Moving with the times: embracing blended energy
With commercial energy prices hiking and grid insecurity concerns increasing, blended energy programmes are becoming ever-more commonplace for businesses nationwide. Here, Tim Broadhurst, CCO at CooperOstlund, discusses the discrepancies between energy tariffs and gives his advice for businesses considering adopting combined heat and power (CHP) technology to generate energy on-site.
For the typical householder, choosing a suitable energy provider is relatively straightforward. Simply enter your details into any price comparison website and each of the ‘big six’ will send you an immediate quote.
For any facilities management professional, however, energy management is a considerably more complicated process. There are far more wide-ranging energy plans available for businesses compared to consumers, with prices varying hugely depending on size, type, location, use and payment terms.
Size – While you may expect businesses of all shapes and sizes to pay a similar price per unit for their energy consumption, this is rarely the case. In fact, the larger your business, the better price per kWh you’re likely to receive. While this may seem counterproductive for energy suppliers, costs are calculated based on economies of scale.
Type – Depending on your business type, rates will vary considerably. While the typical office block will be offered a more standard tariff, manufacturing sites are predicted to use more power and therefore will attract better rates. Industrial businesses receive lower prices still, thanks to their ability to receive electricity at much higher voltages.
Location – UK suppliers will charge wildly different rates depending on the location of your site. This can be due to the geography of their own power plants or availability of energy infrastructure. Prices for British Gas’ electricity, for example, vary from a low of 17.38 p/kWh in North Wales to a high of 24.77 p/kWh in the East Midlands – a difference of 42.5%.
Payment terms – In January 2018, British Business Energy conducted research into the commercial price per kWh electricity for each of the UK’s top 11 energy providers. Rates varied from 10.1p to 27.8p, while standing charges varied from 27.4 p/day to 159 p/day. While the lower costs are obviously more attractive on the surface, each provider offers savings (between 40-60%) for fixed-term contract payment terms, with most providers offering rates of less than 10 p/kWh.
Rather than a ‘quick fix’, securing the best possible commercial energy deal is almost a full-time job. But with almost every business depending on the grid for its day-to-day operations, negotiating a complex marketplace, while remaining cost-efficient, is fast becoming critical for time-strapped businesses.
On-site energy generation
As well as being challenging to navigate and increasingly expensive, the UK’s commercial energy market demonstrates two challenging traits – inflexibility and unpredictability. For facilities managers, who need dependable suppliers and consistent overheads, finding a viable alternative is top of the agenda.
Alongside renewable technologies, battery storage and carbon-neutral processes, one such solution is the use of CHP technology to generate energy on-site. Effectively a gas power station, but more than twice as efficient, CHP combusts natural gas to generate electricity and thermal energy (which can be used for space heating or hot water).
With gas prices lower and more stable than mains electricity supply, businesses can realise significant cost saving by self-generating power – a payback of typically less than five years. What’s more, CHP offsets carbon and can thus help to meet Part L of the Building Regulations.
While moving from a centralised to a decentralised energy model may seem daunting, success is simple if you plan ahead. For anyone looking to embrace decentralised energy, the following five points are important considerations.
While using CHP as an alternative to more traditional grid connectivity can save money on your utility bills, maximising efficiency relies on equipment running at full capacity, 24-hours a day. As such, it’s essential to undertake a feasibility study well in advance. By doing so, you’ll be able to specify the perfect solution for your energy requirements – precisely matching engine size, dimensions, location and generation outputs to site demands. The greater your energy consumption, the more you could save!
When it comes to specifying your engine, there is no one size fits all solution. Instead, it’s important to take facility size and energy requirements into close consideration. While an oversized engine will shut down during periods of low demand, an undersized engine will restrict generation capacity. In both situations, incorrect sizing will limit the financial benefits of choosing CHP over grid connectivity. Identifying the perfect balance is therefore a tricky, yet important task.
When it comes to the physical installation of your engine, precision is key. Unlike more standard gas engines, CHP technology is highly sensitive and must be fitted by an expert. We’ve previously visited sites where poor installations – everything from unlevel floors to inadequate housing – is significantly impacting on engine performance. Alongside correctly planning your project, working in partnership with an installation expert is essential to prevent issues in the long-term.
