Case study for Cornwall by REOC

Renewable energy for commercial and industrial buildings in Cornwall.

REOC report WP5 “Contribution to the planning process” for SEIPLED

TECHNO-ECONOMICAL PLANNING DOSSIER (TEP)

November 2007 Contents 1 PROJECT AIMS AND OBJECTIVES ...... 4 2 LOCAL CONDITIONS...... 4

2.1 CORNWALL ECONOMIC STRATEGY DEVELOPMENT...... 4 2.2 CONVERGENCE PROGRAMME DEVELOPMENT ...... 6 2.3 CORNWALL INDUSTRIAL AND COMMERCIAL SECTORS...... 7 2.4 CORNWALL INDUSTRIAL AND COMMERCIAL BUILDINGS...... 8 3 CORNWALL INDUSTRIAL AND COMMERCIAL ENERGY USE ...... 14

3.1 HEAT DEMAND ...... 16 4 BARRIERS TO RE IN INDUSTRY AND COMMERCE IN CORNWALL...... 18 5 OVERCOMING OBSTACLES TO RE IN CORNISH INDUSTRY...... 19

5.1 DEVELOPMENT PHASE...... 19 5.1.1 Assistance with local strategy process...... 19 5.1.2 Assistance with Convergence Programme Development...... 21 5.2 LOCAL PLANNING POLICIES...... 22 5.2.1 Methodology ...... 23 5.2.2 Planning Policy...... 23 5.2.3 Penwith District Council...... 25 5.2.4 Kerrier Council...... 25 5.2.5 Carrick District Council...... 25 5.2.6 Restormel Borough Council...... 25 5.2.7 Caradon District Council...... 26 5.2.8 North Cornwall District Council ...... 26 5.2.9 Conclusion ...... 26 5.3 TRAINING FOR RE DESIGNERS, INSTALLERS AND OPERATORS ...... 26 6 OPTIONS FOR GRANT PROGRAMME APPLICATION ...... 27

6.1 CONVERGENCE ...... 27 6.2 SW REGIONAL DEVELOPMENT AGENCY ...... 28 6.3 STRUCTURE OF LOCAL CONVERGENCE PROGRAMME ...... 28 6.4 POTENTIAL FOR RE IN NEW/REFURBISHED COMMERCIAL AND INDUSTRIAL BUILDINGS ...... 29 6.5 PROGRAMME EXPECTED OUTCOMES...... 29 7 RE TECHNOLOGY CHOICES...... 30

7.1 BIOMASS BOILERS ...... 31 7.1.1 Benefits to companies...... 32 7.1.2 Integration with buildings ...... 34 7.1.3 Planning issues ...... 35 7.1.4 Operation and maintenance...... 35 7.1.7 Energy, and CO2 savings...... 36 7.2 GROUND SOURCE HEAT PUMPS ...... 37 7.2.1 Benefits to companies...... 38 7.2.2 Integration into buildings...... 39 7.2.3 Planning issues ...... 40 7.2.4 Operation and maintenance...... 40 7.2.5 Energy, and CO2 savings...... 40 7.3 WIND TURBINES ...... 41 7.3.1 Benefits to companies...... 42 7.3.2 Integration with buildings ...... 43 7.3.3 Planning...... 43 7.3.4 Operation and maintenance...... 45 7.3.5 Energy and CO2 savings...... 46 7.4 HEAT MAINS ...... 46 7.4.1 Benefits to companies...... 48 7.4.2 Integration into buildings issues ...... 49 7.4.3 Planning issues ...... 49

2 7.4.4 Installation, operation and maintenance...... 49 7.4.5 Energy, and CO2 savings...... 49 REFERENCES...... 50

3 1 Project aims and objectives

The aim of the project is to develop a programme of encouraging the installation of RE on all new and refurbished industrial and commercial buildings in Cornwall. Specifically this is to be achieved through the following three deliverables: • Setting up training for designers and installers • Helping develop local planning polices for new industrial and commercial buildings to incorporate RE • Preparing and submitting a grant application for a programme to assist the installation of RE in all new industrial and commercial buildings in the region

2 Local conditions

Cornwall is a poor area with low GDP (65% of UK average in 2005), enabling it to gain a new EU Convergence grant. The £500m grant programme will have sustainable energy as one of its main themes, providing an ideal opportunity to set up a grant scheme to encourage R.E industrial and commercial building integration.

Energy costs Cornwall around £600 million a year (euro 870 million), nearly all of which is imported, amounting to 16% of the local economic output. There is a high proportion of small companies in the industrial sector and because the local area is predominantly rural and agricultural, the major part of the local manufacturing industry is food processing, which has high energy needs. Cornwall is renowned for its beautiful environment, its beaches and moorland, and is surrounded by sea on three sides, restricting access to markets for industry.

At present most new industrial buildings are grant aided, so the option to install R.E with grant aid is a natural extension of the present programme

2.1 Cornwall economic strategy development The Cornwall Economic Forum, which is a multi-agency body mainly from the public sector, regularly develops the Cornwall Economic Strategy, called Strategy and Action. A new Strategy and Action has been developed as part of the lead up to the new Convergence Programme, which is meant to cover 2007-2013. However as of summer 2007 this programme had not started and was expected to start in early 2008.

REOC as part of its SEIPLED work has played a full part in the development of this policy document. Specifically we have prepared a major paper on a Low Carbon Vision for Cornwall and what it means in local economic development terms. (ref 1)

4 This showed how the local economy could be grown by around 50% through energy efficiency, RE and local food production and processing to save CO2 and oil needs.

Possible savings and economic benefits for Low Carbon pathway

Savings source CO2 New Employment Increased savings tpa FTE approx business turnover £m pa approx Energy system Energy efficiency 220,000 1,500 200 Renewable electricity supply 2,000,000 4,000 385 Renewable heat supply 375,000 900 109 Biofuels for transport 258,000 90 41 Newquay airport CO2 offset 42,000 30 8 Food system Organic agriculture 100.000 550 50 Local production & supply 282,000 22,000 2,200 Total savings 3,277,000 29,070 2,993

In addition we attended and participated in the consultation meetings and prepared consultation responses which were discussed with the Strategy and Action development team. This work helped to develop the “Strategy and Action” as a document stressing the following:-

• Context Local responses are required to adapt to issues such as climate change, oil dependency, unsustainable travel patterns and the current fragility of world energy supply. As energy demand continues to rise, Cornwall and the Isles of Scilly has an opportunity to support the generation of more energy from renewable sources, and at a more local level. Reducing dependency on oil-derived energy and manufacturing processes would go some way to shielding the area from any impacts of worldwide oil price rises. Promoting growth that reduces the need to travel and encourages less energy consumption will be key to the future economic well-being of Cornwall and the Isles of Scilly. Taking steps towards achieving a carbon-neutral economy is essential in order to achieve long-term sustainability and maintain the environment that is loved by residents and visitors alike for enjoyment by future generations.

• Vision Economic growth is achieved within environmental limits by exploiting the opportunities that arise from its establishment as a low-carbon economy working towards environmental sustainability and is recognised as a leader in renewable energy and environmental technologies.

To ensure environmental sustainability one of four Vision Statements • Themes Cornwall and the Isles of Scilly has a special and distinctive environment that provides very real opportunities to gain economic benefit. Quality of life (often associated with environmental quality and cultural opportunities) is a major attraction for investment, businesses, workers and visitors. Business efficiency can be enhanced through better environmental management and environmental technologies and services, such as renewable energy, which represent a huge global market within which Cornwall and the Isles of Scilly can become a leader.

5 The UK Sustainable Development Strategy states that 80% of the environmental impact of a product is determined at the design stage. Therefore this Objective needs to incorporate environmental considerations from the outset. Building on the emerging renewables cluster will enable Cornwall and the Isles of Scilly to seize an important competitive advantage – particularly given the current reliance on the (well-documented) dwindling supply of fossil fuels and the impact of rising fuel costs. By supporting this activity, a major new and highly productive value-added industry will be developed. This will work closely with academia and research institutions and include a focus on leading the design, development and production (air, sea and land-based) of products responding to environmental and energy-related opportunities, both for local use and export.

• Theme 1: improve competitiveness Integrate strategic principles The principles of sustainable development will be incorporated in the delivery of employment sites and premises. Wherever possible, such development should …… meet the highest standards set out in Future Foundations, the sustainable construction charter for the South West. New or refurbished workspace should be flexible, of high-quality design and energy efficient, and should meet appropriate BREAAM standards. …... New workspace will be fitted out with future-proof services including ….. leading-edge energy solutions, to the benefit of end-users and the general environment.

2.2 Convergence Programme development

The new Structural Fund programme is known as Convergence as now Cornwall is regarded as a converging region. This suggests that this present tranche will be the last location specific help from Europe to be received in Cornwall.

The process of developing the Convergence Operational programme has been carried out in Cornwall initially by the same team which developed “Strategy and Action”. They also received help from consultants in Scotland, and in the later stages the process was taken over by the SW Regional Development Agency, once it had been decided that the RDA would run the programme from their main Cornish office.

The REOC tasks then focussed on feeding the appropriate information to the consultants and to the development team and in ensuring that REOC remained as one of the key consultees for all energy matters. REOC provided assistance with carbon targets and issues and helped with an assessment of the present carbon dioxide emissions in Cornwall as a whole. This task had not been undertaken before and improved local understanding of the scale of the issue, particularly within the Convergence development team.

REOC also provided significant feedback on the Programme as it developed and has helped to shape the programme.

Further meetings are planned in the near future with the RDA Operational Manager to continue to develop his understanding of how to implement the SEIPLED aim of RE on all new industrial and commercial buildings funded through the Convergence Programme. He has expressed approval of the concept

6 for the present programme. The draft Convergence Operational Programme is now published and is awaiting approval from Brussels.

The outline of the Convergence Programme and its relationship to the SEIPLED programme is detailed later in this report.

