theenergyst.com April/May 2017

Aggregator Local Trouble in “The consequences for those who 22 crunch: 36 authorities: 38 store: Rough generate their own power could be Consolidation ahead Councils eye energy storage outage hits as revenues fluctuate market entry gas prices devastating Triad cuts” p16

INSIDE THIS ISSUE 44 Technology – blockchain Because information is visible to every participant in the chain, every change, disruption, delay 18 and movement is transparent Policy & Legislation Analysis by the 34 Climate Change Committee suggests Gas & Electricity that decarbonisation Why organisations such as costs are ‘minimal’ aggregators, local authorities for most firms and renewable generators are – but they are obtaining electricity supply set to double licences 24 Demand-side 42 response Will aggregators without a Energy Finance supply licence struggle to Will the finance director buy survive as demand response into your energy business case, revenues are commoditised? asks ESTA

06 Tidal power is News & ‘the most important Comment Engineers tell government renewable power to pay for efficiency, source to be supported’ storage and tidal power

theenergyst.com April/May 2017

Aggregator Local Trouble in “The consequences for those who 22 crunch: 36 authorities: 38 store: Rough generate their own power could be Consolidation ahead Councils eye energy storage outage hits devastating Triad cuts” p16 61 as revenues fluctuate market entry gas prices Water 10 14 Management Insight Accessing your water ND Metering Solutions’ Kris Front consumption in one place will Szajdzicki provides evidence Cover make it easier to make informed that smart meters can indeed Kinect Energy Group talks decisions to reduce usage and give gross errors, particularly in about transforming uncertainty cut costs I&C applications into opportunity

News & Comment 4 Gas & Electricity 34 Compressed Air 52 Insight 10 Energy Finance 40 Water Management 60 Policy & Legislation 16 HVAC 46 Product News 62 Demand-side Response 20 Lighting 50 Q&A 66

To subscribe please visit: theenergyst.com/subscribe theenergyst.com April/May 2017 3 COMMENT Utilities eye land grab as reality bites

Buying energy used to be all about wholesale challenge on their hands should that scenario market timing and hedging. This is no longer the comes to pass. From their perspective, there is case, at least for electricity, where the wholesale already something of a landgrab taking place. Some proportion is now only half of the bill, due to utilities are looking seriously at diversifi cation rising non-commodity costs such as transmission – not just within their current sectors. and distribution, green initiatives and taxes. Water market competition raises the possibility In fact Dieter Helm, Professor of Energy Policy of energy suppliers bundling water. That may and Offi cial Fellow in Economics, New College, make sense: our recent Directors’ Report found Oxford, recently commented that “the wholesale almost nine in 10 fi rms would buy energy and market will largely wither away. The economics of water from a single provider if it saved money. supply are gradually migrating to the economics of It is already happening. Regent Water, a subsidiary of broadband – a capacity not an energy market.” Regent Gas, was granted its water supply and sewerage Helm thinks that development will fundamentally licence by Ofwat in February. It may well be that water change what it is to be an energy retailer. It also companies are looking at energy supply licences too. opens up the possibility to new entrants such as TV Water suppliers have heavyweight billing and back offi ce companies, telcos, supermarkets and online retailers. systems in place – and, crucially, customer relationships. Given the energy intensity of their operations, they are Some utilities are looking also highly skilled energy buyers. seriously at diversification – Meanwhile, demand-side not just within their response aggregators are current sectors looking at supply licences and suppliers – and DNOs – are becoming aggregators. Paul Fitzgerald, sales and marketing director at Competition is usually good billing fi rm Junifer Systems, believes “it will be a news for consumers. But it multi-utility environment in the next 5-10 years. appears the market and its Companies like Sky already provide TV, broadband players are on the cusp of and telephony – energy is a natural progression for fundamental change. companies like that. Telcos many years ago moved from a single product and that is the nature of how things It will be interesting progress. I see the same thing happening in energy.” to see which Helm, meanwhile, fl oats the idea of a company like utilities move Amazon entering the fray. If energy fi rms worry fastest, and which about their margins now, they will have a serious are left standing.

Editor Sales director Tim McManan-Smith Steve Swaine [email protected] [email protected] Energyst Media Ltd, PO BOX 420, Reigate, Surrey RH2 2DU t: 020 3714 4450 t: 020 3714 4451 m: 07818 574308 m: 07818 574300 Registered in England & Wales – 8667229 Registered at Stationers Hall – ISSN 0964 8321 Contributing editor Commercial manager Printed by Warners (Midlands) plc Brendan Coyne Daniel Coyne [email protected] [email protected] No part of this publication may be reproduced without the written permission of the publishers. t: 020 3771 1267 t: 020 3751 7863 The opinions expressed in this publication are not necessarily those of the publishers. The Energyst is a controlled circulation magazine available to selected professionals interested in m: 07557 109724 m: 07557 109476 energy, who fall within the publisher’s terms of control. For those outside of these terms, annual subscriptions is £60 including postage in the UK. For all subscriptions outside the UK the annual Production Circulation enquiries subscription is £120 including postage. Paul Lindsell [email protected] [email protected] Follow us for up-to-date news and information: m: 07790 434813

4 April/May 2017 theenergyst.com

NEWS & COMMENT

Engineers tell government to pay for energy efficiency, storage and tidal power

A survey of the UK’s main engineering bodies has urged government to provide energy efficiency payments or tax breaks to businesses, communities and households Tidal power is that can demonstrate proven ‘the most important reductions in demand. renewable power The Energy Saving Incentive source to be scheme is one of many recommendations based on supported’ the views of 1,300 engineers Siemen’s SeaGen has achieved 5GWh of tidal power generation from 35 engineering bodies in since starting operation at Strangford Lough in Northern Ireland response to the government’s Industrial Strategy consultation. UK competitiveness the support for small nuclear is mainly heading offshore. The engineers also urged report suggests. It urged reactors, heat networks and Meanwhile, three quarters government to give teeth to policymakers to take a system- hydrogen trials. According (74%) of respondents said that existing energy efficiency wide approach to energy with to survey respondents, government should prioritise regulations. Esos, notes the particular focus on heat. tidal power is “the most support for clean energy report, could unlock more Lamenting the scrapping important renewable power technologies and storage via than £31bn of savings over the of carbon capture and source to be supported” as the £1bn Industrial Strategy next 13 years – if companies storage support, the report it is “reliable and does not Challenge Fund, a view were required to act upon reiterated views that CCS require back-up, and has government appears to share. mandatory energy audits. would be “critical” for huge potential in the UK”. The report also recommends Focusing on energy efficiency meeting carbon budgets after While the UK is a leader public procurement should and productivity will be the 2023 and likely “essential” in offshore wind, the report focus on best value over lowest cheapest way of decarbonising in decarbonising heat. also highlighted the fact that cost, and to enable smaller the economy and increasing The engineers also backed the value of its supply chain firms to participate in tenders.

Grid confirms Broker Pulse acquired by telecom firm Arrow Triad dates Energy Broker Pulse has Internet & Controls wanted to partner with a been acquired by business Innovation of the Year at the company whose ethos and National Grid has confirmed communications firm Arrow for UK Energy Awards for its POD values were similar to Arrow’s,” that last winter’s Triad periods an undisclosed sum. digital energy management said CEO Chris Russell. “Pulse fell at 5-5.30pm on Monday Pulse, owned by Ben Dhesi platform. provides a unique level of 5 December, Thursday 5 and wife Purdeep Kang, made The deal is Arrow’s eighth service and consultancy and January and Monday 23 a profit after tax of £577,982 acquisition in the past seven this is reflected in their loyal January. Businesses will now in the year to 30 September years and, according to the customer base.” find out how well their Triad 2015, according to Companies firm, makes Arrow one of few Pulse will operate as a alerts provider performed. House filings, up 220% on the companies in the UK able to separate business unit and its No provider wants to miss a previous year. provide a full energy, telecoms employees will continue to Triad, or risk their credibility. The company has notched and IT consultancy. look after their customers. Equally, sending out too many up significant growth in The company, which last “We are excited by the Triad alerts risks annoying recent years. It was founded year, received investment opportunities that working customers, because they will in 2009 by Dhesi and Dorian from private equity company with Arrow will bring,” said Nineberg, with Dhesi acquiring Growth Capital Partners, Dhesi. “Both companies seek then ramp down equipment Nineberg’s shareholding in looks set to continue that to differentiate themselves by or ramp up onsite generation, August 2015. buy-build strategy, with the providing sound advice and often generators, at a loss. That year the firm won deal including a “significant” quality products and a service For some businesses, the The Energy Buyer of the acquisition fund. that customers can rely on.” costs of missing a Triad period Year award at the UK Energy “We identified the energy Arrow has some 4,000 are such that they are moving Awards and followed up in market as a strategic customers that it can now to cut consumption altogether 2016 with the the Technology, opportunity a while ago but target to sell energy services. during the 4-7pm winter peak.

6 April/May 2017 theenergyst.com Sponsored column Incoming volatility: Act now to turn risk National Grid procures 138.6MW into reward to balance grid in summer A volatile energy market,” says Chessum. “But National Grid has procured availability fee of £1.50 (though market requires now more than ever, they need 138.6MW of fixed demand Engie has an availability fee large businesses to take a strategic look at the turn-up (DTU) provision, one of £1.75/MWh for 2MW of and organisations opportunities and risks, because of the ways it manages excess capacity). Their utilisation rates to rethink their so many things are changing,” generation over spring and range from £60/MWh to £97/ energy strategy and take he says. “With the changes summer. Six companies were MWh, with prices submitted, a longer-term view. Do it in the UK energy generation now, advises Mike Chessum successful of nine firms that speed of response, duration mix, prices have become more (pictured), sales director, tendered a total of 262MW. of response and location key volatile and non-commodity Industrial & Commercial While the headline factors in assessing bids, costs continue to rise.” Energy and Services at “By taking that strategic procurement is less than last according to National Grid. British Gas Business. year’s tender round of 309 Around 54MW of fixed DTU review and mapping out the MW, the DTU service has procured will come from load As a former energy manager, influences on their business, evolved so that companies response; 37MW from standby/ with more than 20 years’ companies will be in a much stronger place to manage can also bid in their flexibility back up generation with experience in the sector, Mike incoming change,” he adds. on a fortnightly basis. the remainder coming from Chessum understands the Simec Lochaber Hydropower balancing support generation. Non-commodity costs, such challenges of persuading the secured contracts for 30MW; While companies including as network charges and policy board to take a long-term SSE secured contracts Centrica, Enernoc and costs, now make up more than view on energy. But the lines for 29.4MW; Engie won Flexitricity were unsuccessful half of the power bill. That may are blurring between energy 15MW; MVV Environment in the fixed bidding round, it be well known, says Chessum, procurement, management Ridham won 20MW; is likely that they will reenter but avoidance strategies take and flexibility. As prices become Restore won 25MW; Alkane assets into the fortnightly time to action. The same applies more volatile, that creates an energy won 19.2MW. tender, with the DTU service to generating revenue from opportunity both to cut cost Those successful bidders running from 27 March assets by selling flexibility back and to generate revenue. will in the main be paid an to 28 October in 2017. to various markets. Maximising those “Assets are an under-utilised opportunities, he says, requires resource,” says Chessum. “Start Former Npower CEO joins a more sophisticated approach now and it may be possible to procurement. Focus less to bring some online by this on 1-2% price efficiencies, winter. But, for sure,” he warns, blockchain energy firm advises Chessum, and instead “If you don’t connect assets unlock double-digit savings by over the next five years, as the Former Npower fully decentralised model. recognising that procurement, market becomes more flexible, CEO Paul In terms of demand-side energy efficiency and flexibility you will be left behind.” Massara (left) has response, blockchain could, are now intrinsically linked. Even with network charges joined blockchain in theory, deliver a trading In that regard, organisations such as Triad under review, energy start- platform that enables flexibility that employ energy managers Chessum thinks those with up Electron as to be traded collaboratively will find them increasingly connected assets will gain a director. without handing the levers valuable over the next few years, financially, regardless of how The firm, backed by Innovate of power to any single entity, Chessum believes. Even those the revenue is allocated. UK as well as private funding, ie, National Grid. Electron without dedicated resource “Act now and you will be in a is building a demand-side believes that could enable can manage consumption via position to rapidly adapt your response platform as well as a more liquid, transparent a plethora of user-friendly apps strategy to stay ahead of the a switching system for meter and competitive market. and software, and by harnessing competition.” supply points that it believes However, while the energy the expertise available from could make the switching system is already decentralising service-focused suppliers. To fnd out how British Gas process 20 times faster. in terms of generation, But devising a robust, Business can help save you Electron’s focus is on moving to a blockchain longer-term and agile energy money through your energy enabling the energy system model would represent a strategy is now paramount. procurement strategy, data to operate on a peer-to-peer seismic structural shift, given “Many mid-sized companies insights or operational basis wherever possible. The the critical role the system don’t take a long-term view fexibility, call us on: 0845 070 firm believes that blockchain, operator currently performs. on energy. They move from 3720. For further information a system of validating and Nevertheless, Electron is year to year almost on a on managing your business’ recording direct transactions trying to prove that model burning platform, depending energy more generally, visit between peers, could transform could work and recently told on the level of volatility in the britishgas.co.uk/business the energy system from The Energyst it will have one that revolves around a “fully scaled prototypes” in central intermediary, to a market by next summer.

theenergyst.comcom NEWS & COMMENT

UK gas and power prices hit two-year highs but soften as system copes with winter

UK power prices in the first three nuclear fleet is now back months of 2017 averaged almost online, and two damaged a third higher than the same interconnectors have been period a year earlier, according returned to full capacity, to latest analysis from pricing adding system headroom firm ICIS. Gas prices for delivery and dampening prices. over the next year were up 42%. The final Q1 power value, However, longer term prices on 31 March, was £45.283/ began to fall from February as MWh, a rise of 33% from 31 market fears over winter capacity December 2016. Meanwhile and gas storage issues receded. the value of gas delivered over Concerns over generation the next calendar year rose by capacity had driven up power 36% to finish at 43.175 p/th. prices across 2016, according For next winter, ICIS suggested to ICIS. That trend continued the low clearing price of the into 2017 with the ICIS Power Generation capacity concerns drive up prices early capacity auction, at £6.95/ Index (IPI) average over Q1 kW, might have implications 2017 up 32% year on year to gas storage facility, influenced both the power and gas for wholesale power prices as £46.192 per megawatt hour gas prices, driving them to systems’ ability to cope had it may be too low to incentivise (MWh) – the highest quarterly average 46.071 pence per therm reassured markets with old coal plant operators, already average since Q4 2014. (p/th) over Q1, the highest since longer term contract prices struggling with spreads. The Meanwhile, ongoing technical Q2 2015, according to ICIS. softening from February. firm said longer term gas price issues at Rough, the UK’s biggest However, the firm said Furthermore, the French forecasts remain bearish.

New awards for Small firms growing tired energy marketing Event to of constant broker calls The launch of the Energy Marketing Awards, will see address core Small businesses appear to be brokers were satisfied with energy marketers recognised tiring of constant calls from them, negative feelings in for their contribution to energy issues energy brokers, new research the broader small business by Ofgem suggests. Yet at market have intensified in motivating people to make The Energyst Event will equip least a quarter are still paying the past few years. Some better energy choices. energy users with fit-for-purpose over the odds for their energy. 50% cited very or quite The awards take place on knowledge, insight and solutions A survey of 1,254 small negative perceptions of Tuesday 6 February 2018, at in an exhibition and conference businesses found brokers brokers in 2016 versus 46% the Banking Hall, London. that is focussed solely on energy. reached fewer small in 2015 and 44% in 2014. Entries need to be submitted It takes place 17-18 April 2018 business in 2016 than in The report mooted a by 8 September 2017. at the National Motorcycle 2015 (down to 50% of those correlation between increase While the energy system Museum, Birmingham. surveyed from 64%). Despite in negativity and perceived is rapidly changing, the The event will explore and that, they influenced the increase in calls from brokers. big challenge is the need to prepare the visitor for the same percentage of overall About four in 10 small convince consumers – at home coming of a truly integrated contracts (28%) as the firms (39%) renegotiated and in business – to take previous year. contracts with their current energy management an active interest in a topic “However,” states the supplier compared to system. The core areas of they’ve long taken for granted. report, “brokers appear holding a first-time contract procurement, efficiency and to have worked harder with a new supplier (31%). The new Energy Marketing flexibility linked by data to maintain their level of However, one in four Awards have been created to: analytics and AMR will influence”; the perceived businesses (26%) remain on • recognise companies creating form the backbone of the number of calls from brokers a rollover contract, which marketing that motivates event. If you are looking at has increased significantly means they are likely paying people towards solving ways to mitgate rising costs (14% recalled 50+ calls in well over the odds for energy. our energy challenges by reducing and shifiting 2014, increasing to 19% in The smallest firms (fewer • show others what’s possible consumptions patterns and 2015 and 22% in 2016). than five employees) were with engaging marketing effective procurement, find out While those that used most likely to let that happen. For further information visit more at theenergystevent.com energymarketingawards.com

8 April/May 2017 theenergyst.com Energy intensives exempted from low carbon support costs, smaller firms to pick up tab

Energy intensive industries Government announced the will be exempted from plan to protect energy intensive contributing towards subsidies industries from rising policy for low carbon and renewable costs in 2011. It consulted generation via the Contracts again on those plans last year. for Difference (CfD) scheme. With legislation now laid for The Department For the CfD element, BEIS said Business, Energy & Industrial it was negotiating potential Strategy said this will save exemptions for other support 130 eligible companies levies, the feed in tariff and around £100m a year. Other the RO, and would make an businesses will pick up the tab. announcement ‘in due course’. According to government While some business fi gures, the measure will groups will complain that add £900/year to an average they are being burdened with medium business electricity more policy costs, energy bill in 2017/18, rising to £1,600 minister Jesse Norman said the following year. By 2021 that that government needed to will have risen to £3,200 per support heavy industry and annum, based on a business its contribution to UK GDP. using 11GWh per year. “These industries are The CfD scheme replaces worth £52bn to the UK the renewables obligation economy, support 600,000 (RO) and pays generators jobs and produce essential with contracts a guaranteed products that people use every price for producing power. CfD costs currently make up signifi cantly over coming day,” said Norman. “That The so-called strike price small fraction of the overall years as low carbon plant is is why we have taken this varies by technology. While power bill, they are set to rise constructed and commissioned. action to support them.”

