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Solar Energy/ Energy Saving Getting the best out of FITs / RHI Save Money? and the Planet?

United Reformed Church and Rotary District 1080 22 nd October 2011. Reach Within to Embrace Humanity . Solar Energy/ Energy Saving Getting the best out of FITs / RHI Save Money? and the Planet?. Is it as simple as that? - what are the catches?. Keith Tovey ( 杜伟贤 ).

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Solar Energy/ Energy Saving Getting the best out of FITs / RHI Save Money? and the Planet?

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  1. United Reformed Church and Rotary District 1080 22nd October 2011 Reach Within to Embrace Humanity Solar Energy/ Energy SavingGetting the best out of FITs / RHISave Money? and the Planet? Is it as simple as that? - what are the catches? Keith Tovey (杜伟贤) Presentation will be placed on WEB tomorrow at: http:/www2.env.uea.ac.uk/cred/creduea.htm

  2. Summary of Session • Presentation of key issues ~ 30 minutes • Questions and Answers • Examination of actual examples for solar energy • Several people has sent in information of their actual properties and these will be used as potential assessments • Computers available for exploring options • Final Discussion / Question and Answer Session

  3. Summary of Presentation • Background to issues facing energy supply in UK • Renewable Energy Options available to Householder/Community • Background to the financial incentives for local energy generation • Background to the Solar Technologies • An example of solar thermal and solar PV • The subject is so wide ranging – so please as questions as we go along if there are things you do not understand

  4. STOP PRESS! 19th October 2011 19 October 2011 Last updated at 16:35 Longannet carbon capture scheme scrapped Potentials for Saving Money and the Planet Reduction in Energy Use • In next 10 years there is a need to address the issues of Energy Security and Carbon Reduction of Energy Supply. • In Energy Efficiency • In Energy Management • In Electricity Production • Move from high carbon fuels: coal, oil, gas to • Nuclear • Renewables • Carbon Capture and Sequestration An important component to consider now because of inaction on renewables and conservation in past - but not until 2019 at earliest Plans for the UK's first carbon capture project at the Longannet power station in Fife costing £1bn have been scrapped, the energy secretary has confirmed. Available now but financial support needed for small scale and emerging technologies. Will not be available on scale required until 2025 at the earliest.

  5. Energy Security is a potentially critical issue for the UK Completion of Langeled Gas Line to Norway Import Gap UK becomes net importer of gas Oil reaches $140 a barrel Gas Production and Demand in UK On 7th/8th December 2010: UK Production was only 39%: 12% from storage and 49% from imports Prices have become much more volatile since UK is no longer self sufficient in gas. The prognosis for future energy prices is not good

  6. Our looming over-dependence on gas for electricity generation • 1 new nuclear station completed each year after 2020. • 1 new coal station fitted with CCS each year after 2020 • 1 million homes fitted with PV each year from 2020 - 40% of homes fitted by 2030 • 19 GW of onshore wind by 2030 cf 4 GW now Imported Gas UK Gas Oil Existing Coal Existing Nuclear New Nuclear Data for modelling derived from DECC & Climate Change Committee (2011) - allowing for significant deployment of electric vehicles and heat pumps by 2030.

  7. Options available for the Householder • Energy Generation • Solar thermal - providing hot water - most suitable for domestic installations, hotels – generally lees suitable for other businesses • Solar PV – providing electricity - suitable for all sizes of installation • Example 2 panel ( 2.6 sqm ) in Norwich – generates 826kWh/year (average over 7 years). • The more hot water you use the more solar heat you get! • Renewable Heat Incentive available from 2012 • Area required for 1 kW peak varies from ~ 5.5 to 8.5 sqm depending on technology and manufacturer • Approximate annual estimate of generation • = installed capacity * 8760 * 0.095 hours in year load/capacity factor of 9.5%

