Sustainable Energy Horizon Panel Report Executive Summary

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG

MATRIX Report: Vol 10. February 2013

SUSTAINABLE ENERGY HORIZON PANEL REPORT

EXECUTIVE SUMMARY

Prepared for MATRIX by: MATRIX SUSTAINABLE ENERGY HORIZON PANEL MEMBERS

Aaron Black – South West College John Kinney – Cleanfields Technologies Ltd. Paul Brewster – Pure Marine Sam McCloskey – Centre for Advanced Sustainable Energy Denzil Conn – Northern Ireland Electricity Clifford McSpadden – CMS Global Ltd. Joe Corbett – Mainstream Renewable Power Clare Passmore – Clear Spirit Design Ltd Bjorn Elsaesser – Queen’s University Belfast Garry Staunton – Technology Strategy Board Michael Harnett – Bioil Ltd. Neil Stewart – Glen Dimplex Philip Johnson – Delta Carbon David Surplus – The B9 Energy Group (Chair) Chris Johnston – AFBI

IMPORTANT NOTICE Whilst reasonable steps have been taken to ensure that the information contained within this Report is correct, you should be aware that the information contained within it may be incomplete, inaccurate or may have become out of date. Accordingly, the MATRIX SEHP makes no warranties or representations of any kind as to the content of this Report or its accuracy and, to the maximum extent permitted by law, accept no liability whatsoever for the same including, without limit, for direct, indirect or consequential loss, business interruption, loss of profits, production, contracts, goodwill or anticipated savings. Any person making use of this Report does so at their own risk.

Page 2 PROFITING FROM SCIENCE WWW.matrix-ni.org CHAIR’S FOREWORD global energy market oPPortunitieS, delivered by Science.

Ireland to take a leadership role in the I would like to thank the panel for development of distributed energy their intensive work over the past six solutions and their integration into months and everyone who participated Intelligent Energy Systems through in the compilation of this report. I establishing itself as an International also acknowledge the work of Orion Reference Site to demonstrate Innovations who assisted at all stages the commercial scalability of these in the publication of the sustainable solutions to the global market, which energy report. is estimated to be worth £8 billion in 2018. Capturing just a small portion of this market opportunity will represent significant economic benefit to the David Surplus region in terms of job creation, inward Chair – MATRIX Sustainable Energy investment, increased R&D activity and Horizon Panel wealth generation. The development of an Intelligent Today, the convergence of a wide Energy System can not only provide number of political, economic, social significant export opportunities and environmental forces is driving the for Northern Irish businesses, it development of new technologies to can simultaneously address the serve the global energy markets. As challenges facing the existing electricity a result, small, innovative companies infrastructure in Northern Ireland and — either on their own or through improve the sustainability, security partnerships with large, established and affordability of the regional energy energy corporations — are generating supply. competitive solutions to address some of the most pressing issues society is The recommendations contained in the facing. report have been driven by our vision that within 10 years Northern Ireland There is a huge potential for companies will be an internationally recognised in Northern Ireland to tap into these exporter of global solutions forged from markets and last year the DETI Minister the development of the lowest cost, tasked MATRIX with identifying how sustainable energy infrastructure in to grow the Northern Ireland economy Europe. through the development of sustainable energy technologies. I was honoured To help make this a reality we have to be asked by my peers to chair the taken steps to establish an ongoing MATRIX Sustainable Energy Horizon Delivery Team comprised of industry, Panel whose aim was to assess the academic and government parties that current capability of the sustainable will work together towards ensuring the energy technology sector in Northern recommendations are implemented. Ireland and identify the medium to long This group will provide joined up advice term global opportunities in this market to policy makers in order to remove which local companies can exploit. anticipated barriers and will also make appropriate suggestions for possible This report is the result of the work topics of future R&D funding calls. of the panel which has identified a compelling opportunity for Northern

PROFITING FROM SCIENCE WWW.matrix-ni.org Page 3 INTRODUCTION

MATRIX, the Northern Ireland Science Vision is that Northern Ireland should be This report summarises the culmination Industry Panel, is an expert advisory ‘led by business; inspired by academia; of those efforts and is accompanied by panel reporting to the Department and facilitated by Government’.1 four detailed documents’: of Enterprise, Trade and Investment DETI and MATRIX previously identiﬁed • Sustainable Energy Horizon Panel (DETI) and the DETI Minister on the commercial opportunities associated Report; matters pertinent to the exploitation with sustainable energy technology and commercialisation of science, • Annex 1 Literature Review Insights markets as substantial in scope and technology and R&D. It is led by Report; likely to grow signiﬁcantly in the coming high-technology and R&D intensive decades, as worldwide demand for • Annex 2 Technology Capability industry experts and advises the lower-carbon technologies increases. Assessment; Northern Ireland Executive on the The MATRIX Sustainable Energy development of improved interfaces • Annex 3 Market Foresight Report. Horizon Panel (SEHP) was established between Northern Ireland business and to build on the existing base load of the research, science and technology intelligence, and extrapolate forward base, with a view to ensuring that the to identify attractive global market region’s science and R&D strengths opportunities that could be realised by are exploited for maximum economic exploiting Northern Ireland’s science, and commercial advantage. The panel’s research and technology capabilities. THE MATRIX SUSTAINABLE ENERGY HORIZON PANEL HAS DEFINED THE FOLLOWING VISION STATEMENT:

Within 10 years Northern Ireland will be an internationally recognised exporter of global solutions forged from the development of the lowest cost sustainable energy infrastructure in Europe: • Created by thriving, indigenous businesses; • Exploiting the regions natural, intellectual and entrepreneurial capital.

Directly driven by this Vision, this report global relevance, demonstrating their These are based on exploiting regional makes the case for the exploitation commercial scalability, and establishing competitive advantage to address of a signiﬁcant future global market the proﬁle of Northern Ireland as a multiple strategic objectives relating opportunity for Northern Ireland leading and credible International to economic, energy and sustainability based around the development and Reference Site. priorities, whilst ensuring alignment of export of Intelligent Energy Systems key stakeholder needs and minimising The Vision is underpinned by a number and associated know-how. This the cost to the customer. of key assumptions which have directly will be achieved through the early informed the development of the regional deployment of integrated and MATRIX SEHP Recommendations. sustainable energy solutions that have

1 http://www.matrix-ni.org.

PAGE 4 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG CURRENT REGIONAL TECHNICAL CAPABILITY

An analysis of existing regional few large, international corporate and skills provision. In future, the capability in the sustainable energy entities active within the regional sector, proposed Centre for Advanced sector generated an overview of notable companies include: Harland and Sustainable Energy (CASE) will the existing scientiﬁc, research and Wolff; Glen Dimplex, DONG Energy, provide a single focal point for targeted technological capacity of the region, McLaughlin and Harvey, Kingspan, collaborative Research, Development and identiﬁed key differentiating and F.G. Wilson, and Copeland (Emerson and Demonstration (R, D&D) in the commercially competitive features.2 Climate Technologies). sustainable energy sector, coordinating activities across academic institutions Northern Ireland has an evolving and Northern Ireland has two Universities, and industry. maturing sustainable energy supply Queen’s University Belfast (QUB) and chain with approximately 500 currently University of Ulster (UU) both of which Key physical assets of relevance in active companies, of which the majority are considered world class in a range the region include the SeaGen tidal are within the wind, marine, bioenergy, of research areas, including marine generation turbine in Strangford Lough, and integrated building technologies research at QUB and built environment the harbour facilities, the Northern sectors. There is particular expertise research at UU. In addition, the Agri- Ireland Advanced Composites and in systems engineering and offshore Food and Biosciences Institute (AFBI) Engineering Centre (NIACE), and the services.3 conducts leading research into the Northern Ireland Science Park (NISP). growth and processing of biomass In common with Northern Ireland as crops (including SRC Willow). The a whole, the vast majority of these network of six regional colleges companies are micro SMEs (< 10 provides a robust and coherent base employees). While there are relatively of applied research, demonstration

Speciﬁc regional strengths and potential differentiators have been identiﬁed in relation to:

Resources 1. Availability of natural resources – wind, marine and biomass. and 2. Bridgehead location (and physical proximity) between Republic of Ireland and rest of UK. Geography 3. Know-how and practical experience in operation of ‘island’ electricity system. 4. Signiﬁcant number of farming businesses with potential to act as nuclei for rural community-based projects.

Infrastructure 5. Northern Ireland has, and is developing, electricity interconnectors. 6. Ability to demonstrate and exploit know-how relating to next generation technologies in a challenging technical and economic environment.

Academic 7. World class academic teams in areas of marine, low carbon buildings, micro-renewables, Base biomass, power engineering and energy storage. 8. Highly skilled and trained workforce with practical experience in deployment of sustainable energy technologies.

Industrial 9. Track record of success in new and imported technology adaptation and deployment. Capability 10. Strong and ﬂexible industrial base with diversiﬁcation potential.

Public Sector 11. Sympathetic and supportive innovation landscape (including ﬁscal support mechanisms Intervention such as Renewable Heat Incentive (RHI)). 12. Evolving focus on key elements of the sustainable energy sector.

2 MATRIX Sustainable Energy Horizon Panel Report, Annex 2 Technology Capability Assessment, available from www.matrix-ni.org 3 Low carbon buildings and micro-renewables. PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 5 GLOBAL MARKET FORESIGHT

Analysis was undertaken to provide a increasingly complex energy networks, support the accelerated development 10 year (and beyond) outlook to inform and in facilitating the paradigm shift and deployment of complementary the identification of future strategic whereby current consumers of energy sustainable generation technologies international markets for Northern will become energy generators. The (both current and future). Ireland.4 Onshore and offshore overall functioning of the system will wind, bioenergy, integrated building become increasingly important, not technologies and marine energy were just the performance of the individual all identified as offering potential future technologies. market niches in which Northern Ireland As a result, the commercial could leverage its existing capability. demonstration of the grid integration of However, across all segments of the renewable and sustainable distributed future sustainable energy market, energy technologies using intelligent the role of system integration and energy systems (IES) was identified intelligent network management is as providing an attractive and flexible widely anticipated to be the key to platform for future exports for Northern unlocking long-term economic potential. Ireland. The development and deployment of At the same time, this approach will intelligent systems will be fundamental provide a framework and catalyst to to matching supply and demand across

Intelligent Energy Systems incorporate technologies that can measure, analyse, communicate and control the multi-directional flow of energy at a variety of scales. They exploit the symbiotic relationships between technologies, improving efficiency (matching supply and demand), and enabling a new set of stakeholders (including consumers) to become active participants in the energy market. Intelligent Energy Systems include electrical and heat distribution networks, remotely controllable loads, modern energy storage, power electronics technology and computerised control system management.

4 MATRIX Sustainable Energy Horizon Panel Report, Annex 3 Market Foresight Report available from www.matrix-ni.org

PAGE 6 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG THE OPPORTUNITY FOR NORTHERN IRELAND

Northern Ireland is currently in a Investment in ‘intelligence’ No individual region has currently unique position relative to the rest (communications and control established a leadership position in this of Europe, being the first market to infrastructure), coupled with some sector, and there is an acknowledged face the commercial realities and storage capability, will enable better lag in the integration of distributed multiple challenges of high density grid exploitation of renewable resources and renewable generation onto the intelligent integration of renewables. maximise the utilisation of the existing energy system.6 It is this area in which infrastructure. Northern Ireland has the opportunity to Northern Ireland’s existing electricity lead, exploiting first mover advantage to infrastructure is now reaching maximum Optimising and adapting existing become an ‘early adopter’ commercial capacity: the ‘islanded’ network is assets, and the development of Reference Site for scalable solutions for unable to accommodate the region’s interconnected systems, will be international markets and to secure a significant potential for distributed necessary if deployment of sustainable share of the potential export revenue. renewable energy, with the result that energy technologies is to be fast there is curtailment of grid-connected tracked and the associated economic, This will allow exploitation of existing generation, and high levels of additional environmental and social benefits regional strengths whilst building a capacity awaiting connection.5 realised. Development of Intelligent sustainable platform for the future Connection of these assets will be Energy Systems is the common development of next generation critical in achieving the target contained denominator required for the successful technologies and related intellectual within Northern Ireland’s Strategic commercialisation of sustainable energy assets and skills. Energy Framework of 40% electricity technologies whilst extending the life of from renewable sources. the current network.

This diagram illustrates how market-ready, simple, commercial showcases (e.g. energy storage solutions), will pave the way for demonstration of more complex systems (e.g. offshore marine), and subsequent development of emerging technologies (e.g. composite materials). This will enable eventual deployment of fully integrated complex systems, combining multiple technologies.

High Increasingly sophisticated and Larger, more complex deployment scaled projects For example: For example: • Fully integrated and • Off shore marine interconnected network • Tidal

First Commercial Showcases Next generation solutions System Complexity For example: For example:

System Complexity • Onshore wind • Composite & advanced materials • Bioenergy generation • Advanced thermal treatment (AD of farm waste) • Advanced controls • Building scale renewables • Cyber security systems • Energy storage solutions • Sustainable raw materials • Demand response Low Time to Market

2013 2018 2023

5 In 2011 the dispatch-down energy from variable price taking wind generation was 13,415 MWh in Northern Ireland. This represents 5.3% of the available energy from these generators in this period. In October 2011 SONI published a consultation paper “Consultation on Generator Connection Process-ITC Methodology to determine FAQs & Generator Output Reduction Analysis”. The consultation shows Northern Ireland in 2016 as having extremely high levels of curtailment (13.5%) together with constraints of 1.81% at many nodes, leaving a combined maximum potential constraints and curtailment of 13.66%,- NIRIG Response to DECC Call for Evidence Part B, 15th November 2012.

6 IEA, Technology Roadmap, Smart Grids, 2011, http://www.iea.org/publications/freepublications/publication/smartgrids_roadmap.pdf.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 7 Forecasts suggest that global revenue microgrids. Capturing just a small In addition to direct economic benefits, from intelligent grid renewables portion of this market opportunity will realisation of the proposed Vision will integration could grow from £2.5 represent significant economic benefit ensure that Northern Ireland will gain billion in 2012 to just over £8 billion in to the region in terms of investment from a large number of related direct 2018.7 Within this projection, growth in R&D, job creation and inward and indirect advantages including: is anticipated to be particularly strong investment. in advanced storage technologies and

BENEFITS OF DEVELOPING AN INTELLIGENT ENERGY SYSTEM

Government • Addresses all four principal aims of the Strategic Energy Framework. • Facilitates realisation of the 40% renewable electricity target by 2020 and the 10% renewable heat target. • Contributes to compliance with the recently adopted EU Energy Efﬁciency Directive, including refurbishment of 3% of public buildings each year. • Contributes to the UK’s Bioenergy Strategy principles. • Contributes to reductions in regional waste disposal costs and associated environmental impacts. • Beneﬁts the local (and in particular the rural) economy, via decentralised community energy generation and associated job creation (e.g. installation & maintenance).

Customers • Maintains competitiveness across all industrial sectors as a result of developing a more reliable, more resilient and cheaper regional energy system. • Empowers consumers to become participants in the energy system with potential to generate new sources of revenue.

Supply Chain • Enables a step-wise approach to the deployment of distributed generation and intelligent systems that builds market conﬁdence. • Reduces barriers to entry for small-scale renewable energy generators, such as high up-front connection charges.

7 Pike Research SGRI-12-Executive-Summary

PAGE 8 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PROPOSED FORESIGHT IMPLEMENTATION PLAN

MATRIX SEHP has deﬁned a high level Road Map for a Foresight Implementation Plan which identiﬁes the key steps required in the development of sector-leading capability in Intelligent Energy Systems over the next ten years:

2013 2018 2023

• Secure • Active drive resources for commercial & launch. exploitation and • Identify and export of proven • Leading • Identify select options for solutions. international • Scale up priorities for next generation reference site of supply ‘quick wins’. projects, and and exporter chains and ‘value adds’ to of Intelligent • Put in place manufacture existing projects Energy detailed plans. of solutions Systems and • Exploit related • Scale up and for expert • Gather professional commercial increased markets. intelligence services. to underpin opportunities. sophistication plans. of commercial demonstrations.

The MATRIX Foresight Implementation It provides a holistic approach to Specific activities have been defined Plan represents a flexible, enabling market development and exploitation, within the Road Map and classified as framework which seeks to consolidate leveraging existing regional competitive core (those fundamental to realising and build on existing activities and advantage in the short term, whilst the technical and commercial proof capabilities to realise critical mass, evolving new commercial capability and points for market exploitation) and whilst providing a nucleus to facilitate know-how over a longer time horizon. enabling (those required to facilitate the successful future growth. development of an economic landscape that supports market development).

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 9 RECOMMENDATIONS

A compelling opportunity has been identified for Northern integration of renewable generation (including onshore and Ireland to: offshore resources) and embedded energy storage. • Take a leadership role in the development of distributed The academic base will have developed a strong pipeline energy solutions and their integration into Intelligent of next generation, and market-led, intellectual assets, Energy Systems that will optimise efficiencies through and providing best in class skills training. Multiple regional the use of local resources and participation of multiple players will be directly engaged in the market, employing stakeholders; new business models and commercial vehicles. Maturing supply chains will be in place with significant manufacturing • Create an International Reference Site to demonstrate of equipment and balance of plant. Northern Ireland will be the commercial scalability of these solutions to the global exporting specialist technology, services and know-how market. to overseas markets and beginning to put in place large This will not only provide significant export opportunities for interconnected regional and national infrastructure projects. Northern Irish businesses, but will simultaneously improve the sustainability, security and affordability of the regional energy supply. As such, it is closely aligned with Priority 1 The MATRIX SEHP has defined five key Recommendations of the Programme for Government 2011-2015: ‘Growing a which are considered to be fundamental prerequisites for Sustainable Economy and Investing in the Future’.8 the future successful delivery of the MATRIX Foresight Implementation Plan: If the Vision is successful, by 2023 Northern Ireland should have an active and intelligent energy network, with large scale

• Formation of industry led Implementation Group to provide overview, guidance 1. Immediate Execution and monitoring of Foresight Implementation Plan and ensure alignment of key of MATRIX Foresight stakeholders. Implementation Plan • Recruitment of dynamic and commercially orientated Delivery Team for day to day ‘Urgent Action’ planning and management of Foresight Implementation Plan.

• Mechanisms to be put in place to optimise communications across all levels of 2. Leadership and the sector (public, private and academia). Communication • Alignment of key policies across all government Departments. ‘Market Conﬁdence’ • Exploitation of public procurement models where appropriate.

• Mining of existing regional intellectual assets. 3. Innovation Support for SMEs • Review and development of existing support to make it more appropriate/ accessible to SMEs and accelerate internationalisation. ‘Long term Capacity Building’ • Skills development capacity building.

4. Build International • Further reﬁne relative regional USP relating to Intelligent Energy Systems. Networks • Identify key strategic partnerships to share know-how and develop future ‘Exploiting Regional Competitive projects/economic opportunities (academia, public sector agencies and Advantage’ industry).

• Development of focused and attractive financial support programmes for the 5. Develop Innovative sector (pre-commercial finance). Financing Models • In addition to public procurement, explore options for an alternative financing ‘Pump Prime Commercial vehicle to provide risk and/or working capital for commercial demonstration Deployment’ projects.

8 Northern Ireland Executive, Programme for Government 2011-2015; http://www.northernireland.gov.uk/pfg-2011-2015-ﬁnal-report.pdf.

PAGE 10 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG ACKNOWLEDGEMENT

As the global population increases insights and expertise in shaping this and with it industrial activity, the report which I believe will contribute demand for energy is on the rise. enormously to the future of the region’s However, increasing environmental and sustainable energy sector. geopolitical concerns and the depletion I also thank the Minister for Enterprise, of the world’s natural resources has Trade and Investment, Arlene Foster increased the worldwide demand for for her continuing support of MATRIX, energy security through renewable the Northern Ireland Science Industry energy technologies. This situation has Panel. led to an increase in R&D in innovative products and designs - an area in which Northern Ireland has strong science and technology capability. Bryan Keating Comprised of 15 industry experts and Chair - MATRIX, the Northern Ireland academics from a range of sustainable Science Industry Panel energy backgrounds, the MATRIX Sustainable Energy Horizon Panel has undertaken a comprehensive programme of work, over a six month period, to map and assess the current capability of the sustainable energy technology sector in Northern Ireland and to identify the future global opportunities available for the region. The ‘MATRIX Sustainable Energy Horizon Panel’ report is the culmination of that work. I wish to express my gratitude to David Surplus, Chair of the Sustainable Energy Horizon Panel and the entire panel for their invaluable technical

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 11 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG

MATRIX Report: Vol 10. February 2013

SUSTAINABLE ENERGY HORIZON PANEL REPORT

Prepared for MATRIX by: MATRIX SUSTAINABLE ENERGY HORIZON PANEL MEMBERS

IMPORTaNT NOTICE Whilst reasonable steps have been taken to ensure that the information contained within this Report is correct, you should be aware that the information contained within it may be incomplete, inaccurate or may have become out of date. Accordingly, the MATRIX SEHP makes no warranties or representations of any kind as to the content of this Report or its accuracy and, to the maximum extent permitted by law, accept no liability whatsoever for the same including, without limit, for direct, indirect or consequential loss, business interruption, loss of profits, production, contracts, goodwill or anticipated savings. Any person making use of this Report does so at their own risk.

Page 2 PROFITING FROM SCIENCE WWW.MatriX-ni.org CHAIR’S FOREWORD global energy MarKet oPPortunitieS, DeliVereD by SCienCe.

Ireland to take a leadership role in the I would like to thank the panel for development of distributed energy their intensive work over the past six solutions and their integration into months and everyone who participated Intelligent Energy Systems through in the compilation of this report. I establishing itself as an International also acknowledge the work of Orion Reference Site to demonstrate Innovations who assisted at all stages the commercial scalability of these in the publication of the sustainable solutions to the global market, which energy report. is estimated to be worth £8 billion in 2018. Capturing just a small portion of this market opportunity will represent significant economic benefit to the david Surplus region in terms of job creation, inward Chair – MaTRIX Sustainable Energy investment, increased R&D activity and horizon Panel wealth generation. The development of an Intelligent Today, the convergence of a wide Energy System can not only provide number of political, economic, social significant export opportunities and environmental forces is driving the for Northern Irish businesses, it development of new technologies to can simultaneously address the serve the global energy markets. As challenges facing the existing electricity a result, small, innovative companies infrastructure in Northern Ireland and — either on their own or through improve the sustainability, security partnerships with large, established and affordability of the regional energy energy corporations — are generating supply. competitive solutions to address some of the most pressing issues society is The recommendations contained in the facing. report have been driven by our vision that within 10 years Northern Ireland There is a huge potential for companies will be an internationally recognised in Northern Ireland to tap into these exporter of global solutions forged from markets and last year the DETI Minister the development of the lowest cost, tasked MATRIX with identifying how sustainable energy infrastructure in to grow the Northern Ireland economy Europe. through the development of sustainable energy technologies. I was honoured To help make this a reality we have to be asked by my peers to chair the taken steps to establish an ongoing MATRIX Sustainable Energy Horizon Delivery Team comprised of industry, Panel whose aim was to assess the academic and government parties that current capability of the sustainable will work together towards ensuring the energy technology sector in Northern recommendations are implemented. Ireland and identify the medium to long This group will provide joined up advice term global opportunities in this market to policy makers in order to remove which local companies can exploit. anticipated barriers and will also make appropriate suggestions for possible This report is the result of the work topics of future R&D funding calls. of the panel which has identified a compelling opportunity for Northern

PROFITING FROM SCIENCE WWW.MatriX-ni.org Page 3 ContentS

1 6

INTROduCTION 6 � whaT IS ThE ECONOMIC bENEFIT FOR NORThERN IRElaNd? 28 2 7 VISION FOR SuCCESS 9 PROPOSEd FORESIGhT IMPlEMENTaTION PlaN 32 7.1 � introduction 33 3 � 7.2 Key Steps 35 7.3 � What Does Success look like? 37 SuMMaRy OVERVIEw OF CuRRENT REGIONal CaPabIlITy 12 8 4 CONCludING RECOMMENdaTIONS 38

SuMMaRy OF INSIGhTS FROM GlObal MaRkET FORESIGhTING REPORT 15 4.1 � introduction 16 4.2 � overview of Future Sustainable energy Markets 17 4.3 � Prioritisation of Market opportunities for northern ireland 19

ThE OPPORTuNITy FOR INTEllIGENT ENERGy SySTEMS 20 5.1 � background 21 5.2 � What Does an ‘intelligent energy System’ look like? 23 5.3 � the Specific opportunity for northern ireland 25 iMPortant notiCe

Whilst reasonable steps have been taken to ensure that the information contained within this Report is correct, you should be aware that the information within it may be incomplete, inaccurate or may have become out of date. Accordingly, the MATRIX SEHP makes no warranties or representations of any kind as to the content of this Report or its accuracy and, to the maximum extent permitted by law, accept no liability whatsoever for the same including, without limit, for direct, indirect or consequential loss, business interruption, loss of profits, production, contracts, goodwill or anticipated savings. Any person making use of this Report does so at their own risk. Page 4 PROFITING FROM SCIENCE WWW.MatriX-ni.org GLOSSARY OF TERMS

AD ...... Anaerobic digestion AFBI ...... Agri-Food and Biosciences Institute CASE ...... Centre for Advanced Sustainable Energy CHP ...... Combined heat and power CSIT ...... Centre for Secure Information Technologies DARD ...... Department of Agriculture and Rural Development DEL ...... Department for Employment and Learning DETI ...... Department of Enterprise Trade and Investment DOE ...... Department of the Environment ECIT ...... Institute of Electronics, Communications and Information Technology ESCO ...... Energy services company FE ...... Further education FIP ...... Foresight Implementation Plan HVDC ...... High voltage DC IEA ...... International Energy Agency NIACE ...... Northern Ireland Advanced Composites and Engineering Centre NIAUR ...... Northern Ireland Authority for Utility Regulation NIE ...... Northern Ireland Electricity NIRHI ...... Northern Ireland Renewable Heat Incentive NISP ...... Northern Ireland Science Park OECD ...... Organisation for Economic Co-operation and Development PV ...... Photovoltaics (solar) QUB ...... Queen’s University Belfast SCADA ...... Supervisory control and data acquisition SEF ...... Northern Ireland Strategic Energy Framework SEHP ...... MATRIX Sustainable Energy Horizon Panel SEIDWG ...... Sustainable Energy Interdepartmental Working Group SME ...... Small and medium-sized enterprise SONI ...... System Operator for Northern Ireland SRC ...... Short rotation coppice TRL ...... Technology readiness level UU ...... University of Ulster

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 5 introDuCtion BACKGROUND 1.1

MATRIX, the Northern Ireland Science For the purpose of this report, energy sector, including the supply Industry Panel, is an expert advisory ‘sustainable energy’ is taken to include chain, academic base, physical panel reporting to Department of renewable energy sources1, energy assets and natural resources; Enterprise, Trade and Investment storage, and technologies designed • Annex 3 Market Foresighting Report, (DETI) and the DETI Minister on to improve energy conservation and a 5 to 10 year (and beyond) analysis matters pertinent to the exploitation efficiency. Sustainable transport will be of potential market trends and and commercialisation of science, the subject of a separate foresighting growth in global sustainable energy technology and R&D. It is led by exercise, and is therefore not covered markets, and identification of related high-technology and R&D intensive here. opportunities for Northern Ireland. industry and advises the Northern MATRIX recognised the need for a Ireland Executive on the development This report presents a future Vision foresight study into the future global of improved interfaces between for Northern Ireland as defined by the market opportunities which could be Northern Ireland business and the MATRIX SEHP (Section 2) which has exploited using Northern Ireland’s research, science and technology been informed by an appreciation of science, research and technology base, with a view to ensuring that the current regional strengths and potential capabilities. The MATRIX Sustainable region’s science and R&D strengths differentiators (summarised in Section Energy Horizon Panel (SEHP) was are exploited for maximum economic 3), and an understanding of the evolving established to build on the existing base and commercial advantage. The market landscape (summarised in load of intelligence, and extrapolate panel’s Vision is that Northern Ireland Section 4). forward to identify attractive global should be ‘led by business; inspired market opportunities that could be Directly driven by this Vision, this report by academia; and facilitated by realised within a 10 year timescale, makes the case for the exploitation Government’. and define key actions required on the of a significant future global market DETI and MATRIX have previously part of all stakeholders to exploit the opportunity for Northern Ireland focused identified the commercial opportunities associated economic potential. on the development and commercial associated with sustainable energy exploitation of key elements of intelligent This report presents the final technology markets as substantial in energy systems and associated conclusions and recommendations scope and likely to grow significantly distributed generation technologies and from this process, and is supported by in the coming decades, as worldwide know how (Section 5). a standalone Executive Summary and demand for lower-carbon technologies three interim documents as follows:2 Intelligent energy systems incorporate increases. Over the last three technologies that can measure, • Annex 1 Insights Report, a literature years, significant resource has been analyse, communicate and control review of existing studies and committed to mapping and defining the multi-directional flow of energy analyses relating to the sustainable the existing economic landscape in at a variety of scales. They exploit energy sector in Northern Ireland, Northern Ireland, together with regional the symbiotic relationships between 2008-2012; capabilities and the potential for growth sustainable energy technologies, associated with the ‘Green Economy’, • Annex 2 Technology Capability improving efficiency (matching supply and specifically the sustainable energy Assessment, an analysis of existing and demand), and enabling a new set of sector. regional capability in the sustainable stakeholders (including consumers)

1 It is acknowledged that renewable energy may not be sustainable, and there are circumstances under which the use of biomass, in particular, does not result in improved life cycle GHG performance, and may have negative impacts on other environmental factors (e.g. biodiversity, food crops).

2 These are available for reference from www.matrix-ni. org: Sustainable Energy Horizon Panel Report: Annex 1 Insights Report Annex 2 Technology Capability Assessment and Annex 3 Market Foresight Report.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 7 to become active participants to be fundamental pre in the energy market. requisites for the future Intelligent energy systems delivery of the MATRIX will include electrical and Foresight Implementation heat distribution networks, Plan (Section 8). Specifically remotely controllable loads, these relate to establishment modern energy storage, of an appropriate delivery power electronics technology vehicle and associated and computerised control governance structure, as well system management. They as addressing fundamental may utilise organic waste institutional issues to support streams from both agriculture delivery. and municipal sources and produce products such as alternative transport fuels and fertilisers. The scale of the potential economic opportunity for Northern Ireland has been defined on the basis of both direct and indirect benefits (Section 6). This will not only create significant export opportunities, but will also accelerate Northern Ireland’s progress towards its regional targets for security and sustainability of energy supply (as determined by the Strategic Energy Framework). A high level Road Map for a Foresight Implementation Plan is presented (Section 7), identifying the key steps required in the further development of leading capability in intelligent energy systems. Finally, five key Recommendations are defined which are considered

PAGE 8 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG ViSion For SuCCeSS 2.1 VISION FOR SUCCESS

THE MATRIX SUSTAINABLE ENERGY HORIZON PANEL HAS IDENTIFIED THE FOLLOWING VISION STATEMENT Within 10 years, Northern Ireland will be an internationally recognised exporter of global solutions forged from the development of the lowest cost sustainable energy infrastructure in Europe: • Created by thriving, indigenous businesses; • Exploiting the regions natural, intellectual and entrepreneurial capital.

This Vision will be realised through the deployment of regional and integrated sustainable energy solutions that have global relevance, the demonstration of their commercial scalability, and the recognition of Northern Ireland as an international Reference Site.

Key assumptions that underpin this 3. Short-term focus should be strategic aims for sustainable Vision are as follows: on the aggregation of existing economic development, as commercial activities, capabilities enshrined in the Programme 1. Northern Ireland is in a unique and know-how to realise critical for Government, the Investment position in terms of the scale of mass, achieve early deployment Strategy for Northern Ireland, and its islanded electricity system. It and raise the international profile the Economic Strategy.3 is small enough to demonstrate of the region. sustainable energy solutions 6. Wherever possible, the aim is as commercially viable, but 4. The Vision is based on the to implement solutions that are large enough to be relevant and realisation of future commercial cost neutral to the consumer, and credible to global markets. export markets which exploit developed in consultation with existing regional competitive the Regulator (NIAUR). 2. Addressing the near term advantage to achieve international sustainable energy needs of the 7. Wealth will be generated within leadership – ‘lead not follow’. region will: the regional economy by helping 5. In addition to direct economic existing businesses (specifically • catalyse future innovation; benefits, the Vision has the SMEs) enter the highly regulated • provide a credible platform potential to generate significant energy market and move up the for prototype and commercial environmental and social value chain, by encouraging project development; benefits for the region, such the emergence of new players, as decarbonisation of the grid, and by increasing the regional • provide a strong foundation increase in fuel choice and presence of major national and for companies to develop security of supply, and reduction international corporates. export opportunities; and in waste volumes requiring • attract increased inward disposal. The Vision supports investment. realisation of key national

3 http://www.northernireland.gov.uk/pfg-2011-2015 ﬁnal-report.pdf; http://www.northernireland.gov.uk/ draft-isni-2011-2021.pdf; http://www.northernireland.gov. uk/ni-economic-strategy-revised-130312.pdf.

PAGE 10 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 8. Leadership from, and alignment of, all key stakeholders is required to realise the step change necessary to deliver the Vision. This speciﬁcally includes Government, the Utility Regulator, the system and network operators (SONI and NIE) and Industry... 9. ... and their early and sustained commitment will be fundamental to achieving the Vision by 2023. 10. Successful innovation is required to provide the required long term delivery capacity and to maximise associated economic beneﬁts. This will be linked to the coordinated provision of relevant training in schools and tertiary education, and effective communication between industry and academia over longer- term research requirements for market-led technology development. 11. Attraction of additional risk capital (private) and development of human resource (capacity) will be key enablers of the Vision. 12. Northern Ireland cannot succeed in isolation. The supply chain needs to become better integrated within the wider UK innovation community and globally networked.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 11 SuMMary oVerVieW oF Current regional CaPability REGIONAL CAPABILITY 3.1

An analysis of existing regional Composites and Engineering Centre Alliance) and planned Competence capability in the sustainable energy (NIACE), and the Northern Ireland Centres (e.g. CASE) has begun to sector generated an overview of Science Park (NISP). provide a focal point for individual the existing scientific, research and supply chains, addressing some of the Northern Ireland has two Universities, technological capacity of the region, fundamental issues associated with an Queen’s University Belfast (QUB) and and identified key differentiating and SME dominated, fragmented supply University of Ulster (UU) both of which commercially competitive features.4 chain. are considered world class in a range The current industrial supply chain of research areas, including marine Whilst availability of good regional, in sustainable energy is evolving and research at QUB and built environment natural and technical resources provides maturing with approximately 500 active research at UU. In addition, the Agri- potential key drivers for the future companies, of which 77% are within the Food and Biosciences Institute (AFBI) growth of the sector, competition for wind, marine, bioenergy, and integrated conducts leading research into the commercial exploitation is strong from building technologies5 segments.6 growth and processing of biomass supply chains in other regions in the Other segments are relatively immature, crops (including SRC Willow). The rest of the UK and Ireland. Specifically with emerging supply chains and a network of six regional colleges this relates to the high profile offshore lack of critical mass. There is also provides a robust and coherent base wind and marine markets where regions signifi cant diversifi cation potential of applied research, demonstration and such as Scotland, the North West UK within the general industrial base, skills provision. In future, the proposed and Southern Ireland are effectively with engineering, manufacturing and Centre for Advanced Sustainable competing for the same opportunities, port-based services particularly well Energy (CASE) will provide a single but with more mature supply chains. represented. focal point for targeted research in the Consultation with key stakeholders sustainable energy sector, coordinating In common with Northern Ireland as and industry representatives provided activities at all three academic a whole, the vast majority of these important insights into the current status institutions. companies are micro SMEs (< 10 of the regional sector:7 employees). While there are relatively Overall, the analysis showed a number • There is a high penetration of wind few large, international corporate of ‘hot spots’ of capability that span the resource on the electricity network. entities active within the regional sector, breadth of the academic basis, from However, its non-dispatchable nature notable companies include: Harland and early stage R&D through to applied can cause potential overloading Wolff; Glen Dimplex, DONG Energy, skills training, specifically relating to low problems on the 33 kV distribution McLaughlin and Harvey, Kingspan, carbon buildings; micro-renewables; and 110kV transmission lines for F.G. Wilson, and Copeland (Emerson biomass; energy storage; and marine. the Network Operator (NIE), and Climate Technologies). However, there is currently nothing that is associated with an increasing functions as a cluster. There are a small number of notable risk of curtailment by the System physical ‘flagship’ assets outside the In addition to regional technology Operator (SONI). Similar issues academic base, including the SeaGen capability, there are a number of relevant affect the connection of smaller tidal generation turbine in Strangford support programmes and initiatives. The scale generation, such as AD. Lough, the Granville Eco Parks 3MW formation of the Collaborative Networks Nevertheless, these issues are anaerobic digestion facility, the harbour (e.g. Global Wind Alliance and Global acting as a driver for innovation, facilities, the Northern Ireland Advanced Maritime

4 Sustainable Energy Horizon Panel Report: Annex 2 Technology Capability Assessment. Available from matrix-ni.org

5 Low carbon buildings and micro-renewables.

6 Company data derived primarily from Invest NI sector speciﬁc databases, plus existing reports and consultation with the industry. This compliments the results of two studies undertaken for Invest NI by the Energy Scoping 7 Details of insights, evidence base and full list of Group (2008) and Envirolink (2012), which emphasised consultees provided in Sustainable Energy Horizon Panel the potential for short-term businesses opportunities in Report: Annex 2 Technology Capability Assessment. these sectors. Available from matrix-ni.org

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 13 providing an incentive to develop The domination of micro SMEs wind, and to some extent micro expertise in areas such as energy is limiting industrial investment renewables. storage and smart controls. in R&D and creating barriers to • In relation to technology innovation, achieving critical mass. There is • There remains signiﬁcant sustainable signiﬁcant potential remains for little experience of, and therefore energy resource potential, increased cooperation with other precedence for, venture capital particularly for offshore renewables regions of the UK and Ireland. amongst SMEs. and bioenergy. • SMEs are already actively exploiting • Recently value creation has focused • Academic excellence in traditional opportunities for internationalisation. on: areas of strength is well developed, but the level of commercial - ‘buying in’ overseas technology exploitation has been low. Evidence early and developing it to meet from consultations suggests a ‘brain the needs of the local market. drain’ from academia, with many This exploits capabilities in system trained scientists leaving the region integration, with the objective of as a result of a lack of relevant ultimately capturing future regional employment opportunities. manufacturing jobs and exporting technology; • Opportunity exists for improved management and collaboration - Provision of local service contracts across the fragmented supply chain. to deployed technology, in particular

In summary, speciﬁc regional strengths and potential differentiators have been identiﬁed as follows:

Resources and 1. Availability of natural resources – wind, marine and biomass. Geography 2. Bridgehead location (and physical proximity) between Republic of Ireland and rest of UK. 3. Know-how and practical experience in operation of ‘island’ electricity system. 4. Significant number of farming businesses with potential to act as nuclei for rural community-based projects. Infrastructure 5. Northern Ireland has, and is developing, electricity interconnectors. 6. Ability to demonstrate and exploit know-how relating to next generation technologies in a challenging technical and economic environment. Academic Base 7. World class academic teams in areas of marine, low carbon buildings, micro-renewables, biomass, power engineering and energy storage. 8. Highly skilled and trained workforce with practical experience in deployment of sustainable energy technologies. Industrial 9. Track record of success in technology adaptation and deployment. Capability 10. Strong and flexible industrial base with diversification potential. Public Sector 11. Sympathetic and supportive innovation landscape (including fiscal support mechanisms such as Intervention RHI). 12. Evolving focus on key elements of the sustainable energy sector.

PAGE 14 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG SuMMary oF inSigHtS FroM global MarKet ForeSigHting rePort 4.1 INTRODUCTION

A global market foresighting analysis (IEA) flagship World Energy Outlook data points of 2020 and 2035. Up to was undertaken to provide a 5 to 10 (WEO) 2010 and 2012 reports; and the 2020, clear policy commitments have year (and beyond) outlook to inform IEA’s Energy Technology Perspectives been made and the forecast is robust, the identification of future strategic 2012 report.9 but unsurprisingly, as forecasting international markets for Northern extends past 2020 the degree of This data was supplemented by Ireland.8 The analysis drew, in particular, uncertainty in the data increases. additional sources as appropriate, on the International Energy Agency’s in order to provide an overview of 10 the future evolution of global energy markets, with a specific focus on the

Key global trends:10 • By 2035 global energy demand is predicted to be 35% higher than in 2010, reaching 17,197 million tonnes of oil equivalent (Mtoe). • Non-OECD countries will account for 93% of this increase, reflecting faster rates of growth, industrial production, population and urbanisation. China’s industrial base is estimated to account for 28% of global industrial energy demand by 2035. The OECD’s share will fall from 44% today to 33% in 2035. • Overall, spending on oil and gas imports is estimated to more than double to 2035. Natural gas demand will increase by 44%, and will remain the leading fuel in both OECD and non-OECD countries... • ...But rising prices and increasingly onerous carbon penalties, together with policies to encourage the uptake of low carbon technologies, will restrain demand. • By 2035 an additional 5,900 GW of total power generating capacity will be required (~ 6 times the current capacity of the USA). Electricity consumption is estimated to increase by over 80% by 2035. • By 2035 a cumulative $37 trillion investment (in year-2011 dollars) will be required to enable infrastructure upgrades: replacement of production facilities that are retired & expansion of alternative production capacity. This equates to around $1.6 trillion per annum. • OECD countries will see only a 3% increase in aggregate energy demand but will require 39% of the total investment to 2035 (ageing assets and the more capital intensive energy mix). • Energy intensity will decrease as technology advances and will be further exaggerated as more demand side technologies are introduced, and intelligent systems are developed, predominantly in OECD regions. • Energy systems will become more complex. The role of technology integration and network management will become ever more crucial up to 2035 as the energy mix diversifies into a range of technologies with vastly different profiles (many of which are non-dispatchable), and an increasing reliance on distributed generation. • Current consumers of energy will become energy generators and active participants in overall system management.

8 For more details, refer to MATRIX Sustainable Energy 9 These contain scenarios that use the IEA’s World 10 Key insights summarised from MATRIX Sustainable Horizon Panel Report: Annex 1 Insights Report Annex 2 Energy Model, a well respected industry benchmark for Energy Horizon Panel Report: Annex 1 Insights Report Technology Capability Assessment and Annex 3 Market forecasting future energy demand and fuel/generation Annex 2 Technology Capability Assessment and Annex 3 Foresight Report available from www.matrix-ni.org mix. Market Foresight Report available from www.matrix-ni.org

PAGE 16 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 4.2 OVERVIEW OF FUTURE SUSTAINABLE ENERGY MARKETS

In 2010, electricity from sustainable tidal technologies are likely to play As shown in Figure 1, the net share of energy technologies accounted for 19% a greater role, particularly across renewables in electricity generation is of total global electricity production, with Northern Europe, although they will still estimated to increase for all regions, 85% of this coming from hydropower. be dwarfed by the more established and by 2035 the share of renewables In the move towards 2020 and 2035, technologies. Wind power (both in electricity generation across each of it is anticipated that wind and solar PV onshore and offshore) is projected to the key regions ranges from one fifth technologies will take an increasingly increase from 238 GW in 2011 to over to almost half. Of note is the increase larger share of the renewables 1,000 GW in 2035 globally, or over that is likely to be seen in the European electricity production mix.11 2,600 TWh. In contrast, marine power Union, driven by carbon targets and is estimated to increase to no more clearly defined policies to achieve them. Beyond 2035, marine, wave and than 60 TWh in 2035 with an installed Wind, marine, and solar PV are the capacity of 17 GW. likely beneficiaries. 11 Unless otherwise indicated, this section also draws on IEA, World Energy Outlook Reports, 2010 and 2012.

FIGURE 1 SHARE OF RENEWABLES IN TOTAL ELECTRICITY GENERATION BY TYPE AND REGION12

Hydro Wind Bioenergy 2010 World Solar PV 2035 Geothermal 2010 United States Other* 2035

2010 European Union 2035

2010 Other OECD 2035

2010 China 2035

2010 India 2035

2010 Other non-OECD 2035 0 10 20 30 40 50

* Other includes concentrating solar power and marine

12 Based on IEA World Energy Outlook Report 2012.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 17 The required investment in renewable electricity technologies to 2035 is estimated to be over $6 trillion (in 2011 dollars), representing 62% of the total investment in power generation. Government support for the sector is anticipated to increase to $300 billion in 2035, up from an estimated $57 billion in 2009. In 2010, sustainable energy technologies accounted for around 10% of global demand for heat. This is anticipated to increase to 14% of global heat demand by 2035, predominately driven by the industrial and buildings sectors. Anticipated increases in the use of sustainable energy technologies (solar thermal, bioenergy and geothermal) for heating of buildings will be more pronounced in OECD countries, specifically in the USA and the European Union than in non-OECD counties, primarily due to the strong policy drivers in these regions, and the flexibility of bioenergy technologies. Nevertheless, there will also be significant opportunities for low carbon and energy efficiency building technologies for new build in rapidly developing economies (such as China and India).

PAGE 18 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 4.3 PRIORITISATION OF MARKET OPPORTUNITIES FOR NORTHERN IRELAND

Further analysis of individual market • Well established and mature supply and deployment of complementary segments was undertaken to chains (onshore wind, bioenergy); to renewable generation technologies characterise future growth trajectories (both current and future). • Limited regional deployment and profiles, and to identify specific potential in which to generate development needs. The segments commercial proof points (new build were then prioritised in terms of relative and all renewable technologies attractiveness for Northern Ireland on dependent on the existing grid the basis of: infrastructure). • Relative scale of future international In addition, the foresighting analysis market opportunity (potential for highlighted that, across all segments of exports); the future sustainable energy market, • Potential to generate economic the role of system integration and return within 10 years (time to intelligent network management is market); anticipated to be the key to unlocking long-term economic potential. The • Basis for regional competitive development and deployment of advantage within the international intelligent systems will be fundamental market; to matching supply and demand across • Low barriers to entry on the basis increasingly complex energy networks, of the degree of competition and and in facilitating the paradigm shift the nature of supply chain (ease of whereby current consumers of energy access). will become energy generators. The overall functioning of the system will Onshore and offshore wind, bioenergy, become increasingly important, not integrated buildings technologies,13 and just the performance of the individual marine energy were all identified as technologies. offering potential future market niches in which Northern Ireland could leverage On this basis, it was proposed that a its existing capability. However, these focus on the commercial demonstration also presented a number of challenges of the integration of renewable ranging from: and sustainable distributed energy technologies using intelligent energy • Relatively small total market size systems would provide an attractive and (marine); flexible platform for export for Northern • Intense regional/international Irish companies. At the same time, this competition (all offshore energy); would provide a framework and catalyst to support the accelerated development

13 Low carbon buildings and micro-renewables

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 19 tHe oPPortunity For intelligent energy SySteMS 5.1 BACKGROUND

Northern Ireland is currently in a • High prevalence of fuel poverty matching of energy supply and demand unique position relative to the rest (estimated 42% of households will become much more complex and of Europe, being the first market to paying more than 10% of income on will require networks that are flexible face the commercial realities and energy bills15); and reactive, with new tools that enable multiple challenges of high density grid the participation of new actors (primarily • Aging housing, commercial and integration of renewables. The province end users). public sector property portfolio. needs to solve immediate regional Northern Ireland itself is now At the same time, since 2007, the issues which could at the same time approaching maximum capacity: create exportable intellectual assets in region has operated within a Single the existing ‘islanded’ electricity the form of technology and knowledge. Electricity Market with the Republic of infrastructure is unable to accommodate These solutions are globally at an early Ireland. It has a single Transmission and the region’s significant potential for stage of development, providing the Distribution owner (NIE) and System distributed renewable energy, with the opportunity to take an internationally Operator (SONI). result that there is significant curtailment leading market position by exploiting Along with much of the developed of grid-connected generation, and high the region’s strong research base, and world, Northern Ireland has a levels of potential additional capacity developing leading edge experience transmission and distribution awaiting connection.16 Connection of and know-how through the connection infrastructure that was designed to these assets will be critical in achieving of significant renewable capacity to the deliver electricity from a small number the target contained within Northern self-contained and integrated Irish grid. of centralised, largely fossil-fuel Ireland’s Strategic Energy Framework Northern Ireland has an energy based generation sources that can of 40% electricity from renewable infrastructure that is characterised by be dispatched to meet predicted daily sources. its: demand profiles on a minute by minute The region faces choices and basis. • Highly dispersed nature; challenges with regard to the nature of The current dual challenges of climate its future grid system. The options are to • Relatively under developed gas change and energy security, however, continue with upgrades to the existing network. Currently about 120,000 are creating an environmental and ‘top down’ supply system (estimated households and 8,000 businesses economic imperative to reduce by NIE to require an investment of up are connected to mains gas supply dependence on fossil fuels by to £1 billion to meet the Government’s (20% of properties) with a further increasing the efficiency of electricity 2020 renewable energy targets),17 or to 34,000 additional consumers and heat generation and utilisation, and optimise the existing infrastructure by expected to come on line as a result to increasingly capture energy from developing a reactive grid, capable of of proposed pipeline extensions to renewable sources. matching complex supply and demand main towns in the west of Northern Electricity transmission and distribution requirements. The latter approach will Ireland (construction anticipated to require investment in ‘intelligence’ begin in 2015);14 systems are therefore increasingly required to accommodate numerous, (communications and control dispersed generation sources (many infrastructure) which, coupled with small and some variable) which are some storage capability, will be able to connected to the network at a variety of better exploit renewable resources and levels. Going forward, the instantaneous thereby maximise the utilisation of the

16 In 2011 the dispatch-down energy from variable price taking wind generation was 13,415 MWh in Northern Ireland. This represents 5.3% of the available energy from these generators in this period. In October 2011 SONI published a consultation paper “Consultation on Generator Connection Process-ITC Methodology to determine FAQs & Generator Output Reduction Analysis”. The consultation shows Northern Ireland in 2016 as having extremely high levels of curtailment (13.5%) together with constraints of 1.81% at many nodes, leaving a combined maximum potential constraints and curtailment of 13.66%,- NIRIG Response to DECC Call for Evidence Part B, 15th November 2012.

17 NIE, Transmission and Distribution Price Control 14 http://www.northernireland.gov.uk/news-deti-140113 15 http://www.decc.gov.uk/assets/decc/11/stats/fuel for RP5. Capital Investment Requirements for the Fifth foster-welcomes-executive poverty/5270-annual-report-fuel-poverty-stats-2012.pdf. Regulatory Period, April 2011.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 21 existing infrastructure. There have been and developing world countries many studies that show that the long face equivalent issues with ageing term cost-benefits of this latter approach infrastructure, whilst emerging are highly favourable.18 economies are looking to implement intelligent systems to satisfy an In addition, there is an urgent need to increasing demand for affordable and increase the use of renewable heat (in secure energy in the face of uncertain order to reach the 10% renewable heat fuel prices and agreed emissions target by 2020), and reduce the amount targets. of waste heat that is generated (and not re-used). With a significant proportion of homes using oil for heating, Northern Ireland would benefit greatly from deployment of non fossil-fuel, efficient heating systems. Government support for the uptake of renewable heat technologies has recently become available (Nov 2012) via the NIRHI (Renewable Heat Incentive) with £25 million of investment expected over the first four years.19 Optimising and adapting existing assets, and the development of interconnected systems, will be necessary if deployment of sustainable energy technologies is to be fast tracked and the associated economic, environmental and social benefits realised. Development of intelligent energy systems is the common denominator required for the successful commercialisation of sustainable energy technologies whilst extending the life of the current network. Close liaison with the Utility Regulator, NIAUR, and avoiding any associated cost burden to the consumer will be critical to success. This is not just a local or regional issue. Global interest in the technologies and methodologies that can address the issues of intelligent heat and power systems (and indeed markets) is growing rapidly. Many developed

18 IEA, Energy Technology Perspectives, 2012, Ernst & Young, Smart Grid: a race worth winning? A report on the economic beneﬁts of smart grid, April 2012.

19 DETI, Northern Ireland Renewable Heat Incentive – Guidance, November 2012. In addition, DECC’s recently (Dec 2012) consultation on the qualiﬁcation criteria for renewable CHP schemes under the CHPQA standard, includes increased support for use of CHP produced heat in district heat networks.

PAGE 22 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 5.2 WHAT DOES AN ‘INTELLIGENT ENERGY SYSTEM’ LOOK LIKE?

Adding ‘intelligence’ to the electricity An intelligent system will exploit its Realisation of intelligent systems system involves technology that can inherent flexibility to: will require the future commercial measure, analyse and communicate development of a number of key • Maximise the exploitation of the status of power transfer at, and elements: intermittent renewable resources; between, all levels of the system. • Interconnectors – allowing top down • Match supply and demand; Figure 2 illustrates the move from inter-regional system balancing over a hierarchical, top down system, in • Minimise the transportation (and wide geographical areas. Advanced which power and data flows are uni associated cost) of electricity; HVDC transmission cables are a directional, to a network structure crucial technology in this area. • Optimise the performance of the that allows generation, storage and system components; demand side management at a variety of scales and configurations. The latter • Inform market mechanisms is characterised by multi-directional that ensure that generation, power and data flows, managed in such transportation and storage can be a way as to ensure optimisation of the priced and paid for. integrated system. The resulting system would be green, resilient, reliable and fair (an ‘internet’ of electricity).

FIGURE 2 SCHEMATIC COMPARISON OF HISTORIC AND INTELLIGENT ENERGY SYSTEMS

HISTORIC SYSTEM INTELLIGENT SYSTEM

Centralised supply one-way data flow Customers & DSM

Transmission Commercial Customers & DSM

Local generation MicroGrid & storage High Voltage Distribution Centralised generation

Commercial generation Low Voltage Distribution & Storage

Consumers

Innovative market mechanisms Power Data & Controls and business models

DG: Distributed generation – using sustainable generating technologies DSM: Demand side management (ability to control the timing/scale of demand to match supply)

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 23 • ICT technologies that will allow the fuel generation such as hydrogen) In addition, as described above, transfer of data between: sectors (see below). intelligent energy systems are not limited to the generation and use of • sensors that measure system • Advanced controls that can power, but will integrate electricity and status in real-time, not only supply assimilate real time information on heat provision (and eventually transport) and demand, but also physical grid status and send appropriate into a coordinated whole. The addition parameters of components (to instructions to a network of of waste heat capture and use, CHP identify faults, bottlenecks etc.) generation and storage devices to and renewable heat technologies, and and; adjust the flow of power accordingly. heat storage to the mix of technologies • controls that enable the system to • New market trading mechanisms will greatly increase the efficiency and be optimised via manipulation of that enable and encourage active flexibility of decentralised systems. power flow within the distribution participation of end users (including The first of these elements, the system; demand response; use of consumers) in generation and development of interconnectors, is a storage; and remote automated storage. key strategic investment of national repair. • New business models that ensure importance that will require significant Ideally these technologies will attractive commercial returns for political and financial resources for use ‘open source’ communication renewable generators, storage implementation and is subject to protocols that will facilitate providers and demand response, ongoing feasibility and planning by NIE, innovation by multiple players and help to bring about long term the Utility Regulator and the Northern allow robust tools and systems price stability and encourage Ireland Executive. to emerge. Real time modelling investment into the integrated All other elements will require innovation will also be critical, based on system as opposed to component and development on the part of the both analytical descriptions (the parts. The whole system needs market, and offer significant opportunity physics) and/or statistical or to be underpinned by commercial for the current and future supply chains empirically derived (“big data”) constructs that ensure fair of Northern Ireland. models. distribution of the costs, taking into account the ability of end users • Storage technologies to allow the to participate in generation and decoupling of electricity supply storage. and demand. Energy storage may be implemented at all scales, from This is one of the most challenging the utility level, using technologies aspects, and is a key enabler for such as large-scale pumped storage global deployment beyond early and power stations, to the buildings pre commercial (typically subsidised) level where the thermal inertia of the programmes. building materials themselves can be • Operation and Maintenance exploited. technologies and innovative Note that ‘storage’ encompasses processes that address the longer both two way electricity storage, term needs of the market as it and storage that crosses over develops, matures and is rolled out into the heat (thermal energy at across multiple geographies over district heating or building scale) the next 20 years – a significant high or ultimately transport (through yield economic opportunity.

PAGE 24 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 5.3 THE SPECIFIC OPPORTUNITY FOR NORTHERN IRELAND

Commercialisation of key elements of transportation from centralised power to address additional challenges and an intelligent energy system will present stations, partially alleviating the current provide further sophistication to the Northern Ireland with the opportunity pressure to reinforce the grid. initial systems developed. These should to become a market leader and an include complementary and synergistic Subsequent, much larger projects international showcase. Exploitation capabilities within the region, including: would follow, utilising the scalable of current regional infrastructure, technologies and expertise developed • Development of composite and resources and capability would allow in the initial projects. This could advanced materials; the region to become an ‘early adopter’ include, for example, the integrated commercial reference site for intelligent • Advanced thermal treatment use of compressed air energy storage energy systems, demonstrating viable, technologies, such as gasification and waste heat from large scale AD flexible and scalable solutions for the and super critical water oxidation; or biomass CHP to offer storage integration of sustainable energy. efficiencies of 100% to renewable • Gradual development of more Initial activity would sensibly focus on generation projects with high ROC complex systems and controls – the optimisation of early models for multiples, such as the offshore wind allowing manipulation of the interplay the intelligent integration of distributed and tidal schemes recently granted between a variety of devices (e.g. generation, such as a micro-grid development licenses by the Crown electricity and heat generation, approach in which the balance between Estate. These storage projects would be storage, and demand management) embedded renewable generation, privately developed, require minimal grid that are connected at different energy storage and controllable load re-enforcement, be capable of reducing levels (building/community scale) to on a lower voltage circuit of the existing curtailment, and with some re-shaping the distributed system, in order to distribution network is achieved via of present trading arrangements, would optimise efficiencies and economic a discrete control system, operated aim to be cost neutral to the electricity return; through third party access. consumer. • Distributed system design – taking This would present the opportunity to Such a modular, bottom up, approach into account local factors (such demonstrate Northern Ireland’s strength would exploit the region’s diverse as resource availability, existing of capability in: capability in order to generate a truly infrastructure and demand profiles); innovative and integrated system, • Onshore wind and bioenergy20 • Implementation of appropriate and and would put in place the building generation (specifically anaerobic transferable cyber security systems, blocks for scale up and replication, digestion of farm waste); as communication and control without disturbing the functionality of system complexity grows, to address • Building scale renewable generation; the existing infrastructure. It would the need for data security amongst also require initial modest investment, • Energy storage solutions; and end users. allowing commercial proof of • Demand response at appropriate performance of solutions, ahead of • Future extrapolation of expertise and scales. scale up and then export. capability into emerging sustainable raw material sector. It would also allow for the accelerated It is assumed that development work deployment of these technologies with would be undertaken in collaboration These activities would directly exploit near-term benefits for Northern Ireland with international research groups existing regional capabilities and in both rural and urban communities. and consortia to ensure that the IP resources as summarised in Table 1, With energy produced and consumed developed is of global relevance. providing a robust platform for the future locally, there would be a reduction in the development of related intellectual In parallel with these first commercial need for long distance electricity assets and skills. showcases, next generation technologies and capabilities within the existing regional supply chain could be incubated and fast tracked

20 As described in footnote 2, there are circumstances under which the conversion of biomass to energy does not result in improved life cycle GHG performance, and may have negative impacts on other environmental factors (e.g. biodiversity, food crops). It is assumed that any technology that is supported as part of the MATRIX SEHP (both in development and demonstration) will be assessed fully against the current most stringent sustainability criteria.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 25 21 Relevant expertise Energy efficiency in buildings, including thermal energy storage (using phase change materials) and advanced (highly efficient) h eat pumps; integration of micro-renewables. State of the art ENERF laboratory complex. The impact a range of parameters including environmental limits on the operation built environment. Spatial planning sub -group conducts research into rural planning, community planning and energy storage. Knowledge and data engineering, communications networks, cloud computing, creative computing software engineering. State of the art laboratory facility for Next Generation Internet and Computational Modelling. solar driven hydrogen production and one of four focus areas. Applications include fuel cells, solar PV, Clean Technologies storage. Purpose built facilities with sophisticated nano-fabrication, biological and characterisation equipment. Distributed sources of energy and their integration into power networks; control intelligent systems; systems hig h voltage engineering. Data mining; knowledge and information fusion (e.g. modelling managing heterogeneous from multiple sources). High frequency electronic circuits; system on chip architectures; digital communications (including advanced networks; signal processing (DSP) and communications; radio communication; wireless networking). Data security systems; network wireless enabled intelligent largest centre for IT security. UK’s surveillance systems. Recent focus on security of the evolving smart grid. Ionic liquids, including applications in green rechargeable redox flow batteries. Procurement and design of low carbon buildings micro-renewables. Industry-led research centre, with a focus on energy from biomass (including advanced biofuels). R&D into AD CHP, PV and land sourced biomass feedstocks, including optimisation of anaerobic digester performance with grass R&D into AD CHP, slurry based feedstocks. Demonstration facilities at the Renewable Energy Centre of Excellence. Collaboration between SWC and industry (SMEs) to deliver specific development demonstration projects, a model that is now being rolled out to all six FE colleges. CREST provides industry research and development, demonstration testing facilities for new renewable energy products and sustainable technologies. – Electrical Power and 22 - Information and - Centre for Sustainable 24 23 - Nanotechnology and 25 BERI – Centre for Research on Property and Planning CSRI ERI Technologies Technologies Communications Engineering Integrated BioEngineering Centre (NIBEC) Energy Systems EEECS – Knowledge and Data Engineering Centre EEECS - Institute of Electronics, Communications and IT (ECIT) EEECS - Centre for Secure IT (CSIT, part of ECIT) University Ionic Liquid Queen’s Laboratories (QUILL) Centre for the Built Environment QUESTOR (QUB) InnoTech Centre and CREST InnoTech EEECS BERI 26 AFBI South West South West College (SWC) Academic Institutions Queen’s University Belfast Ulster University Built Environment Research Institute Computer Science Research Institute Engineering Research Institute Agri-food and Biosciences Institute School of Electronics, Electrical Engineering and Computer Science The individual generation technologies are covered in detail in Sustainable Energy Horizon Panel Report: Annex 2 Technology Capability Assessment. Available from matrix-ni.org Capability Assessment. Available The individual generation technologies are covered in detail Sustainable Energy Horizon Panel Report: Annex 2 Technology TABLE 1 TABLE TO INTELLIGENT ENERGY SYSTEMS (EXCLUDING RELATING SUMMARY OF CURRENT REGIONAL CAPABILITY TECHNOLOGIES) INDIVIDUAL GENERATION 21 22 23 24 25 26

PAGE 26 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Relevant expertise Relevant expertise In addition to Glen Dimplex and Kingspan: and Scott Wilson; low carbon building design companies, e.g. Bell Architects; a number of construction-based corporates, e.g. MIVAN energy efficiency new build, e.g. GP Williams, Sky Developments; equipment, low voltage controls (Matik NI ); energy management, e.g. P & A Quinn Energy Ltd. A core of MCS certified installers for micro-renewables, with particular strength in solar technologies. Smart Grid Innovation Hub; SmartGrid Ireland, Global Wind Alliance, Maritime Glantek, Energy Skills Network. E nergy Network. Skills and Training Development of energy storage solutions for Northern Ireland adopting a technology agnostic approach. Members include project developers, end users (wind farm operators), utilities and engineering subcontractors. Currently seeking funding for several pi lot programmes across a variety of scales. have manufacturing facilities within the region. Glen Dimplex and Kingspan – both active within the integrated building technologies sector, Mainstream Renewables – wind and solar generation. Bombardier – aerospace and transportation, closely involved in development of advanced materials. Copeland – manufacture of air compressors. A core of companies that specialise in system design, control systems, testing and electrical installation. Examples are PowerTeam fault location). switchgear), and Kelvatek (e.g. LV Electrical (high voltage electrical infrastructure solutions), Kane Engineering (LV Airtricity), present in Northern Ireland. Global companies that focus on intelligent energy systems (e.g. GE, SAP, Large scale harbour facilities (e.g. Belfast harbour); SeaGen tidal turbine at Strangford Lough. Significant capability within the region with a number of companies that originated as Northern Ireland spin outs, e.g. KANA (La gan), Kainos, Kofax (Singularity), Geopii, and Ditactics; global corporates with a presences in Northern Ireland, e.g. EMC, Fukit su, SAP, and Deloitte. Active supply chain with key companies. For example B9 Organic, WIS & Silotank, members of the Glantek Alliance, formed to prom ote clean technology products and processes (including biomass AD). turbine, and energy from biomass CASE – coordination of sustainable energy-related clusters: integration and storage, energy efficiency, (including AD). hub for the research and development of advanced engineering materials technologies. Technology A commercial and research driven centre for knowledge-based industries. Provides incubation support, manages innovation sup port programmes including HALO and NISP Connect. Proposed new Innovation Centre to provide commercialisation services and bridge this current gap in service provision the re gion. 27 Energy infrastructure Physical infrastructure Big Data - interrogation and analysis of vast quantities data at high speeds Bioenergy Integrated building technologies SENSE (Smart Energy Storage) CASE (QUB, UU and AFBI); Networks Anchor companies Supply chain capability NIACE NISP Innovation Centre for the Green Economy Industry Energy Storage Network Public sector bodies Competence Centres Low carbon buildings and micro-renewables

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 27 WHat iS tHe eConoMiC beneFit For nortHern irelanD? 6.1 ECONOMIC BENEFIT

Development of a competent and Internationally, this sector is Nevertheless, no individual region internationally leading capability in acknowledged as a highly attractive has currently established a leadership intelligent energy systems has the future market and there has been position in this sector, and there is an potential to deliver significant economic significant recent early activity in acknowledged lag in the integration of benefits to Northern Ireland. The sector a number of regions, including distributed renewable generation on to is forecast to represent a significant Government investment in smart the intelligent energy system.30 It is this future global market opportunity that has grids (e.g. £2.8 billion of matched area in which Northern Ireland has the been estimated to attract in the region stimulus funding in US); development opportunity to lead, exploiting first mover of £400 billion of spend between 2010 of integrated island smart grid systems advantage to secure a share of the and 2020, with a further £600 billion (e.g. 6,000 households on Jeju Island, potential export revenue. One forecast between 2020 and 2030.28 Capturing South Korea); installation of smart suggests that global revenue from just a small portion of this market meters (e.g. 33 million by ENEL intelligent grid renewables integration opportunity will represent significant Distribuzione S.p.A in Italy); integration could grow from £2.5 billion in 2012 to economic benefit to the region in terms of smart systems into city environments; just over £8 billion in 2018.31 Within this of investment in R&D, job creation and and provision of test-bed systems to projection, growth is anticipated to be inward investment. trial commercial solutions (IES pilot and particularly strong in advanced storage Pulau Ubin microgrid in Singapore).29 technologies and microgrids (75%), see Figure 3.

