Tuesday 20 December 2011

Slippery When Watt

Don’t know your megawatts from your kilowatts peak?  You’re not alone.  Look no further for help.

What’s a Watt?
Some watts are more equal than others
The watt is the unit of power – the rate at which energy is converted from one form, for example coal, to another, for example electricity in a power station. 

According to its rating plate, my kettle at home converts electrical energy to heat energy to keep us going in tasty hot beverages at the rate of 2.2 kilowatts, or 2,200 watts.

1 kilowatt (kW) = 1,000 watts.

At the other end of the scale, my nearest power station at Little Barford, is busy keeping the nation’s television screens alight by burning natural gas to make electricity at the rate of 680 megawatts, or 680,000,000 watts – enough to run 300,000 of those kettles at the same time.

1 megawatt (MW) = 1,000,000 watts.
So if you read that 650 megawatts of photovoltaic solar panels were installed under the Feed in Tariff during 2011, you can compare this to a power station in terms of energy output.  Right?  Wrong!

Give me a ‘p’
A fossil fuel fired power station could in theory run day and night every day of the year at or near full rated output.  The decision whether to or not is typically economic, or influenced by down time for maintenance.

In contrast, a photovoltaic solar panel makes electricity during the hours of daylight, and the output will vary with the position of the sun and cloud cover.  Likewise a wind turbine will produce its maximum (rated) power for a limited range of wind speed.  As the wind speed increases or decreases from there, the power output falls.

The difference between a conventional power station and a solar or wind farm is one small letter that is often dropped from news articles and statistics about this kind of renewable energy.  The letter ‘p’.
A solar panel power output is rated in watts-peak (Wp).  The electricity output of the panel is measured under very specific conditions of light and temperature – equivalent to a clear summer’s day at noon with the panel at 25C.  It is a useful measure to allow comparison of one product from another – it absolutely does not reflect any kind of average power output.

The scale of a solar installation such as a solar farm is the sum of all of the watts-peak of the solar panels used.  Again, a useful comparison between solar farms, but not between solar farms and conventional power stations.

Capacity Factors

The ratio of the energy output compared to that which would be expected if operating at full “nameplate” capacity the whole time is termed the Capacity Factor.
For the entire generating stock of power stations, it is necessary to be able to meet the peak electricity demands of the nation.  This means that at all other times, some of that generating capacity stands idle, resulting in an overall capacity factor between 50% and 60%. 

(Figures from Digest of UK Energy Statistics -DUKES table 5.10)
The energy output from a solar panel installation will depend upon its location, orientation and shading.  For well-situated PV installations in the UK, a rough guide is to expect around 850 kilowatt-hours (kWh) of energy for every installed kilowatt-peak of PV panels.  This corresponds to a capacity factor of around 10%.
Wind turbines at sea benefit from higher average wind speeds.  DUKES table 7.1 allows us to add the average capacity factor for wind energy.

Average Capacity Factor
Gas fired power station
Wind Turbine (offshore)
Wind Turbine (onshore)
Solar PV (UK, S Facing)

(Calculations can be viewed on this spreadsheet)

 All Watts are Equal...
Based on the above, 1 MW of gas fired power station produces the same annual energy output as 2MWp of offshore wind, 2.7 MWp of onshore wind or  6 MWp of solar photovoltaic panels.

The 650 MWp or so of solar photovoltaic panels installed in the UK during 2011 causing such panic in government circles is equivalent to a sixth of Little Barford power station.

How Much Electricity does the Average House Use?

Q: How Much Electricity does the Average House Use?

When putting the scale of a renewable energy development into context, it is common to state something like “this would provide electricity for” followed by a number of houses.  So what is the electricity consumption of a household?

One way to get at the number is to use the energy reporting from the Department of Energy and Climate Change (DECC).  Their Digest of UK Energy Statistics (DUKES) is a mine of information relating to energy.

Specifically, Chapter 5 deals with electricity and Table 5B shows domestic electricity sales for 2009.

Domestic sector electricity sales (Great Britain)              112,064 GWh
Number of domestic customers                                  26,987,000           (based on number of meters)

Dividing the first figure by the second gives a value for the average electricity use of a house.

A: 4,150 kWh/year

Q: How About Electricity Use per Person?

When you’re not at home, you’re probably still using electricity.  At work?  You need to power your computer, telephone, air-con, lights.  Sitting in the cinema munching popcorn?  Pay your share of the electricity to run the projector and the electricity to pop that corn.

On top of this, the goods you consume used electricity to extract, process, manufacture, package and transport them to the point where you buy them.

Domestic electricity use only accounts for 27% of the total, but the rest that is used in agriculture, industry and public administration is only there because you are.

Without getting bogged down worrying about the “balance of trade” in energy – that is that the UK imports more energy intensive goods and materials than it exports, it is possible to get an estimate for the electricity used per head of population as follows.