  8. Options available for the Householder • Energy Generation • Micro Wind - roof mounted turbines • Mini Wind - mast mounted turbines – can be good as long as well clear of buildings, trees, etc – can be a good option for farms Building Mounted - ~ 1kW machines ~ generally poor performance because of turbulence except in a few locations Not generally recommended Mast mounted away from buildings - 6kW Potential output 6000 – 10000 kWh depending on location Vertical Axis machine – better in turbulence

  9. Options available for the Householder • Energy Generation • Onshore Wind - sensible for community schemes – e.g. Orkney, Germany, Denmark etc – the cheapest form of renewable energy • Biomass boilers - can be sensible but need a reliable fuel supply. In cost terms with the proposed Renewable Heat Incentive there are attractions for homes heated by oil or electricity but not, at present, mains gas. • Most convenient if running on pellets • Cheaper with wood chip but more difficult to automate

  10. Options available for the Householder • Energy Generation • Other schemes • - mini hydro – site specific • - anaerobic digestion – suitable for large installation • - gasification/pyrolysis– very large installations Micro-Hydro (Itteringham Mill, Norfolk) 5.5kW annual output depends on flow 12000 – 18000kWh Advanced Biomass CHP using Gasification at UEA

  11. Options available for the Householder • Energy Saving Technologies • Ground Source Heat Pumps: • ideal for new building dwellings or new community buildings – schools/community centre. • Best if used with under floor heating (hence best with new build) • Can be retrofitted using existing radiators – but performance will be lower. • More attractive financially for retrofitting if existing heating is oil, bottled gas or electricity. • Need a ground area approximately twice area of building to be heated or use more expensive vertical boreholes • Air Source Heat Pumps • Less efficient than ground source heat pumps • Less use can be made of off peak electricity unless there is a sizable thermal store • Micro Combined Heat and Power (CHP) • generating both electricity and heat ??? Fit double radiators or ones with fins

  12. Options available for the Householder – Heat Pumps Ground Source: Heat Pumps Typically twice floor area of house is required for heat collection. Best performance with under floor heating – i.e difference between heat supply and source temperature is as low as possible Zones of house can be controlled via a manifold

  13. Options available for the Householder – Heat Pumps Heat pumps run off electricity For a well designed ground source heat pump system: Typically 3.5 – 4.5 as much heat is produced as electricity consumed – the Coefficient of Performance (COP). If a buffer tank is included in system, then off peak electricity can be used to heat store overnight – minimising use of full rate electricity. Air source heat pumps require external fan system, and are not as efficient as air temperature is low when most heat is needed. Retro fitting with existing radiators will lead to poor COP, but could be improved by fitting double radiators and/or a buffer tank

  14. Micro CHP Options available for the Householder – CHP Replaces normal boiler Provides heat and electricity – would normally run on gas Currently there are incentives under the Feed In Tariff. All Installations must be MCS Accredited • To be eligible to claim for any Incentive the installation must be installed by a registered MCS installer. • Certificate of installation must be presented at time of registration.

  15. Renewable Energy Incentives in UK - Electricity • Non Fossil Fuel Obligation (NFF0) - 5 separate tranches in 1990s. Was a Feed in Tariff, but failed to deliver largely because of planning issues. Only suitable for large generators. • Renewable Obligation (RO) - from 1st April 2002. Sets targets which all suppliers had to meet – otherwise they were fined for non-compliance (Buy Out). The fines were recycled to those bodies who held certificates (ROCs) of Renewable Generation. Currently worth around £0.3 billion. These “Buy-out Fines” are inflating unit price of electricity by around 0.1p or 0.5-1.0%. Used by both large scale and small scale generators • From 1st April 2010 all small generators < 50kW were transferred to the Feed In Tariff (FIT) Scheme as were all new small schemes. Medium sized schemes can opt to be in FIT or RO scheme. Large schemes can only be in RO.