2.3 Cornwall industrial and commercial sectors

Cornwall has with assistance from Objective One funds been growing economically over the last five years, but still remains low relative to the UK nationally. Most of the growth has come from the lower earning sectors such as retail and wholesale, along with growth in land and property and other business services and manufacturing.

Total Gross Value Added (GVA) for the region is £5,322m or some €7,826m.

The total number of VAT registered businesses in Cornwall was 18,746 in 2006, which has increased by over 5% over the last seven years.

VAT registered businesses by sector sector No. % of total Agriculture 3,900 21% Retail 3,900 21% Land & property, other 2,600 14% business services Hotels & catering 2,137 11% others 6,209 Total 18,746

This shows the relatively small size of agricultural businesses as they collectively contribute only 3% to local GVA , but make up 21% of the business stock. This does however indicate that there may be significant opportunities for RE in agricultural buildings.

More important for the SEIPLED work is the proportion of local business in the manufacturing and commercial sectors The table below shows the breakdown of businesses by sector for the medium and larger businesses.

7 Businesses by Sector – Cornwall 2004 Industry 11-49 Employees 50-199 Employees No. % No. % Agriculture/Fishing 8 0.3 1 0.2 Energy/Water 20 0.7 16 3.6 Manufacturing 187 7.0 57 13.0 Construction 88 3.3 9 2.1 Distribution/Hotels/Restaurants 1,026 38.2 106 24.1 Transport/Communications 115 4.3 30 6.8 Banking/Finance/Insurance 283 10.5 38 8.7 Public Admin/Education/Health 827 30.8 162 36.9 Other Services 134 5.0 20 4.6 Total 2,688 100.0 439 100.0

The most relevant industrial sector is manufacturing with some 244 businesses, the largest having more than one building in several cases. The commercial sector consists of the distribution, hotels, restaurants, financial services, and public administration areas etc covering over 2,000 businesses.

2.4 Cornwall industrial and commercial buildings

From Strategy and Action The key supply issues for Cornwall and the Isles of Scilly include a shortage of quality, modern floorspace of the right type, location and tenure. There has been limited delivery of floorspace outside of the main towns and there is limited availability of incubation and grow-on space for successful businesses. There are more than 20,000 self employed people working mainly at or from home in Cornwall and the Isles of Scilly, therefore the provision of live/work units are a real opportunity, both for environmental reasons, flexibility and for rural regeneration. There is a high number of redundant buildings and community facilities in more rural locations which could be utilised, providing there is appropriate infrastructure and access to services. Some allocated sites are not deliverable in the short/medium term due to various constraints and in some cases, where premises are available; there is concern about the quality of accommodation and the built and physical environment.

The area of non domestic buildings in Cornwall has been calculated from several data sources which give conflicting information as shown in the tables below:

8 Area of non domestic buildings by District Source Defra LINC DCLG Employment land use employee Rating Space Strategy space Valuation for Convergence programme District 000 m2 Caradon 14,800 79 443 Carrick 15,600 103 761 Kerrier 19,900 80 667 North Cornwall 25,500 99 687 Penwith 11,800 64 406 Restormel 17,600 88 726 Total 10,560 513 3,690 2,482

The land use statistics however include some of the yard and carparking areas associated with non domestic buildings as these statistics were compiled from existing map data. As the Rating Valuation data is compiled for taxation purposes, based on regular surveys on behalf of the government to levy rates it is assumed that this is the most accurate figure, which is used from now on in this report. The commercial and industrial areas of building sin Cornwall is therefore taken to be some 3,700,000 m2.

There is a fairly even distribution of non domestic floorspace in the Districts after allowance has been made for the total area of each District

Number of local units (buildings) by size of employment employment size total 0-4 5-9 10-19 20-49 50-99 100-249 250-499 500-999 Caradon 3,245 2,410 410 250 120 35 15 5 - Carrick 4,045 2,690 630 365 60 35 10 5 250 Kerrier 3,110 2,105 500 175 35 25 5 5 260 NCDC 4,525 3,400 585 305 160 40 25 5 5 Penwith 2,495 1,680 435 215 125 25 10 5 - Restormel 3,495 2,230 640 310 220 60 25 10 - 20,915 14,515 3,200 1,705 1,050 255 135 40 15

3,500 3,000 2,500 Caradon 2,000 Carrick 1,500 Kerrier 1,000 NCDC 500 0 Penwith Restormel 0-4 10-19 50-99 250-499

9 The diagram and table show the predominance of small companies with very few employees.

Employment in each sector by District Sector total Caradon Carrick Kerrier NCDC Penwith Restormel % number agriculture 17% 3,625 665 465 535 1,195 355 410 production 6% 1,350 215 235 230 270 150 250 construction 10% 2,095 355 375 300 455 210 400 motor trades 4% 915 149 170 160 170 108 158 wholesale 4% 885 150 180 150 195 105 105 retail 14% 2,920 400 635 405 550 435 495 hotels &catering 10% 2,085 265 370 245 395 355 455 transport 3% 650 125 155 80 115 65 110 post & telecoms. 1% 185 30 35 45 40 20 15 finance 1% 197 26 55 30 36 20 30 property & 17% 3,480 620 795 495 630 390 550 business services education 2% 445 70 90 80 80 45 80 health 2% 355 50 85 70 70 30 50 public admin & 9% 1,820 235 410 335 335 230 275 other services total 100% 21,007 3,355 4,055 3,160 4,536 2,518 3,383 16% 19% 15% 22% 12% 16%

Calculated area of non domestic buildings by sector

Sector Calculated area Rating Valuation m2 agriculture production 495,237 construction 238,246 motor trades 335,661 wholesale 318,289 retail 420,070 hotels & catering 596,895 transport 105,525 post & communications 57,460 finance 26,923 property & business services 475,600 education 160,044 health 102,140 public admin & other services 359,223 total 3,691,313

This calculation provides an approximate breakdown by sector of non domestic buildings in Cornwall, from the employment space figures noted above pro rata from the Rating Valuation data for each District. This indicates that the most relevant sectors for establishing RE in local commercial and industrial buildings in Cornwall total nearly 3m m2 floorspace., plus an unknown amount in agricultural buildings

10 The main sectors this programme is concentrating on are: • Production (manufacturing) • Wholesale • Retail • Property and business services • Education • Health • Public administration and other services

In preparation for the Convergence Programme the County has studied the supply and demand for employment land and seeks to address the mismatch in value and costs for the development of new industrial buildings locally.

Of the total stock of employment land, it is estimated that 60% is occupied. The majority of this land is in Restormel (150 ha), North Cornwall (135 ha) and Kerrier/CPR (101 ha). Approximately 50 out of the 577 hectares has been developed but is vacant.

In addition to the existing commercial land, a further 62 hectares of land is serviced with planning permission and 23 hectares is allocated as un-serviced without planning permission. A total of 135 hectares has been allocated as employment land, the majority of which is in Kerrier/CPR (52 ha) and Restormel (37 ha).

Recent studies have shown demand amongst businesses in a range of sectors for accommodation, although the market has not yet grown sufficiently to witness substantial private or speculative investment. Much demand is perceived as latent and there is a belief that public sector intervention is required to support new development. There are increasing examples of successful speculative developments, such as Tolvaddon Energy Park in Redruth. A recent comprehensive study of Employment Space Strategy 2007-2017 examined the property market context, future prospects using Cambridge Econometrics growth forecasts, floorspace and employment land forecasts and sectoral requirements. The study concluded that some 70% of businesses were expecting to grow, a high proportion of businesses reported their premises as inadequate and in addition to current concerns, future demand is likely to be significant, and particularly for smaller units.

As well as growing overall, the type of accommodation being sought is changing. A snapshot of one month of property enquiries during 2005 showed a majority of enquiries were for office rather than industrial space, with almost half coming from Regional Economic Strategy priority sectors – IT, software, business services and creative industries.

Whilst recent investments have begun to tackle the shortage of high quality sites and premises, there remains an unmet demand for high quality accommodation of a range of types and sizes. Market conditions are such that in the vast majority of locations, however, development will not come forward without an element of pump priming from the public sector. Further consideration needs to be given

11 to the public sector sharing risks and rewards in terms of development, rather than merely continuing to provide subsidy. In a growing economy, the levels and scale of public sector intervention should be diminishing from Employment Space Strategic Assessment 2007-2017

Despite these increases, current values still do not generally meet costs, resulting in continuing financial deficits on schemes. This has limited the supply of sites and workspace and means there is a continuing requirement for public sector support to assist delivery – either through direct development or through the gap funding of private sector developers.

Much of the existing stock of employment space can be characterised as follows:

 poor environment and access;

 limited supply of freehold units;

 poor design and very intensive use of many units;

 an apparent desire amongst many occupiers for low cost, poorer quality accommodation;

 poor master planning and design of overall estate;

 restricted car parking and servicing; and

 limited scope for refurbishment and/or re-use.

The supply of serviced sites is restricted in many cases by ground conditions, such as mining and requirements for remediation and infrastructure works. With remediated land values of £150,000 to £310,000 per hectare (£60,000 to £125,000 per acre), the high costs of such works are not viable without public sector support. On this basis, public sector organisations such as the South West of England Regional Development Agency and local authorities, have taken the lead role in site assembly and servicing for delivery by the private sector.

Replacement demand If it was economically viable to do so, there is estimated to be demand for some 11% (273,000 sq m) of the existing commercial stock to be replaced and/or substantially refurbished over the period 2007-2017. This estimate is based upon an analysis of: the freehold/leasehold split of accommodation; the age and quality of existing commercial buildings; and the estimated useful life of buildings.

Trend based forecasts The past trends in total floorspace by use have been analysed at the Cornwall and Isles of Scilly level. If the same annual average rate of change per annum were to be applied over the period to 2017 then the net change would be as shown in the table below.