New chief executive for Eon UK Energy Services Group as Tony Cocker moves on acquires Utiligroup Eon Climate & Renewables boss growing its renewables business. US firm Energy Services Group has acquired UK-based Michael Lewis has replaced Eon group CEO Johannes Utiligroup for a reported £100m. Tony Cocker at the helm of the Teyssen thanked Cocker for The Lancashire firm provides data management and energy company’s UK business. his “outstanding contribution, software to energy companies around billing and wholesale Cocker, who took charge of not only to our UK business services as well as sales and pricing. Its ‘supplier in a box’ Eon UK in 2011 following three but also to our company as solutions have helped a number of small energy suppliers years at the head of its energy a whole. During his time enter the market, and it is involved with several local authority energy companies. trading arm in Düsseldorf, leading our UK business, Energy Services Group is backed by US private equity will leave the fi rm in July. Tony helped make customer group Accel-KKR, which is beefing up its energy technology He joined what was then focus part of our DNA.” holdings. Last year it acquired US energy data firm Latitude Powergen in 1997 as head of Cocker said it was time to Technologies. The Utiligroup acquisition gives corporate strategy. He has take on new challenges and the operation a more global footprint, with a doctorate from Lincoln stated he will now pursue operations in the US, Japan and the UK, which College, Oxford, for which “a portfolio career”. ESG said gives energy suppliers and resellers he researched the shape of “I am personally delighted greater geographical opportunities. water droplets, which may or that Michael is to succeed The UK entity will continue operations may not have helped his early me,” said Cocker. as Utiligroup, and CEO Matthew Hirst career at the Bass brewery. Eon board member Karsten (left) will remain at the helm of the UK Lewis, an expert in Wildberger said Lewis’s “wealth business, reporting to ESG CEO engineering, carbon and fi nance, of experience will help to continue Phil Galati. Hirst will has been with the fi rm for almost to accelerate our company’s also join the board of directors of ESG. 25 years, playing a key role in transformation in the UK.”

theenergyst.com April/May 2017 9 INSIGHT Can you trust your smart meter readings?

ND Metering Solutions’ founder and director Kris Szajdzicki provides evidence that smart meters can indeed give gross errors, sometimes six times too high

readings were reproducible. True or false? Potential The greatest errors were for gross metering error in I&C applications seen with energy saving light bulbs and LED bulbs controlled by a dimmer. The errors resulted from the meter’s design. If a Rogowski sensor (air cored coil) was used to measure the current, the meters read high; Hall Effect sensors caused the meter sensors to read low. Another example was where a VSD controlled fan was being used; the VSD generated a fast common mode voltage and current, which lead to a 60% reduction in the reading of an adjacent meter. Replacing the VSD by another make solved the problem. ecent press reports about electronic energy The errors were caused suggest that some meters giving incorrect by conducted and radiated types of electricity readings, usually excessively emissions in the range Rmeter (including high readings; in Holland, below 150KHz. There are so-called ‘smart’ meters) are Germany, Sweden and other several different factors susceptible to gross errors countries. In some cases, For quite some time behind this problem; the when feeding low-energy it appears that legal action now, rumours have use of electronic equipment lamps, variable-speed drives is even being considered. been rife about directed connected to the and other equipment that Professor Leferink of mains, mains communications generates electromagnetic the University of Twente electronic energy and a discrepancy interference. This review in Holland decided to meters giving between standards. concludes that measurement investigate whether such incorrect readings… errors do occur; that their meters can indeed give In some cases, it Discrepancy between magnitude depends upon the false readings. Tests were standards current-sensing technology carried using various loads appears that legal Permissible EMC levels used by the meter; and that such as CFL lamps, heaters, action is even being vary between standards, the effect may be negligible LED lamps and dimmers. considered depending on the industry in normal situations in Nine different static meters, promoting the standard. the domestic market. made between 2004 and 2014, Manufacturers of VSD However, potential for were used. As I understand, would prefer for a relatively gross error remains in some were purchased in the high emissions levels to be unfavourable circumstances, UK and some were MID acceptable; manufacturers of particularly in industrial or approved. Five of these meters PLC equipment would like commercial installations or gave readings that were the mains environment to be where there is deliberate much higher than the actual as quite as possible – apart intent to fool the meter. consumption, up to 582% from their signals. Other For quite some time now, high. However, two of the manufacturers of electronic rumours have been rife meters read 30% low. All the equipment that connect »

10 April/May 2017 theenergyst.com

INSIGHT

to the mains, particularly utilities are fully aware of measuring equipment, would these potential errors. Thus prefer that EMC levels – both smart meters installed in the conducted and radiated – UK should not be affected. were kept to a minimum. IEC TC77 (and CENELEC Mains communications (PLC) SC205A) are responsible PLC uses a frequency uses for ‘Basic and Generic frequencies in the range Standards for Electromagnetic from 110Hz to 148.5kHz. Compatibility’. These are This frequency band is numbered “IEC 61xxx”. currently not fully covered Rather than using the generic by product EMC standards 61xxx series of standards, (such as for meters). Several IEC product committees product committees are Figure 1: Measured Crest Factor of 46 LEDs with leading edge can write their own EMC investigating EMC problems dimming (Shuttle Lighting) standards, which will apply in the range between 2kHz to their products; any and 150kHz and we can expect such standard needs to be amendments to be published. reviewed by TC77. IEC TC22, which develops standards Electronic equipment covering ‘Power Electronic and metering Systems and Equipment’, The major source of EMC is decided to develop an EMC electronic equipment power standard for its industry (IEC supplies. These require a large 61800-3:2017 ‘Adjustable inrush current and have a high Speed Electrical Power Crest Factor (the ratio of Drive Systems – peak to rms value of a Part 3: EMC current waveform. Requirements The crest factor and Specific for a sinusoidal Figure 2: Voltage and current, for heater, CFL and Test 6x current LED load, dimmer at 450 (Frank Leferink) Methods’). Times higher readings waveform is However, were recorded than 1.414). For it did not correct data dimmable properly LED lights, the consult with Crest Factor can other committees. be as high 25 or Without this full 50, depending on the consultation, lack of method of dimming and the compatibility has led to quality of the LED lamp. The problems for other users. dimming process, combined For electronic energy with the electronic power meters, IEC 62053-22 does supplies in each LED or CFL not have any accuracy lamp, results in high levels of requirements for radiated RF harmonics and fast transients. fields below 30kHz and for In pure measurement Figure 3: Voltage and current, for heater, CFL and conducted emissions below terms and assuming that the LED as load, dimmer at 1350 (Frank Leferink) 150kHz. EN 50470-3, for meter design allows for such MID Meters, has the same operation, errors are likely to since the energy content of limits. In both cases, there be small and immaterial; the these peaks is small, the effect is a test for accuracy in the meter will need to be over- on the accuracy of kWh Meters presence of imported 5th rated to cope with such high of not measuring the energy harmonics. All accuracy tests current levels. This approach in such peaks is likely to be only apply to true energy has cost implications and minimal. This presumes good measurement (kWh); no other could limit the minimum design and the use of correctly parameters are covered. current at which the meter designed anti-alias filters. Where utilities are can measure accurately. purchasing meters, or In practice, the Crest Factor Cause of errors specifying meters to be used, limit of meters is likely to be The cause of these large errors they may require additional in the order of 2 at maximum arises from the choice of the performance requirements. current (and rising as the sensor used to measure the I understand that the UK current reduces). However, current and its associated

12 April/May 2017 theenergyst.com electronics. There are four to the rate of change of Conclusions doing the same? I agree that options for sensors: the current, namely di/ ESMIG in its position the emissions generated in • A shunt (or resistor) in the dt, this signal has to be paper states that the smart the tests are higher than current path. The voltage integrated to provide a meters being installed in normally found, but such drop across the shunt is signal proportional to the UK and Europe will be cases may well occur. measured. The sensor itself the current. Where this unaffected by such signals. If such interference affects is unlikely to be affected integrator is designed for It confidently says that: certified smart meters, it will by high crest factors power frequency signals • The electromagnetic ultimately be a problem for • A Current Transformer (CT). and the lower harmonics, interference phenomena the utilities and further reduce Short-term transients with fast transients saturate created in the tests of public confidence. As to sub a frequency up to about the integrator causing the University of Twente metering, there is no such 10kHz will be accurately errors. If the integrator grossly exceed emissions fall-back. As a manufacturer, passed through the CT; is designed for such limits allowable under EU ND is replicating the test higher frequencies will be transients, the output will regulation for equipment system used in Holland subject to errors. Additional be a much reduced signal typically used in households. to check the effect of such errors can be added by the level. This can be amplified, • These conditions would not transients on its meters. electronics if not designed to but the increased noise be found in any imaginable However, since all meters fully deal with the amplitude levels will affect accuracy, normal household scenario. manufactured by ND use and frequency components particularly where the • There is no reason current transformers as of the transients measured current is small to question smart sensors; the tests so far • A Hall-Effect sensor. From metering technology have shewn that, with this the tests carried out, this Other problems type of sensor, errors are type of sensor will give a Extensive use of electronic ESMIG may be right but it relatively small. As to other low reading. At this stage, equipment such as VFDs, LED is rare for a householder to manufacturers, it is a case I have not identified any lights, etc can be a problem be aware of EMC regulations. of ‘Caveat Emptor’. te explanation for the errors where standby generators are I can also well imagine a • A Rogowski device. This used or new buildings are situation where 10 or more This article is based on work is an air cored coil which designed for maximum energy LED lamps may be connected done at the University of Twente surrounds the current efficiency. Standby generators to a dimmer to create the right in Holland as reported on the carrying cable. These need to be overrated to allow ambience. As to dimmable BBC’s Money Box programme devices can be used to for the initial surge (say or otherwise, ESMIG assures on Saturday 4 March – about accurately measure high 50% instead of 44%). For us that non-dimmable lamps 17 minutes into the programme. frequency transients, but the new buildings, to prevent were used in the tests – and In preparing this document, associated circuitry must overheating and distorted they dimmed. Clearly if the opinion of various be suitably designed. As the voltages, supply transformers electrical engineers try to dim metering experts was sought output from a Rogowski need a MVA rating possibly non-dimmable LED lamps, sensor is proportional twice the power rating. what is to stop a householder

theenergyst.com April/May 2017 13 COVER STORY

ne of the major threats to the growth and success of any business is the uncertain, Ooften volatile, cost of fuel and energy. Whether it is the cost of electricity, gas, carbon, water or fuel, commodity markets are complex and unpredictable. Companies of all sizes often struggle to stabilise their operating budget and align their overall strategy with these fluctuations. Even though energy is often a large portion of a company’s operating budget, procurement departments seldom have in- house price risk management resources or expertise to manage this expense. Controlling energy costs in the midst of global volatility can be incredibly complex and time- consuming, requiring market expertise and constant diligence. It’s hard to stay on top of the latest market information, price swings, geopolitical and economic impacts, and more. With these challenges, the most diligent procurement professionals are still often hesitant to hedge energy purchases. My organisation is incredibly vast and complex – how could I possibly put together a hedging strategy that spans our many geographies and lines of business? What if I make the ‘wrong move’ with the timing or tool and lose the organisation thousands? Last time I hedged my purchase, I actually reduced the organisations Transform uncertainty margins – what if that happens again? I don’t see anyone else in my organisation (or in any others) hedging their energy purchases so why should into opportunity I take on this added responsibility? Organisations that have never hedged Kinect Energy Group can help businesses to stay in control of their future fuel consumption, always their energy decisions, writes sales director James Williams paying spot/index prices, often prefer to remain in this comfort zone of ‘how we’ve always done it’ to avoid any potential volume) or why the team didn’t do a better they can be measured and managed. The misalignments or loss. Furthermore, job predicting market trends. Procurement extreme fluctuations in the oil markets procurement departments are not always is challenged on the timing of the hedge and did not happen overnight; rather they closely aligned with company profits so tasked with identifying the ‘just right’ moment took more than 180 days to reach their it’s easier to simply fly under the radar and for their next hedge/budget cycle period. extremes. These 180 days represent 180 purchase fuel at current market prices. It is highly likely that your organisation opportunities for your organisation to have Even those organisations that attempt invests significant sums of money and time taken action and managed the situation. to manage costs by hedging their energy analysing data on sales figures, rationalising Consider the potential benefits if your purchases often make common mistakes. product lines, optimising inventories organisation applied the same level of They may not fully understand the intricacies and improving production efficiency for thoughtful, informed analysis to your fuel of hedging and instead, attempt to ‘call’ relatively small commercial gains. The lack and energy procurement programme as you the market. This ‘guessing’ approach tends of this same analytical diligence applied to do to the rest of your business. Hindsight to encourage an overly-optimistic (or energy and commodity spend (in particular is 20/20. Get ahead of volatility with a pessimistic) view, leading to risky speculation. fuel) is truly a lost opportunity, especially personalised price risk management solution Furthermore, the limited resources available considering that this cost has fluctuated that monitors, measures and evaluates market for market analysis result in insufficient between $150 per barrel (bbl) and $30 risks so you can mitigate volatility of your fuel data and therefore poor decision-making. bbl over a relatively short period of time. costs and provide more budget certainty. Often in these cases of poor hedging As management guru Peter Drucker But before hedging your fuel purchases results, senior management questions why once stated: “You can’t manage what you in-house, ask yourself if your team is last year’s hedge was too large or too small (in can’t measure.” In the case of fuel prices, well-equipped for the challenge:

14 April/May 2017 theenergyst.com • Do you have the in-house resources to develop an effective risk management strategy? • Do you have access to market intelligence to inform decision-making? • Do you understand the various financial and physical hedging options available? • Have you constructed a strategic view of energy management as part of your overall strategic plan or governance?

If the answer is no, then you may want to consider partnering with an energy management firm. An energy management firm can give you access to market intelligence, informed analysis and a team of experts to guide every purchase decision. They can develop an end-to-end risk management strategy tailored to your company needs. And you can save valuable money, time and focus on what you do best. Kinect Energy Group’s certified consultants empower businesses and utilities to stay in control of their energy decisions. For more than two decades, they have delivered a unique combination of services and technology with their “one stop shop” approach for fuel and energy solutions.

For more information, visit kinectenergy.com How to choose an energy management partner Not all energy management firms are created equal so choose transformed into a “management-by-exception” process to ensure carefully. Here are four things to consider to ensure you get the that the precise amount of resources are focused on timely, critical best value, a trusted ongoing partnership and effective outcomes: issues, and then adjust to be lower maintenance at other times – so you can be more efficient. 1. Find an energy management partner who is experienced in working with the products you procure – and has the credentials 3. Quantify your business objectives into measurable goals and to back it up. Trusted partnership comes from experience. At ensure your energy management partner provides metrics to Kinect Energy Group, we offer decades of expertise in procurement, track your success. Make sure you know if your programme is consulting, and risk management from a team of advisors based successful – or not. Kinect Energy Group consultants offer trusted in Europe and North America. We develop custom hedging analyses of pre-determined metrics so you can make informed programmes for electricity, natural gas, as well as traditional fuel decisions on whether to stay the course or adapt – empowering you products. In Europe, we are MiFID regulated and we operate as an to control your strategy. We transform your business objectives into accredited and audited service provider. In the US, we hold a Series a quantitative parameter that translates into a metric that our risk 3 FTC Certification with the National Futures Association and are management team can optimise against. We use a variety of metrics registered commodities trading advisors, which ensure proficiency to guide you but we always start with the most important one: your in options, price limits, futures settlements, delivery, orders, price objectives. We also factor in budget; current positions; market prices; analysis and hedging. past, present and future projections of market conditions; historical data; seasonality; risk tolerance; and technical price analysis. 2. Ensure your risk management strategy includes regular reviews and allows you to revise based on the latest market 4. Customise your strategy to your business objectives and risk information. You need to be aware of the latest market news. tolerances. There is no ‘one size fits all’ approach to effective Kinect Energy Group offers a robust market intelligence platform price risk management. Personalisation is the key. At Kinect with daily and weekly natural gas, power and oil update reports, Energy Group we first identify your goals and then create a strategy and expert insights on current market conditions. We start with to meet them. Every risk plan we create is aligned to your risk market data and make personalised recommendations for tolerance and objectives. We continually measure results with daily hedging opportunities based on your risk tolerance. Our fluid, market monitoring and allocation of hedge-cost against volumes. dynamic process adapts to changing market conditions and Risk management strategies can also be integrated with physical changing business requirements over time. Every strategy can be procurement strategies including customised credit terms.

theenergyst.com April/May 2017 15 POLICY Deep cuts to Triad payments

Ofgem is set to implement deep cuts to the revenues earned by small power generators. The regulator plans to reduce the Triad benefit, currently £45/kW, to £2/kW over three years, starting in 2018

hile Ofgem calls for the regulator to much – and is distorting the suggests take a full review of network capacity market, because the Triad charging. Until that review small generators, with Wcomponent of was undertaken, Rotheray £45/kW Triad benefit in so-called embedded benefits urged Ofgem to make softer their pockets, can bid low, is spiralling out of control, cuts to the payments. undercutting the larger new over-rewarding small generators that government generators and distorting Embedded benefits – wants to incentivise. the outcome of the capacity what’s the issue? As it stands, the capacity market, small generators The regulator is trying to stop market has failed to encourage are aghast at the proposal. generation that is connected investment in large scale “The consequences for to the distribution network new build combined cycle industrial manufacturers, from receiving what it sees as gas power stations. hospitals and local authorities too much money for helping Ofgem, which was accused who generate their own suppliers avoid transmission The consequences of effectively kicking the can power could be devastating,” network charges by effectively for industrial down the road on embedded says Tim Rotheray, head acting as negative demand manufacturers, benefits for many years by of the Association for during peak periods. The hospitals and local Cornwall Energy, appears Decentralised Energy (ADE). Transmission Network keen to make a quick fix. Rotheray suggested that Use of System (TNUoS) authorities who That leaves smaller Ofgem was wrong to “depend demand residual payment, generate their own generators facing a pincer on a rushed industry review, known broadly as the Triad power could be movement, as government led by large coal and gas payment, currently stands at devastating is also moving to cut their generation interests” and had around £45/kW, according to revenues in a bid to achieve ignored independent analysis Ofgem. It predicts that will different outcomes from by Cornwall Energy about the rise to £72/kW by 2020. the capacity market. level of benefits accrued by Both regulator and the BEIS outlined plans last small generators. He repeated government think that is too October to change the rules A third more buildings ‘could be unlettable’

third of commercial serves as a warning that buildings thought to many building energy Ameet minimum energy ratings may be inaccurate, efficiency requirements so and that more commercial that landlords may continue buildings than thought could to let them may actually fall theoretically be taken off the foul of incoming legislation, market under the new laws. modelling of 3,500 “well The firm pointed out managed” buildings suggests. More commercial buildings could fall foul of legislation that its modelling looked at Arbnco (previously CO2 “well managed” building Estates) analysed the data Minimum Energy Efficiency property has an EPC rating stock, suggesting that if via the latest version of Standards (MEES) that come of band F or G. From 2023, even this stock was not its EPC platform, which into force in April 2018, landlords will not be able to up to scratch, many more contains more than 3,500 dropped into an F or G rating. lease buildings with an energy properties could fare worse EPC models all produced The new laws mean public efficiency rating lower than E. under proper scrutiny. within the past five years. It and private sector non- While landlords can self- “With MEES just over a found that 33% of buildings domestic landlords may certify exemptions from the year away, landlords, property previously carrying a D or not grant a tenancy to new scheme as of next month, managers and their advisors E rating, sufficient to meet or existing tenants if their Arbnco says its modelling need to be acting now to