  16. Renewable Obligation Certificates Notifies Regulator how much generated. Notifies Regulator how much generated. ROC’s issued FINES recycled to holders of ROCs in proportion to number of ROCs held. Sells Electricity with or without ROCs Sells ROCs to Trader The Regulator OFGEM Notifies OFGEM of compliance -i.e. ROCs or pays FINE Renewable Generator SUPPLIERS Supplier Buys ROCs from Trader Trader and Brokers Because of recycling, ROCs have value greater than their nominal face value 16

  17. Incentives under the Renewable Obligation Prices per kWh • Several benefits to generator (e.g. wind) • Whole sale price of Electricity • Value of the Renewable obligation Certificate • Mark up price arising from Buy- Out Fines • Other small benefits • BUT if target is met – ROC certificates become worthless • Overall value might be up to 10p but could be much less • At highest level of incentive – i.e. actual current value of ROC ~ 5.0p cost for reducing 1 tonne of CO2 ~ £95 per tonne Recycled Fines 1.0 – 1.5p Wholesale Price Jan 2011 4.950p cf Jan 2010 4.521p ROC Certificate 3.996p

  18. Feed in Tariff • The Renewable Obligation encounters risk and much paperwork for small potential generator • Led to Introduction of Feed in Tariff from 1st April 2010. • A fixed amount is paid per unit and guaranteed for up to 25 years. • BUT General Capital Grants no longer available • Payment is for electricity generated whether it is actually exported to grid on consumed on premises. A frequently asked Question • Will I have electricity when there is a power cut – assuming of course the sun is shining (if I have solar) or the wind is blowing (if I have a wind turbine)? • NO!! – unless you have facilities for both “Island Mode Operation” and Grid Connection which can be very expensive for the small generator.

  19. Renewable Energy Incentives in UK - Heat • Renewable Heat Incentive (RHI) – World’s First was due to start on 1st October 2011 for non domestic properties – but has been delayed because of a technicality over large scale biomass. • Domestic RHI will be available from October 2012 and valid for all installations commissioned after 15th July 2009. • Will include: • Solar Thermal; Biomass • Ground Source Heat Pumps • Air Source Heat Pumps – probably • This incentive will pay for any heat generated in similar manner to Feed In Tariff for Electricity Because of delay in implementation. Temporary Grants for Domestic Installations – implementation 01/10/12

  20. Feed in Tariff • Payments currently range from 4.7p per kWh to 43.3p per kWh GENERATED depending on technology and capacity of generator. • e.g. for small scale retro-fitted solar, the payment would be 43.3p for kWh generator and guaranteed for 25 years, but new entrants from 1st April 2012 will get 37.8p • An additional 3.1p per kWh is paid for any electricity surplus to demand which is exported. • These prices are index linked to CPI and TAX FREE • This amounts to a renewable incentive of ~39p per kWh and £742 per tonne of CO2 ( assuming a wholesale price of ~ 5p) • Nearly 8 times the subsidy for wind generation under the ROC scheme

  21. Feed in Tariffs – Introduced 1st April 2010 • Tariffs are index linked each year for existing generators only new generators are affected by revised prices which have still to be confirmed. • Tariffs also available for hydro, anerobic digestion and mini CHP.

  22. Feed in Tariffs – Example for PV Payment for tariffs will be from a levy on Utility Companies which MAY see a cumulative rise in bills of around £1 billion or more. In addition there will be a payment of 3.1p per kWh for any electricity exported as opposed to consumed on premises. BUT an export meter is needed to identify this. Householder will save on imported electricity at ~ 13 – 14p per kWh, so optimum financial model may not be to generate as much as possible i.e. for each unit generated and consumed it is worth 43.3+ 13 = 56.3p /kWh for each unit exported it is worth 43.3 + 3.1 = 46.4 p/kWh If no export meter is fitted : For domestic consumers it is deemed that 50% of generation will be exported. 22 http://www.decc.gov.uk/en/content/cms/what_we_do/uk_supply/energy_mix/renewable/feedin_tariff/feedin_tariff.aspx

  23. Installations under Feed In Tariff Scheme ( to 28/09/2011) The annual output from all schemes installed is ~ 7.5 GWh – the same output as 1.8 modern 2 MW wind turbines such as those at Kessingland.