12 Expected growth in commercial and industrial floorspace Offices +159,000 sq m Industrial +110,000 sq m Warehousing + 10,000 sq m Total + 279,000 sq m

Vacant space of 50 sq m or more within the B1, B2 and B8 use classes has been identified and recorded across Cornwall and the Isles of Scilly and collated in a database. As at October 2006, the total amount of vacant floorspace identified through the study across the whole of Cornwall and the Isles of Scilly amounts to almost 73,000 sq m. This represents an overall vacancy rate of approximately 2.8% in respect of general industry and approximately 3.8% for offices. These rates are lower than would normally be expected for the efficient operation of the property market – typically vacancy rates might range from 5% to 10%.

Overall, 50% of the vacant stock is rated as either poor or very poor. There is a predominance of leasehold properties.

The amount of land available for the development of additional employment floorspace has also been assessed. In total 254 ha of land has been identified as potentially available for employment floorspace.

In total it was estimated in the Cornwall Economic Forum Employment Space Study that the available employment land has the capacity to accommodate over 765,000 sq m of employment floorspace and 27,400 jobs

Demand for commercial and industrial buildings under Convergence The table below shows the results of the proposed economic growth scenarios, which suggest doubling of commercial and industrial buildings in Cornwall in 26, 22 and 18 years respectively.

Demand for employment space under three Convergence scenarios (000sm2) Industrial Offices (sq m) All classes scenario demand vacant gap demand vacant gap demand vacant gap premise premises premises supply supply supply 2.8% 55 59 155 135 14 22 189 73 177 3.2% 82 59 128 158 14 -2 240 73 127 aspirational 221 59 -11 186 14 -30 407 73 -40 Source Employment Space Strategy Cornwall Economic Forum 2007

Growth in demand for commercial and industrial buildings (m2)

Scenario B1a/b B2/B1c B8 storage & Total Growth rate offices general industry distribution 2.8% p.a. 134,630 -25,320 80,166 189,476 3.2% p.a. 157,646 -9,438 91,361 239,568 Aspirational 185,660 58,540 162,690 406,890

13 The totals are nearly 190,000m2 and 240,000m2 new floorspace in the Convergence period. The target floorspace in the Operational Programme is that in the Aspirational Scenario amounting to some 407,000m2

Analysis of expected size of new buildings in the Aspirational Scenario suggests that national trends will not be relevant to Cornwall in the future any more than they are at present in terms of the national reduction in manufacturing space required. This Scenario may not be met because of external factors such as Peak Oil which is expected to curb most economic growth well within the Convergence Programme period. The kinds of economic growth which are expected to continue under Peak Oil are activities relating to increasing local production and supply of essentials such as food and energy.

Cornwall however in addition to its major specialism in food production and processing has many niche manufacturers which produce for niche markets worldwide. These include the new development of complex speciality chemicals, specialist filters for many types of application, car cleaning products, specialist bandages, aircraft seats, etc.

3 Cornwall industrial and commercial energy use

The UK government has produced regional statistics for energy use in each county and this information is supplemented with REOC’s specialist local knowledge. The results of work on the industrial and commercial sectors in Cornwall indicate the following energy demands, excluding transport uses.

Industrial and commercial energy use in Cornwall (GWh pa 2005) District Electricity Gas Coal Oil Total Caradon 164 134 20 166 483 Carrick 210 125 7 133 474 Kerrier 223 121 18 152 513 North Cornwall 314 128 50 370 862 Penwith 128 64 5 75 272 Restormel 581 856 9 179 1,625 Total 1,620 1,427 110 1,073 4,230 Source DTI Regional Energy statistics

This total of 4,230 GWh for the commercial and industrial sectors in Cornwall is lower than that calculated for 1999, by some 9%. This reduction in energy use is probably due to the loss of some major companies and in particular the reduction in activity by the main china clay company which has a very large and constant energy demand. China clay process demand can be seen in the Restormel statistics as it still raises the Borough’s demand significantly above the average for Cornwall districts, particularly for gas which is nearly seven times the local average demand. Once the demand from the china clay industry has been removed, the overall demand for energy in industry and commerce in Cornwall is seen to be around 3,175 GWh pa.

The numbers of commercial and industrial customers for electricity and gas are 32,000 and under 2,000 respectively. This clearly shows the impact of the rural

14 nature of Cornwall and the lack of a mains gas pipeline network over large parts of the county.

The estimated average energy use in Cornish industry and commerce, excluding transport is shown below:-

Cornish industrial and commercial energy use Sector GWh pa china clay 1,054 commerce 1,013 industry -production 1,704 other agriculture, construction, transport 460 total 4,230

This analysis of energy use in manufacturing has been arrived at through a compilation of employment figures and energy intensity, derived from Berr Energy consumption in the UK and the Industrial Energy Thrift Scheme, which was the last assessment of industrial energy intensity in very specific industrial sectors. Those of significance to Cornwall include milk processing, baking, meat and meat products manufacture, fruit and vegetable processing, plastics goods manufacture. Although the IETS was some years ago, recent government statistics show that industrial energy intensity per employee has remained the same, over the last fifteen years. What has changed is that energy intensity per unit of output has decreased.

Estimate of energy use in industry , excluding transport and china clay Sector GWh pa % food processing 733 43% mechanical/elec engineering 242 14% printing/publishing 157 9% rubber &plastics 145 9% primary products 49 3% textiles /clothing 15 1% other 363 21% Total 1,704 100%

Although there is no available breakdown by fuel of the local industrial and commercial energy demand, we have assessed the demand using appropriate national figures. From this it has been possible to assess the local demand for heat and motive power in the industrial and commercial sectors in Cornwall.

15 Allocation of energy demand type within sectors Sector total demand gas elec oil/coal manufacturing GWh pa food processing 726 182 182 363 mechanical/elec engineering 233 58 93 82 printing/publishing 157 72 53 31 rubber & plastics 143 29 57 57 primary products 49 7 22 19 textiles /clothing 15 7 4 4 other 363 91 109 163 total 1,686 445 520 720 china clay*** 1,076 681 372 23 commerce 1,009 241 498 269 other 460 60 230 170 Totals 4,230 1,427 1,620 1,183 Totals may not add due to rounding *** estimate only Sources: various, DTI and local information including Cornwall Energy Project, ETSU energy use and energy efficiency in UK manufacturing industry up to the year 2000.

3.1 Heat demand

From the above breakdown it is feasible to assess the demand for heat and hence from there work out the programme for renewable energy supply potential for new commercial and industrial buildings in Cornwall over the next few years.

Heat demand in UK commercial and industrial sectors is shown in the tables below which indicates that some 68% of commercial demand and 73% of industrial demand is for heat. As this is such a high percentage of the total demand it has a significant impact of suitable technologies for renewable energy supply in these sectors

UK commercial energy demand percentages by end use 2005 End use Gas Oil Solid Electricity Total fuel space heating 36% 6% 0.1% 6% 49% water heating 7% 1% 0.01% 2% 9% cooking/catering 4% 0% - 6% 11% heat total 47% 7% 0.1% 14% 68% computing - - - 2% 2% cooling/ventilation 0.2% - - 4% 4% lighting - - - 18% 18% other 1% - - 6% 7% total 48% 7% 0.1% 45% 100%

16 UK industrial energy demand by end use percentages 2005 End use Gas Oil Solid fuel Electricity Total space heating 5% 4% 0% 3% 11% high temp processes 7% 1% 4% 4% 17% low temp processes 17% 11% 1% 6% 34% drying separation 6% 3% 0% 2% 11% heat total 34% 19% 5% 14% 73% motors - - - 10% 10% compressed air - - - 3% 3% lighting - - - 1% 1% refrigeration - - - 2% 2% other 6% 3% 1% 2% 11% total 40% 22% 6% 32% 100% Source DTI Energy consumption in the UK, and Energy Trends June 2007

Applying these percentages to the local situation, and allowing for the lower availability of gas in Cornwall, gives the following breakdowns for Cornwall industry and commerce.

Allocation by energy demand in commercial sector Energy source electricity gas oil/coal total End use % MWh pa % MWh pa % MWh pa % MWh pa lighting 18% 182 18% 182 other 13% 131 13% 131 space heating 9.5% 95 17% 172 24% 237 50% 504 catering 5% 50 5% 50 - 10% 101 Water 4% 39 2% 19 3% 33 9% 91 totals 49% 498 24% 241 27% 269 100% 1,009

Allocation of energy demand in manufacturing sector Fuel type gas oil/coal electricity total End use % MWhpa % MWhpa % MWhpa % MWhpa space heating 5% 80 7% 118 3% 43 11% 186 high temp processes 5% 87 8% 135 4% 71 17% 280 low temp processes 13% 219 17% 284 6% 96 34% 580 drying/separation 3% 59 6% 97 2% 26 11% 182 heat total 26% 445 38% 634 14% 236 73% 1,228 motors - - 10% 167 10% 167 compressed air - - 3% 57 3% 57 lighting - - 1% 17 1% 17 refrigeration - - 2% 29 2% 29 other - 5% 87 2% 32 11% 188 total 26% 445 43% 720 32% 538 100% 1,686

These breakdowns of energy use in commerce and industry in Cornwall are the essential starting points for an assessment of the potential for renewable energy potential in Cornish industrial and commercial buildings.

17 A key indicator for Cornish manufacturing industry is that over 40% of non- transport industrial energy is at present supplied by oil, and around 27% of commercial energy is oil. These figures are much higher than the national average and show the lack of gas in the county. In other areas gas has supplanted oil to a large degree. As this has not been possible to the same extent in Cornwall the high and rising price of oil provides a significant opportunity to replace oil with renewable energy economically.

4 Barriers to RE in industry and commerce in Cornwall

There are several obstacles to the installation of renewable energy in industrial buildings in Cornwall. The main reasons it is not happening now are:- • Planning and regulatory problems • Cost of installations • Lack of awareness of the issues for SMEs • Lack of capital in SMEs • Lack of awareness in buildings professionals including architects and builders • Institutional issues relating to the public sector and central government eg confusion between energy efficiency and RE messages, ambiguous attitudes from public authorities eg policies in favour but practical obstacles to implementation • Insurance issues

It is often thought not financially worthwhile for industry for new buildings as they are often already grant aided, as the cost of building is higher than the completed value in the local market place, due to low demand for quality buildings.