16 April/May 2017 theenergyst.com so that the capacity market supplier charge is collected Clark: collaborate on storage based on gross, instead of net demand. That will remove a large chunk of revenue from The Secretary of State for Business, Energy & Industrial Strategy has embedded generators with encouraged closer collaboration between the energy industry and car capacity market contracts. Currently, those generators manufacturers to better decarbonise both energy and transport, and also receive an income stream urged all UK firms to help shape future national industrial policy both from the capacity market contract itself, and the money suppliers pay them for helping reg Clark has Clark said the two sectors were them to reduce their use of outlined how the becoming intrinsically linked. the transmission system. UK could maximise “If you can create jobs in both By changing the charging Glong-term impacts sectors and simultaneously methodology, government of policy decisions that will address problems that do will remove the latter affect national welfare. not respect boundaries… that element, which it suggests Speaking at a Policy is a huge opportunity.” is worth about £15/kW – Exchange event in March, almost as much as capacity the BEIS secretary said Environmental policy market payments. decentralised decision making ‘not a tradeof’ will be key to ensuring The business and energy What next industrial strategy benefits secretary added that while energy Ofgem has issued a all workers, according to the technology is intermittency.” security is “foundational” to the consultation on its ‘minded former communities and local However, intermittency “can economy, “my view is not to see to’ position on embedded government department chief. be accommodated through these things as tradeoffs: that benefits. If the regulator “We need to increase storing energy and making the you can only either be green or proceeds with its plans, productivity in aggregate and grid much more interactive, low cost, either have security of generators under 100MW will inclusively across all sectors of the both of which require a policy supply or be environmentally see their Triad benefit reduced country and economy,” said Clark, response,” said Clark. progressive; these need to be by around a third each year pointing out that while “decades “[The UK storage sector] is pursued simultaneously.” for three years from 2018. of centralised policy” had revived undertaking some of the best With an agile, digitised grid However, Ofgem could London’s fortunes, “that has R&D in the world, which is and sufficient energy storage, face legal challenges taken its toll” on regional UK. In of intense interest not only to said Clark, “the energy you from smaller generators, my view, investment decisions the green economy but to the produce can be clean and according to specialist energy for too long taken in London, automotive sector,” he said. “So low cost. A forward-looking developer and generator will be much better taken by the ability to marry energy and strategy enables you to make website, New Power. te local economies,” he said. automotive [goals] is a wonderful … simultaneous equations opportunity that would be rather than tradeoffs.” Unlock energy storage crazy to separate and dilute.” ensure buildings do not Clark’s decentralisation agenda The BEIS Committee will UK firms: help set policy pose a risk. The analysis was mirrors structural change examine that opportunity via Clark called for businesses to conducted on well-managed occurring in the energy sector. a new inquiry, also launched engage in the industrial strategy building stock, so there is He reiterated his belief in energy yesterday, into the role electric to ensure their voices are potential to observe a greater storage solving renewable vehicles (EVs) can play in heard in creating policy. Doing percentage drop in EPC generation’s intermittency as decarbonising the economy as so is in the national interest, ratings in poorer performing well as decarbonising transport, part of the industrial strategy. he suggested, quoting Bank portfolios,” said Simon West, progress on which has stalled and of England governor Mark co-founder of Arbnco. said cross-industry collaboration Carney: “Every technological “Not everyone involved on storage could unlock higher revolution mercilessly destroys in the management of a value for the UK as a whole. jobs and livelihoods – and building has a background in “The green economy is one therefore identities – well engineering, but the impacts of the most exciting areas of our before the new ones emerge”. of poor energy performance future planning and organisation The ability to “While the robot revolution and forthcoming MEES and in many ways is a good marry energy and may seem some way off,” said legislation will affect all, example of why we need to bring Clark, “automation will have a and informed decisions policy together,” said Clark. automotive [goals] big impact on all of our lives. need to be made.” “We now have some of the is a wonderful So if we want people to have Under MEES, landlords can highest levels of investment in opportunity that satisfying, well paid jobs, we face fines of up to £160,000 renewable technologies in Europe have to prepare – and that per property, as well as … but one of the challenges would be crazy to is precisely the purpose of leasing restrictions. te of renewable [generation] separate and dilute the industrial strategy.” te theenergyst.com April/May 2017 17 POLICY

Why have Building Regs if they are not enforced? Energy efficiency campaigner Peter Thom, founder of Cambridge-based Green Heat, is becoming increasingly concerned that Building Regulations are being regularly flouted in the growing market for replacing gas boilers with electric heating appliances.

n a letter to communities which must be within 2% Section 1.8 of the guide referring panel heaters as a replacement and local government points of efficiency or the to ‘no possible alternative’ would for gas heating – which is secretary Sajid Javid, energy carbon equivalent. I believe this provide ‘reasonable provision’. clearly not even permissible. Iefficiency campaigner Peter procedure is not widely known “I would suggest that this lack This is again a growing market. Thom points out that the trend and is being ignored. This will of proper procedure is allowing I’ve seen an increasing number of replacing gas boilers with have a considerable impact on a growing number of these of advertisements for such in electric heating appliances the claimed carbon savings electric boilers to be installed the national press and even is blatantly disregarding the via Building Regulations without any consideration for on televised football matches. increase in carbon emissions and the consequence the increase in carbon emissions Installing these panels will and lowering of energy ratings, of non-compliance. and currently no requirement not only contravene Building which will be critical in meeting “Although there is a defined to produce a new Energy Regulations, but this non- the new minimum energy procedure for installing a non- Performance Certificate (EPC).” compliance should also prevent efficiency standards (MEES) condensing boiler, there is no any property being rented out for conserving fuel and power. such procedure for replacing Blatant mismarketing under the MEES regulations. I He explains: “I used to sit on a gas boiler with an electric Thom adds: “More alarming is believe action is required by the the Industry Advisory Panels flow boiler; only a comment in the blatant marketing of electric Department for Communities for Parts L and J of the Building and Local Government to Regulations and helped to Installing these panels will highlight this to building produce the first Domestic inspectors, property agents, Heating Compliance Guide, not only contravene Building solicitors and homeowners which is now the Domestic Regulations, but this non- as a matter of urgency.” Building Services Compliance compliance should also prevent Thom has the figures to prove Guide. This guide provides the his point from a recent project procedures to be followed when any property being rented out in Cambridge: “We replaced replacing a heating appliance, under the MEES regulations an old G-rated gas boiler with

18 April/May 2017 theenergyst.com a new, high efficiency A-rated more consumer protection, but gas condensing combination the report’s recommendations boiler with a smart controller in for further registration and a 1930s semi-detached house. accreditation processes will The SAP rating before work put yet more red tape on was started was 42 (E) and the installers. And by continuing carbon dioxide emissions were to allow this blatant abuse of 5.95 tonnes per year. After the Building Regulations by less replacements were installed, scrupulous manufacturers the SAP rating was 61 (D) and and installers who are the reduced carbon dioxide undermining and under- emissions are 4.14 tonnes per cutting the bona fide installer, year – a reduction of 30%. the government is failing to “However, using approved protect professional heating SAP software, I also calculated engineers who do follow all the impact of installing an the rules and regulations. electric boiler or electric panel “Consumers are also left heaters in the same house. The unprotected with the MEES results are frightening. The scheme preventing them SAP rating with an electric from renting out any property boiler would be 12 (G) and which has an F or G rating. the carbon dioxide emissions Furthermore, non-compliance 8.56 tonnes per year. The SAP with the Building Regulations rating with an electric panel may prevent them from being heater would be 17 (G) and able to sell their properties with the carbon dioxide emissions an illegal heating system. 7.8 tonnes per year. As from 1 “The government needs to April next year, there will be a act now by ensuring that a new requirement for any properties or updated EPC is provided rented out in the private rented with these installations and sector to normally have a that the public is informed minimum energy performance of the consequences of non- rating of E on an EPC. compliance. Otherwise what “This situation needs to be is the point of having these addressed now, otherwise it regulations in the first place?” makes a nonsense of having a In a reply to Thom’s concerns, carbon compliance calculation the DCLG has agreed to look in the Building Regulations, into the guidance for Building which can then be ignored when Control when inspecting gas- heating appliances are replaced. fired boiler replacements under “It seems there’s a clear lack Part L of Building Regulations of joined-up thinking on energy when it is next reviewed. efficiency policy,” adds Thom. “The letter from the DCLG “The aim of the recent does not really address my Bonfield Review was to provide concerns,” adds Thom. “There is a serious issue regarding non-compliance of Building Regulations and it is a shame that the government department responsible for this is unable to take any immediate action. “I welcome any initiative that will improve the energy efficiency of homes in this country but regulations designed to do this must close up any loopholes and have to be enforced if we are to reduce fuel poverty and Thom: “There’s a clear lack of meet our commitment to joined-up thinking on energy reducing carbon emissions eficiency policy” by at least 80% by 2050.” te

theenergyst.com POLICY

A significant and growing proportion of the amount business pay is towards green taxes or subsidies

Decarbonisation cost ‘minimal’ but set to double Analysis by the Climate Change Committee suggests that decarbonisation costs are ‘minimal’ for most firms but they are set to double. Brendan Coyne reports

he cost of low carbon goods or services for all but the and growing proportion of the for EU ETS, CRC and CCL. policies for most most energy-intensive sectors. In amount business pay is towards Medium-sized commercial commercial and 2030, its central case modelling green taxes or subsidies. firms again take the biggest Tindustrial companies suggested that would rise to Medium-sized commercial proportional hit, largely due is currently a fraction of 1% about 6p, or broadly double. firms are the hardest hit, to the CRC, with those levies of operating costs, according according to CCC analysis. making up 19% of their gas bill. to detailed analysis by the The squeezed middle Some 33% of their power For small commercial firms it Committee on Climate Change. However, as well as percentage bill goes towards low carbon is 7%. For large firms captured Using government data of overall operating costs, the policies. For medium-sized by the EU ETS, it is 11% and as its source, the CCC found report provides a detailed manufacturers, green levies are for large firms in metal and that the costs of low carbon picture of how much low carbon 30% of the power bill. Small mineral manufacturing it is 7%. policies in 2016 were around policies are adding to energy commercial firms spend 24% The CCC notes that the 0.2% of operating costs for the bills themselves. Table 1 shows of their bill on low carbon reduced burden on gas costs commercial sector, 0.4% for energy costs and the percentage policies; large manufacturers compared to electricity could manufacturing and 0.7% for the of the bill represented by low 15% and for the largest energy have negative consequences more energy-intensive sectors. carbon policies across all sectors users (mainly metal and for decarbonisation goals. While it projects these costs in 2016, and estimates those mineral industries) which are “Overall, this implies a will increase by about 50% by costs based on the CCC’s central given some compensation significantly lower impact of 2020 and double by 2030, the case modelling out to 2030. for policy costs, it is 9%. low-carbon policies on gas committee said that equated In terms of electricity bills, the Gas carries less of the policy prices compared to electricity, to about 3p on a £10 basket of CCC’s data shows a significant costs but bills include charges which risks incentivising a shift

20 April/May 2017 theenergyst.com Table 1: Energy cost change from 2016 and proportion of bill that is low-carbon policy cost for commercial, manufacturing and energy-intensive sectors (2016, 2020, 2030) Commercial sector Manufacturing sector (10% Energy-intensive sectors (58% of UK GVA) of UK GVA) (2% of UK GVA) Energy cost % low- Energy cost % low- Energy cost % low- change carbon change carbon change carbon 2016 - 26% - 21% - 18% 2020 14% 30% 14% 26% 12% 23% 2030 53% 34% 63% 30% 60% 27% Source: CCC analysis based on BEIS (2016) Digest of UK Energy Statistics, BEIS (September 2016) Quarterly Energy Prices And ONS (2016) Input-Output supply and use tables. Available at: gov.uk

in fuel from electricity to gas. responsible for nearly half of that prices are projected to increase This is contrary to the direction rise. Overall energy consumption by 22% to 2020 and 73% to set out in our decarbonisation from the sector fell 30% over 2030, with low carbon policy scenarios, which, involves a shift the period, driven largely by the behind three quarters of those in demand from hydrocarbon decline in manufacturing over rises to 2020 and three fifths energy to low-carbon electricity that period, through the CCC to 2030. Carbon price support for most non-energy intensive says it found some evidence and low carbon generation industries,” the report states. to suggest energy efficiency subsidies are the key drivers. improvement of around 7%. Large and intensive Price rises: Commercial manufacturers with Examining data from 2004 Business outlook: taxes compensation will also see to 2016, the report notes that The CCC predicts support significant price rises out business energy prices, like the levels for low carbon generators to 2030, but as an overall cost of many services, have risen to triple by 2030, from 1.5p/ percentage, decarbonisation at above the rate of inflation. kWh in 2016, to 4.4p/kWh for costs will be lower due to those Commercial businesses paid all consumers accept for the compensation schemes. 92% more for energy in 2016 most energy intensive sectors. than they did in 2004. Low It predicts that the carbon Business outlook: gas prices carbon policies were responsible price support will remain flat The outlook for gas price for two fifths, roughly 40% of out to 2020 and then increase increases is less steep for that rise, the report states. by 50% over the decade to 2030 commercial firms, but large However, the CCC noted that to reach 1.2 p/kWh. Meanwhile manufacturers face significant despite strong growth (+30% the CCL will probably rise to cost increases due to low carbon output) in the commercial sector, make up for the scrapping policies, mainly the EU ETS its electricity use has remained of the CRC, it suggests. and extra gas network costs, broadly flat, suggesting that according to the CCC (see some cost increases have been Business outlook: table below, figure 2.10). offset by energy efficiency. electricity prices While some of the business Lighting and more efficient Energy bills for small commercial energy bill hikes due to computers contributed to firms will rise by 17% out to decarbonisation policy appear efficiency gains, but demand 2020, the CCC believes. By steep, the report suggests that from air con and printers 2030, they will be 51% higher. “the government’s forthcoming increased, wiping out some of Of this, low carbon policy will be plan for meeting the fourth and those improvements, the CCC responsible for over two-thirds fifth carbon budgets should found. The total commercial of the increase to 2020 and provide opportunities for energy lighting stock grew by 6% over three-fifths of the total increase efficiency improvements, which Commercial the period while electricity to 2030, mainly through support in our scenarios would cut consumption from lighting fell for low carbon generation energy costs by 7% on average”. businesses paid 92% 26%. Electricity demand from air and increased CCL costs. It thinks many companies could more for energy conditioning systems increased Medium-sized commercial make much greater energy in 2016 than they 33%, and demand from printers firms face electricity rises of 13% efficiency savings to offset bills. did in 2004. Low rose 43%, according to the report. by 2020 and 50% by 2030, with The report, which also low carbon policy responsible for contains data for the carbon policies were Price rises: manufacturing half of the increase, it suggests. domestic sector, as well as a responsible for two On a like for like basis, According to the report, comprehensive chapter on how fifths, roughly 40% manufacturers paid 58% more for large manufacturers without the UK can remain competitive of that rise energy in 2016 than in 2004, the compensation face the biggest in a decarbonised environment, report found, with green policies short-term price hikes. Electricity makes interesting reading. te

theenergyst.com April/May 2017 21 DEMAND-SIDE RESPONSE Aggregator market ‘faces significant consolidation’ Demand response aggregators believe increasing competition and volatile revenue streams make a market shake-up inevitable. Choose your partner wisely, they tell Brendan Coyne

market and I think if you are a Difficult to build marketing company just selling a business case if capacity, then they will overtake your eggs are in a you fairly soon,” said Phelan. basket with price “If you are providing all the volatility from layered services that are as much £7k/MW to about [your] technology as about, £45k/MW if you like, just a selling engine of a company, then I think it might be a slightly different proposition. I think [suppliers] might need the aggregator or the people doing that work to coexist with them to deliver the market.” Burford agrees suppliers “will struggle to build decent technology platforms” and may therefore need to partner with aggregators – at least those left standing. he number of unpredictable revenue streams, Shells and sells Of around 15 aggregators demand-side response Burford and Phelan agree. Meanwhile, energy suppliers, as currently in business, Burford aggregators active well as distribution networks, are sees that “dropping to a third of Tin the UK market Eggs and baskets now starting to go after the same that figure” within two years. will reduce significantly in the “We have seen a huge amount customers, increasing competitive “Some are swallowing money, next 18 months, according of volatility in the last couple of pressure on aggregators. they are marketing shells that to market participants. auctions, one clearing just under Phelan and Burford think are putting a huge amount of Louis Burford, Restore UK £7k/MW the other at £45k/ competition, as well as finance into marketing,” he vice-president of sourcing and MW. That is a huge spectrum,” commoditisation of revenues from said.” But they are not turning sales, believes only a third of said Burford. “If you are putting system operator schemes, might that into actual value for end operators will be in business. your eggs into those baskets, also contribute to consolidation. consumers. So from a customer Endeco CEO Michael Phelan it is very difficult to build a “[Suppliers] are definitely perspective, you have to make thinks about half of current business plan and forecast going to be involved in the sure you back the right horse.” te aggregators are “sales engines” when you have such uncertainty that may run out of steam. in your pricing model.” “I believe there will be a Endeco’s Phelan says £7k/MW consolidation over the next 12-18 is “almost at don’t care level” as Take our DSR survey months. We will see the stronger far as end users are concerned. The Energyst seeks reader views on demand-side response companies survive and others “It is not possible for an and battery storage for our annual report and conference. move away and look at other aggregator such as us to run a End-users that take the survey will be given priority for areas,” Burford told The Energyst. business on that level of income free event tickets and will receive a copy of the report as “I think there will be no more per megawatt and also not of soon as it is published. than a handful of competent interest to customers at that The short survey asks those that are involved in balancing aggregators, with technology level of income,” he said. services provision about their experiences, positive and that works, that are still in the “So traditional aggregators negative. It also seeks views from companies that do not market in the next two years.” in UK and Ireland that are participate in DSR as to why not. The aim is to provide a snapshot of UK balancing services Aggregators heavily reliant mainly capacity-based, provision, alongside end-user appetite for battery storage. on capacity market revenues then I guess for them the Please take the short survey at theenergyst.com could now be feeling pain from market is probably dead.”