  24. Renewable Heat Incentive from 01/10/11 for Non-Domestic Installations Tier 1 applies annually up to the Tier Break, Tier 2 above the Tier Break. The Tier Break is: installed capacity x 1,314 peak load hours, i.e.: kWth x 1,314 Stop Press!!! 18:00 on 29th September 2011 The EU have rejected support level for large Biomass and scheme cannot now start until amendments to RHI Order are in place.

  25. Configuration of a Solar PV System • All electricity must be converted from DC to AC by use of inverters. • Inverters are only 92 - 93% efficient • Often these are installed in the loft PV panel Inverter Rated Peak Output e.g. 1.25 kW 1.151kW Electricity Supply Generation Meter Normal House Meter Connected to spare Consumer Unit outlet (or auxillary)

  26. Solar Rosette Diagram for East Norfolk/Suffolk 0 30 60 90 120 150 180 210 240 270 300 330 360 N NE E SE S SW W NW N Azimuth • Note: • Optimum direction for solar energy in East Anglia is NOT due south but ~ 10-15 degrees West of South. • Reduction for west facing roof is < 20% • For solar thermal a more westerly orientation is often preferable, but depends on hot water use during day

  27. Solar PV – the Technologies Monocrystalline: Traditional Technology with good performance in terms of Peak Watts per given area – typically 6.9 sqm needed for each installed peak kW. Tend to be cheaper than HIT panels. A good option if area is not restricted. Polycrystalline: Cheaper than Monocrystalline – rather less energy dense ~ 7.35 sqm/ installed peak kW. A good option if area is not restricted Thin Film: cheapest panels – can also be flexible: much less energy dense ~ 11sqm/ installed peak kW HIT Techonology: HeteroJunction with Intrinsic Thin Film: Currently most energy dense ~ 5.6 sqm per installed peak kW. Also most expensive. The option to go for if roof area is limited. Note: total installed peak power should be matched with the same size of inverter

  28. Simulation of Daily Performance of a PV System Demand 9.62 kWh Generated 6.28 kWh Apparent Saving 3.34 kWh Net Import 6.76 kWh Net Export 3.42 kWh Export ~ 51.5% Note: Amount of electricity consumed during sunshine hours 2.86 kWh

  29. Simulation of Daily Benefit of a PV System • Option 1: Householder pays for installation • Gets 43.3p/kWh for each unit generated • Gets a further 1.51p (50% of electricity is deemed as exported) • Saves ~14p/kWh for all electricity consumed in day time which is less than that generated Note: This simulation is for a house with 1.25 kW peak array for a sunny day in October. The household daily consumption is 9.62 kWh

  30. Simulation of Daily Benefit of a PV System • Option 2: Company Pays for Installation • Householder gets electricity • Three different interpretations of FREE! • Free Electricity 1: All electricity consumed by consumed is FREE! • Unlikely that this option will apply. • Free Electricity 2: All electricity in a day up to that generated is free. • Could be an option for an Ethical Company • Free Electricity 3: All electricity consumed in day time which is less than that generated is FREE. • Probably option most companies opt for FREE

  31. Solar Circuit Configuration of a Solar Thermal System 31

  32. Solar Pump Normal hot water circuit Solar Circuit Configuration of a Solar Thermal System 32

  33. Solar Thermal – actual performance Typically domestic situations will have 2 or 3 panels • However, performance can be significantly affected by way normal central heating boiler is used for backup. • A factor of two in output has been measured for otherwise identical installations

  34. Getting the most out of Solar Thermal: Solar Thermal Energy captured when combined with central heating • Tank with small residual hot water at top of tank in early morning • If Central Heating boiler heats up water – less opportunity for solar heating. Zone heated by solar energy