As the building industry operates on borrowed capital it is very sensitive to the first cost of buildings and always seeks to minimise this cost, thus making the installation of RE problematic unless other issues can be made to take a higher priority. Thus for building developers RE installation is not high priority. For owner occupiers it is feasible for RE to take a higher priority as there is a wider set of drivers for the building developer, relating to the use of the building.

Depending on timing the financing charges can add 15-25% to costs of new build. The usual way to reduce high finance charges is to reduce first costs, so making RE installation difficult as it tends to increase capital costs

The main obstacles to the implementation of the project objectives relate in part to the obstacles noted above. In addition the issues to be overcome are:- • Lack of awareness of planning authorities of the issues • Bureaucratic inertia in local authorities • Difficulties in raising the issues into the local agenda for public agencies • Bureaucratic in-fighting between some agencies • Lack of interest from wider region in Cornish specific solutions

18 5 Overcoming obstacles to RE in Cornish industry

5.1 Development phase The first phase of overcoming the obstacles outline above has been in showing the economic advantages of the large scale implementation of renewable energy in Cornwall. This has been achieved through the mechanism of serious involvement in the process of the development of two major documents relating to the future of economic policy in Cornwall.

5.1.1 Assistance with local strategy process As the first part of the development of the Convergence Programme, the County through the medium of the Cornwall and the Isles of Scilly Economic Forum worked up a new Economic Strategy for Cornwall (reference 2))

REOC spent considerable effort developing the Low Carbon Vision for Cornwall and discussing this Vision at length with the main players in the development of the new Strategy and Action including the Regional Development Agency, Cornwall Enterprise, the consultants employed to help the process, and other local agencies and stakeholders.

The results of this work are the inclusion of peak oil and that efforts to tackle climate change by means of renewable energy are central to the new Strategy and Action, as shown in the boxes below:-

Strategy and Action Vision has four main themes One is : To ensure environmental sustainability Cornwall and the Isles of Scilly will ensure that the quality and integrity of its environmentLow Carbon will be further Cornwall enhanced Vision as well development as protected. Placing environmental considerations at the heart of business practice reinforces commitment to sustainability in economic activity and opens up opportunities to explore development solutions that are highly marketable and profitable. The environment is an economic driver that underpins diverse industries and sectors, and environmental commitment will contribute towards development within a knowledge economy that is partly founded on the provision of innovative solutions to the environmental challenges expected in the coming years. Further use of e-connectivity, using low-emission power sources, will be encouraged along with sustainable transport solutions. For example, a transparent, scientifically rigorous mechanism for offsetting carbon production will be developed, helping to position the area at the leading edge of sustainable practices ….. Overall, such actions will benefit the environment, the economy and society, with the ultimate aim being to develop the area and reap the benefits of a low-carbon economy.

19 Theme1 Innovation Building on the emerging renewables cluster will enable Cornwall and the Isles of Scilly to seize an important competitive advantage – particularly given the current reliance on the (well-documented) dwindling supply of fossil fuels and the impact of rising fuel costs. By supporting this activity, a major new and highly productive value-added industry will be developed. This will work closely with academia and research institutions and include a focus on leading the design, development and production (air, sea and land-based) of products responding to environmental and energy-related opportunities, both for local use and export.

Theme 1 competitiveness: employment space

Promote high levels of sustainability, design quality and environmental excellence, including onsite renewable energy where appropriate

… planners from each District Council are working to develop a model planning policy that will be introduced across Cornwall and the Isles of Scilly and that will require all new developments to provide sufficient on-site renewables to reduce carbon emissions from energy use by users of the building by a minimum of 15% initially. Further work will be undertaken to review this percentage and increase this in the future as far as is practical and achievable….. The concept of ‘whole-life costing’ will be widely promoted within Cornwall and the Isles of Scilly to ensure that the longer term costs associated with occupying a building are taken into account from the start. This will also apply to business operations and service provision. Energy generation and demand will be planned from the outset in any large scale regeneration and development project. The impact of rising fuel costs will be factored into all future economic development policies, programmes and strategies.

Increasing the generation and use of local energy sources will reduce the exposure to rising energy costs and ensure that the local business community can compete on a global scale. Support will be given to further maximising the area’s abundant indigenous renewable energy resources (wind, biomass, marine, tidal and solar), through for example the integration of on-site renewables into existing buildings

Actions Establish a ‘low-carbon’, competitive economy for Cornwall and the Isles of Scilly Cornwall and the Isles of Scilly will take the lead in creating an economy based on carbon reduction, establishing an exemplar model for other regions to follow. A robust ‘carbon test’ methodology will be developed and applied to all planned projects and programmes. Actions will be required to reduce predicted carbon emissions, principally through the reduction of energy demand and an increase in the use of local and renewable energy sources. In the case of all new development, a target will be set for incorporating renewable energy technologies. Where this is not possible, ‘offset’ schemes will be required that will fund projects to counterbalance any increased emissions from such developments. This would apply, for example, to the expansion of air travel at Newquay Cornwall Airport. A mechanism will need to be created for this to be achieved in the most cost-effective manner.

20 5.1.2 Assistance with Convergence Programme Development Following the development of the Strategy and Action REOC then provide input into the development of the Convergence Programme and in particular the ERDF elements of that programme. This work included the further development of the Low Carbon Vision document and discussions with the main players, often the same agencies as in the local economic strategy development.

The economic impact of taking on board the Low Carbon Vision document would be an increase in local GVA of around 50%, thus meeting the Convergence targets on economic growth but in a sustainable manner, through the implementation of a high proportion of local renewable energy supply and increasing the local food production and processing industries. The table below shows some of the impacts of this Vision

Possible savings and economic benefits for Low Carbon pathway

Savings source CO2 savings New Increased tpa Employment business FTE approx turnover £m pa approx Energy system Energy efficiency 220,000 1,500 200 Renewable electricity supply 2,000,000 4,000 385 Renewable heat supply 375,000 900 109 Biofuels for transport 258,000 90 41 Newquay airport CO2 offset 42,000 30 8 Food system Organic agriculture 100.000 550 50 Local production & supply 282,000 22,000 2,200 Total savings 3,277,000 29,070 2,993

Within this overall proposed Vision is a strong programme for the installation of renewable energy in new and refurbished commercial and industrial buildings, as well as CO2 savings of around 52% of Cornwall’s present emissions.

The new Convergence Operational Programme (reference 3), shows the impact of representations on the importance of taking account of climate change and peak oil in several areas of the action programme.

Four operational objectives have been set for the Programme:

1. Transforming the economy to a more knowledge based, high value added economy with a broader range of sectors, and a reduced dependence on low paid jobs;

2. Increasing the range of employment opportunities available to the community;

3. Managing economic growth in a sustainable manner; and

4. Take a leading role in investing in the drivers of a low carbon economy, including increased carbon literacy, overcoming market failure, and accelerating technological change

21 The fourth priority is moving towards the necessary low carbon economy, in which the REOC proposals are an important component. The fact that economic growth is not sustainable (Objective 2) has not yet been understood, but significant progress has been made in the direction of moving towards sustainability.

Funding proposed for RE in the programme, which majors on business and industry is possibly in the range of £25-33m as indicated in the table below, assuming that some 60% of the funds allocated to environmental technologies are spent on RE:-

Possible allocation of funds to RE in commerce and industry Priority Axis Expected funds approx €m 1 Innovation/ R & D 2.3-5.8 2 Enterprise 8-15 3 Strategic investments small 4 Place based Main strand Total Possibly 37-48

This level of expenditure would enable around 62-80MW of renewable energy plant to be installed in industry and commerce in Cornwall in the plan period, assuming a range of heat and electricity technologies and a 40% assistance rate.

5.2 Local planning policies As noted above in the local economic strategy work is underway with local planning officers to develop local planning policies for the requirement of on site renewable energy for all new developments above a certain size. REOC has participated in this process and is working to encourage the finalisation of the policies before the District Councils are abolished under a new council structure of single tier local authority, which is effectively the County Council taking over the District Councils. At present it is the District Councils which give planning for new developments in the County apart from waste and minerals developments which are reserved for the County to decide.

If these policies are not completed within the new future, they are likely to be held up for around four years whilst the participants in the Unitary reorganisation process pay attention to institutional and structural issues rather than policy development.

Progress so far:

The report below provides a summary of the work done and reports on the position at the conclusion of the project. This aspect of work should be considered as successful. All the District Councils as planning authorities are demonstrating a commonality of support for inclusion of renewable energy on site for major industrial developments, and a high level of knowledge and expertise now exists in the planning community in the County.

22 5.2.1 Methodology The methodology used was as follows; - • Research the current national, regional, and local planning policies at the commencement of the project period, and as required throughout the duration.

• Review the knowledge base of District Council planning decision makers in the subject. Where necessary increase knowledge by individual discussion and/or reference to national and regional policy.

• Attend the District Council Planning officer group referred to in the text below to increase awareness of the project and obtain firsthand knowledge of the views of the District Councils.

• Discuss with developers, architects and builders the practicability of the proposals to iron out and objections that the planners may face.

• Maintain a watching brief on the emerging policy documents and their progress through the Local Development Framework process.

5.2.2 Planning Policy National National planning policy is established by the Government Department of Communities and Local Government (DCLG). The Policy takes the form of Planning Policy Statements (PPS) together with advisory circulars. The policy on renewable energy is contained in PPS 22. This emphasises the importance of developing positively expressed policies on building integrated renewables. Further, policies that encourage the on-site generation of renewable energy must be placed within a wider context of the need for development, both new build and refurbishment, to incorporate the principles of sustainable energy design. The national policy is supplemented by policies on climate change in general. In 2006 the Government produced “A Code for Sustainable Homes”. Whilst this clearly does not relate to industrial buildings it is relevant as the environment standards and marking system used in the code is being translated into policy at regional level for industrial developments. In short the Code measures the sustainability of the whole building against design categories rating the whole building as a complete package. Standards are national and have been developed by the Building Research Establishment. In summary the current national policy is to improve the sustainability of new buildings which includes those in the industrial sector.