FIGURE 3 GLOBAL MARKET VALUATION FOR SMART GRID RENEWABLES INTEGRATION TECHNOLOGIES32 DR

9000 Microgrids

8000 VPP

7000 Storage Transmission 6000

5000

4000 £ Millions 3000

2000

1000

0 2012 2018 DR refers to dynamic pricing demand response, including automated demand response (ADR). VPP (Virtual Power Plants) are aggregations of ADR resources. Microgrids are small-scale power systems that use a combination of energy generation and storage devices to serve local customers. Often categorised as campus, military, remote, community, and commercial & industrial, they can be used autonomously or connected to central system, where they increase ﬂexibility.

32 Adapted from Pike Research, Smart Grids Renewables Integration, 2012

30 IEA, Technology Roadmap, Smart Grids, 2011, http://www.iea.org/publications/freepublications/ publication/smartgrids_roadmap.pdf.

28 IEA World Energy Report 2012 29 For more detailed examples, see Foresighting Report. 31 Pike Research SGRI-12-Executive-Summary

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 29 Exploitation of regional competitive advantage in early commercial reference projects in these areas presents the opportunity to address this current innovation gap and to develop signiﬁcant export opportunities. Early export opportunities are anticipated in the Republic of Ireland and Great Britain. The scale of the potential markets for some of the core elements of strength for Northern Ireland (farm scale AD, energy storage and integrated building technologies) are summarised in Table 2. However, the added value of exploiting these capabilities within the context of integrated intelligent energy systems will be signiﬁcantly higher.

In addition to the direct commercial opportunity, the MATRIX Foresight Implementation Plan will generate beneﬁts for a variety of stakeholders:

Government • Address all four principal aims of the SEF: building competitive markets, ensuring security of supply, enhancing sustainability and developing energy infrastructure. • Facilitate realisation of the 40% renewable electricity target by 2020, the 10% renewable heat target, and the contribution to the 1% per year on year energy savings target set out in the UK National Energy Efficiency Action Plan. This will be associated with a reduction in reliance on fossil fuels, and eventually, a more stable and resilient grid. • Contribute to compliance with the recently adopted EU Energy Efficiency Directive (October 2012) which includes refurbishment of 3% of public buildings each year. • Contribute to the UK’s Bioenergy Strategy principles which ensure that bioenergy delivers genuine and cost effective carbon reduction without negative impacts on food security and biodiversity. • Contribute to reductions in regional waste disposal costs and associated environmental impacts. It is estimated that in the UK almost 17 million tonnes of food is wasted every year.33 In addition, annual disposal of 10 million tonnes of animal slurries34 is a particular challenge, and one that is directly addressed through the development of farm scale AD systems. • Benefit the local (and in particular the rural) economy, not only as a result of decentralised community energy generation, but also via associated job creation (design, installation & maintenance).

Customers • Maintain competitiveness in all industrial sectors as a result of developing a more reliable, more resilient and cheaper regional energy system. • Empower consumers to become participants in the energy system, with greater control over their source and use of energy, and potential to generate new sources of revenue.

Supply Chain • Enable a step-wise approach to the deployment of distributed generation and intelligent systems that will build trust and conﬁdence between the Regulator, DNO and distributed generators/storage providers. • Reduce barriers to entry for small-scale renewable energy generators, such as high up-front connection charges.

33 WRAP, http://www.wrap.org.uk/ 34 http://www.afbini.gov.uk/index/news/news-releases/news-releases-archive-2008.htm?newsid=15298

PAGE 30 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG

42 at 38 51

36 and 1.3 million solar 49 44 46 39 50 450,000 biomass boilers, 1,500 biomass boilers, and 100,000 solar thermal 43 37 at combined value of £19 bn. 45 Integrated Building Technologies Retrofit – Europe and North America. New Build – China and India. thermal estimated combined value of £1 bn. Estimated installations and market value: 37,000 heat pumps, Low carbon heat use in buildings approximately 6 TWh. Low carbon heat use in buildings predicted to reach approximately 25 TWh. Estimated installations: 650,000 heat pumps, Market for highly energy efficient homes (new build and retrofit), incorporating next generation advanced technologies and solutions, expected to grow from £8.7 billion in 2012 to almost £53 by 2020. Energy efficiency commercial market expected to grow from £92 bn in 2012 to £150 bn (2017/2020). of 7 million heat pumps (£63 bn) in Europe alone by 2020. Target 41 35 48 Energy Storage Output capacity ~1.7GW (pumped hydro). DECC 2050 Pathways analysis suggest storage levels of 4-20 with new technologies GW, (e.g. batteries) introduced at level 3-4 (ambitious targets). Storage seen as an essential element of grid balancing but associated investment will depend on the nature of technology deployed. Europe, North America and South East Asia. Current value of around £0.9 billion (primarily pumped storage). By 2022, over £75 billion of investment will be required in next generation energy storage technologies (centralised and decentralised). 40 scale) (http://www.theecoexperts.co.uk). 47 Farm Scale AD (<500 kW) c. 50 farm scale plants. 1,000 farm-based anaerobic digestion plants by 2020. Achieving this requires approximately 8 plants to be built per month until 2020. But 300,000 farm holdings in the UK, of which 200,000 have slurries. Market for biogas equipment (includes AD plants and landfill gas to energy collection systems) was worth £1.8 billion in 2010. By 2016, it is estimated to reach £5.3 billion, with a CAGR of 19.4%. Eastern Europe, Africa, and South America. http://www.decc.gov.uk/assets/decc/11/meeting-energy-demand/heat/4805-future-heating-strategic-framework.pdf http://www.decc.gov.uk/assets/decc/11/meeting-energy-demand/renewable-energy/2167-uk-renewable-energy-roadmap.pdf estimates heat pump market at £120m for 20,000 units (£6000 per unit) without installation; the Ecoexperts suggest installed prices of pumps (£10,000), http://www.amaresearch.co.uk/Ground_Source_Pumps_12s.html A significant part of this growth comes from deployment heat pumps. http://www.decc.gov.uk/assets/decc/11/meeting-energy-demand/heat/4805-future-heating-strategic-framework.pdf. http://www.amaresearch.co.uk/Ground_Source_Pumps_12s.html http://www.amaresearch.co.uk/Ground_Source_Pumps_12s.html http://www.pikeresearch.com/newsroom/global-energy-storage-capacity-to-multiply-100-fold-by-2021 definition, are properties that built to exceed the 2009 International Energy Conservation Code by 15% Energy efficient homes, according to Pike Research’s http://www.pikeresearch.com/research/energy-efficient-homes. http://www.businesswire.com/news/home/20120709005497/en/Market-Energy-Efficiency-Retrofits-Commercial-Buildings-Double biomass boilers (£12,000) and solar thermal (£7000) per unit (domestic on a kilowatt-hour per square foot basis. Energy Research Partnership Technology Report, The future role for energy storage in the UK, June 2011 Energy Research Partnership Technology Pathways to 2020, March 2010 Heating and Hot Water Taskforce, Heating and Hot Water for Anaerobic Digestion’ ‘Anaerobic Digestion: Shared Goals’ document states that the ‘Vision DEFRA’s (level 2) DECC, 2050 Pathways, http://www.decc.gov.uk/en/content/cms/tackling/2050/2050.aspx Report on Renewable Energy Products in the UK – 2011, OSEC, business network Switzerland, Feb 2011. Installed price as for 2012 with a 10% reduction. Biogas: Global Markets for Anaerobic Digestion Equipment--Focus on North America, June 2011 BCC Research, Waste-Derived European Heat Pump Action Plan, Association, 2008

Current UK Market 2020 UK Market 2020 Global Market Value Key Future Export Regions

TABLE 2 TABLE OVERVIEW OF POTENTIAL MARKET SIZE KEY ELEMENTS PROPOSED INTELLIGENT ENERGY SYSTEM 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 31 ProPoSeD ForeSigHt iMPleMentation Plan 7.1 INTRODUCTION

Realisation of the significant economic scale up and development of more • Building on existing programmes benefit associated with the nascent sophisticated elements to support a and resources – in the early stages, market for intelligent energy systems fully integrated, interconnected and the Road Map seeks to build on will require the implementation of a well ‘intelligent’ system over the next 10 existing programmes and resources planned programme that brings together years. The Road Map assumes that to develop critical mass and market the right combination of technical, early potential for export opportunities confidence in order to leverage commercial and institutional activities to is available from 2014, with significant investment and procurement by ensure long term success over a 5-10 growth and capacity building of the Northern Ireland Executive, year time horizon. associated logistical capabilities from additional third party finance and 2018. future inward investment. Figure 4 provides a summary overview of a high level Road Map Key principles implicit in the Road Map • Collaboration between SMEs for a Foresight Implementation Plan, include: – success will require close identifying the key steps required in collaboration and cooperation • Export-led programme of work the development of sector leading between SMEs within the Province – early activities will be focused capability in intelligent energy systems. in order to realise the scale and on developing systems that meet The Foresight Implementation Plan depth of capability necessary for the needs of the region, but are represents an enabling framework delivery. Experience and best informed by intelligence relating which seeks to consolidate and build practice from existing Collaborative to their relevance to future export on existing activities and capabilities to Networks and supply chain initiatives opportunities. This means that realise critical mass, whilst providing a should be exploited as appropriate. bespoke projects that solely meet nucleus to facilitate successful future a local need/situation would not be • Programme of supporting and growth. It indicates a holistic approach given priority. enabling activities to realise to market development and exploitation, capacity building and next generation leveraging existing regional competitive • A business-led programme that R&D. advantage in the short term, whilst would seek the active involvement evolving new commercial capability and of the private sector wherever Steps in the Road Map have been know-how over a longer time horizon. appropriate. classified as core (those activities fundamental to realising the technical Early projects would deploy • A flexible framework – clear and commercial proof points for market technologies and solutions that are targets and milestones are required exploitation) and enabling (those close to market, supported by related immediately for the initial stages of activities required to facilitate the enabling actions to realise regional delivery (first 3 years) in order to development of an economic landscape market replication that will underpin gain early traction and to ensure that that supports market development). rapid commercialisation and subsequent fundamental capability and capacity Core activities in the short term are exports. is developed. However, in the focused around those key areas of medium to long term, the programme As described in Section 5.3, the Plan regional expertise and existing activity will need to be able to respond and will initially deliver the basic ‘building identified in Section 3.4. Further detail adapt to evolving market needs and blocks’ required for deployment of on each of the key steps is provided dynamics. integrated sustainable energy systems below. and micro grids, with subsequent

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 33 Page 34 Figure 4 ForeSigHt DeliVery Plan roaD MaP

PROFITING FROMSCIENCE WWW.MatriX-ni.org

2013 2018 2023

• Active drive for commercial exploitation • Secure resources & • Identify and select and export of proven launch. options for next solutions • Leading international • Identify priorities for generation projects, • Scale up of supply reference site and ‘quick wins’. and ‘value adds’ to chains and manufacture exporter of Intelligent • Put in place detailed existing projects of solutions for export Energy Systems and plans. • Exploit related markets • Scale up and increase professional services • Gather intelligence to commercial sophistication of underpin plans. opportunities. commercial demonstrations

CORE

Integrated Sustainable Integrated Buildings Feasibility Studies for Commercial Demonstration of Fully Business Plan Energy Reference Site Reference Site Large Scale Integrated Projects Integrated and Inter Connected Network

Scale Up/Next Generation Commercial Reference Sites

Map out Potential Develop Related Develop Prototyping/ Service Offerings, Commercial Models Develop Logistical Capability for Volume Export Markets Manufacturing e.g O&M and Call for Export Markets Capability Centres

ENABLING

Detailed 3 Year Review Delivery Review Delivery Review Delivery Delivery Plan Plan Plan Plan

Develop Market Intelligence and Broaden Scope of Market Intelligence and Relationships ‘Warm Up’ Early Export Markets with Additional Export Markets

Review and Revise Innovation and Skills Provision (Capacity Building)

Build Global Networks 7.2 KEY STEPS

CORE ACTIVITIES 2. Implementation, monitoring and aggregator/brokering models, and The key steps required for successful support of first round of commercial call centres. reference projects. It is assumed implementation should be focused This may include investigation of that these will be focused around around the identification of the financial support mechanisms to the deployment of microgrids most appropriate and highest value address the economic challenges with energy storage, followed by commercial demonstration projects for would-be generators who are projects demonstrating the viability that best fit with the future needs and situated on single phase lines (which of the integration of buildings with challenges of the global market place, require upgrading to triple phase), renewables and storage. New and priority export markets. Key steps for example through spreading business and commercial models will for Years 1-5 include: the cost over time. This currently need to be developed that enable affects approximately 50% of rural 1. Prepare a detailed Business Plan distributed generation and storage customers, and could enable the to define strategic objectives to work cost effectively. In particular connection of significant quantities of and to validate priorities for early this needs to find a market-based currently stranded resource. commercial projects. This will mechanism that can support/reward require the early development of the costs of developing, owning and 6. Establishment of early export robust market intelligence (relating operating efficient energy generation capability, such as contract to both current regional markets and storage facilities. This is development and negotiation, small needs and identification of the scale particularly important in helping to scale prototyping/manufacturing, or and value of replication potential), reduce the concern that investment system design for local conditions. and screening of potential project in renewable energy will have a In this first phase of market opportunities. This should identify negative impact on consumers’ development, a portfolio of early ‘quick wins’ for commercial energy bills. exploitation, alongside a plan for demonstration projects will be required longer-term aims and objectives, 3. Deployment of larger scale, and that addresses the key challenges and a timeline for their development. more complex projects, such as and issues facing the development of Examples of potential existing integration of offshore energy intelligent systems. It is important that projects that have the potential for generation. these are well supported to ensure successful demonstration of the relatively rapid deployment and might 4. Development and fast tracking individual projects, and to build up a be considered for early inclusion of next generation technology complementary spread of technology, are presented in Table 3, Appendix and know-how to improve the skills and know-how, such that a fully 1. The Business Plan will also performance of first generation regionally integrated system can be include definition of relationships systems. and interactions with other key demonstrated by 2018. These will be stakeholders and assets, such as 5. Development of related and critical milestones in developing the QUESTOR, NISP and the proposed complementary commercial international credibility and profile of new Innovation Centre. offerings, e.g. after sales service the region, and realising early export contracts, ESCO models, opportunities (first volume exports

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 35 should be achievable by 2014/15). • Ongoing development of market business management, investor intelligence and networking with readiness, etc). Beyond this first phase of activity, target export markets to provide vital further feasibility studies will be required • Development of long term strategic insights to inform the programme to develop projects that demonstrate an plans with schools, universities and of work, and to facilitate early increasing scale and sophistication in colleges, and closer links between market access. This should include intelligent energy systems (including, for academia and local businesses, to identification of opportunities to form example, the next generation capabilities ensure that skills provision, training international strategic relationships identified in Section 5.3). It is and research in sustainable energy to address specific gaps in anticipated that these will be developed is unified, prioritised and meets the regional technology/know-how, and and deployed from about year changing needs of industry. associated opportunities for inward 2017/18, but the nature and scale of investment where appropriate. • Concurrent efforts to raise public these activities will need to be defined awareness to ensure support for once the first outputs and market • Building of partnerships and community based schemes. response are known in more detail. It relationships with key stakeholders is anticipated that a key requirement (e.g. NIE, SONI and the Utility will be the scale up of manufacturing Regulator), and networks with other and logistical capability to support the regions and agencies. growing volume of export opportunities • Facilitation of capacity building that should be available from 2018. requiring interaction across all the In parallel, as the markets mature, key innovation intermediaries, skills appropriate service offerings will need agencies and providers of finance to be developed to capture longer- in the region to ensure parallel term, high value market opportunities evolution of the capacity of the associated with after sales support. regional supply chain to meet the Enabling Activities needs of the developing sector. This will include skills right across Key steps relate to those activities the value chain, (e.g. technology required to inform and manage the development, project management, overall programme of work. Specifically commercial/business management, they include: O&M, and associated professional • Early definition of a detailed three services) as well as internal to year Work Plan, including the individual businesses (e.g. outputs from the Business Plan identified above, but also taking into account all other related activities for successful implementation. Recognising the dynamic and immature nature of this market sector, it is suggested that this plan be reviewed in detail every three years.

PAGE 36 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 7.3 WHAT DOES SUCCESS LOOK LIKE?

If the Vision is successfully and cost • Strong communication across effectively implemented, by 2023 all levels of value chain to raise Northern Ireland should have an active aspirations and awareness of the and intelligent energy network, with scale and attractiveness of market large scale integration of renewable opportunities. generation within the system (including • Effective international networking. onshore and offshore resources), and embedded energy storage. NI will be • Ability to attract required risk capital, the ﬁrst location in the UK to offer real ideally from the angel sector. time pricing to its customers. • Effective capacity building to ensure The academic base will be developing the development of sustained a strong pipeline of next generation, pipeline of human and intellectual and market-led, intellectual assets, and capital, and to close the gap providing best in class skills training. between research output and Multiple regional players will be directly commercialisation. engaged in the market, employing new business models and commercial vehicles. Maturing supply chains will be in place with signiﬁcant manufacturing of equipment and balance of plant. Northern Ireland will be exporting specialist technology, services and know-how to overseas markets and beginning to put in place large interconnected regional and national infrastructure projects. Critical success factors for the implementation of the Vision include: • Strong and sustained leadership and support from the Government and associated agencies. • Implementation of effective and appropriate regulatory structures. • Alignment between, and clarity of, roles and responsibilities amongst the key stakeholders with responsibility for delivery.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 37 ConCluDing reCoMMenDationS 8.1 RECOMMENDATIONS

An opportunity has been identified for Foresight Implementation Plan. These Northern Ireland to: Recommendations have been informed by examples of international best • Take a leadership role in the practice, defined by relevant case development of distributed energy studies. solutions and their integration into an intelligent energy system that optimises efficiencies through use of local resources, and participation of multiple stakeholders; • Provide an International Reference Site to demonstrate the commercial scalability of these solutions to the global market. This will not only provide significant export opportunities to Northern Irish businesses, but will simultaneously improve the sustainability, security and affordability of the regional energy supply. As such, it is closely aligned with Priority 1 of the Programme for Government 2011-2015: ‘Growing a Sustainable Economy and Investing in the Future’.52 Successful delivery of the Road Map and associated actions will be dependent on a number of critical issues being addressed. Specifically, these relate to the establishment of an appropriate delivery vehicle and associated governance structure, as well as addressing fundamental institutional issues to support delivery. Five key Recommendations are set out below which are considered to be fundamental pre-requisites for the future delivery of the MATRIX

52 Northern Ireland Executive, Programme for Government 2011-2015; http://www.northernireland.gov. uk/pfg-2011-2015-ﬁnal-report.pdf.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 39 8.2 RECOMMENDATION 1

IMMEDIATE KICK OFF OF THE MATRIX FORESIGHT IMPLEMENTATION PLAN

Implementation resources should be put in place to ensure that momentum from the current MATRIX SEHP is maintained, and the economic beneﬁts are captured. Key to implementation will be strong leadership and the establishment of an appropriate management and governance structure that is able to consolidate and build on existing resources, programmes and capabilities wherever possible. A proposed governance structure is presented below:

NI Executive

MATRIX Panel DETI Minister

Implementation DETI SEIDWG Group

Delivery Invest NI Team

It is recommended that the following actions be undertaken: • The current MATRIX SEHP panel would be stood down and a revised implementation panel should be convened (the “Intelligent Energy System Implementation Group”). This Implementation Group should provide ongoing overview of, and guidance to, the future programme of work (See Scottish Government Case Study, specifically the reference to FREDS). It is suggested that the Group meet on a quarterly basis to: - Provide ongoing thought leadership to the overall Plan; - Ensure alignment and buy in of key institutional and market stakeholders, e.g. NIAUR, EirGrid, NIE, & SONI; - Review progress of the Foresight Implementation Plan relative to plan; - Inform revisions to the future programme of work to reflect market evolution over time; - Provide feedback on the efficacy and ‘value for money’ of Government policy in supporting delivery, e.g. fiscal mechanisms; - Input into an Annual Report on progress.

PAGE 40 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG • A revised Terms of Reference • Recruitment of a dynamic Delivery - Work closely with Invest NI, should be developed by and for the Team, responsible for the day to specifically in the development of Implementation Group, facilitated by day management of the MATRIX market intelligence and realisation DETI, including clear definition of the Foresight Implementation Plan, of export potential, innovation future roles and responsibilities of reporting into the Implementation capacity and access to finance each party. This is the approach that Group. Its key role will be to ensure (see Recommendations 3 and 5); has been adopted by the Connected that synergies across individual - Develop international networks Health Project Board, whereby the projects and activities are captured and strategic partnerships public sector agencies represented and exploited for the benefit of as appropriate to need (see carry accountability, whilst the regional sector as a whole, Recommendation 4). industry participants acknowledge and specifically to optimise the responsibility for delivery of specific commercial outcomes. It will be It will be important to ensure that the activities. As part of this process, responsible for galvanising the Delivery Team is led by commercially an appropriate portfolio of KPIs strategy, setting objectives and experienced, credible and respected should be developed to reflect the targets, apportioning responsibilities resources within the business key elements of the Vision Statement and accountability, measuring community, with strong international relating to growth of exports, cost progress against KPI’s, and connectivity. The Head of the Delivery and sustainability of the regional reporting to stakeholders. The Team needs to be someone with a energy infrastructure. Delivery Team should also undertake substantive track record and who to: has the personal credibility to talk to • The constituency of the Ministers, senior officials and industry. Implementation Group should - Develop the 3 Year Work Plan remain business led, and retain including early completion of It is anticipated that industry will continuity with the MATRIX SEHP, Feasibility Studies for portfolio contribute its own resources to the but also include direct and senior of commercial demonstrator running of the Implementation Group. It representation from: projects to ensure sufficient is recommended that early discussions critical mass and early market are held with Invest NI to explore - Government (preferably an traction; potential sources of funding for the individual nominated by the dedicated Delivery Team. Previous Minister and capable of speaking - Facilitate key activities across all MATRIX initiatives have exploited on behalf of all departments actors as appropriate to ensure various funding sources, including the of relevance to energy and the success of the Plan; Collaborative Network Programme economic development); - Liaise with key stakeholders on (e.g. Digital NI 2020, Glantek, Global - Invest NI; behalf of the Plan, e.g. Energy Wind Alliance and Global Maritime), Skills Network, Universities and and thematic calls (such as Advanced - The academic community in Regional Colleges, Industry and Materials (Plastics & Polymers) and Northern Ireland; trade associations; Connected Health Alliance). - The Northern Ireland electricity T&D business; - The Utility Regulator’s office.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 41 CASE STUDY 1

– SCOTTISH GOVERNMENT: INDUSTRY LED POLICY TO REALISE ECONOMIC DEVELOPMENT OF REGIONAL RESOURCE BASE (WAVE AND TIDAL POWER)

Scotland is currently recognised 2. Technology specific sub groups, - Approval of the Beauly to Denny as the leading global region in the co-chaired by a senior industry transmission line upgrade development of wave and tidal power. specialist and senior civil servant, and campaigning to change A number of factors have contributed and composed of a range of transmission connection and use to this success, including the strength specialists from industry and of system charges so that remote of regional natural resources, but there academia, are convened when rural areas were no longer is considerable evidence to suggest necessary to produce reports for the penalised; the actions of Scottish politicians and main forum. - The 2010 Marine (Scotland) policy makers have been particularly The balance of power lies with the Act which created a new significant. The First Minister and his sector representatives. Once the main legislative framework for the ministers have provided strong and FREDS forum endorses a report, there marine environment, including vocal leadership in support of the is a moral obligation on the Government simplification of the consents sector on the international stage, and to address the recommendations. process. have demonstrated a strong and close Reports and minutes are publicly relationship with industry. Key Insights available, providing a transparent record In particular, the Forum for Renewable of Government progress. Scottish Ministers (past and present) Energy Developments (FREDS) has have demonstrated their commitment Recommendations developed by enabled industry to communicate key to developing a wave and tidal power the FREDS Marine Energy Group, barriers to development/deployment sector in their willingness to; and progressed by the Government and ensured that Government used all included: creating market pull and 1. Engage with the sector through the possible levers to attempt to ease those reducing financial risk, developing a FREDS; barriers: supportive planning and regulatory 2. Adopt the recommendations of sub 1. The main forum, chaired by the framework and providing a route to group reports and work to implement Energy Minister, composed of senior market; and developing academic, skills measures to deliver against those industrial figures, and facilitated by and manufacturing capacity. recommendations; Government officials, meets on a Specific responses by the Government regular basis; 3. Challenge UK Government in pursuit included: of their objective of developing the - Introduction of a Marine Supply marine sector; Obligation as part of the 4. Identify pockets of available cash Renewable Obligation Scotland within a constrained budget and be (despite opposition from Defra); prepared to allocate it in support of strategic recommendations.

PAGE 42 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 8.3 RECOMMENDATION 2

LEADERSHIP AND COMMUNICATION

Leadership from, and alignment of, all • Key policies across all Government Key Stakeholders key stakeholders is required to realise departments are aligned to facilitate • DETI the step change necessary to deliver implementation of the MATRIX the Vision (including Government, the Foresight Implementation Plan, • Implementation Group Utility Regulator and network operators). e.g. working with the DOE over • Invest NI Early and sustained commitment is issues relating to planning, waste required to provide market certainty and licensing, close collaboration • DOE/DFP/DARD/DEL confidence for the supply chain and with DEL and Invest NI to ensure • SEIDWG investors alike, and to raise the profile of that this area is directly targeted the regional sector on the national and for skills development and R&D • Innovation Intermediaries, such as international stage. funding; and cooperation with TSB, QUESTOR, CASE, NIACE, DARD over regulations associated NISP, ECIT In parallel, effective communication with production of bioenergy in the between all actors operating within • Collaborative Networks agricultural sector. the sector is necessary to ensure that • Universities and FE Colleges. all parties are adequately informed, • Opportunities to take advantage and awareness of appropriate market of public procurement models intelligence is high. are identified as appropriate. For example, a specific prospect has Specifically it is recommended that been identified for development of DETI and the Implementation Group a future Small Business Research work together closely to ensure that: Initiative (SBRI) competition.53 • Appropriate mechanisms and • An Annual Report on the protocols are put in place to optimise performance of the Foresight relevant communications between all Implementation Plan is made publicly levels of the sector (public, private, available. academia and NfP). Participation of a senior representative • The current objectives of the SEF from Government within the and ongoing work relating to the Implementation Group would definition of the long-term energy mix significantly facilitate the realisation of (2030-2050) are reflected within the these recommendations. Foresight Implementation Plan.

53 These are procurement based initiatives in which a broad range of companies are engaged in competitions for ideas to solve speciﬁc government challenges, and which result directly in fully funded development contracts.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 43 8.4 RECOMMENDATION 3

INNOVATION SUPPORT FOR LONG TERM CAPACITY BUILDING

Sustainable growth of the MATRIX Innovation Centre for the Green • Facilitation of effective Foresight Implementation Plan in Economy. This would provide communication between Industry the medium to long term will be a coordinated approach in the and academia to coordinate dependent on increased capacity and identification and development of and target longer-term research successful exploitation of the current collaborative projects and potentially requirements to meet the needs of regional innovation base. Evidence to broaden the base of parties involved. market-led technology development. date indicates relatively low levels of This should incorporate the work • Review of current provision of successful commercial exploitation already achieved by the FE Colleges support programmes to identify within the sustainable energy sector, in knowledge transfer and employer/ opportunities for improving rates of and reliance on imported technology industry engagement (e.g. via the uptake by SMEs within the sector, (and to some extent supply chains). InnoTech Centre). and subsequent outcomes. This may The current regional supply chain is require tailoring of support to make it • Explore the potential to develop dominated by micro SMEs with low more appropriate and accessible to a more ambitious collaborative levels of activity and investment in SMEs, including for example: more network model, e.g. seeking to innovation. Applied R,D&D activities substantial interventions; support for provide more centralised support will need to be further encouraged the development of service offerings, services to SMEs through the and supported, and exploitation of new business models, internal creation of a virtual corporation to indigenous intellectual assets (current commercial capacity building; and generate economies of scale and and future) significantly improved. technology transfer (see Tekes case accelerate internationalisation (see It is recommended that the study, and Recommendation 4). Mondragon case study). Implementation Group/Delivery Team • Close collaboration with the Key Stakeholders work with the appropriate agencies to Department of Education and the facilitate the following actions: • DETI Department of Employment and • Early ‘mining’ of the existing regional Learning to ensure that future skills • Invest NI IP portfolio to identify potential requirements are met through • Innovation Intermediaries, such as assets for exploitation. broad education (schools) and TSB, QUESTOR, CASE, NIACE, more specific training (FE Colleges, • Close and joined up working NISP, ECIT Energy Skills Network) and are between the Delivery Team and linked to market and employment • Collaborative Networks regional Business Schools, Further opportunities. Education Colleges, technology • Universities and FE Colleges. transfer agencies and innovation intermediaries – including QUESTOR, CASE, Invest NI, Ulster Office of Innovation, QUB Enterprise Development, and the proposed

PAGE 44 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG CASE STUDY 2

TEKES FINLAND: SUCCESSFUL INNOVATION PROGRAMMES FOR SMES IN SUPPORT OF EXPORT AND GROWTH

With an annual budget of £500m, funded project therefore does not By June 2012, 93 companies had Tekes’ principal aim is to ‘Promote need to produce a directly marketable benefitted under the Young Innovative the development of industry and product, but must generate know-how Companies scheme. Overall, in 2011, services by means of technology and that can be utilised in the long term. Tekes provided £90m in funding for innovation’. Two thirds of total funding companies that were established for < 6 Young Innovative Companies is allocated to enterprise, with 33% of years. The funding was granted to 420 this going to start-ups; 33% to SMEs Specific support is available for start companies, from >1000. <500 employees, and 33% to larger ups with the potential for strong Key Insights companies. international growth. Eligibility criteria are both demanding and focused. The Tekes is a successful and dynamic Fundamentally Tekes supports risk company must be: on the threshold of institution with a culture of risk taking taking, and their programmes are international growth; have products, and a rapidly evolving portfolio of structured to reflect this. Within its solutions or services that have support mechanisms to support funding allocation, considerable sustainable competitive advantage changing market needs. It has taken emphasis is put on supporting a number and high growth potential; have a a pragmatic view of what constitutes of less traditional but key business credible growth plan and committed innovation, including innovation in new areas. These include: and experienced management team; or improved service offerings, and - Novel business models; have been in existence for less than six developments in processes that can years and invest significantly in R&D. deliver competitive benefit. Specific - Innovation in service solutions; Significant amounts of funding (75% and substantial grant funding is - Digitisation of business of eligible costs) are provided in three available to start ups. Existing SMEs processes. stages: are mainly supported through activities that encourage networking and Themed programmes are defined on the 1. Investment in Planning (£40,000) collaboration, as well as technology basis of ‘lead markets’, such as ‘natural to fund the provision of high level adoption and transfer. resources and sustainable economy’ expert and information services, and fundamentally provide platforms for e.g. competitor analysis or collaboration between academia, SMEs market surveys that allow a new and industry, with 50% of funding updated business plan to be reactive and allocated to unsolicited developed. projects. Loans of up to 70% are also 2. Planning for Growth (£160,000) available. These are convertible to a to get the company on a grant if the project is unsuccessful, and growth path and demonstrate otherwise repaid direct to the Finnish competitiveness on the Treasury. Tekes has no vested interest. international market, e.g. through Programmes to encourage more starting international sales and established SMEs to innovate are building distribution channels. focused around technology adoption 3. Accelerating Growth (£600,000) and tech transfer. For example, The to accelerate and enhance the Innovation Mill programme transfers growth and internationalisation unexploited IP from Nokia to SMEs of the company’s operations, and new start ups for commercial e.g. through creating new sales development. channels and for strengthening Funding for SMEs incorporates a the company’s internal broad interpretation of innovation, infrastructure. These companies including, for example, researching must also have significant the international market for a product external funding, typically from or service offering; or how improved private equity investors. processes can reduce costs and international competitiveness. Each

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 45 8.5 RECOMMENDATION 4

BUILD NETWORKS WITH OTHER KEY REGIONS AND AGENCIES

Northern Ireland’s success in • It is reported that the TSB is in • Engagement with Enterprise Europe addressing near term deployment the development phase for a 2014 Network will help SMEs take needs, or longer term export aspirations programme focused on Community advantage of the forthcoming EU will be enhanced through greater Energy demonstration projects. Horizon 2020 €80 billion programme cooperation with international partners. This initiative could provide an early for research and innovation (2014 This Intelligent Energy System and highly relevant opportunity to 2020) which will amalgamate and proposition should be used as the engage with the TSB for the direct coordinate all previous research basis for clearly defining the strengths benefit of the MATRIX Foresight funding provided under FP7 and CIP of Northern Ireland relative to other Implementation Plan. programmes. Affordable renewable neighbouring regions (specifically energy will be a key focus area.55 • The Energy Technology Institute other regions of the UK, Ireland, has recently launched a Smart Key Stakeholders and Europe), and engaging with System and Heat Programme which third parties to share know-how, and • Invest NI aims to ‘design a first of its kind develop future projects and economic Smart Energy System in the UK’. • Academic base opportunities. It is recommended that The emphasis is on system level the Delivery Team seeks to complete • Innovation Intermediaries, e.g. performance, based on the provision this analysis and identify key strategic QUESTOR, CASE, NIACE, NISP, of energy services and integrated international partnerships. These could ECIT products to consumers in domestic be with Universities, public sector and commercial buildings. • Priority agencies such as EU, agencies/programmes or Industry Enterprise Ireland, and TSB. (e.g. SmartGridsGB and similar trade • There are numerous relevant groupings), as appropriate, to provide industry forums and networks that the complementary skills, know-how or host in depth discussions on industry access to market required. development and policy change in this emerging sector, including The region needs to significantly the TSB’s Knowledge Transfer improve its level of activity and Networks, ‘Energy Generation connectivity with international public and Supply’ and ‘Modern Built sector agencies, including the Environment’.54 Enterprise Europe Network, the Technology Strategy Board and Energy Technology Institute. For example, a number of active opportunities have presented themselves in the course of the preparation of this report:

55 http://ec.europa.eu/research/horizon2020/index_ 54 https://connect.innovateuk.org/web/guest/networks en.cfm?pg=h2020

PAGE 46 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 8.6 RECOMMENDATION 5

DEVELOPMENT OF INNOVATIVE FINANCING MODELS

Access to finance will be an important be developed to provide risk factor for the success of the MATRIX capital to ‘pump prime’ commercial Foresight Implementation Plan. demonstration projects, leveraging Significant, albeit disparate, sources are private capital where appropriate. available across Northern Ireland, but Various funding models exist, their impact on the sustainable energy including Ofgem’s LCNF, Mutual sector to date has been low. Energy, Carbon Trust Enterprises Ltd, Tekes’ Loan Programme, It is recommended that the SEHP/ and Mondragon Corporation. Delivery Team work with: These should be reviewed and • Invest NI to engage with existing used as appropriate as the basis finance providers and explore for developing an appropriate options to restructure support, mechanism for Northern Ireland. or access additional sources as Key Stakeholders appropriate to provide more focused and accessible innovation services • Invest NI for the sector. This may include ‘ring • Innovation Intermediaries fencing’ a specific innovation (pre and providers of finance, e.g. commercial) fund for the MATRIX QUESTOR, CASE, NIACE, Foresight Implementation Plan. NISP, ECIT, E-Synergy, DETI, The scale of funding required will TSB, European Commission. be in large part dependent on the portfolio of IP identified during the ‘mining’ exercise undertaken under Recommendation 3. • For projects that are close to market, public sector procurement models are considered to be an effective source of finance (Recommendation 1). However, where there is a higher associated level of technical and commercial risk, it is recommended that options for an alternative financing vehicle

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 47 CASE STUDY 3

MONDRAGON CORPORATION (MCC), SPAIN: HOW A COOPERATIVE MODEL CAN SUPPORT THE GROWTH AND INTERNATIONALISATION OF SMES

Formed in 1955, Mondragon Mondragon principles are still in place. The Knowledge division includes Corporation is now the seventh largest Each individual firm remains, legally businesses that provide services to business group in Spain with an annual and, to a large degree, functionally, an MCC companies to enable them to turnover in 2011 of 15 billion. It is made autonomous unit, whilst at the same achieve growth through innovation and up of 281 co-operatives and companies, time benefiting from the availability of internationalisation: with 83,000 workers. centralised support structures that 1. A network of 14 technology centres are in place (including financial and Background and R&D units providing classic innovation support). technology led research activities; Early growth of the initial Mondragon The Mondragon Corporation Co-operative Movement is attributed to 2. Mondragon Innovation & Knowledge the establishment of the Caja Laboral Today the Mondragon Corporation carries out research in four Popular, its own bank. The bank offered is organized into four groups: principle areas: open business, normal banking services and supported Finance (including the Caja Laboral entrepreneurship, internationalisation the development of co-operatives with deposits of 18bn); Industrial; and socially responsible business through the provision of capital funding, Retail (including supermarkets and models; including loans and services for SMEs agricultural and food co-operatives) and 3. ISEA, a Centre of Excellence for that would normally only be available Knowledge. Finance and Knowledge improving the competitiveness of to larger companies. It also fulfilled divisions effectively provide centralised the Services Sector which focuses another key support role through its services to the member companies in on technological development, “Entrepreneurial Division” providing the other divisions. innovation and entrepreneurship; extensive management and technical Internationalisation and innovation lie at consultancy to new and expanding 4. Business acceleration centre, a the heart of the Corporation’s corporate ventures. specialist organisation designed strategy for 2013-16. This is exemplified to accelerate the gestation and By the early 1980s, the organisational by the industrial division. During 2011, establishment of new businesses; structure of independent co-operatives, 66% of its sales of 5.9bn were from linked by the Caja Laboral, was exports; the organisation now has 94 5. LKS group, professional services under pressure from larger more overseas operations employing some businesses employing over 1,000 competitive markets and Spain’s entry 15,162 people. Over 20% of Industrial people and providing services into the European Union. In 1991, the Divisions 2011 sales were generated such as management consultancy, Mondragon group responded with from products or services that did not technical consultancy, lawyers, a special brand of legal-structural exist five years earlier. architects and engineers, property unification, gathering all the enterprises and land management and industrial and support organisations under one design. corporate roof, the MCC. Although the MCC now appears to be much more like a conventional conglomerate, key In addition, the University of Mondragon has a strong emphasis on developing entrepreneurial skills, and maintains close relations with the individual businesses. Although there is no obligation, about 40 - 50% of the graduates (in particular within Engineering) go on to work for the member companies. Key Insights The Mondragon model has been highly successful in providing a supportive and innovative ecosystem in which the individual member businesses have access to centralised support services and other benefits that would typically be associated with large corporate entities, whilst retaining their autonomy. This has resulted in significantly improved rates of innovation and business growth, particularly in relation to export markets.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 49 aPPenDiX

Purpose of demonstration There are approximately 26,000 farms in Northern Ireland, cant volumes of slurry for which alternative generating signifi disposal routes (to current land application) are being cant depth of regional technical sought. There is signifi capability in AD. The project would seek to exploit these resources and build on existing know-how to commercially demonstrate operation of farm scale AD using slurry the cost effective as the primary feedstock (non food crops). Once a system is commercially proven it will be readily standardised and replicable for export. The use of automated controls to measure and communicate line voltage in real time, and vary output of distributed is key to ensuring that the network generation accordingly, does not need to accommodate maximum generation output at all times. This project would demonstrate use of controls with a variety of generation technologies, incorporating ‘fail safe’ devices for network protection. cient storage systems Development and demonstration of effi at medium and small scales, initially focusing on those that are near to market, such as compressed air where feasibility work has already been undertaken in the region. that are currently at concept stage should be Technologies (such as phase change materials included in the longer-term ow batteries). at building scale, and ionic fl Focus should be, not only on two-way electricity storage energy storage, where but also on one way (inter-sectoral) stored energy is used in heating and transport applications. Objective is commercial development of storage + integrated renewables, which exploit current regional resources and wind and micro renewables), capabilities (e.g. bioenergy, including validation of viable, novel business models.

Current Status (with est. TRL levels) Glantek Alliance is in the process of developing a project proposal for 500 kW AD system, and applying for funding from Invest NI. Future potential to build on this to address smaller scale and TRL ‘smart’ systems, down to 30 kW. 5-6. NIE is working with QUB to investigate use of controls to allow connection small-scale wind generation to the local 11kV network in situations where the network does not allow full export at all times. TRL 5-6. c future Potential to develop speciﬁ projects to build on this knowhow and c applications. demonstrate in speciﬁ Proposal has been developed by the Energy Storage Network with funding applied for from Invest NI. TRL 6-7. Proposal for 100% funding submitted to DECC by B9 Energy in association with RES. TRL 6. If successful these projects could provide critical building blocks for larger scale deployment projects, such as offshore integration.

Demonstration of an optimised closed loop ‘smart’ system with nutrient recycling and energy storage, integrated with the grid using demand response nancial systems to optimise fi returns. Business models will be developed to ensure a community led approach. Incorporation of advanced controls to allow response to grid status (via storage or adjustment of output) in real time. Large scale installation at linking an AD Bombardier, plant (based on waste) to a compressed air energy storage system. Integrated onshore wind cient farm and highly effi compressed air energy storage system at site in Co Tyrone. Key Elements Farm Scale AD/ Micro Grid (< 500 kW) Advanced Controls Energy Storage Project These are example projects that have been identifi ed through consultation with the MATRIX SEHP. Other projects should be identifi ed and assessed during Other projects should be identifi SEHP. ed through consultation with the MATRIX These are example projects that have been identifi TABLE 3 TABLE PROJECTS FOR COMMERCIAL DEMONSTRATION* POTENTIAL EARLY * preparation of the Business Plan (see Section 6.2).

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 51 Purpose of demonstration planning, deployment and operation of offshore The effective renewable assets requires access to a significant volume of meteorological, geophysical, environmental and benthic data model and manage the resources assets. to effectively A significant volume of this data is common to all stakeholders. It is proposed that there a need for common repository to ‘host’ a centralised and consolidated archive of these data, making it accessible to businesses on basis. a cost effective Such a Centre of Excellence in Northern Ireland would provide international credibility and a platform for the development of related commercial services, e.g. modelling and interpretation, development of new data platforms. Currently all parties in the network (generators, aggregators, and DNO/TSO) are using their own bespoke SCADA systems. The use of a common language ‘open source protocols’ is required to overcome the issue of inter facilitate the rapid roll out of intelligent control operability, systems and improve risk management. In the short term this is of specific relevance to automated control of distributed generation and energy storage systems, and to enable short-term system balancing. This will require the use of sophisticated software management tools and geospatial meteorological data to levels of the transmission and link control stations at different distribution system, in order to understand and respond system requirements in real time. It will also include the development of viable models for ownership and payment of shared data.

Current Status (with est. TRL levels) An ISIS consortium has been formed, spearheaded by Mainstream Renewables. Early discussions are in place with Invest NI regarding financial support. Potential regional parties might include: QUB DONG, McLaughlin & Harvey, (Power Engineering and EIA), UU (Marine Planning), Pure Marine. If successful this initiative would provide a conduit for future projects to increase deployment and grid integration of offshore renewables. No firm proposal yet developed. Anticipated to require a 3-5 year project that could involve multiple regional players, including regional renewable TRL developers, NIE, QUB, and ECIT. 4-5. Development of a commercial Centre of Excellence in Northern Ireland to host ISIS. Demonstration of the operation of an open source system across an integrated system, including generator, operator and DNO. Definition of the commercial model for wider roll out (service provision). Development of supporting software and modelling capability for data analytics for decision support. Demonstration of data security and protection (see below). Key Elements Integrated Sea Information System (ISIS) Open Source Protocol for Data Communication Project

PAGE 52 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Purpose of demonstration Security of data within intelligent energy systems is be credible, any concern to all users of the system. To systems developed need to acknowledge this and have appropriate safeguards embedded within them. Northern Ireland has strong regional capability in the development of such solutions via CSIT (ECIT). This is of direct relevance to the development open source protocols (see above). There are 750,000 domestic homes in Northern Ireland with an average annual bill of £2k. Assuming a potential for 25% energy efficiency improvements suggests a value of c. £375 m pa that could be recovered. 92,000 homes are owned by the public sector and would sensibly form basis for The requirements a significant commercial demonstrator. of the Energy Efficiency Directive will include a 3% year on year reduction in the energy consumption of regions commercial building stock. This project would represent an opportunity for commercial demonstration using regional whilst at the same time directly contributing to capability, the achievement of Government policy and international targets. Creative public sector procurement could be used to catalyse the project, e.g. exploitation of sustainable procurement by the Housing Executive. This asset would have the potential to demonstrate appropriate mechanisms and solutions for the grid integration renewables as these resources become available of offshore for exploitation.

Current Status (with est. TRL levels) No firm proposal yet developed. CSIT has developed a set of guiding principles for delivering a coherent Smart Grid security strategy that could be used as the basis for developing a specific project proposal. Potential to develop specific future projects to build on this knowhow and demonstrate in specific commercial applications. Glen Dimplex currently undertaking early trials of installation energy storage and smart systems in 150 homes. TRL 9. There is potential to develop larger more ambitious projects that could include Housing Associations, regional equipment manufacturers/suppliers, local contractors for installation, NIE and SONI. Currently seeking funding via EU FP7 applications. Industry partners include JP Kenny & Graham. Alstom, SKF, Research partners include Fraunhofer and the Hydraulic Maritime Research Centre (Cork). TRL 6. Demonstration of appropriate security controls for data management systems, in particular to deal with vulnerability of remote systems. Commercial demonstration of large scale upgrading and refurbishment of public sector housing stock using innovative energy efficiency, micro renewables and smart monitoring systems. A 3MW tidal array commercial demonstration. Key Elements System Security for Data Management Public Sector Housing Retrofit Commercial Tidal Demonstrator (EnTERNI) Project

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 53 Purpose of demonstration The technology will deliver highly efficient conversion of waste biomass to energy with output in the form of high with recovery of other valuable quality heat and/ or power, resources (carbon). The energy can be used on site and exported to the grid. An electricity storage function is available via the sub process for the generation and compression of liquid oxygen. Connection to the intelligent grid will allow optimisation of and demonstrate storage/export function of the technology, technical and commercial viability of a bioenergy system with potential for use at multiple scales, using a variety of waste feedstocks, including poultry litter. Current Status (with est. TRL levels) Ltd is finalising Cleanfields Technologies a project plan to deliver the commercial demonstration of an integrated bioenergy solution with Supercritical Water Oxidation (SCWO) as the core biomass conversion technology. The project is being supported by the Mechanical engineering department (QUB) and the proposed CASE centre, together with potential investment from private companies. TRL 7-8. Commercial demonstration of an advanced bioenergy system utilising waste feedstock such as sewage sludge and poultry litter. This will be initially deployed as a 1MW unit for distributed generation, with potential for scale up to 10 MW. Key Elements Bioenergy with Carbon Capture Project

PAGE 54 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG

MATRIX Report: Vol 10. February 2013

SUSTAINABLE ENERGY HORIZON PANEL REPORT

ANNEX 1 LITERATURE REVIEW INSIGHTS REPORT

Prepared for MATRIX by: ContentS

1 4

INTROduCTION aNd METhOdOlOGy 4 � IMPlICaTIONS FOR TEChNOlOGy aNd CaPabIlITy MaPPING 20 2 5 OvERvIEw OF REPORTS 6 aPPENdIx 1: lIST OF PublICaTIONS 22 3

INSIGhTS 8 3.1 � Defining Characteristics 9 3.2 � Key Drivers and regulations 10 3.3 � existing Capability 11 3.4 � local resource availability and Predicted Deployment 14 3.5 � global Market opportunities (gb, roi and international) 16 3.6 � Key growth Sectors 18

iMPortant notiCe

Whilst reasonable steps have been taken to ensure that the information contained within this Report is correct, you should be aware that the information within it may be incomplete, inaccurate or may have become out of date. Accordingly, the MATRIX SEHP makes no warranties or representations of any kind as to the content of this Report or its accuracy and, to the maximum extent permitted by law, accept no liability whatsoever for the same including, without limit, for direct, indirect or consequential loss, business interruption, loss of profits, production, contracts, goodwill or anticipated savings. Any person making use of this Report does so at their own risk. Page 2 PROFITING FROM SCIENCE www.Matrix-ni.org GLOSSARY OF TERMS

AD ...... Anaerobic digestion AFBI ...... Agri-Food and Biosciences Institute DARD ...... Department of Agriculture and Rural Development DECC ...... Department of Energy & Climate Change DEL ...... Department for Employment and Learning DETI ...... Department of Enterprise Trade and Investment DOE ...... Department of the Environment EPSRC ...... Engineering and Physical Sciences Research Council FDI ...... Foreign direct investment FE ...... Further education FIT CfD ...... Feed-in-tariff with contracts for difference GVA ...... Gross Value Added NIAUR ...... Northern Ireland Authority for Utility Regulation NIE ...... Northern Ireland Electricity NIRHI ...... Northern Ireland Renewable Heat Incentive NIRO ...... Northern Ireland Renewables Obligation NISP ...... Northern Ireland Science Park O&M ...... Operation and maintenance PV ...... Photovoltaics (solar) QUB ...... Queen’s University Belfast QUESTOR ...... Industry-led multi-disciplinary research centre at QUB RoI ...... Republic of Ireland SEAI ...... Sustainable Energy Authority of Ireland SEF ...... Northern Ireland Strategic Energy Framework SEHP ...... MATRIX Sustainable Energy Horizon Panel SEIDWG ...... Sustainable Energy Interdepartmental Working Group SEM ...... Single electricity market SME ...... Small and medium-sized enterprise SONI ...... System Operator for Northern Ireland SRC ...... Short rotation coppice STEM ...... Science, technology, engineering and mathematics UU ...... University of Ulster

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 3 introDuCtion anD MetHoDology 1.1 INTRODUCTION AND METHODOLOGY

MATRIX, the Northern Ireland Science Significant resources have been b. Market opportunities created by Industry Panel, is an expert advisory committed over the last few years in regional infrastructure, resources panel reporting to DETI and the DETI articulating the vision for achieving a and potential energy production Minister on matters pertinent to the sustainable and thriving Northern Ireland – what is the commercial potential exploitation and commercialisation economy over the next decade and, in for indigenous market demand and of science, technology and R&D. particular, in mapping and defining the the contribution towards achieving MATRIX recognised the need for a relative capabilities and opportunities regional energy security? foresight study into the future global associated with a Green Economy. c. Global market opportunities for market opportunities in sustainable As the starting point in the execution exploitation of regional capabilities energy and established the industry- of this study, the Project Team sought – where are the future growth led Sustainable Energy Horizon Panel to optimise the use of this existing markets and which potentially offer (SEHP) to coordinate this activity. knowledge base through judicial the most attractive export and inward analysis of these materials, in order to This report forms the first of three investment opportunities? build on this base load of intelligence. Annexes that support the Sustainable Energy Horizon Panel Report: The purpose of this report was therefore to provide a summary overview (in effect • Annex 1 Insights Report, a a ‘snapshot’) of the synthesised content literature review of existing of these reports, with the objective of studies and analyses relating to characterising the existing platform for the sustainable energy sector in future growth, identifying key sources of Northern Ireland, 2008-2012; data and gaps for subsequent phases • Annex 2 Technology Capability of the study, and thereby informing the Assessment, an analysis of existing scope and focus of the project. regional capability in the sustainable More than 40 publicly available reports,1 energy sector, including the supply produced between 2008 and 2012, chain, academic base, physical were analysed with a view to extracting assets and natural resources; information and insights pertinent to • Annex 3 Market Foresighting three specific questions that would Report, a 5 to 10 year (and beyond) form the basis of subsequent phases of analysis of potential growth in global work: sustainable energy markets, and a. Existing capability – what is the related opportunities for Northern nature and level of competence Ireland. of the existing science, research and technology platform within the region?

1 A full list of documents reviewed is attached in Appendix 1.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 5 overview oF rePortS 2.1 OVERVIEW OF REPORTS

The reports covered a range of issues • Invest NI, Maximising Business and activities associated with the Opportunities from Sustainable sustainable energy sector including: Energy, The Establishment of Energy Technology & Service • Policy setting and associated action Sector Business Led Collaborative plans; Networks in Northern Ireland, the • Specific policy instruments (e.g. Energy Scoping Group (2008); NIRO); • Garrad Hassan, Offshore Wind • Analyses of technology sub- Energy Supply Chain Opportunities, sectors (e.g. offshore technologies; Report for The Carbon Trust and renewable heat; bioenergy); Invest NI, 2010; • The electricity network, distribution • Ecorys, Research Study to and transmission; Determine the Skills Required to Support Potential Economic Growth • Skills and supply chain capability. in the Northern Ireland Sustainable The majority of reports (>80%) provided Energy Sector, Report for the information on the indigenous market Department of Learning, 2011; potential (category b), including drivers • SQW Energy, Economic Study that derive from Government targets, for Ocean Energy Development in incentives and programmes of support. Ireland, Report for SEAI and Invest Category a (existing capability) was also NI, 2010. well covered (50% of reports), but less detailed information was available on the global market opportunities (20%) with the exception of one or two reports that analysed supply chain opportunities and skills availability in specific sub-sectors. In addition to Government sector action plans, a number of individual key reports were identified that provided particularly strong background material for this current study:

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 7 inSigHtS 3.1 DEFINING CHARACTERISTICS

There are a number of characteristics • There is a relatively high level of fuel that set Northern Ireland apart from the poverty, with an estimated 44% of rest of the UK, and result in the need households paying more than 10% for a different set of priorities and a of income on energy bills.4 modiﬁed approach to legislation and incentives within the sustainable energy sector: • Northern Ireland has a relatively small economy that is highly dependent on exports for growth. However, some sources suggest that salaries remain, on average, lower than the rest of the UK, offering attractive terms for inward investment. • The region is largely dependent on oil for heating, with an emerging natural gas market that needs to be carefully maintained. There are currently about 120,000 households and 8,000 businesses connected to mains gas supply (20% of properties) with a further 34,000 additional consumers expected to come on line as a result of proposed pipeline extensions to main towns in the west of Northern Ireland (construction anticipated to begin in 2015).2 Incentives to encourage renewable generation must therefore be balanced against the need for large industrial users to provide a consistent market for the nascent industry. The Strategic Energy Framework (see below) outlines a potential spend of £170 million to expand the gas grid across Northern Ireland and £250 million for a salt-cave gas storage facility. It is believed that natural gas will continue to fuel most of NI’s conventional power generation to 2030.3

2 http://www.northernireland.gov.uk/news-deti-140113 foster-welcomes-executive.

3 DETI, A STRATEGIC FRAMEWORK FOR 4 http://www.decc.gov.uk/assets/decc/11/stats/fuel- NORTHERN IRELAND September 2010. poverty/5270-annual-report-fuel-poverty-stats-2012.pdf.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 9 3.2 KEY DRIVERS AND REGULATIONS

The overarching framework for the research programmes (e.g. The on consumer costs of moving away Government’s vision for sustainable Renewable Research Programme at from NIRO. If Northern Ireland does energy is set out in the Strategic Energy the Agri-Food and Biosciences Institute introduce a FIT CfD then a small Framework (2010) which addresses (AFBI) and the DEL funded Employer scale FIT will also be required (also four principal aims for Northern Support Programme) and the work the subject of the 2012 Energy Bill Ireland: building competitive markets, carried out by Invest NI to support consultation).8,9 ensuring security of supply, enhancing sector growth and encourage FDI. • Proposals for new energy efficiency 6 sustainability and developing energy These have been well documented and obligation. DECC’s Green Deal 5 infrastructure. The SEF sets out two are not repeated here. model is not currently considered key targets associated with sustainable On the regulatory side, however, there suitable for Northern Ireland energy: to achieve 40% electricity are several schemes that are currently (primarily due to the relatively high from renewable sources and 10% in the planning phase or undergoing levels of fuel poverty), despite a renewable heat by 2020. In particular, review. The majority of these are considerable amount of effort having in the case of renewable heat, this similar to those implemented by been expended in developing a ‘New represents a very large increase to 1.6 DECC for England and Wales but with Green Deal’ for Northern Ireland and GWh (from a baseline of 0.3 GWh or modifications to accommodate Northern an initial commitment to spend £12 1.7% in 2010). Ireland’s specific needs (see Section million on a pilot project from April 10 Under the direction of the Sustainable 3.1). Resolution of the remaining 2012. Instead, DETI is currently Energy Interdepartmental Working issues will be important in order to consulting on the introduction of a 11 Group, (SEIDWG), action plans from provide certainty around likely market new supplier obligation scheme diverse departments have recently opportunities to 2020. These include: (similar to CERT) in which suppliers been amalgamated into the single are required to meet specified • The NIRHI was introduced initially ‘Sustainable Energy Action Plan’ (2012) energy efficiency targets on an to the non-domestic sector (phase to ensure an integrated approach. The annual basis. 1) in November 2012.7 Phase 2 is plan has a focus on energy efficiency, anticipated to extend the scheme • Planning. DOE’s Planning Policy large scale renewables, bioenergy to the domestic sector and include Statement 18 (Renewable Energy) and renewable heat, setting out key was published in Aug 2009 and additional technologies (e.g. deep targets for each sub-sector and the accompanied by comprehensive geothermal, large biomass). The actions required to achieve those supplementary planning guidance scheme is expected to require targets. for wind farms. In addition, a funding of approximately £25m. ‘Planning and Energy Group’ now There are a number of support • The future of the NIRO (versus a FIT forms a sub-group of SEIDWG. programmes and financial incentives CfD), as a result of DECC’s planned Nevertheless, planning is still in place that support supply chain Electricity Market Report. The NIRO cited as a remaining key barrier development and deployment of (which incorporates small scale to the deployment of renewable sustainable energy technologies. These generation) has been seen as highly technologies.12 range from programmes to increase the effective to date. DETI and the Utility uptake of energy efficiency technologies Regulator are collaborating with (e.g. Warm Homes Scheme, NISP, DECC to consider how a FIT CfD Envirowise) to awareness raising could work within the SEM, and to workshops and support for specific understand the associated impact

8 DETI, Proposed changes to the Northern Ireland Renewables Obligation, Oct 2011.

9 http://www.detini.gov.uk/energy_bill_consultation_ document_-_11_june_2012__2_.pdf.

10 NORTHERN IRELAND GREEN NEW DEAL GROUP, The Green New Deal and the Programme for Government, January 2012, http://www.niassembly.gov. uk/Documents/Social-Dev/Green%20New%20Deal/8_ Report_%28draft%29_Green_New_Deal.pdf.

11 http://www.detini.gov.uk/energy_bill_consultation_ document_-_11_june_2012__2_.pdf. 6 In particular within SEAP and individual sector action plans. 12 Ecorys, Research Study to Determine the Skills Required to Support Potential Economic Growth in the 5 DETI, A STRATEGIC FRAMEWORK FOR 7 http://www.detini.gov.uk/deti-energy-index/deti Northern Ireland Sustainable Energy Sector, Report for NORTHERN IRELAND September 2010. energy-template-menu-5.htm. the Department of Learning, 2011.