In the same way that a racing car must be professionally tuned to deliver optimum performance, correct calibration of a CHP engine is essential to ensure best possible running efficiencies. In our experience, rushed calibration can impact on outputs considerably. As such, getting it right from the outset is essential to ensure long-term financial savings.
Working at full capability, 24 hours a day, inevitably takes its toll on the performance of any CHP engine. In our experience, poorly maintained engines can see efficiencies fall by as much as 20%. While there are number of simple daily checks you can make, it’s important to work with an established CHP maintenance provider to action the servicing intervals outlined by your manufacturer (typically 2,000, 10,000, 20,000, 40,000 and 60,000 running hours).
As the UK’s leading gas engine specification and maintenance expert, CooperOstlund has worked with countless companies nationwide to deliver effective CHP installation projects. From initial site surveys and installation, right through to lifetime maintenance provision, we can save up to 40% every year on our clients’ utility bills.
It’s an inconvenient but unavoidable fact – the National Grid is no longer fit for purpose. A centralised system is not the answer to the UK’s energy future, especially with an oligopoly of energy providers and dated logistics network.
While hydrogen and renewables may be considered blue sky thinking for the future, we need to address the issue of fluctuating commercial energy costs and embrace solutions to meet today’s escalating demand for mains supply. CHP technology offers an efficient and cost-effective solution to provide controllable, self-generated energy, delivered on-demand.
Trafigura and Yara International explore clean ammonia usage
Reducing shipping emissions is a vital component of the fight against global climate change, yet Greenhouse Gas emissions from the global maritime sector are increasing - and at odds with the IMO's strategy to cut absolute emissions by at least 50% by 2050.
How more than 70,000 ships can decrease their reliance on carbon-based sources is one of transport's most pressing decarbonisation challenges.
Yara and Trafigura intend to collaborate on initiatives that will establish themselves in the clean ammonia value chain. Under the MoU announced today, Trafigura and Yara intend to work together in the following areas:
- The supply of clean ammonia by Yara to Trafigura Group companies
- Exploration of joint R&D initiatives for clean ammonia application as a marine fuel
- Development of new clean ammonia assets including marine fuel infrastructure and market opportunities
Magnus Krogh Ankarstrand, President of Yara Clean Ammonia, said the agreement is a good example of cross-industry collaboration to develop and promote zero-emission fuel in the form of clean ammonia for the shipping industry. "Building clean ammonia value chains is critical to facilitate the transition to zero emission fuels by enabling the hydrogen economy – not least within trade and distribution where both Yara and Trafigura have leading capabilities. Demand and supply of clean ammonia need to be developed in tandem," he said.
There is a growing consensus that hydrogen-based fuels will ultimately be the shipping fuels of the future, but clear and comprehensive regulation is essential, according to Jose Maria Larocca, Executive Director and Co-Head of Oil Trading for Trafigura.
Ammonia has a number of properties that require "further investigation," according to Wartsila. "It ignites and burns poorly compared to other fuels and is toxic and corrosive, making safe handling and storage important. Burning ammonia could also lead to higher NOx emissions unless controlled either by aftertreatment or by optimising the combustion process," it notes.
Trafigura has co-sponsored the R&D of MAN Energy Solutions’ ammonia-fuelled engine for maritime vessels, has performed in-depth studies of transport fuels with reduced greenhouse gas emissions, and has published a white paper on the need for a global carbon levy for shipping fuels to be introduced by International Maritime Organization.
Oslo-based Yara produces roughly 8.5 million tonnes of ammonia annually and employs a fleet of 11 ammonia carriers, including 5 fully owned ships, and owns 18 marine ammonia terminals with 580 kt of storage capacity – enabling it to produce and deliver ammonia across the globe.
It recently established a new clean ammonia unit to capture growth opportunities in emission-free fuel for shipping and power, carbon-free fertilizer and ammonia for industrial applications.