22 April/May 2017 theenergyst.com Sponsored feature Making power work for the Industrial and Commercial business sector Business energy specialist Haven Power is challenging the market by creating bespoke solutions to enable its Industrial and Commercial (I&C) customers to make a difference to their bottom line while cutting their carbon emissions

n the past few years, there have been compressed wood pellets instead of coal in customers make a real difference that as well countless false dawns where energy order to generate reliable, affordable, renewable as offering free energy efficiency consultancy, suppliers offered to help organisations electricity. They are now the biggest single they’re working with customers in design save money and cut their carbon output by site renewable electricity generator in the UK, workshops to create the precise products I producing 16% of the country’s renewable power and services they need. Here, experts from improving their energy efficiency. However, the energy market remains a landscape dominated – enough for four million households.” Haven Power and Drax Power sit down with by complexity and inertia. “Here at Haven we’re making it easier for each customers to discuss their needs and processes In an era of mass-customisation, where you business we supply to find the energy efficiency and ultimately help them to produce a bespoke can specify every single detail of a new car or solution that’s right for them – and giving them solution. computer – inside and out – it is disappointing the tools to deliver it.” Haven Power even tailors the way its services that large businesses still struggle to find any Haven Power is even investing its experts’ are charged for. As Sheffield explains: “We know meaningful difference between suppliers and time to help customers discover how they can that it can sometimes be difficult for businesses what they offer. improve their energy efficiency. to make changes, that’s why we’re happy to help All the evidence suggests that businesses Sheffield explains: “It is reasonable for a customers spread the cost via their energy bill.” across the UK really are ready to play their part in reducing carbon emissions – and they would be “We are focusing on individual solutions, even happier if they could cut their costs at the same time. not of-the-shelf products” Energy is typically one of the top five concerns for Industrial & Commercial (I&C) customers. Paul Shefeld, Chief Operating Ofcer That’s why the changes happening here at and I&C Director, Haven Power Haven Power, in Ipswich, are so interesting. Haven Power is starting a quiet revolution in customer to target savings up to 25% on their It may seem radical, but from product energy efficiency for the entire I&C sector. fuel bills – and reduce their carbon emissions design to charging structures, when it comes As Paul Sheffield takes the reins as Chief accordingly. That’s going to make a big to supplying energy for business customers, Operating Officer and I&C Director at Haven difference for some businesses, but they can only business as usual is a thing of the past at Power, we caught up with him to find out about achieve those savings if they know what they can Haven Power. how he and his team are making this revolution do, specifically for their business, to reduce bills www.havenpower.com | 01473 725943 happen. “We have an enviable reputation for and carbon emissions. “ | [email protected] excellence in customer service at Haven. We’ve “There’s a huge difference between how you always built our I&C teams around our customers’ achieve energy efficiency in a set of factories needs. Everything we do here is about helping compared to if you run a number of offices, or if make power work for you,” he says. you have a large retail network to support. To find “And as part of Drax Group, we also share a out exactly how we can help our customers, we heritage of creating change that delivers positive need to get our experts on the ground working results. Our colleagues at Drax Power upgraded with them to really get to know their business.” half of the power station to run on sustainable Haven Power is so committed to helping DEMAND-SIDE RESPONSE Licensing issues and a capacity market crunch? Limejump CEO Erik Nygard believes aggregators without a supply licence will struggle to survive as demand response revenues are commoditised. Meanwhile, questions are being raised about the ability of small generators and aggregators to deliver capacity market contracts. Brendan Coyne reports

ast summer Limejump they are using, or the may not have on their side. boss Erik Nygard customer has a contract “The concept [behind the suggested traditional with exposure to markets. solution] is good. But if you Lutilities would “fall Ofgem and BEIS have asked, are a business with demand by the wayside” unless they in the smart systems call for response pricing coming off could adapt their business evidence, how great a barrier and that is all you do, you models to suit a demand-led, lack of access to those markets have a problem as a business decentralised power system. presents to unlocking flexibility model. You have nowhere else He also thinks that traditional and the regulator is looking at to go,” he told The Energyst. aggregators may be in trouble if how a solution might work. “So our view is that, if you they are waiting for regulators But any fix will likely require want to [access the BM], just to come up with a solution cooperation and consensus register yourself as an electricity that allows them to play in from those that might not supplier, and deal with the wholesale market and balancing want further competition. physical delivery of energy mechanism (BM), thereby and then you can play the broadening revenue streams. Get a licence flexibility however you want. If you are a business Currently, they cannot do Nygard thinks any solution “If you have a good that unless they supply the will therefore take time – knowledge of what happens with demand customer whose flexibility which some aggregators in the physical energy market response pricing coming of and that is all you do, you Restore and Endeco: No Licence? No problem have a problem as a “A supply licence is a great facilitator but not the be all and end all,” says Restore’s business model Louis Burford (left). Restore’s clients in the main have exposure to wholesale and Erik Nygard, Limejump imbalance markets through flexible contracts with suppliers, which enables them to unlock more of the value of their flexibility, he says. “So do aggregators need a supply licence to survive? I would say not, because we are growing pretty quickly today without a supply licence.” Endeco CEO Michael Phelan says the aggregator has a supply licence in Ireland to access markets, and may consider acquiring one in the UK for the same reasons. But he says the firm has no immediate plans to do so and that the margins are “just too low” to even consider using the licence as it is intended, ie becoming a supplier. “Our focus is on dynamic frequency response and enhanced frequency response,” he says. “Whether you need a supply licence to [maximise the value of flexibility] is questionable.”

24 April/May 2017 theenergyst.com Triad cuts to hit capacity market contracts? Up to half of small generators with capacity market contracts for delivery in winter 2018/19 and 2019/20 could give them up due to steep revenue cuts proposed by the energy regulator (see p16). Embedded benefit rates, specifically the so-called Triad payment, are set to be slashed from £45/ kW to less than £2/kW under Ofgem’s plans. Consultancy Aurora Research believes this may hit small generators’ projected capacity market revenues by up to 40% and could lead them to give up contracts issued in 2014 and 2015 (T-4) auctions. It thinks they may potentially then bid their assets back in to early (T-1) auctions in the hope of a better deal. The consultancy estimates Ofgem’s changes, if they lead to a shortfall in capacity delivery, may drive up capacity market prices in those auctions. The firm also believes that the impact of the changes on the Triad mechanism will drive up wholesale and balancing mechanism prices, and may also lead National Grid to spend more on Short Term Operating Reserve (STOR) procurement. Meanwhile, the consultancy estimates that although proposed Triad changes will drive up capacity market outturns, little in the way of large new gas plant, or combined cycle gas turbines (CCGTs), will be developed over the 2020s, perhaps 1GW to 3GW. Much large thermal plant will also run at load factors of under 15% throughout the decade, it suggested, with the economics of those conditions ruling out CCGTs. Other analysts have also highlighted concerns around the impact of Triad changes on capacity market delivery in recent weeks. Frontier Economics’ energy director Dan Roberts was quoted by pricing firm and specialist publisher ICIS as suggesting many contracts are being “touted around”. That is, developers who realise that their project economics no longer stack up, are keen to offload them. “There is a strong risk the owners of these ‘options’ – they are not yet projects – just pay the penalty [for non-delivery] and move on,” Roberts is quoted as stating.

then going down this route is tends to constrain the level of down its energy supply not actually that complicated.” participation severely,” he said. business, as a UK example. “Some aggregators do attempt “You might conclude that Fix the problem to be suppliers, but the problem the capabilities and priorities However, other aggregators they face is that it’s very difficult needed to be an effective and believe that the underlying for them to compete effectively competitive retailer and those problem should be fixed. Paul with larger suppliers, as, while to be a good aggregator are Troughton, senior director of the clever use of flexibility should quite incompatible,” he said. regulatory affairs at Enernoc, give them a cost advantage, “Fortunately, there’s an said the issue is not about this tends to be outweighed easy fix: remove the forced ‘having a supply licence’. by their lack of scale: it’s very bundling of the two services, “That is relatively trivial to hard to win large customers’ so that customers can shop obtain. Rather, it’s a market business against competition around separately for the design flaw that the sale of from the major incumbents.” best retail deal and the best flexibility in these markets Aggregators and niche deal to get value from their It’s a market design is forcibly bundled with retailers around the world flexibility. This has been done retail supply. This is bad have tried to make this work, successfully elsewhere and flaw that the sale of for customers and for the he said, pointing to Tempus there are processes in train flexibility in these efficiency of the system, as it Energy, which last year closed to get it done here.” te markets is forcibly bundled with retail Will turn down capacity market contracts get delivered? supply Paul Troughton, Enernoc National Grid issued 312MW of contracts for turn down or ‘load’ demand-side response in March for delivery next winter at a rate of £45,000/MW. While that value is higher than many anticipated, Endeco’s Michael Phelan (right) is not convinced it will all be delivered. “It is difficult for load people to turn off their factory for half an hour, even at a time of crisis,” he said. “So I think [the high auction outturn] was to do with scarcity [of pure ‘load’ DSR] and possibly, lack of understanding, even on the part of aggregators, as to how prepared people are to deliver that kind of service.” Phelan thinks many bids in the Transitional Arrangement (TA) auction may turn out to be “speculative, without necessarily knowing where the load [they have contracted to deliver] is”. Does he think aggregators contracted to deliver that volume will struggle to deliver? “I think they might.” For aggregators in that market, it could be a calculated risk. Bid bonds in the TA auction are £500/MW, versus the £5,000/MW aggregators must post in the capacity market proper.

theenergyst.com April/May 2017 25 DEMAND-SIDE RESPONSE A network review Ofgem is consulting on the transmission and distribution network charging arrangements. prior to a proposed Significant Code Review. The scope of the consultation includes small generators, storage and private wire networks

All users who are connected to the licensed networks should make some contribution to common costs

Ofgem wants to level the playing field for storage operators, which currently face double charging issues

fgem has launched from network users, ie sunk picking up a higher tab, behind the meter, and as a a consultation on costs. The regulator believes despite not actively driving result lead to higher residual network charging the behaviour incentivised up network costs. charges for other users”. Oarrangements ahead by the current charging It says that situation Likewise private wire of a major review. Everything is arrangements is distorting is driven by those with networks. The regulator said in the frame, from all aspects of the market and risks driving embedded generation earning its initial view “is that all distribution and transmission up consumer bills. revenues by allowing energy users who are connected to charges, to behind the meter However, Ofgem left room suppliers to avoid peak costs the licensed networks should generation, battery storage not to take action if its review by acting as negative demand, make some contribution and private wire networks. concludes that changing the while not actually reducing the to common costs”. Ahead of a so-called current regime would be amount of revenue that needs In the consultation, Ofgem Significant Code Review, via detrimental to consumers. to be recovered via residual outlines potential options for which it could implement Similarly, the regulator charges. As more small scale network charges, as well as sweeping changes to market reiterated that it may not generation is connected to examples from other countries rules around network charges, implement changes to Triad the system, the risk is that as to how they might be the regulator seeks views on payments, as outlined in a distortion, and therefore implemented. It seeks industry potential solutions to make ‘minded to’ decision earlier costs to some consumers, views on a broad range of cost recovery more reflective this month, which dismayed could spiral, argues Ofgem. questions relating to network and prevent ‘haves’ benefitting those representing small charge recovery, treatment of at the expense of ‘have nots’. generators and businesses Behind the meter batteries, behind the meter Ofgem says part of the which would stand to lose and ‘of grid’ assets and private wires and review will focus on levelling significant revenues. Although Ofgem said it has says answers will inform how the playing field for storage “no wish” to prevent firms and whether it proceeds with operators, which currently Haves and have nots with onsite – or behind the a Significant Code Review. face double charging issues. However, Ofgem repeated meter – generation making However, as that review However, the main focus that it thinks the current use of that generation reduce would take at least 18 of its proposed review is arrangements will result in costs, “the current residual months to conclude, Ofgem on the means of recovering householders and businesses network charges may distort said it may make some rule residual network charges without onsite generation decisions to install generation changes in the meantime. te

26 April/May 2017 theenergyst.com

DEMAND-SIDE RESPONSE

Businesses must look to the most profitable schemes in light of falling capacity market and balancing revenues

Is traditional DSR dead? There is a lack of understanding in the market around the value of different demand- side response schemes, according to Endeco Technologies CEO and co-founder Michael Phelan. He warns many businesses are becoming ‘locked into commodity schemes where there is no money’. Louise Frampton reports

ndeco boss Michael avoidance and optimisation, affects the business case. £7,000 Phelan thinks the market but these are smaller.” per MW is not a lot of money for for traditional demand Dynamic Firm Frequency potentially having to do some Eresponse may be dead. Response (DFFR) is the latest work, putting in some equipment But he believes that energy revenue opportunity for large There are a lot of and testing. This has caused more balancing schemes can still offer energy users and is a continuously than its fair share of problems for attractive revenue opportunities provided service used to schemes and a lot of aggregators, it is nearly a 70% fall. but the real potential lies with manage the normal second-by- prices. The problem The value, instead, has gone into fast response schemes. second changes on the system. is that no one is fast frequency response (FFR) “As a DSR business, you According to Endeco’s figures, explaining where or DFFR,” comments Phelan. could not rely on the traditional an organisation can earn an It has been suggested that the DSR, the STOR and capacity income of about £70,000 per the real value is DSR market may have become markets, and have a business MW in return for its availability ‘too commoditised’ or ‘over – or certainly grow a business. to meet unscheduled energy complicated’. Phelan points out There is more of a balancing peaks on the grid, by participating “there are a lot of schemes and a problem than a capacity problem, in DFFR. This is much higher lot of prices”. The problem is that at present. This is why we are than the circa £35,000 for Non- no one is explaining where the seeing low prices on the capacity Dynamic Frequency Response real value is, so people are “getting and short-term markets. The and around £20,000 for STOR. locked into ‘commodity schemes’ main revenue streams are where there is no money.” around frequency response – ie Falling revenues If you do not have the the ‘faster’ services. There are “A year ago, we were all getting capabilities to deliver fast other revenue opportunities £22,500 per MW capacity; this response schemes, you around smart tariffs, peak year it is around £7,000, which are not going to “shout

28 April/May 2017 theenergyst.com Sponsored column

PPI for utility bills: How to recover the millions firms about” these higher value simply turn on the engine and markets, Phelan suggests. hope that it will work,” says are due from suppliers While there is greater Phelan. “You need to test clarity in Ireland it, to take it for a run on “where the sometimes and If Energyst readers do one thing value is”, the carry a heavy this fnancial year it could unlock UK market 1/3 load. If you don’t a substantial energy efciency budget, according to STC. needs help in Revenue from the do this, you understanding increase the risk capacity market has An energy consultancy recently that the faster of it failing.” dropped by more than a schemes offer “Data highlighted the ‘missing millions’ the biggest 1/3 from £22,500/MW centres have owed to businesses due to utility returns. Phelan to £7000/MW large Rotary billing errors. Specialist validation firm STC’s business development suggested that UPSs and it is a formatting between meter National Grid could ‘no-brainer’ for them manager Alan Little (pictured) outlines how to get that money operators, data collectors and have a role to play in offering to participate in Frequency suppliers, with a knock on impact some clarification to the market. Response but they are nervous back. “If nothing else, readers should on billing accuracy. about participating. Early Meanwhile, new non- Fast and slow adopters adopters are confident in their conduct a thorough, historic utility bill audit going back six commodity energy bill elements, As an aggregator with more than assets, but I think many are such as the capacity market 200 sites, operating in the UK concerned about contractual years,” says Little. “That will enable them to claim charge and Contracts for and Ireland, Endeco currently barriers that may prevent Difference, as well as incoming enables energy users from a wide them from participating back from suppliers anything they are due.” changes to network charges, add range of sectors to participate in in DSR,” says Phelan. further complexity to the task. grid balancing schemes. However, He adds that hospitals are If businesses are not already conducting rigorous bill Such developments increase some business sectors require starting to look more at DSR the importance both of accurate more convincing than others and opportunities but are also slow validation, “I think that would convince them to ensure they do billing and proper analysis of many organisations still struggle to adopt and are ‘less confident half-hourly consumption data so to understand what is required in their assets’ than data centres. it from now on,” he says, likening the situation to an energy and that resulting cost increases can at a technical level – presenting “We expect them to come very be mitigated. a barrier to uptake. Phelan says late to the party,” says Phelan. water equivalent to PPI. “The rebates can be there is a need to raise awareness Get your money back Investing in technology substantial,” he says. of the potential of DSR, reduce “There’s a lot of talk about confusion in the market and The move towards fast Water-gate? ‘missing millions’, but not much in encourage increased participation. response schemes has meant the way of a solution,” says Little. Industrial and commercial that the business has shifted The new water retail market makes it especially important for “It’s complex for businesses operators with refrigerator chiller its focus towards battery to manually undertake proper load or induction heating load are technology. Many sites still firms to increase their vigilance, he adds. validation. But by using specialist proving to be the most receptive to use lead acid batteries, which software and dedicated resource, are not capable of the amount “Typically more errors occur participating, according to Phelan. businesses can show not only of switching that the grid with a change of supplier,” says The greatest uptake is among current bill savings, but also what wants them to do at present. Little. “You may have been able operators that are particularly they will save going forward by profit and margin driven – such as “We expect there to be to secure a better rate with that cutting out errors now.” in the food industry, for example. transition towards lithium- contract, but the risk of error By completing a historic audit, Mission critical applications ion over the next 12 months. with a new supplier handling and claiming back up to six where the risks associated with There is a lot of value in this your data increases.” years’ worth of inaccurate bills, an outage are very high are area,” he explained. Endeco has Little also expects teething the rebates can unlock additional currently more conservative and received “significant” inward issues from new suppliers’ billing investment in energy efficiency, it will take some “confidence investment from Irish utility systems, which have historically further reducing bills, he adds. education”, to bring these sectors ESB and this will help support proven problematic. “We are coming across more on board, he acknowledges. plans to supply batteries to errors on a daily basis”, says Aggregators will need to deliver DFFR, in the future. P272 fallout Little. “That is money in the bank work with them more closely to “With battery technology, you The water market opening also that suppliers have been sitting understand that participation can receive better payments, coincides with the deadline on.” can be achieved safely, while as you can participate in for more businesses to be half there needs to be greater dynamic or enhanced schemes. hourly metered and settled understanding that assets need Without this, you may end up under P272 regulations. Little Find out how to reclaim to be used and tested – so why in schemes that offer less than suspects there may also be what you are owed at not profit at the same time? £30,000 as opposed to schemes teething issues with data stcenergy.com “The analogy I use is that, if pay upwards of £100,000 you bought a truck, you wouldn’t [per MW]. There is huge expect to leave it outside, and potential,” Phelan explains. te thetheenergyst.energyst.com DEMAFEAT.ND SPR-SIDEAED RSPLIESPONST E WPD launches local DSR aggregator business Western Power Distribution launches demand-side response unit to sell flexibility both into National Grid’s schemes and balance its own local networks. Brendan Coyne reports

PD’s Flexible constraint issues at a local “very high standard of service The DNO is one of a Power project level, which also affects the delivery to National Grid number of network companies initially focuses national system. DNOs are and therefore highly reliable examining procurement of Won the East faced with a choice of throwing revenues for contracted flexibility services. UK Power Midlands. If successful over copper at the problem, which business customers”. Networks recently indicated the next three years, it may is expensive, or trying to By reliably delivering a ramping up of its demand- be rolled out more widely. develop smarter solutions. 100% of what is contracted side response activity, stating The network operator is WPD will use the aggregator to National Grid schemes, it will procure more flexibility now wooing medium and model to contract services into WPD believes it can remove in 2017 via aggregators and large businesses with onsite National Grid schemes as well the clawback that can erode directly with industrial and generation and flexible as keep some capacity back revenues for DSR providers. commercial consumers. energy consumption to manage local constraints. To ensure that outcome, Meanwhile, SSE chief profiles to hep balance the It will use Kiwi Power’s WPD plans to put excess executive Alistair Phillips- local and national grids. technology to underpin the capacity into the balancing Davies recently told the Future The move signals the shift of business and the aggregator services ‘buckets’ contracted of Utilities conference that distribution network operators will provide control desk, to National Grid. SSE’s network operation (DNOs) towards distribution National Grid interface While that ‘gold plated’ was “now beginning to run system operators (DSOs) and back office services approach would reduce its tenders to manage local as a result of the volume of while WPD builds its own profit from the venture, WPD constraints in our distribution connected generation they control room and back believes the benefits in terms networks through flexibility now have to manage. office in the midlands. of local network constraint services, such as demand-side Distribution-connected A spokesman for the firm management will enable response, energy storage and generation is causing said it hoped to provide a it to defer investment. stand-by generation”. te Why DNOs need your flexibility WPD’s innovation and low carbon networks engineer Matt Watson explains the network operator’s approach

Could you outline the types of constraint issues that require a a call and maintain their response for at least two hours. It will be DSR approach? fascinating to see the different options customers use to fulfil these We are investigating whether we can use DSR as a cost-effective requirements. It could be as simple as turning on some back-up alternative to traditional asset reinforcement. The cost effectiveness generation or as complex as deferring certain energy intensive of such a solution depends on the loading profile of the asset, and processes. also the cost of the traditional solution. As such we would envisage DSR being primarily used to manage high value assets like those Why should businesses consider coming to WPD with their on our 132 kV networks. In addition, DSR may be useful where the flexibility? traditional solution will be lengthy, allowing us to manage the period WPD is a leading UK electricity distributor with a proven customer until the asset is built. A new 132kV overhead line is a good example service record. The Flexible Power trial enables us to demonstrate of both a costly and lengthy piece of traditional reinforcement. our commitment to offering customers who take part maximum value for their flexibility in as easy a way as possible. We’re doing What kind of business and assets are you particularly looking to this via two services. The first is simply a constraint managed zone sign-up for the service? service, focussing on DNO led DSR. The second is a fully managed One of the aims of the trial is to understand which businesses service that seamlessly integrates three revenue streams: the and assets can respond to our requirements. As such we have constraint managed zone service, STOR and Triad. How a customer tried to keep the requirements as functional as possible. We are achieves energy flexibility is really their choice – we’re very much looking for half hourly metered customers who can drop their focused on providing a personalised service that will suit each demand, or increase their onsite generation, within 15 minutes of customer’s needs.