PAGE 10 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 3.3 EXISTING CAPABILITY

Higher and Further Education foresighting exercise, and noted for College, North West Regional College, its overlap with sustainable energy Northern Regional College and Belfast There is a strong academic research technologies; Metropolitan College). However, base in a broad range of sustainable the difficulty associated with highly energy technologies and related • Smart grid technologies (QUB and specialised courses is accurately disciplines with notable capability in UU). QUB, for example, took part timing the supply of expertise with specific areas including: in the £5M EPSRC Supergen 5 demand. A miss-match will result in project, and hosts the UK’s national • World leading research in marine trained individuals leaving the sector Centre for Secure Information energy technologies, in particular or leaving the country. Growth in the Technologies. from Queen’s University Belfast more specialist sub-sectors (such as (which also has experimental wave University and further education offshore energy) therefore requires very tanks and flume facilities); research capabilities will be analysed careful management and timing of skills more fully in the next phase of work. development in the local workforce. • Various biomass technologies (including farm-based AD, The sustainable energy sector is Supply chain gasification, feedstock, e.g. grass recognised as requiring a highly Two early studies (2008) identified and seaweed) at QUESTOR (QUB), skilled and growing workforce (with, strong potential for harnessing the UU and AFBI. AFBI also hosts the for example, 3,300 skilled workers capability of the Northern Ireland supply recently developed Renewable needed between 2011 and 2015). chain to support successful growth of Energy Centre of Excellence Skills shortages have been cited as the sector, suggesting: (support from DARD’s Environment a barrier to growth in a number of and Renewable Energy Funding reports,13 but it has been argued that • A realisable potential for the creation Package), incorporating a visitor this can be well supported by the of around 33,000 jobs in the sector demonstration site for a variety of provision of generalised STEM training to 2020 (with an economic benefit biomass technologies, and energy (in particular for more ‘generalist’ of approximately £1 billion GVA per efficient design; sub-sectors such as energy efficiency annum);16 technologies) as well as by more • The built environment, for example, • More than 600 businesses had specialised energy technology focussed advanced glazing, thermal energy the ‘potential to engage with and courses (e.g. for emerging energy storage and advanced heat pumps benefit from’ the development of the storage technologies).14 The recent at The Centre for Sustainable sector, primarily within four generic STEM ‘Strategy for Success’ has Technologies, part of The Built technology groups (Integrated been put in place to counter a decline Environment Research Institute Building Management, Bioenergy, in high level engineering graduates (UU); and structural materials at Offshore Energy and Energy through improving sector attractiveness The Centre for Built Environment Storage).17 and facilitating STEM continuous Research (QUB); professional development.15 Both studies noted that a lack • Advanced materials (e.g. at the of consultants was a potential More specialised energy industry Engineering Research Institute, UU), barrier to exploiting the indigenous training is also available, for example, at already the subject of a MATRIX deployment potential of sustainable CAFRE and the six FE colleges (South energy technologies and that greater West College, South East Regional collaboration with the academic world College, Southern Regional

13 For example, SQW Energy, Economic Study for Ocean Energy Development in Ireland, Report for SEAI and Invest NI, July 2010. 16 Roger Tym & Partners, Northern Ireland Renewable 14 Ecorys, Research Study to Determine the Skills Energy Supply Chain, report for The Carbon Trust, June Required to Support Potential Economic Growth in the 2008. Northern Ireland Sustainable Energy Sector, Report for the Department of Learning, 2011. 17 Invest NI Maximising Business Opportunities from Sustainable Energy. The Establishment of Energy 15 STEM Government sub group, Success through Technology & Service Sector Business Led Collaborative STEM – one year on, March 2012. Networks in Northern Ireland.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 11 and B2B was needed to ensure (Bombardier). Companies head Infrastructure that internally generated IP could be quartered elsewhere are also starting There are three large ports (Belfast, commercialised and exploited within the to invest heavily in the sector (Dong Londonderry and Warrenpoint) with region by entrepreneurial ‘integrated Energy, SAP). However, the Northern capabilities across the breadth of product designers’. Ireland economy is made up of 98% offshore energy support requirements SMEs (which are responsible for Since then, a number of active clusters (including construction and installation) employing 67% of the workforce) and have developed within the sustainable and at least 10 additional smaller these form the bulk of the sustainable energy sector including, for example, harbours with the ability to support energy supply chain. integration of renewable energy O&M and ancillary requirements.25 sources, electric supply networks, Northern Ireland is known for its strong Harland and Wolff, at the Port of energy storage, marine prototypes18 and manufacturing sector (representing Belfast, have particular experience and smart grids (for example, with RoI as almost 30% of the total economic expertise in offshore wind and marine The Smart Grid Ireland Initiative).19 activity of Northern Ireland business),22 technology installation, and the port within which food production is the A more recent estimation suggests was used as the assembly base for largest sub-sector, followed by electrical that the sustainable energy sector in installation of the full scale (1.2 MW) and optical equipment, transport Northern Ireland (based on the same MCT SeaGen Turbine at Strangford equipment and other machinery and four generic technology groups) has Lough. Belfast harbour has also recently equipment.23 In 2008, a limited number a total GVA of approximately £175m, begun construction of a 50-acre of manufacturers were identified 1,040 active companies20 and employs assembly and logistics base, which with products directly relating to the around 3,900 people. The highest will be leased on a long term basis to sustainable energy sector, including numbers are found in Integrated DONG Energy, primarily for its three solar energy, insulation, glazing, wind Building Technology which incorporates offshore wind farms in the Irish Sea. The turbines, heat pump compressors, heat a high concentration of independent, site is due to become operational in Q4 pump systems, boilers, gasifiers and skilled trade workers from the wider 2012 and represents a £50m investment engines. There is also a well developed construction and building services by the harbour. 150 acres of land are concrete industry in the region with a sector. High employment is also evident also available in the immediate vicinity number of specialist pre-cast concrete in the bioenergy sub-sector.21 to accommodate spin-off industrial producers. It has been suggested sites. The nearby establishment of a Mapping and marketing the business that ‘The current Irish [including RoI] new composite centre by Bombardier, supply chain is an essential part of concrete industry has the required and the provision of specialist training enabling networking, collaboration capacity and expertise to support courses for offshore technicians at and growth of the sector. Invest NI Ocean Energy developments in the Belfast Metropolitan College’s Titanic is developing an online database of future.’24 Quarter campus, suggests that this is businesses in the offshore sector, There are examples of collaboration potentially the beginning of a leading including information on products and between the industrial and academic industry cluster.26 capability. base (e.g. QUESTOR, (QUB) an Since 2007, Northern Ireland has A number of key corporates in the industry-university collaborative research operated within a Single Electricity region have begun to diversify (Harland centre focused on environmental Market (SEM), in which the wholesale and Wolff from shipbuilding); develop remediation and sustainability, where markets of Northern Ireland and the new businesses in the renewable fee-paying industrial members help Republic of Ireland are combined. energy sector (B9 Energy Services); direct the research, its application and Within Northern Ireland, there is a single or provide significant deployment commercialisation), but on the whole Transmission and Distribution opportunities as early adopters this is an area that needs strengthening.

18 Invest NI Renewables Sector Brochure, http://www. investni.com/locate_renewables_sector_brochure_ism. 22 Invest NI Maximising Business Opportunities from pdf. Sustainable Energy. The Establishment of Energy Technology & Service Sector Business Led Collaborative 19 http://www.smartgridireland.org/. Networks in Northern Ireland.

20 The size of the supply chain is dealt with in greater 23 Roger Tym & Partners, Northern Ireland Renewable detail in the Technology Capability Report. Energy Supply Chain, report for The Carbon Trust, June 25 Garrad Hassan, NORTHERN IRELAND 2008. RENEWABLE ENERGY PORTS PROSPECTUS, Report 21 Ecorys, Research Study to Determine the Skills for The Carbon Trust and Invest NI, 2010. Required to Support Potential Economic Growth in the 24 SQW Energy, Economic Study for Ocean Energy Northern Ireland Sustainable Energy Sector, Report for Development in Ireland, Report for SEAI and Invest NI, 26 http://www.agendani.com/belfast-harbour-embracing the Department of Learning, 2011. July 2010. offshore-energy.

PAGE 12 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG owner (NIE), and systems operator that uncertainty surrounding future (SONI), owned by EirGrid since 2009. levels of small scale generation means Historically, NIE was also the sole that the there is no provision in the supplier in the region, but competition plan for enhancing the grid to facilitate is now rapidly entering the market, with connection at this scale. This is an additional 17 electricity suppliers therefore likely to remain very expensive currently licensed by the Utility and a potential barrier to deployment. Regulator. A recent EU funded project, ‘The It is universally acknowledged that Irish-Scottish Links on Energy Study achievement of the 40% renewable (ISLES)’ has investigated the potential electricity target is heavily dependent on for a transmission network and subsea major reinforcement of the transmission electricity grid to support renewable and distribution system (estimated by energy sources off the coast of western NIE to require a £1 billion investment) Scotland and the Irish Sea.28 The and the construction of the new North study concludes there are no technical South inter-connector between Northern barriers to the deployment of an ISLES Ireland and the Republic of Ireland. network, but CAPEX is likely to be very high (approximately £5.6 bn) and there The Renewables Integration are signiﬁcant challenges in navigating Development Project (RIDP), a joint complex and changing onshore/offshore project between EirGrid, SONI and planning and licensing regimes in all NIE, began in 2008 to determine the three jurisdictions. optimum means of major (275kV) grid reinforcement to accommodate high levels of predicted renewable generation (primarily onshore wind) in Donegal and Northern Ireland. This project is still underway. NIE’s latest Transmission and Distribution Price Control for RP5 incorporates a renewable integration plan with indicative spending of £215m, of which £70m is for medium term solutions (110kV network reinforcements to increase capacity and remove “bottlenecks) and £127m is for longer term solutions (the RIDP). An additional £76m expenditure is proposed for the north-south interconnector.27 RP5 is focussed strongly on the need to accommodate new large-scale generation, and NIE acknowledges

27 Northern Ireland Electricity Ltd, Transmission and Distribution Price Control for RP5 Capital, April 2011. 28 www.islesproject.eu/.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 13 3.4 LOCAL RESOURCE AVAILABILITY AND PREDICTED DEPLOYMENT

Northern Ireland has seen a rapid projects (Rathlin Island and Torr Head). Nevertheless, Northern Ireland has increase in the generation of Development rights were subsequently some of the best tidal locations in renewable electricity in the last few awarded to:34 the UK, and marine energy is widely years (mostly driven by onshore wind acknowledged to represent very • First Flight Wind Limited for the farms) and the interim target of 12% significant medium to long term 600 MW offshore wind area: a joint renewable electricity by 2012 has been opportunities for sector growth. venture between Dong Energy of successfully attained.29 Northern Ireland However, this is associated with a high Denmark and RES-B9 (NI) Offshore currently has a total installed generation degree of uncertainty, correlated with Wind Limited, which combines the capacity of 3,145 MW with 378 MW relatively immature technologies and local wind development experience renewable generation (of which 355 very high capital costs. of Northern Ireland company B9 MW is onshore wind). The region also Energy with Renewable Energy Onshore Renewable Energy benefits from a high average capacity Systems, part of the RES Group, factor for onshore wind (32.5%) versus The Onshore Renewable Electricity an international renewable energy the whole of the UK (28.1%).30 Much Action Plan (OREAP) suggests that project developer. of the increase in capacity is attributed some additional capacity for onshore to the success of the NIRO. The • Tidal Ventures Limited for the 100 wind remains, in particular using wind equivalent generation required to meet MW tidal opportunity at Torr Head. farm clustering in areas of existing the 40% target by 2020 (estimated as A joint venture between OpenHydro development.35 The value of O&M 1500 - 1800 MW) cannot be met by Group, a designer and manufacturer contracts available in the next five years onshore wind alone,31 but according to of tidal turbines, and Bord Gáis is estimated to be in excess of £100m SONI (assuming grid constraints are Energy one of Ireland’s leading annually. overcome) the potential exists for total energy providers. Biomass resource has been significantly renewable capacity in Northern Ireland • DP Marine Energy Limited with under-utilised to date, but is believed to reach 2163 MW by 2020.32 DEME Blue Energy for their 100 to have an important role to play in Offshore Renewable Energy MW tidal stream energy project the future energy mix. Forest cover off Fair Head. This project is a is relatively low (6.2%) but could be The Offshore Renewable Energy consortium comprising Cork based exploited efficiently and there are plans Strategic Action Plan (ORESAP) and DP Marine Energy Limited and the to double forest cover by 2050. There associated Strategic Environmental Belgian marine engineering company is also the potential for using a range of Assessment set out development DEME Blue Energy. other feedstocks, including fast growing opportunity for up to 900 MW of energy crops (SRC willow in particular), offshore wind and 300 MW from tidal However, it is worth noting that, municipal waste, food waste and poultry resources in Northern Ireland waters by according to NIE, connecting the 600 litter. 2020.33 In December 2011, The Crown MW of east coast off-shore generation Estate launched a Leasing Round for (County Down site) to the network To date only a small number of plants 600 MW offshore wind generating will be extremely challenging because generating electricity from biomass capacity for a single company (SE coast of the need for additional major have been deployed in Northern Ireland, of Country Down) and 200 MW tidal electrical circuits traversing the Mourne one example being the Balcas plant in generating capacity for multiple Mountains. Enniskillen, which generates 2.7 MW of

29 DETI, Energy Bill Consultation Document, June 2012.

30 CEPA and Parsons Brinkerhoff, Determination of the Appropriate Form of Support for Incentivising the Development of Renewable Electricity Generation in Northern Ireland, report for DETI and NIAUR, August 201.

31 Ecorys, Research Study to Determine the Skills Required to Support Potential Economic Growth in the Northern Ireland Sustainable Energy Sector, Report for the Department of Learning, 2011.

32 DETI, NI Offshore Renewable Energy Strategic Action Plan 2012-2020 (ORESAP), March 2012. 34 http://www.thecrownestate.co.uk/news-media/ 35 DETI, DRAFT ONSHORE RENEWABLE 33 DETI, NI Offshore Renewable Energy Strategic news/2012/northern-ireland-offshore-energy-successful ELECTRICITY ACTION PLAN 2011-2020, October Action Plan 2012-2020 (ORESAP), March 2012. bidders/. 2011.

PAGE 14 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG electricity and 10 MW of heat for use at 10,000 houses per year) and the retrofit the sawmill itself. Belfast West has been market is thus of prime importance for identified as a potential site for a large- the deployment of energy efficiency scale (up to 300 MW) biomass-fuelled technologies. As yet this market remains electricity generating station, but this unexploited. However, as a result of would require import of feedstock. the relatively high levels of fuel poverty, efficient subsidy (e.g. via the NIRHI, or Particular emphasis is placed on the new supplier obligation) is particularly potential for farm-based AD, using important in encouraging deployment in silage and slurry feedstocks for both this sector. heat and electricity production. An early report suggested that the production Smart grid and smart metering of 295 MW heat and 146 MW of technologies are considered crucial electricity, from 50 sites was feasible.36 enablers for the encouragement of The current Biomass Action Plan is behavioural change in energy use, the focussed on raising awareness amongst integration of renewable technologies rural communities and increasing (in particular domestic and small-scale), support for farm-based activities, and the management of the potential as well as continuing research and increase in demand associated with demonstration activities at AFBI. electric vehicles. The Strategic Energy Framework allowed for up to £280 In terms of renewable heat generation, million to roll out smart meters across biogas from various waste resources, the country. district heating (in the greater Belfast area) and geothermal energy have been cited as potential contributors to the 10% (2020) target.37 Built Environment and Smart Grid Energy efficiency also forms a crucial part of the Strategic Energy Framework, and the Government is committed to contributing to the 1% per year on year energy savings target set out in the UK National Energy Efficiency Action Plan, primarily via improving energy efficiency in the built environment and supporting the development of the smart grid. Although the Government is also committed to delivering new energy efficient housing using the standards set out in the Code for Sustainable Homes, typical new build rates in Northern Ireland are relatively low (approximately

36 AEA,Executive summary of a report on the assessment of the potential for bioenergy development in Northern Ireland, Report for DETI, October 2008.

37 DETI, The Development of the Northern Ireland Renewable Heat Incentive, July 2011.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 15 3.5 GLOBAL MARKET OPPORTUNITIES (GB, ROI AND INTERNATIONAL) As described in Section 2, the TABLE 1: ANNUAL GROWTH RATES TO 2020 FOR discussion of global market SUSTAINABLE ENERGY SECTORS (AND SUB-SECTORS)39 opportunities was limited to a few key reports, and the majority of these were concerned with a timeline to 2020 only. Annual growth of market size to 2020 % Broad growth estimates are available Low Central High for the sustainable energy sector as a whole. Examples are:38 Integrated building 5.5 10 15 technology • Annual global growth potential [for Offshore wind 17 27 32 the sustainable energy sector] of 5% and a value of 2.2 trillion Euros by Offshore wave and 7 26.5 40 2020; tidal • Global market value of the low Bioenergy – 5.7 6.7 29 carbon and environmental goods electricity and services sector estimated to be Bioenergy - heat 3.9 9.4 22 around £3 billion (2007/2008); with Bioenergy - 6.2 9.5 13.8 the value in the UK alone estimated transport to have the potential to grow to £234 Energy storage 3 4 6 billion by 2025. The Ecorys study incorporated an analysis of potential growth rates in four core sectors (see Section 3.6 below), using ﬁgures from a variety of sources (including Member States National Renewable Energy Action Plan submissions (NREAPs) and trade associations). The results illustrate the considerable degree of variation between high and low predictions, in particular for the less well developed technologies (e.g. wave and tidal) (Table 1).

38 Ecorys, Research Study to Determine the Skills Required to Support Potential Economic Growth in the Northern Ireland Sustainable Energy Sector, Report for 39 Ecorys, Research Study to Determine the Skills Required to Support Potential Economic Growth in the Northern the Department of Learning, 2011. Ireland Sustainable Energy Sector, Report for the Department of Learning, 2011.

PAGE 16 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Wind energy Maritime Alliance, currently comprising As described above, Northern Ireland nine organisations from Northern may have particular opportunity to The Global Wind Energy Council Ireland and the Republic of Ireland, develop and deploy anaerobic digestion (GWEC) has worked on a series has identified over 180 wave and tidal technologies. However, although AD of scenarios for global sector technology developers from around the is considered likely to be an area of development, which predict that the world. They estimate a development global growth,45 it will be a challenge for industry will experience rapid growth market size of between €500 million and Northern Irish companies to compete over the next 5-10 years, after which €900 million over the next decade. against the long established AD markets growth rates will begin to stabilise. of countries such as Austria and Initial growth rates vary from 17-27% The UK also leads the way in wave and Germany. annually, declining to stabilise at 3-9% tidal research and deployment and, for annual growth in the future.40 example, is forecast to install 51 MW Built Environment and Smart Grid (60%) of the total global tidal capacity Offshore renewable energy Growth in the buildings technology by 2014. Total installed wave and tidal sector is closely linked to the status of Northern Ireland businesses can benefit, stream energy capacity in Scottish the construction sector and drivers to not only from the wind and marine waters alone may reach an installed improve the sustainability of the existing energy generation sites off the coast of capacity of 1.3 GW by 2020. The housing stock (i.e. retrofit). Although the Northern Ireland, but also from access USA, Portugal and Canada are also UK is seen as offering a considerable to the significant existing and planned considered significant markets for wave market for such building technologies deployment along the West coast of and tidal technologies.43 (e.g. the Housing Green Paper England and Scotland and around the Bioenergy (2007) and plans for new Eco Towns), Republic of Ireland. there has been a clear slow down in According to the Ecorys report,44 The UK is already the largest offshore construction sector activity since the NREAP figures also suggest significant wind market in the world with over 1.3 economic downturn in 2008. potential for growth in biomass GW currently installed. The Crown generation in all EU member states, and Smart grid technologies are seen Estate has auctioned licences for in the UK in particular. Summary figures globally as critical enabling technologies developing offshore wind energy sites are as follows for Europe as a whole: to support the increasing demand for around the UK over 3 rounds with electricity and the rise of intermittent an estimated total potential capacity • Biomass electricity generation generation linked to the networks. possible in these licensed areas at capacity increases from 22.2 GW Opportunities for smart grid deployment 33 GW.41 It has been suggested that in 2010 to 42.7 GW by 2020, at may be particularly high in rapid growth deployment at these sites will be average annual growth rates of (China and India) and developing (Asia associated with an increase in local 6.7%; and Africa) economies where growth sourcing of materials, services and • Biomass heat energy increases from in electricity demand is particularly expertise, with particular opportunities 58.0 Mtoe in 2010 to 85.2 Mtoe acute. The importance of the smart grid for Northern Irish businesses in by 2020, at average annual growth in Europe is evidenced by significant consulting and advisory; O&M; and rates of 3.9%; investment (approximately €2 billion) turbine GBS foundations.42 in related R&D set out in the European • The use of bioethanol in transport As described above, the uncertainty Electricity Grid Initiative Roadmap. increases from 2.8 Mtoe in 2010 to associated with the development of 6.8 Mtoe by 2020, at average annual the marine energy sector is high, but growth rates of 9.5%. there is potential for high growth if the opportunities are realised. The Global

40 Ecorys, Research Study to Determine the Skills Required to Support Potential Economic Growth in the Northern Ireland Sustainable Energy Sector, Report for the Department of Learning, 2011.

41 Ecorys, Research Study to Determine the Skills Required to Support Potential Economic Growth in the 43 Pure Marine: Information and Analysis of Wave & Northern Ireland Sustainable Energy Sector, Report for Tidal market in Scotland, report for Invest NI (Aug 2011). the Department of Learning, 2011. 44 Ecorys, Research Study to Determine the Skills 45 Ecorys, Research Study to Determine the Skills 42 Garrad Hassan, OFFSHORE WIND ENERGY Required to Support Potential Economic Growth in the Required to Support Potential Economic Growth in the SUPPLY CHAIN OPPORTUNITIES, Report for Invest NI Northern Ireland Sustainable Energy Sector, Report for Northern Ireland Sustainable Energy Sector, Report for and The Carbon Trust, 2010. the Department of Learning, 2011. the Department of Learning, 2011.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 17 3.6 KEY GROWTH SECTORS

Taking into account the Government opportunities for Northern Ireland smart meter and grid technologies, drivers, local capability and resource businesses in the short and medium and fuel cells and hydrogen within the availability, local, national (including term. These core sub-sectors were Energy Storage category (originally GB) and international market taken up by other reports, notably focussed on the need for underground demand, four generic technology Ecorys 201247 in their analysis of future storage space for natural gas), see sub-sectors were identiﬁed in 200846 skills demands in the four sub-sectors. Table 2. that were considered to offer the best Ecorys expanded the list to include

TABLE 2: FOUR CORE TECHNOLOGY SUB-SECTORS WITH POTENTIAL FOR GROWTH WITHIN NORTHERN IRELAND. 4647

Technologies Supply chain opportunities Reasons Integrated Building Technologies • Micro-generation • Design • Building sector is a large energy consumer • District heating • Manufacture • Housing stock refurbishment represents an • Energy efﬁciency technologies (e.g. • Supply unexploited market opportunity (with links to fuel lighting, boilers, windows & doors, • Retail poverty) insulation, materials) • Installation • Construction sector is a major employer • Building energy management • Maintenance • Energy assessors Offshore Energy • Offshore wind • R&D and design • Major resource availability • Wave • Surveys • Outstanding research capabilities • Tidal • Manufacture and testing • Strong predicted growth in the sector, in particular • Installation around the UK coast • O&M • Ancillary services Bioenergy • AD for electricity and heat (esp. farm • R&D • Large, unexploited resource, in particular for AD based AD, e.g. using slurry, poultry • Manufacture • Potential for wider range employment opportunities litter, grass silage) • Supply with beneﬁt to rural economy • Biofuel (manufactured from biomass) to • Retail produce a solid, liquid or gas for com Feedstock production bustion to produce heat and/or power • • Installation & plumbing • Biofuel for transport • O&M Energy Storage • Storage technologies (e.g. pumped • R&D • Enabling technology for other sectors storage, compressed air, electrical (bat • Surveys • Global market opportunities teries), mechanical, thermal) • Manufacture • Smart meter and grid technologies • Supply • Hydrogen fuel cells • Retail • Installation • O&M Adapted from Ecorys, Research Study to Determine the Skills Required to Support Potential Economic Growth in the Northern Ireland Sustainable Energy Sector, Report for the Department of Learning, 2011, P3.

46 Invest NI Maximising Business Opportunities from Sustainable Energy, The Establishment of Energy Technology & Service Sector Business Led Collaborative Networks in Northern Ireland.

47 Ecorys, Research Study to Determine the Skills Required to Support Potential Economic Growth in the Northern Ireland Sustainable Energy Sector, Report for the Department of Learning, 2011.

PAGE 18 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG It is also worth noting that these generic groupings encompass a number of emerging technologies with longer development timescales. Some of these have been cited within the literature as potential development opportunities for Northern Ireland: • 3rd generation biofuels (e.g. from grass and seaweed); • Direct gasification; • Cross-cutting and enabling technologies, such as • Advanced materials. These have the potential to play an important role in all aspects of sustainable energy from generation, through infrastructure to storage and efficiency technologies.48 • Controls and integration technologies, an area that overlaps with Northern Ireland’s significant electronics/IT expertise. Lastly, deep geothermal may have a potential role to play in reaching the Renewable Heat targets in Northern Ireland. Northern Ireland has six towns (Ballycastle; Bushmills; Ballymoney; Ballymena; Larne and Antrim) which have been identified with appropriate geothermal conditions and the necessary heat demand.49

48 MATRIX, Advanced Materials Horizon Panel Report, Vol 5, 2008. Available from www.matrix-ni.org

49 DETI, The Development of the Northern Ireland Renewable Heat Incentive, July 2011.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 19 iMPliCationS For teCHnology anD CaPability MaPPing 4.1 IMPLICATIONS FOR TECHNOLOGY AND CAPABILITY MAPPING

1. There is a significant amount of 4. As expected, less information is information available from existing available on longer term growth sources that can be used to prospects in more immature and populate the Technology Capability evolving segments, and Government framework, but this is a rapidly priorities are currently focussed on evolving landscape and will need the period to 2020, with little specific validating to ensure that the data is information on the longer term vision. up to date, especially with regard 5. Limited information was available to academic research focus and relating to the wider historical the activities of SMEs. Cross- profile and capacity and capability referral with the Invest NI database base for innovation, and specifically will be particularly important. This commercialisation of new will enable identification of areas technologies within the sustainable in which Northern Ireland has energy sector. It would appear a specific USP and/or potential that there has not been significant national/international leadership commercialisation activity to date. position for technology development. 2. There has also been substantial investment to date in characterising the primary sustainable energy sectors of bioenergy, offshore wind and marine, and building technologies, focussing primarily on the potential for supply chain development and future skills requirements. Building on this information through further stakeholder consultation will again support identification of Northern Ireland’s USP and potential for future leadership within these segments. 3. The insights outlined in this report suggest that, in the short to medium term, there is potential for considerable local deployment of products and services in the sector, in particular relating to electricity network upgrades; advisory services around biomass deployment; early offshore wind-related activities; and the retrofit market.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 21 aPPenDix 1: liSt oF PubliCationS APPENDIX 1: LIST OF PUBLICATIONS

AEA, Executive summary of a report DEL, Skills to Support Potential Ecorys, Research Study to Determine on the assessment of the potential for Economic Growth in the Northern the Skills Required to Support Potential bioenergy development in Northern Ireland Sustainable Energy Sector - Economic Growth in the Northern Ireland, Report for DETI, October 2008. Government response. Ireland Sustainable Energy Sector, Report for the Department of Learning, AEA, An independent study of the DETI, All Island Grid Study overview, 2011 need for the introduction of an energy Jan 2008. efﬁciency measure, DEC 2011. EirGrid, Renewables Integration DETI, A Strategic Framework For Development Project North West of the AECOM and Poyry, Assessment of the Northern Ireland September 2010. Island of Ireland, 2009. Potential Development of Renewable DETI, Sustainable Energy Action Plan, Heat in Northern Ireland 2010 - Garrad Hassan, Offshore Wind Energy May 2012. Executive summary, 2010. Supply Chain Opportunities, Report for DETI, The Development of the Northern Invest NI and The Carbon Trust, 2010. CEPA and Parsons Brinkerhoff, Ireland Renewable Heat Incentive, July Determination of the Appropriate Garrad Hassan, Northern Ireland 2011. Form of Support for Incentivising the Renewable Energy Ports Prospectus, Development of Renewable Electricity DETI, Energy Bill Consultation Report for The Carbon Trust and Invest Generation in Northern Ireland, report Document, June 2012. NI, 2010. for DETI and NIAUR, August 2010. DETI, NI Offshore Renewable Energy Intra Consulting Ltd, Northern Ireland CEPA and AEA Technology, Renewable Strategic Action Plan 2012-2020 Organic Energy Study, report for Invest Heat Incentive for Northern Ireland, A (ORESAP), March 2012. NI and The Carbon Trust, March 2010. report DETI, June 2011. DETI, Draft Onshore Renewable Invest NI, Maximising Business CER and Utilities Regulation of Northern Electricity Action Plan 2011-2020, Opportunities from Sustainable Ireland, Impact of High Levels of Wind October 2011. Energy, The Establishment of Energy Penetration in 2020 on the Single Technology & Service Sector Business DETI, Bioenergy Action Plan for Electricity Market (SEM), Jan 2009. Led Collaborative Networks in Northern Northern Ireland 2010-2015, Feb 2011. Ireland. DARD, Renewable Energy in the DETI, Proposed changes to the Land Based Sector, A Way Forward, Invest NI Renewables Sector Brochure, Northern Ireland Renewables Renewable Energy Action Plan 2010. http://www.investni.com/locate_ Obligation, Oct 2011. renewables_sector_brochure_ism.pdf. DARD, Review of Alternative DOE, Consultation on draft Northern Technologies to Fluidised Bed Invest NI, Report into Future Ireland Marine Position Paper, March Combustion For Poultry Litter Opportunities for Sustainable Building 2012. Utilisation/Disposal, Jan 2012. Products (Kappa Consulting), Feb DOE, Planning Policy Statement 18 2009. DEL, Success through Skills - ‘Renewable Energy’, August 2009. Transforming Futures, The Skills ISLES project, Irish-Scottish Links Strategy for Northern Ireland, 2011. on Energy Study (ISLES), Executive Summary, April 2012.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 23 MATRIX, Advanced Materials Horizon OFMDFM, Sustainable Development Panel Report, Vol 5, 2008. Strategy, 2010. Pure Marine: Information and Analysis Roger Tym & Partners, Northern Ireland of Wave & Tidal market in Scotland, Renewable Energy Supply Chain, report report for Invest NI (Aug 2011). for The Carbon Trust, June 2008. NIEA, SNIFFER ER05 Impacts of RPS, Review of Engineering & Biomass and Bioenergy Crops on Specialist Support Requirements For Landscape, Land Use and the Wider the Ocean Energy Sector, report for Environment in Northern Ireland and SEAI, June 2009. Scotland, March 2010. SQW Energy, Economic Study for NIEA, Wind Energy Development In Ocean Energy Development in Ireland, Northern Ireland’s Landscapes Draft Report for SEAI and Invest NI, July Supplementary Planning Guidance to 2010. accompany Planning Policy Statement STEM Government sub group, Success 18 ‘Renewable Energy’, August 2010. through STEM – one year on, March Northern Innovation Ltd, Technical 2012. Investigation into Thermal Oil Technology, report for Invest NI, March 2010. Northern Ireland Electricity Ltd, Transmission and Distribution Price Control for RP5 Capital, April 2011. And Appendix H - Innovation For Rp5. Northern Ireland Executive, Economic Strategy, Priorities for Sustainable Growth and Prosperity, March 2012. Northern Ireland Executive, Investment Strategy for Northern Ireland, 2011 2021, Strategic Investment Board, October 2012. Northern Ireland Executive, Programme for Government, 2011-2015, March 2012. Northern Ireland Green New Deal Group, The Green New Deal and the Programme for Government, January 2012.

PAGE 24 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG

MATRIX Report: Vol 10. February 2013

SUSTAINABLE ENERGY HORIZON PANEL REPORT

ANNEX 2 TECHNOLOGY CAPABILITY ASSESSMENT

Prepared for MATRIX by: contentS

EXECUTIVE SUMMARY 4 � 4 �

1 � CURRENT MARkET ANAlYSIS 38 � 4.1 Policy Context 39

INTROdUCTION 7 � 4.2 Regional Deployment Potential 42 4.3 Competitor Regions within the UK and Ireland 46 4.4 Innovation Support Landscape 51 2 �

REGIONAl CONTEXT 9 � 5 � 2.1 Demographics and Geography 10 2.2 The Economy and Infrastructure 11 STRATEGIC AnALySIS 55 � 2.3 The Energy Sector 12 5.1 Regional Sector Trends 56 5.2 Market Specific Insights 59 5.3 Regional Strengths and Differentiators 63 3 � 5.4 Key Challenges for Growth 66

OVERVIEw OF TEChNOlOGY CAPAbIlITY bASElINE13 Appendix A – List of Consultees 68 3.1 Methodology 14 Appendix B – Data Sources 70 3.2 Industrial Activity 16 Appendix C – Overview of UK Competitor Regions 72 3.3 Academic Activity 27 3.4 Other Key Assets and Programmes 35

imPortant notice

Whilst reasonable steps have been taken to ensure that the information contained within this Report is correct, you should be aware that the information within it may be incomplete, inaccurate or may have become out of date. Accordingly, the MATRIX SEHP makes no warranties or representations of any kind as to the content of this Report or its accuracy and, to the maximum extent permitted by law, accept no liability whatsoever for the same including, without limit, for direct, indirect or consequential loss, business interruption, loss of profits, production, contracts, goodwill or anticipated savings. Any person making use of this Report does so at their own risk. Page 2 PROFITING FROM SCIENCE WWW.matrix-ni.org GLOSSARY OF TERMS

AD ...... Anaerobic digestion NIAUR ...... Northern Ireland Authority for Utility AFBI ...... Agri-Food and Biosciences Institute Regulation BERI ...... Built Environment Research Institute, NIE ...... Northern Ireland Electricity University of Ulster NIRHI ...... Northern Ireland Renewable Heat Incentive BIS ...... Department for Business, Innovation & Skills NIRO ...... Northern Ireland Renewables Obligation CASE ...... Centre for Advanced Sustainable Energy NISP ...... Northern Ireland Science Park CCS ...... Carbon capture and storage NWRC ...... North West Regional College CHP ...... Combined heat and power O&M ...... Operation and maintenance CSIT ...... Centre for Secure Information Technologies OECD ...... Organisation for Economic Co-operation DARD ...... Department of Agriculture and Rural and Development Development PCMs ...... Phase change materials DECC ...... Department of Energy & Climate Change PV ...... Photovoltaics (solar) DEL ...... Department for Employment and Learning QML ...... Queen’s Marine Laboratory DETI ...... Department of Enterprise Trade and QMTec ...... Queen’s Marine Energy Test Centre Investment QUB ...... Queen’s University Belfast DOE ...... Department of the Environment QUESTOR ...... Industry-led multi-disciplinary research DNO ...... Distribution Network Operator centre at QUB ECIT ...... Institute of Electronics, Communications ROC ...... Renewables obligation certiﬁcates and Information Technology SEF ...... Northern Ireland Strategic Energy EMR ...... Electricity market reform Framework EMEC ...... European Marine Energy Centre SEHP ...... MATRIX Sustainable Energy Horizon Panel EPSRC ...... Engineering and Physical Sciences SEIDWG ...... Sustainable Energy Interdepartmental Research Council Working Group ETI ...... Energy Technology Institute SERC ...... South East Regional College FDI ...... Foreign direct investment SME ...... Small and medium-sized enterprise FE ...... Further education SONI ...... System Operator for Northern Ireland FIT CfD ...... Feed-in-tariff with contracts for difference SRC ...... Short rotation coppice GDP ...... Gross Domestic Product STEM ...... Science, technology, engineering and GHG ...... Greenhouse gas mathematics GVA ...... Gross Value Added SWC ...... South West College KTP ...... Knowledge transfer partnership TIC ...... Technology and Innovation Centre MCS ...... Microgeneration Certiﬁcation Scheme TNO ...... Transmission Network Operator NDPB ...... Non-departmental Public Body TRL ...... Technology readiness level NIACE ...... Northern Ireland Advanced Composites and UU ...... University of Ulster Engineering Centre

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 3 EXECUTIVE SUMMARY

MATRIX, the Northern Ireland Science technological capacity of the region, marine research at QUB and built Industry Panel, is an expert advisory and identifies key differentiating and environment research at UU. Both panel reporting to DETI and the DETI commercially competitive features. This universities conduct a significant amount Minister on matters pertinent to the includes not only an understanding of of research into sustainable energy exploitation and commercialisation the capability of the sector in terms of related technologies, although neither of science, technology and R&D. the key players (public sector, academic has a unified and dedicated research MATRIX recognised the need for a and private) and their competence centre for the sector. In addition, AFBI foresight study into the future global and capacity, but also the commercial are believed to be conducting leading market opportunities in sustainable environment in which they operate. research into growth and processing energy and established the industry- of SRC Willow for biomass. In future, The analysis identifies an evolving led Sustainable Energy Horizon Panel the proposed Centre for Advanced and maturing industrial supply chain (SEHP) to coordinate this activity. Sustainable Energy (CASE) will provide with approximately 500 companies a single focal point for targeted research This report forms the second of three active in one or more segment. 77% in sustainable energy, coordinating Annexes that support the Sustainable of active companies are within the activities across academic institutions. Energy Horizon Panel Report: wind, marine, bioenergy and micro- The network of regional colleges renewable segments. Other segments • Annex 1 Insights Report, a literature provides a robust and coherent base are relatively immature with emerging review of existing studies and of applied research, demonstration and supply chains and a lack of critical analyses relating to the sustainable skills provision. mass. There is significant diversification energy sector in Northern Ireland, potential within the existing industrial Overall the analysis shows a number 2008-2012; base. For example, more than 100 of specific ‘hot spots’ of capability with • Annex 2 Technology Capability companies have declared an ability to a full complement of capabilities from Assessment, an analysis of provide services in the marine segment. early stage R&D through to applied existing regional capability in Engineering, manufacturing and port- skills training: low carbon buildings; the sustainable energy sector, based services are particularly well micro-renewables; biomass; energy including the supply chain, represented. storage; and marine. academic base, physical assets The vast majority of companies are Notable physical assets in the region and natural resources; micro SMEs, with < 10 employees, include QMETec (including the SeaGen • Annex 3 Market Foresighting and there are relatively few high profile tidal generation turbine in Strangford Report, a 5 to 10 year (and beyond) corporates. However, the latter include: Lough), the harbour facilities, the analysis of potential growth in global Harland and Wolff, Glen Dimplex, Northern Ireland Advanced Composites sustainable energy markets, and DONG Energy, McLaughlin and Harvey, and Engineering Centre (NIACE), and related opportunities for Northern Kingspan, and Copeland (Emerson the Northern Ireland Science Park Ireland. Climate Technologies). (NISP). This report presents an assessment of Northern Ireland has two Universities, In addition to the key industrial and the current technology capability for the Queen’s University Belfast (QUB) academic capabilities and assets, sustainable energy sector in Northern and University of Ulster (UU) both of there are a number of relevant regional Ireland. It provides an overview of which are considered world class in a programmes. The formation of the the existing scientific, research and range of research areas, specifically Collaborative Networks, Competence

PAGE 4 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Centres and subsequent Alliances, deployment has been undertaken • Recently value creation has focused have provided a focal point for individual by large international players using on: supply chains and have begun to imported technology, often utilising • ‘Buying’ in overseas technology overcome some of the fundamental well established international supply early and developing it to meet issues associated with a fragmented chains at the expense of regional the needs of the local market. supply chain dominated by SMEs. operators. This exploits recognised QUESTOR, CASE and NIACE also • The condition of the national grid capabilities in system integration provide a strong cohort of industry led infrastructure is commonly cited as a and manufacturing of prototypes collaborative centres for R&D, offering constraint to renewables integration. and bespoke systems, with the an important route for engagement with However, this can also be seen to objective of ultimately capturing the wider, and international, industrial be acting as a driver for innovation, regional manufacturing jobs and base. providing an incentive to develop exporting technology. Examples Regional policy and availability of good expertise in areas, such as energy are biomass boilers, anaerobic indigenous markets and regional natural storage and advanced controls. digestion and energy storage. resources provide potential key drivers • Northern Ireland has particular • Provision of service contracts to for the future growth of the sector. know-how related to trading within a deployed technology, in particular However, competition is strong from single energy market, across national wind, and to some extent micro other regions in the rest of the UK and borders. renewables. Ireland, specifically in the high profile offshore wind and marine markets • Academic excellence in traditional • Provision of public sector innovation where regions such as Scotland, the areas of strength has continued to support has evolved and next North West and Southern Ireland are develop, but the level of commercial generation commercialisation effectively competing for the same exploitation has been low, with few vehicles have emerged, specifically opportunities. successful spin outs and limited the Alliance models, which are licensing of IP. Anecdotal evidence demonstrating early market traction. Key insights gained from interviews suggests a ‘brain drain’ from and relating to evolution of the regional • There is limited evidence of academia, with graduates in key sector include the following: cooperation with other regions of subjects leaving the region. the UK and Ireland. As a result the • Whilst developing a unified approach • The supply chain is highly region may be missing out on key to sustainable energy, in particular, fragmented and dominated by micro commercial opportunities, such as by articulation of the Strategic SMEs. This presents significant involvement in the Offshore Catapult. Energy Framework and creation of challenges, limiting industrial SEIDWG, there is a perception investment in R&D and creating that the sector still lacks strong barriers to achieving critical leadership. mass. Whilst there is a general acceptance of grant funding, there • There remains significant sustainable is little experience of, and therefore energy resource potential, precedence for, venture capital particularly when considering the amongst SMEs. ‘Island of Ireland’, and the favourable climatic conditions. • In the rapidly maturing onshore wind sector, much of the development and

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 5 Regional strengths and potential differentiators have been identiﬁed in relation to:

Resources and Availability of natural resources – wind, marine and biomass. Geography Bridgehead location (and physical proximity) between Republic of Ireland and rest of UK. Know-how and practical experience in operation of ‘island’ electricity system. Significant number of farming businesses with potential to act as nuclei for rural community-based projects. Infrastructure Northern Ireland has, and is developing, electricity interconnectors. Ability to demonstrate and exploit know-how relating to next generation technologies in a challenging technical and economic environment. Academic Base World class academic teams in areas of marine, low carbon buildings, micro-renewables, biomass, power engineering and energy storage. Highly skilled and trained workforce with practical experience in deployment of sustainable energy technologies. Industrial Track record of success in technology adaptation and deployment. Capability Strong and flexible industrial base with diversification potential. Public Sector Sympathetic and supportive innovation landscape (including fiscal support mechanisms such as RHI). Intervention Evolving focus on key elements of the sustainable energy sector.

However, the sector faces a number of signiﬁcant challenges to future growth relating to the institutional landscape, the incumbent infrastructure, the fragmented nature of the supply chain, and the innovation landscape.

PAGE 6 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG INTRODUCTION 1.1 INTRODUCTION

Significant resource has been Section 4 provides an overview of committed over the last few years to the current market in terms of policy articulating the vision for achieving a drivers; regional deployment potential sustainable and thriving Northern Ireland for sustainable energy technologies; the economy over the next decade and, in competitive position of Northern Ireland particular, in mapping and defining the relative to other UK regions; and the relative capabilities and opportunities existing innovation support landscape. associated with a Green Economy. Section 5 then provides a strategic This current report builds on the analysis of the preceding evidence Literature Review Insights Report base, identifying key strengths of the (Annex 1),1 exploiting further data region within the sustainable energy collection and market consultation to sector, together with specific challenges inform the development of a robust to development. assessment of current technology This data subsequently informed capability for the sustainable energy the development of the Sustainable sector in Northern Ireland. This report Energy Horizon Panel Report. defines the existing scientific, research and technological capacity of the region, and identifies key differentiating and commercially competitive features. REGIONAL It includes not only an assessment of the capability of the sector in terms of the key players (public sector, academic and private), their competence and CONTEXT capacity, but also the commercial environment in which they operate. Section 2 of the report provides a summary overview of the regional context in terms of the socio economic, demographic, and geographic characteristics that underpin the development of the sustainable energy sector in Northern Ireland.2 Section 3 presents an overview of the evidence base for current regional capabilities relating to: industrial activity; the academic base; and additional regional programmes and resources.

1 This report is available from www.matrix-ni.org, as MATRIX Sustainable Energy Horizon Report: Annex 1 Literature Review Insights Report.

2 Summary only provided here as more details are contained within the Annex 1 Literature Review Insights Report.

PAGE 8 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG regional context 2.1 DEMOGRAPHICS AND GEOGRAPHY

Northern Ireland covers an area of Extensive deforestation in the 16th and 13,843 km² (5,345 square miles), 17th centuries means that current forest with a population 1,810,900 in cover is relatively low (5.5%), although 2011, constituting about 30% of the there are plans to double this by 2050. island’s total population and about The province has a temperate maritime 3% of the population of the United climate, wetter in the west than the Kingdom. The population of Northern east. The country receives generally Ireland has seen consistent annual warm summers and mild winters, and growth since 1978. The seven largest is considerably warmer than other settlements are Belfast, Derry, Lisburn, areas on its latitude. Average daytime Newtonabbey, Bangor, Craigavon and maximums in Belfast are 6.5 °C in Castlereagh – all with populations January and 17.5 °C in July. >50,000. The metropolitan area of Belfast includes over a third of the population of Northern Ireland, with heavy urbanisation and industrialisation along the Lagan Valley and both shores of Belfast Lough. The centrepiece of Northern Ireland’s geography is Lough Neagh, which at 151 square miles (391 km2) is the largest freshwater lake both on the island of Ireland and in the British Isles. A second extensive lake system is centred on Lower and Upper Lough Erne in Fermanagh. The largest island of Northern Ireland is Rathlin, off the north Antrim coast. Strangford Lough is the largest inlet in the British Isles, covering 58 square miles (150 km2). The Lower and Upper River Bann, River Foyle and River Blackwater form extensive fertile lowlands, with excellent arable land also found in North and East Down, although much of the hill country is marginal and suitable largely for animal husbandry. Over 90% of agricultural land is under grass.

PAGE 10 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 2.2 THE ECONOMY AND INFRASTRUCTURE

Northern Ireland has a relatively small More recently the economy has economy that is highly dependent on beneﬁted from major investment by exports for growth. The economy is many large multi-national corporations strongly reliant on agriculture, forestry into high tech industry. These large and ﬁsheries, although the region has organisations are attracted by traditionally had a solid industrial base, government subsidies and the skilled most notably dominated by shipbuilding, workforce in Northern Ireland, as well rope manufacture and textiles. However, as good infrastructure such as the a decline in heavy industry since the major sea ports at Larne, Belfast and 1980s has seen it replaced by services, Warrenpoint. primarily the public sector and to a lesser extent tourism. It is estimated that the public sector currently accounts for approximately 30% of total employment in the province.3 The economy is made up of 98% SMEs (responsible for employing 67% of the workforce), with 84% of total businesses as micro SMEs employing <10 individuals. Nevertheless, Northern Ireland retains a strong manufacturing sector (representing almost 30% of the total economic activity of Northern Ireland business)4 within which, food production is the largest sub-sector, followed by followed by electrical and optical equipment, transport equipment and other machinery and equipment.5 There is also a well developed concrete industry in the region with a number of specialist pre-cast concrete producers.

3 Northern Ireland Knowledge Economy Index Baseline Report 2011.

4 Invest NI Maximising Business Opportunities from Sustainable Energy. The Establishment of Energy Technology & Service Sector Business Led Collaborative Networks in Northern Ireland, 2008.

5 Roger Tym & Partners, Northern Ireland Renewable Energy Supply Chain, report for The Carbon Trust, June 2008.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 11 2.3 THE ENERGY SECTOR

Since 2007, Northern Ireland has The region has relatively high levels of operated within a Single Electricity fuel poverty, with an estimated 44% of Market (SEM), in which the wholesale households paying more than 10% of markets of Northern Ireland and the income on energy bills.7 The average Republic of Ireland are combined. home energy bill in Northern Ireland is Within Northern Ireland, there is a £2114 per annum; compared to £1400 single Transmission and Distribution for the rest of the UK. owner (NIE), and System Operator Northern Ireland is heavily dependent (SONI), the latter owned by EirGrid on imported fossil fuels, providing a since 2009. Historically, NIE was also key incentive for development and the sole supplier in the region, but deployment of sustainable energy competition is now rapidly entering the technologies. The region is largely market, with an additional 17 electricity dependent on oil for heating, with an suppliers currently licensed by the Utility emerging natural gas market. There are Regulator. currently about 120,000 households It is widely acknowledged that and 8,000 businesses connected to achievement of the 40% renewable mains gas supply (20% of properties) electricity target is heavily dependent on with a further 34,000 additional major reinforcement of the transmission consumers expected to come on line as and distribution system, (estimated by a result of proposed pipeline extensions NIE to require an investment of up to £1 to main towns in the west of Northern billion),6 and the construction of the new Ireland (construction anticipated to North South interconnector between begin in 2015).8 The Strategic Energy Northern Ireland and the Republic of Framework outlines a potential spend Ireland. of £170 million to expand the gas grid across Northern Ireland and £250 The Renewables Integration million for a salt-cave gas storage Development Project (RIDP), a joint facility. It is believed that natural gas project between EirGrid, SONI and will continue to fuel most of Northern NIE, was begun in 2008 to determine Ireland’s conventional power generation the optimum means of major (275kV) to 2030,9 with the likely closure of the grid reinforcement to accommodate remaining coal-ﬁred power station high levels of predicted renewable (Kilroot) by 2017 which may, however, generation (primarily onshore wind) result in short term issues relating to in Donegal and Northern Ireland. This security of supply. project is still underway.

7 http://www.decc.gov.uk/assets/decc/11/stats/fuel poverty/5270-annual-report-fuel-poverty-stats-2012.pdf.

8 http://www.northernireland.gov.uk/news-deti-140113 foster-welcomes-executive. 6 NIE, Transmission and Distribution Price Control for RP5. Capital Investment Requirements for the Fifth 9 DETI, a strategic framework for Northern Ireland Regulatory Period, April 2011. September 2010.

PAGE 12 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG oVerVieW oF tecHnology caPability baSeline 3.1 METHODOLOGY

This report analyses the current and latent technical capability of Northern Ireland’s sustainable energy sector, using the following classiﬁcation of contributing technologies and their associated supply chains:

TABLE 1 SEGMENTATION OF SUSTAINABLE ENERGY SECTOR

Segment Primary Focus Onshore wind >50 kW Offshore wind All aspects of supply chain Marine Tidal and wave Low Carbon Buildings Including new materials, insulation, control systems, and software Micro-renewables Including heat pumps, solar thermal, small wind, biomass CHP, small scale PV, and hydro Bioenergy Consisting of: Biomass – which includes AD, waste to energy and CHP Biofuels - production of value added fuels, for example, from lignocellusic feedstock, production of syngas, gasification, pyrolysis, and torrefaction processing Energy Infrastructure Grid management, power engineering, data management solutions, smart metering and communications, efficient transmission, voltage optimisation, controls and instrumentation, smart white goods Energy Storage Includes advanced batteries, flow batteries, super capacitors, compressed air, adsorption chillers PV Thin film and third generation; solar farm development Hydrogen and Fuel Cells Including PEMFC, DMFC and reformate fuel cells, electrolysis and hydrogen storage Hydroelectric All scales, such as run of river, pumped storage (but excluding micro hydro) Geothermal All Carbon Capture Capture and sequestration Professional Services Including carbon services, legal, risk management, finance, and engineering design Enabling technologies Such as advanced materials and nanotechnology

PAGE 14 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG A database was set up with the from Sustainable Energy, 2008’ and, following criteria against each of the from national sources, the MCS Installer above segments: Database. • Research and industrial capacity Details of the individual sources and (number of players/organisations coverage of data used are given and scale); in Appendix B. Overall the level of confidence in the data was reasonably • Key/flagship organisations; good, especially once validated via • Key regional assets/projects; consultation with the market and key • Specific sector support programmes stakeholders. (public or private sector); • Specific regional market drivers/ resources; • Growth trends to date; • Time to commercial market potential; • Key gaps/challenges in bringing the technology to market. By definition, the analysis has been semi quantitative in nature, informed through consultation with representatives from the regional market and independent external experts, and validated with the MATRIX SEHP and other key stakeholders. A full list of consultees is presented in Appendix A. The quality and quantity of data available for individual segments was variable. As identified in the Annex 1 Insights Report, Northern Ireland has a comprehensive set of data sources, with particularly strong coverage of the offshore wind, marine and bioenergy segments. The Invest NI Offshore and Marine Database, in particular, is actively managed and contains considerable amounts of data on each company. Other significant sources were the Invest NI Bioenergy Database, a number of reports, such as the Invest NI ‘Maximising Business Opportunities

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 15 3.2 INDUSTRIAL ACTIVITY

This section summarises the current their numbers, which are partly based The database used for low carbon level of activity within the regional on simple SIC code categorisation,13 buildings is less well developed, and supply chain, with an emphasis on may tend towards overestimation the remaining sectors were analysed the identification of significant players (and this is likely to be the case for through a combination of interviews (corporate and innovative SMEs), key the building sector, in particular). The with supply chain participants, and strengths and potential gaps. Although key sectors which lend themselves direct internet searches. As such, this information has been covered to towards diversification into energy the level of confidence in these data some extent in previous reports,10 this related activities are manufacturing, is lower (with a likelihood that the study had a broader scope and included construction, and engineering. Northern data are underestimated rather than an assessment of additional segments Ireland has capability in all of these overestimated), but the results are not previously investigated. areas, and this is discussed further in considered sufficiently accurate to Section 3.2.8. inform the analysis required for the Various estimates have been made of current study. the total number of companies linked to Based on this current analysis, Figure the sustainable energy supply chain in 1 indicates the number of companies In summary, the majority (77%) of Northern Ireland: in the sustainable energy supply chain active companies are in the wind, to be approximately 630, although marine, bioenergy, and micro • Invest NI have a list of approximately several of these are active in more renewables segments. Low carbon 1300 companies that have made than one sector, bringing the total buildings, advanced materials, energy contact with the organisation, number of individual companies down infrastructure and energy storage either through service provision or to about 565. An additional 65 of these have relatively immature and emerging outreach events, although not all of (associated solely with the marine supply chains, with a lack of critical these are based in Northern Ireland; sector) are not believed to have direct mass. These individual segments • K-Matrix data suggests that 1500 practical experience to date. This is a are described in more detail below. companies are involved in whole similar figure to that obtained by Invest Professional services predominantly LCEGS sector in Northern Ireland;11 NI research in 2008.14 consist of legal, consulting or advisory firms that only specialise in the • Ecorys estimated a total 1000 Figures for wind, marine, bioenergy and provision of professional (as opposed to companies involved in four principal micro-renewables were provided by up technical) services. It is acknowledged sub-sectors: Integrated Building to-date databases,15 that are believed that companies within other categories Technology (634); Offshore Energy to be reasonably accurate, although may also provide professional services. (94), Bioenergy (239) and Energy it is important to note that they rely on Storage (73).12 information supplied by the companies themselves. This can therefore include In most cases, however, it is not known ‘aspirations’ for activity within the sector, how many of these companies are rather than actual experience, and may truly active in the sector (as opposed account for some of the difference to interested in diversifying from their between the figures quoted here and current core businesses). The Ecorys those cited by the Ecorys report above. report, for example, acknowledges that

10 For example Invest NI, Maximising Business Opportunities from Sustainable Energy, The Establishment of Energy Technology & Service Sector Business Led Collaborative Networks in Northern 13 In particular data from BIS – Innovas (2009) Low Ireland, the Energy Scoping Group (2008); Envirolink, Carbon and Environmental Goods and Services: An Development opportunities for the Wind, Marine and Industry Analysis, which has been criticised in terms of Bioenergy sectors in Northern Ireland, Draft Report, Sept an excessively broad scope resulting in artificially inflated 2012. figures.

11 Envirolink, Development opportunities for the Wind, 14 Invest NI, Maximising Business Opportunities Marine and Bioenergy sectors in Northern Ireland, Draft from Sustainable Energy, The Establishment of Energy Report, Sept 2012. Technology & Service Sector Business Led Collaborative Networks in Northern Ireland, the Energy Scoping Group 12 Ecorys, Research Study to Determine the Skills (2008). Required to Support Potential Economic Growth in the Northern Ireland Sustainable Energy Sector, 2011, 15 Wind, Marine, Bioenergy from Invest NI databases; Report for Department of Employment and Learning. microgeneration from the MCS Installers scheme.

PAGE 16 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG FIGURE 1 NUMBER OF COMPANIES CURRENTLY ACTIVE IN THE REGIONAL SUSTAINABLE ENERGY SUPPLY CHAIN

200 185 180

160

140

120 119

100 85 80

Number of Companies 61 60 55 50

22 17 20 14 12 6 3 2 0 0 s

Wind Marine H & FC Bioenergy Geothermal LC Buildings Hydroelectric Energy Storage Carbon CaptureLarge Scale PV Micro-Renewables Advanced Materials Energy InfrastructureProfessional Service Hydroelectric capability in Northern has pioneered a ‘quad-generation’ sectors, with geothermal capability Ireland is limited to a few specialist technology to recover carbon dioxide for occupying only a small part of their companies, specifically, Hydro NI and industrial use. overall business. Specific companies NHT Engineering which offer a range of of note include Alan & Eugene Dunne The Geothermal sector contains a engineering and installations services. Drilling and GT Energy. The latter is number of firms with capability to based in Northern Ireland but all of CCS activity has been limited to date. provide engineering, consulting services its geothermal projects are located in Of note is the Coca-Cola Hellenic and geothermal technology, although mainland UK. and ContourGlobal project that many are active in other renewables

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 17 Onshore and Offshore Wind from China; inverters from Germany), As described above, the vast majority the installation process tends to use a of companies (98%) in Northern Ireland There is currently no indigenous local labour force for ground work and are SMEs (<250 employees), with 84% investment in large scale PV installation. civils, which accounts for approximately having fewer than 10 employees16. As The sector has recently attracted some 40% of installation costs. However, a result, the proportion of companies interest from overseas companies major barriers to investment in Northern that are fully NI-owned is high (at as a result of the relatively generous Ireland include the prolonged planning approximately 95%), although many of ROC subsidies (in comparison with process, and limitations of the grid these can only access small contracts. the rest of the UK), the availability of carrying capacity. With one or two exceptions (e.g. reasonably priced land to rent and high Bombardier) the larger companies electricity prices. Whilst the supply There is no discernible industrial activity associated with the sustainable energy chain for PV components is dominated in fuel cells or hydrogen technology. sector have headquarters based outside by international players (e.g. panels Northern Ireland.

FIGURE 2 WIND SUPPLY CHAIN DISTRIBUTION

100 92 90

61 60

40 33 Number of Companies 30 22 20

10 7 4 0 0 Tech. Applied R&D Wind Farm Consultancy Engineering Manu. & Installation, Developers Developers Components O&M

There are approximately 185 Northern • Wind technology developers; As would be expected from an SME- Ireland-based companies currently • Applied R&D; dominated supply chain, the majority active in the onshore and offshore wind of companies (84%) offer a single • Wind farm developers and owners; sectors. Based on data from the Invest service within the above categories; NI database, the supply chain can be • Consultancy & support; approximately 10% offer services in broken down further into the following • Engineering; twoareas, and just 4% in three or more. activities (Figure 2): • Manufacturing & components; • Installation and O&M.

16 ONS, UK Business, Activity, Size and Location, 2012.

PAGE 18 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG As indicated in a recent Invest NI wind farm maintenance and logistics Marine report,17 the supply chain map illustrates services (see Section 3.4). According to the Invest NI database, the strength of the engineering sector It is considered likely that wind turbine there are approximately 119 companies overall with particularly high numbers OEMs will be looking to increase the in the marine energy supply chain. Their involved in electrical engineering, level of local component sourcing and distribution across the supply chain is materials and composite products and service provision as the proposed shown in Figure 3. Supply chain activity mechanical/precision engineering. offshore developments around the coast is similar to that seen for wind, and There is also considerable activity of the UK get underway. This could indeed there is considerable overlap in consultancy, manufacturing and provide significant opportunities for the between these segments (45% of installation. inherent engineering and manufacturing marine companies are also listed under Counter to this, however, is the capability outlined above. wind). Again the analysis highlights general lack of technology developers the strengths in the engineering and The presence of a leading corporate, (specifically turbine OEMs) and large manufacturing sectors with a focus Harland & Wolff Heavy Industries, and scale wind farm developers in the on power take-off and precision the infrastructure available at in Belfast Province. One notable exception is B9 engineering; and machining and metal Harbour also provides a potential Energy Offshore Developments Ltd, fabrication respectively. focal point for wind-based engineering which is part of the First Flight Wind activities, and a draw for inward However, it should be emphasised consortium (together with Dong Energy investment. The recent announcement that this is essentially a supply chain and RES) that has been selected by The of DONG’s decision to locate its Turbine that is ‘poised for action’, since there Crown Estate to develop an offshore Logistics facility is a good example of has been limited full scale wave and wind farm (up to 600 MW) off the south this. With an historical legacy in ship tidal deployment to date, and therefore east coast of County Down. There are design and build, Harland & Wolff limited opportunities for implementation also a small number of companies (e.g. now have considerable experience in of services. Nevertheless, the numbers McNicholas Construction, Farrans renewable energy projects, including indicate that there is a high degree of Construction) that act as principal storage and assembly of the large potential capability within the sector, contractors for major turnkey projects. scale turbines for the Robin Rigg and particularly if component manufacture One or two companies (such as Axis Ormonde offshore wind farms. and systems integration can be Composites) are also providing direct undertaken in the province. Some There are additional ports in Northern support to turbine development, for of these companies are international Ireland that have the potential to take example through the use of novel construction, engineering and oil & gas advantage of the growing market for materials in blade manufacture. Other companies that have clear transferable offshore services, not only providing innovative SMEs are also actively skills (Farrans (Construction) Ltd; CEI infrastructure for installation and involved in the sector, including for Collins; Atlantic Oilfield Services). maintenance activities, but also example; Barton Industrial Services accommodation and services for (installation and maintenance); Green personnel. Energy Technology (farm-scale onshore wind); Grants Electrical Services; and A number of other international PF Copeland (metal fabrication). corporates (e.g. Graham Construction, Over Arup, WYG Ireland, and BASE) Several of these companies are have regional offices, and are actively members of the Global Wind Alliance, engaged in the sector within Northern a unique commercial organisation that Ireland. offers a single point of access for all

17 Envirolink, Development opportunities for the Wind, Marine and Bioenergy sectors in Northern Ireland. Draft Report for Invest NI, Sept 2012.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 19 Only a few companies in the region association with QMTeC, but these experience of installing marine have practical experience in the sector, are not headquartered in Northern devices in the ocean. The via the Strangford Lough test site (see Ireland (although Minesto UK is construction and civil engineering Section 3.3.2), and also further afield. based at NISP); firm has been involved with more Examples are: than six marine energy projects, • Harland & Wolff: involved in the including Open Hydro in Orkney; • Pure Marine: the only regional installation of Marine Current device developer, but also offering Turbine’s SeaGen device in • Charles Brand: involved in the third party consultancy services. Strangford Lough; construction of the Limpet device in Other device developers are active Scotland. • McLaughlin & Harvey: one of a in the region (specifically Minesto limited number of companies, and Aquamarine), primarily via an internationally, with practical

FIGURE 3 MARINE SUPPLY CHAIN DISTRIBUTION

45 45 41 40

35 33

20 Number of Companies 15

10 10

5 5 4 1 1 0

Survey

Applied R&D Consultancy Engineering

Techn. Developers Project Developers Installation, O&M Marine & Components

PAGE 20 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG As seen in the wind sector, the majority Micro-renewables There are approximately 85 MCS of companies (71%) listed on the certified companies in Northern This sector incorporates domestic and Invest NI database offer services within Ireland19, with a reasonable split across commercial scale heat and electricity a single supply chain category only, the different technologies, although generation, (solar thermal, solar PV, heat 22% within two categories, and just relatively few for wind and none for pumps, biomass boilers, small wind and 5% (including H&W, McLaughlin & hydro. In the case of micro-hydro, there micro-hydro). The principal source of Harvey, Pure Marine and Mo Team) are few suitable sites (fast-flowing information for active companies is the have capabilities spanning three or four streams) for installation due to the Microgeneration Certification Scheme categories. topography of the region. (MCS) database18.