Regional Within the national policy there is a recently changed development plan strategy at regional government level. It is the responsibility of the South West Regional Assembly to produce a Regional Spatial Strategy. At the present there is a draft strategy covering the South West of England, including Cornwall, published in July 2007. This has just completed the examination in public process. The document includes Policy RE5 “Renewable energy and New Development”. This states: - “Larger scale developments will be expected to provide, as a minimum, sufficient on site renewable energy to reduce CO2emissions from energy

23 use by users of the buildings constructed on site by 10%. Developers will be expected to demonstrate that they have explored all renewable energy options, and designed their developments to incorporate any renewable energy requirements. Individual Local Planning Authorities may use lower thresholds for what constitutes larger scale development and set higher percentages for on-site generation, taking into account the impact of initial and lifetime affordability.” In addition the Regional Assembly is the only regional body to have included for the introduction of sustainability standards for new buildings. Policy SD 1 includes; - “Requiring sustainable construction and design as the norm in all future development and when opportunities arise, improving the Region’s existing building stock in line with best practice” Also “Meeting national and regional targets relating to renewable energy……..” The Regional Assembly is introducing the requirement to meet standards of sustainable building which will be tightened through to 2016. The very positive approach by the Regional Assembly results in part from work it commissioned in the form of a report “Revision 2020”. This was a substantial piece of work and developed the policy on the sustainable energy use within new development and regeneration. It supported fully the adoption of building standards and energy performance ratings using the Building Research establishment standards. Local It is the responsibility of District Councils, of which there are six in Cornwall, to produce Local Development Frameworks (LDF). This is a statutory process and therefore the timing of the introduction of policy is outside of the ability of this project. These comprise a number of separate Local Development documents, dealing with different issues. • A local development scheme document describing the schedule fo work on production of LDF documents.

• A statement of community involvement describing the authorities plans for involving the local community in the development of the LDF documents.

• Annual monitoring reports produced each year to show the authority’s progress against its schedule for development of LDF documents

• Development plan documents

• Supplementary planning Documents.

It is at this level that the project can in reality influence policy by ensuring each District Council includes within their Framework a robust and challenging policy on renewable energy requirements for industrial buildings.

In summary, however, the approach to renewable energy and sustainability in general by the Councils is very positive, supporting and even enhancing the government and regional policies. This is demonstrated by the setting up of an officer Group, the “Sustainable Energy Planning Group”. This meets normally bi monthly. This provides a valuable forum where policy development can be discussed as well as individual views and experiences. Other participants in the group are the Cornwall Sustainable Energy Partnership, the County Council, the

24 South West Regional Assembly, the Cornwall Sustainable Buildings Trust. The group also for instance are setting up a training course with the local further education college for the training of planning members and officers in renewable energy.

Each of the Councils is developing its Local Development Framework which incorporates the overarching renewable Energy Policies. There follows a description of each of the Councils Policies, and proposed timescale for adoption. However, several of the Councils have made it clear that it is not within the powers of planning to dictate the construction techniques for new buildings, but to lay down certain principles which developments need to follow. The detailed design and construction criteria are laid down in “Design Guide” booklets which are also supplemented by other help sheets; -

5.2.3 Penwith District Council Penwith fully support the policies of the national and regional government. It was the first Cornish Council to have a Climate Change Policy. Its Local Development Framework Scheme was submitted to the Government for approval in March 2005 and revised in February 2007. The draft Core Strategy is being prepared having had a period of public consultation in February and March 2007. Its preferred option is to introduce the regional recommendations for sustainable development including the requirement for non residential developments over 1000m2 to provide 20% of their predicted energy requirements from on site renewable technologies. The timescale is for the Core Strategy to be adopted in March 2009.

5.2.4 Kerrier Council Kerrier’s current timescale for the adoption of its core strategy is March 2009. The Core Strategy lays down no hard and fast rule for the onsite renewable provision, policy CP5 states that “new development where practicable use renewable resources”. Further that developments should contribute to the generation of renewable energy to meet the Cornwall target, including where it can be consumed nearby.

5.2.5 Carrick District Council The core strategy is due to be adopted in November 2007. Strategic Objective SO22 promotes the development of renewable energy resources, energy efficiency etc. Core policy CP2 requires a reduction in consumption of natural resources including energy.

5.2.6 Restormel Borough Council Restormel were well advanced and the core strategy due to be adopted in June 2007. However, the government appointed planning inspector has rejected the document until more work is carried out. The additional work will not impact on the renewable energy or sustainable development strategies. The precise timetable for implementation is now uncertain. Restormel include as Strategic Policy 1 to “Minimise the environmental impact of new development and taking into account the benefits of sustainable energy and construction…”

25 5.2.7 Caradon District Council Caradon is running behind the timetable of the other Councils and the first document, the Local Development Scheme, was only approved by the government in June this year. The current timetable for adoption of the Local Development Framework is December 2010. The current planning framework is covered by the Local Plan First Alteration. Its policy ALT 3 states “Development will only be permitted where it is clearly demonstrated that the principles of sustainability have been considered in the construction, design, orientation, layout, and siting of the proposal and that all measures that are practicable have been included as part of the scheme. Measures should included, but not be limited to. orientations that maximise solar gain for heating and lighting and minimise energy loss.” The Council state that it is committed to sustainable development, and want all new buildings to be as energy efficient as possible.

5.2.8 North Cornwall District Council The core strategy is due to be adopted in April 2009. Strategic Objective 14 states “Encourage sustainable construction and the use and development of renewable energy”.

5.2.9 Conclusion

It is clear that at the end of the project period we have reached a point where the planning policy is being put into place to achieve the required outcome of ensuring that all industrial developments over 1000m2 will have on site renewable energy, for at least 10% of their requirements. It is the intention of some of the District Councils that this amount will be higher, at 15% or 20%. This however will be subject to consultation at the appropriate time. All of the Planning Authorities in Cornwall support the national and regional policies in this regard.

5.3 Training for RE designers, installers and operators A major part of the programme development to reduce obstacles to the development on RE on commercial and industrial buildings in the region is the development of a programme to train RE designers, installers and operators. This will it is hoped go hand in hand with a grant programme for the installation of RE on commercial and industrial buildings.

Under the Convergence Programme the training of installers and designers of RE would be a European Social Fund activity rather than an ERDF activity.

REOC has been working with the main local training provider to strengthen efforts to increase local training provision, and is now in the process of working with all the local training provides in a partnership to put a joint bid into Convergence for funding on a broad range of issues including RE in industrial and commercial buildings.

Cornwall Sustainable Buildings Trust is a key partner to help take forward the agenda of RE for new and refurbished industrial and commercial buildings in

26 Cornwall. More recently REOC has also joined with the Learning Partnership as part of a bid under Convergence to cover training needs in a range of sectors across Cornwall. We are now helping to prepare the bid and can report that all the environmental and RE technology sectors are collaborating to help make this bid a powerful and complete one under Convergence to increase sustainability skills.

Meetings/discussions held with organisations including : • Cornwall Sustainable Buildings Trust • Cornwall College head of Building Trades • Cornwall Sustainable Energy Partnership • Combined Universities in Cornwall: Business Development Team • Environment Kernow • Learning Partnership • Transition Cornwall

Most local RE training is provided by Cornwall Sustainable Buildings Trust at present, with which we have been working as part of this project. 6 Options for grant programme application

There are two main options for the grant application for the proposed programme to install RE on new and refurbished industrial and commercial buildings in Cornwall. These are the Convergence Programme as discussed above and the SW Regional Development Agency, which has significant funding for the SW region as a whole and is the main agency at present which funds new industrial buildings in Cornwall

6.1 Convergence

As noted above this Programme is well developed to accept a grant application on the topic of assistance with RE installation on all new industrial and commercial buildings in Cornwall. However from the SEIPLED point of view there are several problems with this approach. • Discussions with the parties developing the programme indicate that most applications must be not applications but commissioned work , which is limiting from the present SEIPLED work plan • Partnerships can be set up and provided they are with existing well known parties the SWRDA, which will be operating the Convergence Programme may consider an application either now or at some time in the future • The timetable for Convergence is still not clear and cannot be guaranteed to start within the time frame of SEIPLED.

On the positive side however the Convergence Programme has set up a good standard for new industrial build (see notes below) and the Programme Director is well disposed to consider the aims put to him by REOC. This will be further explored at the next meeting at the end of November 2007.

27 6.2 SW Regional Development Agency

The SWRDA has major funding streams and covers the SW of England of which Cornwall is administratively a part. The RDA already fund industrial building in Cornwall, to overcome the market failures noted in the Obstacles section above. However problems with this approach to the RDA are: • RDA prefers to fund activities region wide, rather than Cornwall specific • Funds are already committed and future planning is on a year by year basis only.

A major meeting to discuss this option is planned for November 2007.

6.3 Structure of local Convergence Programme

The local Convergence Programme has four strands of supported activity

• Innovation, research and development • Enterprise and Investment • Transformational Infrastructure • Unlocking the economic potential of place

Within these priority Axes there are several niches within which the development of a programme to assist the design and installation of RE on industrial buildings could comfortably fit. In addition the standard for new build requesting support has been specified as BREEAM Excellent

Building Research Establishment Environmental Assessment Method BREEAM rating for industrial buildings, possible marks topic assessed marks % energy 20% land use 16% management 14% health 14% pollution 12% materials 10% transport 8% water 5% total 100%

BREEAM rating “Excellent” needs high energy efficiency and in Cornwall possibly RE to qualify, as one of the elements requires the use of derelict land wherever possible ( see land category), which attracts 18% of the marks possible. This is difficult in Cornwall because of the location and major contamination of much derelict land, left over from the tin mining industry. Therefore most new industrial build is not on derelict land and can only achieve Excellent status through the use of RE on site. In addition the transport element requires use of rail and employees travelling by public transport to achieve high marks, both of are unlikely in Cornwall which is a rural area with low train and public transport access. These problems are helpful to the REOC aims of integrating RE into new industrial build in Cornwall.