Total UK electricity consumption:             328,318  GWh                    (DUKES Table 5.1)

UK Population:                                           62.219 million                     (Google public data)

Again, divide one by the other to get electricity use per person
A: 5,276 kWh/year

Tuesday 22 November 2011

Green Deal or No Deal

Selling Energy Efficiency

Government: “I will pay for you to make improvements to the energy efficiency of your house.  Don’t worry though – I’ll let you pay me back through your energy bills. The savings must exceed or equal the cost of the repayments and interest, so you may be better off.” 

 Homeowner: “Hmm.  Not the most persuasive sales pitch I’ve ever heard, but can you tell me more?”

Government: “Of course, we’re really excited about this initiative.  You’ll have to take time off work to be at home for the surveyor, and to let the installers into your home.  The installers may find stuff that needs fixing before they start work.  You know, wiring not up to current regulations, that kind of thing.  Of course, you’ll have to pay to put that right.”

Homeowner: “So I go through all this hassle and at the end of it my bills are about the same?”

Government: “Yes, clever isn’t it?”

Homeowner: “I’m not sure you’ve thought this through.”

Government: “Don’t worry about that, this programme is a main-stay of the government’s green agenda”

Homeowner: “Oh dear.”

The Energy Act 2011 passed into law on 19th October, providing the legal framework for the Green Deal which is due to start in Autumn 2012.  Under the scheme, homeowners and tenants will be able to install energy efficiency measures such as loft and cavity wall installation, internal and external wall insulation, new doors, windows and boilers without paying the upfront costs.  Instead the costs and interest are spread out over a number of years and the payments are collected through energy bills.

DECC wants financing for the programme to come from commercial lenders and anticipates that because non-payment of energy bills would result in the householder being cut off, interest rates will be lower than for unsecured loans as people are more likely to keep up payments.

The re-payment of the loan is linked to the property rather than the individual, so if someone moves house, the new owners have to make the repayments, but also benefit from the energy saving measures.

The Golden Rule

A defining feature of the Green Deal is the so-called “Golden Rule”, that the annual charge does not exceed the value of the energy savings, leaving the housholder better off.  Results of our financial analysis of various energy improvements show that very few measures are likely to meet the rule at commercial lending rates.
<> <> <> <>
Approx. Annual Saving
Annual Repayment
Net Saving on Energy Bill
Meets Golden Rule?
Loft Insulation 100-270mm
Timber floor insulation
-£ 12.68
Cavity Wall Insulation
Internal Solid Wall Insulation
External Solid Wall Insulation
New Boiler
£ 2,000

  The figures in the table were derived as follows:
Cost – source: Energy Saving Trust – where a range of values was given the mid-point was taken.
Approximate Annual Saving –  source: Energy Saving Trust – where a range is given, the mid-point was taken.
Follow the link in the table to see the source material.
Annual Repayment – assumed a 7% rate of interest, 20 year term.
Net Saving on Energy Bill – this is the Approx. Annual Saving less the Annual Repayment.

Check the workings here

The golden rule is only met by two measures – topping up loft insulation and cavity wall insulation.  The interest rate has been taken as 7%, which is an optimistic commercial rate considering that unsecured consumer loans are currently asking for around 10% APR.  In DECC’s Impact Assessment of the Green Deal, efficiencies of scale and learning are assumed for Solid Wall insulation, amounting to a 30% reduction in cost compared to those published by the Energy Saving Trust.

Even accepting DECC’s assumption that lower installation costs for solid wall insulation will emerge once installed in large numbers, internal solid wall insulation just meets the golden rule with 7% interest rate for a 25 year term (the maximum allowed), and external solid wall insulation only meets the golden rule with a very competitive 3% interest rate.

In the meantime, a trial by Sainsbury's demonstrates the challenge of selling the Green Deal.  When the supermarket offered 147,000 employees home insulation free of charge the offer was taken up by only 200 staff.

Of course if energy prices continue to rise, then the saving on the energy bill will rise too, making early adopters of the Green Deal look like investors of great foresight and acumen.  On the other hand, consumers may just choose to wait and see if energy prices reach a level that makes the Green Deal a deal worth the hassle.  Expect the Government to have to offer more incentives to sweeten this deal.

Thursday 3 November 2011

FIT to Burst - Government Adjusts PV Subsidy

“What’s that spine-chilling noise?  I’ll just check out the cellar.  The bulb has gone?  Let’s go anyway.”  As aficionados of horror movies know, the surprise that makes you jump out of your skin is the one you know is coming.  On Halloween 2011, the UK solar PV industry received just such a widely expected shock from the Department of Energy and Climate Change (DECC).