FIGURE 4 MCS: NUMBER OF CERTIFIED INSTALLER COMPANIES 1819

29 30 27

22 20 15

Number of MCS Certified Companies 6

0 0 Solar Solar PV Heat Biomass Wind Hydro Thermal Pumps

A number of companies are certified in services (including feasibility, size There are two key Southern Ireland- multiple technologies, such as Green optimisation, system integration and based manufacturing companies with Energy Technology Ltd; EAGA NI Ltd; finance), and may act as distributors for plants located in Northern Ireland: Glen Bluebuild Energy Ltd, Alternative Heat specific technologies (e.g. Silverford Dimplex and Kingspan Renewables Ltd; Biofoss Renewables Ltd; FG Renewables). Ltd. Glen Dimplex is the world’s largest Plumbing; Linton & Robinson Ltd; and manufacturer of electrical heating There is little product development Tri-Power Environmental Energy Ltd; appliances, but has been steadily within the region, and most of these but the majority are limited to one or diversifying into the renewables market-ready technologies are two. sector, primarily focussing on heat imported. One exception is Willis pumps, solar and smart devices for There is little information on other parts Renewable Energy Systems Ltd, which the home (including energy storage, of the supply chain within this sub- designed the Willis Solasyphon, a such as the Quantum Energy System). sector, although it should be noted vertical heat exchanger that can be They have recently invested heavily that many installer companies will offer used with existing hot water storage in the region, setting up two new consultancy as well as installation systems for retrofit of solar thermal. laboratories (employing 20 R&D staff

18 http://www.microgenerationcertification.org/consumers/installer-search

19 Action Renewables, pers. Comm.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 21 in the development of heat pump, based factory. companies that are focussed on large PV and solar thermal systems, and scale (multi-megawatt) installations, and Since its acquisition of Thermomax, smart grid technologies), and two new those involved in numerous distributed Kingspan Renewables (part of the manufacturing plants, for development, farm-scale/community based projects, Kingspan Group) has also been involved testing and assembly of heat pumps and primarily anaerobic digestion20, (and to a in the production and installation of solar integrated hot water storage vessels. lesser extent commercial scale biomass thermal products. The company sources the majority boilers). (Domestic scale biomass of its components from Europe and Bioenergy installations are covered under micro the Far East, with the exception of renewables.) The bioenergy market in Northern Copeland (Emerson) which supplies air Ireland can be seen as predominantly compressors from its Northern Ireland- active at two distinct scales: a few

FIGURE 5 BIOENERGY SUPPLY CHAIN DISTRIBUTION 20

31 30

20 18 18 17 15 15

11 Number of Companies 10

6 5

5 3

Survey Engineering Applied R&D Consultancy

Techn. Developers Project Developers Installation, O&M Feedstock Suppliers Manu. & Components

20 Domestic scale biomass identified within previous section

PAGE 22 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Data for the bioenergy supply chain • Balcas Timber, Enniskillin – 10 MW Ltd (supercritical water oxidation, initially was again obtained from the Invest NI biomass power generation using of sewage, to produce electricity, plus database (total 61). The supply chain wood pellets. carbon capture as a pressurised liquid). distribution is somewhat different to that Of particular note is the relatively broad Advanced materials seen in the wind and marine sectors spread of capability within this sector (Figure 5). Although manufacturing and Advanced materials have been identified (when compared with marine and wind): engineering capability is highlighted one of the most significant enabling only 57% offer services within a single again, there are noticeably more technology fields for the sustainable supply chain category; 19% within two ‘technology developers’. However, energy sector (see Section 3.3.6). categories, 8% within three categories; the majority of these source their Other key fields are Controls and and the remaining 16% (10 companies) core technologies abroad, primarily Instrumentation (included under Energy have capabilities spanning four to nine Austria and Germany, and are involved Infrastructure), and other technologies categories. This illustrates the tendency in adaptation to the local market which are assumed to be covered by of key companies in this sector to through system integration. One the existing IT and engineering supply offer turnkey solutions, incorporating exception is Turkington Engineering, chain (see Diversification section design, consultancy, manufacture and which is manufacturing a complete below). installation. Example companies are: UK-based woodfired boiler system Advanced materials are defined as for Woodpecker UK Energy Ltd. • Green Energy Engineering; the development of next generation Within manufacturing, there is a • Green Energy Technology; materials in polymers (e.g. formation relatively even split between ancillary of new polymer blends), composites plant components; balance of plant • Williams Industrial Services; (e.g. combinations of matrices and components; combined heat and power; • Action Renewables. reinforcements), and metallics (e.g. and pumps, turbines and storage tanks. developing new alloys with high This breadth of capability has been formability and low temperature). Feedstock supply, another element taken a stage further in the Glantek of the bioenergy supply chain, is an Alliance22 (see Section 3.4). The first Capability in advanced materials is active and growing segment in Northern of the novel Alliance organisations in coordinated by the Northern Ireland Ireland. The majority of companies the region, Glantek is heavily involved Advanced Composites and Engineering provide forestry-based products (e.g. in the bioenergy sector, and spans Centre (NIACE) and Northern Ireland Balcas Brites, McAulay Renewables) both scales of development, bringing Polymer Association (NIPA). Between and one or two companies are involved together supply chain companies with them, there are 55 organisations that in industrial and commercial waste complementary skills to provide an have an interest in advanced materials, feedstocks. overarching service from a single point with around 10 being the most active, Large scale project developers are of contact. Many of the most active predominantly in research, design, involved in a range of technologies, for companies (including WIS, B9 Energy integration and adaptation of new example:21 & Silotank) are amongst its members. materials. These organisations are often larger corporates, operating • B9 Organic Energy – primarily There is little data regarding companies across numerous sectors, and with an energy from waste (via anaerobic involved in advanced biofuel generation. interest in benefiting from technological digestion); Two notable exceptions are Conversion advancement through development And Resource Evaluation Ltd (CARE), • Kedco Energy (Irish-based) – of the next generation of materials. involved in pyrolysis technology responsible for a 4 MW waste wood Although these companies have the development and performance gasification plant which became potential to develop technologies that evaluation; and Cleanfield Technologies operational in September 2012; support the sustainable energy sector,

21 For full list of operational and pending facilities, see Envirolink, Development opportunities for the Wind, Marine and Bioenergy sectors in Northern Ireland. Draft Report for Invest NI, Sept 2012. 22 http://www.glantekalliance.com/

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 23 in many cases other sectors (such as renewables) in the region, although it is smaller specialist operators and pharmaceuticals and bioengineering) acknowledged that this figure may be an contractors, such as Kane Engineering form the first priority focus. overestimation. (LV switchgear), and Kelvatek (design and manufacture of innovative However, three SMEs have been The data used for the current analysis technology for the power sector, identified, Axis Composites, Creative suggests that there are at least 50 including 11kV digital fault recorders; Composites and MOF Technologies, companies that are actively engaged digital circuit breaker testing; LV fault which are particularly active in Northern with low carbon building design and/ location; and transformer monitoring). Ireland and have a specific interest in or energy efficient products. Several Kelvatek has recently opened a test the sustainable energy sector. Much of of these overlap with both the micro facility that allows testing of cable the design occurs via NIACE, which renewables and bioenergy segments. systems with fault disruptions of up to provides the facilities for coordinated, One again, Glen Dimplex is a key 20,000 Amps. collaborative research activities. anchor company for the sector, along In addition, a number of international Low Carbon Buildings with a number of other construction- companies, that are leading in smart based corporates, such as MIVAN and This sector incorporates a broad range grid development around the world Scott Wilson. The supply chain also of energy efficiency technologies, (such as Cisco, GE, SAP, Airtricity and incorporates: including insulation products, advanced The Wright Group), are present within glazing, building scale energy storage, • Low carbon building design Northern Ireland, although not currently HVAC equipment and low carbon companies, such as Bell Architects; directly involved in regional activities building design. • Energy efficiency new build, such as within this segment. There is currently no maintained GP Williams, Sky Developments; Energy storage is an emerging field, database for the low carbon buildings • Construction materials manufacture, closely related to the evolution of the supply chain, and the data was such as Glas Seal (NI) Ltd; smart grid and the need to optimise therefore compiled from a range of and control intermittent and distributed sources.23 • Energy efficiency equipment, such generation from renewable systems. as insulation (Homewrap Ltd); low This is a particularly difficult sector Energy storage technologies cover voltage controls (Matik NI); in which to assess the supply chain a very wide range of scales from accurately since it is so closely tied • Energy management, such as P & A pumped storage in caverns and salt in with the construction sector. Many Quinn Energy Ltd. mines (associated with multi-MW wind plumbers and electricians have farms) to battery storage integrated into Energy Infrastructure and Energy individual small scale wind turbines. the capability to participate in the Storage supply chain, for example, but do not It can also be used to describe storage necessarily engage actively with the Data for energy infrastructure indicates potential within buildings, ranging from ‘green agenda’. Likewise insulation an estimated 22 companies operating simple hot water storage to emerging and glazing companies do not always in Northern Ireland, that specialise in technologies, such as phase change identify themselves as low carbon system design, control systems, testing materials within the building fabric (e.g. building suppliers. As described and electrical installation. This sector chilled beams). This category has been above, the Ecorys report24 suggested comprises both large engineering firms, addressed within Low Carbon Buildings that there could be as many as 634 such as PowerTeam Electrical which in this report. companies potentially associated with designs, supplies and constructs high the Integrated Buildings Technologies voltage electrical infrastructure solutions supply chain (including micro for utility and private operators, and

23 Invest NI databases, published reports, internet searches.

24 Ecorys, Research Study to Determine the Skills Required to Support Potential Economic Growth in the Northern Ireland Sustainable Energy Sector, 2011, Report for Department of Employment and Learning.

PAGE 24 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Some of these technologies (pumped setting up field demonstrations of state- Northern Ireland Census of Employment storage) have been in existence of-the art technologies, and ensuring data from 2009, there were 63,275 for many years, whilst others (flow subsequent exploitation/deployment of employees within these key sub sectors, batteries) are more recent, but in all appropriate systems. which is equivalent to approximately 9% cases there are development needs for of total Northern Ireland employment. Diversification Potential commercial deployment, including the The figure shows that the construction need to increase efficiency and reduce In addition to the companies which sector is a significant employer with heat loss during the process. have been identified as active within 18,000 employed in ‘specialised the current sustainable energy supply construction activities’25, 10,000 in As a result, there has been limited chain, it is recognised that there is a construction of buildings and 9,000 opportunity for the development of a latent pool of capability amongst the in civil engineering. Indeed, the dedicated and coherent supply chain. existing regional industrial base that has construction sector is more significant In response to this, the Energy Storage the potential for future diversification. to the Northern Irish economy, at 10% Network (a collaborative network of 14 Three key sub sectors most lend turnover and 11.7% GVA, than it is in companies, supported by Invest NI) is themselves to potential diversification: any other region of the UK. Architectural currently being formed along the same manufacturing, engineering, and and engineering activities, and scientific lines as Glantek, see Section 3.4. The construction. Figure 6 details the research and development are also Network is composed of a range of current number of employees in each strong with 6,500 employees. companies (including major international of these subsectors. Based on the players and end users) capable of

FIGURE 6 NORTHERN IRELAND EMPLOYMENT IN KEY INDUSTRIAL SECTORS (2009) (NUMBERS EMPLOYED)

25 20000

18002 18000

16000

14000

12000

9899 10000 8877

8000 6876

6000 5484 4374 4000 3601 3680

1990 2000 492 0

activities activities products* Scientific R&D Civil engineering Manu. basic metals & optical products Manu. fabricated metal Construction of buildings Specialised construction Manu. computer,Manu. electronic electrical equipment Architectural & engineering Manu. machinery & equipment

* except machinery & equipment

25 Note that the term ‘specialised’ under 2007 SIC Code 43, distinguishes activities associated with the interior of buildings and connection to utilities, such as plumbing, painting, electrical, from the actual construction itself.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 25 Figure 7 provides a breakdown of report, significant up/re-skilling of the was £16,449 million, representing the specialised construction activities existing construction workforce will be 28.8% of the Northern Irish economy. category and indicates a relative required to meet anticipated growth in Similarly, manufacturing GVA strength in plumbing, heat and air the sector, for example to install new represented 25.4% and employment conditioning installation, and electrical equipment designs, or ensure best costs 22.7% of Northern Ireland totals. installation. practice in energy efficient construction This contrasts with the much smaller techniques26. proportion of manufacturing within Once again, this indicates the Great Britain at around 14% of the significant latent resource capability Manufacturing is also acknowledged economy’s total turnover, GVA and in the region, relating to low carbon as being particularly important to the employment costs27. building technologies, and micro Northern Irish economy. In 2010, renewables. According to the Ecorys Northern Ireland manufacturing turnover

FIGURE 7 BREAKDOWN OF EMPLOYMENT IN SPECIALIST CONSTRUCTION ACTIVITIES 2627

20000 1899 Specialised construction activities

378 Scaffold erection 18000

525 Roofing activities 16000 888 Other building completion and finishing 14000 1298 Painting and glazing

390 Floor and wall covering 12000 1959 Joinery installation

10000 478 Plastering

812 Other construction installation 8000 3544 Plumbing, heat & air-conditioning installation 6000 5172 Electrical installation

4000 37 Test drilling and boring

484 Site preparation 2000 138 Demolition

26 Ecorys, Research Study to Determine the Skills Required to Support Potential Economic Growth in the Northern Ireland Sustainable Energy Sector, 2011, Report for Department of Employment and Learning.

27 Annual Business Survey, 2010, ONS, http://www.detini.gov.uk/deti-stats-index/stats-surveys/stats-census-of-employment.htm

PAGE 26 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 3.3 ACADEMIC ACTIVITY

Table 2 provides an overview ‘snapshot’ renewables, to foundation degrees the general curricula offered by the of the relative capabilities of the with specialism in renewable energy. colleges. The InnoTech Centre model regional academic base with regard Significant expertise in the sustainable (considered outstanding in a recent to sustainable energy. The institutions energy sector has been developed by a evaluation) is currently being rolled out have been assessed on a comparative number of colleges, with both specialist to other colleges, under the Innovation basis, and scored on the relative equipment and demonstration facilities. Fund: Employer Support Programme level of resource and capability they Some micro-renewables training is (see Section 4.4). currently demonstrate in each of the key available at all colleges. Overall, the A detailed study to determine the technology areas. colleges provide excellent training skills required to support growth in the facilities with limited funding, but do not Northern Ireland has two Universities, sustainable energy sector in Northern compete with the universities for the Queen’s University Belfast (QUB) and Ireland was conducted in 2011. This larger scale projects. University of Ulster (UU) both of which concluded that, in the period 2011 are considered world class in a range Technology transfer and industry 2015, the sustainable energy sector of research areas. Both universities training programmes are also provided would require an estimated 3,300 conduct a significant amount of at CAFRE (the College of Agriculture, skilled workers, some with highly research into sustainable energy related Food & Rural Enterprise) to students specialist skills, and others with more technologies, although neither has a within the agri-food sector. In addition generalist STEM training. This can be unified and dedicated research centre specific programmes, funded by the met through a combination of DEL’s for the entire sector. Innovation Fund, have been instrumental Stem Strategy (to counter a decline in in supporting the development of skills STEM graduates), an emphasis of the AFBI, an NDPB, closely associated with in the sustainable energy sector:28 importance of sustainable energy within DARD, is another source of primary the STEM curriculum, and continued research in land-based sustainable • The Carbon Zero Programme support for specialist courses delivered energy technologies, as well as – focussed on regional capacity by the Universities and FE colleges. providing specialist demonstration building in development and facilities at its Renewable Energy deployment of smart, sustainable Figures for the proportion of research Centre of Excellence. energy technologies; that is specifically industry-driven are not readily available. However, a In future the proposed Centre for • InnoTech – focussed on report into the quality of FDI into NI,29 Advanced Sustainable Energy (CASE) enhancing employer engagement, suggests that the renewable energy (see Section 3.4) will provide a single entrepreneurial activity and providing sector (including marine/wind turbines) focal point for targeted research in the industry linked R&D services and is forecast to be the fastest growing sustainable energy sector, coordinating innovation support by bringing new sector for FDI globally and into the UK activities at all three academic ideas and products to the market. to 2015, increasing demand for R&D institutions. The programme is also aimed at investment (approximately 11% of FDI increasing participation in STEM In addition, there are six regional investment in the sector is R&D based). courses. colleges which provide a wide range of To date Software & IT, business & relevant training courses, ranging from The Carbon Zero Programme has now professional services, and financial broad-based engineering skills, through closed, but many of the specialised services have dominated FDI in installer qualifications for micro training courses are incorporated into Northern Ireland, but the region should

28 An Evaluation of the Innovation Fund: Employer 29 Improving the Quality of Foreign Direct Investment Support Programme, Education and Training to Northern Ireland, FINAL REPORT. April 2012, fDi Inspectorate, April 2011 Intelligence, Financial Times Ltd.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 27 be able to compete effectively for Wind Marine R&D investments in renewable energy. Large scale wind technologies are QUB has internationally renowned QUESTOR (see Section 3.4) is also relatively mature, and there is little expertise in marine technologies, noted for its strength of collaboration evidence of primary research within this with a long history of research and with industry. segment at the universities, although development that dates back to the Overall the academic capability analysis QUB has been involved in research into invention of the Wells Turbine by shows a number of specific ‘hot the social acceptability of onshore wind, Professor Alan Wells in 1978. The spots’ of capability, and generally well the regulation of renewable energy and University’s Marine Laboratory (QML) populated innovation chains (i.e. full the broader governance implications of (approximately 12 academic staff, 4 complement of capabilities from early the low carbon transition. The exception research staff, and 20 students) was stage R&D through to demonstration to this is the strong research focus into subsequently responsible for generating and applied skills training). Specific the integration of renewables on to the the core IP for two wave devices that depth of capability is associated with: grid at QUB. This is covered under were commercialised by Scottish Energy Infrastructure (see below). companies: the Limpet (by Wavegen, • Marine; now a subsidiary of Voith Hydro); and Nevertheless, research into both • Low carbon buildings; the Oyster (Aquamarine, part owned onshore and offshore wind is by SSE and ABB). A research team • Micro-renewables; incorporated into the proposed Turbine from Aquamarine is currently embedded Cluster at CASE, including composite • Bioenergy; within the department at QUB, making technologies, repair techniques, use of their wave tank facilities. • Energy Storage; monitoring and control, carbon footprint, • Enabling Technologies. and H&S – see Section 3.4. The University has also been instrumental in installing and monitoring There is specialist training in wind Key notable exceptions to this pattern Marine Current Turbine’s SeaGen tidal technologies in Northern Ireland, are: device, which has been generating with South West College offering a electricity at the Strangford Lough test • The wind sector where there is foundation degree in ‘Engineering with site since 2008. relatively little R&D with regard to the Specialism - Wind Turbine Technology’, primary technology; and the City & Guilds Level 3 Certificate QUB continues to make a significant • Less mature technologies such as in wind turbine installation, as well impact in this area, primarily focussing next generation biofuels, hydrogen as the Level 3 Diploma in Electrical on two areas: power engineering – Wind turbine and fuel cells, and carbon capture • Developing and promoting the maintenance. These courses are where downstream capabilities are Queen’s Marine Energy Test Centre, coupled with the Renewable UK as yet undeveloped; QMETeC consisting of the 1/10th ‘Working at Height and Rescue’ training scale testing facility at Strangford • More mature and niche technologies provided at the SWC Enniskillen Lough, plus two wave test tanks. such as hydroelectric and training tower facility. geothermal. Since the installation of SeaGen, The City & Guilds Level 2 & 3 Strangford Lough has been used The following text provides a summary Diplomas in wind turbine operation and to test a number of different wave of the relative regional academic maintenance, and Level 3 Technical and tidal devices (such as EvoPod, capabilities for each market segment. Certificate are offered by Belfast Ocean Flow Energy, and the Metropolitan College. forthcoming Minesto Seakite);

PAGE 28 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG • World class expertise in the (Jordanstown Campus) with state of across all the regional colleges and investigation of the environmental the art testing equipment (such as the elsewhere in the UK. A number of the impact of marine arrays. QUB phase change material/chilled beam FE colleges have buildings built to the (Environmental Engineering ceiling/human comfort controlled BREEAM standard which are used Research Centre) are leading the environment test room). for demonstration and assessment way in moving this field from a high purposes, and provide specialist Priority research areas include energy risk reactive stance: install a device Foundation Degrees focusing on the efficiency in buildings, with a focus and measure the impact; to a low Low Carbon Construction sector, such on advanced glazing, thermal energy risk predictive stance: understanding as the FD in Sustainable Construction storage (using phase change materials) the likely impact of installation on at SWC. AFBI also has demonstration and advanced (highly efficient) heat physical (e.g. flow velocity) and facilities for relevant technologies at its pumps; and renewable energy, with biological (benthos) parameters. visitor centre (part of the Renewable a focus on improved energy storage Energy Centre of Excellence). In addition, there is still research activity within low-cost integrated collector/ into turbine cost reduction, ideally using storage solar water heater (ICSSWH) Bioenergy mass produced, cheaper materials and systems. The centre collaborates Although Northern Ireland has the impact of wave loading on power extensively with other universities and historically been slow to realise the output. Researchers from The School of industry (both local and international potential of the biomass resource, there Mechanical and Aerospace Engineering players). is rapidly growing interest in a number (Integrated Aircraft Technologies The Centre for the Built Environment of technologies, with an emphasis on cluster) will also input to this, potentially (QUB) also conducts research relevant energy crops (primarily SRC Willow) through adaptation of their work on to low carbon buildings, primarily via and anaerobic digestion of grass and composite materials and cost modelling a focus on structures (e.g. use of slurry. A small research group at AFBI for aircraft design. advanced composites) and structural (4-5 full time staff) is conducting leading The University of Ulster also contributes materials (e.g. behaviour of self research into growth and production to this sector via its expertise on marine compacting concrete), as well as of biomass from Short Rotation Crop ecosystems. procurement and design of low carbon Willow, including a project (with buildings and cities. collaboration from SWC) into the The proposed Turbine Cluster at CASE potential for simultaneous use of the will have a strong focus on marine This area is also well covered within the willow for bioremediation of wastewater. power, with an emphasis on resource proposed Energy Efficiency research Northern Ireland Water is also a major evaluation, design and cost optimisation, cluster at CASE. industrial partner in this project. array design, and energy storage. Training and deployment support for Both AFBI and SWC also conduct Low Carbon Buildings and Micro low carbon design and micro-renewable research into optimising anaerobic renewables installation is provided at the regional digester performance with grass colleges, using specialist training Research into low carbon buildings and and slurry based feedstocks, and facilities. SERC is the sole provider micro-renewables is particularly strong provide demonstration facilities for the of the BRE Energy Assessors training at Ulster University’s Built Environment technology at the Renewable Energy for Northern Ireland. SWC’s InnoTech Research Institute (BERI), via the Centre of Excellence and InnoTech Centre has been considered highly Centre for Sustainable Technologies30 Centre, respectively. Domestic and successful in engaging the business (with approximately 30 academic staff). commercial scale biomass installation community with micro-renewable The Centre incorporates the £1.5M training is available at SERC. projects, and is now being rolled out ENERF laboratory complex

30 http://www.cst.ulster.ac.uk/index.php

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 29 Research into biomass at Queen’s Energy Infrastructure and Energy Work into ionic liquids at QUB (see University is primarily driven through Storage Enabling Technologies below) may the biomass cluster at QUESTOR, also have a potential impact on energy The highly respected Electrical Power with an emphasis on the production storage via the development of green and Energy Systems research cluster31 and preparation of many different rechargeable batteries, using ionic at QUB (School of Electronics, feedstocks, conversion to energy liquids. Electrical Engineering and Computer through a variety of technologies Science) conducts research into As mentioned above, work on energy (including more advanced biofuel problems relating to the integration storage at UU, is conducted at the production through gasification and of distributed sources of energy. The buildings scale (such as hot water pyrolysis), and sustainability issues. island of Ireland is acknowledged as a storage and thermal storage (PCMs)), Current research projects include particularly interesting potential test bed and the university has additional ‘New Solutions for Second Generation for solutions to renewable integration expertise in the planning of large scale Biofuel Production’ and ‘Feasibility since it is a small, self-contained power storage infrastructure via its spatial Study of Energy Production from system with a disproportionately high planning group (BERI). Fermentation Wastes.’ reliance on renewable generation. The proposed Integrated and Storage One area of potentially ground breaking Under the Charles Parsons Energy cluster at CASE will also take up the research in this sub-sector is the Research Award, collaborative research challenge of ensuring that the electricity production of biofuels from marine is being undertaken to establish grid is fit for purpose and can enable algae. Both Universities are currently ‘exemplar, renewable all-Ireland Northern Ireland to meet its renewable involved in a joint UK and Irish project, energy solutions by 2020’. Research generation targets. Areas for research ‘Biomara’ that aims to demonstrate the topics include smart consumer load include: smart grid (e.g. voltage control, feasibility and viability of producing third participation, and power system stability. generation & load); generation (e.g. generation biofuels from marine biomass For example, the University is currently system stability); DC systems; storage (both seaweed and micro-algae). QUB conducting field trials with SSE, for a technologies (both large and small (via QML) is also active in two other novel synchrophasor technology, which scale); curtailment; sensors; demand large scale projects with the same is able to reliably detect and report loss management and asset monitoring. objective, the FP7 MABFUEL project of-mains conditions. and the European EnAlgae partnership Enabling Technologies The cluster was also involved in the (a £12m INTERREG IV initiative, 2011 EPSRC SUPERGEN AMPerES project There is a broad range of platform 2015). In the latter project, QML is (Asset management and performance technologies that have the potential involved in the evaluation of offshore of energy systems), developing a to enhance technology development cultivation methods for sustainable framework for complete telemetry, in many different sectors. Those that kelp biomass production, particularly in teleprotection and telecontrol of have a bearing on the generation and areas of high human activity (in this case distributed energy resources (2006 use of sustainable energy, include Strangford Lough). 2010). QUB specifically worked on a catalysis, ICT, advanced materials and Once again ‘Energy from Biomass’ low cost Synchrophasor Measurement nanotechnology. is the subject of one of the proposed System suitable for ‘loss of mains’ QUB has significant expertise and research clusters for CASE, with an 32 detection at embedded generators. facilities in catalysis research, based initial focus on thermal combustion of The cluster works closely with a at the Centre for the Theory and solid biomass, anaerobic digestion and number of international industrial Application of Catalysis.33 There are biogas upgrading. players, including Airtricity, Areva numerous industrial applications for T&D, Caterpillar, ESB, National Grid, catalysts, but part of the research NIElectricity, and Premier Power.

31 http://www.qub.ac.uk/research-centres/EPES.

32 http://www.rcuk.ac.uk/documents/energy/supergen. pdf. 33 http://www.centacat.qub.ac.uk/

PAGE 30 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG being undertaken under a major and novel concrete materials. A current exhaust streams. There are also EPSRC funded project ‘CASTech, PhD is examining the use of novel projects underway at the centre, looking Catalytic Advances through Sustainable materials (e.g. structural composites at materials for super capacitors for Technologies’, is centred on sustainable made of fibre reinforcement and automotive application, and the Centre energy applications. This includes chemically activated cement systems) to for Nanostructured Media houses the the design and development of next improve the efficacy of structural forms ANSIN (advanced material research and generation gold-based catalysts for the used in marine renewable projects development) hub which is focussed on production of clean hydrogen for use (specifically the Oyster wave device). meeting the needs of industry through in fuel cells and the in situ conversion Research into advanced composites targeted research into materials, of methane into a useable liquid fuel. is also undertaken by the Integrated coatings, sensors and photonics Work in this field at QUB has also led to Aircraft Technologies group. for application across a variety of the development of ‘some of the most sectors. One current activity involves Nanotechnology is another emerging advanced spectroscopic instruments the development of thin film coating field of research that has the potential to available in this field of research’. materials at industrial scale. provide the basis for a new generation Both universities undertake research of sustainable energy technologies. QUB has been leading the way in into areas of ICT that influence The Nanotechnology and Integrated research into ionic liquids (liquid salts) sustainable energy systems, the smart BioEngineering Centre (NIBEC)36 since the opening of the Queen’s grid in particular. For example, the at UU is a large, very well equipped University Ionic Liquid Laboratories highly respected centre of excellence, and industry focussed centre (30 (QUILL)37 in 1999. One potential The Centre for Secure Information patents filed and 4 spin-outs, although application for these, currently under Technologies (CSIT) at QUB is running none to date within cleantech). Clean development at the university, is in green a project called ‘Securing the Smart technologies is now one of four primary rechargeable redox flow batteries. The Grid’ to ensure that the smart grid is not focus areas with research topics batteries are based on organic materials open to cyber attack.34 including nanomaterials for fuel cells (quinone/hydroquinone derivatives) and photovoltaics; solar water splitting which are molten salts at room Both universities also have recognised and artificial photosynthesis; and sensor temperature, lowering the risk of fire or research teams in the field of advanced applications. explosions. These materials are cheap, materials. At UU, the Engineering safe, scalable materials, and do not Composites Research Centre35 At QUB, there are two nanotechnology degrade when repeatedly discharged. undertakes research into polymeric and related research groups: the Centre They therefore offer the potential to composites materials for use in a wide for Nanostructured Media and the create large-scale energy storage media range of engineering applications, and Semiconductors and Nanotechnology for the harvesting or controlled delivery is considered to be the UK leading 3D cluster. Although research could of intermittent renewable energy. This woven textile research group. Expertise undoubtedly have application in technology has a patent pending. includes design and development and cleantech applications, there currently manufacture of 3D tailored complex appears to be more emphasis on other Other textiles, materials characterisation and sectors, such as bio-engineering. Research into the remaining technology advanced composite manufacturing. Nevertheless, one recent spinout from categories appears to be relatively Queen’s University, MOF Technologies, As mentioned above, research at small scale and limited to one or two has developed a metal organic QUB within the Centre for the Built institutions. frameworks (porous nanomaterials) Environment has a strong structural technology which has potential as an material component, including the use environmentally friendly and efficient of advanced composites in construction, means of capturing CO2 from gaseous

34 http://www.qub.ac.uk/sites/CSIT/InnovationatCSIT/ Projects/SecuringtheSmartGrid/

35 http://ecre.ulster.ac.uk/ 36 http://www.nibec.ulster.ac.uk/ 37 http://quill.qub.ac.uk/index.php/research

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 31 TABLE 2 OVERVIEW OF RELATIVE ACADEMIC ACTIVITY WITH REGARD TO SUSTAINABLE ENERGY (EXCLUDES ASSESSMENT OF QUESTOR, CASE AND NIACE WHICH ARE CONSIDERED IN SECTION 3.4)

Key:  - Red = research up to a max of 3 for relatively significant resource;  - Green = development up to a max of 3 for relatively significant resource  - Blue = applied skills training up to a max of 3 for relatively significant resource

Segment QUB UU ABFI FE38 Speciﬁc Comments

QUB, research into social acceptability of onshore wind, the regulation of renewable energy. Research into improvements of the transmission & distribution from renewable energy is covered under  - - - Energy Infrastructure. Onshore - - -  wind SWC run an accredited wind installers course in Northern Ireland, - - -  plus a foundation degree in Engineering with specialism in Wind Turbine Technology, and Belfast Metropolitan College (BMC) provide certiﬁed wind technician training. R&D for turbine development and design available through FE colleges.

-  - - UU is primarily active in marine planning and ecosystem mapping. Offshore This activity overlaps with the marine impact assessment and - - - - wind ecosystem research. Onshore training available through FE is - - - - transferrable. QUB: world class research in marine technology development (in particular cost reduction), installation, environmental impact   - - and spatial planning. UU has some activity looking at the marine Marine  -  - environment (spatial planning and ecosystems). - -  - Marine energy will be the focus of the turbine research cluster at the CASE centre. SERC offers training in wave and tidal energy. Centre for Sustainable Technologies at UU is world renowned. Research includes innovative design, advanced glazing and energy storage (PCMs). QUB is looking at advanced materials in construction, and has expertise in design and procurement of low   - - carbon buildings and cities. SERC is sole provider of the BRE Energy Low Carbon -   Assessors training for Northern Ireland. Buildings  - - -  LC buildings are included under proposed Energy Efﬁciency research at CASE and the CREST Centre at SWC. Public buildings have been built to BREEAM standards with design assistance available through FE. NRC offer speciﬁc assessment assistance for low carbon buildings and Responsible Sourcing of Materials.

38 The six FE colleges are: South West College, South Eastern Regional College, Southern Regional College, North West Regional College, Northern Regional College and Belfast Metropolitan College

PAGE 32 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Segment QUB UU ABFI FE Speciﬁc Comments

-  - - Centre for Sustainable Technologies at UU is world renowned. Micro - Research includes advanced heat pumps; ICSSWH39 systems with -    renewables improved energy storage. All FE colleges provide training with a focus - - -  on supporting local deployment of energy technology. QUB activity primarily driven through the Biomass Cluster at QUESTOR. AFBI has strong focus on growth of SRC Willow     and performance of on-farm AD. SWC collaborating with AFBI Bioenergy: -   on SRC Willow project, and involved in EU project mapping sites Biomass*  for installation as well as industrial research and demonstration of - -   biomass and AD. Proposed research under Energy from Biomass at CASE centre covers combustion of solid biomass and AD. QUB activity driven via Biomass Cluster at QUESTOR. Both UU   - - and QUB involved in Biomara project – UK/Irish collaboration into Bioenergy: 3rd gen biofuels from marine algae. QUB also involved other marine   - - Biofuels* algae projects. UU looking at performance different fuels in gasiﬁers. - - - - Proposed research under Energy from Biomass at the new CASE centre includes biogas upgrading and energy conversion. QUB world class research into integration of variable distributed Energy   - - generation on to the power network: system stability, variability of Infra  - - - generation, smart grid. Potential for unique test bed, due to all Island structure integration and relatively high wind penetration. Other capability is - - -  covered under ‘enabling technologies’. QUB involved in SFI Charles Parsons which is investigating ‘System operation with increasing variable generation.’ UU (BERI)   -  Energy incorporates research into planning for energy storage infrastructure. - -  Storage  SWC involved in research and demonstration via Energy Storage - - -  Network. Will be focus of research at new CASE centre. - - - - Large scale - - - - PV training and system design available at NWRC. PV - - -  Well known and very active centre HySAFER (BERI) at UU focussed Hydrogen   - - on hydrogen safety, with close collaboration with industrial and and Fuel -  - - international partners. QUB, via CenTACat also have activity relating Cells - - - - to development of alcohol fuel cells. - - - - Hydro Hydro system installer training available at NWRC with system design - - - - electric at SWC. - - - 

39 Integrated Collector/Storage Solar Water Heater

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 33 Segment QUB UU ABFI FE Specific Comments

- - - - SERC offers training in geothermal technologies. SRC have design Geothermal - - - - capability. - - -  UU Geophysics group at Environmental Sciences Research Institute

  - - looking at induced seismicity through CO2 sequestration, which Carbon presents both threats and opportunities. MOF technologies recently - - Capture - - spun out, focusing on nanomaterials for CCS. CenTACat are working - - - - on an EPSRC funding project for CCS and carbon utilitsation with universities of Manchester, Sheffield and UCL. Both UU (carbon fibre, glass, composites) and QUB (composites, concretes) have expertise in advanced materials, with potential for use in wind, marine and LC buildings. Both undertake research in ICT: wireless technology, cyber security (QUB) and communications networks (UU) that could impact on the smart grid. QUB (ECIT and CSIT), UU and SWC are all members of   - - SmartGridIreland. Enabling   - - technologies QUB’s catalysis work is also significant for H&FC development (in - - - - particular alcohol FCs). Both UU and QUB have expertise in nanotechnology. At NIBEC (UU) this is focussed more directly on SE technologies, with applications including fuel cells, PV, solar driven hydrogen production, hydrogen storage and solar driven CO2 conversion to fuels (artificial photosynthesis). Note that Materials Research at UU jumped from 17th to 11th in the UK national league table for research excellence. * Separated here to distinguish between different research capabilities.

PAGE 34 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 3.4 OTHER KEY ASSETS AND PROGRAMMES

In addition to the key industrial and to have improved as a result of more industry led centres for R&D, providing academic capabilities, there are a targeted support from the public sector an important route for engagement with number of relevant regional programmes (see Section 4.4). The formation of the the wider, and international, industrial and assets that play an important role in Collaborative Networks (e.g. Global base. supporting the wider sustainable energy Wind Alliance and Global Maritime There are a small number of notable sector within the region. Key examples Alliance) and planned Competence physical ‘ﬂagship’ assets outside the are provided in Table 3. Centres (e.g. CASE) have begun to academic base, including QMETec in provide a focal point for individual Together, these potentially provide a Strangford Lough, the harbour facilities, supply chains, addressing some of the strong resource base from which to and the Northern Ireland Science Park fundamental issues associated with a grow the sector in Northern Ireland. (NISP). fragmented supply chain, dominated Commercial progress over the last two by SMEs. In addition, QUESTOR and to three years is generally considered NIACE provide a strong cohort of TABLE 3 KEY REGIONAL ASSETS AND PROGRAMMES

Asset/Project Scope of Activities Action Renewables A not-for-profit company that supports deployment in the renewables sector, through project management activities; delivering the Microgeneration Certification Scheme; providing advice and information; and running the membership- based Action Renewables Association. AFBI Hillsborough Visitor The Renewable Energy Centre of Excellence, as well as actively supporting research also acts as a Visitors Centre, Centre hosting tours and providing a wide range of information on many aspects of renewable energy production, with a specific focus on those technologies of relevance to agriculture, e.g. biomass and AD. Belfast Harbour Construction of a 50-acre assembly and logistics base for DONG Energy and its partner, ScottishPower Renewables, began last year and is scheduled for completion in Quarter 4, 2012. The facility, the first bespoke terminal of its kind in the UK, represents a £50 million investment by Belfast Harbour – the largest ever in its history. Other large ports located in Northern Ireland include Londonderry, Larne, and Warrenpoint. Londonderry has a water depth deep enough to carry large ships at all tides and large storage areas, thus making it suited to construction, operations and maintenance of offshore wind, wave and tidal projects, albeit with some limitations to access and manoeuvrability. Similarly, Warrenpoint is suited to wind, wave and tidal construction, operations and maintenance, whereas Larne is best suited to operations and maintenance of wave and tidal technologies alone. Centre for Advanced Due for launch in Q3 2012, CASE will operate in partnership with QUB, Ulster University and AFBI. It will function as Sustainable Energy (CASE) a sister centre to QUESTOR and will co-ordinate four new research clusters: Turbine development and manufacture (relevant to the wind, marine, biogas and micro-generation sectors), Energy from Biomass, Integration and Storage, and Energy Efficiency. With prime funding from Invest NI, as one of five Competence Centres in the region, CASE will offer up to 75% funding for a range of collaborative research projects. Industrial partners will be required to invest cash into individual projects, as well as in kind contributions – there will be no membership fees. The Vision of CASE is ‘To position Northern Ireland at the forefront of the global sustainable energy market; by integrating leading research into the local industrial base, for the benefit of the business community and the wider economy’. ECHAlliance Northern Ireland undertakes world class research within the Sensors and Connected Health cluster, based at NIBEC40. The cluster forms part of the European Connected Health Alliance (ECHAlliance), launched in 2012. The alliance aims to foster ‘Connected and MHealth’ markets and practices across Europe through collaboration between academic, industry and healthcare professionals. Membership is available at a variety of levels, costs (EUR 450 to 20,000) and offers benefits such as discounted event fees, networking opportunities, access to forums, articles, and papers. The alliance has developed geographically based ‘Ecosystems’ that ‘provide access, structure and fuel to the rapidly developing mHealth market; creating a community of stakeholders sharing risk and rewards and facilitating mutually beneficial research & innovation of the highest quality.’41 RV Corystes The RV Corystes is owned and operated by the Agri-Food and Biosciences Institute (AFBI) to support their research and monitoring programmes in the Irish Sea and surrounding waters. Operated out of the Port of Belfast, AFBI undertakes the work programme of marine fisheries and environmental research and monitoring in the Irish Sea and adjacent sea areas required by DARD. The vessel is also fully equipped to conduct high resolution seabed mapping, using sophisticated acoustic sensors, with ground-truthing of marine habitats being achieved by deploying camera sleds or a remote vehicle.

40 Nanotechnology and Integrated Bioengineering Centre, http://www.nibec.ulster.ac.uk/about-us/introduction/sensors-and-connected-health

41 http://www.echalliance.com/content.asp?PageId=134&id=134

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 35 CREST The new centre at Eniskillin is part of SWC, speciﬁcally designed to provide industry R&D, demonstration and testing facilities for new renewable energy products and sustainable technologies. Funding was secured in Oct 2012. The project is worth £2.9M over two years with four partners (SWC as lead, along with IT Sligo, Dumfries & Galloway College and Cavan IT). Dungannon AD Plant B9 Energy received planning permission (2010) for a 60,000 tpa Anaerobic Digestor at Dungannon that will take commercial and industrial waste. The project received a £3.75m grant from the UK government and is currently under development. Ecos Millennium Ecos visitor and recreation centre has Ireland’s largest array of photovoltaic and solar water heating panels – c. 100m2 of Environmental Centre panels, installed in 2000. Calculated to have an average performance efﬁciency of 7-8%.

Energy Skills Training A collaborative network, that aims to promote the development of on and offshore energy skills within the region. Network Energy Storage Network* A collaborative network recently established with funding from Invest NI that seeks to develop solutions for Northern Ireland from a technology agnostic stand point. The network is coordinated by SW College; members include project developers, end users (wind farm operators), utilities and engineering subcontractors. Currently seeking funding for several pilot programmes across a variety of scales (tens of kW to MW), demonstrating different technologies. Potential for added value for Northern Ireland associated with system integration and development of appropriate control systems. Glantek Alliance* Formed in 2010, this is a collaboration of regional companies working together to develop and promote clean technology products and processes, and bringing together industry leaders into a single supply chain network. Specific focus on the areas of waste, waste water, renewable energy (strong focus on biomass and AD) and resource efficiency. The Alliance is based around a core group of 5 founding companies, supported by a wider network of SMEs. Global Energy Supply A dedicated directory of companies within Northern Ireland with an active interest in sustainable energy projects. Chain* Currently acting as a supporting resource for the GMA and GWA – see below (together with active web based portal with third party search facility), but with potential to evolve into a more commercial construct over time. Managed by CMS Global, the directory currently has over 100 companies from across the broader supply chain. Global Marine Alliance Launched in 2010 based on the same model as the GWA – see below, but currently less well commercially developed. (GMA)* Focused on wave and tidal marine technology development and deployment. Currently has membership of 8 companies from Northern Ireland across the supply chain from provision of offshore logistics through to O+M. Seeking to exploit existing assets and know how, e.g. Queens Marine Test Centre – see below. Global Wind Alliance Developed as an extension from a Collaborative Network, initially funded by Invest NI, the Alliance was formerly launched (GWA)* in 2008. It acts as a commercial corporation with 14 fee paying member companies, acting as a single entity for the purpose of negotiation and delivery of commercial contracts. The focus is on provision of after sales support to wind farm operators, with an ultimate vision to provide a single source solution for the market in the areas of: Parts (via newCo GA Supplies Ltd), People, Performance (inspections etc), and Logistics. Members include both regional and international partners, who together provide complementary skills to deliver integrated, turnkey contracts. The Alliance is managed by CMS Global who take the lead role in business development, and then hand over to other members, as appropriate, for contract delivery. A significant opportunity for international growth of the business is anticipated up to 2030. Northern Ireland A technology hub for the research and development of advanced engineering and advanced materials technologies, Advanced Composites strongly supported by Bombardier. Its primary goal is to support the development of Northern Ireland’s manufacturing and Engineering Sector base both nationally and internationally. NIACE has facilities and capability to support participation of companies from (NIACE) multiple sectors including Aerospace, Automotive, Industrial Marine and Renewable. Current research within the renewable energy field involves the potential use of carbon fibre taken from the aerospace industry for use in turbine manufacture. All work undertaken at NIACE is in close collaboration with leading universities including QUB and UU. Northern Ireland Science Established in March 1999 as a not for profit business to create a self-sustaining, internationally recognised science Park Foundation Ltd (NISP) park offering a commercial and research driven centre for knowledge-based industries. The park is located in the Titanic Quarter, Queen’s Island, Belfast, and offers 20,000 m2 of workspace. It has been commercially independent since 2008, and manages innovation support programmes including HALO and NISP Connect – see Section 4.4. Currently home to a number of companies active in the sustainable energy sector including Pure Marine and the Carbon Trust. Queens Marine Energy Test Specialist facility owned and operated by QUB, focused on TRL 3-4, and based around their tank facilities and the Centre (QMETeC) 1/10th scale tidal research facility at Strangford Lough. These are significant physical facilities for developers of early tidal prototypes, supported by the practical and technical expertise of QUB personnel in the logistical deployment of plant at this scale. Long client list including MCT; more current client is EvoPod (Ocean Flow Energy). QUESTOR Formed in 1989, a multi-disciplinary research centre that works collaboratively with industry and academia. Research projects are selected monitored and directed by the Industrial Advisory Board and can be carried out at any of the international partner institutions. 35 industrial partners/members in Europe, the US, Canada and China. Four clusters focusing on the following areas: Environmental Monitoring, Water and Wastewater Treatment, Waste and Remediation and Energy from Biomass. Initially, part funded by the European Regional Development Fund under the European Sustainable Competitiveness Programme for Northern Ireland 2007 – 2013. Now self financing via a membership fee paying model and accessing grant funding from EU. IP generated is owned by the academic institution in the first instance.

PAGE 36 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG QUESTOR Applied Not for proﬁt organisation with a multi-disciplined team of 12 environmental engineers and scientists that delivers a Technology Unit (ATU) professional monitoring service; includes on-site monitoring and environmental analysis. ATU also works with QUESTOR members to successfully take research projects through to commercialisation. ATU can also work directly with local companies, assisting in their technology development by providing a technical support role. Smart Grid Innovation Hub Due to be launched imminently by EirGrid and NDRC to promote the development of innovative Smart Grid solutions. Identiﬁes the potential for Island of Ireland as a ‘live laboratory of Smart Grid evolution’, supplemented by strong skills in ICT. Industry Advisory Board will include representatives from: • ESB/NIE (as DSOs) • Invest Northern Ireland • Irish Software Association • Energy Research Centre (ERC) • Sustainable Energy Authority of Ireland (SEAI) • Enterprise Ireland • IDA. The hub will offer a ‘facility’ to enable prototyping, testing, access to market intelligence and commercialisation support.42 SmartGridIreland* A network of organisations based in/operating out of Northern Ireland and the Republic of Ireland - seeking to jointly exploit new commercial opportunities in the Smart Grid sector locally, nationally and internationally. Members are drawn from industry, research bodies, universities and government agencies. Activity is currently focused on control systems and energy trading models – links to Energy Storage Network.

* Funding provided by Invest NI via the Collaborative Network Programme

42 http://www.nisp.co.uk/wp-content/uploads/2012/10/Smart-Grid-Innovation-Hub.pdf PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 37 current marKet analySiS 4.1 POLICY CONTEXT

Europe from agricultural sources polluting • The future of heating: A strategic ground and surface waters. This has framework for low carbon heat There are a number of key European particular implications for Northern (March 2012); Directives, relating to the sustainable Ireland in the disposal of poultry energy sector, that require • Energy Bill (2012), the most recent litter. implementation through national and potentially significant strategy, regulations within each of the member Additional strategy documents are which incorporates proposals for states. available to support implementation of Electricity Market Reform (EMR), the Directives. The Energy Roadmap through two principal mechanisms:45 The most relevant of these in the context – 2050, for example, focuses on of this report are:43 • Feed-in-Tariffs with Contracts maintaining the reduction in CO2 levels for Difference (FIT CfDs) to • Renewable Energy Directive whilst improving security of supply, ensure investment in low carbon 2009/28/EC, which sets out the and incorporates longer term GHG generation; target for 20% energy production reduction targets of 80-95% below from renewable sources by 2020; 1990 levels by 2050. • A capacity market to ensure security of supply. • Energy Performance of Buildings Although the majority of penalty and Directive 2002/91/EC, which incentive schemes are implemented Supported by: requires measurement of energy nationally, one important exception is the • The Carbon Price Floor, a tax to used (including the controversial EU wide EU ETS scheme which targets underpin the carbon price in the Primary Energy Factor, accounting heavy energy using industries, through Emissions Trading Scheme; for energy losses in generation and a cap and trade system for carbon transport); minimum performance emissions. • An Emissions Performance Standard requirements (e.g. public sector (EPS) to curb the most polluting UK buildings to be nearly zero carbon fossil fuel power stations. In the UK, the Department of Energy by 2018); and publication of Energy Again these strategies are supported and Climate Change (DECC) is Performance Certificates; by roadmaps and implementation responsible for setting policy and • Energy Efficiency Action Plan documents, which describe the regulations to meet the over-riding (2011),44 which sets out ideas for methodologies and pathways for targets set out in the 2007 Energy binding measures to save energy meeting the overarching targets, White Paper, namely to reduce in order to cut energy use 20% by and aim to support and encourage carbon emissions, whilst ensuring the 2020. These include requiring 3% private sector investment in associated availability of secure and affordable of public buildings to be refurbished technologies. energy. each year and imposing mandatory Examples are: energy audits on large companies. The major strategic documents include: This was endorsed through the • 2050 Pathways Analysis Report, July • The Climate Change Act 2008; approval of the EU Energy Efficiency 2010; • The UK Low Carbon Transition Plan Directive in October 2012; • UK Renewable Energy Roadmap, (2009); • Nitrates Directive 91/676/EEC, July 2011. which aims to protect water quality • UK Renewable Energy Strategy (July across Europe by preventing nitrates 2009);

43 Note that, in line with the rest of this report, the following discussion does not include transport related policy. 45 http://www.decc.gov.uk/assets/decc/11/policy 44 http://www.businessgreen.com/bg/news/2032168/ legislation/EMR/5349-electricity-market-reform-policy eu-proposes-tough-energy-efﬁciency-package overview.pdf

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 39 By way of example, DECC’s vision, As described in the Insights Report, (FIT) powers, and the introduction enshrined in the 2050 Pathways current sustainable energy policy of a new supplier obligation scheme Document is for 600k heat pumps in the is framed by the Strategy Energy (similar to CERT) in which suppliers UK by 2020, 2.6 million by 2025 and Framework (SEF - 2010), which sets are required to meet specified energy 6.8 million by 2030. out the target of 40% renewable energy efficiency targets on an annual basis. and 10% renewable heat by 2020. The Department is also responsible for The Northern Ireland government putting in place the incentives (sticks The SEF also makes reference to a also has a series of incentives and and carrots) that Government can number of other policy documents that programmes in place to support the use to ensure that the strategies are focus on key elements of the Northern deployment of renewable energy implemented. Of primary importance Ireland renewable energy sector. For and energy efficiency technologies. are: example: Although, in many cases, these appear to follow those implemented by DECC, • Renewables Obligation and Feed in • Offshore Renewable Energy all the schemes have been adapted Tariffs (currently under reform as per Strategic Action Plan (2012 – 2020), to suit the specific requirements EMR); identified the potential for 600MW of of Northern Ireland and some are offshore wind and 300MW of marine • Renewable Heat Incentive; considered to have been particularly energy in Northern Ireland waters successful. These are well documented • Green Deal and electricity supplier without a significant impact on the in the SEAP and departmental Strategic obligations – aimed at increasing environment. The Crown Estate Actions Plans, and are not repeated in energy efficiency in buildings; has since announced its preferred full here. Nevertheless, some pertinent developers for the first 600 MW • Carbon Reduction Commitment examples are outlined below: of offshore wind and 200 MW of Energy Efficiency Scheme (CRC) marine energy (see Section 4.2). • Northern Ireland Renewables – a mandatory scheme to drive a Obligation (NIRO) came into force in reduction in carbon emissions from • Draft Onshore Renewable Electricity 2005. ROCs are certificates issued large public and private sector Action Plan (OREAP) and Strategic by Ofgem to operators of accredited organisations, through a mixture Environmental Assessment (SEA) renewable generating technologies of reputational, behavioural and (Oct 2011), which identified the for the eligible renewable electricity financial drivers. A consultation is requirement for between 1400 and they generate. Operators can then currently in place to simplify this 1800 MW of renewable energy trade the ROCs with other parties. scheme. installed capacity (both onshore and The main electricity suppliers offshore) to meet the 2020 targets. Northern Ireland are under obligation to deliver an • Cross Departmental Bio-Energy As a devolved administration, Northern increasing number of ROCs per Action Plan for Northern Ireland Ireland has powers to administer energy year. In 2010, the mechanism was 2010 – 2015. policy independently of Westminster. updated to increase support for small-scale generators (specifically Although influenced by policy created Action plans from these diverse onshore wind, hydro and solar PV), by DECC, there are significant strategies have recently been in order to replicate support levels differences in both the targets that are amalgamated into the ‘Sustainable being proposed under FIT elsewhere set by DETI (Department for Enterprise, Energy Action Plan’ (2012) to ensure an in the UK (for generation < 5MW) Trade and Investment) and the precise integrated approach. nature and timing of incentives and and in 2011, this was extended to DETI is currently consulting on a new support programmes put in place to anaerobic digestion, in the form of 3 Energy Bill, that incorporates proposals achieve those targets. ROCs (per MWh) for installations ≤5 for introducing small scale feed-in tariff MW and 4 ROCs for installations ≤

PAGE 40 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 500kW. The subsequent significant • The Biomass Processing increase in number of projects Challenge Fund provides coming forward (at least 17 matched capital grants (up to applications since April 2011)46 EUR 400,000) towards cost is believed to be a direct result effective methods of processing of these levels of support.47 A agricultural wastes to generate second consultation on the NIRO renewable energy. However, was undertaken in October 2011, recipients of this grant may dealing with proposed changes find that their eligibility under to ROC banding levels from 1st the forthcoming RHI will be April 2013 and the impact of EMR compromised.49 proposals on Northern Ireland, with • Numerous buildings related the following conclusions:48 schemes, such as Warm • Maintenance of 4 ROCs for solar Homes Scheme, NIHE Heating PV up to 10 kW; Replacement Scheme, and Low Carbon Homes Scheme, to • Increase to 5 ROCs for wave tackle fuel poverty and energy and tidal (under RO not NIRO) efficiency simultaneously. over the period 1 April 2013 to 31 March 2017, up to 30 MW • It is widely acknowledged installed capacity. Above 2 MW, that the current electricity grid support will be 2 ROCs/MWh; within Northern Ireland has insufficient capacity to exploit the • NIRO will be closed to new region’s potential for renewable generation and additional generation. The Renewables capacity after 31st March 2017, Integration Development Project and the end date of NIRO (RIDP) (being undertaken jointly payments is set at 2037. This is by NIE, EirGrid and SONI) a particularly important decision, aims to identify the most cost- since uncertainty over the effective means of upgrading the long term payment of ROCs is transmission system in order to hampering investment decisions cater for increased renewable elsewhere in the UK; generation (primarily in the North • This will coincide with an and North West of the Island). introduction of a Feed in Tariff with Contracts for Difference (FIT CfD) for large scale renewable electricity generation (> 5 MW); (small scale FIT is being considered under the new Energy Bill). • The Northern Ireland Renewable Heat Incentive has recently been launched, and will be crucial in meeting the 10% renewable heat by 2020 target.

46 http://apps.planningni.gov.uk/statistics/data%20 extracts/default.aspx

47 http://www.mrw.co.uk/Journals/2011/10/27/p/q/q/ mrw-28-oct-p21-AD.pdf

48 DETI, Government Response to the consultation on 49 http://www.dardni.gov.uk/t2-bcpf-info proposed changes to the Northern Ireland Renewables brochure.13.090_biomass_challenge_fund_info_ Obligation in 2013, August 2012. brochure.pdf

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 41 4.2 REGIONAL DEPLOYMENT POTENTIAL

Economic development is commonly MW of renewable energy generating • First Flight Wind Limited for the predicated on the early exploitation of capacity.53 However, the All-Island 600 MW offshore wind area: local and indigenous markets, ahead Generation Capacity Statement 2011 a joint venture between Dong of subsequent exploitation of export 2020, produced by SONI, estimates Energy of Denmark and RES-B9 opportunities. This is a model that has that by 2020, Northern Ireland could (NI) Offshore Wind Limited, typically been adopted with regard to have a total of 2163 MW of installed which combines the local wind sustainable energy technologies, and renewable generation. development experience of Northern Ireland has significant regional Northern Ireland company B9 Indicative deployment potential for on- resources to provide such a platform for Energy with Renewable Energy site renewable and energy efficiency growth. Systems, part of the RES Group, technologies for Northern Ireland is an international renewable energy The deployment potential for sustainable summarised in Table 4. In summary, project developer. energy technologies is a function of the these data indicates the following: availability of natural resource (wind, • The next stage will involve • Northern Ireland has significant water and fuel) and the number of environmental assessment natural resource potential, both off suitable sites (predominantly buildings of projects to secure marine and onshore.54 Current installed for micro-renewables and energy licences and electricity consents capacity is dominated by onshore efficiency). before a full lease is granted. wind. To date 322.2 MW has been Offshore wind is seen as crucial In 2011, 12%50 of Northern Ireland’s installed from an estimated annual for Northern Ireland to reach its renewable electricity consumption was resource potential of 1500 MW. ambitious targets for renewable derived from renewable sources, a The combined contribution of wind energy.58 figure which was 3% higher than the and marine55 to Northern Ireland’s national statistics for the same year.51 total installed renewable electricity • Northern Ireland has excellent This was generated from 144 sites as capacity was 92.1%, which equates marine resource capacity, for both follows:52 to 6% of the UK’s total capacity. This tidal and wave, being located close capacity produces enough electrical to the Irish Sea. Strangford Lough, • 45 hydroelectric; energy to power 167,000 homes.56 with a theoretical maximum of 300 • 83 wind; Subject to potential grid constraints, MW, has been used a test site for onshore wind is likely to continue a number of tidal stream devices, • 5 landfill gas; its recent growth, having grown by although it is likely that a limit of 50 • 3 sewage gas; 8.2% over the past three years. MW per annum is more practical. To 2020, up to 300 MW of marine • 8 biomass. • To date, no offshore wind technologies could be installed installations have been deployed. The future development of the around the coastline. Developers for However, Northern Ireland green sustainable energy sector in Northern 200 MW potential installed capacity energy licences have recently been Ireland will be driven by the ambitious have also just been announced by announced,57 with The Crown Estate target of 40% renewable electricity The Crown Estate: consumption by 2020, requiring approving the following site: deployment of an additional 1448

53 All Island Generation Capacity Statement 2012-2021

54 Envirolink, Development opportunities for the Wind, Marine and Bioenergy sectors in Northern Ireland, 2012

55 Marine renewable (tidal only) contribution to this ﬁgure is marginal (1.2MW). There are currently no wave devices connected to the grid.

50 DETI (2012) Offshore Renewable Energy Action Plan 56 Renewable UK UK Wind Energy Database 2012

51 DECC Energy trends June 2012 57 http://www.thecrownestate.co.uk/news-media/ news/2012/northern-ireland-offshore-energy-successful- 58 http://www.bbc.co.uk/news/uk-northern 52 Centre for Advanced Sustainable Energy, 2012 bidders/ ireland-19891604

PAGE 42 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG • Tidal Ventures Limited for the consortium Rose Energy to use scale solar PV (<50KW) receives 4 100 MW tidal opportunity at Torr poultry litter in a biomass power ROCs, a higher rate than currently Head. A joint venture between plant has finally been over-turned due available throughout the rest of the OpenHydro Group, a designer to local opposition. The government UK from the Feed-in Tariff scheme. and manufacturer of tidal has since commissioned a ‘Review This has resulted in a recent turbines, and Bord Gáis Energy of alternative technologies for the increase in interest in solar PV. one of Ireland’s leading energy management and disposal of poultry • The potential for geothermal district providers. litter’, which proposed gasification heating systems in Northern Ireland as potentially the most promising • DP Marine Energy Limited with is generally considered to be limited. technology, and has recently DEME Blue Energy for their announced an SBRI competition 100 MW tidal stream energy to encourage the development of project off Fair Head. This project alternative technologies and novel is a consortium comprising approaches to utilize poultry litter.59 Cork based DP Marine Energy Limited and the Belgian marine • There are around 760,000 dwellings engineering company DEME Blue in Northern Ireland, 99% of which Energy. use central heating. 68% of dwellings use oil as the primary • Northern Ireland is predominantly heating fuel and of these 82% grassland (57.5%) with only are rural homes. Good potential 5.5% being forested. In 2010 the exists for further energy efficient bioenergy market made an 11% improvements to the existing housing contribution to renewable energy stock, especially given the large capacity, with 16 MW. DETI’s proportion of fuel poor, as well as Strategic Energy Framework (2010) the improved design of new build recognises that biomass could projects (commercial and domestic). potentially contribute up to 300 MW of renewable electricity by 2020. • In total there is an estimated Anaerobic Digestion (AD) has the resource potential of 173 MW potential to produce up to 146 MW per annum available for micro of electricity (i.e. half the potential renewables technologies in Northern 300 MW) and 295 MW of heat by Ireland. Installations of solar thermal 2020. and heat pumps technologies have been steady, having benefited from a • Northern Ireland has a particular high cost of oil as a fuel source and opportunity (or threat) associated government incentives such as the with the availability of excess Renewable Heat Premium Payment poultry litter. The region currently Scheme run by DETI. However a produces 260,000 tons of litter/ poor grid, non-ideal geoclimatic yr but can only dispose of 100,000 conditions and historical lack of tons sustainably. This leads to large FITs to incentivise mass uptake, has infringement costs associated with resulted in limited installations of the requirements of the Nitrates solar PV to date. However, as stated Directive. A major proposal by above, since April 2011 small-

59 www.innovateuk.org/_assets/sbri%20_poultry.pdf

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 43 TABLE 4 CURRENT STATUS AND POTENTIAL FOR REGIONAL DEPLOYMENT OF SUSTAINABLE ENERGY TECHNOLOGIES

Available resource Current status and potential for deployment Remaining potential Onshore wind Theoretical maximum of 3,203MWe The wind sector in Northern Ireland has grown H and estimated practical resource of significantly over the last few years. 2011/2012 1500MWe per annum.60 saw the biggest growth in the last 3 years of 8.2%. Further growth in the sector is expected over the next 3 years when it is expected to reach 8.6%, subject to the availability of grid connections. 322.2 MW has been installed, accounting for the vast majority of installed capacity to date in Northern Ireland. Offshore wind There are significant resources for There have been no offshore installations to date. H offshore wind in Northern Ireland. However, in October 2012, Northern Ireland green Theoretical maximum of 600MWe energy licences were granted by The Crown and estimated practical resource of Estate. The deals will potentially see the creation of 100MWe per annum.61 a 600MW wind farm off Ardglass, County Down. Work on the projects is expected to start from 2016.62 Marine Northern Ireland has excellent Potential deployment of up to 300MW from tidal H available marine resources, being energy by 2020.64 Rathlin Island and Torr Head located closely to the Irish Sea. Strategic Area have been identified as suitable sites for development of up to 200MW. A further Theoretical maximum of 300MWe 100MW has been earmarked for development and estimated practical resource of off the NW coast of Northern Ireland. These 50+MWe per annum.63 are however located in deeper waters and it is anticipated that they will be developed as technology advances. In October 2012, Northern Ireland green energy licences were granted by The Crown Estate. The deals will potentially see the creation of two 100MW tidal turbines off Fair Head and Torr Head, County Antrim. Work on the projects is expected to start from 2016.65

606162636465

60 DETI, Draft OnShore Renewable Electricity Action Plan 2011-2020, 2011

61 DETI, Draft OnShore Renewable Electricity Action Plan 2011-2020, 2011

62 http://www.bbc.co.uk/news/uk-northern-ireland-19891604

63 DETI, Draft OnShore Renewable Electricity Action Plan 2011-2020, 2011

64 Offshore renewable energy strategy 2012 DETI.

65 http://www.bbc.co.uk/news/uk-northern-ireland-19891604

PAGE 44 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Available resource Current status and potential for deployment Remaining potential Bioenergy In 2007 5.5% broadleaved/mixed Northern Ireland’s biomass market made an 11% M and yew wood forest, 4% coniferous contribution to renewable electricity generation in woodland, 3.5% arable and 2010.70 horticulture, 57.5% grassland, 20% In the same year, Northern Ireland’s total installed heath, fen, marsh, bog and open biomass electricity capacity was 16.2MWe, standing water, 5% urban area, and consisting of 10MWe from Landﬁll Gas, 0.2 4.5% other.66 MWe from Sewage Gas and 5.8MWe from other UK market has the potential to deploy Biomass. 71 up to 6GW by 2020.67 The DETI’s Strategic Energy Framework published Biomass theoretical maximum of in 2010 recognises that biomass could potentially 13MWe and estimated practical contribute up to 300 MW of renewable electricity resource of 13MWe per annum.68 by 2020.72 Energy from Waste theoretical AD has the potential to produce up to 146 MW of maximum of 58MWe and estimated electricity (i.e. half the potential 300 MW) and 295 practical resource of 58MWe per MW of heat by 2020.73 annum.69 Low carbon Northern Ireland’s housing stock There are a total of 760,000 dwellings in Northern M buildings grew rapidly between 2006 and 2009 Ireland, of which, 498,600 are owner occupied, with an annual average increase of 144,500 are privately rented, 88,400 are housing approximately 12,000 bringing the executive, and 28,500 are in housing associations. total stock to 740,000. By 2011 14% of homes are pre-1919, 21.9% are post the housing stock had reached 1990 and the largest majority, 24.6%, were built 760,000.74 between 1965-1980. 99% of dwellings use central heating. 68% of homes use oil as a heating source. Of these 82% are rural homes. 65% of homes have cavity wall insulation, 7% have partial cavity wall insulation and 8% have internal and or external insulation. 94% of dwellings have loft insulation. 77% of dwellings have double glazing. In 2006, Northern Ireland’s dwelling stock had an average SAP rating (SAP05) of 52.4; by 2009 this had increased to 57.0. The estimated average SAP05 for England in 2008 was 51.4.75 Micro- Estimated practical resource of Off grid housing a key market driver – Northern H renewables 173MWe per annum.76 Ireland has 550,000 out of 760,000 off grid. Northern Ireland Housing Executive has installed: 2,032 solar thermal, 32 solar PV, 1 ground source heat pump, 55 solar air pumps, and 42 wood pellet boilers. They have 90,000 homes and are Northern Ireland’s largest housing association.