28 Priority Axis allocations in Convergence Priority Axis Target Funding New premises % of total m2 Enterprise and Investment 90% of 20% new/refurbished buildings Transformational 4 large projects eg 20% of which 30% for Infrastructure university, airport airport expansion Unlocking the Economic 220,000 37% Potential of Place Total c. 1,000,000m2 100% is euro 667 m

6.4 Potential for RE in new/refurbished commercial and industrial buildings

The expected programme is noted in the table above, which suggests the following significant parameters for the potential for RE

• area over 2008-2013 1,000,000m2 • possible number of buildings c.400 • average building size 3,500m2

6.5 Programme expected outcomes The Convergence Programme will operate through the four priority axes noted above and in terms of new and refurbished industrial and commercial buildings will be working at several levels:-

• Individual company and building • Industrial and commercial estate planning • Town and village industrial and commercial provision

The technologies for specific buildings may be slightly different to that looked at when a whole industrial estate is being planned.

As part of this project, the project team have been working with a local industrial development partnership to encourage the integration of RE into the industrial estate design and hence can understand how the process works and the results of this early intervention which are beginning to bear fruit as that project progresses to the design of site services level.

It is important to study the potential impact which the addition of a heat main to industrial estate design can have on RE technologies for any specific site. Therefore heat mains with biomass/waste pyrolysis and/or gasification will be included in the assessment.

The technologies which are expected to make the main contributions to the proposed programme are

29 • Biomass boilers • Wind turbines • Ground source heat pumps • Heat mains providing distribution from chp biomass or waste plants

The table below shows the impacts of an illustrative programme which will be aimed for in the grant programme proposed. This shows some 100 biomass boilers and 100 ground source heat pump installations in commerce and industry matched by around 150 wind turbines of 660kW and upwards in size. In addition the programme will encourage the development of three heat main installations, on e of which is at the early planning stages in October 2007.

Illustrative programme Technology option No average average total total MWh pa tpa CO2 projects size cost cost MW kW £k £m Biomass 100 100 80 8 10 35,000 6,650 Wind 150 660 990 148.5 99 277,517 119,332 Ground source 100 60 48 4.8 6 18,000 1,456 heat pumps Enabling technology 3 2km 1,700 5.0 15** 112,000 48,000 heat mains 353 166.3 130 442,517 175,438 **assuming 3 X 5MW biomass fired district heating +electricity

The programme will yield some 175,000 tpa CO2 savings and considerable long term savings to Cornish industry once increasing fuel and electricity prices begin to bite, with around 400 GWh pa or some 10% of energy demand in these sectors coming directly from RE sources.

7 RE technology choices

The expected main RE technologies taken up under this programme are expected to be: • Biomass boilers • Ground source heat pumps • Wind turbines • Heat mains: using biomass or waste for the RE heat source in chp plant.

Although there are many other RE technologies on the market those noted above are expected to meet the main demand as they are either economic now, such as commercial scale wind turbines or have strong local supply chain companies such as in ground source heat pumps.

Other technologies such as photovoltaic panels or hydro have either low present economic viability even with a large grant (PV), have small local resource (hydro)

30 or have to be undertaken by major RE developers rather than at the individual business or industrial estate level (tidal barrier or tidal stream).

7.1 Biomass boilers

The SW Regional Development Agency RE team have concluded that biomass has a major potential in the SW. It is therefore establishing a SW Bioheat Programme, under which biomass projects will be supported to establish the industry.

Commenting on the South West Bioheat programme, Sir Ben Gill Ex Chairman of the National Farmers Union said:

“The South West has regularly showed itself to be in the lead with the development and use of renewable energy so it is no surprise to me that once again they are pushing ahead with the challenge set in the Biomass Task Force to champion the potential uses and benefits from the use of biomass as a renewable heat source”

This programme aims to help initially by providing aid for feasibility studies into biomass options.

One example company considering taking up this option is a large Cornish food processor, which has an energy demand of 3.5MWe and 6MWth, all year round with continuous operation. They could make significant savings through following this route, particularly as their heat demand is high and met in part with oil at present. An investment of around their present annual energy costs , £4millon, with a loan for the remainder of the capital costs of a biomass chp plant would effectively turn into an annual income of £3/4 million, through sales of green electricity certificates and charcoal

Kob Pyrot automatic wood fired boiler,85-540kW , range of fuels

Vølund's commercial plant (42 tons/day) in

31 operation in Harboøre, Denmark

This plant is an updraft gasifier with an output of 1.4MWe and 2.75MWth, able to take biomass up to 50% moisture content and a high electrical efficiency of 30%.

Biomass boiler to heat world's biggest greenhouses at Eden

January 5, 2006

The Eden Project has won 75% funding for a state-of-the-art biomass boiler run on purpose-grown miscanthus (elephant grass) and woodchip to supply heat to the world-famous Biomes. Project cost of £175,000 for a 300kW boiler to replace gas heating for the biomes and offices.

The locally sourced miscanthus will provide 50% of Eden’s heat needs and will reduce net carbon emissions from Eden's heating system by 49 per cent, representing a reduction of 483 tonnes of carbon dioxide a year.

Chris Hines, Eden's Sustainability Director, said: "This is a significant development for the Eden Project. Talking about sustainability is one thing - for Eden it is essential that we also walk our talk. This means looking at all of our operations behind the visitor destination and trying to ensure that we do these in as sustainable a manner as possible. This helps us tackle the way we heat our Biomes

7.1.1 Benefits to companies

The main type of company which could benefit from biomass boiler heating has a high heat demand, preferably all year round, such as food processing, film processing, swimming pool providers, care providers such as hospitals and nursing homes.

The box above indicates how effective this option is for the Eden Project, which has a year round heat demand for the biomes, which are for tropical and for Mediterranean plants

32 The example below is a larger heat demand and could be met with a chp plant as the company also has a constant electricity demand and operates continuously.

One example company considering taking up this option is a large Cornish food processor, which has an energy demand of 3.5MWe and 6MWth, all year round with continuous operation. They could make significant savings through following this route, particularly as their heat demand is high and met in part with oil at present. An investment of around their present annual energy costs , £4millon, with a loan for the remainder of the capital costs of a biomass chp plant would effectively turn into an annual income of £3/4 million, through sales of green electricity certificates and charcoal

Example calculations

Plant size 100kW Plant cost £70,000 Annual fuel needs at 7,000 hour heat load • 875MWh • 140 tpa miscanthus at £50/t • costs of £7,000 • plus small maintenance

If replacement for gas present annual fuel costs are £19,700 including Climate Change Levy

Savings of £12,900 pa Straight payback of under 6yrs

If replacing gas oil, present annual fuel costs are £27,000 pa Savings of £20,200 pa Straight payback of 3.5 yrs

Even allowing for the slightly increased staff time required for attending to the boiler once every week, whilst it is in continuous operation this provides major energy cost savings.

As biomass boilers are eligible under the Enhanced Capital Allowances scheme any profit making company can obtain 100% first year corporation tax relief against the capital and installation cost of the boiler, providing it meets eligibility criteria set out in the ECA website. This can make the installation of biomass boilers in industry a valuable cost and CO2 saving technology.

Non profit making bodies such as the public sector would have to rely on the fuel cost savings to make the case, as noted above.

33 This scale of boiler plant would need the miscanthus from around seven hectares of land and is easily contracted by any local company from surrounding farmland.

For quality control and ease of supplies companies can choose to use a local supplier of which there are now building up a small range of reliable and experienced contractors. These suppliers will ensure that fuel supplies are delivered in a timely fashion to agreed quality in terms of bale specification, moisture content and particle size etc.

7.1.2 Integration with buildings

The ease of installation of a biomass boiler into an existing building depends entirely on the building. Most boilers will fit easily into an existing building, although there may be more problems with the bulky fuel store. A commercial scale biomass boiler generally has an auger or screw-fed feed system from the biomass store, which will require individual design and installation

Energy Cabin : biomass boiler, fuel store and solar panels in 30’ container

Alternatively for projects up to around 600kW, it is feasible to purchase an all-in- one system as shown in the picture above, which fits into a 30’ container and comes ready to plumb into existing building systems. The fuel store has a hydraulic lid which opens for fuel input. This provides a very practical solution for buildings low in available internal space. It is of course necessary to allow adequate space for lorry delivery of fuel.

Delivering woodchip

34 7.1.3 Planning issues Central government planning guidance on sustainable development requires good design and states that sustainable energy is an essential element of good design. Many biomass plants will be small, only providing heat, and may be easily incorporated into existing buildings or new buildings. Where they are included in agricultural buildings they may not require specific planning permission if they are ancillary to the main use of the site. However, any heat and power generation plants will require planning permission. The generating plant and activities directly related to it are subject to planning control, but the growing and harvesting the biomass crops are outside planning control.. Key issues planning authorities may wish to consider are: • visual intrusion, particularly of any chimneys • noise from engines, boilers, handling equipment can normally be mitigated • traffic delivering fuel supplies • air emissions, can save significant emissions when operated correctly

Issues associated with biomass crops Although the growing of biomass crops does not fall under the control of the planning system, the Environmental Impact Assessment (Agriculture) no 2 Regulations 2006 require land owners of permanent pastures/ semi natural habitats to obtain permission from Natural England before converting land to intensive agriculture, if over two hectares of uncultivated or semi-natural land is involved.