30 April/May 2017 theenergyst.com Sponsored column

Three things you need to know before trusting a demand-side ‘Forget blackout response aggregator Demand-side response is gaining momentum. Aggregator Britain: Flexibility will consolidation may be on the cards, increasing the importance of picking the right partner, says solve capacity issue’ Louis Burford (pictured), VP Sourcing & Sales, REstore UK olicymakers should 50 times more powerful than reject calls for the UK to the most powerful nuclear bomb The competition to pay Preturn to double-digit ever used – hitting the earth.” companies to harness their margins of power capacity over The thinktank believes storage, flexibility is heating up. Some demand and let fl exible plant interconnectors, demand-side traditional utilities are trying “All aggregators are and agile companies deliver response and peaking plant to catch up and are investing a leaner electricity system, can deliver a leaner, more in aggregator-type business not equal, and it is a new report suggests. responsive power system that models or partnerships with likely that some will The Energy & Climate will cope with ever thinner aggregators. Intelligence Unit (ECIU), a margins as older plant retires. Meanwhile some aggregators not be in business non-profi t thinktank funded by “The new [decentralised] are taking a degree of risk by in the next 12-24 climate and environment bodies, system would operate more bidding for contracts that they months” suggests that National Grid’s like a traditional market, where cannot guarantee to fulfil. Supplemental Balancing Reserve demand can fl ex to supply as At the same time, price (SBR), put in place to shore up well as vice versa,” it suggests. uncertainty in schemes like the thin capacity margins ahead of That view appears to be capacity market combined with launch of the capacity market, gaining traction at both policy and regulatory changes 2. The longest proven track was a £180m waste of money. government and regulatory that will affect generation forms record It argues that the fact SBR was levels. BEIS and Ofgem recently of demand-side response, Anybody can claim they have the not once called upon over three issued a call for evidence on the could have a serious impact on best software and the optimal years underlines the reliability shift towards a smarter power revenues for some aggregators trading strategy. That is where a of the UK power system. Now system, and the regulator’s most and their customers. strong track record will separate the capacity market is up and senior networks partner Andrew All of which underlines the the market. For example, Restore running, “that should be the fi nal Wright has consistently stated need for businesses to undertake and those that are delivering the nail in the coffi n for blackout that the value of fl exible kilowatts robust due diligence when it revenues they promise, versus fears in the UK,” states the ECIU, will increase signifi cantly comes to selecting a partner those that are not. pointing out that the chances of over the coming years. to monetise their flexibility. All the grid totally failing are remote. Meanwhile, traditional aggregators are not equal, and it 3. The most result-driven “A reliability of 99.999993% utilities, rather than committing is likely that some will not be in You have to be able to give corresponds to a less than to large new power stations, are business in the next 12-24 months. people comfort that they are one-in-ten-million chance of in the main developing smaller Remember the following three backing the right horse and the grid failing to deliver power, plant to capitalise on peak prices. things before trusting a DSR will receive the value they are roughly equal to the chance of However, to signifi cantly aggregator: promised. Otherwise it is bad winning the lottery in each UK scale demand-side response for business, bad for demand- draw,” states the ECIU. “It is also participation from UK 1. The best-in-class technology side response and, ultimately, around a thousand times less companies, it may be that Having the best technology bad for consumers. Restore likely than asteroid 2013 TV135 – price signals will need is critical: firstly to identify has consistently delivered which would cause an explosion to be sharpened. te flexibility within sites and most those elements. As a result, crucially to then maximise its the company is ranked 41st in value by enabling smart trading Deloitte’s Technology Fastest across all available markets. Growing EMEA Companies Restore describes itself as a 500-List. technology company rather than an aggregator and that is why it So while it appears to be a developed the patented FlexTreo seller’s market for flexibility, platform, to capture all existing choose carefully where you put market opportunities, as well as it. Doing so will ensure maximum emerging revenue streams. returns with minimum fuss.

For more information, visit restore.eu

Fears about blackouts ‘should be a thing of the past’ theenergyst.comcom DEMAND-SIDE RESPONSE We need to talk about Triad Smart Grid Consultancy director Gary Swandells believes heated debate around proposed cuts to Triad payments is fuelling fear and misunderstanding. He points out Triad avoidance will likely become even more valuable, and only those generators that receive a disproportionate benefit by exporting power in those periods will be affected

were exporting power during There is a great deal of concern about the scope the three triad periods. and impact of Ofgem’s The report presents a case and proposed changes to evidence demonstrating that up Triad payments to £350m per year goes to these generators from consumers. Furthermore this figure could reach £650m/year by 2021. It is also claimed that payments to these generators creates a distorting effect on other markets such as the capacity market, wholesale and ancillary services markets, by disproportionately incentivising such generators. In summary, Ofgem now proposes that payments will be gradually reduced by a third each year over a three-year here has been a great although its real name is actually Many large consumers such period, starting in April 2018. deal of discussion and in Transmission Network Use as hospitals, water authorities The full embedded benefits some cases quite heated of System (TNUoS) charge. or energy-intensive industries consultation closed on 18 April. Tviews expressed since The mechanics of the already do this, albeit with Unfortunately, in all the Ofgem published a less than methodology are somewhat the help of their supplier or discussion and debate that this snappily titled document, Minded convoluted but simplistically, deman-response aggregator has triggered, it would appear to decision and draft Impact there is a substantial premium to predict when peaks are many people have misunderstood Assessment of industry’s proposals levied on energy consumers likely. This amounts to several the nature of the changes and (CMP264 and CMP265) to during three half-hourly hundred megawatts of energy are worried about the increased change electricity transmission periods during the winter, that is shifted away from the costs to the hospitals, etc. charging arrangements for when peak demand occurs. peaks, and has helped to keep The proposed changes should Embedded Generators, on 1 March. the lights on in recent years not affect them unless they Views across the industry have Disproportionate charge as operating margins have were also receiving income ranged from concern through to This disproportionate charge tightened significantly. from exported energy. The outrage and, unfortunately, this is then applied on a pro-rata This, however, is an charging methodology remains has been coupled with a great basis so that, in theory, the indirect consequence and not and therefore their ability to deal of misunderstanding about costs are applied fairly to those the purpose of TNUoS. avoid them still holds the same what the scope and impact of who contributed to the peaks. For generators that are potential. In fact the forecasts for the change proposals will be. This can amount to as much as connected to the distribution TNUoS suggest that the costs Firstly, the document is a £50,000-plus per MW based on networks, this has been a associated with the transmission consultation on the change geographic location, compared very attractive opportunity, as system will continue to proposal and has not yet with the value of the electricity they have been afforded this increase with predictions of been confirmed, although on itself,which more likely to be in same disproportionality in more than £70 per kW by this point at least it is highly the range of £90-£150 per MWh. terms on their income if they 2020/21 being suggested. te likely that it will go ahead. Triad charges can be avoided The regulator’s proposal relates by consumers if they are Payments to these generators to the charging methodology able to predict high demand creates a distorting efect on that is used to fund the costs periods in advance and either other markets such as the associated with the high-voltage shift load to another time or transmission network, which use an alternative supply such capacity market, wholesale and is commonly known as Triad, as embedded generation. ancillary services markets

32 April/May 2017 theenergyst.com DEMAND-SIDE RESPONSE Battery storage ramps up Renewable energy partners to deliver 185MW of battery storage by the end of 2018

ggregator Limejump generators look to benefit and renewable from the technology.” energy developer Limjump CEO Erik AAnesco are teaming Nygard said the capacity up to deliver 185MW of battery market revenues were storage by the end of 2018. one piece of the Limejump will operate the puzzle for battery portfolio within balancing storage operators, and flexibility markets, 1GW who must stack combining the granular Amount of renewable revenues from speed of response of batteries generation technologies different grid with other distributed balancing services Anesco has deployed generation assets in order to Anesco has just completed its 20th utility in order to deliver maximise their flexibility. scale battery unit to date reasonable return The deal is one of a on investment. He number of partnerships taking its storage portfolio to stability, energy said the partnership being struck to deliver 18.9MW. By the end of next storage can help would “provide Anesco with capacity market contracts. year, that will have increased maximise the use of renewable access to the full breadth The agreement adds weight by an order of magnitude. power being generated, while of market opportunities”. to market views that the UK Anesco executive chairman breeding a more resilient local Anesco has deployed is rapidly approaching a Steve Shine said the move is grid. It’s an exciting time for about 1GW of renewable battery storage boom. Anesco “further proof of the significant the sector and we predict generation technologies to has just completed its 20th growth of the sector”. momentum will continue date, of which roughly half utility scale battery unit, “As well as aiding grid to grow, as more and more (480MW) is solar PV.

Enernoc takes big slice Haven signs Kiwi as of £14m DSR auction preferred aggregator Drax-owned business energy supplier Haven Power has ggregator Enernoc was (£1.56m); industrial gases firm struck a deal with demand-side response firm Kiwi Power so awarded contracts worth BOC took 19MW (£855k); that the aggregator will be recommended to the supplier’s A£3.9m in the capacity Limejump, another aggregator customers seeking to monetise energy flexibility. market auction specifically for with a supply licence, won The deal comes two weeks after Kiwi Power’s success in turn down demand-side response 17.508MW (£788k); UK Power the Transitional Arrangements capacity auction. Haven said it selected Kiwi “following a rigorous selection (DSR). The aggregator took Reserve was awarded 10MW process”. (£450k); EDF was successful 86.88MW of 312MW derated Haven Power COO Neil Isaacson, said the agreement capacity procured at £45/kW, with 8.687MW (£390k); and would make DSR “more accessible and simpler for roughly 28% of the total. Energy Pool UK won contracts businesses to implement”. Nine other firms were for 4.344MW, worth £195k. The move comes as many aggregators predict successful in their bids Some 88% of the capacity consolidation in the market. Speaking to The Energyst, in the final Transitional (275MW) procured is for new Restore’s UK lead Louis Burford suggested the current Arrangements capacity auction capacity, classified as unproven market, whereby around 20 aggregators are currently trying for delivery next winter. DSR, with the remaining to scale their portfolios, will be reduced to “a handful” over Fellow aggregator Kiwi 37MW procured proven DSR. the next 12-24 months. Power took the next biggest In total, 372.987MW derated Read more about demand-side response with insight from share with 60MW, worth capacity was prequalified for the end users, energy suppliers and aggregators, via our 2016 £2.7m. Eon took 36MW, worth auction, meaning that roughly Demand-side Response Report. £1.6m; Tata Steel won 35MW 60MW failed to secure a contract. End users interested in monetising flexibility should also (£1.58m); aggregator and These were two capacity market register for a free ticket for our 2017 DSR Event, held in licensed energy supplier Smartest units from Smartest Energy and London on 7 September. See www.dsrevent.uk Energy landed 34.752MW one from Energy Pool UK. theenergyst.com April/May 2017 33 GAS & ELECTRICITY Why more firms are obtaining electricity supply licences Consultant Jo Butlin believes a push to obtain electricity supply licences by aggregators, local authorities and renewable generators is set to continue as they try to maximise value and minimise reliance – and payments – to incumbents. Meanwhile those that fully exploit opportunities afforded to licence holders may actually deliver long-mooted business model innovation

he growth in the inherently low margin business. service offering, a supply licence number of electricity provides a route to value creation. supply companies has 2. Growth of demand- More complex than the historical Tbeen well documented, side response (DSR) channel, but potentially appealing with more than 50 players now The growing need for demand- for business sustainability, active in the market and no sign side response actions in order to particularly if the market shifts of an apparent slowdown in new balance the UK system is driving towards energy as a service. licences being granted by Ofgem. the growth of a plethora of new What is less well understood market participants. These 4. Energy as a service is the opportunity that a supply businesses are genuine disruptors ‘Energy as a service’ is a phrase licence potentially offers its owner as they are technology-led and being bandied more and more. – and increasingly it is not just agile. They can reposition quickly The trend towards the integration about access to end consumers. as new value pools emerge. of supply, generation and With the growth of However, what many of demand management means competition, continual media them are realising is that The trend towards that the world for customers bashing, a large proportion however clever the technology the integration of (and suppliers) is increasingly of consumers who have not in reducing demand, the complex. Offering warm, lit yet had the appetite to switch attributable value ultimately supply, generation offices, factories and ultimately supplier and a complex market flows via the supply licence and demand homes at lowest cost is potentially to navigate, it is perhaps holder who inevitably want management means a more attractive proposition surprising that so many are their cut. Increasingly, that the world to customers than having to still keen to enter the fray. suppliers and DSR providers work it out themselves. We are However, look a bit closer are becoming one – whether for customers is starting to see convergence of the and the emergence of new ‘non through partnership or in the increasingly complex relative parts of the value chain conventional’ models gives some recent case of Limejump by through acquisition, partnership clues as to why this is happening. acquiring a supply licence. This and in-house development. In trend is likely to continue. this new energy retail model, 1. Local government the supply licence, or more to Robin Hood Energy, Bristol 3. Route to market for the point, access to the market Energy and many other local renewable generation which an optimisation function authorities are leading the way With the slashing of Feed-in can leverage, is the key to with new more localised models. Tariffs (FiTs) and closure of the unlocking much of the value. Robin Hood is positioned as Renewables Obligation, many Complex and increasingly a not-for-profit organisation and small-scale renewable developers, competitive, straight energy Bristol is championing social particularly in solar and onshore retail is a hard market to play equality, local renewables and wind, are increasingly under in. However, for those wishing stronger communities. As well as pressure. Historically suppliers to leverage the value that an the emotional pull that is hoped have been, and still are, the electricity supply licence offers, will attract new customers, what primary route to market for the there is an opportunity that will these and other local authorities power via FiTs or Power Purchase ultimately only result in innovation are realising, is that the ability Agreements. However, inevitably and more appealing choice for to optimise council-owned and value is lost via fees and charges Jo Butlin has recently set up consumers – finally moving us locally generated power supported by accessing the market this way. EnergyBridge, a consultancy on from price-focused products by strong credit ratings potentially For those who have the appetite focused on helping businesses to proposition-led services. gives the new businesses a to build a trading/optimisation and investors navigate the That represents an exciting real competitive edge in an function and create an integrated UK energy market phase in market development. te

34 April/May 2017 theenergyst.com

GAS & ELECTRICITY

ocal authorities are taking a keen interest in Bristol Energy and L Nottingham’s Robin Hood Energy, the UK’s first municipal energy companies to launch in the modern era. Many other councils are mulling whether to enter the fray and service providers working with them believe further launches will be under way within the next year. Wirral Council recently broke cover, stating in March that it is considering whether to go into a franchise or ‘white labelling’ arrangement with a company such as Robin Hood, or go the whole hog and acquire an energy supply licence. There is a third option, the ‘licence lite’ route, being pursued by the Greater London Authority but whether any other local authority will go down that path is debatable, given its complexity.

White labelling White labelling is the most straightforward option Councils enter the fray for councils. It means they reduce their risk and required resources, effectively Local authorities are launching energy companies. Some now supply just handling marketing businesses, are signing power purchase agreements with local and engagement. However, it also means generators and seeking TPIs to scale their B2B rosters. What are the they cede control to a third challenges they face and who’s next, asks Brendan Coyne party, which manages everything else. Then, when the third party puts up prices, third parties to enable That makes it critical not offer better prices due to lower they have to communicate efficient delivery at the right only to secure the right overheads, and in some cases, that to their customers. price point. But you have blend of skills, resources and not-for-profit models. Can they to become intimate with partners, he says, but also actually beat the Big Six on price? Licenced supplier forecasting demand, the to “keep the politics out and “There is some truth [in those Becoming a licenced supplier tariff you are setting and the decision making clear”. claims] but it needs validating gives councils full control, your trading partner.” every time,” says Coyle. enabling them to set prices and The commitment to an Lower prices? “I don’t think they will ever packages, sign power purchase energy business, he says, “is Councils mulling energy supply be 20-30% cheaper [than the agreements with generators, and for life, not for Christmas”. believe they will be able to Big Six] but a 5% saving in this ultimately become a national market can make a big difference. supplier as well as white label And some suppliers have taken partner. But it requires resources Business energy supply it further than that,” he adds. and no small commitment. “But leanness and good “It’s not something you can Bristol Energy already supplies businesses that technology are most important, do casually,” says Utiligroup consume up to 3GWh per site per year and plans because then you don’t have the strategy and marketing to supply larger firms in the coming months. overheads that the Big Six carry.” Nottingham also quotes for business tariffs. director, Mark Coyle, who Utiligroup’s Mark Coyle (right) thinks some councils is working with a number Billing issues might actually start supplying businesses before residential of local authorities. customers, especially those with large estates of their own. As well as hedging and “You can get help from pricing strategy, any council

36 April/May 2017 theenergyst.com Nottingham’s Robin Hood Energy What smart billing means for I&Cs is proactively TPI Inenco recently claimed that UK firms are them to do some proper bill analysis.” entering white owed £500m due to billing errors, and that only Fitzgerald thinks P272 and HH label agreements one in five businesses validate their bills. Junifer’s metering and settlement more broadly Paul Fitzgerald (right) suggests sheer complexity will enable customers to better of data may be to blame, both in terms of the understand consumption, and use number of parties in the energy data supply chain the data both to validate bills and find and the nature of multisite business operations. contracts and prices that best suit their profiles. “You might have a combination of half hourly and non-half hourly meters, with different pricing Demand-side response structures and different mechanisms to receive With about 160,000 business migrated to half the data. So you can understand why commercial hourly metering and settlement under P272, customers are not always able to analyse their there is also potential for more firms to provide bills and understand exactly how the energy is demand-side response (DSR). Fitzgerald says that consumed,” he says. presents even more challenges to the parties that Equally, he claims many billing systems are not manage industry data and process. able to handle the increasing volumes of data “There are lots of issues around DSR and how it that make up the bill, thereby relying on third will operate,” he says. ”But key to a lot of incoming party systems, creating another link in an already changes is the consumer first understanding their complex chain, increasing the potential for error. energy consumption on an hourly, daily, weekly Fitzgerald says Junifer, which came from the and yearly basis. You just can’t do that with a telco industry, was set up to address that issue. It dumb meter. describes itself as a ‘smart billing’ company. “Once you have that understanding, you can “What we are trying to do is create a single work out how to manipulate data to the best location for customer and energy-centric data effect, work out what assets you can better utilise that enables that interrogation, so [suppliers] can and perhaps invest in some onsite generation. I pull the data out and show customers, enabling think that is what needs to happen.”