6667686970717273747576

66 Northern Ireland Countryside Survey 2007: Broad Habitat Change 1998-2007

67 Envirolink, Development opportunities for the Wind, Marine and Bioenergy sectors in Northern Ireland, 2012

68 DETI, Draft OnShore Renewable Electricity Action Plan 2011-2020, 2011

69 DETI, Draft OnShore Renewable Electricity Action Plan 2011-2020, 2011

70 Envirolink, Development opportunities for the Wind, Marine and Bioenergy sectors in Northern Ireland, 2012

71 Envirolink, Development opportunities for the Wind, Marine and Bioenergy sectors in Northern Ireland, 2012

72 DETI (2010) Strategic Energy Framework

73 Envirolink, Development opportunities for the Wind, Marine and Bioenergy sectors in Northern Ireland, 2012

74 NIHE, Northern Ireland House Conditions Survey 2009

75 NIHE, Northern Ireland House Conditions Survey 2009

76 DETI, Draft OnShore Renewable Electricity Action Plan 2011-2020, 2011

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 45 4.3 COMPETITOR REGIONS WITHIN THE UK AND IRELAND

Given its geographic location, an The developments that have already UK. Furthermore the port is well placed analysis of the capability of Northern taken place in Great Britain and to service sites such as Argyll Array, Ireland cannot be undertaken in isolation Republic of Ireland have utilised Islay and sites off the eastern seaboard from an understanding of its competitive established supply chains of OEMs of the Republic of Ireland. position relative to the rest of the UK such as Vestas, Siemens, Repower, and There is no clear regional ‘leader’ and Ireland. Enercon, making use of manufacturing in the offshore wind sector across facilities in mainland Europe with Appendix C provides an overview of the UK and Ireland, although it is a limited local content. Vestas previously the main competing regions in terms of highly competitive landscape. Whilst opened factories in Scotland for the key activities, assets and programmes Scotland and the North East have/ manufacture of towers, and the Isle of for each of the more mature segments are investing in development facilities Wight for the manufacture of blades, of the sustainable energy sector. The and test sites, significant economic but has subsequently closed both. following text provides a summary value lies in capturing employment Despite huge efforts by economic overview of these activities and provides associated with deployment and development agencies and large a high level analysis of the relative service contracts which are evolving infrastructure grant funds from both the competitive position of Northern Ireland. now. UK and Scottish Governments to attract Wind Power facilities to manufacture equipment for Belfast Harbour and Northern Irish Round 3 sites, so far only Siemens has companies have enjoyed relative There are now over 4,000 wind turbines committed to an assembly facility at Hull success in attracting work for with a combined capacity of 7.4 GW and Gamesa to a similar facility at Leith. offshore wind farms within the Irish operating onshore in Great Britain and Companies such as GE and Mitsubishi Sea, as evidenced by the agreement a capacity of 2 GW in the Republic that have proposed investing in with DONG. This presents a of Ireland. In addition, there are 568 manufacturing capability in the UK have significant platform of capability for offshore wind turbines with a capacity so far failed to make any commitment other developments in the region and of 1.8 GW now operating in British and the current state of play appears to for supply chain partners. There will waters, as much as the rest of the world be ‘on hold’. also be significant continued onshore combined. wind farm development in both Relatively speaking, Harland and Wolff Whilst it is recognised that technology Northern Ireland and the Republic and the Port of Belfast have been development, particularly with regard of Ireland in the foreseeable future successful in attracting work for Irish to offshore wind turbines, is necessary and the regional supply chain is well Sea developments such as Robin to address ongoing challenges (for positioned to exploit the associated Rigg, Barrrow and Ormonde sites. example relating to greater water depth, opportunities. The commitment of DONG Energy restricted access, a need for increased to the region as a logistics base for Wave and Tidal Power reliability, and reduction in the overall developments such as Burbo Bank, cost of energy produced) this is unlikely The international wave and tidal sector Walney, Irish Sea (4.2 GW Round to be via disruptive technologies or new is currently dominated by Scotland. This 3 site) and the recently announced entrants into the top few tiers of the position derives from an early realisation Ardglas site has been a significant supply chain. from its government that Scotland had achievement relative to the rest of the an advantage: world leading IP coming

PAGE 46 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG out of the Scottish universities; its commercial devices in Scottish waters Galway Bay; and there are long term own climate change policies and that will compete for the Saltire Prize ambitions for a full scale wave test site ambitions; abundant natural resources; in 2015-17. An important focus for at Belmullet. and perceived synergies with the these competing groups will be the Northern Ireland has a low profile in established offshore oil and gas development of supply chains that are the wave and tidal sector relative to industry. This was compounded by the able to support volume commercial other regions of the UK and Ireland, acknowledgement of the need to avoid deployment. with Scotland dominating the sector the mistakes of the past (Howden’s of Scotland does not, however, have an and arguably well ahead of much of Glasgow enjoyed a leading position in exclusive hold on the sector. The South the competition. onshore wind turbine development in West has several device developers, the 1980’s) and use the opportunity to Wave and tidal generation is about including MCT and Tidal Generation develop a new industry sector. to enter a new phase as six device Ltd based in Bristol, and has invested developers seek to establish supply Over the last five years, Scottish significantly in the formation of key chains for the four developments Government, Scottish Renewables, facilities, including the South West involved in the Saltire prize and the device developers and academics Marine Energy Park, and previously the two recently announced 100 MW have all worked together to address Wavehub. The latter is an 8km2 wave Antrim coast sites. and overcome the barriers to demonstration site off the Cornwall commercialisation. The Scottish coast, with a recently installed sub- Northern Ireland faces stiff Government has been a strong sea distribution hub and 11/33kV grid competition if it is to exploit this supporter of UK initiatives, such as connection (costing £42m). However, rapidly closing window of opportunity. the £22m Marine Renewables Proving there is limited evidence of this facility Energy Storage/Smart Grids Fund (with the result that two thirds being utilised by the wider community. of the funding came to Scotland) and Energy storage can come in many The recent formation of the Marine its own grant funding initiatives such forms at both utility and consumer Energy Catapult Centre, although as WATERS. It has also successfully level. At utility level, pumped storage, having strong Scottish representation collaborated with a range of public compressed air storage, hydrogen and being located in Glasgow in the and private sector partners to secure and flow batteries have the capacity to International Renewable Energy Zone early and follow on funding for key absorb electricity when supply exceeds (alongside Strathclyde University’s TIC), assets and initiatives, most notably demand and subsequently release seeks to exploit the wider UK innovation EMEC and ITREZ. The Crown Estate electricity when demand exceeds capability, and pull together all the key has responded to this activity by supply. At consumer level building UK regional players including the South offering early seabed concessions fabric, water heating, electric vehicles, West and the North East. However, around Orkney and the Pentland Firth and smart appliances all have the Northern Ireland is not represented. for wave and tidal stream generation, capacity to store energy charging at with a combined capacity of 1.6 By contrast the Republic of Ireland times of low demand and discharging at GW. As a consequence, a number appears to be relatively less well times of peak demand. advanced in its support of the sector. of world leading device developers Smart Grids are intelligent electricity However, there is ongoing research such as Pelamis Wave Power, AWS, networks that seek to reconcile into device concepts, and device Aquamarine, Voith Wavegen and Scot variations in electricity supply, due to developers, such as Open Hydro, Renewables are based in Scotland, the intermittency of renewable energy are based in Dublin; it is close to and manufacture devices in Scotland. devices, and the variation in demand commissioning ¼ scale wave test Four companies are now gearing that naturally occurs through the daily facilities (not grid connected) in up to develop and install arrays of load profile. Smart grids will use storage

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 47 strategies that can change both the net of electricity networks to match high Bioenergy supply and demand on the network. proportions of intermittent generation to The development and deployment of These tools are particularly necessary the daily load profile. bioenergy technologies across the UK as grids (in particular ‘weak’ grids that Whilst individual regions have and Ireland is typically being driven have little excess capacity to handle identified the economic potential of by national and regional financial short term peaks) get an increasing the opportunity, the number of specific incentives, using technologies and proportion of their supply from targeted projects or programmes is feedstocks that match local availability, intermittent renewable energy sources. limited and they tend to be broad in their need and the prevailing economics. The need for tools to deliver smart scope of activities. Examples worthy grids is thus global and any enabling Critical to success is the guarantee of of mention include Bristol’s Smart City technologies will have a huge market quality and quantity of feedstock. In Project (an EU funded programme), from about 2020 onwards. general fuel sources e.g. wood chip or and The Energy Innovation Centre at food waste, have high volume and low It is recognised in DETI’s Strategic Capenhurst in the North West. There energy density which makes the viability Energy Plan that extensive upgrading is limited evidence of activities related of schemes sensitive to the cost of fuel to the Northern Ireland grid is required to the development of energy storage transportation. With the exception of if the 40% renewable electricity target from renewable power. Examples are large, multi MW plants, this means that is to be met. Smart grid technology the LAES pilot plant, hosted by Scottish markets are typically based around local developments have the potential to & Southern Energy at their Slough heat supply chains for feedstock. reduce the investment required to and power 80 MW biomass plant (part strengthen the networks. If these funded by a £1.1m grant from DECC), The market for anaerobic digestion has technologies were developed locally in and the hydrogen storage project in typically been driven by environmental Northern Ireland this would both reduce development in Aberdeen. legislation, for example, farmers are the investment needed to reinforce the finding it increasingly difficult to dispose The TSB has also begun to focus network and create knowledge that has of slurry on the land, while the zero funding activities on Energy Storage, value across the globe. waste and landfill policies will in future including the recent Storage Technology prevent the disposal of organic waste Demonstration Competition and Energy However, despite the need for these streams to landfill. There is limited Storage Component Research and technologies across the globe there is evidence of other regions developing little evidence of a systematic adoption Feasibility Study. less traditional feedstock, such as grass of Energy Storage/Smart Grids as an Whilst there are small pockets of and silage. engine of long term regional economic activity across the UK and Ireland, development in the UK or Ireland. Across the UK, financial incentives, no region has established a such as feed-in tariffs, the Renewables In Great Britain, Ofgem have a £500m leading position with regard to the Obligation and the Renewable Heat Low Carbon Networks Fund for the development of energy storage and Incentive, are in or being put in place. period 2010-2015, which is being associated smart grid technologies. These are all broadly similar, although used to fund projects put forward Northern Ireland has an urgent the renewable obligation payments by Distribution Network Operators need to reinforce its grid to meet for electricity generated via anaerobic (DNO). So far this has funded about renewable electricity generation 25-30 projects. However these seem digestion are notably higher in Northern targets. Adopting a systematic ‘whole to be isolated and discrete projects Ireland. In the Republic of Ireland, network’ smart grid approach has that do not add up to a co-ordinated incentives exist to support AD through the potential to reduce the cost of approach to understanding the extent the REFIT feed-in tariff arrangements. reinforcing the Northern Ireland grid to which energy storage and smart grid and a competitive advantage in know The core technologies for wood technologies can increase the capacity how, system IP and control strategies. fuel heating or anaerobic digestion

PAGE 48 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG are mature with well-established review of the Northern Ireland • The University of Nottingham has supply chains in continental Europe. Renewable Obligation. In addition, a new low carbon building on Deployment within the UK and Ireland it has the potential to utilise novel the Jubilee Campus, dedicated is typically based on the adaptation feedstocks, such as grass and silage. to R,D & D in sustainable energy of imported combustion technologies There is an opportunity for Northern technologies. This is a showcase to meet local feedstock needs. For Ireland businesses to exploit this building, demonstrating a range of example, over the last 5-10 years home market potential and use this low carbon technologies. Scotland has developed a vibrant as a basis to develop unique know • The North Sea Regional woodfuel heating sector based around how and IP. Programme’s Low Carbon Skills for local wood chip and pellet supply Low Carbon Buildings and Micro Sustainable Futures is developing chains, which has been seen to renewables a network in the North Sea Area generate significant local economic (Sweden, Denmark, Germany, the benefits. The RingLink Pilot Project Northern Ireland appears to be in a Netherlands, the Flemish Region based in Aberdeenshire, which focuses good competitive position in relation of Belgium, the UK and Norway), on economic exploitation of farm-based to low carbon buildings and micro so that knowledge transfer and woodland, is worthy of mention in this renewables. As described in Section sharing of best practice in the area regard. 3, there is a strong academic base, of low carbon skills, training and in particular at the Built Environment Development of next generation employment based capacity building Research Institute at Ulster University. technologies for the production of can take place. biofuels is still relatively immature, with However, across the UK there are From an industrial perspective, two of pockets of R&D within key academic many examples of low carbon building the major global players in the home institutions across the country, such clusters and activities. These generate energy market, the insulation company as Aston University and Imperial awareness of low carbon building Kingspan and home heating company College, and a few key publicly funded innovation through demonstration Glen Dimplex, are headquartered in the development programmes such as the projects and training programmes in Republic of Ireland but both companies Carbon Trust’s Pyrolysis Challenge. collaboration with key players, thereby have manufacturing sites in Northern up-skilling individuals as well as the Evolving markets for biomass and Ireland, and are diversifying into micro industry. For example: anaerobic digestion tend to be based renewables. around regional, or even local, supply • The Centre for Efficient and There is also potentially a very strong chains as determined by feedstock Renewable Energy in Buildings home market for insulation and availability and requirements. No is a partnership between London renewable energy products in Northern single region has been identified South Bank, City and Kingston Ireland, with the low penetration of the as leading, although Scotland has Universities with funding from the gas grid, high levels of dependency on developed a successful model around Higher Education Funding Council oil heating and resulting high levels of wood fuel biomass at a community for England (HEFCE), from the fuel poverty. scale. London Development Agency (LDA) and M&E Sustainability. The Whilst these strengths have the Anaerobic digestion has the potential centre provides a unique, teaching, potential to deliver competitive to make a much higher contribution research and demonstration advantage and employment and export to renewable energy targets in resource for the built environment prospects to Northern Ireland, they Northern Ireland compared to other and hosts a number of renewable are not unique. Stiff competition for regions of the UK and Ireland. This and intelligent energy solutions. manufacturing will come from the has been recognised in the recent

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 49 Republic of Ireland and the rest of the UK where well established players such as Shefﬁeld Insulations, Knauf Insulation, and Worcester Bosch are developing new offerings in response to new market opportunities. Historically Scotland has had little involvement with the manufacture of insulation and micro- renewable products, but this changed in 2009 when Mitsubishi opened a plant at Livingston for the manufacture of air source heat pumps. Northern Ireland has manufacturing facilities for home energy and insulation products, a potentially strong home market and good academic credentials in buildings research. However, this is a highly competitive sector. Other academic institutions and manufacturers elsewhere in the UK will continue to develop their offerings in response to the rapidly growing market opportunity. Northern Ireland will need harness its strengths through co-ordinated action if it is to maintain or grow the economic beneﬁt it derives from these activities.

PAGE 50 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 4.4 INNOVATION SUPPORT LANDSCAPE

Innovation policy in Northern Ireland The recent Northern Ireland Knowledge Both Universities have active innovation is developed and driven by the Economy Index Baseline Report 2011 transfer support offices (Knowledge Department of Enterprise, Trade and provides an overview of the current Enterprise Unit at QUB and Office of Investment (DETI), whose stated goal status and performance of the region’s Innovation at Ulster) and associated is “to grow a dynamic, innovative knowledge economy, as defined by investment companies. Ulster University economy”. The central vision of the the CONNECT programme.79 The is now considered amongst the top Regional Innovation Strategy for benchmarking analysis undertaken 10% of UK universities for tech transfer Northern Ireland (2003) is ‘to create a for this report draws out a number and spinout, having been particularly culture and environment within which of key messages relating to current successful in the areas of advanced Northern Ireland will prosper by using performance: materials and healthcare. its knowledge, skills and capacity to • The sector is approximately half the Internationalisation is a crucial aspect innovate’. The accompanying 2008 size of the leading UK knowledge to the success of new companies 2011 action plan looks to address the economy, with a third of the business within the region: of the 28 companies Executive’s Public Service Agreement stock that might be expected; supported by Ulster’s investment (PSA) 1, which seeks to “promote arm (Innovation Ulster), all but one higher value-added activity through • Levels of R&D in the region are are selling into international markets, innovation and the commercial well below the levels in leading with international sales projected exploitation of R&D” and progress ‘knowledge intensive’ regions; within their first year business plan. towards this will be measured in terms • The venture capital market is small Eleven of these companies have also of the increase in the average annual and underdeveloped; received investment from International growth of Business Expenditure in companies. However, there is a need R&D.77 • Patent applications are low and to ensure that the internationalisation linked to only a few major firms; In 2009, Northern Ireland’s total process does not deplete the region expenditure on R&D equated to 1.7% • The number of PhDs per million of the benefits of the IP. As described of regional GDP, ranking it 8th of the 12 inhabitants is low in Northern above (Section 4.3), two other well- UK regions with regard to R&D intensity. Ireland compared to the UK average known spinouts from the Marine sector When benchmarked against a range of although above a number of other (Wavegen and Aquamarine) that were comparable countries (i.e. small open regions. founded using Northern Ireland IP were economies) and also the OECD, EU27 However, although the overall level of formed outside the region. and US for context, Northern Ireland innovation activity in the province is A recent report80 analysed the published is situated towards the bottom of the acknowledged as being relatively low, research papers from the past three rankings for R&D intensity. However, the number of spin-off companies from years, of direct relevance to the R&D expenditure has shown large Higher Education Institutions compares sustainable energy sector, for each of increases since 2008, driven mainly by favourably with the rest of the UK, with the key regional research institutes. Business R&D (BERD) which increased one source suggesting a level four times The research identified a total of 58 by 171% between 2008 and 2010 to a higher than the UK average (UK Higher papers, the majority of which were total of £344m.78 Education Business and Community unsurprisingly from the two main Interaction Survey, 2011). academic institutions, QUB and Ulster

77 Increase by 8% the average annual growth in BERD expenditure in Invest NI client companies with less than 250 employees; and increase by 5% the average annual growth inBERD expenditure in Invest NI client companies 79 Speciﬁcally including Pharmaceuticals and with greater than 249 employees. biotechnology/lifesciences; Medical devices; Software & digital content; IT services; Telecommunications; 80 Development Opportunities for the Wind, Maine 78 http://www.northernireland.gov.uk/economic Computing and advanced electronics; Other technical and Bioenergy Sectors in Northern Irelands, September strategy-evidence-base.pdf services; and, Aerospace and other transport equipment. 2012.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 51 University. Academic papers relating to salts). Patent pending (see Section • Graphene International (UU) – bioenergy were the most prevalent (30) 3.3 6). focussed on environmentally friendly with three of the institutes exhibiting methods for producing graphene (for • AEROCHILL – Air Cycle expertise in this area. Overall, QUB applications including batteries and Refrigeration (QUB), an energy was responsible for publishing the most fuel cells). efficient unit, capable of achieving research with a total of 28 relevant very low temperatures without the • FBPS – novel methods for papers over the last three years. use of harmful CFC’s or refrigerant producing environmentally friendly As a relatively immature sector, gases. Licensing opportunities are hardened concrete structures. however, this has not yet led to being sought. The majority of these are in discussions significant levels of commercialisation • Granular fertiliser from anaerobic with a range of potential partners, of IP in sustainable energy from the digestion (QUB): nutrients contained including international institutes and academic base. Nevertheless, there within the AD waste liquor are corporates (e.g. Macrete, SSE and is evidence that the focus is shifting concentrated and adsorbed onto Fraunhofer). towards clean energy technologies, in a powdered adsorbent, which is particular where there are opportunities Nevertheless there has been a limited then processed to form a low-cost, to make use of cross-cutting know-how number of spinout successes within organic, granular fertiliser. Patent via enabling technologies (sensors, new the sector to date, as indicated in Table pending. materials etc.). This new focus can be 5. The majority of high profile start ups seen in the recent (over the last 5 years) • SolaCatcher – a novel (patent operating in the region have typically rise in investment in sustainable energy pending) cost effective, passive, formed from within the industrial related proof of concept projects at solar water heating system under base, e.g. Pure Marine, or from an QUB and UU. Current examples are: development by SolaForm Ltd, international company starting up offices a pre-commercialisation spin- in Northern Ireland, e.g. Minesto (UK) • Green rechargeable batteries out vehicle supported by Ulster Ltd. (QUB): using ionic quinone/ University’s Office of Innovation and hydroquinone derivatives (molten Innovation Ulster Ltd.

TABLE 5 EXAMPLES OF SUCCESSFUL COMMERCIALISATION

Company Comment MOF Technologies QUB spin out and recent winner of 25k Cleantech Award (see Section 4.4). Developers of a patented technique for the synthesis of metal organic framework (MOF) materials, which is environmentally friendly, rapid and highly scalable, allowing cost-effective, large-scale deployment across a wide range of potential applications from CCS to gas storage. AXIS Composites AXIS Composites spun out from the University of Ulster’s Engineering Composites Research Centre (ECRE). It’s primary aim is to commercialise 3D Carbon Fibre preform expertise and advanced manufacturing techniques developed within ECRE. They have extensive composites development capability and operate across multiple sectors including aerospace, construction, automotive, energy and marine. AXIS is also a member of NIACE – Advanced Composites and Engineering. Catagen Recently formed from QUB (shareholder agreement signed in February 2012), and licensing agreement underway. The company provides innovative (simple, energy efﬁcient, cost effective) catalyst testing equipment and services.

Public sector support programmes delivered by third party agencies, part addition, support is also available via for the sector include a combination funded by the public sector. Table the industry facing research centres of generic business support services, 6 provides an overview of the key identified in Table 3, specifically typically provided through regional organisations involved in the provision QUESTOR, CASE and NIACE. development agencies, and more of innovation support to the sustainable tailored and sector specific support energy sector in Northern Ireland. In

PAGE 52 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG TABLE 6 KEY INNOVATION SUPPORT PROGRAMMES FOR THE SUSTAINABLE ENERGY SECTOR

Programme Scope Invest NI The regional business development agency with support programmes for economical development via R&D, technology (including energy and waste), exports and FDI. Fund for academia: • Proof of Concept Fund supports the pre-commercialisation of leading-edge technologies emerging from Northern Ireland’s research organisations. Invest Northern Ireland can provide up to a maximum of £100,000 of support towards eligible costs. There are two strands of support available: • Support for the further development of the technology (12 months duration) with maximum assistance of up to £80,000; • Support for efforts towards commercialising the technology (15 months duration) with maximum assistance of up to £20,000. Key funds for businesses include: • The Jobs Fund: Employment Grants; • NISPO (Northern Ireland Spin Out) Funds – a family of innovation funds for different audiences at different stages, see Innovation Funds below for detail; • Co-Fund Northern Ireland; • Growth Loan Fund; • Small Business Loan Fund (to be launched); • The Development Fund (to be launched). Innovation support includes: • Investor Readiness programme; • Innovation Vouchers – £4k for SME’s, Micro Businesses and Sole Traders to carry out initial research with FE Colleges and Universities in Ireland. Approximately 15% (83/566) of the vouchers awarded in the period 2011/12 to date related to renewable/sustainable-type activity; • Collaborative R&D Grants – since January 2009, 37 R&D offers have been made to companies in the renewables sector with grants awarded totalling approximately £2.2million and total projects costs of £6.8million. Projects included innovative solar heat tubes, biomass boilers, zero carbon building design and tidal turbine foundation development; • KTPs; • Competence Centres; • Collaborative Network Support - to research, build capacity and facilitate commercial opportunities for consortia of SMEs (e.g. wind, marine, and energy storage). Innovation Funds Established to support post Proof of Concept projects: • Queens University Innovation Fund; • Ulster Innovation Fund. Established as a pre commercial grants for individuals, start-ups, micro-enterprises and SMEs: • Invest Growth Proof of Concept Fund. Early stage business ﬁnance: • Invest Growth Fund. Established to enhance the FE colleges’ economic engagement with employers • DEL Employer Support Programme.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 53 InterTrade Ireland Given responsibility by both Governments to boost N/S economic co-operation to the mutual benefit of Northern Ireland and Ireland. Supports SMEs across the island to identify and develop North/South trade and innovation opportunities via: • Business support programmes – including FUSION, Innova, All Island Innovation Programme, Trade Accelerator Vouchers, and Seedcorn Business Competition; • Research and publications; • Networks and partnerships – including US-Ireland R&D Partnership (with energy and sustainability a core theme). Northern Ireland Provides physical office facilities, support services and events for approximately 100 knowledge based Science Park companies. Manages a number of related programmes including the HALO business angel network and (NISP) CONNECT (see below). NISP Connect An independent, non-profit organization fostering entrepreneurship by accelerating the growth of promising technologies and early stage companies in the knowledge economy. A collaboration between Northern Ireland Science Park (NISP), the University of Ulster, Queen’s University, Belfast and AFBI (Agri Food & BioSciences Institute), NISP CONNECT acts as an ‘honest, neutral broker’ within the region. 2030 targets set to realise additional £6.2 billion GVA for the region’s economy. Revenues derived from membership, sponsorships and grants. Key programmes include: • US: Northern Ireland Mentorship Programme; • Springboard; • 25k Awards; • Northern Ireland Knowledge Economy Index; • Frontiers in Science and Technology; • Access to Capital; • Generation Innovation. Part funded by the European Regional Development Fund under the European Sustainable Competitiveness Programme for Northern Ireland 2007 – 2013. InnoTech Collaboration between SW College and industry (specifically SMEs) to deliver specific development and demonstration projects. SMEs can get c. £4k funding for the project – in a model similar to the Innovation Voucher Scheme. Initially formed in 2008, received new round of funding in March 2012 from the Employers Support Programme. Managed by SWC, the model is now being rolled out to other colleges in the region and the rest of the UK. Primary focus of projects is around solid biomass production and processing, feasibility studies for the installation of biomass plant, and technical adaptation of imported equipment. No industry Board setting overall direction – InnoTech responds directly to the needs of local businesses.

PAGE 54 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Strategic analySiS 5.1 STRATEGIC ANALYSIS

More than 30 interviews were held with a range of stakeholders from across the region, representing a cross section of relevant public sector agencies, suppliers and end users. Appendix A provides a full list of consultees. The following section provides a strategic analysis of the preceding evidence base, supplemented by insights from the consultation process. It seeks to identify the key strengths of the region with regard to the sustainable energy sector, speciﬁc barriers to development, and an overall prioritisation of market segments on the basis of their current competitive position, and perceived potential for future growth and commercial success.

PAGE 56 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 5.1 REGIONAL SECTOR TRENDS

When viewing the performance and how related to trading within a single sustainable energy sectors over evolution of the regional sustainable energy market (in Northern Ireland’s the next 5-10 years will require energy sector as a whole over the last case, at the same time as dealing continued revision and evolution five years, a number of trends become with the complexities of different of the sustainable energy material apparent: currencies and cross-border within general STEM courses, the regulations and incentives). provision of specialist high level • There is a large sustainable energy courses where necessary, and up- resource potential, particularly • Academic excellence in traditional skilling of the existing work force (in when considering the ‘Island of areas of strength have continued to particular in the construction sector). Ireland’, and the favourable climatic develop in line with maturing market conditions. Despite reasonable needs, e.g. marine research at • Provision of public sector innovation deployment successes to date, QUB, and new areas of emerging support has evolved significantly significant potential for future research are developing, e.g. with the emergence, for example, of deployment remains – primarily with nanotechnology materials at NIBEC. successful Collaborative Networks regard to on- and offshore wind, However, the level of commercial and Competence Centres. Next marine and biomass. exploitation from the academic base generation commercialisation has been low, with few successful vehicles have emerged from these, • The last five years has seen the spin outs and limited licensing of specifically the Alliance models, strong emergence, mirrored IP to the international marketplace. and are demonstrating early market globally, of the wind sector, to a In addition, anecdotal evidence traction. point where the current rate of suggests there is a ‘brain drain’ from on-site deployment is showing • However, anecdotal evidence academia, with graduates in key signs of slowing as grid constraints suggests that there is still relatively subjects, lacking relevant industrial become evident. However, in a limited interaction between SMEs opportunities in Northern Ireland and rapidly maturing sector, much of and academia: a small number have leaving the region. the development and deployment direct relationships, e.g. sponsoring has been undertaken by large • AFBI and the regional colleges of PhDs and KTPs and involvement international players using imported have developed a good range of in projects at InnoTech, but this technology, often utilising well complementary capabilities, which would appear to be the exception established international supply has resulted in a robust programme rather than the rule. chains at the expense of regional covering most of the key segments • There has been limited direct operators. of the sustainable energy sector. commercial exploitation of This is backed up by DEL’s STEM • The national grid infrastructure is indigenous R&D to date. In ‘Strategy for Success’ which aims currently approaching maximum addition, whilst there is a general to counter a decline in high level capacity. However, this constraint acceptance of grant funding, there engineering graduates, through may also be seen to be acting as is little experience of, and therefore awareness raising, sector promotion a driver for innovation, providing precedence for, angel or venture and facilitation of CPD within the an incentive to develop expertise capital amongst SMEs. As a result, profession. However, there is in specific areas, such as energy value creation has focused on: an understanding that growth in storage, smart controls and know

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 57 • ‘buying’ in overseas technology early and developing it to meet the needs of the local market. This exploits recognised capabilities in system integration and manufacturing of prototypes and bespoke systems, with the objective of ultimately capturing regional manufacturing jobs and exporting technology. Examples are biomass boilers, anaerobic digestion and energy storage. • Provision of service contracts to deployed technology, in particular wind, and to some extent micro renewables. • Interaction, cooperation and collaboration with partners in Ireland and Scotland (and to a lesser extent other regions) is increasing, but is generally undertaken on an ad hoc, project by project basis, rather than as part of a more strategic framework. • There was a clear trend of Northern Ireland-based SMEs looking abroad for business. Many of the SMEs contacted operated in Ireland and Great Britain as well as Northern Ireland, with some serving markets in Europe or even further aﬁeld. There were also cases in which all business was conducted in Scotland and England. This was due to larger and more numerous market opportunities supported by a more developed supply chain and/or more attractive policy incentives.

PAGE 58 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 5.2 MARKET SPECIFIC INSIGHTS

Table 7 presents a summary of the key deployment. comparison. Enabling Technologies – insights generated from the consultation advanced composites in particular – is a Overall, onshore wind, micro- process, and of speciﬁc relevance growing segment, but with many of the renewables, low carbon buildings and to individual market segments. Many technologies under development having solid fuel biomass are the most mature of these insights reﬂect the evidence potential application across a number of markets within the region, in terms presented in preceding section of markets, as well as sustainable energy. of status of technology development this report, and highlight the diverse and commercial market deployment. nature of the markets and their relative Marine (wave and tidal) and energy levels of maturity in terms of R&D and storage remain relatively immature in

TABLE 7 INSIGHTS OF RELEVANCE TO SPECIFIC MARKETS FROM STAKEHOLDER INTERVIEWS

Technology Key Insights Onshore Wind • A relatively mature sector, first farms installed in early ‘90’s. Now dominated by large developers bringing existing supply chains – typically with HQs and decision makers outside of Northern Ireland. With a few notable exceptions, this has resulted in barriers for smaller local companies to engage. Most local supply chain opportunities are associated with O+M. • Deployment has slowed recently: high penetration to date and increasing difficulty in obtaining grid connections is impacting on the ability to raise project finance. • Large scale projects for wind power in Ireland, such as Mainstream Renewables’ Energy Bridge, may provide the potential for deployment of large number of farms in the midlands of Ireland, with associated opportunities for the Northern Ireland supply chain. A significant number of applications are in the system already, waiting for approval and connections. Offshore Wind • Massive resource potential around the UK, with Northern Ireland geographically well positioned to exploit this opportunity. • DONG Energy’s announcement that its turbine logistics base will be located at Belfast Harbour from Jan 2013, initially to serve wind farms in the Irish Sea, is an important ‘win’, and will provide a key anchor for the local supply chain. • This is reinforced by the recent announcement, by The Crown Estate, that Dong Energy has been chosen to work with Renewable Energy Systems Ltd and B9 Energy Services Ltd on a 600 MW wind farm off County Down. • The market is already dominated by large OEMs based in the UK and Europe, many of whom lack of local presence. • The GWA is seeking to overcome the problems of a fragmented regional supply chain by providing a single commercial vehicle to bid into commercial contracts for regional and international projects. There is evidence of early commercial success, with focus on provision of service support contracts. • As deployment rolls out it is anticipated that ‘pinch points’ and development needs within the European supply chain will emerge, creating opportunities for those that spot these early, e.g. foundation design, steel for towers and power management equipment.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 59 Technology Key Insights Marine • QUB still recognised as one of the leading centres of research in this field. Currently focus moving away from device development to cost optimisation, exploitation of 1/10th scale testing facilities and predictive impact assessment (where they are believed to be global leaders). • Marine technology has now come out of the lab and gone offshore. Significant commercial deployment is anticipated in the next 5-10 years. There is a concern that if the region fails to take a position, then the market will develop based on imported know-how and capabilities from other regions. Sector is beginning to converge on optimal devices, and it is anticipated that in the region of eight device designs will be deployed at scale in the next 2 years. • Recent announcements underline this shrinking window of opportunity. OpenHydro, based in Dublin, and Irish utility Bord Gais will develop a 100 MW tidal power site at Torr Head. DEME Blue Energy and Cork-based DP Marine Energy Ltd will deliver a 100 MW tidal stream park off Fair Head. Work at the project sites is stated to start in 2015. • From 2013 to 2017, Northern Ireland will offer 5 ROCs for some marine-power technologies, with a 30 MW limit. After 2017, the system will be closed to new generation and replaced with long-term contracts offering a fixed price for low-carbon power in the UK (CfD FITs). • The regional supply chain is currently focused on R&D, testing and prototyping. QUB and a few players, such as McLaughlin & Harvey, have practical experience in the deployment of scale demonstration units, and this needs to be exploited for the benefit of the region. • Applications for funding have been submitted for a regional tidal test site to take an array of up to 10 turbines. Access to a suitable site is an issue, but it is felt that such an asset would provide a critical focal point to encourage device developers into the region. Low Carbon • Awareness of energy management is increasing, particularly in the food processing and manufacturing Buildings industries, due to the presence of technically trained employees that are able to recognise the potential benefits, encouraging demand for energy efficient solutions. • Northern Irish based players often purchase established technologies that have been proven through long term global market sales from reputable global suppliers and manufacturers. • There are examples of Northern Irish companies working beyond regional markets in the UK and Europe. • Anecdotal evidence suggests some confusion amongst SMEs as to the numerous agencies supporting this sector in Northern Ireland. • Northern Ireland is seen to be lagging behind GB in the introduction of supplier obligation and ‘Green Deal’ type incentives. It was suggested that this is in part due to the high level of fuel poverty, since any increase in energy bills is unacceptable. • There is a need for greater focus on demand side management as opposed to generation going forward. There are still large opportunities existing with carbon reduction in businesses. Micro • Lack of awareness of alternatives and potential for use amongst the professional services and new build renewables projects is a barrier to uptake and deployment. • Lack of specialist knowledge on the part of accredited installers is a problem and inability to ‘upsell’ means that traditional technologies are being selected ahead of renewables. • However, models such as the InnoTech centre at SWC are considered successful in supporting deployment by local businesses. • Equipment and/or components are typically brought in from established manufacturers in Europe and China and then are adapted as required, e.g. PV optimisers and smart controllers. One exception is Copeland (compressors), a key supplier for regional companies. • Government incentives such as the Northern Ireland Renewable Heat Premium Payment Scheme have been seen to facilitate uptake. • Perceived potential for heat pumps to become a central technology for the UK in the next 10 years – including installation in a significant proportion of the 500,000 off grid properties in Northern Ireland.

PAGE 60 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Technology Key Insights Bioenergy • Overall 68% of domestic properties are off grid and reliant on oil; of these 82% are rural. In such cases, the relative economics to switch to bioenergy are attractive. • Emergence of the AD/biomass sector over the last couple of years has been driven by triple ROCs; a result of successful lobbying of the Government by the sector. Generally the Northern Ireland ROC system has been seen as successful, stimulating a proliferation of research for alternative feed stocks including willow and grass. It has also underpinned the commercial case for the installation of large CHP plants, such as B9 Organic’s new plant at Dungannon. • Strongly opposing views within the region over the potential land use conﬂict between food and energy crops. This is particularly pertinent with regard to the exploitation of grassland. Farmers generally have a traditional outlook. Those in favour cite the contradictory situation of exporting 80% of food grown, and importing 90% of primary energy. • Also issues over access to public sector organic waste streams which are currently ring fenced for long term composting contracts. • The new build domestic market for biomass installations is growing fast in 2012, associated with awareness of the MCS scheme and the Low Carbon Homes Scheme (new builds exempt from council tax for 2-5 years depending on the speciﬁcation). Applies equally to micro renewables above. • The Northern Ireland Renewable Heat Premium Payment Scheme provides grants up to £2,500 to homeowners for the installation of biomass boilers. • Commercial market is harder to make the economic case – 3 year pay back required. • Largest player, Green Energy Technology, has been operating for more than 12 years. Boilers are sourced from multiple manufacturers, but typically imported from Germany and Austria. • There are currently four 250-500 kW AD plant installed to date (at Belfast, Armagh, Ardstraw and Castlederg), two being built and more in planning. These use slurry as feedstock & imported technology. Market size could be 40-60 plants in total, exploiting ROCs. Smaller scale plants (c. 40 kW) exist at SWC and AFBI. • Funding from banks can be a problem, in particular with uncertainty around EMR. • Micro district heating/domestic and commercial systems beginning to go in based on willow – service and supply contracts provided for the consumers. • CHP sector in Northern Ireland is regarded as too small to support a growing business. There is a need for export market, primarily, UK, Ireland and Europe. • Cultivation of algae from biofuel is now the subject of a number of research projects (primarily at QUB), although some individuals have suggested that higher value products (such as plastics) might be a more suitable target for the development work. Energy • Although SmartGridIreland is seeking to develop projects in this area, there is a general feeling that Infrastructure the decision has been made that Northern Ireland should be a ‘fast follower’ rather than a leader in this market. • However, key areas of R&D are underway related to energy storage, control systems and associated future trading options. • There are companies in Northern Ireland capable of supplying into ongoing smart trials in the South. However, much of this equipment and know-how is currently being imported from mainland UK. • Smart Energy Innovation Hub is starting reach out to entrepreneurs in the North.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 61 Technology Key Insights Energy Storage • Regional infrastructure and challenges offer opportunities for the island to become a test bed for demonstration of commercial systems. Energy Storage Collaborative Network has a key role to play in near term projects. • Claims that if storage issues could be solved, the region could be self sufficient in energy from renewable sources. • Primary technology is being sourced from overseas and developed in the region. View that with current planned trials with a compressed air system, the region is in a global leadership position. • General consensus that region has the potential to build exportable expertise, and local manufacturing jobs, in building balance of plant and controls for systems. This could potentially serve a significant global market. • Energy storage is synonymous with ‘smart grid’ – and closely linked to Energy Infrastructure (i.e. control of flow of electricity through the storage system). This opens up the possibility for ‘virtual power plants’ and energy storage trading. Solar PV • Limited activity in solar PV in the region. Few early demonstrators – such as Ecos, but nothing significant beyond that. Geoclimate not ideal and developers have struggled to raise finance for large scale projects. Geothermal • Geothermal is most closely competitive with gas and/or oil networks located in urban areas, rather than in rural locations. There is an unexploited potential of geothermal. Almost all activity undertaken by Northern Irish based companies has been in Ireland or mainland UK. • RHI tariff set on marginal cost of oil makes this less attractive economically than the rest of the UK. Hydro-electric • Activity in the hydro sector has been limited to date, with NHT Engineering and Hydro Northern Ireland being the most active players. • Installations include small demonstration projects located in Northern Ireland, Scotland and England, as well as the design and installation of micro turbines at e.g. treatment works. • Challenges of development complexities and inexperienced customers who are unlikely to have previously installed hydroelectric technologies. • It has been suggested that significant potential for hydroelectric pumped storage, primarily through disused reservoirs, has been overlooked. CCS • Coca-Cola Hellenic and ContourGlobal project is pioneering ‘quad-generation’ technology to recover carbon dioxide for industrial reuse. The partnership aims to build 20 CHP units across EU by 2015 and is the biggest multinational energy-saving project in the beverage industry. Enabling • Includes companies that mould composite components, e.g. blades and nacelle covers and housing. Technologies Carbon fibre composites equally applicable to wind and marine – smaller scale for early markets. • Access to markets for smaller turbines by new entrants difficult because large developers are driving the market and current certification standards difficult to achieve with new technology. • Global shortage of carbon fibre – taken up by large turbine manufacturers and aerospace. Limited supply making small technology developers uncompetitive.

PAGE 62 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 5.3 REGIONAL STRENGTHS AND DIFFERENTIATORS

This section provides a summary of the key areas of strength, and potential differentiators that are speciﬁc to the sustainable energy sector in Northern Ireland. Speciﬁcally these relate to: 1. Resources and Geography; 2. Infrastructure; 3. Academic Base; 4. Industrial Capability; 5. Public Sector Intervention

Resources and Geography Potential Differentiators? • Significant availability of natural resources: wind and marine – up to a quarter of the offshore turbines (2,500) planned for British and Irish waters fall within 150 nautical miles of Belfast. Also significant oil and 1. Availability of natural resources – wind, gas reserves. marine & biomass. • Mild and wet climate – uniquely placed for biomass 2. ‘Bridgehead’ location and proximity to Ireland production (including ‘value added’ products); and the rest of the UK. highest yields in Europe. Strong knowledge-base 3. Know-how and practical experience in amongst farmers. ‘Islanded’ electricity systems. • Well educated population. 4. Significant number of farming businesses

• Strategic positioning – ‘bridgehead’ between Ireland with potential to act as nuclei for rural and rest of UK (able to access natural resources, community-based projects. complementary know-how and end user markets). • Expertise/know-how in operating within ‘Island of Ireland’ and a Single Electricity Market.

Infrastructure Potential Differentiators? • Devolved administration has ﬂexibility to develop bespoke regional policy. • Unique infrastructure relative to rest of Europe: highly dispersed and constrained grid infrastructure, underdeveloped gas network, signiﬁcant off grid, fuel 5. Northern Ireland has, and is developing, poor population, and aging housing stock. electricity interconnectors. • ‘The island of Ireland is effectively a live laboratory of 6. Ability to demonstrate and exploit know-how 81 Smart Grid evolution’. relating to next generation technologies • Highest deployment of wind in the world for a non in a challenging technical and economic interconnected region; recent announcements for environment. offshore concessions will provide an additional focal point. • Excellent digital infrastructure. • Depth of expertise in community/farm scale projects, in particular biomass.

81 Smart Grid Innovation Hub, 2012

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 63 Academic Base Potential Differentiators? • Academic excellence at QUB and UU in speciﬁc areas of: 3 Marine – early demo (SeaGen is world’s largest generating tidal device); impact assessment; 3 Energy Efﬁciency – adv. glazing; PCMs; 7. World class academic teams in areas of marine, low carbon buildings, micro 3 Micro-renewables – adv. heat pumps; renewables, biomass, power engineering 3 Energy infrastructure – renewable integration; and energy storage. • Good international connectivity. 8. Highly skilled and trained workforce with practical experience in deployment of Leading know-how on use of SCR Willow for biomass sustainable energy technologies. at AFBI; and development of alternative feedstock for AD at SWC. Strong applied research/demonstration and skills provision via the regional colleges. Proven successful industrial collaboration via InnoTech model.

Industrial Capability Potential Differentiators? • Nascent, and well connected, on and offshore wind supply chains with cross over know-how and expertise of relevance to other segments such as Marine and Bioenergy. • Proven capability around technology adaptation, demonstration and system integration – track record of importing technology and adapting to regional needs. Current potential for leadership in energy storage. 9. Track record of success in technology • Diversification potential within manufacturing and adaptation and deployment. engineering base – precision engineering and metal 10. Strong and flexible industrial base with fabrication, machining of components, power take diversification potential. off, prototype manufacture (especially marine). • Important anchor industrial players including DONG Energy, Bombardier, Glen Dimplex, Kingspan, Copeland, McLaughlin & Harvey, FG Wilson and WIS. • Key infrastructure assets, in particular, harbours and QMETeC. • Can do/will do culture amongst the rural workforce.

PAGE 64 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Public Sector Intervention Potential Differentiators? • Regional flexibility in fiscal policy, for example NIROCs have been successful in catalysing early markets. • Wide portfolio of public sector funding. Successful model of Collaborative Networks and Competence Centres, and evolving Alliance models. • Strong platform and track record of success in commercialisation within the adjacent Knowledge 11. Sympathetic and supportive innovation Economy (e.g. via NISP CONNECT). landscape (including fiscal support • Specific initiatives worthy of note include: mechanisms such as RHI). 3 CASE - a key focal point (and funding) for 12. Evolving focus on key elements of the collaborative R&D in priority areas that will sustainable energy sector. underpin regional supply chain development; 3 Smart Grid Innovation Hub, open to the innovators across the island of Ireland; 3 InnoTech Centres – specifically seeking to increase level of STEM training, engage SMEs in R&D, and support local businesses in SE deployment.

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 65 5.4 KEY CHALLENGES FOR GROWTH

There are a number of factors that • Supply chain: the heavy dominance present significant challenges to the of micro SMEs presents challenges current and future evolution of the for achievement of critical mass, sustainable energy sector as a whole with a lack of capacity and finance to within Northern Ireland, and others that exploit regional IP. apply to specific segments within it. The • Innovation Support: a view that overarching challenges are summarised public sector funding in the sector in Figure 8, and have been classified as is not being deployed effectively; those relating to: access to working capital is a key • Policy: Perceived lack of joined barrier for SMEs. up thinking between various The relative impact of these challenges Government Departments which on individual segments within the sector is seen as sending conflicting varies with the maturity and nature of messages to the market place, the market (and the technology). Those e.g. in regard to competition for segments that are relatively immature feedstock between composting and capital intensive are generally more and AD. Overall the response to constrained by Innovation Support, the development of new policy is whereas more mature segments are perceived as passive, with the region more affected by the policy landscape often choosing to follow the rest and infrastructure challenges. of the UK, rather than taking the opportunity to lead when they have a regional competitive advantage. More could be done to provide an enabling environment for the development of the sustainable energy sector. • Infrastructure: Recognition that price determinations currently underway will influence the level of investment NIE can make, in the short to medium term, in the upgrading of the current grid infrastructure. This outcome will influence the future direction and scale of innovation and deployment potential for sustainable energy in the region.

PAGE 66 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG FIGURE 8 OVERVIEW OF KEY CHALLENGES TO DEVELOPMENT

Policy Infrastructure • Lack of clear Government vision and joined up • Energy Infrastructure thinking Significant investment required to deliver current • Policy framework set nationally with regional sustainable energy policy flexibility; tendency to follow rather than lead, e.g. Lack of transparency over availability, timing RHI and Green Deal and cost of connections - costs are borne by • Relatively weak policy drivers in some areas, e.g. the installer; Single DNO, lack of competition to Building codes and standards encourage innovation in infrastructure • Poor industry consultation consultation when • Physical infrastructure: defining new requirements Limited number of notable physical assets to act • Anecdotal evidence of loss of indigenous as ‘flagships’ manufacturing, squeezed out by larger (US) OEMs.

Supply Chain Innovation Support • Overall, low proﬁle of the sector on international • Public sector funding not being deployed stage effectively (scale, timing and suitability of support mechanisms) • Highly fragmented supply chain dominated by micro SMEs (>80%) • Lack of ﬁnance (working capital) especially for high capex demonstration projects • Few anchor OEMs to catalyse supply chain • SMEs have few resources to compete - therefore • Limited connectivity between SMEs and global tends to be a culture of survival rather than institutions growth...lack of long term planning and ambition. • Limited commercialisation of IP to date; reliance on imported technology • Culture of reliance on grants; fear of VC investment • Shortage of business managers with industrial experience

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 67 aPPendix

liSt oF a conSulteeS APPENDIX A - LIST OF CONSULTEES

Organisation Action Renewables Advantage Control Ltd Agri-Food and Biosciences Institute Axis Composites B9 Energy Bio-Oil CARE CASE CCS Global Clear Spirit Design Creative Composites Ltd Glen Dimplex Ltd Energy Storage Network Fin Engineering Grants Electrical Services Green Energy Technology Greengage Group GT Energy Hughes Energy Systems Hydro NI Innovation Technologies (Ireland) Ltd Invest NI Mainstream Renewables NHT Engineering NIE NuTech Renewables Ofﬁce of Innovation (UU) Pure Marine Queen’s University Belfast Knowledge Enterprise Unit (QUB) Rural Generation South West College Tughans Tyrone Fabrication LIST OF WIS (Williams Industrial Services) CONSULTEES

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 69 aPPendix

data SourceS Pageb 70 PROFITING FROM SCIENCE WWW.matrix-ni.org Data protection Data in public domain Data in public domain Data held by Invest NI Data held by Invest NI Data held by Invest NI Data held by Invest NI Data held by Invest NI Data in public domain Data in public domain Data in public domain Data in public domain Level of detail in data Medium: full capability data not provided Medium: limited company information High: information on capability High: information on capability High: information on capability Medium: limited company information Low: simple list of companies Low: simple list of companies Low: simple list of companies Low: simple list of companies Low: simple list of companies Sector bias Micro-renewables technologies only Biomass fuel supply only All wind only Wave and tidal only Wave Biomass and biofuels only Low Carbon Buildings All All Wind, Marine and Bioenergy only Wind, Marine, Bioenergy, Wind, Marine, Bioenergy, LC Buildings and Energy Storage Advanced Materials

Data manipulation Individual companies: fi ltered by postcode Individual companies: fi ltered by postcode Individual companies: fi Original supply chain segmentation followed, backed up by website checks on key companies Original supply chain segmentation followed, backed up by website checks on key companies Original supply chain segmentation followed, backed up by website checks on key companies Original supply chain segmentation followed, backed up by website checks on key companies Full list 1300 companies – scanned for well-known companies and keywords (e.g. biomass, biofuel etc, solar etc.) List of companies scanned for well-known and keywords (e.g. biomass, biofuel etc, solar etc.) List of companies scanned for well-known companies and keywords (e.g. biomass, biofuel etc, solar etc.) List of companies scanned for well-known companies and keywords (e.g. biomass, biofuel etc, solar etc.) List of companies scanned for well-known companies and supply chain Source MCS Installer Database (http://www. cation.org/mcs microgenerationcertifi consumer/installer-search.php) National Biofuel Supply Database, http://www. nbsd.carbontrust.co.uk and usewoodfuel.co.uk Invest NI Wind Energy Database Invest NI Marine Energy Database Invest NI Bioenergy Database Invest NI Low Carbon Buildings Database Invest NI Supply Chain Interactions Invest NI Maximising Business Opportunities The Establishment of from Sustainable Energy. & Service Sector Business Energy Technology Led Collaborative Networks in Northern Ireland, 2008. Envirolink, Development opportunities for the Wind, Marine and Bioenergy sectors in Northern Ireland, Draft Report, Sept 2012. Ecorys, Research Study to Determine the Skills Required to Support Potential Economic Growth in the Northern Ireland Sustainable 2011, Report for Department of Energy Sector, Employment and Learning. Northern Ireland Polymers Association General Regional

DATA SOURCES SOURCES APPENDIX B - DATA

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 71 aPPendix

oVerVieW oF uK comPetitor c regionS

Comments Offer 2 ROCs per MWh. Offer Centres for Offshore Renewable Engineering (COREs) are partnerships between Central and Local Government Centres for Offshore and Lowestoft, Tyneside, Great Yarmouth and Local Economic Partnerships (LEPs) located in Hull Humber, renewables industry. and Sheerness. £60m of support available to invest in manufacturing for the offshore Teesside Centre of excellence that will bridge the gap between business, academia, research and government. Marine Energy catapult to be located in Glasgow International Renewable Zone alongside Strathclyde TIC. University’s wind turbine manufacturing plant in the UK on Feb 2012- GE Energy has put plans to build an £110m offshore hold. Installation of 15MW drive train test rig at Narec. wind turbines for deep water applications. oating offshore Project to look at feasibility of fl Centre near Glasgow Wind Technology Jun 2011 - The Spanish-based company has located its £12.5m Offshore wind technology centres across the globe). (one of 5 offshore March 2012 company announces its intention to develop £125m manufacturing facility at Leith. to develop 2010 - The investment is aimed at establishment of Edinburgh based Centre for Advanced Technology ‘game changing’ green energy technologies and assist in their mass production. The endeavour also includes rm Artemis intelligent Power (AIP). acquisition of Edinburgh fi 2011 - The SeaAngel™ turbine – featuring AIP TECHNOLOGY will have a minimum generating capacity of 7MW and a rotor diameter of over 165 metres. Group Renewables joined Wind and Wood Offshore July 2012, Mitsubishi Power Systems Europe, SSE, Technip wind Wind Programme (EOWP) - set up to overcome challenges in the offshore cient Offshore together in£33m Effi industry. No suggestion of possible UK ce base in Edinburgh. Supplied turbines to Ormonde OWF. REpower UK have offi manufacturing or assembly sites! Construction yards at Burntisland, Methil and Contractor with long history of serving North Sea oil and gas sector. wind farm. Arnish. Fabricated 30 subsea structures for Ormonde offshore 9 sites with total capacity of 9.8 GW, of which; 9 sites with total capacity of 9.8 GW, Under construction 0 sites; development 8 sites with capacity Operating 1 site with capacity of 0.01 GW; of 9.8 GW. £70m grant fund available to support projects intended provide marine renewables infrastructure and manufacturing facilities. No grants made to date Oct 12. Activity Renewable Obligation Centres for renewable offshore engineering. Marine Energy Catapult Centre Manufacturing rig Test Deep water Steel Fabrications Licensing National Renewables Infrastructure Fund Organisation DECC BIS Technology Strategy Technology Board GE ETI BiFab Crown Estates Mitsubishi REpower Scottish Government Gamesa OVERVIEW OF Sector Government OEM Public/Private Initiatives Supply chain Public UK COMPETITOR Government OEM Region UK-wide Scotland

REGIONS APPENDIX C - OVERVIEW OF UK COMPETITOR REGION Offshore Wind Energy

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 73 The port is home to the Operation and Maintenance Base for Greater Gabbard Offshore wind farm; The port is home to the Operation and Maintenance Base for Greater Gabbard Offshore extensive facilities for the construction of large topside-deck structures and jackets SLP Engineering Ltd offers destined for the North Sea and other oil gas ﬁelds wind farms; fabrication facilities within the Inner Harbour; AKD Engineering offers standby / support vessels. The port is home to a substantial ﬂeet of offshore

Former Davy Offshore, SLP (Odebrecht) Offshore Yard acquired in 2000. Fully serviced, multi -user facility Yard SLP (Odebrecht) Offshore Former Davy Offshore, and marine related operations. Special feature - 260m deepwater fitting-out quay. designed for offshore The Marine Energy Park (320 Hectares with Deep Water frontage) is being developed for the manufacturing, The Marine Energy Park (320 Hectares with Deep Water wind turbines. commissioning, installation and recycling of offshore Siemens’ new £80m wind turbine assembly and project facility based at ‘Greenport’ Hull will see the creation of around 700 local jobs. Metropolitan Modern Apprenticeship in 2010 at Tyne Technician first Wind Turbine Siemens launched the UK’s College, Newcastle. Now working with Carnegie Dunfermline and Lincoln College. The investment in Siemens’ Service Energy Centre Newcastle shows a strong local footprint that will continue from parts to tools, logistics during Round 3 as the renewables team reviews all areas of service delivery, transport Comments Jun 2012 - Vestas announce that plans for a manufacturing plant at Sheerness have been put on hold; the company Jun 2012 - Vestas wind turbines. have no firm orders for offshore 22 sites with total capacity of 28 GW, of which; 22 sites with total capacity of 28 GW, Operating Under Under construction 5 sites with capacity of 1.8 GW; 7 sites with capacity of 0.8 GW; development 13 sites with capacity of 25.4 GW • • • • An established centre of excellence for operations and maintenance activities Round 1 2 wind farms in the North Sea; Centrica, Siemens and RES have established operations within the port. In January 2011, Siemens announced it had chosen the Port of Hull as its preferred location to develop new Alexandra involving a £200m regeneration of the port’s wind turbine manufacturing and export facility, offshore Dock. “The newly constructed outer harbour is the closest deep water that has the largest concentration of offshore wind “The newly constructed outer harbour is the closest deep water that has largest concentration of offshore projects in the world within 100 miles of port. In recent months, vessels working on Sheringham Shoal, Greater Wind Farms have utilised the facilities at outer harbour”. Gabbard, and Lincolnshire Offshore O&M base for London Array. In 2011/12 the Port developed proposals for a new offshore wind turbine manufacturing facility in the southern In 2011/12 the Port developed proposals for a new offshore site for previously proposed Vestas part of the port area which have now achieved outline planning approval. Was manufacturing facility. “The future developments in renewable energy are key to regional growth and we therefore investing further and the Port will wind turbine manufacturing is huge for the River Tyne in these areas. The potential with offshore continue to play a major role in helping drive this business the region.” Humber (Killinghome) Assembly & skills Training Ongoing O&M Middlesborough Activity Manufacturing Licensing Lowestoft Hull Grimsby Gt Yarmouth Gt Yarmouth Sheerness Siemens Organisation Vestas Vestas Crown Estates ABP East port Port of Ramsgate Peel Ports Port of Tyne Port of Tyne Able Ports OEM Sector Public Port Operators Region Eastern England

PAGE 74 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Experience in heavy lifts for the offshore industry, including monopiles and transition pieces for Walney 1 and including monopiles and transition pieces for Walney industry, Experience in heavy lifts for the offshore wind farms; 2 offshore Walney wind farms constructed on the quayside prior to Robin Rigg, and Ormonde offshore Substations for Barrow, load-out and installation on site. to optimise the amount of renewable electricity sustainably generated from offshore wind and marine renewable to optimise the amount of renewable electricity sustainably generated from offshore reduce carbon waters in order to enhance diversity and security of supply, resources in Northern Ireland’s emissions, contribute to the 40% renewable electricity target by 2020 and beyond develop business employment opportunities for NI companies; wind and 300 MW from tidal The associated development opportunity is for up to 900 MW of offshore resources in Northern Ireland waters by 2020.

