Download Robert Kennedy - The Scottish Parliament Archive

SUBMISSION FROM ROBERT KENNEDY
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What type of future is needed in Scotland in terms of the production,
distribution and more efficient use of energy, given the issues of price,
security of supply and sustainable development?
There is an over emphasis on the production of renewable electricity; meaning heat
(and in particular domestic heating) has not received the recognition it deserves.
Heat is ~50% of the total energy consumption in Scotland. Electricity is only ~20%
yet receives almost 100% of the support. The value of heat is still too low to justify
many renewable technologies and until it is given a similar ranking of importance to
electricity they will never be developed in Scotland.
Scotland’s annual energy consumption in 2002 was 176 Terawatt hours, of which;
¾ Electricity - 34tWh,
¾ Heating - 84tWh (of which 47tWh is domestic heating)
¾ Transport - 58tWh.
In November 2007 Energy Minister, Jim Mather announced the setting of a new
target to generate 50 per cent of Scotland's electricity from renewables by 2020.
The 2020 installed capacity target is 8 Gigawatts, which currently sits at 2.8
Gigawatts.
There is sufficient organic waste in Scotland to produce ~2.5tWh of biomethane from
municipal, commercial & industrial and agricultural resources. This is before we
consider energy crops where each 1000 hectares can produce 32gWh of
biomethane per year.
Biomethane is the primary fuel which can be used in a number of ways;
¾ Combined heat & power
¾ Steam production
¾ Road transportation.
Point 1 – Biomethane injection into national grid
Electricity generated from biogas is already covered within the Renewable Orders
Obligations.
When generating this electricity, almost the same quantity of heat is produced.
This is a valuable commodity that should be harnessed & used for the heating of
residential, commercial, industrial, public applications.
Biogas production is generally carried out in rural locations mainly due to planning,
environmental, feedstock supply constraints, and as such is usually remote from
energy users.
This poses 2 main issues;
1. Most of the electricity generated has to be exported into the national grid
network. As such encounters losses on transmission.
2. There are insufficient heat users within the proximity of the Biomethane plant.
As such the heat is wasted.
To maximise the potential from the production of biogas (both commercially &
environmentally), it is important to generate heat & power where it is most needed
(metropolitan areas).
This means the transportation of biogas from the plant to the town.
This can be done in 3 ways;
1. Transport by road using gas tankers,
2. Installation of private gas pipe from biogas plant direct to end user/s,
3. Inject biogas into existing gas network.
Points 1 & 2 are cost prohibitive and restrict the potential users of biogas energy to
short distances from the biogas plant.
Only point 3 makes commercial sense for mainstream application.
The technology, agreements & quality standards (cleaning, drying, odorising,
pressurising, and calorific values), etc already exists to prepare biogas to natural gas
standards for injection into the gas grid.
Micro-generation also exists in the UK, supplying heat & power from small scale
generation plants direct to residential & commercial users (known as combined heat
& power or CHP). This uses private wire networks for electricity supply (no
transmission losses) & super insulated pipes to carry hot water as a district heating
system.
What doesn’t exist is the recognition under The Renewable Obligation Orders that by
injecting Biomethane into the gas network, an equivalent quantity of natural gas can
be extracted to fuel the CHP. And by doing so, the electricity generated is eligible for
ROC’s.
This means that the commercial benefits of producing electricity through the
Renewables Obligation Orders cannot be realised.
Until such time, the benefits described above from micro-generation of Biomethane,
electricity will continue to be generated at the biogas plant, remote from the end
users, thus losing 30% of the “green” electricity in transmission losses & wasting
most of the valuable heat.
Biogas to grid does not necessarily require a new ROC scheme for gas.
A simple clarification in the ROO would easily solve this;
"Natural gas is equal to Biomethane under this Order if an equal volume
(=calorific value) of natural gas has been replaced by Biomethane elsewhere in the
grid."
This process is easily monitored & controlled through existing technology.
Why is this concept expected to be particularly successful in Germany?
The German feed-in-tariff awards a bonus for efficient use of excess heat. The more
of the excess heat is purposefully used, the higher the feed-in-tariff for the electricity.
Translated into the ROO the implication is: The more of the excess heat is
purposefully used, the more ROCs are awarded for the electricity.
Electricity generated from biogas is expected to be increased to 2 ROC’s/MWhr
whether the heat is utilised or not.
We would suggest that incentives be applied to encourage the use of heat by
increasing to 3 ROC’s/MWhr if the heat produced from the power generator is fully
utilised.
Without such incentives it is often more cost effective to “vent” the heat rather than
pipe it long distances because the revenues over costs are so marginal.
Point 2 – District heating networks
The revenues received from the sale of heat are extremely marginal and require
significant volumes of usage to justify the capital expenditure.