DECC has published a consultation document with proposals for changes to the Feed in Tariff (FIT) for solar photovoltaic systems (PV).  This scheme was created to encourage green technologies by rewarding individuals and businesses that install green electricity systems with payments for the units that they generate.

As discussed in an earlier Blog Post, the payments were fixed at a level that resulted in over-generous financial rewards.  A bubble inflated in the PV market as financial investors chased returns unavailable elsewhere in these fiscally challenged times.  The result was a growing financial commitment scary enough to make DECC want to hide behind the sofa.

It has been evident for quite some time that FIT payments were going to be adjusted downwards, and in a significant way.

The Changes

The consultation proposes a number of changes to the level and structure of the FIT scheme for PV.  The details are explained here, but in summary:
1.       There will be a 50% reduction to the payments for new systems joining the scheme.
2.       Even lower payments for organisations with installations at more than one location. 
3.       Only reasonably energy efficient buildings will qualify.

DECC reckons that the new tariff level will result in a 4.5% financial return for a system installed in a good location.  However, PV prices are expected to fall further during 2012 as a global over-supply of PV panels corrects itself so returns for consumers investing in PV are likely to recover.
The creation of a new payment structure for organisations with installations in more than one location is aimed squarely at the “solar-for-free” or “rent-a-roof” companies.  These businesses approach householders or social landlords and offer to install PV systems free of charge on their roofs.  The company collects the payments, the resident gets to use the electricity generated (if they’re at home during the day) and there may even be a small fee for the use of the roof.  The consultation recommends a 20% lower tariff for these types of installation to reflect the greater economies of scale and lower installation costs for these companies.

Although the very significant change to the payment levels has provided a focus for the ire of solar PV companies, it is the third change that is likely to produce the most significant effect on the industry.

DECC are proposing that buildings with an energy performance certificate (EPC) level lower than ‘C’ would not qualify for the new payment levels.  The building owner then has the choice of accepting a much lower payment rate, or investing in their building to achieve the required energy efficiency.  DECC estimate that 86% of dwellings would not meet this criteria.  If this measure is implemented, DECC would have put a significant barrier in the way of the scheme uptake. 

Householders might have to pay for loft insulation, new boilers, and cavity wall insulation before installing a solar PV system.  What was a relatively painless and simple process has become more invasive and time consuming.
Social Landlords will have to upgrade the thermal performance of housing stock before moving on to more expensive renewable energy measures.

This  chiller contains a real twist in the tail, which is going to do more than anything to slow the uptake of PV.

Sunday 16 October 2011

Technology or Training?

Solar Trial Highlights how to get the most from Solar Water Heating Systems

The Energy Saving Trust (EST) has recently published the results of the most comprehensive study ever of the performance of solar water heating.  Eighty eight homes, 12 months of monitoring and millions of data points later the results are out and the report brilliantly highlights both the strengths and weaknesses of this technology.

Customers were clearly delighted with their solar heating systems, with 84% of households being “satisfied” and 50% “very satisfied”.

Those systems that were categorised as “well installed and properly used” achieved excellent results with the report showing a typical energy saving of 1,500 kWh/year, corresponding to the solar system providing around 60% of the household’s hot water energy.

The report also found many systems where users had timed their back-up heating in a way that was detrimental to the energy saving.

Most solar systems in the study used a twin coil cylinder, where the solar system heats the whole volume of the cylinder from the base, with the back-up heater (most often a boiler) heating only a portion at the top of the cylinder.  Read a fuller explanation of how a twin coil cylinder works here.

If the household controls their back-up heater well, it is timed to be on for a short time and switch off before the main period of hot water use starts.  As hot water is taken from the top of the cylinder, cold water enters at the bottom.  The cylinder has plenty of cold water in it for the solar system to work on the next day.

An example showing good use of back-up heating is shown in the image above. The main water use is in the evening and the following morning. The best time to time the back-up heater is to come on around 18:00, after solar energy input is over, but before hot water use starts. If the cylinder is large enough, and well insulated, then water use the following morning will be covered and there will be no need for a morning timing of back-up heater.
By contrast, if the back-up heater runs during or after hot water use, then the cold water let into the cylinder is quickly heated up.  By the time the solar system starts to work, the only cold water available is at the very bottom part of the cylinder where the back-up heater couldn’t reach.  Once this zone reaches its maximum temperature, there is nowhere left for the solar panel to put its heat; it switches off and solar energy that could have been collected goes to waste.

An example showing poor use of back-up heating is shown in the image above. The main water use is in the evening and the following morning (as before). The back-up heater is timed to coincide with morning water use, and runs after water use is finished, ensuring that most of the cylinder is already hot as the day begins and severely limiting the amount of solar energy that can be collected.

One approach is to try and educate the householder about how to get the most from their solar heating system.  Better information from their solar installers might have lifted more of the households in the study into the higher performing category.  After the systems in the study were installed, a new installer standard, the Microgeneration Certification Scheme (MCS), came into force.  It requires installers to leave printed materials and durable stickers about the place to explain how to get the best performance out of the solar system.