Comments 13 sites with total capacity of 7.2 GW, of which; 13 sites with total capacity of 7.2 GW, Operating Under Under construction 3 sites with capacity of 0.9 GW; 6 sites with capacity of 0.7 GW; development 4 sites with capacity of 5.6 GW • • in Manchester will create up to 340 new Renewable Energy Engineering Centre at Siemens Transmission jobs in its Projects business. 3 sites with total capacity of 3.2 GW, of which; 3 sites with total capacity of 3.2 GW, Operating 0 sites; Under construction 0 sites; Under development 3 sites with capacity of 3.2 GW. “Ideally located to serve both the assembly and O&M needs of wind tidal projects being developed in wind industry”. Bristol Channel. Currently has a 16 ha site available for development by offshore “Located approximately 35 to 60 miles from the two Round 3 sites east and west of Isle Wight, Southampton wind developers“. big-port deep-sea capability to offshore offers 0.6 GW site under development. Mar 2012 The overall aim of the ORESAP is; • • the south east coast of County Down, will be leased to First Flight Wind – DONG wind area, off The offshore RES and B9. energy, wind turbine assembly facility to be completed in 2013. Will used by Belfast Harbour investing £50m in offshore Duddon Sands site and afterwards Scottish Power Renewables/DONG Energy for the development of their West by DONG energy for its future Irish Sea operations (Company has 50% stake in 4.2GW round 3 site). 0.7GW Islay Site also well placed to serve Scottish Power Renewables 1.8GW STW Argyll Array site (and SSE’s site). wind sector including; fabrication of foundation structures for Robin Rigg Have completed projects for offshore and and Repower turbines for Robin Rigg Ormonde OWF’s transhipment and assembly of Vestas OWF, fabrication of transformer stations for Bard 1 (Germany) and Gwynt y Mor OWF. Have carried out studies for Crown Estates that assessed feasibility of Tune Plateau (offshore wind) and Torr Head wind) and Torr Plateau (offshore Have carried out studies for Crown Estates that assessed feasibility of Tune (tidal stream) to support renewable energy developments which lead subsequent call for lease proposals. operations and maintenance support to wind farm operators. Offer Activity Licensing Barrow HV systems Licensing Swansea Southampton Offshore Renewable Energy Strategic Action Plan Facilities Terminal Shipbuilders and marine fabrications Seabed leases Offshore Energy Offshore Operations and maintenance Organisation Crown Estates ABP Siemens Crown Estates ABP DETI Belfast Harbour Harland and Wolff Crown Estates B9 Energy Group Sector Public Port Operators OEM Public Port Operators Government Port Operators Business Region Northwest England Southwest England Northern Ireland

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 75 Pelamis Wave Power Pelamis Wave Artemis Intelligent Power tanks). Edinburgh Designs (Wave

Comments stream installations July 2012. and Tidal DECC adopt SG proposals for support of 5 ROCs per MWh Wave Centre of excellence that will bridge the gap between business, academia, research and government. Marine Energy catapult to be located in Glasgow International Renewable Zone alongside Strathclyde TIC. University’s Range of projects including design and demonstration at EMEC 1MW TGL device. Other yield estimation tools and improved electrical connectors. Recently produced marine energy Produced marine resource assessment as part of Marine Energy Accelerator. briefing http://www.carbontrust.com/media/150271/carbon-trust-marine-energy-briefing-july-2012.pdf. Marine Renewables Proving Fund. £22m grant managed on behalf of DTI, awarded to 6 developers in 2010. Has lead to successful deployment at EMEC of several next generation devices included Pelamis P2, Oyster 800 and HS1000. Marine Renewable Commercialisation Fund - £18m fund managed on behalf of Scottish Government, which will support two or more projects that have an installed capacity in excess of 2MW and involve at least 3 devices. Spawned a number of Formed in 2002 bringing together colleagues energy systems and wave power. successful spin outs including: • • • N GenTec • An £89m investment due to open in 2014, the TIC will house researchers, engineers and project managers from academia and industry who will sit side by side. Response to EU mandatory requirement setting out how Ireland’s allocated 2020 target of 16% all energy will be Response to EU mandatory requirement setting out how Ireland’s delivered from renewable sources. Anticipates 42% of electricity or 13.9 TWh from renewable sources, including wind (installed capacity 500MW), 10.2 TWh from onshore wind and 1.7 offshore http://www.dcenr.gov.ie/NR/rdonlyres/C71495BB-DB3C-4FE9-A725-0C094FE19BCA/0/2010NREAP.pdf SEA identified potential capacity of 4.5 GW. Comments 25 MW constructed; 1.6 GW with lease and no grid connection offer; 0.8 offer but lease; (2.3 GW in Irish Sea). wind will be developed in response to export demand for electricity form UK and North Suggests that offshore Europe. West Activity Renewable Energy Strategy 2012 2020 National Renewable Energy Action Plan Activity Renewable Obligation Marine Energy Catapult Centre Marine Programme Resource and economic assessments Managing Grant funding schemes Institute for Energy Systems and Technology Innovation Centre Organisation Department of Communications, Energy and Natural Resources Organisation Energy Technologies Institute Technology Strategy Technology Board Carbon Trust Strathclyde University DECC Edinburgh University Sector Government Sector Public/Private Initiatives Government Academic Institutions Region Region UK-wide Scotland Republic of Ireland Marine (Wave and Tidal) Energy and Tidal) Marine (Wave

PAGE 76 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Comments Have purchased and deployed at EMEC a 750 kW Pelamis P2 machine. development rights for 50 MW Marwick Head site. Have consent for 10MW demonstration tidal stream array in Sound of Islay using Andritz Hydro Hammerfest HS1000 (currently on test at EMEC) devices which they hope to deploy by 2015. Have development rights for 100 MW Ness of Duncansby site. Have development rights both exclusively and with partners (Aquamarine Open Hydro) for a number of wave Hold 50% of equity and tidal stream sites in the Pentland Firth around Orkney amounting to about 800 MW. in Aquamarine. Company currently has two 2nd generation P2 devices (Owned by Scottish Power and Eon) on test at EMEC. Second generation device now on test at EMEC to be joined by two further devices in mini array. SEP (Scottish Equity Partners), SSE and ABB all have significant equity stakes. III device chosen by SSE/Alstrom for 200 MW Costa Head (Orkney) site AWS 40% owned by Alstrom. Installed first commercial wave generator on Islay in 2000. Installed 26 18kW turbines in breakwater at Mutriku Spain 2011. in 2005. Bought out by Voith Have successfully proven design concepts and generated with prototype 250kW device. Will now scale up to a 2MW device. Device fabricated by Harland and Wolff. Novel tidal stream turbine device featuring two counter rotating ‘propellers’ (eliminates turning moment on device). Strathclyde University spin out. the opportunity for a 10% increase in electricity yield from wind Direct displacement hydraulic drives offer turbines, wave and tidal stream generators. Now owned by Mitsubishi. which will demonstrate characteristics to full-scale 1 MW prototype permanent magnet generator, NGenTec’s 6MW level, will be built and tested under an industrial partnership the company has with global gearing David Brown Gear Systems (DBGS). Former oil rig yard, has fabricated device structures for both PWP and Aquamarine. Also looking to offshore wind turbine market foundation market. facility for both wave and tidal stream devices, 4 berths capable of accepting up to 1.5MW devices at Test commissioned in 2006. Recently stream berths at Falls of Warness Billa Croo operational since 2004 and 6 Tidal developed both wave and tidal nursery berths. Operating at capacity. Have granted development rights for 11 sites in Pentland Firth and around Orkney with a total capacity of 1.6 GW. (£3m), 160m extension of existing pier Halston Investment in new piers & laydown/fabrication areas at Lyness (£8m) and jetty facilities for workboats at Stromness (£9m). Scottish Government confirms its proposal to increase ROC support for wave and tidal stream devices from 2 per MWh subject to a 30MW installation cap. 5 ROC’s Activity Energy Wave stream Tidal and tidal stream Wave Pelamis P2 750 kW wave device Oyster 800kW near shore wave generation device generation device Wave Oscillating water column shoreline wave generation device stream generation Tidal device stream generation Tidal device Direct displacment™ hydraulic drives Permanent Magnet Generators Steel fabrications Live test centre for full scale wave and tidal stream devices Owners of UK continental shelf. Issuing of licences for marine development sites. Owners of existing harbour and pier facilities around the Orkney Islands Renewable Obligation Scotland Organisation Scottish Power Renewables Power Pelamis Wave Ltd Artemis Intelligent Power Ltd EMEC SSE Ltd Aquamarine Ltd Ocean Energy AWS Wavegen Voith Scot Renewables Nautricity NGenTec Bifab Crown Estates Orkney Islands Council Scottish Government Sector Corporates Device developers Supply chain Public sector initiatives Region

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 77 - ¼ scale nursery site for device testing. 2 wave demonstration site of N Cornwall coast. Recently installed sub-sea distribution hub and 20 MW, 33kV wave demonstration site of N Cornwall coast. Recently installed sub-sea distribution hub and 20 MW, 2 Aquamarine – Oyster wave devices off NW coast of Lewis Aquamarine – Oyster wave devices off Power – Pelamis P2 wave devices at Farr Point Pelamis Wave Scottish Power Renewables Andritz Hydro Hammerfest HS1000 tidal stream devices at Ness of Duncansby. Mey Gen – Atlantis tidal stream devices in inner Pentland Firth.

Respected by Government and highly inﬂuential. Since it was established in 2003, The National renewable Energy Centre (Narec) has invested over £150 million of Government, private and European funding to create a unique portfolio independent test, research, development and demonstration assets including; turbine blades, drive systems, electrical power take off wind demonstration site. systems, 1/10th Scale wave tank testing, and proposed offshore Renewable Energy Group has a 30 year track record of research into marine energy. Pan University initiative to provide focus for range of marine based activities that have historically operating Marine sciences building opened 2012 which includes signiﬁcant test tank facilities at it across the University. COAST laboratory. Facility (DMaC). Facility (SWMTF). Dynamic Marine Component Test Moorings Test South West grid connection at a cost of £42m. No apparent customers. Pre-consented 2km £20m investment in shore based infrastructure adjacent to the tidal North Quay, which has potential to provide £20m investment in shore based infrastructure adjacent to the tidal North Quay, O&M support base to Hub facility (when the tide is in!). Bristol based company successfully installed 500 kW device at EMEC 2010. Now working on ETI funded project to demonstrate 1MW device. Became wholly owned subsidiary of Rolls Royce in 2009 who have recently announced sale to Alstom. Bristol based. Installed 1.2MW demonstration turbine in Strangford Loch 2008. Has now generated 5GWh of electricity (2GWh in the last 6 months). Now wholly owned by Siemens. Collaboration to market and promote the collective Marine Energy capability resource with SW region. See http://www.wavehub.co.uk/wp-content/uploads/2012/02/Marine-Energy-Park-prospectus.pdf. 8km Comments Joint Government/Industry forum intended to identify actions necessary facilitate progress of marine energy Produced Marine Energy Roadmap and subsequent action plan. See http://www.scotland.gov.uk/ sector. Resource/0039/00396266.pdf. (1) provided a total of £13m grant funding to 5 developers in July 2010. WATERS Ocean Energy £3.9m, Nautricity £1.4m and 2 funding announced Aug 2012; including AWS £7.9m of WATERS Scot Renewables £1.24m. to developer who generates most electricity in two year period 2017 (subject 100 GWh threshold) Awarded from wave or tidal stream device located in Scottish waters. Four competitors have gone forward to Grand challenges stage; • • • • Renewables sector trade association Renewable Energy Test Facilities Renewable energy research Marine Institute Component testing Wave device test facility Wave Marine Renewable Business Park stream device Tidal stream device Tidal Wave generation Wave demonstration site Activity Government /Industry liaison Energy: & Tidal Wave Research, Development & Demonstration Support £10m International Marine renewables prize South West Marine South West Energy Park Exeter University Scottish Renewables Narec Lancaster University Plymouth University Falmouth Bay Test site Falmouth Bay Test Tidal Generation Ltd Tidal Hayle Harbour Marine Current Turbines Wave hub Wave Organisation Marine Energy Group Scottish Government/ Scottish Enterprise/ HIE Saltire Prize Public/private sector initiatives Public/private sector initiatives Academic institutions Academic Institutions Others Device Developer Sector NE England NW England SW England Region

PAGE 78 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Comments Energy Convertor technology that Provide Ocean energy consultancy services. Have ownership of DUO Wave Applied Research Grant. was the subject of a 2009 Carbon Trust Built fabrications for MCT installation at Strangford Loch and Scot Renewables SR250. 25m ocean wave basin test tank. Rotating electrical test rig. All facilities in area of marine and sustainable energy to be rationalised into the new Beaufort Laboratory. wind, building a sustainable bioenergy The document sets out five strategic goals – increasing on and offshore fostering R&D in renewables such as wave & tidal, growing sustainable transport and building out robust sector, and efficient networks, http://www.dcenr.gov.ie/NR/rdonlyres/9472D68A-40F4-41B8-B8FD-F5F788D4207A/0/ RenewableEnergyStrategy2012_2020.pdf. wind) energy target for 2020. 500 MW ocean (includes offshore SEA identified available wave resource as 1.5GW. Still going through consultation, but see earlier draft http://www.dcenr.gov.ie/NR/rdonlyres/2990B205-534E 486E-8586-46A6770D4B6/0/Draft_13_OREDPWebversion.pdf Ocean energy development fund. ¼ scale test site at Galway Bay due to be operational in 2014. http://www.marine.ie/home/services/operational/oceanenergy/National+Test+Facility+for+Marine+Technology+a nd+Ocean+Energy.htm. Proposed grid connected site at Belmullet in Co Mayo. of Have had test rig installed at EMEC since 2005 and have successfully demonstrated a 250 kW turbine. Trials a 1MW device at the Force test site have been suspended after Nova Scotia Power pulled out. with Alderney Renewable Energy Co. Working Summer 2011 tested device at Bay of Galway test site. http://www.mria.ie/. Both Wavegen and Aquamarine designs have spun out of QUB. Both Wavegen Now moving from device concept development to cost reduction, wave impact/yields and environmental impacts. Centre QMETeC. Marine Energy Test The Queen’s Sept 12 concessions announced for two 100 MW tidal stream sites: ventures (Bord Gias & Open Hydro); Head Tidal Torr Fair Head - DP Marine Energy – (MCT turbines). Activity Marine consultancy & device developer Shipbuilding & marine structures Hydraulics & Maritime Research Centre Strategy for Renewable Energy 2012-2020 Renewable Offshore Energy Development Plan Ocean Energy Development unit ¼ scale wave test facility Full scale test site stream device Tidal device Wave body Trade Organisation Irish Government Open Hydro Marine Renewables Industry Association Harland and Wolff Harland and Wolff Sustainable Energy Authority /Marine Institute Wavebob Queens University Belfast Pure Marine University College Cork Crown Estates Sector Public Device Developer Other Academia Academia Business Region Northern Ireland Republic of Ireland

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 79 Anaerobic Digestion and Biogas Association. Source of information (c300 members). http://www.adbiogas.co.uk. Sets out a series of actions for the Scottish Government over and above ensuring introduction RHI that will address barriers to implementation including skills development, supply chain ensuring right policy and regulatory regime exists. www.scotland.gov.uk/Resource/Doc/290657/0089337.pdf. per MWh reducing to 1.8 in 2016/17. Anaerobic Digestion - 2 ROC’s Per DECC. Per DECC. Suggests that Scotland is currently producing 3.2% of heat from renewable sources, the 11% 2020 target will be reached early and that 16% would represent a more stretching target. Key drivers are large industrial plants ambitious targets to eliminate the land filling of biodegradable waste leading to increasing numbers of energy from waste schemes, http://www.scottishrenewables.com/static/uploads/publications/110320_sr_-_renewable_heat_report_final.pdf. Scottish Government 2020 renewable energy target of 20% includes an 11% heat target. Ringlink is a farm machinery co-operative operating in NE Scotland, which running pilot to allow farm-based small estates to aggregate smaller woodland holdings into sufficiently large packages stimulate development of woodfuel supply businesses. Comments Anaerobic Digestion - 2 ROC’s per MWh reducing to 1.8 in 2016/17. Anaerobic Digestion - 2 ROC’s AD - Set at 14.7 p/kWh for >250 kW in 2013/14 falling to parity with RO (c9p). from 1/4/13 - 5.2 with effect Domestic Renewable heat premium payment (biomass boiler) £950 – proposed tariff 8.7 p/Kwh for 7 years. Non-domestic <200 KWth 7.9 p/kWh for first 1,300 kWh/KW and 2p thereafter. Government keen to encourage biogas injection into the gas grid which will be eligible for RHI. Contained powers to allow DETI establish Northern Ireland RHI. £10m Anaerobic Digestion Loan Fund to accelerate deployment of AD in England. Max loan £1m. RO (Scotland) FITs RHI Renewable Heat Report 2011 Renewable Energy Targets Renewable Heat Action Plan co Woodfuel operatives Activity RO FITs RHI 2011 Energy Act Loan fund Promotion of AD & Biogas sector Scottish Renewables Scottish Government Ringlink Organisation WRAP DECC ADBA Private sector Government Sector Government Trade Body Trade Scotland Region England & Wales Bioenergy

PAGE 80 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG 2008 Bioenergy potential report AEAT pointed to maximum 2020 potential for 1650 GWh heat (5.8%) and 900 2008 Bioenergy potential report AEAT GWh elect (7.8%). Particularly point to importance of AD (benefits treating food and agricultural waste streams), http://www.detini.gov.uk/assessment_on_bioenergy_in_ni_oct_2008.pdf. “NI is one of the least forested countries in Europe and current availability home grown biomass therefore limited to around 4 – 5% of overall heat demand. An increase in potential from biomass would therefore require extensive growth of energy crops which could provide another 5% heat by 2020 (assuming 2.5% the agricultural land is used) or the import of biomass from Republic Ireland overseas. The extensive farming industry in Northern Ireland could be used to help develop a biogas from AD utilising In total there is a potential for around 2.9 TWh of biogas farm wastes, and grass as a potential feedstock enhancer. per year corresponding to about 15 – 16% of the 2020 heat demand.” “Out of the three options in this report, generation biogas is most flexible – it does not rely on suitable heat demands, uses a long term resource, and produces fuel which is flexible for grid injection, distribution via containers, or transportation applications (although this clearly does not contribute to heat targets). Therefore targets set for biogas generation are compatible with longer term aspirations.” http://www.detini.gov.uk/executive_summary_-_renewable_heat_study Renewable Energy targets; 40% renewable electricity and 10% heat by 2020. Current heat demand 17.4TWh of which 300GWh or 1.7% provided by renewable sources. Domestic currently grant scheme paying £2500. Non-domestic >20<100 kWth 5.9p for 20yrs. Biogas injection and biogas combustion 3p/kWh for 20 yrs. AD <500kW 4 ROCs/MWh, 500-5MW 3 >5MW 2 ROCs/MWh. Biomass processing challenge fund 40% grant up to £320k for install biomass fuelled technologies primarily aid agricultural activities at farm level. Comments and progressing research programme Agri-food and Biosciences Institute have installed AD plant for farm slurry, (includes enhance feedstock i.e. includes grass). Wood gasifier/CHP plant 200kWe plant operating since 2009, now developing 300 kW site at Larne. gasifier/CHP plant 200kWe Wood Enniskillen pellet plant capable of producing 55,000 t/yr (10,000 homes) Strategic Goal 2: A sustainable Bioenergy sector supporting renewable heat and power Generation. 12% target for Renewable Heat by 2020. Will support up to 50 MW of AD and 100 Biomass CHP electricity generation with payments in the range 100-150 per MWh. Earlier ‘Reheat’ scheme included grant support for renewables including biomass, replaced by now closed ‘Better which excludes renewables and is currently closed. Energy Workspaces’ Non- food crops financial support schemes. Earlier ‘Greener Homes’ scheme did include grant support for renewables including biomass, replaced by ‘Better Energy Homes ‘Scheme that focuses solely on energy efficiency. Renewable heat study Strategic Energy Framework Renewable Heat Incentive NIRO Grant funding Activity Renewable Energy centre Scoping report Equipment supplier Fuel supplier Strategy for Renewable Energy NREAP REFIT 3 Business support Domestic support DARD Organisation AFBI BALCAS DETI Biomass CHP Sustainable Energy Authority of Ireland DCENR Trade body Trade Sector Private Government Government Region Northern Ireland Republic of Ireland Low Carbon Buildings and Micro-renewables

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 81 Construction and Project Management; Architectural Design Research; Structures; Structural Materials. Turbines; Energy Device; Wave Integration and Storage; Energy Efﬁciency; Energy from biomass.

Energy Systems Research Unit - within ESRU is concerned with the development and testing of and the evolution of computational tools to new methods and technologies for energy reduction supply, assist designers in their attempts to devise clean and sustainable solutions. In May 2010, a £47 million phased expansion of new facility in Portadown, Northern Ireland was most technologically-advanced solar announced. Now operational, the facility is one of world’s technology productions sites. Glen Dimplex Ireland is responsible for the design, manufacture and international sales of heating products in Seagoe Technologies with three manufacturing plants in Ireland, including Glen Electric Newry, Portadown and Glen Dimplex Ireland in Dunleer. leader in design and manufacture of standby generators based Northern Ireland. Will have World knowledge and skills that are applicable to renewable energy. Making progress on over 90% of Sulliven Commission Report (Low Carbon Building Standards Strategy). New energy standards with Scottish Building Regulations in 2007 and 2010 – next revision 2013. c30% reduction each time. Interest free loan scheme (up to £15k) in Orkney and selected areas of Fife with a view increasing uptake increasing knowledge of the technology its benefits and barriers. Comments Built Environment Research Institute is concerned with the delivery of research that will enhance quality Through of the built environment and address changing needs society in a more sustainable manner. biomass and bio-energy, research in areas such as hydrogen technologies, fire dynamics, renewable energy, sustainable energy systems, regeneration processes and financing models, BERI is addressing questions central to global, national, regional and local economies. The ENERF building consists of nine laboratory spaces, the largest being general containing the phase change material/chilled beam ceiling/human comfort controlled environment test room, small the large scale computer controlled glazing test facility and scale computer controlled glazing test facility, as well general fabrication and maintenance equipment. solar simulator, The need for closer cooperation between architects and engineers to address issues of these sectors cannot be overemphasised. CBER facilitates this by undertaking its activities within four research themes, • • • • Research clusters include; Centre for Advanced Sustainable Energy. • • • • • ESRU Solar Thermal Heating products FG Wilson insulation Solid Wall Trial Activity BERI ENERF lab Centre for Built Environment Research CASE Strathclyde University Glen Dimplex Emerson Electric Energy Unit Kingspan Renewables Building Standards Queens University Belfast Organisation Ulster University Academia Scottish Government Private Sector Academia Scotland Region Northern Ireland

PAGE 82 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Low carbon refurbishments for existing buildings in domestic and non-domestic sectors; Challenges for new-build low-carbon buildings; Adapting buildings for a future-climate Building simulation and modelling; Socio-economic barriers to achieving low-carbon targets in the building sector; Fuel poverty in UK homes; Micro and small-scale energy generation; Identifying trends and behaviour from building energy performance data; Embodied energy and embodied carbon associated with building construction. Construction product research and development; Development of technical standards, robust details and building regulations; Building diagnosis and material performance; Sustainable construction.

Successor to former Building Research Establishment – owns a number of BRE companies that are to sponsor Profits allow BRE Trust essentially commercial consultancies specialising in buildings technology. & Bath Universities. University research at Strathclyde, Cardiff Is to pave the way a new generation of digital buildings that have lifelong resilience and adaptability enabled by (a) smart materials and products, (b) integrated design their environment, usage and occupancy, and manufacturing systems, (c) total lifecycle approaches. The research interests and activities of the Centre fall into following broad definitions: Advanced composites; Concrete structures and technology; Low carbon and traditional materials; Structural masonry; materials and engineering. Timber Research covers five key areas: Health Care Infrastructure; Digital Practice; Business Innovation in Pathways to a Low-Carbon Built Environment; and Innovative Sustainable Construction; Transition Technologies. £3.3m project to sse of Kingdom Housing site to construct 27 dwelling by 10 partners using different £3.3m project to sse of Kingdom Housing site construct 27 dwelling by 10 partners using different designs and construction methods. Homes now occupied and are in a comprehensive monitoring evaluation programme. £131m programme. Despite the name, appears to have acted as Microgeneration grants to understand ‘whole property’ energy balance and how LCB micro Little evidence of efforts renewables integrate. Comments Specific research areas currently being investigated by the group include: • • • • • • • • Key functions of the Centre include: • • • • Institute of Sustainable Engineering Centre for Innovative Construction materials Research Institute for the built environment Housing Innovation Showcase Low Carbon Buildings Programme Activity Urban energy research group Building Performance centre BRE Trust BRE Trust Cardiff University Cardiff Bath University Reading University Fife Council/Kingdom Housing DECC Heriot Watt University Heriot Watt Organisation Napier University Private sector Academia Government Public Sector Sector UK Region

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 83 Comments Major corporate player in insulation and building systems market, moving into renewables via Kingspan Renewables. Major corporate player in all forms of heating, cooking and domestic appliances with ambitions to move into manufacturing sites in NI. Two renewables including heat pumps and solar thermal PV. component level research for storage technologies to improve particular components or materials within an energy system which could be deployed to meet grid-scale storage needs in the UK electricity network; system level feasibility studies to investigate deployment issues and operational aspects of electricity storage systems, including integration of storage systems into the UK electricity network.

Published ‘smartgrids roadmap’. Jointly host Smart Grid Forum. http://www.ofgem.gov.uk/Networks/SGF/Pages/SGF.aspx. 5-year £500m programme to fund projects put forward by Distribution Network Operators (DNO). So far this has funded c. 25-30 projects. However these seem to be isolated and discrete projects that do not add up a co-ordinated approach understanding to what extent energy storage and smart grid technologies can increase the capacity of electricity networks match high proportions of intermittent generation to the daily load proﬁle. Comments There is up to £10m available support energy efﬁciency technologies such as building control systems, advanced lighting systems, and space heating cooling technologies. There is also up to £6m available for power generation and energy storage technologies including fuel cells , biomass boilers and heat pumps. organisations the opportunity to secure funding Demonstration Competition will offer The Energy Storage Technology develop and demonstrate innovative energy storage technologies which can address grid-scale needs for the UK electricity network in the run up to 2020 and beyond. Grant funding, on a competitive basis, to support: • • £20m for above calls, expected autumn 2012. £9m funding for ‘UK Energy Storage R&D Centre’ electric and hybrid vehicle battery development. The centre, will be University, Manufacturing Catapult at Warwick based at the High Value Strategy Board, the has been awarded a grant by the Technology the energy storage and clean fuel company, ITM Power, for a project that will build and integrate into the power system, hydrogen energy storage innovation agency, Government’s and vehicle refuelling system on the Isle of Wight. National Physical IBM, Cable & Wireless Worldwide, The project will be led by ITM Power in collaboration with SSE, Toshiba, Ecoisland Community Interest Co, (“Ecoisland CIC”) and the Universities of Cheetah Marine, Arcola Energy, Laboratory, Glamorgan and Nottingham. ITM Power will receive £1.3m of grant funding directly with a further £1m going to the collaboration partners who are The total project value is £4.66m. refuelling technology. integrating their equipment with ITM Power’s Activity Building materials Heating appliance Low Carbon Networks Fund Activity Activity Hydrogen vehicles Energy Entrepreneurs Fund Scheme Energy Storage Technology Demonstration Competition Energy Storage Component Research and Feasibility Study Battery vehicles ENSG/Smart grid Forum Glen Dimplex Organisation Kingspan Ofgem Organisation DECC Technology Strategy Board DECC/Ofgem Sector Private Sector Government Region Republic of Ireland Location UK Energy Storage and Smart Grids

PAGE 84 PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG Berwickshire Housing; PURE project; Hydrogen ofﬁce.

Aberdeen Renewable Energy Group Set up project known as ‘hydrogen Hub involving First Group, Stagecoach, SSE purchase 10 hydrogen buses and establish fuelling infrastructure for operation in 2014. Involved in TSB Redox flow battery project. Conducted by AEAT. Concluded that for Scotland Pumped Storage provided the best short to medium term solution. Document provides a very useful review of technology. http://www.scotland.gov.uk/Resource/Doc/328702/0106252.pdf. Funding for various hydrogen demonstrators involving wind turbines, electrolysers, storage Fuel cell heat and power or hydrogen vehicles including • • • Have a minority shareholding in Premium Power UD developer of zinc bromide flow batteries. Have installed 100 kW 150kWh flow battery demonstrator at its Nairn sub-station. Potential flow battery developer/manufacturer – Subject of investment by ITI Energy wound up Sept 2012. UK Energy Research Centre UK Smart Grid Capabilities Development Programme report. Useful resource, https://connect.innovateuk.org/c/document_library/get_file?p_l_id=55060&folderId=5341738&name=DLFE-48966.pdf. energy demand and systems. Sponsoring a number of research projects Five streams of work including; energy supply, that touch on Energy Storage/Smart Grids – but no evidence of co-ordinated thematic approach. Li-ion battery at Martham sub-station. Installed 600 kVA Aim listed company based in Sheffield specialising hydrogen electrolyser and vehicle fuelling systems. A collaboration between Eirgrid Group and National Digital Research Centre due to be launched Oct 2012 (see Section 3.4). Comments Flow batteries Grant funding Flow batteries Flow batteries Flow batteries Hydrogen Energy storage and management study Smart Grid Innovation Hub Activity Activity Energy Research Scottish Power AREG Plurion SSE EDF ITM Power Energy Division Eirgrid Organisation UKERC Utilities Public/private Private Utility Private Government Public Sector Academia Republic of Ireland Location Scotland “The maximum demand in the Province is around 1,800MW, but on a summer night it is 600MW. If it is a windy summer night, there could be 1,500 – 1,600MW but on a summer night it is 600MW. “The maximum demand in the Province is around 1,800MW, of wind that cannot be used as there is nowhere for it to go” DETI Barriers report, quoting NIE

PROFITING FROM SCIENCE WWW.MATRIX-NI.ORG PAGE 85 PROFITING FROM SCIENCE WWW.MAtrix-ni.org

MAtrix report: Vol 10. February 2013

Annex 3 MArket Foresight report

prepared for MAtrix by: Contents

1 7

INTROduCTION 8 BIOENERGy 73

2 8

OvERvIEw OF FuTuRE MaRkET EvOluTION 12 INTEGRaTEd BuIldING TEChNOlOGIES 85 9 3 INTEllIGENT ENERGy SySTEMS 100 dETaIlEd FuTuRE MaRkET aNalySIS 24 10 4 GEOThERMal 113 11 STRaTEGIC FIT wITh NORThERN IRElaNd 47

hydROElECTRIC 120 Appendix 1 12 dETaIlEd MaRkET SEGMENT aNalySIS 54 CaRBON CaPTuRE aNd STORaGE 129 13 5 laRGE SCalE SOlaR Pv 139 wINd ENERGy 55 6 Appendix 2

MaRINE ENERGy 64 lIST OF PuBlICaTIONS 148

iMportAnt notiCe

Whilst reasonable steps have been taken to ensure that the information contained within this Report is correct, you should be aware that the information contained within it may be incomplete, inaccurate or may have become out of date. Accordingly, Orion Innovations LLP makes no warranties or representations of any kind as to the content of this Report or its accuracy and, to the maximum extent permitted by law, accept no liability whatsoever for the same including, without limit, for direct, indirect or consequential loss, business interruption, loss of profits, production, contracts, goodwill or anticipated savings. Any person making use of this Report does so at their own risk. pAge 2 PROFITING FROM SCIENCE WWW.MAtrix-ni.org glossAry oF terMs

ad ...... Anaerobic digestion CaGR ...... Compound annual growth rate CCS ...... Carbon capture and storage ChP ...... Combined heat and power CSP ...... Concentrating solar panels daRd ...... Department of Agriculture and Rural Development dECC ...... Department of Energy & Climate Change dEl ...... Department for Employment and Learning dETI ...... Department of Enterprise Trade and Investment dOE ...... Department of the Environment dNO ...... Distribution Network Operator ESCo ...... Energy service company ETI ...... Energy Technology Institute FIT Cfd ...... Feed-in-tariff with contracts for difference GdP ...... Gross Domestic Product GhG ...... Greenhouse gas IEa ...... International Energy Agency IP ...... Intellectual property lSIP ...... Large scale industrial project Mtoe ...... Megatonnes of oil equivalent O&M ...... Operation and maintenance OEM ...... Original equipment manufacturer OECd ...... Organisation for Economic Co-operation and Development Pv ...... Photovoltaics (solar) SEhP ...... MATRIX Sustainable Energy Horizon Panel SME ...... Small and medium-sized enterprise SwI ...... Solid wall insulation wEO ...... World Energy Outlook

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 3 exeCutiVe suMMAry

MATRIX, the Northern Ireland Science future strategic international markets for Industry Panel, is an expert advisory Northern Ireland. The analysis drew, in panel reporting to DETI and the DETI particular, on the International Energy Minister on matters pertinent to the Agency’s (IEA) flagship World Energy exploitation and commercialisation of Outlook (WEO) 2010 and 2012 reports; science, technology and R&D. MATRIX and the IEA’s Energy Technology recognised the need for a foresight Perspectives 2012 report.1 This data study into the future global market was supplemented by additional opportunities in sustainable energy and sources as appropriate, to provide an established the industry-led Sustainable overview of the future evolution of global Energy Horizon Panel (SEHP) to energy markets, with a specific focus on coordinate this activity. the data points of 2020 and 2035. Up to 2020, clear policy commitments have The report forms the third of three been made and the forecast is robust, Annexes that support the Sustainable but not surprisingly, as forecasting Energy Horizon Panel Report: extends past 2020, the degree of • Annex 1 Insights Report, a literature uncertainty in the data increases. review of existing studies and analyses relating to the sustainable energy sector in Northern Ireland, 2008-2012; • Annex 2 Technology Capability Assessment, an analysis of existing regional capability in the sustainable energy sector, including the supply chain, academic base, physical assets and natural resources; • annex 3 Market Foresight Report, a 5 to 10 year (and beyond) analysis of potential growth in global sustainable energy markets, and related opportunities for Northern Ireland. This report presents a global market foresighting analysis, undertaken to provide a 5 to 10 year (and beyond) outlook to inform the identification of

1 These contain scenarios that use the IEA’s World Energy Model, a well respected industry benchmark for forecasting future energy demand and fuel/generation mix.

pAge 4 PROFITING FROM SCIENCE WWW.MAtrix-ni.org key globAl trends �

• By 2035 global energy demand is predicted to be 35% higher than in 2010, reaching 17,197 million tonnes of oil equivalent (Mtoe). • Non-OECD countries will account for 93% of this increase, reflecting faster rates of growth, industrial production, population and urbanisation. China’s industrial base is estimated to account for 28% of global industrial energy demand by 2035. OECD’s share will fall from 44% today to 33% in 2035. • Overall, spending on oil and gas imports is estimated to more than double. Natural gas demand will increase by 44%, and will remain the leading fuel in both OECD and non-OECD countries... • ...But rising prices and increasingly onerous carbon penalties, together with policies to encourage the uptake of low carbon technologies, will restrain demand. • By 2035 an additional 5,900 GW of total power generating capacity will be required (~ 6 times the current capacity of the USA). Electricity consumption is estimated to increase by over 80% by 2035. • By 2035 a cumulative $37 trillion investment (in year-2011 dollars) will be required to enable infrastructure upgrades: replacement of production facilities that are retired & expansion of alternative production capacity. This equates to around $1.6 trillion per annum. • OECD countries will see only a 3% increase in aggregate energy demand but will require 39% of the total investment to 2035 (ageing assets and the more capital intensive energy mix). • Energy intensity will decrease as technology advances and will be further exaggerated as more demand side technologies are introduced, and intelligent systems are developed, predominantly in OECD regions. • Energy systems will become more complex. The role of technology integration and network management will become ever more crucial up to 2035 as the energy mix diversifies into a range of technologies with vastly different profiles (many of which are non-dispatchable), and an increasing reliance on distributed generation. • Current consumers of energy will become energy generators and active participants in overall system management.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 5 Future sustAinAble energy MArkets �

In 2010 electricity from sustainable increase from 238 GW in 2011 to over Indonesia and South East. energy technologies accounted for 19% 1,000 GW in 2035 globally, or over As shown in Figure 1, the net share of of global total electricity production, with 2,600 TWh. In contrast, marine power renewables in electricity generation is 85% of this coming from hydropower. is estimated to increase to no more estimated to increase for all regions, than 60 TWh in 2035 with an installed In the move towards 2020 and 2035, and by 2035 the share of renewables capacity of 17 GW. it is anticipated that wind and solar in electricity generation across each of photovoltaic technologies will take Electricity produced from solar the key regions ranges from one fifth an increasingly larger share of the photovoltaics is estimated to increase an to almost half. Of note is the increase renewables electricity production estimated 26 fold to around 630 TWh in that is likely to be seen in the European mix. Beyond 2035, marine wave and 2035, or 410 GW, equating to 7.5% of Union, driven by carbon targets and tidal technologies are likely to play global electricity demand. Concentrating clearly defined policies to achieve them. a greater role, particularly across solar power is anticipated to reach 90 Wind, marine, and solar photovoltaics Northern Europe, although they will still GW by 2035. Geothermal installed are the likely beneficiaries. be dwarfed by the more established capacity is anticipated to increase over technologies. Wind power (both three fold to about 280 TWh in 2035, onshore and offshore) is projected to or over 40 GW, predominantly in USA,

Figure 1 ShaRE OF RENEwaBlES IN TOTal ElECTRICITy GENERaTION By TyPE aNd REGION2

Hydro Wind Bioenergy Solar PV Geothermal World 2010 2035 Other*

United States 2010 2035

European Union 2010 2035

Other OECD 2010 2035

China 2010 2035

India 2010 2035

Other nonOECD 2010 2035

0 10 20 30 40 50

*Other includes concentrating solar power and marine.

2 IEA World Energy Report 2012

pAge 6 PROFITING FROM SCIENCE WWW.MAtrix-ni.org The required investment in renewable development needs. The segments anticipated to be the key to unlocking electricity technologies up to 2035 is were then prioritised on the basis of: long-term economic potential. The estimated to be over $6 trillion (in 2011 development and deployment of • Relative scale of future international dollars). Government support for the intelligent systems will be fundamental market opportunity (export); sector is anticipated to increase to $300 to matching supply and demand across billion in 2035, up from an estimated • Potential to generate economic increasingly complex energy networks, $57 billion in 2009. Renewables will return within 10 years; and in facilitating the paradigm shift account for 62% of the total investment whereby current consumers of energy • Basis for regional competitive in power generation up to 2035, with advantage within the international will become energy generators. The wind investment accounting for the market; overall functioning of the system will largest proportion at over $2.1 trillion. become increasingly important, not • Low barriers to entry on the basis just the performance of the individual In 2010, sustainable energy of the degree of competition and technologies. technologies accounted for around the nature of supply chain (ease of 10% of global demand for heat. This is access). On this basis, it was proposed that a anticipated to increase to 14% of global focus on the commercial demonstration heat demand by 2035, predominately Onshore and offshore wind, bioenergy, of the integration of renewable driven by the industrial and buildings energy efficiency and micro-renewables, and sustainable distributed energy sectors. intelligent energy systems, and marine technologies using intelligent energy energy were all identified as offering systems would provide an attractive and Anticipated increases in the use of potential future market niches where flexible platform for export for Northern sustainable energy technologies Northern Ireland could leverage its Irish companies. At the same time, this (solar thermal, bioenergy and existing capability. However, these would provide a framework and catalyst geothermal) for heating of buildings also presented a number of significant to support the accelerated development will be more pronounced in OECD challenges ranging from: and deployment of complementary countries, specifically in the USA renewable generation technologies and the European Union than in • Relatively small total market size (both current and future). non-OECD counties, primarily due (marine); to the strong policy drivers in these • Intense regional/international regions, and the flexibility of bioenergy competition (all offshore energy); technologies. Nevertheless there will also be significant opportunities for low • Well established and mature supply carbon and energy efficiency building chain (onshore wind, bioenergy); to technologies for new build in rapidly • Limited regional deployment developing economies (such as China potential in which to generate and India). commercial proof points (new build Prioritisation of and all renewable technologies Market Opportunities for Northern dependent on the existing grid infrastructure). Ireland In addition, the foresight analysis highlighted that, across all segments of Further analysis of individual market the future sustainable energy market, segments was undertaken to the role of system integration and characterise future growth trajectories intelligent network management is and profiles, and to identify specific

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 7 introduCtion 1 introduCtion

The purpose of the report is to provide • A ‘bottom-up’ analysis of individual a 5 to 10 year (and beyond) outlook for sustainable energy segments the global sustainable energy market to provide an understanding of in order to inform the identification of relative segment sizes; geographic appropriate future (medium to long variations; the competitive landscape term) niches which could represent and development challenges strategic economic growth options (technical, supply chain & for Northern Ireland. It provides an institutional). overview of the future evolution of global energy markets, with a specific focus on the data points of 2020 and 2035. ‘Top Down’ overview Key questions addressed are: of the macro level i. What does the overall energy mix look like; market dynamics ii. What will be the key trends and drivers; iii. What does the contribution from sustainable energy technologies look like; iv. For individual segments of the market, how will they evolve over time and what are the critical ‘Bottom Up’ analysis success factors. of individual The analysis presented in this report segments to give adopts a dual approach: detail • A ‘top down’ analysis to define global trends within the energy and related sectors. This used a ‘back-casting’ methodology, taking a long-term vision of the world and highlighting the critical pathways required to achieve that vision, with specific reference to the state of play in 2020 and 2035.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 9 Forecasting the evolution of global by sector and region by region basis. • Energy prices are different for future energy markets is a complex It is a large scale mathematical model end consumers and producers of process. It needs to consider that is designed to replicate how energy energy as there is a high degree of fundamental socio-economic markets function. influence from government policies assumptions of GDP, and population and support. IEA assumptions differ The macro level assumptions made growth and size. Overlaying these across the scenarios, reflecting the by IEA are based on commonly are important assumptions of future impact of government policies on the understood and accepted trends that energy and climate policy, at a national demand and supply of each fuel. are considered most likely to occur and international level. This complexity over the next ten to twenty years. Up to • Demand for oil, natural gas and coal means there is enormous uncertainty 2020, clear climate commitments have is highly uncertain and is dependent about the outlook for energy prices, been made and therefore the forecast on geopolitics as much as actual the size of energy resources and their is more certain, whereas for the period available supply. The IEA modelling costs, and the prospects for new between 2020 and 2035, it is assumed assumes that coal demand is likely to technological innovations. that further policy commitments will increase until 2020 before levelling There are a number of well recognized be made, and the data becomes less off; oil is estimated to reach $125 and credible data sources that provide certain. Key assumptions include: per barrel (based on 2011 dollars); potential scenarios for meeting long- and gas prices are assumed to • Broad national policy commitments term targets associated with the broadly follow the trend in oil prices. and future plans, including policy reduction in greenhouse gases, energy commitments that have already been • CO prices are anticipated to be security, and sustainable economic 2 made and those that are considered set by most key energy consuming growth. highly likely to occur. regions around the world by 2035. The analysis presented in this report • Population growth is assumed to • Technologies that are in use draws, in particular, on the International increase from its 2010 level of 6.8 today or are approaching the Energy Agency’s (IEA) flagship World billion to an estimated 8.6 billion commercialisation phase will achieve Energy Outlook (WEO) 2010 and in 2035. This takes into account further cost reductions as a result of 2012 reports; and the IEA’s Energy relative population declines in some increased learning and deployment, Technology Perspectives 2012 report. countries, a plateaued population in but no new technological These contain scenarios that use the OECD countries and much greater breakthroughs are made by 2035. IEA’s World Energy Model, a well- population increase in emerging Technologies that are developed respected industry benchmark for economies such as Brazil, India and and deployed affect investment forecasting future energy demand and China. decisions, the cost of supply of fuel/generation mix. These extensive different forms of energy, and the annual reports describe long-term • Economic growth: GDP grows at level and composition of future projections of energy demand and average of 3.5% per annum. This energy demand. The most uncertain supply, related carbon-dioxide emissions takes into account the range in technology sectors are carbon and investment requirements, and act GDP growth rates across various capture and storage, solar power, as a reference for many sector-specific regions. For example, EU compound advanced bioenergy and biofuels, or alternative global energy market average annual growth (CAGR) rate nuclear power, and electric vehicles. forecasting reports. The underlying is anticipated to be less than 1.8% model, IEA’s World Energy Model up to 2035, whereas China’s CAGR • Energy intensity (the cost in energy (WEM), is the principal tool used to decreases from 8.5% (2010-2015) to produce a unit of GDP) is generate these projections, on a sector to 5.7% (2010-2035). estimated to falls by 1.8% per year between 2010 and 2035.

pAge 10 PROFITING FROM SCIENCE WWW.MAtrix-ni.org The key factors that could potentially Data from these primary sources were influence these assumptions include: triangulated and validated against a impact of conflict; discovery of new range of secondary sources including: resources; existing resources becoming EIA, McKinsey, PWC, BNEF, BP, commercially accessible; development Exxon Mobil, DECC, sector specific and uptake of currently unidentified resources, and third party experts. disruptive technology(ies). All references are cited within the following text, and a full list is provided Unless otherwise indicated, figures in Appendix 2. used in the report are based on the: • WEO 2012 central New Policy Scenario which takes a reasonably The report is structured as follows: conservative view that current • Section 2 presents the insights planned national and international from the ‘top down’ analysis of policies are implemented, but macro level forecast for the global there are no additional policies that sustainable energy market. support the reduction of carbon emissions. Assumptions include • Section 3 provides sector specific population growth from 6.8 billion detail relating to growth trends, (2010) to 8.6 billion (2035); average technology development needs and economic growth of 3.5% per critical success factors. This section annum; and commercialisation of the report presents a summary of technologies that are currently overview of the more detailed under development. It also assumes analysis that is provided within that China implements some form Appendix 1. of carbon price as indicated in • Section 4 then discusses the the latest five year plan, and that approach taken in the prioritisation by 2015, investment decisions in of segments considered to be the USA, Canada and Japan factor in best strategic fit for Northern Ireland, an implicit or “shadow” price for and the identification of commercial carbon. opportunities to form the basis • IEA’s 2DS model which sets out of subsequent Conclusions and optimistic technology options and Recommendations. policy pathways that ensure an 80% chance of limiting long-term global temperature increase to 2°C. Within this framework, annual improvements in energy intensity double, from 1.2% over the last 40 years to 2.4% in the coming four decades.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 11 oVerVieW oF Future MArket eVolution 2 2.1 globAl trends And driVers

By 2035 global energy demand is OECD countries account for 93% of demand falls from 44% today to 33% predicted to be is 35% higher than in this increase, reflecting faster rates of in 2035. Figure 1 shows the split in 2010, reaching 17,197 million tonnes growth of economic activity, industrial primary energy demand across key of oil equivalent (Mtoe), at an average production, population and urbanisation. regions. growth rate of 1.2% per year. Non- The OECD’s share of world energy

FIGuRE 1 wORld PRIMaRy ENERGy dEMaNd By REGION3

18 000 China United States Mtoe 16 000 European Union India 14 000 Middle East Japan 12 000 InterRegional (bunkers) Rest of World 10 000

8000

6000

4000

2000

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

3 http://www.iea.org/publications/freepublications/publication/weo2010.pdf

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 13 By 2035, the world energy market will potentially accounting for 58% of the policy commitments and plans that thus look noticeably different to that of global increase by 2035. Nonetheless, international governments have recently today, driven particularly by the growth China is also committed to increasing announced would, if implemented in energy demand from developing the share of renewables in its energy successfully, have a real impact on world nations, and specifically China’s supply, as was outlined in their most energy demand and related carbon impact on overall energy demand. recent 5 year plan. dioxide emissions. By 2035, China will account for an Parallel to China’s rising influence is Lastly, the role of technology estimated 22% of world demand, up a continued high level of spending on integration and energy network from 17% today. India is likely to be energy imports by many countries. management (power and heat) will the second-largest contributor to the For example, spending on oil and gas become increasingly crucial up to increase in global demand to 2035, imports are estimated to more than 2035. As the energy mix diversifies accounting for an estimated 18% of the double from $1.2 trillion in 2010 to and new technologies (including non- rise, with national energy consumption $2.6 trillion in 2035. However, rising dispatchable generation) are adopted, more than doubling by 2035. The fossil fuel prices and increasingly the profile of energy generation and Middle East is anticipated to experience onerous carbon penalties, together consumption will change markedly. the fastest rate of increase, at 2% per with greater numbers of policies to There will be an associated need for year. Aggregate energy demand in encourage the uptake of sustainable network integration, optimisation, OECD countries is expected to rise energy technologies, will help to restrain management and control at a supply very slowly over the projection period. demand growth for all three fossil fuels. and demand level. However, the USA will remain a large Global energy intensity, which is energy consumer, the world’s second- the amount of energy needed to largest behind China in 2035. generate each unit of GDP, has fallen With such a large energy demand, steadily over recent decades due to China’s energy system growth will have improvements in energy efficiency, fuel a major role in shaping global supply switching and structural changes in and demand for oil, natural gas and the global economy away from energy- coal. The cause of such a rapid growth intensive industries. This trend is likely in energy demand comes from China’s to continue as focus on developing an industrial base, • Technological advances are which is likely to account for 28% of introduced, creating further global industrial energy demand by efficiencies in energy generation, 2035, up from 16% in 2000. China has supply and consumption extensive coal resources, but in recent years has become a net importer as • More demand side technologies are it has struggled to expand its mining introduced and rail-transport infrastructure quickly • ‘Smart grids’ are developed, across enough. Chinese oil imports are predominantly OECD regions. estimated to increase from 4.3 million barrels per day in 2009 to 12.8 million The commitment to decarbonising the barrels per day by 2035. China is global energy market remains a priority expected to have an increasing impact to bodies such as the United Nations on global carbon dioxide emissions, as well as many national governments across the world. As it stands, the

pAge 14 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 2.2 Future energy Mix

Fossil fuels will maintain a central role in 2035, whilst demand for biomass, the projected changes in world primary in the primary energy mix but their share nuclear and other renewables will energy demand by fuel type. will decline, from 81% in 2010 to 74% increase. Table 1 and Figure 2 show tAble 1 wORld PRIMaRy ENERGy dEMaNd By FuEl (MTOE)4

1990 2010 2015 2020 2030 2035 2010-2035* Coal 2,231 3,474 3,945 4,082 4,180 4,218 0.8% Oil 3,230 4,113 4,352 4,457 4,578 4,656 0.5% Gas 1,668 2,740 2,993 3,266 3,820 4,106 1.6% Nuclear 526 719 751 898 1,073 1,138 1.9% hydro 184 295 340 388 458 488 2.0% Bioenergy (incl. 903 1,277 1,408 1,532 1,755 1,881 1.6% Biomass) Other renewables 36 112 200 299 554 710 1.7% Total 8,779 12,730 13,989 14,922 16,417 17,197 1.2% *Compound average annual growth rate. FIGuRE 2 ESTIMaTEd GROwTh IN wORld PRIMaRy ENERGy dEMaNd uP TO 20355

Other renewables Biomass and Waste Estimated growth in energy demand up to 2035 Hydro Nuclear Gas Oil 20000 Coal 18000 16000 14000 12000

Mtoe 10000 8000 6000 4000 2000 0 1990 2010 2015 2020 2030 2035

4 IEA World Energy Outlook 2012

5 IEA World Energy Outlook 2012 and Orion Innovations analysis

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 15 Oil demand is estimated to increase by generation of 215 Mtoe, greater than 18%, from 84 million barrels per day the total increase seen across all OECD in 2009 to over 100 million barrels per countries. day in 2035. Nevertheless, its share of Between 2010 and 2035, power the primary fuel mix falls (from 33% in sector demand (heat and electricity) 2008 to 28% in 2035) as high prices will account for 53% of the increase and government measures to promote in global primary demand, meaning fuel efficiency result in an increase in the an additional 5,900 GW of total use of alternative fuels across industrial, capacity is required. This is equivalent power-generation and transport sectors. to approximately six times the current Oil demand will increase the most in capacity of the USA. Electricity China (7.1 million barrels per day), India consumption is estimated to increase by (4.5 million barrels per day) and the over 80% by 2035 compared with 2010 Middle East (2.7 million barrels per day) totals. The vast majority of the increase as a consequence of rapid economic is attributable to non-OECD countries, growth and, in the case of the Middle as a result of rising prosperity. East, the continuation of subsidies on oil products. To support this increase in demand, $37 trillion investment (in 2011 Coal demand is likely to be 20% dollars) will be required by 2035 to higher in 2035 than today with the enable infrastructure upgrades to be majority of growth due to occur before completed. This includes replacement of 2020, and subsequent levelling off. production facilities that are retired and All net increases occur in non-OECD the expansion of alternative production countries, with China accounting for capacity. The most marked investment over 54%. By 2035, OECD countries will be in OECD countries that see only are estimated to consume 37% less a 3% increase in aggregate energy coal than they do today. demand but will require 35% of the total Natural gas demand is projected to investment to 2035. This is due to the increase by 44%, a greater increase number of ageing assets and the more than any other energy source, due to capital intensive energy mix compared favourable environmental and practical with non-OECD countries. Also of attributes. It remains the leading fuel note is the >$5 trillion dollar investment for power generation as well as vital to required by both China and USA. the industrial, service and residential sectors in both OECD and non-OECD countries. The share of nuclear power is estimated to increases from 6% in 2010 to 8% in 2035 across OECD and non- OECD regions. Much of the growth is attributable to China, which is expected to see an increase in nuclear power

pAge 16 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 2.3 Contribution FroM sustAinAble energy teChnologies

Driven by international targets, 1,684 Mtoe in 2010 to 3,079 Mtoe in electricity generation will increase from government policy, rising costs of 2035, which equates to an increasing 20% in 2010 to over 31% in 2035; traditional energy fuels and the desire share of total primary energy demand or from 4,206 TWh to 11,342 TWh. to diversify energy supply, sustainable from 13% to 18%. China, the EU The contribution of sustainable energy energy technology will become an and USA see the largest increases in technologies to heat production across increasingly important part of the energy sustainable energy demand. the same period increases from 10% to mix to 2035. The supply of hydro, wind, 14%, or from 337 Mtoe to 604 Mtoe. According to WEO 2010, the share solar, geothermal, biomass and marine of sustainable energy technologies in energy, is predicted to increase from

FIGuRE 3 ESTIMaTEd GROwTh IN SuSTaINaBlE ENERGy TEChNOlOGy dEMaNd uP TO 20356

Energy Efficiency Microrenewables Rooftop PV Low carbon heating & cooling 4000 Bioenergy Traditional Biomass CCS 3500 Geothermal Solar pv Hydro 3000 Marine Onshore wind 2500 Offshore wind

Mtoe 2000

1500

1000

500

0 2010 2020 2030 2035

6 IEA World Energy Outlook 2012 and Orion Innovations analysis

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 17 The required investment in sustainable taken towards 2050. It is also worth energy technologies up to 2035 is noting that sharing of resources and estimated to be over $6 trillion (in 2011 reserves within the European region (via dollars). Government support for the key interconnectors for example) would sector increases to $300 billion in 2035, be effective at reducing the need for up from an estimated $57 billion in excessive back up capacity and could 2009. reduce the need for resources and reserves by around 35-40%. By 2035, power generation becomes the largest biomass-consuming sector, ahead of industry. The market for manufacturing wind turbines and solar photovoltaic is anticipated to become increasingly global with greater influences from China, competing with the EU as a major manufacturing centre. In the case of solar, Asian companies from China and Japan as well as those from USA remain the most significant producers. European Union’s energy mix in 2050 is forecast to be significantly different than it is today. New fossil fuel and nuclear plants will be required as existing assets come offline, and there will be a significantly larger proportion of sustainable energy technologies in the overall energy mix. By 2020, it is estimated that sustainable energy technologies will account for around 32% of Europe’s power demand. By 2050 this figure is anticipated to increase to 34%, although the actual amount of power produced by sustainable energy technology is likely to be significantly greater than in 2020, due to an overall increase in power demand from 3,250 TWh in 2010 to over 4,800 TWh in 2050. The energy mix up to 2050 is likely to change depending on the sustainable energy pathway (i.e. level of decarbonisation) that is ultimately

pAge 18 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 2.4 sustAinAble energy teChnologies in eleCtriCity generAtion

The future prospects for electricity 2035. Geothermal installed capacity is wind, marine and solar photovoltaic. production from sustainable energy anticipated to increase over three fold Figure 5, shows the estimated technologies rest on government to about 280 TWh in 2035, or over 40 generation cost of electricity for large policies to encourage development, GW, predominantly in USA, Indonesia scale installations. For the more mature deployment and integration. Electricity and South East. technologies (hydro, geothermal and from sustainable energy technologies biomass) cost reductions per MWh are As shown in Figure 4, the net share in 2010 accounted for 19% of global less pronounced. of renewables in electricity generation total electricity production, with 85% is thus estimated to increase for all of this coming from hydropower. The regions. Of note is the increase that is share of other renewable (biomass, likely to be seen in the European Union, solar, wind, geothermal and marine driven by carbon targets and clearly power) contributions to total electricity defined policies to achieve them. Wind, production (including fossil fuels) marine, and solar PV are the likely rose from 2% in 2000 to 3% in 2008, beneficiaries. and from 9% to 15% as a share of renewable only electricity production. From this European perspective, the Offshore Valuation Group7 estimates In the move towards 2025 and 2035, that there is a maximum electricity wind and solar PV technologies will generation capacity equivalent to take increasingly larger shares of the 1 billion barrels of oil that could be renewables electricity production mix. generated annually from marine Beyond 2035, marine wave and tidal technologies (wind, wave and tidal) by technologies are likely play a greater 2050. This would match North Sea oil role, particularly across Northern and gas production and make Britain Europe, although they will still be a net electricity exporter. The study’s dwarfed by the more established central ‘Scenario 2’, assumes a 29% technologies. Wind power (both North Sea resource utilisation, estimates onshore and offshore) is projected to an installed capacity of 169 GW is increase from 238 GW in 2011 to over possible from a capital expenditure of 1,000 GW in 2035 globally, or over £443 billion, and resulting in annual 2,600 TWh. Marine power is estimated revenues of £62 billion by 2050. to increase to 60 TWh in 2035 with an installed capacity of 17 GW. Electricity At the heart of the growth in deployment produced from solar PV is estimated of sustainable energy technologies to increase an estimated 26 fold to and their share in global electricity around 630 TWh in 2035, or 410 GW, production by 2035, is an assumption equating to 7.5% of global electricity that there will be a falling unit cost of demand. Concentrating solar power is production, particularly for the less anticipated to reach 90 GW by mature technologies such as offshore

7 http://offshorevaluation.org/downloads/offshore_ valuation_full.pdf

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 19 FIGuRE 4 ShaRE OF RENEwaBlES IN TOTal ElECTRICITy GENERaTION By TyPE aNd REGION8

Hydro Wind Bioenergy Solar PV Geothermal World 2010 2035 Other*

United States 2010 2035

European Union 2010 2035

Other OECD 2010 2035

China 2010 2035

India 2010 2035

Other nonOECD 2010 2035 0 10 20 30 40 50

*Other includes concentrating solar power and marine

8 IEA World Energy Report 2012

pAge 20 PROFITING FROM SCIENCE WWW.MAtrix-ni.org FIGuRE 5 GENERaTING COSTS OF SuSTaINaBlE ENERGy TEChNOlOGIES FOR laRGE SCalE ElECTRICITy GENERaTION9

2010 2020 2035

Marine

Concentrating solar power

Solar PV

Biomass

Hydro

Wind offshore

Wind onshore

Geothermal

0 50 100 150 200 250 300 350 400

Dollars per MWh

9 http://www.iea.org/publications/freepublications/publication/weo2010.pdf

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 21 2.5 sustAinAble energy teChnologies in heAt generAtion

Heat energy is defined as the Solar heat energy is likely to increase in 2035, as much of the population “consumption of non-electrical energy from 10 Mtoe to 70 Mtoe, with much of switches to biogas. for producing heat for use in stationary the growth expected in China, USA and applications” and it accounted for European Union. Geothermal energy around 47% of global final energy is likely to increase from 6 Mtoe to 27 consumption in 2010 (the remainder Mtoe in 2035. being transport and electricity). Heat As shown in Figure 6, anticipated is used in the buildings sector for increases in the use of sustainable cooking, water and space heating, and energy technologies (solar thermal, in the industrial sector for production bioenergy and geothermal) for heating processes. of buildings are more pronounced in Due to the large share of heat in final OECD countries, specifically in the global energy demand, it has been USA, European Union, Australia and proposed that expanding the use of New Zealand, than in non-OECD bioenergy, geothermal and solar thermal counties. This is due to policy drives energy for heat production could make which increase the uptake of both solar a significant contribution to meeting thermal and geothermal technologies. future carbon targets. Demand for heat On the other hand, increases in the use is greater in colder climates. However of sustainable energy technologies in there are likely to be instances in which the industrial sector are significant in warmer countries have a larger share of both OECD and non-OECD countries, heat in total final energy consumption, with an almost exclusive focus on the as a result of a reliance on traditional use of bioenergy. This is expected to biomass, such as in Indonesia, or high be due to the increase in uptake of industrial consumption rates, such as in bioenergy technologies and relative China. flexibility of bioenergy technologies, i.e. variety of feedstocks, technologies and In 2010, sustainable energy scales. technologies accounted for around 10% of global demand for heat or, 338 Traditional biomass (wood, charcoal, Mtoe. This is anticipated to increase to crop residues and animal manure), used 604 Mtoe by 2035, or 14% of global primarily for space and food heating in heat demand, predominately within the the developing world is estimated to industrial sector (207 Mtoe in 2010 increase from 751 Mtoe in 2010, to 761 to 324 Mtoe in 2035), but also in the Mtoe in 2020, and then fall to 687 Mtoe buildings sector (131 Mtoe to 280 Mtoe by 2035. Demand for biomass in Africa over the same period). is anticipated to grow to 300 Mtoe in 2035, whereas in China it is expected to fall from 200 Mtoe in 2008 to 120 Mtoe

pAge 22 PROFITING FROM SCIENCE WWW.MAtrix-ni.org FIGuRE 6 SuSTaINaBlE ENERGy TEChNOlOGIES FOR hEaT IN ThE INduSTRy aNd BuIldINGS SECTORS10

Biomass Solar Geothermal

OECD: 2008 NonOECD: 2008

Buildings OECD: 2035 NonOECD: 2035

OECD: 2008 NonOECD: 2008

Industry OECD: 2035 NonOECD: 2035

0 50 100 150 200 250

Mtoe

10 http://www.iea.org/publications/freepublications/publication/weo2010.pdf

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 23 detAiled Future MArket AnAlysis 3 This section provides a more detailed analysis of the predicted future growth of key segments of the sustainable energy sector:

• wind • Marine • Bioenergy • Integrated building technologies (low carbon buildings and micro- renewables) • Intelligent Energy Systems • Geothermal • hydroelectric • Carbon Capture and Storage • large Scale Solar Pv • CSP It seeks to provide insights into the scale and nature of potential future growth over the next ten years and beyond, identifying emerging new market opportunities and critical success factors that will inform their relative potential attractiveness for Northern Ireland. An overview of each key market segment is summarised below, with full details provided in Appendix 1.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 25 3.1 Wind energy11 �

Estimated Global Geographic Growth Critical Success Factors demand Markets (institutional, technical, supply chain) Mtoe11 (Twh) Today • Onshore 28.8 • EU, USA for onshore • Strong government support and associated policies (335.2) • UK and EU for offshore • Development of international supply chains and OEMs • Offshore 0.6 • Technological advances in key areas including gear box design and remote monitoring (6.8) 2020 • Onshore 101.9 • USA, South America • Policy frameworks to provide long term investor and China (with target of confidence (1,185.5) 200 GW) for onshore • Power system integration and transformation • Offshore 7.4 • North Sea (with target • Technology improvements in reliability and cost (86.5) of 40 GW) and USA, for offshore • Social acceptance 2030 • Onshore 152.3 • EU, USA, Asia and • Technology development to exploit harsh environments increasingly South (1,771.5) • Development of more sophisticated solutions for deeper America for both on and offshore installations such as floating wind turbines/ sub • Offshore 35.7 offshore wind stations (415.5) • Improved network infrastructure in developing markets 2035 • Onshore 2175.2 (2,037.6) • Offshore 55.3 (643.4)

Wind power is the exploitation of the wind speeds are higher and the wind is Onshore wind is the more proven kinetic energy of wind by wind turbines typically available more regularly and for technology and resources in some of for electricity generation. Wind speeds longer periods of time. the early markets such as EU and USA suitable for electricity generation are considered likely to be, to the most Today, wind power is most cost range from four metres per second part, fully developed within the next ten competitive in locations where a) the to 25 metres per second. These are years. resource potential is strong and b) potentially attainable all over the world, when the cost of carbon is reflected in Offshore wind technology is less with the exception of some equatorial markets. Provision of fiscal incentives proven and has further technical and regions. Wind power is exploited not and enabling policies has played an commercial development before it only onshore but also off-shore, where important role in catalysing the market. becomes truly economic. This is due to the complexity and scale of investment required to install an offshore wind farm.