  35. Getting the most out of Solar Thermal: Tank with small residual hot water at top of tank in early morning No hot water provided by central heating boiler. Gain from solar energy is much higher. More solar energy can be gained if boiler operation is delayed. Boiler ON/OFF times should be adjusted between summer and winter for optimum performance

  36. The Future According to the Comprehensive Spending Review For complete information see Section 4 of http://www.hm-treasury.gov.uk/d/nationalinfrastructureplan251010.pdf 36 The Government will • maintain the Feed-In-Tariffs to support investment in emerging small-scale generation technologies in electricity, saving £40M by improving their efficiency, and complement this with • the Renewable Heat Incentive to reward ground-source heat pumps and other renewable heat sources, while making efficiency savings of 20% by 2014-15 compared with the previous government’s plans.

  37. The Consequence of possible changes • The UK Government has always “Grandfathered” rights such as these so those receiving FITs etc will continue to benefit for the duration of the contract • The incentives are index linked and Free of Tax for Domestic Consumers FINANCIAL TIMES: October 19, 2011 10:00 pm Solar panel subsidy to be slashed By Pilita Clark and Jim Pickard • New installations after April 1st 2012 were scheduled to receive reduced incentives ~ 37p cf 43.3p, but latest indications are that incentive will be much lower 30p or even lower??? • However, costs of equipment have come down by ~ 30% in recent years

  38. From the National Infra-Structure Plan 2010 following Comprehensive Spending Review Equivalent to £36 per household over 4 years For complete information see Section 4 of http://www.hm-treasury.gov.uk/d/nationalinfrastructureplan251010.pdf 38 The Government will (para 4.18): • Support investment in low carbon energy supply by: maintaining Feed-In Tariffs for small-scale generation, funded through an obligation on electricity suppliers equating to a levy of almost £900 million over the period to 2014-15. At the same time, the efficiency of Feed-In Tariffs will be improved at the next formal review [2012], rebalancing them in favour of more cost effective carbonabatement technologies. May be an issue for PV as carbonabatementusing PV is >£700 per tonne savedwayabovemanyotherstrategiescf ~£95 for large scalewind, ~£20 or lessfor cavityinsulation

  39. Who really pays for Electricity Incentives? • For Renewable Obligation: there is a small levy ~ 1% on all bills meaning that those who use most pay most – • For Feed in Tariff: there is also a levy on all electricity consumed. • Those with capital to pay for installation will be paid and will save on electricity consumed and will benefit more than any rise in tariffs. • Those who do not install will see their bills rise and will be subsidising those who have installations. • Current Proposals for Renewable Heat Incentive will pay for heat generated from Government Funds from general taxation. • Under previous Government the RHI proposal was for “deeming” payments i.e. You would get the credit even if you did not use a Solar Water Heater. Would have been open to abuse.

  40. Conclusions (1) • Current Renewable Electricity in UK is saving around 12 Mtonnes of CO2 a year. • The Renewable Obligation is increasing electricity bills by around 1%, levied on all consumers. • The Feed in Tariff will see a further increase in bills, and will provide an income for those installing PV, etc as well as reduced electricity consumption. • BUT those not installing will see their bills go up disproportionately. • There is a greater return on capital if size of scheme is matched with demand

  41. Conclusions (2) • The Feed in Tariff for PV is currently an attractive method to generate income with returns of > 4% cf savings • The Renewable Heat Incentive has yet to be finalised • Following the Comprehensive Spending Review a review of incentives in 2012 may well significantly reduce benefits for PV, but increase those for other strategies – e.g. insulation, micro-CHP??? • Previous experience indicates that existing Rights to Tariffs/Benefits such as these are always “Grandfathered” • Finally: If you want to take advantage – do so before 1st April 2012. • This presentation is available at • http://www2.env.uea.ac.uk/cred/creduea.htm

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