Biomass woodchip costs approximately 2.5-3p/ kWh, whereas the revenue from
selling the heat is approximately 3.5-4p/ kWh, giving a profit of only 1p/ kWh.
A typical new built home will require ~15,000kWh of heat per year.
A 500 unit residential development would receive an EBIT of £75,000 from the sale
of heat which doesn’t cover the £2,000,000 installation cost for a district heating
network.
An incentive of 4p/ kWh would completely change the dynamics of district heating
networks and would stimulate this market. The only concern would be controlling the
rise in biomass cost negating any benefits.
Point 3 – Decentralised heat & power
Combined heat & power (CHP) using standard gas engines generate equal amounts
of electricity and heat. Whereas homes built under current regulations require 5
times as much heat as electricity.
If the network is designed to meet the electricity profile, there is insufficient heat
generated. If the network is designed to meet the heat profile, there is significantly
more electricity generated which needs to be exported to the grid at low revenues.
The solution is to install a network that meets the heat & electricity profiles. This can
be done by installing a CHP plant to suit the electricity requirements and
supplementing the heat demand with alternative sources such as biomass, ground
source heat pumps, etc.
The revenues from the sale of heat are very low and without incentives from the
Scottish Government will be slow to take off. As described in options 1&2, economic
support for the generation & usage of heat would stimulate this market.
Point 4 – Steam production from biogas
Many industries with significant organic waste also have large a usage of gas for the
generation of steam. It is often the case a biogas plant could supply over 50% of the
gas demand from the wastes the industry produces. This is certainly what most of
these industries would like to do.
Under the Renewable Obligation Orders only the electricity generated from biogas
will be eligible for additional credits; not the biogas itself. The value of the electricity
including renewable credits will be ~ £160/mWhr which means using efficiency
conversion factors; the biogas has a value of ~£64/mWhr.
As industries currently pay ~£30/mWhr for heavy oil, it would not be economically
viable to sell the gas directly. In fact, the biogas plant requires this value to justify the
capital expenditure.
However, if there was an alternative support mechanism for the biogas production
equivalent to ROC’s, the biogas can be used on site to provide electricity and steam
to the industry.
•
How can this future be delivered in Scotland and how will we meet all the
various targets and obligations?
By looking at the wider picture of renewable energy. 50% renewable electricity by
2020 will not meet the UK’s committed EU target of 15% renewable “energy”.
If electricity does meet the 50% target, this will only deliver 17-20tWh of the 26tWh
required by Scotland. We need to look at renewable heating & transport to find the
other 6-9tWh.
Anaerobic digestion of organic waste along with biomass heating can deliver the
remainder, but only with economic support from the Scottish Government.
•
What decisions need to be taken, by when and by whom to deliver on
Scotland’s energy future?
¾
Allow local authorities to negotiate or partner with renewable energy
developers to unlock the 1.3tWh of biodegradable organic waste currently
going to landfill. European tender rules delay progress. This needs to be done
now.
¾
4p /kWh support mechanism on the generation and utilisation of renewable
heat.
¾ Recognising biomethane injection into national grid under a mass balancing
mechanism. Gas injection is permitted and is closely monitored to ensure
quality is maintained. This would stimulate significant decentralised heat &
power facilities all over Scotland and the UK.
Linked to these three key issues are the following—
•
Which energy sectors offer the best prospects for economic growth and
reduced carbon emissions, and how should these be secured?
Wave, tidal, on/off shore wind has great capacity for growth. However, they rely on
interconnectors and the Beauly to Denny network being implemented.
Biogas can deliver decentralised heat & power now. It doesn’t need a new network
either to transport it across the country, if gas injection is permitted. There are only a
handful of biogas plants in Scotland and almost 4,000 in Germany alone.
Biogas plants unlike wind & wave are labour intensive. It requires a network of
support staff to operate & maintain, supply waste material, harvest energy crops, etc.
Biogas will provide significant employment and assist with meeting;
¾
EU Landfill Directive
¾
Scottish minister’s statement on plans for Zero Waste Scotland Scottish
Government target for 80% reduction in GHG emissions by 2050
¾
Scottish Government target for 50% renewable electricity by 2020
CHP linked with biomass to supplement the heat demand profile is another area for
rapid expansion. Scotland has an enormous capacity for the utilisation of biomass.
All it requires is a financial support mechanism.
•
How can demand for energy be reduced in Scotland?
¾ Smart metering
¾ Free public transport
¾ Ban on standby electronics
•
How can the energy sector deliver the kind of reductions in greenhouse gas
emissions that the Scottish Government wants to see?
Capturing the heat from power stations to serve district heating networks through
legislation and incentives.