11 Cumulative installed capacity on and offshore using IEA WEO 2012 data. Estimates for percentage split between on and offshore wind have been made on basis of projections made within IEA’s Energy Technology Perspective report, IEA’s WEM and GWEA future market estimations.

pAge 26 PROFITING FROM SCIENCE WWW.MAtrix-ni.org key trends:

• The focus for installation of new developments is shifting to offshore wind, especially in regions that face opposition to onshore wind and where installed capacity is nearing saturation. However, the global installed capacity base for onshore wind will always be significantly higher than that of offshore assets. • To reach the proposed 2050 target of 12% of global electricity coming from wind power, an estimated 2,016 GW of installed wind capacity will be required. This will need an estimated investment of $3.2 trillion, including an average installation of 47 GW each year, for the next 40 years. • The European Wind Energy Association has established targets of 40 GW installed offshore wind capacity by 2020, and 150 GW by 2030. USA has an ambition to develop 54 GW of offshore wind capacity by 2030. • By the end of 2010 China had a total installed capacity of 41 GW. More than 15 GW of new capacity is likely to be installed each year, predominantly from onshore wind but supplemented by offshore projects. By 2020, total installed capacity in China is estimated to reach 200 GW (5% of total electricity production), and could reach 400 GW by 2030. • By 2030 it is estimated that non-OECD countries will produce around 17% of global wind energy. This figure is anticipated to rise to 57% by 2050. • Clarity and certainty around national and international policy will be fundamental to successful growth by creating market certainty and providing an attractive fiscal environment for investment. Coordinated planning and upgrading of the transmission infrastructure, increasing social acceptance of wind, and exchange of best practice with developing regions will be important market enablers. • There are a wide range of technical and supply chain challenges that still need to be addressed to reduce the costs and deployment time for installations (predominantly offshore). Decreasing cost per MW on the basis of full life time costing is critical for success. Development will be required in key areas such as: models for feasibility and impact assessment, remote monitoring and control, gearbox design, new materials of construction (durability and recyclability), power engineering (including HV systems), and energy storage. • Technology innovation remains a crucial driver for enabling the exploitation of ‘hard to access’ locations, for example deep water sites. Investment is therefore required to enable these advances in innovation, as well as to improve and extend electricity infrastructure. • Currently, offshore farms are being installed in shallow sites. These resources will be quickly utilised (estimated by 2025) requiring the subsequent exploitation of deep water sites. This will require greater research and development, testing of new technologies, and installation of complex infrastructure such as offshore sub stations. • The international onshore supply chain is already well developed and dominated by international Project Developers, OEMs and utilities from Northern Europe and the USA. Increasing competition from China is anticipated to ramp up in next 10 years. As the market continues to mature, and the installed base grows, the value chain will shift in favour of O&M and the provision of field support services. Most of this will be delivered via local/regional delivery partners providing opportunities to develop local assembly, logistics, and service hubs. • In contrast, the offshore supply chain is currently relatively undeveloped with a diverse range of prototypes being tested at numerous locations. However, it is anticipated that development will follow a similar trajectory as that for onshore over the next 5 -10 years and is likely to benefit from increased crossover of expertise from the oil and gas sector.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 27 3.2 MArine energy (WAVe And tidAl) �

Estimated Global Geographic Growth Critical Success Factors demand Markets (institutional, technical, supply chain) Mtoe (Twh) Today 01 • UK • Fundamental development of devices to realise cost and performance targets (1) • Development of know-how and capability in resource mapping, impact assessment and deployment of technology 2020 0.4 • UK, Europe, Asia • Focused policies to incentivise development of sector Pacific (5) • Development of know-how and capacity for power take off • Scale up and development of supply chains for full scale deployment 2030 2.3 • UK, Europe, • Focused policies and greater interest from parallel sectors North America (wind, oil and gas) (27) • Track record of success in early deployments to provide 2035 4.9 market confidence for roll out (57)

Marine energy includes wave and tidal attached to existing structure such energy technologies. In general, wave as bridges. Installations might be energy is intermittent but relatively placed in fast flowing water locations predictable, and tidal current energy is that are dependent on tidal flows intermittent but largely predictable. The such as in estuaries or between land core technologies in question include: masses. • Wave energy: generates kinetic • Tidal range or barrage: generate energy through harnessing the kinetic energy through the power of waves on ocean surfaces. differences in height between high Technologies are in various stages of and low tide. This requires the commercialisation and take a variety strategic placement of dams that of different forms, from buoys to enable energy to be harnessed snake-like structures. by allowing the flow of water through turbines. Barrages are • Tidal stream: generate kinetic energy often found across estuaries and through the use of moving water are highly capital intensive. They that powers under water turbines. have historically attracted negative Installations can be stand alone with reactions from the public. their own foundations or they can be

pAge 28 PROFITING FROM SCIENCE WWW.MAtrix-ni.org key trends:

• It is estimated that the theoretical global resource for offshore renewables (including wind) is 260,000 to 330,000 TWh per year and the realistically usable worldwide resource has been estimated to be greater than 2 TW. Marine technologies are likely to contribute a relatively small part of this total as offshore wind develops further and faster over the next two decades. • In the immediate term there is line of sight for around 200-400 MW of both tidal and wave installations by 2020, with over 50% of installations in UK. Recent announcements by the Crown Estate approving two tidal projects off the Northern Irish coast provide more long term assurances to the UK market. • Less than 1 TWh of electricity was generated by marine technologies in 2010, which equates to less than 1 GW installed capacity. In 2010, over half of the projects installed or under construction were sub-scale prototypes, ranging from 20 kW to 1 MW. • The various marine energy technologies that are currently being developed are currently broadly sitting between the research, prototype and demonstration phase. Unlike other sectors, to date there has been limited technology convergence. Ultimately, the vast array of wave energy technology developers with highly differentiated technology designs will need to consolidate before winners emerge. • There have been numerous successful demonstration installations around the world but limited true commercial deployment. It is generally acknowledged that volume deployment of marine technologies is unlikely to occur within the next 10 years. • The UK, (Scotland and south west England in particular) is considered to be at the forefront of the international industry and is host to a significant proportion of the global community of technology developers. Significant strategic investment in Scotland over the last five years has placed it in a strong competitive position in the areas of technology innovation, device demonstration and ultimately deployment. • Considering the high capital expenditure and the current small size of the marine energy industry, clear, long-term policies are required to enable technology and project developers to have the investment certainty they need. • Successful exploitation of wave and tidal resources will also require large sub-sea electrical cables connecting regions of high resource concentration. Integration with offshore wind will also be a key component of the future offshore electricity networks, as will grid connections from the UK to Europe. Marine technologies must be network accessible, so as to maximise their current and future potential. • There is a need for on-going fundamental development of devices and balance of plant to achieve cost and performance targets. Priorities include improved durability, moorings and foundations, undersea cabling and power take offs. There is also a need for the development of modelling resources to understand resource and device interaction in such a way that it delivers predicted design performance. • Ultimately it requires the development of larger, more advanced and efficient wave and tidal technologies with improved economics of offshore foundations and installations processes. • It is anticipated that development of the supply chain will require strong and continuing support from government and industry over the next 10 years and beyond.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 29 3.3 bioenergy12 �

Estimated Global demand Geographic Growth Markets Critical Success Factors Mtoe12 (Twh) (institutional, technical, supply chain) Today • Bioenergy • Europe and North America for • Strong government policies bioenergy in support of bioenergy with 523 associated subsidies • Traditional biomass in (6,089) developing world (Africa and • Research and development into • Tradition biomass Asia) next generation technologies 753 • Public awareness and acceptance (8,762) 2020 • Bioenergy • OECD and increasingly China • Maintaining clear policy support for bioenergy for bioenergy 756 • Traditional biomass decrease • 2nd & 3rd generation (8,795) overall but increases in Africa technology advances • Tradition biomass • Improved supply infrastructure 762 • Reduced trade barriers (8,866) • Minimising costs of feedstocks 2030 • Bioenergy • Europe, North America other • Achieving international OECD and China strongest for cooperation on bioenergy 1,031 bioenergy • 2nd & 3rd generation (11,996) • Traditional biomass almost technologies established • Tradition biomass exclusively in developing world • Standardisation of technologies 728 • Overcome feedstock trade (8,475) barriers 2035 • Bioenergy • Minimise food competition 1,185 (13,781) • Tradition biomass 696 (8,094)

12 2020 and 2030 data have been estimated using current and 2035 projections and anticipated market growth rates

pAge 30 PROFITING FROM SCIENCE WWW.MAtrix-ni.org Bioenergy is defined as energy final use, but also on the nature of the Bioenergy is a complex sector that produced from organic material grown, biomass feedstock. includes a wide range of feedstocks, collected or harvested for energy technologies and processes. Some Within this section, bioenergy is defined use. At present, biomass is the only of which are relatively mature, as uses of biomass for heat, power renewable energy source that can be whereas others are yet to be fully and transport but excluding traditional used for electricity production, heat commercialised. burning of biomass; which is defined as production and transport. The range the use of wood, charcoal, agricultural Figure 7 provides an overview of the of technologies exploiting biomass residues and animal dung for cooking range of biomass conversion routes resources is very wide and the choice and heating in the residential sector, available to the bioenergy sector. of technology depends not only on predominantly in non-OECD countries.

FIGuRE 7 BIOMaSS CONvERSION ROuTES13

Feedstock1 Conversion routes2 Heat and/or Power

Oil crops (rape, sunflower, etc.), (Biomass ungrading3) + Combustion waste oils, animal fats Liquid Fuels Transesterification or hydrogenation Biodiesel Sugar and starch crops

(Hydrolysis) + Fermentation Bioethanol

Lignocellulosic biomass (wood, Syndiesel / Renewable diesel straw, energy crop, MSW, etc.) Gasification (+ secondary process) Methanol, DME Pyrolysis (+ secondary process) Biodegradable MSW, sewage Other fuels and fuel additives sludge, amnure, wet wastes AD4 (+ biogas upgrading) (farm and food wastes), Gaseous Fuels macroalgae Other biological / chemical routes Biomethane

Hydrogen Photosynthetic microorganisms, Biophotochemical routes e.g microalgae and bacteria

1 Parts of each feedstock, e.g crop residues, could also be used in other routes 2 Each route also gives coproducts 3 Biomass upgrading includes any one of the densification processes (pelletisation, pyrolysis, torrefaction, etc.) 4 AD = Anaerobic Digestion

13 E4Tech 2012

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 31 key trends: �

• Bioenergy is the largest source of renewable energy today, the majority of which consists of fuel wood used in simple inefficient stoves for domestic heating and cooking in developing countries where biomass contributes an estimated 22% to the total primary energy mix. In developed countries, the total contribution of modern biomass is only about 3% of total primary energy. • Global primary energy demand for bioenergy (including traditional biomass) is anticipated to increase from 1,277 Mtoe in 2010 to 1,881 Mtow in 2035. Excluding tradition biomass from these figures leaves bioenergy increasing from 526 Mtoe in 2010 to nearly 1,200 Mtoe in 2035. This represents an average rate of 3.3% per year. • The power sector will see the largest increase in share of demand over this period, increasing from a 9% share of total bioenergy to 22% share, or once traditional biomass has been excluded its share of bioenergy increases from 21% to 35% in 2035. This equates to an increase in Mtoe from about 115 in 2010 to over 400 in 2035. • Globally, the use of biomass in heat and industrial energy applications is expected to double by 2050, while electricity production from biomass is projected to increase, from 1.3% in 2010 to an estimated 3.3% by 2030. • Excluding demand for traditional biomass, primary energy demand for bioenergy is currently largest in the European Union. It is estimated to increase from 130 Mtoe in 2010 to about 230 Mtoe by 2035. • It is estimated that by 2020, the UK could have sufficient access to global biomass feedstock to supply 20% of primary energy demand. UK feedstocks are anticipated to provide about one-third of this supply. By 2030 this is expected to decrease to 10% due to a large increase in the international supply. These levels of supply are dependent on the development of energy crops both in the UK and abroad as well as the import of significant quantities of biomass to the UK.14 • Since bioenergy can be generated from energy crops and biomass residues, as well as organic wastes, there is considerable potential for new sources of income along the whole value chain, from cultivation to harvest, processing and conversion into energy. This can potentially benefit farmers and forest owners and support rural development. • Importantly biomass feedstocks such as wood chips, pellets, pyrolysis oil or biomethane can be traded globally and are likely to play an important role in the future development of the sector. • A key development priority will be an increase in bioenergy production based on low-risk feedstocks such as wastes and residues, and through yield improvements. The use of waste streams is likely to become increasingly important over the next ten years a landfill capacity becomes increasingly constrained. • Improved coordination between government departments and agencies that are involved in the supply chain of bioenergy feedstocks, technologies or processes will be essential. Policies must recognise grid access, and standardisation of feedstocks. • Similarly, reducing tariffs and other trade barriers and adopting international technical standards to promote sustainable biomass trade will be necessary. • As the developing world switches to other forms of bioenergy over the next twenty years, it will be increasingly important that appropriate technologies as well as sustainable feedstocks are available, enabled through long-term policy support and reduced international trade barriers.

14 http://www.decc.gov.uk/assets/decc/what%20we%20do/uk%20energy%20supply/energy%20mix/renewable%20energy/policy/1464-aea-2010-uk-and-global-bioenergy- report.pdf

pAge 32 PROFITING FROM SCIENCE WWW.MAtrix-ni.org • The variety and nature of alternative feedstocks and conversion technologies means that the supply chain is highly fragmented and often reliant on local suppliers. With the exception of the maturation and consolidation expected within the utility scale market, his is unlikely to change over the next 10 years. • Enhanced research, development and demonstration will bring new technologies such as small-scale, high efficiency conversion technologies to the market. At the same time, international R,D&D collaboration will be required to make best use of national competencies, including best practices for bioenergy production. • It is expected that anaerobic digestion will become an important technology due to its flexibility. Plants can be built on many different scales, from large facilities that treat sewage, sludge or MSW, to smaller plants that deal with waste from a specific farm or a local community. • Specific technological advances over the next 10 years are anticipated to include: - Development of biomass conversion to biomethane for injection into the natural gas grid; - Development of commercial-scale torrefaction and pyrolysis plants; - Development of ‘packaged’ technologies, with associated ‘smart’ intelligence.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 33 3.4 integrAted building teChnologies �

Estimated Global demand Geographic Growth Markets Critical Success Factors Mtoe (Twh) (institutional, technical, supply chain) Today • Buildings energy demand: 2910 • Europe (EE) • Solar thermal for HW now (33843) (delta = 0 Mtoe)* competitive in some regions • China, Germany, Spain (solar • Low carbon heating & cooling:** thermal) • Recent rise in PV uptake 22 (250) in OECD countries due to generous fiscal support • Rooftop PV:*** 1.4 (16) mechanisms

2020 • Buildings energy demand: 3302 • New build in China (especially • Policy support for EE (minimum (38402) (delta = 65 Mtoe) commercial) and other energy performance standards; developing world speeding up retrofit) and • Low carbon heating & cooling: renewable heating/ cooling 76 (889) • Retrofit in developed world • Access to commercial retrofit • Rooftop PV: 14 (166) • Renewable heating in OECD with deep refurbishment • Cooling technologies in • Improvement in thermal developing Asia efficiency building shell 2030 • Buildings energy demand: 3599 • Increasing market in Africa, and • Integration complementary (41856) (delta = 146 Mtoe) developing Asia renewable technologies and energy storage • Low carbon heating & cooling: 167 (1944) • ‘Energy systems’ approach to built environment • Rooftop PV: 29 (332) 2035 • Buildings energy demand: 3748 • Technology development for (43589) (delta = 183 Mtoe) solar cooling • Low carbon heating & cooling: • Decarbonisation of electricity 215 (2500) supply • Rooftop PV: 36 (423)

Integrated building technologies is The sector thus incorporates dependent on mandatory building a highly complex sector, consisting technologies that reduce energy use regulations incorporating minimum of a wide range of technologies that within the building (energy efficiency), energy performance standards. encompass the building fabric itself, and provide renewable heating/cooling The deployment of these technologies plus heating and cooling (HVAC), and electricity (micro-renewables). within the retrofit segment is likewise lighting, cooking, and other appliances. There is assured market growth for highly dependent on policy support Fuel type and distribution (electricity, new build through to 2050, as a result for emissions reduction, in order to gas, oil, biomass and waste, and of population growth in emerging and overcome the natural (slow) rate of commercial heat) are also diverse, and developing economies, and a reduction refurbishment and ensure that energy vary considerably between the domestic in the average number of individuals efficiency/renewable generation is and commercial sub-sectors, and per household. However, the uptake of prioritised within the new design. between regions. low carbon technologies will be highly

pAge 34 PROFITING FROM SCIENCE WWW.MAtrix-ni.org key trends: �

• Recent growth in electricity demand (1.3% per year), will continue, in particular, in association with the growth of commercial buildings in non-OECD countries, and continued increase in use of electrical appliances and personal equipment in buildings. Deployment of energy efficient lighting and appliances, and renewable heating (and in particular cooling) is therefore critical in this sector. • The opportunity for new build technologies is expected to be dominated by China in the commercial sector (from 2015 to 2035), and India (from 2015 to 2035), and other developing countries (residential) from 2020 onwards. • Retrofit technologies will be primarily in demand in the developed world: in 2050 only 35% of buildings in OECD countries will have been constructed since 2012. Retrofit is easier to regulate within the commercial sector but progress in all sectors to date has been slow and significant potential remains. • Mature energy efficiency technologies are available for new build (including Passive Haus) and retrofit. Thermal improvements to the ‘building envelope’ (insulation, glazing, passive design) are considered the essential first step for all buildings, not only to reduce energy demand, but also to downsize micro-renewable installations. More advanced technologies will include integration of phase change materials with SWI. • Retrofit is likely to focus on completing the ‘quick wins’ to 2020 (loft and cavity wall insulation), with slower uptake of more advanced technologies (e.g. SWI) starting to achieve critical mass from 2020. • Mature commercial technologies are already available for solar thermal and heat pumps, albeit with significant scope for improved efficiencies and cost reduction. Development opportunities over the next 10 years include optimising the integration of complimentary renewable technologies within an efficient building envelope. • Potential for strong continued growth in the solar thermal market is anticipated (potentially reaching 700 TWh in 2020 and 1600 TWh in 2035),15 with solar thermal maintaining 60-70% share of renewable heating and cooling building technologies (alongside heat pumps and CHP). Growth is expected to be particularly marked in non-OECD countries (including China), resulting in a 67% share of deployment in 2050. • There is also likely to be a strong increase in demand for solar cooling (particularly associated with rising income levels and urbanisation in developing countries). By 2050 solar heat for cooling could reach 400 TWh per year. • Under stringent policy scenarios, there is also potential for strong growth in the heat pump market, providing approximately 270 TWh of energy demand in 2020, 700 TWh in 2035 and 1250 TWh in 2050 in OECD countries. Growth is focussed in OECD countries and reliant on decarbonisation of the electricity supply. Heat pumps could have a 38% share of the global renewable heating and cooling market by 2050. • Although growth occurs in building scale co-generation (micro-turbine and fuel cell CHP), this never occupies more than 5-7% of the market. • Residential and commercial scale solar PV (<1 MW) share of PV market expected to decrease over time from approximately 70% in 2012 to just over 50% in 2035. • Ultimately optimised use of renewable heating and cooling technologies will depend on the development of compact, low cost thermal storage, and advanced controls that ensure efficient integration into an integrated building HVAC system. • There is an overarching requirement for the development of skills in integrated planning at multiple levels (network, community, individual buildings) to successfully optimise use of energy efficiency and low carbon heating and cooling within the built environment. For example, peaks in electricity use by heat pumps can be mitigated by smart controls, ancillary storage and supplementary technologies; whilst advanced building materials (e.g. phase change materials) can ensure a flatter operational profile. • Spending on Smart Building Managed Services (encompassing smart building data acquisition and analytics and building maintenance contracts) is also expected to be a key growth area with estimates that it could more than triple in value to>£700 million by 2020.16 • Over the next ten years, this will remain is a highly fragmented end user market (urban, suburban, rural) with diverse local characteristics and a strong local contribution to the supply chain.

15 IEA Energy Technology Perspectives, 2012 2DS scenario.

16 https://www.pikeresearch.com/wordpress/wp-content/uploads/2012/08/SBMS-12-Executive-Summary.pdf

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 35 3.5 intelligent energy systeMs17 18 19 20

Estimated Global demand Geographic Growth Markets Critical Success Factors (institutional, technical, supply chain) Today • Intelligent energy systems: pilot • Europe, US, China, Korea, • Strong government leadership stage only Japan, Australia and vision • Global market for RE • Basic research and modelling integration technologies: £2.5 into impact of integration of bn17 renewable generation and demand response • Public acceptance 2020 • Intelligent energy systems • China and India; continued • Coordination of complex global market: £16 bn18 growth all OECD countries technologies into a unified system • Global market for RE • Incremental improvements integration technologies: £8 where existing infrastructure in • Development of internationally bn19 place accepted codes and standards • Elsewhere opportunities for • Solutions to cyber security new system design (India, • Energy storage, enabling Africa) cross-over with heat and transport sectors

2030 • No data available Opportunities in Africa, and rest of • New business models and developing world market structures 2035 • No data available

The intelligent energy system is widely (via digital communications) of the Energy storage may be categorised as acknowledged to be the most crucial ‘transport of electricity from all two-way electricity storage, with both enabler for permitting high penetrations generation sources to meet the varying mature (pumped hydro, compressed of low carbon generation whilst electricity demands of end-users’.20 air) and concept stage (advanced stabilising the electricity system through The sector therefore includes energy batteries) storage; and as one-way demand response, fault detection and generation, transmission, distribution energy storage, in which the energy is optimisation. and supply technologies, together with subsequently used in its stored form communications, data analysis and (e.g. as heat or hydrogen fuel). Intelligent energy systems incorporate a control systems, and energy storage. wide range of technologies that enable The intelligent energy system will close monitoring and management develop first in relation to electricity generation and consumption, but will eventually allow full integration and optimisation of power, heat and transport sectors.

17 Pike Research SGRI-12-Executive-Summary

18 Using ‘smart grid’ market as a proxy, World Smart Grid, 2nd Edition from SBI Energy

19 Pike Research SGRI-12-Executive-Summary

20 IEA, Technology Roadmap, Smart Grids, 2011, http://www.iea.org/publications/freepublications/publication/smartgrids_roadmap.pdf.

pAge 36 PROFITING FROM SCIENCE WWW.MAtrix-ni.org key trends: �

• Intelligent energy systems are already at the heart of Government strategy around the world. Although almost all projects are currently in the development or pilot phase, commercial competition will increase rapidly. Leaders will emerge from regions in which academia and industry are able to cross traditional sector boundaries to develop whole system approaches that allow integration and optimisation of complementary technologies. • Success in the development of intelligent infrastructure will also rely on: - extensive collaboration between a wide range of stakeholders (Government, Utilities, service providers, consumers) who may be motivated by different factors; - the development of universally acceptable codes and standards; - solutions to concerns over cyber security. • Geographical variation in solutions and time taken to ensure interoperability across national boundaries will mean that transfer of learnings between countries will be gradual. In general: - OECD countries with existing infrastructure will be compelled to make incremental adjustments and gradual implementation of ‘intelligence’, in order to maintain a reliable system; - Countries where the grid is currently less well developed have the opportunity to design distributed power systems from scratch. • To date R&D into the integration of distributed renewable generation has been hampered by political nervousness associated with the reliance on intermittent generation, and there remains a need for basic monitoring and modelling of the impact of increasing renewable penetration. • However, initial concentration on consumer-side technologies (smart meters), and transmission enhancements, will gradually be supplemented by increasing interest in distribution management (self-healing), demand response and integration of renewable generation. • The focus on renewables integration will be associated with increasing R&D to reduce the cost of electrical storage, and to find appropriate business models for storage services. The current appetite to establish a leading position in electrical storage in Europe and US, was evidenced by Chancellor Osborne’s speech in November 2012 emphasising the importance of the market to UK. • There is a potential for a step change in system design (from 2020) as increasing cross-over occurs between traditionally ‘siloed’ sectors (i.e. power, heat and transport), and a single ‘energy system’ evolves. In some regions, heat and transport applications will become demand response agents in their own rights, via the ability to store, and subsequently make efficient use of, excess energy generated from renewable power. • The evolution of the intelligent grid will require concomitant development of new regulatory and market models (e.g. system investment, transmission charges, trading and pricing) in order to accommodate the participation of end users in generation and demand response. • The supply chain is currently immature but the sector is dominated by utilities (sometimes monopolies) and some large international technology developers (e.g. ABB, Siemens, and Schneider). Regional variation may keep competition high, and there will be potential for new supply chain models, e.g. ESCos, and innovative service providers (Opower). It is anticipated that there will be significant cross-over with/ competition from digital sector (ITC/hi-tech companies).

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 37 3.6 geotherMAl �

Estimated Global demand Mtoe Geographic Growth Markets Critical Success Factors (Twh) (institutional, technical, supply chain) Today • 5.8 (68) • Existing electricity (utility scale) • Cost is still a major barrier to generation from geothermal the development of projects and sources: in particular access to finance for the exploratory stages • Australia, Chile, China, Costa remains a challenge – long Rica, El Salvador, Ethiopia, lead times (>5 years) between Germany, Guatemala, Iceland, prospecting for energy sources Indonesia, Italy, Japan, and income generation require Kenya, Mexico, New Zealand, considerable working capital Nicaragua, Philippines, Russia, Turkey, United States 2020 • 11.3 (131) • Future high growth markets for • Advanced geothermal the sector are expected to be technology – exploitation of Asia (Philippines, Indonesia); co-produced geothermal water Central & South America; from oil and gas wells Iceland and East Africa • Development of new • The United States market may technologies for exploitation of remain constrained through super-critical fluids uncertainty over policy and • Reduce drilling costs via regulatory framework new drilling technologies, improving hard rock and high temperature /high pressure drilling, and improving borehole instrumentation and monitoring 2030 • 21.7 (253) • Market consolidation in the • As above emerging markets of Asia- 2035 • 27 (315) Pacific and South America, with fewer opportunities in the mature markets of Europe and North America

Geothermal resources accounted for heat and the remainder was delivered countries account for 88% of global an estimated 205 TWh of global energy as electricity. The United States is the capacity. consumption in 2011. Two-thirds of global geothermal market leader with this output was delivered as direct 3,086 MW of installed capacity. Seven

pAge 38 PROFITING FROM SCIENCE WWW.MAtrix-ni.org key trends: �

• � Significant geothermal energy capacity is now being developed across Europe. As of 2011, Europe had a total installed geothermal energy capacity of 1,600 MW, producing 10,900,000 MWh of electric power through 59 geothermal power plants, 47 of which were in EU member states. • � Europe currently has 109 new power plants under construction or under investigation in EU member States. • � The geothermal energy market worldwide is likely to see significant investment over the next ten years, though growth will vary geographically as each region is influenced by many different technical, institutional and commercial factors. • � By 2020 geothermal power will gain ground on wind and solar in terms of market share, but will still account for only a small proportion of the overall renewables market. Geothermal potential will remain underutilised due to high upfront costs of exploration and development. • � It is estimated that between 3.6 GW and 14.4GW of new geothermal capacity will be present by 2020. • � Under business as usual conditions, a CAGR of 3% is expected over the next decade; under high growth projections this figure could rise to 9% CAGR. • � The estimated potential of geothermal resources in the East African Rift System is more than 15,000 MW. • � New technology appears to be underpinning geothermal expansion in some regions which have already seen significant development of their conventional resources. • � In the US and Europe, for example, the geothermal industry is increasingly exploring binary technology that can exploit lower temperature resources to generate electricity. • � Also, energy and economic security are compelling drivers for the adoption of policies supporting geothermal development in countries like Chile and Japan. • � In nearly every case, national policies are propelling growth in the strongest markets, while the current world leader – the US – appears to be growing more slowly due to policy uncertainties. • � The creation of more viable sites through hydraulic fracturing, known as enhanced geothermal systems (EGS), is not close to full commercialization. • � With only two US EGS projects in operation – although more are in the pipeline - the economics are not fully understood and there are concerns about induced seismicity. • � Another innovation is the use of underwater geothermal resources for projects, but this would be extremely expensive and a long way in the future.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 39 3.7 hydroeleCtriC �

Estimated Global Geographic Growth Critical Success Factors demand Mtoe Markets (institutional, technical, supply chain) (Twh) Today • 295 (3,431) • China, Brazil, • No significant technical barriers to market entry Canada, India, • Addressing institutional and commercial risk perceptions Vietnam (large scale hydro) • Overcoming complicated domestic and IFI licensing and consents processes • EU, China, Japan (pump storage) 2020 • 388 (4,513) • China, United • Commercialisation of hydrokinetic technologies to capitalise States, Russia, on markets centred on low flow / low hydrostatic head Brazil, Canada, geographies India, Indonesia, • Dealing with funding constraints and commercial risk Peru, Africa perceptions in more challenging geographies 2030 • 458 (5,323) • Africa (e.g. DR • Investment in politically unstable regions Congo), central • Absence / paucity of grid networks limits market 2035 • 488 (5,677) Asia (e.g. Tajikistan)

Hydropower is currently the largest Hydropower schemes often have renewable energy source, and it significant flexibility in their design and produces around 16% of the world’s can be designed to meet base-load electricity and over four-fifths of the demands with relatively high capacity world’s renewable electricity. Currently, factors, or have higher installed more than 25 countries in the world capacities and a lower capacity factor, depend on hydropower for 90% of their but meet a much larger share of peak electricity supply (99.3% in Norway), demand. and 12 countries are 100% reliant on hydro. Hydro accounts for the largest source of electricity in 65 countries and plays some role in more than 150 countries. Canada, China and the United States are the countries which have the largest hydropower generation capacity.

pAge 40 PROFITING FROM SCIENCE WWW.MAtrix-ni.org key trends: �

• � Large hydropower systems tend to be connected to centralised grids in order to ensure that there is sufficient demand to meet their generation capacity. Small hydropower plants can be, and often are, used in isolated areas off-grid or in mini-grids. • � There is increasing interest in smaller scale hydro investments worldwide due to trends away from the risks associated with newer, less proven renewable energy technologies. • � Hydropower capacity is increasing, accounting for around 1,000 GW worldwide at the end of 2010. The average annual growth rate of about 2.5% is small in comparison with wind and solar growth rates, but should be viewed against a large baseline. • � Emerging economies in Asia (led by China) and Latin America (led by Brazil) have become key markets for hydropower development, accounting for an estimated 60% of global activity. Four countries (China, Brazil, Canada and the United States) together produce half the world hydropower generation; ten countries produce 70% • � 25 GW of new hydropower capacity came on line in 2011, increasing global installed capacity by nearly 2.7% to approximately 970 GW. China accounted for almost half of this new capacity, with Canada, Brazil, India and Vietnam each accounting for 5-8% of new capacity in the same year. • � Global hydropower capacity is projected to increase from 1 067 GW in 2011 to over 1,680 GW in 2035. China’s capacity almost doubles, to 420 GW, bringing its total installed hydropower capacity in 2035 close to that of the entire OECD in 2011. Capacity jumps from 42 GW to 115 GW in India, from 89 GW to over 130 GW in Brazil and Africa will continue to develop some of its significant hydro potential. • � The five countries with the highest potential (China, United States, Russia, Brazil and Canada) could in the future produce around 8,360 TWh annually. The next five countries (DR Congo, India, Indonesia, Peru and Tajikistan) with the greatest potential could generate around 2,500 TWh per year. These ten countries account for about two-thirds of global hydropower potential. • � Most of the future growth in the hydropower sector will come from large projects in emerging economies and developing countries. • � In industrialised countries with mature hydropower sectors, there will generally be a greater emphasis on upgrading or redevelopment of existing plants where additional commercial benefits or enhanced capacity can be realised. For example, RusHydro of Russia is seeking to replace all obsolete hydropower equipment by 2025. • � Increasingly, pump storage technology is being deployed in grid networks which derive an increasing proportion of their electricity from variable renewable resources. For example, interconnectors between Norwegian hydro stations and Danish electricity grids provide system balancing for Denmark’s substantial wind turbine capacity. • � The IEA suggests that a further 60 pumped storage schemes are expected to be built in Europe by 2020, particularly in Germany, Austria, Switzerland and Spain. • � Chinese financial institutions are supporting loans for hydro development in Africa, often delivered by Chinese contractors. A small but promising market for low capacity (<1 MW) hydropower applications is emerging in Asia, sub- Saharan Africa, and South America. • � Hydropower equipment manufacturing is limited to comparatively few countries. All significant players have branched out from providing goods and services to only national markets. • � Hydropower technologies are mature and well-proven. There are relatively few openings in new hydro technologies, although some, such as hydrokinetics, are attracting interest for lower flow or smaller hydrostatic head applications. • � Larger manufacturers have been investing in new plants and acquiring smaller firms involved in the development of these new technologies.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 41 3.8 CArbon CApture And sequestrAtion 21 22 23

Estimated Global Geographic Growth Critical Success Factors (institutional, technical, supply demand Markets chain) Mtoe (Twh) Today • No large-scale • US, Canada, Australia • Progression towards commercial scale integrated power stations & NZ demonstration (i.e. with transport and storage) with CCS • Eight large scale projects (mostly ‘high-purity’ CO2) 2020 • 15.5 (180) (power • As above plus Europe, • Continued R&D to reduce cost and energy use sector only) and China • Continued commercial scale demonstration • Max total 75 • Full policy support alongside other LC technologies LSIPs21 with (>50% in power sector) 2030 • 31 (360) (power • China (power sector) • Significant technology cost reductions achieved sector only) • Energy intensive • Predictable carbon price developing world, 2035 • 39 (450) (power • Regulatory infrastructure in place (in particular for 22 including India and sector only) storage) Africa (industry sectors) • Development international standards

Carbon capture and storage involves through further demonstration to a range of techniques in which CO2 commercialisation. is separated from a stream of mixed Nevertheless, there is widespread gases, then compressed, transported acknowledgement that CCS offers and injected into a deep geological the only solution to carbon emissions formation (storage). reduction in the energy intensive There has been limited demonstration industries and fossil-fuel generating at scale to date, and there is little sectors. Scenario modelling suggests understanding of best practice in all that although investment in CCS is very parts of the supply chain. Sustained high, pathways that omit CCS incur policy support and public-private risk higher overall costs in order to reach sharing is required to ensure sufficient equivalent carbon emission reduction investment can be secured to move targets.23

21 Large scale industrial projects, defined as projects involving the capture, transport and storage of CO2 at a scale of: at least 800,000 tonnes of CO2 annually for a coal-based power plant; or at least 400,000 tonnes of CO2 annually for other emission-intensive industrial facilities (including natural gas-based power generation), Global CCS Institute, THE GLOBAL STATUS OF CCS, 2012.

22 IEA, World Energy Outlook, New Policies Scenario (p 250), assuming incremental deployment between 2010 and 2035.

23 IEA, Energy Technology Perspectives, 2012.

pAge 42 PROFITING FROM SCIENCE WWW.MAtrix-ni.org key trends:

• Integrated demonstration at commercial scale is currently limited to industrial plant, primarily where CO2 separation is an inherent part of the process (e.g. gas processing, fertiliser production). • Recent development in the sector has been very slow, with numerous project cancellations and delay, primarily due to uncertain financing of the very high capital costs, and lack of regulatory framework (for storage in particular). However, there has been recent progress in this area in EU, US, Canada and Australia. • Project life cycle is very long (in the order of 10 years), in particular due to the time needed to evaluate storage facilities. There are currently 59 LSIP projects in the early life cycle stages, which are expected to come online from 2018-2020. This cohort contains a larger proportion of power generation projects, but many rely on revenue generated from EOR (which is not likely to provide sufficient storage capacity in long–term). • Growth will be highly dependent on Government policy (in particular around carbon pricing) since projects have no additional benefits outside carbon abatement, and currently incur increased operating costs. • Near term growth is expected to be led by US and China, but by 2035, these markets are predicted to have a 20-30% share only, and growth in non-OECD countries will be marked from 2020/2025. • Many technology advances (in particular around cost reduction and energy use in the capture process) are at the R&D stage. In general, validation of demonstration projects is expected 2020-2025, and full scale efficient commercial systems 2025-2035. • There is a need for increased understanding of global technically available storage, within a universally accepted framework of assessment. • It is anticipated that the current nascent supply chain will evolve slowly over the next ten years with some cross-over from oil and gas (including EOR24 producers). It is expected that a handful of market leaders will build and consolidate their position, and that multi nationals will dominate.

24 Enhanced oil recovery.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 43 3.9 lArge sCAle solAr pV �

Estimated Global Geographic Growth Markets Critical Success Factors demand (institutional, technical, supply chain) Mtoe (Twh) Today • 1.4 (16) • EU accounts for 75% of • Establishment of PV industrial scale mass installed global PV capacity production • Germany, Italy are the • Overcoming supply-side stresses in the global dominant EU players, market place accounting for 60% of the • Unit costs must be driven down further to reduce global market FIT dependence • The solar PV generation • Decreasing FITs require new technology and market outside the EU efficiency incentives to encourage investment expanded 100% in 2011. China is the biggest non- • Responding to a dynamic market place and EU player, the US market consolidation of technology companies doubled in size, and Japan is an emerging market too 2020 • 14.3 (166) • Ongoing shift towards • Large scale integration of domestic, industrial and Asia-Pacific region utility scale PV power into grid connections manufacturing and • Develop and implement smart grids, grid technology base. management tools, and enhanced storage • Installations in United technologies States, China, India, Japan, 2030 • 28.5 (332) • As above Middle East, North Africa, South America 2035 • 36.4 (423) • North Africa

pAge 44 PROFITING FROM SCIENCE WWW.MAtrix-ni.org key trends: �

• Global PV cell production has demonstrated significant growth in recent years, with global cell production capacity increasing at a 3-year compound annual growth rate (CAGR) of 66%. Over the past decade, technology and production leadership has shifted from the United States to Japan to Europe and now to Asia. • In mid 2011, the global solar value chain comprised some 250 wafer producers, about as many manufacturers, and more than 400 module producers. A majority (59%) of all PV cells were produced in China and Taiwan in 2010, which also retains 62% of global cell production capacity. Europe maintained its position as the second largest cell producer, with 13% of global production. Japan held a 9% share of the market, while North America was in fourth with 5% of PV cells produced globally in 2010. • Redressing supply-side stresses in the market place is a key success factor – there has been a global over-supply of PV modules in the last 12 – 24 months. In 2011 and early 2012 there were many bankruptcies, insolvencies and closure of facilities in Europe and China. Some involved high profile companies. The manufacturing market has in turn been driven towards significant consolidation, with the top 15 solar PV module manufacturers accounting for about 50% of global production. • Cell, module and polysilicon manufacturers have struggled in the last 18 months – module prices fell by some 40% in 2011, and thin film prices were also down – their price advantage has declined due to significant price reductions for crystalline modules. • Module manufacturing has shifted at the expense of European firms, and by 2011, 12 of the top 15 manufacturers were located in Asia. Europe’s manufacturing market share declined to 14% in 2011 – China and Taiwan presently account for some 60% of global production. • There is a dominant European focus in the current global market – the EU accounts for 75% of installed PV generating capacity globally. Germany and Italy are the dominant EU players, accounting for 60% of the global market, and are driven by favourable domestic Feed in Tariffs (FIT) and policy frameworks. • There is a significant dependence on FITs worldwide to stimulate fledgling markets and to compete with wholesale electricity costs. Unit production and generation costs need to be driven down further to reduce FIT dependence, and underpin the commercial credibility of the technology. • The solar PV generation market outside the EU expanded 100% in 2011. China is the biggest non-EU player, the US market doubled in size, and Japan is an emerging market too. The non-EU market could account for 38 – 77 MW of installed capacity per annum by 2016. • Electricity production from solar PV in 2035 is predicted to be over 26 times greater than in 2010, increasing from 32 TWh to 846 TWh. Its share in total generation would rise to just over 2% in 2035, driven partly by ongoing production cost reductions and a supportive regulatory and energy policy framework. • Over the forecasting period, EU capacity is predicted to increase to some 146 GW, accounting for 5% of its electricity generation in 2035 (from 1% in2010). In the United States, capacity is predicted to increase from 4 GW in 2011 t 68 GW in 2035. Other countries with large estimates of installed solar PV capacity in 2035 are China (113 GW), India (85 GW) and Japan (54 GW). • There is a need for continuing innovation along the value chain – advances in production efficiencies (e.g. thin film technologies), development of organic construction materials, and new policies and fiscal incentives from governments. There is a need for the development of demand-side management and storage solutions to moderate diurnal variations in generation • Thin-film PV technologies have grown faster than crystalline silicon (c-Si) over the past five years, with a five-year CAGR of 94% for thin-film shipments and a 5-year CAGR of 63% for c-Si, from 2005 to 2010. • The large scale integration of domestic, industrial and utility scale PV power into grid connections will be required to drive the future solar PV market. As a result, there is an identified need to develop and implement smart grids, grid management tools, and enhanced storage technologies.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 45 3.10 ConCentrAting solAr pAnels �

Estimated Global Geographic Growth Markets Critical Success Factors demand Mtoe (Twh) (institutional, technical, supply chain) Today • 0.2 (2) • Spain and the United • Market development through FITs, binding States are the largest solar targets, capacity payments or other fiscal markets incentives • Egypt, Morocco, Algeria, • Long term funding for additional R&D, Thailand and India all demonstration and deployment of CSP launched their first CSP technologies plants in 2011 • Projects under construction or development in for example Australia (250 MW), China (50 MW), India (470 MW) and Turkey 2020 • 4.3 (50) • OECD Europe, OECD • New technology milestones expected by 2020 Americas, Africa and include dry cooling of all plants; first tower plants Middle East, China with air receivers and gas turbines; and first supercritical CSP plants 2030 • 13 (152) • OECD Americas, Africa • By 2030-35, new technologies may include and Middle East, China, substitution of biogas and solar fuels for natural India gas as back-up fuel in power plants; hydrogen from solar towers/large dishes introduced 2035 • 23.9 (278) • OECD Americas, OECD in natural gas grids; production of solar-only Oceania, Africa and Middle hydrogen to manufacture liquid fuels; and solar East, China, India, Latin production of other energy carriers America, Asia

key trends:

• More than 450 MW of CSP was installed in 2011, bringing global capacity to almost 1,760 MW. Spain accounted for the large majority of capacity additions in 2011, while several developing countries launched their first CSP plants. • Parabolic trough technology continued to account for the largest market share, but new central receiver and Fresnel plants were commissioned during 2011 and others were under construction. • Rapidly falling solar PV prices have placed price pressure on CSP technologies, and the Arab spring of 2011 influenced market conditions in North Africa. However, significant additional capacity was under construction by the end of 2011. • Electricity generation from CSP is forecast to increase substantially from 1.6 TWh to around 280 TWh, and installed capacity from 1.3 GW to 72 GW between 2010 and 2035. While larger scale projects in the near term remain focused on Spain and the United States, it is predicted that other regions will promote CSP during the later years of the IEA’s forecasting period, including North Africa, the European Union, India, Australia and South Africa. In 2035, CSP capacity is forecast to be highest in China, followed by the Middle East. • There will be ongoing pressure on manufacturers to innovate in order to reduce the unit costs of plant manufacturing and electricity generation. In a similar vein to the solar PV industry, there will be a market trend towards vertical integration of the value chain supported through mergers and acquisitions. pAge 46 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 4 strAtegiC Fit With northern irelAnd 4 4 strAtegiC Fit With northern irelAnd

A workshop was held with the market; assigned on the basis of the relative Sustainable Energy Horizon Panel to competitive position of NI and the nature • Low barriers to entry on the basis review and discuss the outputs from the of the supply chain (i.e. the stage of of the degree of competition and foresighting analysis, with the objective development, complexity, and degree of the nature of supply chain (ease of of prioritising the most attractive future fragmentation). This analysis indicates access). market opportunities for Northern significant market opportunities, with Ireland. Criteria for prioritisation were Figure 8 presents a ‘snapshot’ overview remaining growth potential associated defined as: of the relative scale and level of maturity with bioenergy, wind, micro-renewables of the individual market segments in and energy efficiency. These segments • Relative scale of future international 2020. The size of the bubble indicates are also relatively attractive in terms of market opportunity (export); the potential maximum market size ease of access for Northern Ireland. • Potential to generate economic by 2035, and the horizontal access Marine, by comparison, is a smaller return within 10 years; the current status of deployment as market opportunity, and the regional a percentage of the final total market competitive position is not as strong as • Basis for regional competitive size. Relative ease of access has been for the other segments. advantage within the international

Figure 8 2020 globAl deployed CApACity And eAse oF ACCess

Microrenewables Bioenergy High

Bubble size: Energy Efficiency Anticipated installed Offshore wind capacity in 2035 (Mtoe)

Medium Onshore wind

Marine Large scale solar Relative ease of access CCS

Traditional biomass Geothermal Hydro Low

0% 20% 40% 60% 80% 100% 120% Anticipated 2020 installed capacity as % of anticipated 2035 installed capacity (Mtoe)

pAge 48 PROFITING FROM SCIENCE WWW.MAtrix-ni.org Overlain is an appreciation of where • Geothermal; which are becoming more global in Northern Ireland has strong regional their distribution, with expansion into • CCS. technical capability (as defined in the developing countries. Although there is Technology Capability Study), blue Figure 9 indicates the scale of an associated significant future export indicating good depth of capability. This the additional anticipated installed potential, this should be regarded within analysis indicates relatively low regional capacity associated with each of the the context of the parallel evolution competitive advantage in the following segments between 2020 and 2035. of an increasingly competitive supply segments, which were subsequently not This analysis also indicates a sustained chain, and a shift in emphasis in many prioritised: and significant market opportunity in segments away from technology bioenergy, micro-renewables, energy development and deployment to • Large Scale Solar; efficiency and wind beyond 2020. It provision of operation and support • Hydro; reflects the increasing level of maturity services. of the more developed markets, • Traditional Biomass;

FIGuRE 9 dIFFERENTIal IN GlOBal INSTallEd CaPaCITy BETwEEN 2020 aNd 203525

Bubble size: Anticipated installed capacity in 2035 (Mtoe) Bioenergy High

Microrenewables

Energy efficiency Intelligent Energy Systems 2020 2030 Offshore wind Medium Marine 2010 2020 Onshore wind 0.8 GW CCS Relative Ease of Access Geothermal Traditional biomass Large scale solar Grid scale energy storage in 2020 £400 bn £600 bn Hydro Forecast Global Investment Low

150 0 150 300 450 600 Differential between 2020 and 2035 anticipated installed capacity (Mtoe)

Table 2 provides a summary overview energy systems for which data are a potential installed capacity for energy of the potential attractiveness of the presented in terms of market value, as storage (an important component of this key market segments, drawing on opposed to deployed capacity. Due segment) by 2020 of around 0.8 GW, insights relating to the region’s current to the nature of this segment, it is not which is comparable with that for marine technology capability and evolving appropriate to define scale on this basis, in the same time period. market needs. This includes intelligent although the foresight analysis indicates

25 Micro-renewables and energy efficiency separated here as a result of the need for different calculations. Energy efficiency calculated as the delta between predicted energy demand under the IEA WEO 2012 Current Policies and New Policies scenarios.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 49

planning & impact assessment conditions offshore/harsh for regional deployment with GB and Ireland trading and balancing low-risk feedstocks (waste/slurry); process optimisation/ yield improvements costs and technical risk for developing markets promising feedstock types and locations for future scaling up models

Potential Future Niches for Northern Ireland Plc • Know-how and capability in subsea mapping, • Advanced material research and testing for • Scale up and development of local supply chains • Grid infrastructure development and integration • Exploitation of know how relating to electricity • Commercialisation of technology based on • the shelf’ plant design to reduce Develop ‘off • Land suitability mapping to identify the most • Development of socially responsible business

Basis for Regional Competitive advantage M 2020: Regional capabilities relatively limited, but To Technology and supply significant resource potential. chain relatively mature, but opportunities around infrastructure optimisation and services (trading etc) 2020-2030: Increasing global competition and supply and extensive deployment in more chain maturity, remote geographic markets M 2020: Regional capabilities relatively limited, To but significant resource potential. Supply chain opportunities are highly competitive and technology design and manufacture already offshore 2020-2030: Maturing supply chain and deployment in more distant and hostile markets H 2020: Good existing regional capability with To considerable scope for technology innovation. Supply chain highly fragmented, multiple technologies, and often reliant on local capability for service support and feedstock 2020-2030: Large market with ongoing evolution of new technologies, but a maturing supply chain and increasing competition

Incremental Growth 2020 - 2035 (Mtoe) 73.3 47.9 428.8 Market Size 2020 (Mtoe) 101.9 7.4 756.3 Segment Onshore Wind Offshore Offshore Wind Bioenergy tAble 2 tAble OF PRIORITy SEGMENTS aTTRaCTIvENESS OF STRaTEGIC SuMMaRy

pAge 50 PROFITING FROM SCIENCE WWW.MAtrix-ni.org technologies – both design and installation and reduce system improve cost effectiveness size. Potential for 20% improvement by 2020 renewable heating technologies with integrated building scale storage technology integration develop models for renewables integration and analytics dynamic pricing codes and standards

Potential Future Niches for Northern Ireland Plc • Engineering/modelling capability in integrated • Increased performance of heat pumps to • Development (and manufacture) of advanced • Smart controls for heating/cooling and to enable • Use of integrated Ireland grid as basis to • Capitalise on knowledge-base of smart sensors • Establish NI as leader in field of electric storage • Develop new business models, incorporating • Lead in development of internationally accepted Basis for Regional Competitive advantage (h/M/l) H 2020: Good existing regional capability; supply To chain is relatively immature and highly fragmented providing opportunities for local participation and new entrants 2020-2030: Increasing competition and growing maturity of supply chain, with highest growth in developing markets H 2020: Good existing regional capability; potential to To exploit large local market for existing technologies 2020-2030: Easy wins largely complete but energy efficiency in deep retro-fit and new build (global) opportunities remain H 2020: Strong regional capability and know-how; To immature market with significant opportunity for new entrants 2020-2030: market leaders will emerge, essential to have previous experience to build on Incremental Growth 2020 - 2030 160.6 118 £600 bn* Market Size 2020 90.7 65 £400 bn* Segment Micro - renewables Energy Efficiency Intelligent Energy Systems

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 51 planning & impact assessment realise cost and performance targets – power engineering? chains for regional deployment demonstrations and installations

Potential Future Niches for Northern Ireland Plc • Know-how and capability in resource mapping, • Contribute to development of devices • Scale up and development of local supply • Use of deep water ports for coordinating tests, Basis for Regional Competitive advantage (h/M/l) M 2020: Strong competition in R,D&D (especially To Scotland and rest of the UK) relatively limited basis for regional completive advantage; Strong regional resource; limited opportunities in early commercial deployment within this timeframe 2020-2030: Emergence of winning technologies and consolidation of supply chain; deployment technology in more geographically remote and hostile environments 4.5 Incremental Growth 2020 - 2030 0.4 Market Size 2020 Marine Segment *No data available for capacity. *No data available for capacity.

pAge 52 PROFITING FROM SCIENCE WWW.MAtrix-ni.org Onshore and offshore wind, bioenergy, The intelligent energy systems segment of Northern Ireland as a leading and integrated building technologies, also stands out for the following credible International Reference Site. intelligent energy systems, and marine reasons: Specifically it was identified that energy were all identified as offering 1. An immature market that is forecast potential regional areas of expertise that potential future market niches in which for significant growth in the next 10 could be exploited related to: Northern Ireland could leverage its years and beyond, with no current existing capability. However, these • ITC – the development of ‘open market leaders; also presented a number of significant source protocols’ for intelligent challenges ranging from: 2. Close links and synergies with the control systems; other segments; • Relatively small total market size • Energy storage – development and (marine); 3. Particularly strong basis for regional demonstration of efficient storage competitive advantage predicated systems at medium and small scales; • Intense regional/international on the island of Ireland integrated competition (all offshore energy); • Integrated renewable generation network and the current regional solutions; • Well established and mature supply challenges being faced in the chain (onshore wind, bioenergy); to integration of renewables. • Enabling technologies such as automated control systems; • Limited regional deployment On this basis, it was proposed that a potential in which to generate focus on the commercial demonstration • New business models – that enable commercial proof points (new build of the integration of renewable distributed generation and storage to and all renewable technologies and sustainable distributed energy work cost effectively. dependent on the existing grid technologies using intelligent energy Potential economic benefits for Northern infrastructure). systems would provide an attractive Ireland were identified as: and flexible platform for export for In addition, the foresighting analysis Northern Irish companies. At the same • Raising the profile of the region as highlighted that, across all segments of time, this would provide a framework an international leader in sustainable the future sustainable energy market, and catalyst to support the accelerated energy; the role of system integration and development and deployment of intelligent network management is • Optimising potential for commercial complementary renewable generation anticipated to be the key to unlocking deployment of regional technology technologies (both current and future). long-term economic potential. The e.g. Bioenergy, wind and micro- development and deployment of It was proposed that: renewables: intelligent systems will be fundamental There is significant future global - Underpinning creation of regional to matching supply and demand across market opportunity for Northern supply chains in key technology increasingly complex energy networks, Ireland based around the areas; and in facilitating the paradigm shift development and export of intelligent whereby current consumers of energy - Supporting regional objectives of energy systems and associated will become energy generators. The energy security climate change; know-how. This will be achieved overall functioning of the system will through the early regional deployment • Creating exportable IP in terms become increasingly important, not of integrated sustainable energy of know-how, technology and just the performance of the individual solutions that have global relevance, services. technologies. demonstrating their commercial This concept was therefore chosen scalability, and establishing the profile to form the basis for the development of a robust and validated set of recommendations in the next stage of the project.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 53 Appendix

detAiled MArket segMent 1AnAlysis Wind energy 5 5.1 segMent deFinition �

Onshore and offshore wind energy is Offshore wind technology is less and wind farm); hardware supply; defined as: proven and has further technical and field services (including all aspects of ‘The kinetic energy of wind is exploited commercial development before it installation and O&M services); and in wind turbines for electricity becomes truly economic. This is due to other input such as finance, insurance generation. Wind speeds suitable for the complexity and scale of investment and legal services. electricity generation range from four required to install an offshore wind farm. Offshore wind farm development metres per second to 25 metres per Investment costs are estimated to be requires considerable upfront second. These are attainable practically twice those for onshore installations, investment with a return that is both all over the world, with the exception of although the quality of the resource may uncertain and dependent on regulatory some equatorial regions. Wind power is be up to 50% better. incentives. Most developers of wind exploited not only onshore but also off- Given the significant remaining farms off the UK coast are therefore shore, where wind speeds are higher unexploited resource, offshore wind large utility companies. and the wind is typically available more is generally considered to have the regularly and for longer periods of time. For several years now there has been greatest future economic potential The depth of water and distance from a widespread trend towards vertical for technology deployment (and centres of demand onshore are major integration within the wind turbine challenges). However, global onshore factors influencing the siting of off- manufacturing industry. Almost all capacity will greatly exceed that of shore developments. The availability of leading turbine suppliers now control offshore, presenting significant long land enjoying suitable wind conditions their own vital components, such as term market value. is one constraint. Moreover, wind is a blades and control systems, in-house. variable source of power: output rises Offshore wind farm development can The testing and type certification of wind and falls as wind strength fluctuates. be viewed as comprising six key stages turbines and site specific certification This variability poses a challenge when of activity. These are, technology of offshore wind energy projects, by integrating wind power into grids, development (an ongoing activity); wind qualified independent third parties is especially once wind becomes a major farm development (years 1-5); wind vital to ensuring a wind farm project’s component of the total system..’26 farm construction (years 6-7); wind farm safety and economic viability. The operation (20-25 years); and wind farm Today, wind power is most cost secretariat of the Danish Wind Turbine decommissioning (years 30+). competitive in locations where a) the Certification Scheme keeps a list of resource potential is strong and b) The individual activities within each accredited bodies. There is currently a when the cost of carbon is reflected in of these stages can be categorised strong German / Danish bias to this list. markets. Provision of fiscal incentives as, general management consultancy and enabling policies has played an (including project management); R&D important role in catalysing the market. and technical services (including Onshore wind is the more proven technology evaluation and testing, technology and global resources are site surveys, and environmental considered likely to be, to the most part, assessments); certification (wind turbine fully developed over the coming decade.

26 IEA, Technology Roadmap, Smart Grids, 2011, http://www.iea.org/publications/freepublications/ publication/smartgrids_roadmap.pdf.

pAge 56 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 5.2 MArket groWth trends �

Current Situation installed across more than 50 countries Figure 10 shows the geographic spread Since the 1970s, when wind energy at an investment of $51 billion. This of installed capacity up to 2008. As was first identified as a viable energy brought global capacity of onshore and can be seen, USA, Germany, Spain source, the sector has grown to a offshore to 121 GW in 2008. During and China have the largest installed multi-billion dollar industry. Since 2000, the same year it was estimated wind capacity, followed by a group of cumulative installed capacity of wind energy generated 260 million megawatt European countries, and India. energy has grown at an average rate of hours of electricity27. By 2010, 198 GW around 30% per year. capacity had been installed, equating to approximately 342 TWh. In 2008, over 27 GW of capacity was

Figure 10 GlOBal CuMulaTIvE CaPaCITy GROwTh OF ON aNd OFFShORE wINd POwER aCROSS ThE TOP TEN COuNTRIES, 1990-2008 (Gw)28

130 100 Rest of World India 120 Portugal China 90 Denmark Spain 110 United Kingdom Germany 80 100 France United States Italy 90 70

80 60 70 50 60 50 40

40 30 Annual growth (%) Capacity installed (GW) 30 20 20 10 10 0 0

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: IEA (2008a).

27 Global Wind Energy Council

28 IEA World Energy Report 2010

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 57 Currently there is an estimated global will require a target of 2,016 GW of cost reduction in wind energy up to installed capacity of onshore and installed wind capacity, equating to 2050. It indicates that by 2050, 32% offshore wind of >238 GW. In 2011, 40 2.8 gigatonnes of CO2e emissions of wind capacity is anticipated to be GW of additional wind energy capacity being avoided annually. To achieve located at sea, up from 19% in 2030. was installed globally. Offshore wind these targets will require an estimated The IEA estimates that by 2035 offshore accounts for less than 2% of the current investment of $3.2 trillion, including an wind deployment capacity will reach global total. average installation of 47 GW each around 180GW yet could be as high as year, for the next 40 years. 340 GW with additional policy support. Future demand This would equate to around one The 2050 target of 12% of global Figure 11 shows IEA’s estimated quarter to global install capacity. electricity coming from wind power22 capacity development and investment

FIGuRE 11 wINd POwER CaPaCITy dEvElOPMENT aNd INvESTMENT COST REduCTION30

2500 3.5

3 2000

2.5 Offshore investment cost Capacity offshore 1500 2

On land investment cost

1.5 1000 Gigawatts capacity USD million / MW

500 Capacity on land 0.5

0 0 2010 2015 2020 2020 2030 2035 2040 2045 2050

29 As assumed within the NPS model adopted by the World Energy Outlook, IEA, 2010.

30 http://www.iea.org/publications/freepublications/publication/wind_roadmap_foldout.pdf

pAge 58 PROFITING FROM SCIENCE WWW.MAtrix-ni.org Currently, offshore farms are being installed along sand banks and other areas of shallow water around the coast of Europe, USA, and Eastern Asia. It is assumed that these resources will be quickly be utilised (estimated by 2025) requiring the subsequent exploitation of deep water sites. This will require greater research and development, testing of new technologies, and installation of complex infrastructure such as offshore sub stations. Up to 2050, investment costs are anticipated to fall. For onshore wind investment costs were estimated to be $1.4 to $2.6 million per MW in 2010, whereas for offshore wind they ranged from $3.1 to $4.7 million per MW. Costs are anticipated to decrease by 23% by 205031. Furthermore, operational and maintenance costs are highly variable depending on the location of the installation and the technology employed. Typically they varied from between $12 and $32 per MWh for onshore wind installations, to between $21 and $48 per MWh for offshore wind in 2010. The operations and maintenance cost of wind turbines include service, spare parts, insurance, administration, site rent, consumables and power from the grid. As wind technology is evolving so fast, operations and maintenance requirements differ greatly, according to the sophistication and age of the turbine and associated balance of plant. As the sector matures the relative importance of operations and maintenance costs, within the context a life cycle cost approach, will increase. Longer term reductions in these costs is particularly challenging for hostile offshore locations.

31 http://www.iea.org/publications/freepublications/ publication/wind_roadmap_foldout.pdf

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 59 5.3 geogrAphiC VAriAtions in deMAnd And groWth �

The largest wind sectors today are in The European Wind Energy Association Looking forward, more than 15 GW Europe, USA and China; specifically in has established targets of 40 GW of new capacity is likely to be installed Denmark where wind energy provided installed offshore wind capacity by in China each year, predominantly almost 20% of electricity consumed in 2020, and 150 GW by 2030. USA onshore, but supplemented by offshore 2008. In the same year, wind accounted has an ambition to develop 54 GW of projects. By 2020, total installed for 11% of electricity consumption in offshore wind capacity by 2030. capacity in China is estimated to reach Portugal and Spain, 7% in Germany 200 GW, and could reach 400 GW Growth in the UK offshore wind market and almost 2% in USA. In 2011, almost by 2030. Without taking into account is determined by leasing rounds run by 10 GW of wind energy capacity was transmission cost, wind power costs the Crown Estate. The most recent, installed in the EU. are likely to fall to levels similar to those Round 3, was completed in 2010 when of coal power. By 2020, wind energy’s China is increasingly focusing on wind the successful bidders for each of the contribution to China’s energy system as a source of energy and is regarded nine Round 3 offshore wind zones could represent 11% of total installed as one of the largest potential future within UK waters were announced. It generation capacity and 5% of total onshore markets. In 2011, its wind is broadly anticipated that these will electricity production, and by 2030 market grew by almost 40%32. Other occupy the industry until 2025, by which wind power could account for 15% of key markets include OECD countries time an estimated 30GW of offshore capacity and >8% of the total electric in the Pacific region which are likely to wind capacity will have been developed. production.36 gain greater importance after 2020, as In a recent interview, The Crown Estate well as central and South America after said it has no immediate plans to launch 2030. By 2030 it is estimated that non- Round 4 in the medium term33; however OECD countries will produce around it is likely that Round 4 will be launched 17% of global wind energy. This figure at toward the end of this decade. is anticipated to rise to 57% by 2050. Of particular note is China, where wind Onshore wind has, to date, been power has entered the large-scale the focus of the majority of wind development phase. From 2006 to developments due to ease of 2009, China’s total wind power installed installation. The world’s first offshore capacity doubled each year. By the wind plant was installed in 1991 about end of 2010, total installed capacity 3 km off the Danish coast, and within was 41 GW, with an operational wind the past five years, offshore wind has power capacity of 31 GW equating to seen increased deployment. By the 50 TWh of electricity generated from end of 2008, approximately 1.5 GW wind power. More than 10 TWh were had been installed, mainly in the Baltic, generated from wind power in western North and Irish Seas; i.e. off the coasts Inner Mongolia; a relatively isolated of Denmark, UK, Netherlands, Ireland, region with poor transmission links to Sweden and Belgium. Additional the more populated areas of China34. offshore turbines are in operation off Grid connection bottlenecks and excess China, Germany, Italy and Japan, while local power supply have become major other projects are planned in Canada, problems for wind power programmes Estonia, France, Germany, Norway and in northern China, leading to large-scale the United States. wind power delays35.