7.1.4 Operation and maintenance This boiler is fitted with automatic ignition, cleaning and de-ashing equipment and is capable of burning woodchip fuel of up to 50% moisture content. A 120 cubic metre fuel store with walking floor extraction is located under the loading deck where HGVs normally turn to unload their cargo of furniture. About once a week a 'walking floor' lorry delivers 100 cubic metres of woodchip fuel into the fuel store. The fuel is delivered from the store to the boiler by a series of augers. The boiler modulates its output to match the heat load of the building. The boiler uses a pneumatic self-cleaning system and automatic de- ashing to an 800 litre wheeled bin to minimise routine maintenance. The boiler is shut down for manual cleaning once a month which takes about an hour to complete

950kW wood chip boiler at Ikea Milton Keynes

Installed on completely commercial terms by Ikea.

35 Most commercial scale biomass boilers have automatic ignition, cleaning and de- ashing systems. This considerably reduces the staffing requirement to less than one hour a week, or thereabouts.

7.1.7 Energy, and CO2 savings The energy savings from biomass boilers come mainly from the installation of modern appropriately sized plant replacing older less efficient plant. This can produce savings up to 30%, depending on the local situation.

The main environmental saving in operating biomass boilers is in the CO2 emissions. Whilst burning wood obviously does produce CO2, this is not an increase in atmospheric CO2 as it is CO2 which has only recently been absorbed from the air and so is deemed CO2 neutral.

The energy costs of cutting and preparing wood fuel along with transporting it to site, are mainly dependent on the travel distance. Solid biomass fuel has low energy density and so is relatively expensive to transport. Economic biomass energy projects require short transport distances for fuel supply for energy efficiency as well as economic reasons. Given the massive increases in fossil fuel prices recently experienced and further increases expected as Peak Oil reduces supplies and their security, the security of supply and security of fuel price for a number of years ahead at lower than fossil fuel prices is a major plus point for biomass systems.

Tobermory rural area woodchip store

36 7.2 Ground source heat pumps

Ground source heat pumps use the heat in the ground via a heat collection pipe system and a heat pump to transform a large amount of low temperature heat into a small amount of higher temperature heat.

There are three important elements to a GSHP:

1) The ground loop. This is comprised of lengths of pipe buried in the ground, either in a borehole or a horizontal trench. The pipe is usually a closed circuit and is filled with a mixture of water and antifreeze, which is pumped round the pipe absorbing heat from the ground.

2) A heat pump. This has three main parts:

. the evaporator - (e.g. the squiggly thing in the cold part of your fridge) takes the heat from the water in the ground loop; . the compressor - (this is what makes the noise in a fridge) moves the refrigerant round the heat pump and compresses the gaseous refrigerant to the temperature needed for the heat distribution circuit; . the condenser - (the hot part at the back of your fridge) gives up heat to a hot water tank which feeds the distribution system.

3) Heat distribution system. Consisting of under floor heating or radiators for space heating and in some cases water storage for hot water supply.

The ground loop can be:

• borehole; • straight horizontal - trench costs less than a borehole, but needs more land • spiral horizontal (or 'slinky coil') - needs a trench of about 10m length/1kW of heating load.

The efficiency of a GSHP system is measured by the coefficient of performance (CoP). This is the ratio of units of heat output for each unit of electricity used to drive the compressor and pump for the ground loop. Typical CoPs range from 3 to 4. The higher end of this range is for under-floor heating, as it works at a lower temperature (30-35ºC) than radiators. This means that for every unit of commercial energy put in , usually electricity, the system gives 3-4 units of heating. This will therefore save some 2/3rds to _ of energy input with consequent cost savings..

Carnon Contracting installing systems in Penwith

37 The picture shows the drill rig in action for vertical holes for gshp for a series of bungalows, replacing coal fires.

Source Carnon Contracting

7.2.1 Benefits to companies Typical commercial systems cost around £1,000/kW of heat energy needed., and save significant percentages of heating energy compared to more traditional heating systems using fossil fuels. This kind of system suits new build and commercial/industrial projects with a large heat demand, preferably at a relatively low temperature: such as swimming pools, hospitals, care homes, offices (where cooling can be useful in the summer), etc.

Example calculation for new build care home

Plant size 100kW Capital cost of gshp system £100,000 Plus capital cost of underfloor heating Heat load 70kW (for 10months ) Hot water load 30kW (all year round )

Expected energy cost savings of £5,400 pa or 37% at current energy prices This gives a straight payback of some 15 years against current fuel prices and the expected difference in installation cost of a heat pump system compared to a gas boiler.

However are major commercial reasons for this kind of system:- • provides security of energy costs when fossil fuel prices are rising rapidly • allows future installation of renewable electricity supply to minimise future costs and maximise energy security. • long life systems with little or no maintenance • low space and low noise • some grant assistance available

38 • eligible for Enhanced Capital Allowances

100 per cent first-year Enhanced Capital Allowances (ECA) allow the full cost of an investment in designated energy-saving plant and machinery to be written off against the taxable profits of the period in which the investment is made. The general rate of capital allowances for spending on plant and machinery is 25% a year on a reducing balance basis.

In this example the Tax Relief would be £100,000, in the first year, against taxable profits. Providing the company was making at least this amount of profit, the new plant would be effectively very low cost, and hence the energy savings would have an increased value. Thus the calculation is transformed into a valuable investment rather than a marginal one.

7.2.2 Integration into buildings A ground source heat pump system is easy to integrate into commercial and industrial buildings, as the heat collection system is underground, either in trenches or vertical boreholes if less room available, and the heat pump system is only the size of a normal boiler plant. GSHP systems are useful for visually sensitive locations as there is little to see.

A small ground source heat pump installed within a commercial building

Distribution Depot wins Sustainability Award ground source heat pumps 39 • 72kW heat and • 85kW coolth • saves 62% of CO2 emissions Ground source heat pump

7.2.3 Planning issues There are few planning issues associated with closed loop ground source heat pumps as they produce no noise or visual intrusion. The excavation of the ground and or the drilling of boreholes can have potential impacts on site archaeology. Open loop systems, which continually draw upon a reliable ‘warm’ water source such as shallow water wells could have impacts on local hydrology. Projects must therefore be carefully designed to meet Environment Agency regulations. There is potential for the use of open loop systems in Cornwall in flooded mines.

7.2.4 Operation and maintenance There is little requirement for maintenance as heat pumps are reliable plant which have been in use for many years. The underground elements have a design life of 50 years., and have no moving parts, so do not necessitate maintenance.

7.2.5 Energy, and CO2 savings The energy savings for heat pump systems depend on what system they are replacing or being measured against..

One example house and private swimming pool recently assessed made savings of 80% after installation of a gshp system, without any changes to the heat distribution system, just by replacing an old oil fired boiler.

Comparison with the example calculation above indicates with a long term heat load that savings of 30-40% compared to gas boilers are feasible.

40 Carbon dioxide savings depend entirely on which fossil fuel is being replaced. On the assumption that gas is replaced the 100kW example above would show CO2 savings of nearly half, at 48%.

7.3 Wind turbines

Wind turbines for industry and commerce in Cornwall could vary in size from the small 1kW plus size up to standard 3MW turbines as are now commonly used in windfarms. The scale chosen will depend on the business involved and its aspirations for green electricity as well as local conditions and financing possibilities.

Segen 1.5kW small scale wind turbine on industrial unit

Larger turbines are more likely to be suitable for industrial estates and larger manufacturing sites with high electricity demands. As Cornwall has high wind speeds it is well suited to wind turbines. On average a wind turbine will, in Cornwall, produce around one third of its rated output throughout the year. Therefore a quick calculation of a site electricity demand (MWh pa), divided by 8,760 (number of hours in the year), times three gives an indication of the expected size of turbine to install to provide on average the annual demand of the site.

For example a metal manufacturing business in north Cornwall has an electricity demand of around 1,700MWh pa, giving an average demand of 194kW, which could be met on average by a 400kW turbine. The nearest sizes on the market to this are 225kW or 600kW, with the 600kW being the more economic in terms of p/kWh produced. A larger machine could be partially paid for by sells of excess electricity produced when the wind is high and demand is low.

41 7.3.1 Benefits to companies Benefits to companies fall into the following categories

• Reduced exposure to electricity price increases • Increased security of supply ( with the right technology options) • Improved green image • Reduced CO2 emissions • Potential for income from sales of excess electricity • Potential for income from reduced CO2 emissions under EU Emissions Trading Scheme Phase II

Example calculations Obviously the larger the wind turbine the greater the CO2 and electricity benefits, but the higher the initial investment. There is no “correct” size of wind turbine for industry and commerce as it depends on the company aims in installing the technology.

Example small turbine : 10kW In Cornwall such a small wind turbine would produce around 26MWh on a reasonable site. Such an output would be worth around £2,500 pa at present day electricity prices to the company which used it all, in reduced electricity bills. With present day inflation of 3.9% this machine would pay for itself in six years after allowing for insurance and the minimal maintenance required. If electricity prices increase faster than present inflation as expected the value of the turbine is multiplied in the same proportion. Whilst only relatively small sums are involved for this machine it could also be used to gain carbon trading certificates. Each certificate is likely to be worth some €70/tonne or more if the market functions well., against the fine which can be levied at €150/tonne of CO2. Each MWh of green electricity produced saves in the UK around 430kg CO2. Thus the annual CO2 savings are around 11tonnes CO2, worth an extra €780 or some £530 pa. This reduces the straight payback time to only five years, within the time horizons of most companies.. If capital allowances are taken into account the turbine could be ECA

Example wind turbine 600kW S this size of turbine is in demand by windfarm developers there can be a long wait for supply. However the larger turbine produces lower cost electricity, and can have a bigger impact on reducing energy bills for the larger electricity user.

