Wind turbines hit the volume market when Glasgow-based Windsave negotiated a supply agreement with the national DIY chain B&Q. There are now a number of other devices on the market, mostly horizontal axis designs, but some using more novel approaches, such the vertical axis Quiet Revolution device.

Licensing, certification and legislative issues

Projects wishing to benefit from the Renewables Obligation need to be accredited by Ofgem to confirm that they meet the requirements. For wind projects this is typically quite straightforward. There is a procedure for obtaining indicative pre-registration to assist with project financing.

Small scale systems to be installed under the Low Carbon Buildings Programme need to be certified under the Microgeneration Certification Scheme (MCS). The companies selling such systems must be members of the REAL Assurance Code of Conduct and installers need to be accredited under the MCS. It is anticipated that similar requirements will apply to the renewable electricity tariffs.

There is currently no preferential tax treatment for wind energy installations, though they may in future be eligible for Enhanced Capital Allowances.

Market entry, barriers and opportunities

The UK is in principle a very open market. The renewable energy targets it has adopted to meet the EU Renewable Energy Directive require a ten-fold increase in renewable energy delivery in little over a decade. It is anticipated that most of this growth will come from the electricity sector and of that much will come from wind.

Bulk energy production

The most self-evident opportunity for overseas companies is in the supply of the core technology, especially wind turbines and power trains. In view of the medium term potential of the British market, there will certainly be opportunities for established suppliers, who need to expand their capacity, to set up subsidiary or licensed plant in the UK. Both national governments and regional agencies would be very supportive in bringing forward new capacity of that type.

The UK has a well established network of project developers, who are familiar with the process and particularly with the best ways of structuring projects to accelerate their progress through the planning and grid connection requirements. Companies interested in bringing forward projects would be well advised to work with incumbent players, especially in light of the obstacles facing developments described above.

The UK already has the world’s largest offshore wind capacity and this sector is projected to continue to grow strongly. Therefore this will present opportunities not only for wind energy technology but for the expertise and facilities associated with installing and operating plant offshore.

Decentralised wind energy

Though the bulk energy market has been the one where most development has happened in the past, the decentralised energy sector may be an equally exciting one for the future. New drivers, such as the renewable electricity tariffs and the Carbon Reduction Commitment, should stimulate a lot of new demand in this sector.

This will create new opportunities for those with expertise in community projects, energy services companies and technology aimed at energy users rather than energy suppliers.

All in all the UK promises to be a very interesting wind energy market in the coming decades!

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