that takes the licenced route parties that must be properly Which councils might be next? has to get its billing right. managed to ensure bills Nottingham’s Robin Hood Councils enter the fray Energy companies that get are as accurate as the data Energy is proactively entering billing wrong tend to quickly they are based upon. white label agreements. It has lose customers and suffer That creates “an interesting signed deals with Leeds for reputational damage. It can also I don’t think they dilemma for local authorities White Rose Energy (which be costly: British Gas, Npower will ever be 20-30% deciding whether to get has soft launched), Liverpool, and Scottish Power have all cheaper [than the into the business or not”, he which has called its company been hit with multimillion- Big Six], but a 5% says. “It is very complex.” ‘The Leccy’, and with Leicester. pound penalties for billing That said, there are many Several other councils failures by regulator Ofgem saving in this market local authorities that are are exploring the market. Utiligroup’s Coyle says there can make a big “extremely savvy” in terms Cornwall Council is weighing are numerous “good” billing diference of energy, says Fitzgerald. its options, Birmingham systems and integrators in “Some have district energy has called for expressions market to help local authorities or may be producing energy of interest. Islington is also choose the right technology. But from waste, so there are a looking at white labelling. he reiterates the importance number of councils that are Indeed, there are so many of councils securing the au fait with what needs to be local authorities looking right skills and experience done. For those that are not at Bristol and Robin Hood in their founding teams. as comfortable, there is the that some consultants As well as local authorities, option of white labelling.” have warned prospective Paul Fitzgerald, sales and councils not to become time marketing director at billing wasting ‘tire kickers’ that firm Junifer Systems, works hamper their success. with a number of utilities Calling all TPIs So how many will actually take that have entered the market Councils as B2B suppliers presents an opportunity for third the plunge? “None are going to from overseas. He says they party intermediaries. Bristol Energy is calling for TPIs to do a Nottingham or Bristol in soon realise the UK energy help scale its business operation both locally and nationally. the coming weeks,” says Coyle. market is far more complex The company says it will deal with firms that “share our “I think we will see than their home territories. ethos to offer fair and transparent prices to businesses”, and momentum through this Aside from the regulatory “welcomes enquiries from those who comply with one of the year and a number launch aspects, there is vast data recognised TPI Codes of Practice”. at the back end of this year coming from multiple and early next year.” te

theenergyst.com April/May 2017 37 GAS & ELECTRICITY Gas storage issues hit prices

Centrica’s storage arm has confirmed it ‘cannot safely recommence injections’ at its Rough facility off the East Yorkshire coast, impacting long-term gas prices

increased marginally in April. The future of the Rough Centrica Storage said it gas field is uncertain “has concluded that, as a reasonable and prudent operator, based upon the results well testing, Rough cannot safely recommence injection operations in the 2017/18 storage year. “CSL has made this decision based on the results of the well testing programme to date which, due to the age of the asset, have confirmed a number of different potential containment failure modes in a number of the wells.” The firm said it would now ough is responsible the site since last summer. from pricing firm ICIS. cease its current tests, having for the lion’s share That left UK gas storage However, the firm noted covered two thirds of the of UK gas storage. at historically low levels that gas prices for delivery facility, but would carry out RBut Centrica’s facility last winter but the system during the year ahead hit tests on some wells to plot is ageing and has suffered coped with extra gas two-year highs last winter, Rough’s commercial future. technical issues for some time. imported via the Zeebrugge up 42% on average during CSL added that it As a result, there have been interconnector, plus supplies the first quarter of 2017. will continue to provide no injections (the term for from Norway ramping up With confirmation of withdrawal services in respect putting gas into storage) at 22%, according to analysis Rough’s status, gas prices of the 2016/17 storage year. te

be seen but the media has been quick to point out how this A Rough winter ahead? could potentially affect gas supply and prices. It has been reported that the UK will need to import 1.75 billion cubic Gazprom Energy head of metres of additional gas this winter, most probably sourced from Norway or elsewhere in mainland Europe. This increased customer optimisation reliance on supply from outside the UK could mean competing Phil Ivers comments on the recent with demand from the rest of Europe, in turn leading to a price premium. Sources have also likened the situation to developments at Rough early 2013, which saw gas prices swing to a high due to a combination of the temporary closure of a main import pipeline and a cold winter. For several months now events have been unfolding at the If higher price premiums did become an impact of the UK’s largest natural gas storage site, the Rough field 18 miles Rough situation, business users would be wise to consider the off the East Yorkshire coast. potential implications, especially if they are buying gas on a Gas stored at Rough is used to meet about 10% of the flexible contract or planning to renew a fixed contract. UK’s winter peak demand. In June 2016, it was reported that The long-term future of Rough seems somewhat uncertain. an issue was found with one of its wells following testing Following the announcement that Rough cannot safely works, and although this was later resolved, the robustness recommence injection this year, it could be perceived that a of other wells was reported as uncertain. In April it was been change in balance between domestically stored and imported announced that Rough is going to be unavailable for injection gas is on the cards, but Rough’s operator Centrica Storage during the storage year 2017/18. This has had an instant has given reassurance that this would have “minimal impact”, impact on UK gas prices. Summer months (traditional injection claiming that it has made preparations accordingly. months) had prices drop and winter months, particularly for The long-term implications of the situation at Rough are delivery in the first quarter of next year, saw prices rise. simply unknown at this stage but this winter could prove to be An accurate picture of Rough’s long-term future remains to fundamental shift in the UK supply mix.

38 April/May 2017 theenergyst.com

ENERGY FINANCE Pilots can make projects fly DONG Energy Sales UK sales and marketing director Ashley Phillips discusses how to boost energy efficiency on a budget

t is a challenging time and solutions that achieve with tariff structures, peak period wholesale market. Our solution for those responsible for that all-important reduction. premiums and wholesale prices, took into account onsite usage managing their company’s to produce a comprehensive and equipment needs, as Ienergy. On the one hand, The importance of piloting view of energy costs. Users can well as pricing information. there is the ever-present and scenario modelling then simulate the cost and load From these inputs, it created pressure to keep a sharp Current conditions are placing impact of changing their demand bespoke run schedules for eye on the bottom line. On emphasis on sourcing funding and, importantly, their demand the plant, resulting in an 11% the other, the desire to fulfil internally, although competing profile, enabling them to consider reduction in energy costs. carbon reduction commitments for capex budget is no mean a range of approaches to energy Many companies are remains a priority for many feat. This puts focus on building management with fully costed adopting a similar approach businesses, eager to do the a robust business case. Many outcomes. It also goes on to by trying out a solution right thing and operate in an companies are turning to pilots also recommend the best times on one site or plant. ethical manner. Managing and scenario modelling because to consume from the grid or Once the results consumption effectively is it allows them to test solutions export, helping are known, therefore key for businesses and produce real, evidence- businesses to they have a wanting to act sustainably based savings. This means they make the most truly compelling while also minimising can rule out any options that of their onsite 11% case to invest in energy expenditure. do not deliver on their savings assets as well projects on other Making the most of energy promises but also proves the as build costed sites, enabling budgets continues to be concept prior to investment. investment them to achieve a top priority. Adopting a Several monitoring and cases. Energy cost saving achieved the energy and procurement strategy that targeting systems have included Kodak by Kodak Alaris using cost reductions works for businesses is vitally scenario modelling for a Alaris DONG’s Energy Vision platform required. important but to really reduce number of years now, and the used this costs the trick is to identify sophistication of the process approach to reduce energy A better energy future ways to reduce consumption used has evolved considerably. costs as well as operational There are various drivers for and optimise existing assets. Increased automation means planning time. The company reducing consumption, but For the majority of that assessing different options felt that it was not able to drive we find that many of our organisations, the low and is far less resource-heavy than optimal efficiency from its customers choose to work with no-cost efficiency options are it used to be, better supporting manufacturing site because us because they want to align pretty well exhausted. So, to time-poor energy teams. For it did not have the in-team themselves with a company make a tangible difference, they instance, our own Energy Vision resource to plan, monitor that has strong sustainability must now invest in technologies platform combines historical data and respond to a fluctuating values. With so many companies signing up to schemes such as RE100 (whereby organisations Piloting and scenario commit to sourcing 100% of modelling allows companies their electricity from renewable to test solutions and produce generation), an ethical stance real, evidence-based savings means a competitive edge, as well as a clear conscience. Reducing consumption makes an enormous difference to a company’s carbon footprint. But where efficiency projects seem hard to come by, using renewable electricity is an equally important step. To drive the transition to lower-carbon options, we supply renewable electricity at no additional cost, proving that moving towards a sustainable energy future need not cost the earth. te

40 April/May 2017 theenergyst.com

VIEWPOINT

Will the finance director buy into your energy business case? One of the biggest challenges facing those charged with managing energy is the effective engagement of the key decision makers, particularly where capital investment is needed, says Jes Rutter, managing director JRP Solutions and chair of ESTA’s Independent Energy Consultants Group (IECG)

ne of the universal findings of the investment decisions? the thousands of Esos audits To stand the greatest chance of recently completed was the success, we have to know how to Olack of awareness within the communicate with the purse holders board rooms of UK Plc of the opportunity and it is critical that any business case that energy offers organisations. for energy efficiency is in the right It often seems that the board is prepared language, is robust and is verifiable. to invest considerable resource in making Good quality, reliable, consistent, small savings in material and production relevant management information costs but is not prepared to consider that is key. By this I do not mean endless significantly more money could be added reams of meaningless data written to the bottom line by an organisation in a language alien to many board Lack of trust of the level of savings becoming more energy efficient. directors, most of whom don’t know, being claimed is one of the commonly Why is the message not getting let alone care, what ‘kWh’ means. cited barriers to the uptake of energy through to the people who make Firstly, energy consumption data has eficiency projects

42 April/May 2017 theenergyst.com to be reported in a format and style International Performance Measurement that is easily understood. This should & Verifi cation Protocol (IPMVP) form the basis of an energy report that Guidelines. The guidelines, built with the provides a clear picture of how energy is help of organisations from 16 countries being used across a business, the levels and hundreds of individual experts from of consumption and cost relative to the 25 nations, provides a consistent, reliable levels of activity and the impact of any approach to M&V around the world. implemented improvement measures. Esta’s Energy Performance Contracting Group (EPCG) considers Monitoring integrity the fi ner details of effi ciency projects The quality, completeness and reliability and Esta also provides the UK’s Certifi ed of the energy data will very much Measurement & Verifi cation Professional depend upon the integrity of the (CMVP) training on a quarterly basis. installed metering and monitoring A further barrier is the cost of (aM&T) infrastructure, the scale implementing improvement projects, and complexity of which will vary in but often improvements can be made accordance with not only the size and with little or no investment. We have energy intensity of the site but also delivered energy behaviour training with its organisational structure. programmes, for example, that have It is not uncommon to see organisations delivered the same energy savings as where the infrastructure exists but capital investment programmes but at a there is a lack of good quality energy fraction of the cost. The effectiveness of data due to non-functioning meters, behaviour training projects can be more insuffi cient metering, poor data collation diffi cult to predict and verify but it is or simply from an inability to interpret possible and trainers should be able to the data into useful information. provide robust case studies of previous It is important to ensure the integrity success to support any business case. of the aM&T, as a good system will provide senior managers with defi nitive Gaining trust proof of performance against energy Another way of gaining trust and targets and will evidence the actual credibility is to be able to produce return on investment where capital reliable, timely reports on the energy projects have been implemented. improvement project pipeline as This will validate the investment and effective project tracking and reporting ease approval for future projects. helps engage stakeholders, prioritise One of the commonly cited barriers resources and ease decision making. to the uptake of energy effi ciency Many organisations use Excel spread projects is the lack of trust of the sheets to manage improvement projects. level of savings being claimed. This is a useful tool that works well for One way to overcome this barrier is by small organisations or for those with only asking for proof of energy consumption a handful of projects but spreadsheets savings from a third party that uses the become cumbersome and unwieldy for protocol for performance measurement bigger, multi-site organisations with a and verifi cation (M&V) as outlined in the large number of improvement projects. There are now energy improvement project management systems available that provide up-to-date information in the format and frequency demanded by senior managers to give them the assurance that time, resources and money is being focused upon the projects offering the best ROI. With good data in the right language, verifi ed evidence to build trust and effective project management, capital investment for energy projects is likely to be more forthcoming. te

To fi nd out more about how Esta’s IECG A good aM&T system will provide senior members can help your organisation visit managers with definitive proof of esta.org.uk or come along to one of Esta’s performance against energy targets and regional ‘understand | manage | reduce the actual return on investment – energy’ events in May and October

theenergyst.com TECHNOLOGY Chain reaction Eka’s chief technology officer Rajeev Warrier discusses the power of blockchain in commodity markets

ngage in any preventing people from moving This is how it would work: benefits to commodity supply conversation in the the same digital coin more assured of complete data chains. For example: FinTech community than once – known as ‘double transparency, commodity Eand it is not long spend’ – or from fraudulently market participants could form 1) Smart tendering before the subject turns to introducing counterfeit a blockchain and then register The RFID tags attached to pallets blockchain – the much talked- ‘coins’ to the network. the transfer of goods on the can transmit data directly to about technology that will, In the world of crypto-currency ledger, including information the blockchain, indicating to according to its advocates, there is no central arbitrating on all the parties involved, the the supply chain network when revolutionise not just financial authority, and this is where price, date, location, quality, they should be moved from services but any area of business blockchain comes in. It records current condition of the point A to point B. Carriers can with a substantial supply chain and publishes every single goods or products, and any then use blockchain mining behind it. Everything from bitcoin transaction to the entire other information relevant to applications to place bids to win ensuring payment of parking community of users. Once a managing the value chain. the transport job. The blockchain tickets to protecting sales of transaction is recorded and time- Because this information is then records the transaction and energy have been linked in stamped, it cannot be altered. visible to every participant in the tracks the shipment as it moves some way to blockchain. In this way, blockchain creates chain at all times, every change, through the supply chain. Since As Ginni Rometty, CEO of a virtual, distributed ledger, and disruption, delay and movement all these steps are automated, IBM and high-profile blockchain anyone who joins the blockchain is completely transparent to cumbersome negotiations proponent, said last November: network – anyone who holds or everyone. All updates are logged and inter-party information “Today, blockchain – the spends a bitcoin – can contribute and immediately visible to exchanges can be eliminated. technology behind the digital to this process of continuous all participants – so there are currency bitcoin – might seem monitoring and arbitration. no nasty surprises or hidden 2) Vessel cargo management like a trinket for computer Participants can also create costs waiting for the unwary. The value chain for crude oil geeks. But once widely adopted, rules for the ledger, and enforce Blockchain enables or refined products can span it will transform the world.” contracts and transactions based transactions to be automated hundreds of stages and dozens And she’s not alone in her on predefined conditions that and contracts to be enforced of geographic locations. Oil belief in the power of blockchain. all parties agree to upfront. without third-party oversight. shipments are usually tracked In the last nine months of 2016, The result is a watertight, All this automatic compliance manually using bills of lading, a $1.4bn was invested globally irrefutable and mutually agreed saves time and money on each pen-and-paper system developed in blockchain start-ups. record of all transactions. And transaction, as well as reducing more than 500 years ago. Each So what is blockchain, and it is this ledger that is getting fraud, disputes and litigation – time ownership of the cargo is why is it garnering so much financial services – and more significantly improving efficiency transferred – from buyer to trader attention? As Rometty pointed recently commodities business and decreasing costs in the value to seller – the ship’s captain out, it hails from the world of – excited, since similar ledgers chain. There are plenty of specific has to acknowledge receipt bitcoin and unregulated crypto- could be deployed to record series examples where blockchain by stamping the bill of lading currencies. Because bitcoin of transactions in other sectors. could provide transformative before dispatching it to customs and its competitors have no physical presence and have no Because this information is visible to every participant physical store of value behind in the chain at all times, every change, disruption, delay them, they need a universally recognised method of and movement is completely transparent to everyone

44 April/May 2017 theenergyst.com officials, surveyors, agents and scenarios is blockchain’s ability others to review. However, a to provide commodity market single distributed ledger created participants with unprecedented using blockchain would enable visibility into transactions – the buyer, shipper and seller eliminating conflict, confusion, to track the product without and manipulation of data while going through laborious and significantly decreasing costs time-consuming paper-based and improving efficiency. processes. Information about Not surprisingly, IBM’s latest the shipment remains available estimates put the potential to all participants to eliminate annual savings from applying inconsistencies or confusion. blockchain technology to global supply chains at more than 3) Farm-to-fork monitoring $100bn, with a substantial Blockchain technology has the proportion coming from more potential to take agricultural efficient commodity movements. supply chains to the next level That data can be fed into by allowing market participants advanced analytics solutions – to track products through their such as Eka Analytics’ platform entire lifecycle. Thanks to RFID – to enable commodity market tags, barcodes and the sensors participants to make better, that form part of an Internet fact-based decisions based on of Things (IoT) deployment, a real-time information. Eka blockchain has a rich repository Analytics’ intelligence engine of information about individual uses blockchain to manage products and their movement smart contracts, produce origin through the value chain. traceability, commodity-backed Farmers providing information financing, warehouse receipt to the blockchain would give financing, commodity logistics, manufacturers visibility into delivery and settlements. their supply crops before they are Blockchain technology harvested and shipped. Those could revolutionise transaction manufacturers would also be able management, especially to prepare for disruptions and when combined with artificial supply complications thanks to intelligence and machine updated information from logistics learning, improving efficiency, providers. As well-informed decreasing costs and eliminating purchasers, they can take steps to fraud. Perhaps blockchain’s work around these issues before greatest value is that it ensures they become serious problems. the integrity of data, enabling The common theme in all these better decision making. te theenergyst.com HVAC Optimising heating efficiency