In Cornwall a 600kW wind turbine would produce around 1.63 GWh pa output on a reasonable site, and a high proportion of Cornish industrial estates are in high/exposed locations. This output at the average manufacturing price of electricity in 2007 plus Climate Change Levy would have a value of over £100,000 if the owning company used it all onsite to offset bought electricity. In addition the turbine would produce CO2 savings of 700 tpa, worth around €49,000 or some £33,300. On top of this the value to the company would include the normal investment capital allowance of 25% on a reducing balance basis. At this point in time wind turbines do not attract Enhanced Capital Allowances, and hence unlike the other technologies noted here cannot claim 100% First year Allowances.

42 Taking these elements into account a 600kW wind turbine, costing around £612,000 to install would pay for itself in less than five years, assuming electricity prices inflate at today’s RPI rate.

7.3.2 Integration with buildings Integration with buildings is dependant on the relative sizes of building and wind turbines. Small wind turbines of under 1kW can be building mounted and are often seen on gable ends. However for the size of turbine discussed here this is not technically feasible. To maintain the life of a wind turbine it is important to ensure that it receives “clean” air, ie that it is not exposed to undue turbulence from the wind bouncing off nearby obstacles such as buildings trees etc. It is technically important that wind turbines are raised well above any obstacles in their vicinity.

Example 1.8kW turbine with commercial building

Source: SW Windpower

The pictures in this section show several examples of wind turbines of various scales fitting with the buildings they are providing electricity for. The M4 turbine particular is close to a modern building and provides an interesting and clean image for that building. It location beside the building provides a functional relationship.

7.3.3 Planning That element of form following function is what is needed for the placement of industrial and commercial turbines to fit the local landscape. The county council developed a local renewable energy planning guidance document in 2004 on biomass and wind energy in particular The Cornwall Energy Study Planning Guidance for Renewable Energy, assessed landscapes in Cornwall and found that most areas could take wind turbines within the local landscape without harm. The main advice was on the most sensible numbers of turbines within each landscape character type, with larger landscapes able to absorb bigger clusters.

43 As this report is discussing single and small numbers of turbines, it would appear this approach would find favour under the planning guidance. In addition the planning officers of each local planning authority are working up planning policies to encourage on site renewable energy developments, such as those proposed here.

The issues relevant to industrial wind turbines are likely to be fewer than those normally relevant to a windfarm planning application. Windfarms tend to be in the countryside where there is room. However this application of wind energy around industrial and commercial buildings will not normally have to cover concerns on such issues as • nature conservation - in the curtilage of existing buildings, so not relevant • noise – less of an issue as in areas with higher ambient noise levels • grid connection – most industrial estates have good grid connection for electricity supply to local customers, a wind turbine could ease supply restrictions and provide extra benefits • access - the sites should already have good access for normal industrial and commercial activity • archaeology - unlikely to disturb archaeology by using existing built up areas, such as car parks, industrial storage yards etc

Remaining issues less affected by an industrial or commercial location are • shadow flicker- site location should be chosen to avoid this problem for nearby dwellings • communication links - always need to be avoided • landscape and visual amenity - usually the main issue for consideration • cumulative impacts – relates to landscape and visual issues

The landscape issue is less of a problem in industrial areas which are recognised as being already industrial landscapes. For example a new windfarm of three turbines at Avonmouth docks is entirely contained within the visual envelope of an industrial landscape, and the main planning issue was conservation of the birds using the derelict land chosen for the turbine location.

2MW turbine at tyre factory

The Michelin tyre factory in Dundee has two 2MW wind turbines installed in 2006, which provide around 8GWh pa, around one third of the electricity needed by the plant. Saves 7,200 tpa CO2

The specific elements relevant to

44 Any assessment of landscape and visual issues for a wind turbine or cluster of turbines includes

1 Physical Landscape Attributes _ Landform, shape and scale; _ Nature of the skyline; _ Landscape pattern and foci; _ Openness/ enclosure; _ Character of the built environment; _ Transport network; _ Landscape features. 2 Perceptual Landscape Attributes _ Sense of remoteness/wildness; _ Inter-visibility with adjacent landscapes; _ Experience of landscape.

These elements have been largely assessed through the series of landscape designations applied in Cornwall as elsewhere.

The Land Use Consultants report also assesses the capacity of the landscape to accommodate wind turbines. Through analysis of the characteristics of the landscape, their sensitivity and value, to identify which areas could accommodate wind turbines with least adverse impact on landscape character and designated areas.

Their conclusions are presented in a series of maps, which show that most areas of Cornwall can accommodate wind turbines in individual or small clusters whatever the landscape character.

7.3.4 Operation and maintenance

Green Park 2MW wind turbine by M4, Berkshire

This 2MW wind turbine was installed in 2005, and is visible to around 50 million people a year being beside the M4 at Junction 11.

The turbine produces around 3.5 GWh pa, providing electricity for around 1,000 homes and local businesses.

Saves 3.000 tpa CO2 Blade rotational speed 6-22rpm Commercial installation

45 Source: Ecotricity Wind turbines once installed require very little maintenance, only needing checking twice a year. For the larger machines this should be undertaken by specialist contractors of which there are a number in Cornwall. They will check mechanical and electrical systems safely and keep the turbine operating efficiently. In a turbulent environment turbines might need more frequent replacement of the gear box, which suffers more wear in those circumstances.

7.3.5 Energy and CO2 savings The energy produced and greenhouse gas savings depend on the size of wind turbine and the windspeed at the site.

On average in Cornwall the following would be the savings at well exposed sites around the county :-

Turbine size Electricity CO2 savings Average value Average total output tCO2 pa of electricity value** MWh pa £pa £pa 1.8kW 4.4 2 260 350 10 kW 25.8 11 1,500 2,000 600kW 1,580 678 91,500 123,730 2MW 5,600 2,410 325,200 440,000 *including sales of carbon credits at £70/tonne, and CCL

This table makes the assumption that all the electricity produced is replacing purchased electricity at £58/MWh. For smaller users the cost of purchased electricity is higher and for larger users tends to be lower.

7.4 Heat mains

Recent advances in insulated underground pipe technology has reduced the costs both of the pipe and the installation costs. New pipe can be installed off the roll up to 150mm diameter, reducing joint making, and new plastic welding techniques reduce costs by reducing the need for inspection chambers on all joints.

With the environmental gains to be made from distributing heat from a combined heat and power plant using biomass or waste feedstocks, it is now imperative that all new industrial and commercial estates planners consider and hopefully install heat mains as part of the services trench system.

46 Hot water insulated pipe 6” diameter Insulated hot water pipe

Heat mains as an enabling technology will generally be used in conjunction with combined heat and power plant. The picture below shows a biomass updraft gasification plant using wood chips with combined heat and power providing 1.4MWe and 2.75MWth, with an electricity efficiency of nearly 30%.

Vølund's commercial plant (42 tons/day) in operation in Harboøre, Denmark

This is the kind of plant the programme will be aiming at implementing via the new heat main systems being targeted here

47 Wood chip store and boiler house for district heating system in Oban, Argyll

This pictures show the scale of the technologies which can be small as well as large city based systems.

7.4.1 Benefits to companies A major benefit to companies on a heat main is that they do not have to purchase or maintain boiler plant. This provides a considerable capital and operational advantage to businesses. Once a business is convinced of the security of supply of such a heat system, there are major business savings to be made in purchasing such a heat service.

Example calculations At this stage it is not possible to give definitive calculations for the savings for individual businesses when using heat supplied through a heat main from a third party as the actual details will be the subject of negotiations at the time. However it is expected that the heat provider will make their heat available at under the cost of the competing option which is assumed to be gas boilers.

Thus a company may well make 10-15% operational savings as well as the reduced capital requirement of not needing boiler plant, assuming the heat provider guarantees the contracted heat supplies and maintains backup equipment to ensure this.

For a company which uses heat for a continuous process, this could save a significant proportion of overhead costs, particularly when considering rising energy prices and the possibility with biomass or waste feedstocks to provide security of price for some years ahead.

48 The main extra cost is that for the heat main, connectors and local heat exchangers for each customer. The significantly greater experience in Europe can usefully be brought into Cornwall to ensure projects are designed, installed and operated in the most cost-effective manner.

7.4.2 Integration into buildings issues As all heat mains are underground, usually in a common service trench, there should be no integration issues. The individual heat exchangers, meters etc are smaller in scale than the boiler plant they replace, giving a net gain in space for participating companies.

7.4.3 Planning issues Pipes being underground do not require planning permission. Any planning issues are expected to be part of the overall planning for an estate.

7.4.4 Installation, operation and maintenance Pipes are normally installed in a service trench on industrial and commercial estates, and in their own dedicated trench otherwise. Modern underground hot water pipes are designed for exceptionally long life and normally require no maintenance to the pipes themselves. Heat exchangers and ancillary equipment will need some maintenance usually once a year.

7.4.5 Energy, and CO2 savings The energy savings with this type of system rely on very low heat losses from the heat transfer pipes and efficient heat exchangers. The main energy savings are therefore in the use of efficient combined heat and power plant where the heat is effectively “waste” heat being used after the generation of electricity. These systems can reach 90% efficiency overall, but can also have lower efficiencies in for example an anaerobic digestion system, where a significant proportion of the heat is needed to heat the digester, or a west chip system where some 20% of the heat may be needed to dry out the chips before combustion takes place.

With appropriately designed and operated systems the energy savings can be 15%+ compared to individual boiler systems in each customer building. For the envisaged systems in Cornwall with around 5MW of heat being sold, the CO2 savings would be around 24,000 tpa each system.

49 References 1 Low Carbon Vision for Cornwall REOC Aug 2006 2 Strategy and Action: the economic development strategy for Cornwall and the Isles of Scilly 2007-2017. Cornwall Economic Forum 2007 3 Convergence Programme for Cornwall and the Isles of Scilly: Operational Programme 2007-2013 negotiation draft June 2007, formal programme Oct 07 4 Cornwall Energy Study Land Use Consultants Renewable Energy Planning Guidelines final report 2004 at www.cornwall.gov.uk

Other sources are quoted in-situ

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