The problem with this approach is that as we move from solar heating being a fringe hobby to a mainstream technology, more and more diverse people will end up in houses with solar heating.  Unlike the sample in the EST trial, these people may not have bought it for themselves – it may have come with a new house, been fitted by a social landlord or a previous owner.  They may not be bothered about optimising their solar saving, or able to program the boiler timer.

Fortunately there is a technical fix that reduces the sensitivity of solar water heating systems to the user settings of heating systems.

If the solar heating system provides a larger volume of water that the back-up heater cannot heat, then there is more likely to be cold water available for the solar system to heat when there is sunlight available. This can be achieved by selecting a twin coil cylinder with an adequate solar dedicated volume, or having a separate solar cylinder that pre-heats water before it reaches the main cylinder. 
According to the Domestic Heating Compliance Guide, the solar system should provide at least 25 litres of solar dedicated volume per square metre of solar panel aperture area, but few do.

Specifiers of solar heating systems who are installing solar heating for others (for example social landlords or property developers) should consider carefully before choosing solar heating systems that rely upon achieving user-behaviours to achieve results.   Particular care should be taken with systems which retro-fit onto existing cylinders without providing any solar dedicated volume.  Although these seem attractive because there is no need to replace the existing cylinder, they are extremely sensitive to the timing of back-up heating. 

Instead, consider systems that are much less sensitive to user behaviour – specify hot water storage with an adequate solar dedicated volume.

Wednesday 5 October 2011

FITs and Starts

It doesn't have to look rubbish
According to a former US President, the nine most terrifying words in the English language are "I'm from the government and I'm here to help ".  The UK solar PV industry is preparing to demonstrate the truth of this in spades.

Many in the solar industry describe the development of  the UK solar PV market as a massive success for the government's Feed in Tariff (FIT).  Nothing could be further from the truth.

The FIT has inflated a bubble in solar PV, which may well burst in 2012 with spectacular results.  At home, we regularly recieve a couple of calls a day from telesales centres trying to get an appointment for a high pressure sales visit.  So called "PV for free" companies are installing panels onto houses with offers that seem too good to be true.  In my own village, a meeting promoting a bulk-buy PV scheme was standing room only. 

So just how has PV replaced double glazing as the short-hand industry for pushy sales tactics?

The Department of Energy and Climate Change (DECC) set the tariff levels based on PV prices in 2009, and created a clumsy review process which has tied their hands for making changes.  Subsequently, a perfect storm has hit global PV manufacturers causing a crash in prices.  The result - returns on investment that would make a loan shark blush.

Realizing that their own FIT schemes were becoming unaffordable, Germany, Spain and Italy have massively scaled back the levels of support for PV.  Rates of PV installations have fallen as a result.

At the same time, the Chinese government has identified PV as a strategic market, and offers cheap loans and incentives to Chinese companies to invest in PV manufacturing.  Business plans based on projections of continued growth supported investment in capacity.  We have seen factories in China that are fully equipped, with staff practicing assembling modules as they await orders.

Overcapacity has resulted, and inevitably a race to the bottom on prices.  It is reckoned that the cost of PV modules has fallen by about 33% in the last 12 months.

To be absolutely clear, this price reduction is all about in a global market where the UK demand is still an irrelevance.  It is not to do with technological breakthroughs, or economies of scale.  It's simple supply and demand.

Where does this leave the UK PV industry, as DECC ponders how to change the "unaffordable" scheme it has in place?

Any business person will tell you that rapid growth is difficult to manage well.  It is normal for businesses to accept losses during a scale-up phase as they invest in capacity - training and equiping new staff, investing in developing new processes and systems.  They do this in the expectation of future profits.  As the early growth rates slow, and more stable conditions emerge the early investments are recouped.

What is absolutely unhelpful is stop-start government support that creates massive demand up to an artificial deadline, followed by a collapse.  How can you expect sustainable long-term businesses to develop under such conditions?  Expect announcements of redundancies and business closures if the FIT is reduced.  Consumers will be left high and dry if they have subsequent problems, but the installation company is no longer around.

The madcap race to install systems before April 2012, when the next review of tariff levels comes into force is likely to lead to installation issues that could harm the image of the industry for years to come.  Systems are being crammed onto roofs to maximise financial yield, and with no consideration for other issues, such as the resulting aesthetic of the roof and its visual impact in our villages and towns.

So, where to go from here?  DECC needs to try to find a way to deflate this bubble gently, perhaps with a steady programmed reduction in the value of the tariff, rather than a single large drop.  The solar industry needs to lobby for a realistic tariff scheme that would support sustainable business growth rather than the simplistic strategy of fighting for the highest level it can get.