The efficiency and reliability of a space heating system are influenced strongly by the effectiveness of the water treatment regime, which may include innovative additives to improve heat transfer. Tony Willis of Sabien Technology explains

system inefficiencies due to Sabien is the reduced heat transfer from exclusive UK the water in the system to the distributor of surface of the heat emitters. EndoTherm. It is said Improving heat transfer to reduce Even in the cleanest, scale-free energy wet heating system there will consumption be microscopic crevices and between imperfections on the internal 10%-15% heat exchange surfaces. These effectively create gaps between the heating fluid and the heat exchange surface – gaps that the heating fluid is normally unable to enter because of its natural water surface tension. This means that the heated water is not always in perfect contact with the inner surfaces of the heat emitters. pace heating systems improves efficiency. The To address this issue, a make a significant second is a relatively new heating system additive – contribution to a water treatment additive that Endotherm – reduces surface Sbuilding’s energy further improves the efficiency tension within the fluid, consumption and carbon of heat transfer, resulting enabling closer contact with emissions, so it makes in added energy savings. Microscopic crevices the heat exchange surface to sense to ensure they operate From the moment a system enhance conduction of heat efficiently. Very often, the is installed it is at risk from and imperfections from the water to the heat main focus is on the heating corrosion due to the reactions on the internal heat emitter. This product was plant – which is clearly between the water and the exchange surfaces the recipient of CIBSE’s 2016 important – but the distribution metal components of the lead to heating Energy Efficiency Award. system also influences system. Left unchecked this The system additive is efficiency and reliability. can cause a range of problems, system ineficiencies organic based and fully For example, the performance including blockages, cold due to reduced heat compatible with existing of a wet heating system spots, damage to pumps and transfer from the heating inhibitors and heating is dependent on three key valves and, in some cases, water to the surface system water treatment. Typical mechanisms of heat transfer to premature boiler failure. dosage to the system would be heat emitters such as radiators Over time, the system will of the heat emitters 1% of the total system volume, – conduction, convection and also suffer from reduced and will not require further radiation. Consequently, the efficiency, higher energy dosing for five years under distribution system’s ability to costs and CO2 emissions and, normal system conditions. transfer heat efficiently to heat potentially, higher capital Independent ‘in field’ emitters is critical. To that end, investment on replacement verification on more than 50 an effective water treatment parts such as boilers. These projects has demonstrated regime is essential and there risks are mitigated through the energy savings of between are two aspects to this. application of well-established 10% and 15% and paybacks The first of these is a anti-corrosion and anti-scale typically within two years. water treatment strategy water treatment programmes. These projects involved many that protects the system, However, there are also other different building types, ranging underpins its reliability and factors that lead to heating from schools and leisure centres

46 April/May 2017 theenergyst.com Figure 1: How Endotherm works – water only (left) compared with Endotherm (right)

to offices and care homes. under part-load conditions, leads to temperature set- energy wasted by boiler dry which may lead to boiler dry points being achieved more cycling and short cycling. Using Boiler load optimisation cycling and short cycling, quickly, so that the boilers may the right type of boiler load It is common industry practice both of which waste energy. be further under-utilised. optimisation controls has been to size boilers for the worst- Moreover, when the overall There is therefore a strong shown to reduce the energy case scenario of very cold efficiency of a heating system argument for using boiler load consumption of commercial winters, so for much of the is improved by installing the optimisation control alongside and industrial boilers by year boilers often operate additive described above, this such additives to prevent the between 10% and 25%. te

theenergyst.com April/May 2017 47 HVAC

HVAC pumps claimed energy savings of more than 30% The new Tango range features two pump heads of pump solutions with built-in parallel from Armstrong Fluid sensorless pump control Technology offers built-in integrated as standard. parallel sensorless pump The actual capacity of a control, motor effi ciency single pump is greater than exceeding IE4, embedded expected (2 x 5hp motors intelligence and connectivity, with one motor operating and is designed for ease and one shut down, for of maintenance. These example, delivers 82.5% of capabilities, when combined, capacity rather than 50%). deliver energy savings Wireless connectivity of more than 30%. and on-board web The Tango pump solutions services are provided are the latest addition to as standard across the the Armstrong Design full product line. The perfect complement to Envelope portfolio of fl uid actuators and valves? management systems Belimo has launched provide application data access. for HVAC new HVAC sensors to The highly resistant applications. complement its actuators sensors also carry a fi ve-year Designed for all and valves, optimising warranty, conform to NEMA variable speed system performance and 4X / IP65 requirements operation in improving energy effi ciency. and are UL compliant. the 1hp to 10hp The sensors can be Belimo offers sensors for range, the Tango seamlessly integrated into all measuring temperature, solutions are fully major building automation humidity, pressure, CO2, integrated parallel and control systems (BACS) and VOC (volatile organic pumping modules and are extremely reliable, compounds) for pipe, duct offering signifi cant guaranteeing high quality. and outdoor applications. reductions in size and Belimo’s sensors have a “Sensors from Belimo weight, and improved compact enclosure design, not only deliver reliable and effi ciency, with intuitive tool-less snap- accurate readings,” states particular advantages on cover and detachable David Alliband, product for applications where mounting plate, which make manager, “but the sensor full duty standby would installation and commissioning enclosure design also features traditionally be installed. easy. BACnet and Modbus a modular conduit fi tting Each Tango solution communication protocols and a plug-in terminal.”

48 April/May 2017 theenergyst.com

LIGHTING Time to wise up

Smarter lighting is a key component of smart buildings. Achieving it requires the latest technologies and a more user-focused approach, says Zumtobel Group senior vice-president Paul Coggins

Using the lighting the lighting and temperature system to control control for a single workstation. other infrastructure The luminaires can also be makes sense used to discreetly ‘host’ other technologies such as Bluetooth transmitters, enabling people to navigate a space via their smart phones. Again, a key advantage is that no extra power supply or separate batteries are required to run these devices.

Managing space Occupancy data can also be used to assess how each space is being used without resorting to traditional, time-consuming space utilisation studies. e have seen a is type in the appropriate IP sensor technology and the Harvesting current data from transformation in address and they are able to cabling that powers it – a far lighting occupancy sensors the way lighting is control individual lights, change from ‘smart’ solution. Making enables spaces to be managed Wcontrolled – and lighting scenes and manage better use of the infrastructure more effectively, based on more in the opportunities for doing every aspect of the system. that is already present in the timely and meaningful data. more than simply controlling A further benefit is that the majority of these buildings, To that end, our company is the lighting. In particular, lighting can be reconfigured namely the lighting system, already trialling a dashboard there is now a strong trend easily without the need for is the obvious way to provide that pulls in information from towards using ‘plug and play’ expensive control specialists. much needed simplification. lighting occupancy sensors to connectivity to integrate the For this potential to be In this ‘Internet of provide a graphical overview lighting control network with fully exploited, though, it is Lighting’ the data captured of occupancy patterns. other networks and control essential to recognise that the by, say, occupancy sensors for In addition to the usual the lighting through a PC. lighting control interface will controlling the lighting can parameters that are monitored However, this does not mean be used by non-specialists, also be used for other purposes. by lighting systems, such as lighting control can become the so simplicity is the key. A single, discreetly located daylight and occupancy, there are domain of general networking occupancy sensor can forward sensors that can also measure companies; considerable Simplifying infrastructure its data to the HVAC systems, colour temperature. When lighting expertise is still Smarter lighting provides an window blinds and security linked to tuneable white lighting required to achieve acceptable opportunity to take advantage of management system, as well this means that the colour results. The key advantage is the communication functionality as the lighting control system. temperature can be adjusted that these developments give that has become known as It may also become possible to suit changing conditions. lighting specialists the tools the ‘Internet of Things’. for a single sensor to control Taking this principle slightly to provide a better solution – For instance, a modern office all of the requirements of a further, there are now sensors ensuring the right lighting in will often contain a range of space. One obvious example using charge coupled device the right place at the right time. sensors scattered across the is an occupancy sensor in a (CCD) technology to detect Achieving this also requires a ceiling, which some architects toilet that controls both the contrast and ‘understand’ change in focus from ‘how to refer to as ‘ceiling acne’. These lighting and the solenoids activity in the space, adjusting control’ to ‘why to control’. may be used for smoke detection, responsible for urinal flushing. the lighting accordingly. Software used as a gateway temperature detection, lighting Such sensors can be installed Technology now allows between the internet protocol control, security and perhaps discreetly in luminaires, and if the lighting infrastructure to (IP) on the general network to control the window blinds. a number of luminaire-based not only control the lighting and the Dali protocol on the Not only does this lack sensors are used, the data can in better ways but also lighting control system has aesthetic appeal, it also requires be evaluated in much finer contribute more broadly to the increased. All users need do considerable duplication of detail, perhaps to optimise management of the building. te

50 April/May 2017 theenergyst.com

COMPRESSED AIR Take your marks

Vilnis Vesma, a specialist in the analysis of energy consumption data, has been experimenting with advanced benchmarking methods

n energy-intensive Table 1: Benchmarking pilot kWh by output at an output of manufacturing processes, 9,000m3 you should find the just as with buildings, there Case Marginal Standing SER is just under 0.12 kWh/m3 is a need to benchmark SER kWh per but at a low daily output, say I day 3 production units against each 4,000m , you get 0.14 kWh/ The drawback of the 3 other and against yardstick 8 0.085 115 m . The fixed consumption SER approach is that figures. Conventional wisdom 5 0.090 62 makes performance look more has it that you should compare variable than it really is and some compressor specific energy ratios (SER), 1 0.092 3,062 changes in throughput change installations, of which kWh per gross tonne 2 0.097 161 the SER whereas in reality, like any energy- is one common example. It with a small number of obvious seems simple and obvious 7 0.105 58 exceptions, the performance intensive process, but, as anybody who has 6 0.124 79 of this particular compressor have a certain tried it will know, it does not looks quite consistent. 3 0.161 698 fixed standing load really work because a simple When I say it looks consistent independent of SER varies with output, and Note: Case 4 gave irrational I mean that consumption this clouds the picture. results and had to be excluded has a consistent straight-line output To illustrate the problem and relationship with output. The to suggest a solution, this article you might expect a given gradient of the best-fit straight SERs are mainly fairly picks some of the highlights compressor’s SER to fall in line does not change across comparable and may prove from a recent pilot exercise to the range 0.09 to 0.14 kWh/ the normal operating range: to be more so once we have benchmark air compressors. m3 (typically). Lower SER it is said to be a ‘parameter’. In taken proper account of inlet These are the perfect thing for the values are taken to represent parametric benchmarking we temperatures and delivery purpose not least because they better performance. compare compressors’ marginal pressures. But their standing are universally used and obey SERs, that is, the gradients of kWh per day are wildly different. fairly straightforward physical Key drawback their energy-versus-output scatter It makes little sense to try laws. Furthermore, because they The drawback of the SER diagrams. The other parameter comparing the standing loads. are all making a similar product approach is that some that we might be interested In part they are a function of from the same raw material, they compressor installations, like in is the standing load, that is, the scale of the installation should in principle be highly any energy-intensive process, where the diagonal characteristic (Case 1 is huge) but also the comparable with each other. have a certain fixed standing crosses the vertical (kWh) axis. metering may be such that Various conventions are used load independent of output. The The compressor installation unrelated constant-ish loads are for expressing compressors’ compressor installation in Figure in Figure 1 is one of eight contributing to the total. The SERs but I will use kWh per 1 has a standing load of 161 kWh that I compared in a variation in energy with variation cubic metre of free air. From per day for example, and this has pilot study (Table 1). in output is the key comparator. the literature on the subject a distorting effect: if you divide As you can see, the marginal In order to conduct this

Figure 1: Compressor benchmarking – 2 kWh per day Figure 2: Compressor benchmarking – 7 kWh per day

1,600 1,000 900 1,400 800 1,200 700 1,000 600 800 500 400 600 200

Consumption (kWh) 400 Consumption (kWh) 200 200 100 - - 0 2,000 4,000 6,000 10,000 12,000 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Driving factor: Air Driving factor: DailyAir

52 April/May 2017 theenergyst.com kind of analysis, one needs kWh per day. The only plausible frequent meter readings, and the explanation is that No. 3 leaks installations in the pilot study 63m3 per day before the meter, were analysed using either daily quite possibly internally because or weekly figures (although of defective seals or non-return some participants provided vales. Enquiries with the owner minute-by-minute records). revealed that they had indeed Rich data like this can be filtered been skimping on maintenance using cusum analysis to identify and they have now had a quote inconsistencies, so for example in to have the machines overhauled Case 3, although there is no space with an efficiency guarantee. to go into the specific here, we found that performance tended Performance variations to change dramatically from time This last case is one of three to time and the marginal SER where we found variations quoted in the table is the best in performance through that was consistently achieved. time on a given installation Case 7 was found to and were able to isolate the toggle between two different period of best performance. characteristics depending on its It improves a benchmarking loading: see Figure 2. At higher exercise if one can focus on best outputs its marginal SER rose achievable, rather than average, to 0.134kWh/m3, reflecting the performance; this is impossible relatively worse performance of with the traditional SER the compressors brought into approach, as is the elimination service to match higher loads. of rogue data. Nearly all the In Case 8, meanwhile, the pilot cases were found to include compressor plant changed clear outliers which would have performance abruptly at the contaminated a simple SER. start of June, 2016. Figure 3 Deliberately excluding compares performance in May fixed overhead consumption with that on working days from the analysis has two in June and we obtained the significant benefits. It enables following explanation. The plant us to compare installations of consists of three compressors. vastly differing sizes, and it also Compressor one is a 37kW means we can tolerate unrelated variable-speed machine which equipment sharing the meter takes the lead while compressors as long as its contribution to two and three are identical fixed- demand is reasonably constant. speed machines also of 37kW A fuller account of the rating. Normally, compressor pilot study can be found at two takes the load when demand EnManReg.org/air-bm, and is high but during June they had I would be interested to hear to use compressor three instead, from users of compressed air and the result was a fixed who would like to participate in additional consumption of 130 further benchmarking studies. te

Figure 3: Compressor benchmarking – 8 kWh per day

1,000

900 Working days in June 2016 800 700

600

500

400 300

Consumption (kWh) May 2016 200

100 - 0 1,000 2,000 3,0004,000 5,000 6,000 7,000 8,000 Driving factor: DailyAir

theenergyst.com VIEWPOINT The appliance of science

Karthik Suresh, committee member for UKAEE and director at Ameresco, highlights the growing development of science-based targets in reducing greenhouse gas emissions. Can this cause a ripple effect in driving wider emissions reductions in the supply chain?

he corporate sector signing up to the Science the level of decarbonisation 1 emissions result from sources is the world’s Based Targets initiative set required to keep global controlled by the organisation, largest source of up by the WWF, the World temperature increase below such as generation or process Temissions, and larger Resources Institute, the UN 2°C compared to pre-industrial equipment. Scope 2 emissions companies are coming under Global Compact and CDP. temperatures, as described in result from indirect emissions, pressure and scrutiny from The term ‘science’ in the the Fifth Assessment Report of for example from purchased customers, investors and name of the initiative has a the Intergovernmental Panel on energy and Scope 3 emissions employees to do more about very precise meaning. The Climate Change (IPCC AR5)”. result from activities such as their carbon footprint. As a group defi nes science-based Some 230 companies have commuting that are related to result, an increasing number targets as targets adopted signed up to the initiative, the organisation but not directly of companies are setting by companies to reduce with 41 having set targets so controlled or owned by it. science-based targets to reduce greenhouse gas (GHG) far covering Scope 1, Scope 2 Companies participating in greenhouse gas emissions, emissions “that are in line with and Scope 3 emissions. Scope the initiative are required to »

Figure 1: Scope 1 greenhouse gas reduction commitments signed up to by a number of large companies to date

100%

90% Verbund

80%

70%

60% Konika Minolta

Coca-Cola Enterprises EDP - Energias de Portugal

50% Dell Inc Diego plc Kerring

Lundbeck A/S Sony Thalys Tetra Pak 40% Capgemini Postnord Land Securities

Ingersoll Rand Co Daiichi Sankyo

30% Husqvarna Group Proctor & Gamble Proximus Kirin Holdings Host Hotel & Resorts General Mills Eneco Enel Hewlett Packard Enterprise Kawasaki Kishen Kaisha Panalpina 20% Pfizer AMD AstraZeneca Pepsico Walmart Stores International Post Corporation Kellogg Company UBM plc Nestle 10% Swisscom

0% 2018 2020 2022 2024 2026 2028 2030 2032

54 April/May 2017 theenergyst.com

VIEWPOINT

set a target for the percentage reduce total Scope 1, 2, and 3 6. Greenhouse gas emissions of emissions reduction emissions 43% by 2020, while per unit of value added (Geva) they will make by a target Ingersoll Rand commits to The Geva analysis suggests year against a base year. reduce scope 1 and 2 emissions reducing greenhouse gases Scope 1 emissions are those (on a per unit revenue basis) per unit of GDP by 5% a that companies have the 35% by 2020. The headline year to meet the two-degree greatest ability to influence reduction figures cannot be target, which then translates by changing the way in which compared directly as a result. into a corporate target of 5% they operate or carry out their Companies can choose a reduction in Geva per year. business. Figure 1 shows the method that works for them This seems similar in form to commitments that some of and drives the right kind the BT-CSI at first glance. the companies in the initiative of emissions reductions in have signed up to so far for their business. To help them 7. MARS Method reducing Scope 1 emissions. there are seven methods The MARS method targets The bulk of companies put forward by the science- Implementation Scope 1 and Scope 2 emissions, have set targets for reductions based targets group so far: by some of the where it has direct control in emissions ranging from and selects to “over-deliver” 10% to 60% to be achieved 1. The Sectoral largest companies on targets on these emissions between 2020 and 2030. Decarbonisation in the world will by targeting a reduction of One outlier, Verbund, has Approach (SDA) cause a ripple 100% in 2040 rather than set itself a target of 90% The SDA looks at how similar efect through their 80% in 2050. This takes reductions in Scope 1, 2 and energy intensive companies pressure off Scope 3 emissions 3 by 2021 but it is Austria’s can choose the lowest cost supply chains and that cover agriculture and largest electricity provider technology mix to meet their reduce emissions far are harder to influence. and generates 90% of its energy demand. The SDA looks beyond their own The one method missing electricity from hydro power. at how sectors differ from from the Science Based Many companies have set each other, the potential for companies Targets initiative is the targets that at first glance reductions and how quickly system of carbon budgets seem quite challenging. each sector grows over time. in the UK. The third Reductions of 10-50% of calculates a carbon intensity carbon budget sets a target direct emissions in three years 2. The 3% solution reduction rate that takes reduction of 35% by 2020. are going to require taking Developed by McKinsey, into account growth rate. Companies operating in the a radical approach to every WWF, CDP and Point 380, US UK should consider whether aspect of company operations. corporates would cut emissions 5. CSO’s context-based they should align their targets In particular, it will require by 3% per year overall, while carbon metric with UK policy or a global implementing a number of individual corporates would The Center for Sustainable initiative – and to a large extent energy conservation measures have tailored targets using Organisation’s (CSO) this will depend on whether as soon as possible. Vilnis a tool called the Carbon developed a context-based their emissions are created in Vesma, a well-known figure in Target Profit Calculator. carbon metric along with the UK or internationally. the energy industry, says “the Ben & Jerry’s in 2006. The The Science Based Targets challenge (and opportunity) 3. BT – CSI metric compares emissions initiative is a significant step relates to rational target-setting BT has come up with a Carbon from an organisation to in the right direction with at the micro rather than macro Stabilisation Intensity (CSI) targets based on climate commitment from some major level”, pointing out that the target in 2008 that is calculated change mitigation scenarios. companies. Implementation scientific approach needs to by comparing its emissions with It works out an individual by some of the largest be followed through to the how much it as a corporation target that looks at how the companies in the world will detail of implementation. contributes to GDP. organisation will grow and is cause a ripple effect through The initiative, however, The contribution to updated based on what others their supply chains and allows companies a little GDP is defined as “value- are doing and the change in reduce emissions far beyond more flexibility as targets added”, and the CSI is global emissions over time. their own companies. te can be absolute or relative. measured as the emissions For example, AMD has an per unit of value added. absolute goal for suppliers’ UKAEE covers a range of expertise in the energy wafer foundry scope 1 4. C-FACT management and energy efficiency sectors. It delivers a emissions to stay 30% below Corporate Finance Approach range of technical-focused seminars and offers excellent the Semiconductor Industry to Climate-Stabilising networking opportunities for energy and sustainability professionals. It offers Continued Professional Development Association average while Targets (C-FACT) is a opportunities for AEE certifications such as Certified Thalys’ commitment is to relative target that divides Energy Manager, Certified Measurement and Verification reduce corporate Scope 1, 2 a company’s greenhouse Professional and Certified Energy Auditor. Membership to and 3 GHG emissions per gas emissions footprint the UKAEE is currently free. For more information on UKAEE passenger kilometre by 41.4% by its GDP contribution or how to join, please visit ukaee.org.uk by 2020. Autodesk commits to (measured by gross profit) and

56 April/May 2017 theenergyst.com The Directors' Energy Report 2017

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Directors Survey revised.indd 1 2/20/17 9:13 AM RECRUITMENT Smart cities and the job market

As the world’s population becomes more urban, so cities are adapting to this by becoming smarter through the Internet of Things. How will this affect the future job market, asks McLean Ross’s Lauren Cox

occupations to sweep the globe, to ensure continual innovation to keep up or ahead of the trends. When it comes to smart technology in general, the threat of hackers is a big concern; on the back of this, cyber security is growing in importance. Last year, we saw a surge of attacks on smart home devices. While security companies are stepping up their game to keep hackers at bay by developing devices that scrutinise data as it flows throughout networks, Global smart city security remains a big worry technology will with the proliferation of devices. reach $408bn Cue the rise in demand for annually in the cyber security analysts. next three years Without the right talent to implement these transformation t’s full steam ahead for the supplies, agriculture, healthcare. of innovative job prospects. technologies, communities will smart cities movement. The integration of As the machine learning be unable to keep up with the Cisco Systems has suggested transformation technologies to market is predicted to reach trends and the ever-growing Ithat the world is being accommodate the smart city 52.65% CAGR over the next needs of their population. This urbanised at a staggering rate movement is boundless but with five years, it is unsurprising risk is currently all too familiar; of 10,000 people per hour. these innovative concepts, how that machine learning scientist we are experiencing a global This means that by 2050, exactly is smart city technology roles are becoming highly digital skills gap, which the more than 60% of the world’s impacting the global job market? sought, particularly with House of Commons Science and population will live in cities, so it regard to smart cities. Technology Committee says is is no wonder smart technology Change brings opportunities costing the UK economy more is gaining momentum at While exact global market Data , data everywhere than £63bn a year alone. These a phenomenal pace. size is difficult to determine, We know that IoT devices digital skills will be fundamental This influx of people means it is expected that smart city and services are the future; in the widespread adoption that cities are now facing technology will reach $408bn the trillion-dollar industry is of smart city technology; a accumulative challenges – annually in the next three years. predicted to sky rocket by 2020, smart city can only exist when from transport congestion to Of course, the sheer scale of making way for a flood of data it is able to attract the right sufficient supply of electricity. market growth is incredible, with scientist and analyst roles. In talent to continually update new sectors being thrown into addition to this, we can expect the economic infrastructure Times are changing the mix; so surely that’s good urban innovation and mechanics through innovative processes. Improving a city’s infrastructure news for the global economy? Aside from employers ensuring to keep up with technological Those with digital skills that they have a strong employer innovation is essential in will see doors opening as IT and talent branding strategy in order to maintain quality of infrastructure will be at the order to hire the most skilled life, manage carbon emissions core of the new wave of IoT, and culturally suited employees, and to maintain economic bringing a number of new and bridging the skills gap is clearly growth. By way of keeping interesting opportunities. A smart city can a necessity in the years to come. ahead of the trend, entire cities Transformation technologies only exist when it Inspiring people to choose a are adopting IoT solutions to like machine learning, energy technology-based career path increase flexibility across areas storage and smart metering have is able to attract is an essential requirement for such as transportation, water already opened up a number the right talent the future of smart cities. te

58 April/May 2017 theenergyst.com

WATER MANAGEMENT Further deregulation in England’s water market England’s water market for business customers underwent further deregulation in April, enabling companies of all sizes to benefit from more competition and lower costs. Nick Simpson, marketing director at SUEZ Water UK, highlights the benefits

usiness owners across England can benefit from lower bills and B better service by switching water providers. The market for supplying water to businesses in England was further deregulated in April, £43m bringing it in line with current arrangements in Scotland. Water deregulation is not new. Competition for water The savings that water services was first introduced deregulation in Scotland in England in 2003, and has delivered since 2008 commercial customers using more than 5,000 cubic meters companies established licenced formidable task, for example. of water per year can already water retail supply businesses, Customers will also have choose their supplier. In practice, either directly owned, joint- to wade through new, and however, the complexity of owned or in partnership potentially quite complex, the overall market has meant Initially, at with specialised providers. In offers and pricing structures continued high costs and low least, capturing each case, contact was made from different providers levels of customer satisfaction. with business customers to to find the best option for Businesses in Scotland have those benefits advise them of the changes. them. That might feel like fared better. The commercial could be tricky. In principle, this further an unwelcome distraction. water market there has been Amalgamating deregulation will help To take advantage of the fully deregulated since 2008. customer and companies cut their water costs potential savings, however, More than 40% of businesses by eliminating inefficiencies, non-domestic water users in north of the border have supply records reducing the complexity of England do need to develop renegotiated their arrangements from all the existing sourcing across multiple sites, strategies for managing vital for the supply of water and water companies, and providing single billing water and wastewater services. sewerage service. It is estimated rather than multiple billing from One answer may be to the change has delivered for example, is a different regional suppliers. It outsource responsibility overall savings of £43m and formidable task isn’t all about price, however. for water and wastewater reduced water consumption Many customers will place equal treatment – and factors such by about 20 billion litres. customers, plus public sector, or greater value on other factors, as cost negotiations – to an The success in Scotland has charitable and not-for-profit such as reduced administrative industry expert such as SUEZ encouraged the government organisations in England, to complexity, flow monitoring, Water UK. In many respects, to adapt a similar model choose their supplier of water security of supply, greater this type of outsourcing is no in England. In 2009, the and sewage services, regardless water efficiency, enhanced different to that of many other independent Cave Review of of where they are in the country. customer or water hygiene non-core business services such competition and innovation This represents a dramatic shift services or carbon reduction. as warehousing, IT or payroll. in water markets published in the scale of the deregulated Initially, at least, capturing Ultimately, such an its final report. The Water Bill water market. With around one those benefits could be tricky. arrangement would help a was subsequently published million eligible companies, the There will inevitably be teething company to remain focused on by Defra in 2013 and passed English market is about eight problems with the new market. its core business, while reducing by Act of Parliament in 2014. times larger than in Scotland. Amalgamating customer and the cost, risk and complexity The Water Act is intended to In anticipation of these supply records from all the of managing its water and allow all non-domestic business changes, many of the water existing water companies is a wastewater systems. te

60 April/May 2017 theenergyst.com WATER MANAGEMENT The plunge into Open Water

Much has been made of the benefits that are available to businesses from taking control of their water cost and consumption but what options are available to them, asks SES Business Water managing director Giuseppe Di Vita

he commercial a large amount of administrative a third party, meaning additional water market is now work to set up, to upfront cost could be incurred. open for business in working capital requirements. This option may work for TEngland, meaning In short, businesses purchase a some organisations but there are 1.2 million eligible businesses self-supply licence and go through The ability to alternatives that negate the need have the choice to move their a licence application process. for lengthy processes and capital water supply to a different Businesses are then required to access and analyse requirements. One example is retailer for the first time. set up supply agreements with your business’ Wholesale Tracker Plus from The current wholesale price wholesalers and pay upfront for consumption in one SES Business Water, a tariff that framework is in place until 2020, their pre-estimate consumption. place will also make tracks the annual wholesale rate, restricting the ability of retailers This can mean paying out with one single charge based to make drastic price reductions significant levels of capital (and it far easier to make on the services taken. This still immediately available. However, setting up individual agreements informed water provides transparency and access the average business should still with multiple wholesalers decisions to reduce to wholesale prices, without be able to immediately reduce where businesses have sites in admin-intensive processes or their water bills by up to 5% in different regions). Businesses usage and cut costs taking on commercial risks. the newly deregulated market would then need to set up meter Consider contract terms too: as from competitive pricing alone, reading contracts and manage businesses get to grips with the and tariff savings could be more the reconciliation of settlement water market, locking yourself in significant from 2020 onwards. volumes after consumption, to a long-term contract with high and potentially allocate costs exit fees may restrict your ability Fix, flex or self-supply? across internal sites. This could to adapt as you focus more on There are different water be managed internally water costs and consumption. procurement strategies where resource available to businesses, from allows, or by Securing the best deal for you fixed tariffs to navigating the Of course, price is only one factor wholesale markets directly. to consider in water. Efficiencies Unlike in the volatile energy from consolidating a portfolio markets, where fixing a under one national supplier also contract can guarantee count, reducing resource and budget certainty for those streamlining invoice management with a low risk appetite, processes. The ability to access fixed tariffs offer minimal and analyse your business’ benefits to businesses in the consumption in one place more stable water market. will also make it far easier A fixed tariff should freeze to make informed water the vast majority of costs decisions to reduce within a business’ water usage and cut costs. supply, although wholesalers However, choosing the make annual price adjustments right contract from the as laid out in the frameworks offset will be crucial in that will be passed through ensuring your business as part of the contract. takes control of water costs There has been some talk in and accesses the benefits of the market about self-supply open water through a contract to enable larger businesses to that meets your individual access wholesale prices. This is needs. The water market offers now possible in the open market opportunity making the right and while this might work for decisions to secure the best deal some organisations, there are Businesses need to consider all their options carefully for your business means that some hurdles to overcome, from before pressing the button on changing their water supplier opportunity can be untapped. te theenergyst.com April/May 2017 61 PRODUCTS

University saves online DriveSize tool to £194,000 a year using identify which motors would drive technology be best for use with VSDs. This showed that any motor The University of Leeds of 10kW or above would is saving £194,000 a year produce the greatest savings.” in energy costs and more ABB-authorised value provider than 809 tonnes in carbon Halcyon Drives was chosen to emissions following the supply the drives as it was able installation of 94 ABB variable to meet all of the university’s speed drives ranging from technical specifi cations. 5.5 to 55kW. A payback of 1.2 Among its requests were years has been achieved on a harmonic mitigation, a fi ve- capital outlay of £228,859. year warranty and the ability to The project formed part This included installing VSDs on motors had no speed control, use one model of VSD across of the university’s Carbon existing motors powering fans being connected direct-on-line. all installations. Halcyon Management Plan, in which it in air handling units and fume Robert Douglass, energy Drives also had the ability to identifi ed ways to save energy extraction equipment and water project offi cer for the university, provide service for drives and and cut its carbon emissions. pumps. Most of the assessed said: “Initially we used ABB’s had the stock availability.

Higher luminous flux, less power LED lighting overhaul reduces costs by 70% Tridonic has given its rendering. The 50mm package Industrial air movement sixth-generation SLE LED is ZHAGA compliant. This specialist Air Control modules a chip upgrade allows for a more stable Industries is experiencing as well as extending its connection between the lower electricity bills colour palette range. chip and improvement in and an improvement in The Art, Food And Fashion thermal conductivity. its warehouse’s working colours, each tailored to New versions with a 17 mm environment from a new suit a specifi c application, light-emitting surface (LES 17) LED lighting system. have now been joined by close the gap between 15mm The system, which has ‘Tinge’ to make warm tones (LES 15) and 19mm (LES 19) been paid for in part by appear even more vibrant. modules, which allows for a a Carbon Trust grant, is All the versions benefi t choice of different emission set to save the company from greater effi ciency in angles for spotlights. almost £3,500 a year in high-output mode and are Less power is needed to electricity savings, while now available with a 17mm produce the same luminous reducing it’s carbon light emission surface. fl ux as the predecessor emissions by 18,161kg of CO2 per year. The dimmable LED modules modules. The LED modules Installed by SunGift Energy, which previously designed and for spotlights and downlights are also compatible with installed the company’s 50kW rooftop solar system, the LED have a greater effi ciency of all the drivers in the lighting is also making visibility in the warehouse much clearer. up to 30% and better colour standard portfolio. “It’s one of those improvements that makes sense from every angle,” said Nick Wilson, purchasing manager at Air Control Industries. “When SunGift reviewed our site and showed us the money we would save, the reduction in downtime for repairing broken standard lights, and the concentration benefi ts for our staff, switching from standard lighting to LED was the obvious choice. “Lighting is a huge overhead for us,” added Wilson, “but now our annual costs will reduce from approximately £5,000 per year to £1,500 per year. That’s a huge reduction – £42,000 over the expected lifespan of the lights.” The installation consists of 32 Fitzgerald ‘Lowbay’ LED lights and 15 JCC ‘Skypack Plus’ LED battens. The full system cost £15,000 but Air Control Industries received a fi nancial contribution of almost £4,000 towards this from the Carbon Trust Green Business Fund. The grant had to be spent using one of the trust’s accredited suppliers, such as SunGift Energy. The savings mean that the system will have ‘paid for itself ’ in just over two-and-a-half years.

62 April/May 2017 theenergyst.com Lighting the way to greater energy savings Brick supplier to install heat recovery Eaton has launched warranty to all mains lighting The Austrian the Crompack LED+, a products, with no annual Wienerberger Group, a premium version of its hours usage restrictions. leading brick supplier Crompack LED batten. “The Crompack LED was and a large European The company’s latest a leap forward in terms of tile maker, has awarded a luminaire increases both energy effi ciency but with consortium led by CNIM performance and effi ciency the Crompack LED+ we’ve a turnkey contract to by offering 150 luminaire added an even greater level manufacture and install lumens per circuit watt (Llm/ of effi ciency where it is a heat recovery system cW) compared with the 114 required,” said Ian Roberts, in a plant in the Linz Llm/cW of its predecessor. product line manager for region of Austria. As a result, customers mains lighting at Eaton. This is a pilot project can expect greater energy “The Enhanced Capital for the group, which is savings and larger reductions Allowance looking to optimise costs and in through-life costs. (ECA) improve its energy effi ciency. sites in 30 countries The latest development Developed by CNIM in worldwide, Wienerberger follows an announcement close collaboration with had revenues of !2.9bn to apply a fi ve-year Wienerberger, this system, (£2.4bn) in 2015. which is based on a heat CNIM’s cooling unit absorption pump design, and heat pump offering, Scheme allows energy lost in the form acquired through the helps businesses of hot exhaust air from the purchase of INVEN’s activity to benefi t from dryer to be recovered. This in this area in 2014, has single-year capital will enable Wienerberger to applications including oil allowances by using energy save the equivalent of 500kW and gas, petrochemicals, saving equipment, including of gas to pre-heat the dryer. chemicals, energy generation lighting,” said Roberts. With 202 production and shipbuilding.

Sealing specialist’s annual energy consumption reduced by 62% to install a full-feature Atlas Copco GA45VSD+FF rotary screw compressor with integrated refrigerant dryer as an ‘endurance machine’ on a six-month free trial basis. Running the plant at 6.2bar air system pressure rather than 7bar, combined with the VSD’s capability to vary output from 26 to 155l/s to match the facility’s compressed air demands, the new compressor’s performance results were impressive. It provided savings of 62% in energy consumption, down from 45 to 17kWh, which adds up to £11,400 in annual energy cost savings. The Trelleborg Sealing An essential requirement actuating pneumatic doors In addition to the cost Solutions manufacturing of the production processes on production machinery savings, the sealing specialist facility in Tewkesbury, in at the site is a constant, to the removal of processed has also benefi ted from the Gloucestershire, is one of large volume supply products from moulding compressor’s quiet operation. Trelleborg Group’s prime of compressed air. tools and the spraying of The company’s current European production and Within the 6,000 sq ft bonding agents on to metals. production objective development facilities for facility, the wide variety Based on an iiTrak system is to achieve a 3% standard and custom-made of applications for the energy audit, Trelleborg improvement annually in high pressure elastomer seals. air supply ranges from Sealing Solutions decided energy consumption.

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theenergyst.com April/May 2017 65 Q&A Phil Ivers

Gazprom Energy’s head of customer optimisation regrets missing out on the dot-com boom, dislikes lazy people and wants to know the real truth behind the Stephen Avery case

Who would you least like What would you take to a anywhere I wanted and always of advice you’ve ever to share a lift with? Why? desert island and why? fi rst class, but being able to fl y been given? Tom Cruise. After watching I’d need some way of would be pretty good as well. Don’t stress about the his TV interviews he looks accessing the internet... things you can’t control. very weird, talking about how I really can’t live without What would you do with “he becomes the characters Google and BBC Sport. I’d a million pounds? What irritates you he plays for his art”. also like an endless supply Vegas with mates the most in life? of good rum and ice. – that’s it. Laziness – if you You’re God for the day. want something What’s the first thing What’s your favourite What’s your to happen then that you do? film or book and why? greatest you have to push I’d like to be able to read The Hurricane – I love extravagance? for it. If you don’t my girlfriend’s Denzel Washington I’m not that ask you don’t get! mind about and this story of extravagant but where she wants a long fi ght for I enjoy spending What should the energy to go for dinner. justice, with a bit money on holidays and nice users be doing to help itself After that, I’d of violence. hotels. After years of staying in the current climate? explore other in two-star holes I happily Don’t fear the market, read planets as I’ve If you could pay a premium now. the reports suppliers send always wondered perpetuate a and understand what is what is out there myth about If you were blessed with happening to energy prices – hopefully some yourself, what any talent, what would your and how this will impact little green would it be? dream job be and why? your bills. Some practical people. My dog is not I think 10 years ago I would steps you should take are: fat… he is just have said a pilot but now I • Form a buying strategy If you could travel big boned. get sick on rollercoasters, or work with people who back in time to so probably a lawyer will do that for you a period in history, what What would your super because it opens the doors • Don’t fall into standard would it be and why? power be and why? to so many opportunities, tender rounds every I’d like to go back to just I’d like to be Air Miles Man – I including politics. 12 and 24 months before the dot-com boom would basically have unlimited • Work with your supplier on so I could invest in Google air miles so I could go What is the best piece a product that works for you. and be a very rich man. • Get smart meters or AMR and use that data wisely Who or what are you enjoying listening to? What’s the best thing – work Normally I listen to Radio X wise – that you did recently? except when Chris Moyles Part of my job is helping is on, but on a long drive new, independent energy I often fl ick between 5 suppliers enter the market by Live and talkSPORT. providing strong pricing and products. It is risky entering a What unsolved mystery very competitive market and would you like the I recently saw two of these answers to? companies celebrate a full 12 Making a Murderer is the months of business which is latest TV series I’ve been impressive; with Gazprom hooked on, and I’d like to Energy’s help they made it know the real truth behind through a very tough winter the Stephen Avery case. Did he or didn’t he? Making a Murderer’s Stephen Avery and still successfully grew. te

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