33 http://www.businessgreen.com/bg/news/2120303/ crown-estate-downplays-prospects-offshore-wind-round

34 http://www.iea.org/publications/freepublications/ publication/china_wind-1.pdf

35 http://www.iea.org/publications/freepublications/ 36 http://www.iea.org/publications/freepublications/ 32 http://www.gwec.net/global-figures/wind-in-numbers/ publication/china_wind-1.pdf publication/china_wind-1.pdf

pAge 60 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 5.4 CritiCAl suCCess FACtors For MArket deVelopMent �

Institutional Factors • � Exchange of best practice with • � Developments in performance Ensuring the wind market continues developing countries, targeting and cost improvement in key to develop over coming decades will development finance at bottle necks, components and balance of plant require further political and economic creating carbon finance options in such as gearboxes, rotors, nacelles support mechanisms to generate developing regions. and lighter materials of construction. greater annual investment whilst also Technical & Supply Chain • � Development of more accurate, facilitating greater social acceptance. development Needs longer-horizon forecast models for Considering the long-time scales and Technology innovation remains a crucial use in power system operation; high capital expenditure from planning driver for increasing the efficiency of to commissioning, these policy-led • � Development of HVDC cables for wind turbines, reducing costs and actions will provide technology and offshore wind and long distance inter enabling the exploitation of ‘hard to project developers with the long term connection; access’ locations, for example deep certainty they need to invest. Specifically water sites. Investment is therefore • � Development of offshore substations it has been suggested that these might required to enable these advances in for offshore wind and potential include: innovation, as well as to improve and integration of regional ‘super grids’. � extend electricity infrastructure. The • Clearly defined targets that are fully • � Development of appropriate models infrastructure deployment required by supported by governments so as to for feasibility and impact assessment offshore wind is similar in scale to that create market certainty; to facilitate the planning process. undergone by oil and gas in recent • � Facilitating new financing structures decades. As such, the wind sector • � Development of reliable remote that support the scale and speed of is likely to benefit from increased condition monitoring technology industrial growth required; crossover of expertise from the oil and to support predictive maintenance • � Advanced planning of new plants gas sector. programmes, improved reliability and to attract investment, such as the cost reduction. Specific technology challenges that leasing of offshore development need to be addressed include: Specific supply chain challenges that sites; need to be addressed include: • � Improvement in the flexibility of • � Accelerate, harmonise and power systems to support higher • � Development of international streamline permitting practices; penetrations of wind energy, i.e. standard education and training • � Appointment of lead agencies to access to flexible generation, programmes; coordinate planning of transmission storage and demand response; • � Acceleration of automated, infrastructure, including exploring • � Acceleration of electricity system localised, large-scale manufacturing options to make them ‘super-grid integration and transformation, for economies of scale, with an compliant’; e.g. enhanced market design increased number of recyclable • � Increasing social acceptance of and deployment of smart grid components; wind by raising public awareness of technologies; benefits;

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 61 • � Development and maturation of local supply chains to support deployment, including local manufacturing, logistics, operations and maintenance hubs; • � Accessibility/availability of purpose- designed vessels for offshore work; • � Improvements in installation strategies to minimise work at sea; • � Availability of suitably equipped large harbour space. key Emerging Technologies Technical advances are critical for market success. These include technology advances in efficiency and size, to integration advances with electricity grids, and development of supporting infrastructure. Examples of these opportunities include: • � Development of large >10 MW wind turbines that will require new turbine design; • � Development of HVDC cables for offshore wind including offshore sub stations; • � Improved economics of offshore foundations; • � Development of next generation deep water foundation and floating foundation wind turbines. There is currently one full scale floating wind device deployed off the coast of Norway.

pAge 62 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 5.5 the CoMpetitiVe lAndsCApe �

The international wind supply chain is players by 2020. China has also already well developed and dominated instructed its domestic manufacturers to by established international Project start developing offshore wind turbines Developers, OEMs and utilities from as part of a plan to install 30GW of Northern Europe and the USA. The capacity by 2020. market is dominated by relatively few Increasing competition from China turbine OEMs, including: Vestas, is anticipated to ramp up in next 10 Goldwind, Enercon, Suzlon Group, years, both Project Developers (who Siemens, GE Wind, Sinovel, United are already beginning to explore Power, Gamesa and Mingyang. Vestas international markets, such as Ireland), is currently the world’s largest turbine and OEMs such as Goldwind which OEM. has recently recaptured a leadership In Western markets, Enercon is position in China. currently Europe’s market leader due As the market continues to mature, to its dominance of Germany’s onshore and the installed base grows, the value wind market plus a strong performance chain will shift in favour of O&M and in Southern European markets such the provision of field support services. as France and Italy. In USA, long- GE It is anticipated that whilst the large Wind, Vestas and Siemens are all OEMs will try to maintain control of dominant37. the equipment market, a significant Currently, just six countries worldwide proportion of the value associated account for almost all wind turbine with these contracts will be delivered manufacturing. In 2008 Denmark via local/regional delivery partners contained only 3% of global installed (facilitated by remote monitoring wind capacity yet more than one-third of technology). Indeed, many regions are all turbines operating in the world were already gearing up to ensure their local manufactured by Danish companies. supply chains are well placed to support Other important turbine manufacturing these contracts, such as is evidenced in countries include Germany, Spain, the east Coast of Scotland. USA, India and China, with components supplied from a wide range of countries. There are only two manufacturers making offshore wind turbines at scale, Siemens and Vestas, however RePower, Multibrid and BARD have started producing offshore wind turbines, and Clipper, GE and Mitsubishi are anticipated to become key market

37 http://www.renewableenergyfocus.com/view/24793/ global-wind-turbine-market-competition-intensifies/

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 63 MArine energy 6 6.1 segMent deFinition �

Marine energy includes wave and tidal • � Tidal stream: generate kinetic energy energy technologies. In general, wave through the use of moving water energy is intermittent but relatively that powers under water turbines. predictable, and tidal current energy Installations can be stand alone with is intermittent but largely predictable. their own foundations or they can be Marine energy is defined by the IEA attached to existing structure such (2011) as: as bridges. Installations might be placed in fast flowing water locations ‘Marine energy technologies exploit that are dependent on tidal flows the kinetic energy of the tides, waves such as in estuaries or between land and currents of the sea, as well as masses. temperature and salinity gradients, for the generation of electricity. The • � Tidal range or barrage: generate resource is, in principle, unlimited kinetic energy through the and exists in all world regions, but differences in height between high it is exploitable in practice only and low tide. This requires the at sites that are close to demand strategic placement of dams that centres and where, at the same time, enable energy to be harnessed by damage to local ecosystems can be allowing the flow of water through contained. Marine technologies are turbines. Barrages are often found the least developed of the renewable across estuaries and are highly energy technologies. Some marine capital intensive. They have also technologies, namely those exploiting attracted negative reactions from the tides, have variable output, though public. this has the advantage of being predictable’.38 Specifically, the core marine technologies in question include: • � Wave energy: generates kinetic energy through harnessing the power of waves on ocean surfaces. Technologies are in various stages of commercialisation and can take very different forms, from buoys to snake- like structures.

38 IEA, World Energy Outlook, 2012

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 65 6.2 MArket groWth trends �

Current Situation marine technologies currently being Less than 1 TWh of electricity was developed progress through to full generated by marine technologies in commercialisation. 2010, which equates to less than 1 Future demand GW installed capacity. In 2010, over It is estimated that the theoretical global half of the projects installed or under resource for offshore renewables construction were sub-scale prototypes, (including wind) is 260,000 to 330,000 ranging from 20 kW to 1 MW in size. TWh per year39 and the realistically The various marine energy technologies usable worldwide resource has been that are currently being developed are estimated to be greater than 2 TW. currently broadly sitting between the Marine technologies are likely to research, prototype and demonstration contribute a small part of this total, as phase. There have been numerous offshore wind develops further and successful installations around the faster over the next two decades. world, with the UK, Scotland and Nonetheless, marine resource potential south west England in particular, at is large and can be found across all six the forefront of the industry. Wide continents, as is shown by Figure 12. spread commercialisation of marine technologies is not likely to occur for some years or decades; yet they are likely to play an important role in achieving low carbon policy objectives of generating sustainable energy and facilitating greater security of supply. In 2009, the marine sector took a 4% share of total global spend on research and development out of a total $5.6 billion, which equates to approximately $224 million. Considering the current stage of the industry, with limited installations to date, this is a relatively large share or the research and development spend and demonstrates that there is significant interest in the marine sector but that it is also in an early stage of maturity. Significantly more investment will be required over coming years to ensure the range of

39 http://iea-retd.org/wp-content/ uploads/2012/10/11-Paunescu-Canada1.pdf

pAge 66 PROFITING FROM SCIENCE WWW.MAtrix-ni.org FIGuRE 12 GlOBal MaRINE ENERGy RESOuRCES40 41

Electricity generation from marine Marine energy will require support up Furthermore, between 2010 and 2020 energy is anticipated to increase from to 2035 and beyond due to the high marine is expected to see $4 billion less than 1 TWh in 2010 to almost 60 generation costs experienced during worth of investment and between 2021 TWh in 2035, with capacity growing the sectors infancy. Generating cost per and 2035 it is anticipate a further$63 from less than 1 GW to 17 GW. MWh of marine energy are estimated billion investment will be made. Tidal power is limited to select sites to range from $235 to $325 between due to economic considerations as 2010 and 2020 and then decrease it requires a large tidal range and to between $139 and $254 between proximity to existing transmission lines 2021 and 2035 (based on $2009). to be considered viable. Wave power The learning rate41 of marine energy is has notable potential to contribute to anticipated to be 14% over this period, meeting electricity demand, yet the the highest rate apart from large scale relevant technologies remain in their solar photovoltaic. This indicates that infancy and will require significant significant ‘cost per MW’ reductions are improvements to reduce costs. likely to be seen.

40 http://www.wavehub.co.uk/wp-content/uploads/2012/02/Marine-Energy-Park-prospectus.pdf

41 As described by the IEA in the World Energy Outlook 2010: “Learning rates are used to represent the reductions that occur in technology costs as cumulative deployment increases. A learning rate of 5% implies that the investment cost of a technology would be expected to fall by 5% with every doubling of cumulative installed capacity”

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 67 6.3 geogrAphiC VAriAtions in deMAnd And groWth

Most demand for marine energy is found in Europe and USA and to a lesser degree in the Asia-Pacific region. Europe is home to nearly 60% of the total global demonstration projects proposed between 2010 and 2014 as indicated in Figure 13. The rest of the activity occurs in predominantly Australia and in North America. Interest from the Middle East and Latin America is slowly emerging, with a handful of projects proposed in Israel and Brazil42.

FIGuRE 13 NaTIONal TaRGETS FOR MaRINE ENERGy IN EuROPE By 202043

United Kingdom 0.3 GW in 2020

Ireland 0.5 GW in 2020

France 0.3 GW in 2015

Spain (Basque) 0.1 GW in 2010

Spain 0.1 GW in 2015

Portugal 0.3 GW in 2020

42 http://www.emerging-energy.com/uploadDocs/Excerpt_GlobalOceanEnergyMarketsandStrategies2010.pdf

43 http://www.decc.gov.uk/assets/decc/11/meeting-energy-demand/wave-tidal/3610-position-paper-towards-euro-ind-leader.pdf and : European Ocean Energy Association

pAge 68 PROFITING FROM SCIENCE WWW.MAtrix-ni.org With an estimated 250 GW of In the immediate term there is line of • � South Africa: has completed a theoretical wave and tidal resource sight for around 200-400 MW of both resource assessment through the potential off UK coasts, equating to tidal and wave installations by 2020, Eskom / Sabregen project and is approximately 116 TWh tidal stream, with over 50% of installations in UK currently deciding on approach; 36 TWh tidal range, and 40 TWh wave waters. However the certainty of these • � USA: approach differs across energy, the UK is one of the world’s projects increases beyond 2014. the states which have different leading markets for marine energy. Recent announcements by the Crown renewable support schemes but There are currently around 4 MW of Estate approving two tidal projects off some include wave as a separate marine energy technologies being the Northern Irish coast provide more technology. USA is currently tested in UK waters and an estimated long term assurances to the UK market. undertaking a six state wave 300 MW of capacity is anticipated to Wave and tidal support in other leading energy demonstration project be installed by 2020. By 2050, marine countries include:48 (Oregon, Washington, California, energy capacity is estimated to be Massachusetts, Hawaii, and Maine). between 28 and 36 GW,44 generating • � Canada: BC Hydro continues over 20 per cent of the UK’s electricity to fund work on wave resource demand. The Carbon Trust estimates assessment for wave energy that currently the UK has around 35 of projects off Vancouver Island; the world’s 120-130 wave energy and • � Denmark: has a support scheme for tidal stream technology developers. technical development; Half of the wave resources and over a quarter of its tidal energy resources • � Ireland: recently consulted on in Europe are estimated to be found options for the development of wave off the British coastline45. As such, energy in Ireland; marine energy will be a key focus of • � Japan: has been one of the biggest the UK government as it works to meet funders to date with funding focusing 46 2020 renewable energy targets. It is on the R&D; anticipated that if the UK can maintain its position at the centre of the marine • � New Zealand: government has industry, the sector could be worth over provided funding for a wave power £70 billion to the UK economy by 2050 project by the state research and create tens of thousands of jobs. company Industrial Research Ltd; In particular, Scotland is has a large • � Portugal: has set a tariff of Euro 23c/ potential marine energy resource with kWh for wave energy devices. This an estimated 21.5GW (79.2 TWh per figure is set for the first 20MW of annum) that could be generated from connected power, but discussions its waters. Some of the best resources are apparently underway to increase are located off the north west coast this to the first 50MW; and northern tip of Scotland. However, • � Spain: have set a tariff for wave in these locations the electricity supply energy of Euro 6.4c/kWh plus network is currently inadequate to substantial grants dependent on accommodate the power that could be local content. Tariff is reviewed 47 delivered to the mainland markets . annually and could be increased in line with Portugal;

44 � Carbon Trust 2011

45 � Carbon Trust 2011

46 http://www.emerging-energy.com/uploadDocs/ Excerpt_GlobalOceanEnergyMarketsandStrategies2010. pdf

47 http://www.scotland.gov.uk/Resource/ 48 http://www.scotland.gov.uk/Resource/ Doc/17002/0028242.pdf Doc/17002/0028242.pdf

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 69 6.4 CritiCAl suCCess FACtors For MArket 49 50 51 deVelopMent 52

53 54 Institutional Factors • � Accelerate, harmonise and Technical & Supply Chain streamline permitting practices; development Needs Ensuring the marine market maintains Significant technology innovation is its commercialisation progress towards • � Make existing grid connections required over the next ten years in both industry maturity will require political ‘super-grid compliant’ to enable the core devices and the supporting and economic support mechanisms to potential future international balance of plant. Developing wave and underpin the necessary technological electricity sales; tidal resources will also require large advances. Considering the high capital • � Take a leadership role in EU super- sub-sea electrical cables connecting expenditure and the current small size grid negotiations to ensure that the regions of high resource concentration. of the marine energy industry, clear, UK derives maximum value from its Integration with offshore wind will long-term policies are required to enable design and implementation; also be a key component of the future technology and project developers to offshore electricity networks, as will grid have the long term certainty they need. • � Evaluate and where appropriate, connections from the UK to Europe. Similarly, the major expansion of the facilitate new financing structures These cables will initially be used for supply chain that will be required also that complement the fundamental balancing the grid during periods of low needs strong and continuing support features of renewable energy supply. As the development of offshore from government and industry in the infrastructure and can support the renewables increases, additional coming years. Specifically it has been scale and speed of industrial growth interconnection will be required to suggested that these might include: required. export large volumes of electricity • � Clearly defined targets that are fully to European power markets52. The supported by governments so as to development of marine technologies and create market certainty; associated electricity networks require specific technological and supply chain • � Facilitating new financing structures challenges to be overcome. These that support the scale and speed of include53,54: industrial growth required; • � Advanced planning of new plants to attract investment, such as the leasing of offshore development sites;

49 http://www.decc.gov.uk/assets/decc/What%20we%20do/UK%20energy%20supply/Energy%20mix/Renewable%20energy/explained/wave_tidal/ 1_20100317102353_e_@@_MarineActionPlan.pdf

50 http://eti.co.uk/downloads/related_documents/ETI_UKERC_Roadmap.pdf

51 http://www.decc.gov.uk/assets/decc/11/meeting-energy-demand/wave-tidal/3610-position-paper-towards-euro-ind-leader.pdf

52 http://offshorevaluation.org/downloads/offshore_valuation_full.pdf

53 http://www.bsk-cic.co.uk/uploads/assets/media/documents/3ed611616930275d0eba6efccfdd5c6f8ea8337f.pdf

54 http://offshorevaluation.org/downloads/offshore_valuation_full.pdf

pAge 70 PROFITING FROM SCIENCE WWW.MAtrix-ni.org • On-going fundamental development Specific supply chain challenges that key Emerging Technologies of devices and balance of plant need to be addressed include: Technical commercialisation to achieve cost and performance • The infrastructure deployment advances are critical for market targets; priorities include durability; required is similar in scale to that success. These include technology moorings and foundations; undersea of oil and gas in recent decades. advances in efficiency and size, to cabling and power take offs; The major expansion of the supply integration advance with electricity • Further trials and demonstration chain this needs will take strong and grids, and development of supporting projects at commercial scale continuing support from government infrastructure. Examples of these to provide basis for further and industry in the coming years; opportunities include: development and the emergence of • Development of leading • Development of larger, more ultimate ‘winners’; manufacturing centres and regional advanced and efficient wave • Development of modelling resources and international supply chains; technologies; to understand wave and tidal • Integration with other marine • Improved economics of offshore resource-device interaction in such a industry sectors such as offshore foundations and installations way that it delivers predicted design wind and oil and gas; as well as processes; performance; local logistical, operations and • Integration with offshore wind • Development of procedures for maintenance supply chains; technologies and integration with installation and commissioning of • Improved ability to install possible ‘supergrid’; devices; technologies in marine conditions • HVDC cables and offshore sub • Improved modelling of wave and using new facilities, processes and stations. tidal resources as well as subsea actors; geology; • Marine technologies must be • Improved remote monitoring and network accessible, particularly in control systems for condition the early days of the marine energy monitoring; industry and market, so as to maximise potential opportunities; • Improved ability to continue to operate reliably over the • Continue to develop the supply chain technology’s predicted lifetime, as a key to deployment at scale and including after maintenance; least cost. • Development of appropriate methods for the assessment of environmental impacts associated with installation, operation and maintenance. • Scale up and development of supply chain for full scale manufacture and deployment.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 71 6.5 the CoMpetitiVe lAndsCApe

Marine energy is characterised by multi technology developers working towards commercialising their different marine technologies. Key organisations include: • Alstom Hydro, Aquamarine Power, Atlantis Resources Corporation, AW Energy, AWS Ocean Energy, Fred. Olsen Renewables, Andritz Hydro Hammerfest, Marine Current Turbines, Minesto, Ocean Power Technologies, OpenHydro, Pelamis Wave Power, Pulse Tidal, Scotrenewables Tidal Power, Tidal Energy, Tidal Generation, Voith Hydro Ocean Current Technologies, Voith Hydro Wavegen, Wave Dragon, and Wello.55 Large traditional power sector OEMs such as Voith Hydro, Rolls-Royce, Alstom, Andritz, Dresser-Rand, and Siemens are also stepping into the industry, meaning the industry is likely to see further consolidation in technology design and organisation of the supply chain. However, as marine energy is an emerging sector, its supply chain has yet to fully develop. As marine energy becomes more established there is likely to be increased activity along the supply chain, specifically competition is likely to increase from oil and gas sector companies as they look to diversify their business portfolios. With this added competition and investment in marine energy supply chains, there is likely to be a faster pace of development as well as consolidation as the leading technologies take a greater market share.

55 Renewable UK, Marine Energy in the UK: State of the Industry Report 2012 pAge 72 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 7 bioenergy

7PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 73 7.1 segMent deFinition �

Bioenergy is defined by the IEA as: • � Traditional biomass: Use of wood, Key bioenergy feedstocks include: charcoal, agricultural residues ‘Biomass energy is energy produced • � Oil crops (rape, sunflower, etc.), and animal dung for cooking and from organic material grown, collected waste oils, animal fats heating in the residential sector. It or harvested for energy use. At present, tends to have very low conversion • � Sugars and starch crops biomass is the only renewable energy efficiency (10% to 20%) and often source that can be used for electricity • � Lignocellulosic biomass (wood, unsustainable biomass supply. production, heat production and straw, energy crop, MSW, etc.) Most commonly used in non-OECD transport. The range of technologies countries. • � Biodegradable MSW, sewage, exploiting biomass resources is very sludge, manure, wet wastes (farm wide and the choice of technology • � Biofuels: Refers to liquid and and food wastes), macro-algae depends not only on final use, but also gaseous fuels produced from on the nature of the biomass feedstock. biomass and used in the transport • � Photosynthetic micro-organisms, The biomass resource can be sector. e.g. micro algae and bacteria. estimated, based on the land available This section focuses on the bioenergy And key bioenergy technologies/ for dedicated crops and the available sector, and primarily on heat and power, processes include: forestry and agricultural residues with less focus given to traditional and waste. The main constraints on • � Advanced gasification biomass and the transport sector. biomass exploitation are the availability • � Advanced pyrolysis of land for crops and water use’. Bioenergy is a complex sector that includes a wide range of feedstocks, • � Anaerobic digestion Further definitions of biomass and technologies and processes. Some bioenergy include: • � Biomass conversion (incl. with CHP) of which are relatively mature, • � Biomass: Any organic, i.e. whereas others are yet to be fully • � Biomass co-firing (standard and decomposing, matter derived from commercialised. Bioenergy is a unique enhanced, and with CHP) plants or animals available on a source of renewable energy as it can • � Energy from waste (incl. with CHP). renewable basis. Biomass includes be provided as solid, gaseous or liquid wood and agricultural crops, fuel and can be used for generating Figure 14 shows the development herbaceous and woody energy electricity, transport fuels, as well as status of the key technologies used to crops, municipal organic wastes as heat. upgrade biomass and or convert it into well as manure. heat and power and Figure 15 shows the conversion routes available to • � Bioenergy: Is energy derived from biomass from feedstock to output. the conversion of biomass where biomass may be used directly as fuel, or processed into liquids and gases.

pAge 74 PROFITING FROM SCIENCE WWW.MAtrix-ni.org FIGuRE 14 dEvElOPMENT STaTuS OF ThE MaIN TEChNOlOGIES TO uPGRadE BIOMaSS aNd/OR TO CONvERT IT INTO hEaT aNd/OR POwER56

BASIC & APPLIED R&D DEMONSTRATION EARLY COMMERCIAL COMMERCIAL

Biomass Torrefaction Pyrolysis Pelletisation Densification HTU1

Combustion Gasification Biomass to Heat (in boilers & stoves)

ORC2 Steam cycle Combustion Stirling engine

IGCC4 Gasification Gasification IGFC3 IGGT5 + Steam Cycle

Indirect Parallel Direct Cofiring cofiring cofiring cofiring

Anaerobic Microbial Biogas 2 stage AD 1 stage AD Digestion (AD) fuel cells upgrading

Biomass densification techniques Biomass to heat Biomass to power or CHP

1 Hydrothermal upgrading; 2 organic Rankine Cycle 3 Integrated gasification fuel cell; 4/5 Integrated gasification combined cycle (CC)/gas turbine (GT)

56 IEA Bioenergy - a Sustainable and Reliable Energy Source 2009

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 75 FIGuRE 15 BIOMaSS CONvERSION ROuTES57

Feedstock1 Conversion routes2 Heat and/or Power

Oil crops (rape, sunflower, etc.), (Biomass ungrading3) + Combustion waste oils, animal fats Liquid Fuels Transesterification or hydrogenation Biodiesel Sugar and starch crops

(Hydrolysis) + Fermentation Bioethanol

Hydrogen Photosynthetic microorganisms, Biophotochemical routes e.g microalgae and bacteria

Biomass can be stored at times of Important considerations in the The use of waste streams in bioenergy low demand and provide dispatchable development of the bioenergy sector is also likely to become increasingly energy when needed. Depending on the are the issues surrounding the supply important over the next two decades type of conversion plant, bioenergy can for feedstocks. Land suitable for due to lack of available landfill capacity play a role in balancing the rising share producing biomass for energy can also and therefore a desire to find alternative of variable renewable electricity from be used for the creation of biospheric means of waste disposal. The costs wind and solar in the power system. The carbon sinks, and so a balance must be associated with waste disposal are possibility to store biomass allows for achieved dependant on land productivity likely to be a significant incentive for generation of biomass-derived heat to and the possible direct and indirect anaerobic digestion or energy from meet seasonal demand. This is common emissions from converting land to waste plants to generate additional in Nordic countries. another use. Making the wrong choice income or reduce demand for energy. can substantially reduce the climate Anaerobic digestion is an important Since bioenergy can be generated from benefit of bioenergy activity and carbon technology in dealing with organic energy crops and biomass residues, sink projects58. Importantly biomass waste and avoiding GHG emissions as well as organic wastes, there is feedstocks such as wood chips, pellets, that are associated with its disposal to considerable potential for new sources pyrolysis oil or biomethane can be landfill. The technology also enables of income along the whole value chain, traded globally and are likely to play an energy recovery, and the production of from cultivation to harvest, processing important role in the future development valuable fertilisers. Plants can be built and conversion into energy. This can of the sector. on many different scales, from large potentially benefit farmers and forest facilities that treat sewage, sludge or owners and support rural development. MSW, to smaller plants that deal with waste from a specific farm or a local community.

58 IEA Bioenergy - a Sustainable and Reliable Energy 57 E4Tech 2012 Source 2009

pAge 76 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 7.2 MArket groWth trends �

Current Situation Current markets are primarily domestic Future demand Bioenergy is one of the largest sources heat supply (e.g. pellet boilers), large- Future demand for bioenergy and of renewable energy today, accounting scale industrial and community CHP traditional biomass is project to reach for around 1,277 Mtoe in 2010, which generation (particularly where low 1,532 Mtoe by 2020 and 1,881 Mtoe by was a slight rise from a 2008 figure of cost feedstocks from forest residues, 2035. This 2035 total includes a 16% 1,059 Mtoe. This total includes a 15% municipal waste, etc. are available), share from industrial applications, 22% share from industrial applications, 9% and co-firing in large coal-based power from power applications, 11% from the from power applications, 5% from the plants. To date the deployment of transport sector, 8% from the buildings transport sector, 7% from the buildings dedicated electricity plants has been sector, 5% from other bioenergy sector, 6% from other bioenergy mainly confined to low cost feedstocks sectors, and a 37% share from the sectors, and a 59% share from the in relatively small-scale applications, traditional biomass sector. This equates traditional biomass sector. such as the use of biogas and landfill to the bioenergy sectors increase by gas from waste treatment. The majority of biomass used today around 650 Mtoe and a decrease of consists of fuel wood used in simple From 2000 to 2010, global electricity around 50Mtoe in traditional biomass. inefficient stoves for domestic heating generation from bioenergy grew by Figure 16 displays the relative split in and cooking in developing countries, 6.9% per year, with larger increases in world bioenergy and traditional biomass i.e. ‘traditional biomass’. In these the OECD than in non-OECD countries. use between 2010 and 2035. locations traditional biomass contributes The increase in absolute terms was an estimated 22% to the total primary more than five times that of solar energy mix, or around 753 Mtoe. This photovoltaic. By 2010, generation from use of biomass is expected to grow bioenergy reached 331 TWh globally, with increasing world population, but accounting for over 40% of global non- it is ultimately anticipated to decrease hydro renewables generation. to below today’s levels as populations Trade in biomass is global, particularly in China and India shift to using more for wood pellet being shipped from advanced bioenergy technologies. Canada to USA and Europe; from USA In developed countries, the total to Europe; and from Eastern Europe to contribution of bioenergy is only Western Europe. about 3% of total primary energy; mostly consisting of heat and power applications. Many countries have targets to significantly increase use of bioenergy, as it is seen as a key contributor to meeting energy and environmental policy objectives.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 77 FIGuRE 16 wORld BIOENERGy uSE By SECTOR aNd uSE OF TRadITIONal BIOMaSS IN ThE NEw POlICIES SCENaRIO, 2010 aNd 203559

2010 1 277 Mtoe Industry Power Transport Buildings Other 15% Traditional biomass

2035 59% 5% 1 881 Mtoe

6% 16%

37%

22%

5% 11% 8%

59 IEA World Energy Outlook 2012

pAge 78 PROFITING FROM SCIENCE WWW.MAtrix-ni.org • � Globally, the use of bioenergy in heat Electricity • � It is estimated that biomass heat in and industrial energy applications is industry and buildings could provide • � In 2035, 13% of the world’s expected to double by 2050. 0.7 Gt CO2e emission savings per renewables based electricity comes year by 2050 if feedstocks can be • � Global primary energy demand for from bioenergy. produced sustainably and used bioenergy is anticipated to increase • � Bioenergy generation is estimated efficiently. from 526 Mtoe in 2010 to nearly to increase to 1,487 TWh in 1,200 Mtoe in 2035. This represents Over the next two decades, 2035. It is estimated that by 2050 an average rate of 3.3% per year. enhanced research, development and bioenergy could provide 3,000 TWh demonstration (R,D&D) will bring new • � The industrial sector is the largest of electricity, or 7.5% of global technologies such as small-scale, high consumer of bioenergy in 2010 at electricity generation. efficiency conversion technologies to 196 Mtoe, increasing to over 300 • � Large-scale (>50 MW) biomass the market. Global investment required Mtoe in 2035. Whereas, the power power plants will be important to in bioenergy electricity generation sector accounts for a larger share of achieving these estimations, as they plants is estimated at $290 billion bioenergy consumption in 2035. allow for electricity generation at between 2012 and 2030, and a further • � The power sector sees the largest high efficiencies and relatively low $200 billion between 2031 and 2050. increase in share of demand over costs. Co-firing biomass in coal- Investments in bioenergy heating this period, increasing from a 9% fired plants provides an opportunity installations in industry and buildings share of total bioenergy to 22% for short term and direct reduction are also required. Furthermore, share, or once traditional biomass of emissions, avoiding the “carbon global expenditures on feedstocks has been excluded its share of lock-in effect”. are estimated to reach $7-14 trillion bioenergy increases from 21% to between 2012 and 2050; depending • � It is estimated that bioenergy 35% in 2035. This equates to an heavily on feedstock prices. electricity generation could provide increase in Mtoe from about 115 in 1.3 Gt CO2e emission savings per 2010 to over 400 in 2035. year by 2050. • � Together, these two sectors account heat for about two-thirds of the additional consumption of bioenergy, or more • � Global bioenergy use, for heat than an additional 400 Mtoe. production is estimated to increase from 294 Mtoe in 2010 to 480 Mtoe • � The use of traditional biomass in 203560. declines over time as access to modern fuels increases around • � Industrial demand is assumed to the world. Traditional biomass maintain its share of about two-thirds accounted for 751 Mtoe in 2010 of total bioenergy demand for heat and is estimated to decrease to 687 between 2010 and 2035. Mtoe by 2035. • � Opportunities to expand bioenergy for heat production in non-OECD countries are larger than in the OECD due to the anticipated rapid energy demand growth.

60 IEA Technology Roadmap Bioenergy for Heat and Power

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 79 7.3 geogrAphiC VAriAtions in deMAnd And groWth

In several emerging and industrialised strong growth rates for bioenergy and resulting lack of competitiveness of countries (such as Brazil, Canada, electricity and commercial heat over bioenergy with other energy sources. China, EU, South Africa, and USA), the last decade. In some countries Figure 17 shows the current split in policies are an important drivers for the this growth has recently slowed, due global primary bioenergy supply. development of bioenergy for heat and to constrained government support in power. Some regions have experienced combination with rising feedstock costs

FIGuRE 17 GlOBal FEEdSTOCk SuPPly FOR BIOENERGy aNd TRadITIONal BIOMaSS61

60 1 400 Other developing Asia 1 200 50 China

1 000 Central and South America 40 800 Africa and Middle East

EJ 30 Mtoe 600 Eastern and Europe FSU 20 400 OECD Asia Oceania

10 OECD Europe 200

0 OECD Americas 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

61 IEA Technology Roadmap Bioenergy for Heat and Power

pAge 80 PROFITING FROM SCIENCE WWW.MAtrix-ni.org Primary energy demand for bioenergy to a large increase in the international Bioenergy is anticipated to contribute is largest in the European Union. It supply. These levels of supply are an increasing share of global electricity is estimated to increase from 130 dependent on the development of generation, rising to about 7% by 2050, Mtoe in 2010 to about 230 Mtoe by energy crops both in the UK and abroad and accounting for an estimated 3000 2035, with industrial and residential as well as the import of significant TWh. Currently, the EU, USA, Brazil heat accounting for nearly half of this quantities of biomass to the UK62. and Japan generate the most electricity demand. USA’s demand is second from bioenergy. China is anticipated to Demand for traditional biomass is highest, reaching around 210 Mtoe surpass the other regions, generating estimated to increase to around 300 by 2035. Brazil is anticipated to see 325 TWh by 2035. USA and the EU are Mtoe in 2035 in Africa. In China, significant demand in biofuels and anticipated to generate 259 TWh and traditional biomass demand drops from demand for bioenergy in China and 272 TWh from bioenergy respectively 200 Mtoe in 2008 to an estimated India is likely to increase as populations by 2035, and India is anticipated to be 120 Mtoe in 2035, as a large number switch from traditional biomass. the only other region generating more of households switch to conventional than 100 TWh. Figure 18 shows the It is estimated that by 2020, the UK stoves or modern biomass, such as projected split in bioenergy electricity could have sufficient access to global biogas, for cooking. Traditional use of generation by region up to 2050. biomass feedstock to supply 20% of biomass is also estimated to fall in India, primary energy demand. UK feedstocks from 128 Mtoe in 2010 to about 120 are anticipated to provide about one- Mtoe in 2008. third of this supply. By 2030 this is anticipated to decrease to 10% due

FIGuRE 18 62 BIOENERGy ElECTRICITy GENERaTION By REGION63

3500 10% Africa and Middle East 9% 3000 Central and South America 8% Other developing Asia 2500 7%

6% China 2000 5% Eastern Europe and FSU TWh 1500 4% OECD Asia Oceania 1000 3% OECD Europe 2% 500 OECD Americas 1%

0 0% Share of global generation 2009 2015 2020 2025 2030 2035 2040 2045 2050

62 http://www.decc.gov.uk/assets/decc/what%20we%20do/uk%20energy%20supply/energy%20mix/renewable%20energy/policy/1464-aea-2010-uk-and-global-bioenergy- report.pdf

63 IEA Technology Roadmap Bioenergy for Heat and Power

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 81 7.4 CritiCAl suCCess FACtors For MArket deVelopMent �

Institutional Factors • � Introducing internationally agreed Technical & Supply Chain Bioenergy policy needs to be designed sustainability criteria, indicators and development Needs66,67 so that it is consistent with meeting assessment methods for bioenergy Specific technology challenges that environmental and social objectives. that provide the basis for land use need to be addressed include: Bioenergy needs to be regulated and management schemes; so that these issues are taken into • � Expand international R,D&D • � Support needs to be directed at consideration and the environmental collaboration, making best use of developing cost-effective bioenergy services provided by bioenergy systems national competencies, including routes and at deploying larger are justly recognised64. Key factors best practices for bioenergy quantities of biomass feedstocks to be considered in this process are: production; from sustainable sources; accounting emissions including lost • � Replace 100 million traditional CO2 absorption capacity, competition • � Policies should take into account biomass stoves with efficient with food land, and the biodiversity of the development stage of specific stoves through developing low- bioenergy feedstocks. bioenergy technologies, and provide cost, efficient biomass stoves, incentives consistent with its specific Specific institutional factors that need to and establish viable supply chains barriers; be addressed include: for advanced biomass stoves and • � Access to markets is a critical household biogas systems; • � Creating a stable, long-term factor for bioenergy technologies. bioenergy policy framework to • � Increase bioenergy production Policies must recognise grid access, increase investor confidence and based on low-risk feedstocks such and standardisation of feedstocks. allow for private sector investments as wastes and residues, and through This may include introducing in the sustainable expansion of yield improvements; internationally aligned technical bioenergy production; standards for biomass to help • � Increase biomass’ use as a co- • � Coordination amongst policies overcome trade barriers and tap new product through integration of and other government actions, as feedstock sources; bioenergy production in biorefineries; well as working with industry and • � The public must be informed • � Develop ‘off the shelf’ plant other stakeholders to establish a and confident that bioenergy design to reduce capital costs and framework conducive to investment is environmentally and socially increase average energy generation in bioenergy; beneficial and does not result in efficiencies in new plants; • � Account for the influence of other significant negative environmental • � Support the installation of pilot and policy areas, including forestry, and social trade-offs.65 demonstration projects and their agriculture, environment, transport, supply chains. health and trade; • � Introducing efficient support mechanisms that address the specific issues of bioenergy use in electricity and heat markets;

66 IEA Technology Roadmap Bioenergy for Heat and Power

64 IEA Bioenergy - a Sustainable and Reliable Energy 65 IEA Bioenergy - a Sustainable and Reliable Energy 67 IEA Technology Roadmap Bioenergy for Heat and Source 2009 Source 2009 Power

pAge 82 PROFITING FROM SCIENCE WWW.MAtrix-ni.org Specific supply chain challenges that key Emerging Technologies need to be addressed include: Bioenergy is a very diverse sector with • Develop technologies at appropriate multiple technologies and process scales and with appropriate supply feeding many different end users with chains to meet different application heat, electricity (and transport fuel). requirements; In order to ensure technologies are efficient and that the most appropriate • Adopt sound sustainability and sustainable feedstocks are being certification schemes for biomass; used, technological advances will be • Improved coordination between required. Specifically these will be government departments and seen in as second and third generation agencies that are involved in bioenergy processes are further the supply chain of bioenergy developed. Examples include: feedstocks, technologies or Development of biomass conversion processes; • to biomethane for injection into the • Increase research efforts on natural gas grid to exploit existing development of bioenergy investments in gas infrastructure and feedstocks and land suitability provide flexible electricity. mapping to identify the most Development of advanced bioenergy promising feedstock types and • technologies such as a commercial- locations for future scaling up; scale torrefaction and pyrolysis • Risk mitigation strategies already plants; common in food and energy markets Development of a commercial scale include having a larger, more fluid, • biosynthetic natural gas and biomass global biomass sector and the integrated gasification combined creation of buffer stocks; cycle (BIGCC) plants; • Reduce tariffs and other trade Development of solutions to barriers and adopt international • integrate bioenergy plants with the technical standards to promote local energy supply network so as to biomass trade; operate as part of the ‘smart grid’; • Improve biomass potential analysis Development of ‘packaged’ with better regional and economic • technologies, with associated ‘smart’ data, including from large-scale intelligence. energy crop field trials; • Establish biomass feedstock hubs to develop local feedstock supply chain networks.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 83 7.5 the CoMpetitiVe lAndsCApe �

The growth in demand of bioenergy for Greater use of organic waste and electricity and heat generation is driven agricultural and forestry residues could largely by government policy. Where a help mitigate land and water demand carbon price is established, bioenergy and reduce competition with food. The power generation technologies are development of second generation likely to become competitive with biofuel technologies could lead to fossil fuel-based power plants by competition for biomass resources 2035, particularly combined heat and between bioenergy applications, and power, co-firing with coal and waste to potentially with other industry sectors. energy. Renewable energy standards Support needs to be directed at and support subsidies are also likely developing cost-effective bioenergy to contribute to the competitiveness routes and at deploying larger quantities and therefore growth in the demand for of biomass feedstocks from sustainable bioenergy. sources. Bioenergy developers and owners are often locally based organisations that use specialist knowledge of the local market to integrate the most appropriate bioenergy technology into the energy mix. This creates a highly fragmented market with few sector-wide dominant companies. Instead there are multiple niches occupied by local market players. However, it is bioenergy feedstocks that are likely to see the most competition. Biomass is grown on land that often can also be used for farming, and biomass exports, such as wood chip from Norway, can be exported globally. Furthermore, feedstock supply security can be affected by natural variations in biomass outputs and by supply-demand imbalances in the food and forest product sectors; impacts that are not straightforward to predict68.

68 IEA Bioenergy - a Sustainable and Reliable Energy Source 2009

pAge 84 PROFITING FROM SCIENCE WWW.MAtrix-ni.org integrAted building teChnologies 8 8.1 segMent deFinition

This sector incorporates: • Energy efficiency technologies – building fabric, heating and ventilation technologies, lighting and appliances; • Building scale renewable heat and electricity generation technologies – solar thermal, heat pumps, solar PV and micro-CHP (buildings scale biomass is covered under bioenergy); There is strong cross-over between this sector and intelligent energy systems in relation to • Effecting changes in consumer behaviour (via information provided from smart meters and in-house displays); • Potential contribution of buildings to demand response, both manually controlled and automatic; • Smart monitoring and control required for integration of energy networks within the built environment. Note that anaerobic digestion is covered under Bioenergy. Domestic scale wind (<50 kW) is generally not discussed within broad-based future scenarios, and has therefore been excluded here.

pAge 86 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 8.2 MArket groWth trends �

Current Situation cooling (3.5%), water heating (21%), (electricity, gas, oil, biomass and waste, Buildings currently account for cooking (22%), lighting (6%), and and commercial heat) and distribution approximately 32% of global energy use appliances/other equipment (15%). methods, and varying significantly (approximately 2910 Mtoe in 2010)69, Energy supply to the sector is highly between the domestic and commercial consisting of space heating (32%) and complex, incorporating a range of fuels sub-sectors, and between regions.

Figure 1969 energy use in buildings70

4% 6%

Space heating 15% 32% Water heating

Cooking

Appliances

Lighting 22% Space cooling 21%

69 IEA, World Energy Outlook, 2012, P552

70 IEA, World Energy Outlook, 2012

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 87 In the residential sector (75% of energy In addition, the viability of different In some countries (China and Israel for consumption in buildings), electricity solutions is highly dependent on example), solar water heaters are now and natural gas are the predominant local physical characteristics, energy mainstream technologies, with markets fuels used in OECD regions, followed resources and raw materials: including continuing to expand without subsidy. by oil (Asia Oceania in particular) and insolation, wind, seasonal climate Other significant markets are in US, biomass. In non-OECD countries, patterns, fuel availability, and building Canada and Europe. biomass and waste (including traditional materials. There is less readily available wood and dung burning, see Bioenergy) Technologies to reduce new build information on the heat pump market. remain the predominant source of energy consumption to 10% of typical Worldwide, there is an estimated 800 energy. District heating is particularly designs are well established and can million installed heat pumps, with 1 prevalent in non-OECD Europe and be net zero-energy or even net positive million ground source heat pumps Eurasia. energy contributors (Passive Haus installed in Europe (12.5 GW) by 2010. All regions have exhibited significant designs) if on-site distributed generation However European sales declined growth in use of electricity in buildings, is used. However, although the numbers considerably between 2008 and 2010, with electricity accounting for 12% of Passive Haus design new build are potentially on account of a sceptical of energy consumption in 2009, and believed to be increasing, there is little public attitude towards the technology, contributing approximately 11% to the actual data on global implementation. as well as the economic downturn.72 increase in building energy use over the In terms of retrofitting energy efficiency Cooling abatement technologies last 10 years. This has been associated measures, many of the technologies and have been neglected to date since with the entry of larger appliances supply chains are mature (loft, cavity, current demand is relatively low (with into emerging economies and the floor insulation, advanced glazing), for example only 1000 solar cooling significant global rise in use of personal but there is room for technology installations worldwide in 2011), but electronics (TVs, computers etc), and development for solid wall insulation, global income growth and urbanisation has counteracted the improved energy in particular, to meet standards set could drastically change this. efficiency of many appliances (e.g. by novel aerogel materials, to reduce refrigerators). The commercial sector It is widely accepted that current embodied carbon, and to reduce is increasingly reliant on electricity as a installed capacity of renewable heating costs of installation.71 Innovations fuel source. and cooling technologies, is very limited made in SWI, however, tend to be compared with potential.73 Technological solutions to reduce directed at the local building stock and carbon emissions from the sector compliance with local regulations, and Residential (<20 kW) and commercial involve a combination of reducing transfer of these developments to other scale PV(20 kW - 1 MW) forms demand (energy efficiency), increasing jurisdictions is likely to require additional approximately 60% of the whole PV the renewable proportion of supply, trials and modification. market, with an installed capacity (2012) and the interaction between the of 18 GW. Extremely rapid expansion in The use of renewables within the implementation of these technologies. solar power was experienced between sector (solar thermal, geothermal and For example, the combination of efficient 2010 and 2012 (led by Germany and solar PV) has increased steadily in buildings (low energy demand/sqm) Italy), due to falling costs and generous recent years, with global installed solar with decarbonised electricity supply, government incentives, leading to thermal system capacity, rising from allows installation of efficient systems oversupply. There is currently a portfolio approximately 100 GW in 2005 to 200 for heating and cooling, primarily via of technologies with wide ranging GW in 2010, and more than 50% of heat pumps. performance standards and costs.74 this accounted for by China.

72 IEA, Energy technology Perspectives, 2012, http:// www.iea.org/W/bookshop/add.aspx?id=425

73 http://www.ren21.net/Portals/97/documents/GSR/ GSR2012_low%20res_FINAL.pdf 71 GHk, In-depth Technology Innovation Assessment for Solid Wall Insulation, Final report to DECC, September 74 http://www.iea.org/publications/freepublications/ 2012. publication/pv_roadmap-1.pdf

pAge 88 PROFITING FROM SCIENCE WWW.MAtrix-ni.org Future demand • Number of households, which will New build increase by 88% (to >3 billion) by The data used in this section draws Deployment of building related energy 2050, as a result of fewer inhabitants from a number of scenario based efficiency and renewables is technically per house on average (as well as models, with particular regard paid to easier than in the retrofit market, but population growth). Growth will be two models: will be reliant on policies that mandate particularly high in China, India and minimum energy performance and • The IEA’s 2DS model,75 which other non-OECD countries – and encourage integration with other looks at technology options and these countries will dominate the sustainable policies for the urban policy pathways that ensure an new build market. environment (such as smart grids). 80% chance of limiting long-term • Rising incomes. Demand for global temperature increase to The market is anticipated to be heating and cooling technologies, 2°C. Within this framework, annual dominated by China (especially for in particular, is expected to rise improvements in energy intensity commercial buildings), India and other in developing world countries as must double, from 1.2% over the developing countries. incomes increase. Estimates of last 40 years to 2.4% in the coming cooling demand (and therefore Retrofit four decades. electricity) in ASEAN,77 Latin The deployment of suitable technologies • The IEA World Energy Outlook 2012 America, India and China is in this segment is highly dependent models, ‘Current Policies’ scenarios predicted to rise from 19 Mtoe on the characteristics of the existing and ‘Efficient World’ scenarios (see in 2010 to 38 Mtoe in 2020, and building: not all solutions are viable. Section 2 for more details). steadily to 139 Mtoe in 2050. The The natural rate of retrofit also varies increase is particularly marked in Energy demand from the building sector between different parts of the building, India and ASEAN. is predicted to increase from 2421 Mtoe for example, appliances tend to be (2010) to 3497 Mtoe by 2035, and There are therefore strong global drivers replaced much more frequently (10- 3821 Mtoe by 2050, even if all currently to decrease (and decarbonise) energy 15 years) than parts of the building planned policies are implemented. Key use in buildings, in order to: envelope (20-30 years). Deployment drivers for this growth are: will thus be highly dependent on • � Reduce carbon emissions; stringent energy efficiency targets and • Population growth to 9.3 billion (an • � Combat rising, volatile and uncertain viable incentives to encourage retrofit, increase of 35%) by 2050. This energy prices; in order to exceed the natural rate of will be associated with increased refurbishment. Costs for retrofit are urbanisation, with a projected 6.4 • � Increase energy security; highly dependent on labour (rather than billion (70%) living in cities by • � Reduce investment needed in energy technology) and are therefore unlikely to 2050 (up from 3.5 billion today). In supply. It has been calculated that decline over time. China alone, the number of urban every £1 spent on energy efficiency dwellers will double to 1.1 billion.76 The market is anticipated to be reduces the investment required in Urbanisation also influences growth dominated by OECD countries: in 2050, energy supply by £2.78 in the services (commercial) sector, 65% of the building stock will have which is expected to account for Market opportunities for technologies been built before 2012. (This contrasts 64% of the predicted overall growth that reduce energy use and carbon with 36-48% in non-OECD countries). in energy demand. emissions from this sector are typically Given that much of the building stock divided into: new build and retrofit; and was constructed before 1970, and has residential and commercial, each with a very high space heating demand, different drivers and solutions. retrofit offers particularly high abatement potential in OECD countries.

77 Association of Southeast Asian Nations: Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. 75 IEA, Energy technology Perspectives, 2012, http:// www.iea.org/W/bookshop/add.aspx?id=425 78 Institute for Building Efficiency, Johnson Controls, DRIVING TRANSFORMATION TO ENERGY EFFICIENT 76 IEA, Energy technology Perspectives, 2012, http:// BUILDINGS Policies and Actions: 2nd Edition Big www.iea.org/W/bookshop/add.aspx?id=425 Picture, June 2012

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 89 Results from scenario modelling It has been suggested that additional/ 2010 and 2035 (resulting in a further more stringent energy efficiency 1000 Mtoe reduction in demand in Buildings account for a significant policies (over and above those already 2035). Efficiencies are achieved through proportion of all potential energy planned) have the potential to reduce a combination of uptake of energy efficiency carbon emissions savings, the increase in global energy demand efficient electrical appliances, retrofitting with particular opportunities to realise from buildings from 1% a year (WEO in OECD countries and efficient new savings from electricity demand (see New Policies scenario) to 0.4% a year building in non-OECD countries. Figure 20). (Efficient World Scenario) between

Figure 20 energy sAVings in 2035 by Fuel And seCtor in the eFFiCient World sCenArio CoMpAred to the neW poliCies sCenArio, Weo 2012

Power Electricity and heat* Gas Coal

Transport Oil Bioenergy** Other renewables Industry

Buildings

0 200 400 600 800 1000 Mtoe

pAge 90 PROFITING FROM SCIENCE WWW.MAtrix-ni.org Principal actions required to achieve The uptake of renewable • Growth in micro, mini and fuel cell these stringent targets include the technologies (principally solar CHP, in particular in areas where following:79, 80 , 81 � thermal and heat pumps) is also power generation remains CO2 critical to achieving the ambitious intensive (i.e., there is electricity • � Early improvements in the thermal targets for emissions reduction. is not fully decarbonised). These envelope of buildings and other The following predictions assume technologies also contribute building shell enhancements – these a highly supportive regulatory significantly to grid balancing but are critical, not only for reducing environment:82 continue to occupy a relatively small energy demand, but also to allow proportion of the building heating downsizing of heating and cooling • � 2020-2030 substantial increase in and cooling market (5-7%). equipment. Technologies include low carbon heat deployment as key not only insulation (loft, wall, and technologies begin to reach the It is calculated that these activities floor) and glazing technologies, but mass market. Growth in heat pump would require global investment in also buildings incorporating passive market expected predominantly in heating and cooling equipment for cooling (e.g. evaporative or radiative OECD countries with, for example, a buildings to rise from £1195 bn (2010- cooling or natural ventilation), the sustained 28% growth rate for heat 2020), to £1694 bn (2020-2030) and ability to adapt to changes in season pumps in the EU, reaching delivery £3471 bn (2030-2050). via directional air flow, and/or of 38% of space heating demand by There is some uncertainty over the adaptive windows. 2050. In all OECD countries, growth sustainability of the recent rapid growth in heat pumps could reach 24 Mtoe • � Building energy management in solar PV (2010 to 2012) which led of energy demand in 2020, 57 Mtoe systems (automated controls for an oversupply of equipment. Continued in 2035 and 107 Mtoe in 2050. Heat HVAC, lighting and appliances) growth will depend to a large extent pumps are particularly suitable for incorporated in all OECD new build on uptake in China, but is estimated suburban and rural areas. from 2015 and non-OECD from to reach approximately 300 GW by 2020. • � Widespread use of solar energy for 2035.83 Africa and Latin America may hot water heating, space heating be important markets in the mid to long • � Early retrofit of cost effective energy and cooling, coupled with compact term. efficiency measures. By 2020 the thermal energy storage. Although cheaper measures, such as loft and Market Forecasts solar thermal technology is primarily cavity wall insulation are likely to be used for water heating today, In addition, early market forecasts are largely implemented in the developed the development of markets for available for energy efficiency, and world. Rollout will subsequently space heating and air conditioning heating and cooling technologies: continue of solid wall insulation, has begun in Germany, Austria alongside more complex incremental All residential: and Spain. Growth could enable improvements such as under floor deployment of 60 Mtoe in 2020, 143 • � Global market for energy efficiency insulation and double and triple Mtoe in 2035 and 240 Mtoe in 2050, homes (new build and retrofit), glazing. providing 14% of all building energy incorporating building envelope, • � Refurbishment of around 210 million demand for hot water and heating lighting, HVAC and major residential dwellings in the OECD (but predominantly hot water), and appliances, water heating, energy between 2010 and 2050. 17% of energy demand for cooling audits and soft costs is expected by 2050. to grow from £8.7 billion in 2012 to almost £53 billion by 2020.84

79 IEA, Energy technology Perspectives, 2012, http:// www.iea.org/W/bookshop/add.aspx?id=425

80 DECC The Future of Heating: A strategic framework 83 � IEA, WEO 2012 for low carbon heat in the UK, March 2012 84 https://www.pikeresearch.com/wordpress/wp- 81 http://www.iea.org/publications/freepublications/ 82 IEA, Energy technology Perspectives, 2012, http:// content/uploads/2012/05/EEH-12-Executive-Summary. publication/pv_roadmap-1.pdf www.iea.org/W/bookshop/add.aspx?id=425 pdf

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 91 New build commercial: This market evaluation includes: building envelope, water management, controls, • � The global market for energy lighting, ESCo, solar, commissioning efficiency buildings (non-residential): and HVAC. Once again revenue is encompassing ESCo revenues, dominated by ESCos (50%), followed sales of energy efficient HVAC by HVAC, lighting, and building equipment, and sales of energy envelope. efficient lighting systems is expected to grow from £42.3 billion in 2011 Services: to £64 billion in 2017, (CAGR of • Spending on Smart Building 7%). The market is dominated by Managed Services (encompassing the US, France, Germany, UK and smart building data acquisition and China (>75%) with growth in China analytics and building maintenance (supported by a strong endorsement contracts) is expected to grow more in the 12th (2011-2015) 5 year than triple from £181 million in 2012 plan), expected to be higher than to £700 million by 2020.88 average (9%). ESCo revenues form the greatest proportion of the total through long term engagement with consumers (with revenues doubling from £18.8 bn in 2011 to £41.0 bn in 2017, a CAGR of 14%).85 Growth is expected in all technology types (in particular HVAC systems which will expand from £1.9bn to £4bn), with the exception of lighting where increased penetration of LED will reduce replacement frequency.86 However, a renewed market for lighting is expected 2025-30 as current products wear out and are replaced by new innovations. Retrofit commercial: • � The global market for energy efficiency retrofits in commercial buildings is expected to grow from £50 billion in 2011 to £94.7 billion by 2020 (CAGR of 7.3%).87 The market is again dominated by Europe, Asia Pacific and N. America, although market share will change over the next 9 years (Europe: 41% to 37%; Asia Pacific: 32% to 36%; N. America 21% to 23%). The largest market sub-sector is currently offices, followed by retail and education.

85 http://www.thegreenitreview.com/2011/12/market- for-energy-efficient-building.html

86 Pike Research, Energy Efficiency Buildings Global Outlook, 4Q 2011.

87 http://www.businesswire.com/news/ 88 https://www.pikeresearch.com/wordpress/wp- home/20120709005497/en/Market-Energy-Efficiency- content/uploads/2012/08/SBMS-12-Executive-Summary. Retrofits-Commercial-Buildings-Double pdf

pAge 92 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 8.3 geogrAphiC VAriAtions in deMAnd And groWth �

As described above, many non- risk of ‘lock in’ of inefficiencies if East, Africa and Latin America) in the OECD countries are expected to build innovation is not achieved). This is residential sector. extensively in the next 40 years, with an particularly the case for ‘other non- associated potential for construction of OECD’ countries (i.e. non-OECD Asia highly efficient buildings (and converse (excluding China and India), Middle

FIGuRE 21 GROwTh IN NuMBER OF hOuSEhOldS, 2009 TO 205089

1600

1400 Brazil 1200 OECD Asia Oceania OECD Americas 1000 OECD Europe

800 India China

Million Households 600 Other nonOECD

400

200

0 2009 2050

89 Data from IEA Energy Technology Perspectives, 2012, p471.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 93 Growth in commercial floor space in Commercial new build is also expected this is proceeding slowly and offers developing Asia (China in particular) is to continue steady growth in the substantial opportunity over the next 10 marked between about 2015 and 2030, developed world. years. occurring somewhat later in other non- In OECD countries, retrofit is critical OECD countries. for achieving emissions reduction, but

Figure 22 � groWth in CoMMerCiAl Floor AreA, 2009 to 205090 �

Brazil

18000 India

OECD Asia Oceania 16000 Other nonOECD

14000 OECD Europe 2 OECD Americas 12000 China

10000

8000

6000 Commercial floor area million m 4000

2000

0 2009 2015 2030 2050

90 Data from IEA Energy Technology Perspectives, 2012, p471.

pAge 94 PROFITING FROM SCIENCE WWW.MAtrix-ni.org The retrofit market is dependent on targeted policies and incentives (see below). Europe is leading the way with the implementation of the Energy Performance in Buildings Directive and Energy Efficiency Action Plan, which will ensure that member states implement appropriate measures. In the UK, the Government has put a number of relevant strategies and incentives in place, culminating in the recent Energy Efficiency Strategy (Nov 2012), which reinforces the Government’s commitment to the sector. Energy efficiency of the existing housing stock will be addressed via Government support schemes, the Green Deal and Energy Company Obligation. Energy efficient new build is being driven by the (non-mandatory) Code for Sustainable Homes (a national set of standards) and the Zero Carbon Home target which aims for all new build to meet Code 6 (maximum efficiency) standards by 2016. The Government is also leading the way in providing a strong vision for increase in deployment of renewable heat technologies, driven by the 10% renewable heat target for 2020 and underpinned by the Renewable Heat Incentive (RHI). This is strongly supportive of an increase in electrified heat, coupled with the use of heat pumps and building scale energy storage technologies. The recent Heat Strategy91 also endorses district heating where appropriate.

91 DECC, The future of heating: A strategic framework for low carbon heat, 2012, http://www.decc.gov.uk/ en/content/cms/meeting_energy/heat_strategy/heat_ strategy.aspx#

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 95 8.4 CritiCAl suCCess FACtors For MArket deVelopMent �

As described above, mature energy collaboration and agreement on educate end users in optimal use of efficient and renewable technologies standards. new technologies (e.g. managing are available that can have a significant thermal comfort with heat pumps/ o � This support also needs to impact on carbon emissions from the underfloor heating). ensure that the rate of retrofit building sector. However, there are is increased and that energy Technical and supply chain a number of critical actions that are efficiency is prioritised as development needs required in order to ensure deployment refurbishment projects are and continued innovation in the sector. • � There is an overarching requirement designed for integrated planning at multiple o � Policies to support low-carbon levels (network, community, Institutional Factors heating and cooling technologies individual buildings) to successfully are lagging behind. Progress optimise use of energy efficiency • � Successful deployment of energy has been made over the past and low carbon heating and cooling efficiency, and renewable heating five years, led by the European within the built environment. For and cooling, technologies is highly Union, primarily using capital cost example, peaks in electricity use dependent on the implementation of subsidies, tax incentives and soft by heat pumps can be mitigated by appropriate policies and incentives: loans. Other countries are likely smart controls, ancillary storage and o � Improvements in new to follow suit, but policy design supplementary technologies; whilst build can be governed by is particularly challenging as a advanced building materials (e.g. mandatory building regulations, result of the distributed nature of phase change materials) can ensure incorporating minimum energy heat generation and the highly a flatter operational profile. performance standards, but at fragmented market. • � Customised solutions are often present only European Union • � Early engagement with new build needed to accommodate the countries, China, Tunisia markets is essential to avoid complexity of the built environment, and 22/50 USA states have continued ‘locking in’ of inefficient with multi-faceted, interconnected mandatory regulations in place. technologies. uses of energy. This may be o � The retrofit market requires exacerbated by a lack of skilled • � Development of innovative incentives support for upfront costs, and technicians, which reduces public and mandatory targets are required minimum energy performance trust in the market place. It also in order to overcome the common standards and labels, to means that transferring R&D tenant/landlord split between ensure continued efficiency between regions is challenging. responsibility for the capital costs of appliances and equipment. of retrofit and payback via reduced Significant progress has been energy bills. made in standards and labelling of appliances in a number of • � Public awareness raising in order to countries, including China, India counter current negative perceptions and the EU. However, more work of some technologies (e.g. heat needs to be done to move the pumps), which can counter that fact focus from components (e.g. that many available technologies are chillers) to the operational units, already cost-effective over their life and to improve international cycle. There is also a need to

pAge 96 PROFITING FROM SCIENCE WWW.MAtrix-ni.org Specific technology challenges that Specific supply chain challenges that key Emerging Technologies need to be addressed are primarily need to be addressed include: Technical advances are critical for associated with increased performance • � Upskilling of the design and installer market success. Although solar thermal and reduced costs. For example: base. The complexity of the built and heat pump technologies are environment requires an integrated already commercially available, there approach that combines many is considerable potential for enhanced • � Energy efficiency: traditional divisions: building design, deployment and improvements in • � Reduced cost and increased power supply, heating requirements system cost and efficiency. This performance of SWI, potentially etc. New skills are needed to includes use of new materials to reduce via integration of phase change ensure a holistic approach, plus an cost and improve efficiency: materials; understanding of new technologies; • Advanced SWI, including aerogel • � Improved lighting (e.g. via solid state • � Development of standardised materials, commercial from 2020. lighting) and appliance efficiencies. methodologies for measuring and • Integration of solar thermal collectors reporting energy consumption • � Micro-renewables: into building shells, to improve and CO2 emissions reduction efficiency, and overcome limitations • � Increased coefficient of performance associated with renewable heating of roof space.92 Commercially of heat pumps to improve cost and cooling technologies, together available from 2020.93 effectiveness and reduce system with internationally acceptable size. Potential for 20% improvement certification schemes for equipment • Development of cooling by 2020; and installers; technologies, including high temperature collectors, development • � Solar thermal integration into • Ensuring economies of scale of new sorption materials, new the building envelope and new through innovative approaches to material coatings for heat exchange technologies that span the gap the retrofit market to counter its surfaces, and new heat and mass between current low-temperature fragmented nature, for example transfer systems. Anticipated and high temperature collectors; through involvement of regionally- demonstration 2015-2020; large based public sector organisations • � Cost reduction in small scale scale deployment from 2030. (e.g. Local Authority’s involvement in solar PV, e.g. via integrated micro- Absorption cooling, uses heat UK Green Deal). inverters; energy to expands and compress a • � Understanding and modelling the fluid in a thermodynamic cycle. interaction between complementary • Building scale compact thermal technologies within individual storage for integration with buildings and within the built renewable heating and cooling environment, and the addition of technologies to allow balancing building scale compact heat storage of supply and demand, potentially for electrical load shifting. over long periods (seasons). Potential demonstration 2020-2025, commercialisation 2030. Compact thermal storage can take the form of: Sensible heat – most commonly hot water tanks. This technology is

92 In China, for example, there is enormous potential for the development of solar space heating, but technological challenges exist in applying this to high-rise buildings in urban areas.

93 IEA, Solar Cooling and Heating Roadmap, 2012, unless otherwise stated.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 97 widely available and mostly mature; Latent heat – uses the phase change properties of materials to provide higher storage densities. Technologies are commercially available for low temperature storage in buildings but have not yet been trialled as containers for integration with heating technologies for electrical load balancing; sorption heat storage – allows potentially four times more storage density than heat storage in water through water vapour uptake by a solid (adsorption) or liquid (absorption) material; thermochemical heat storage – currently under early development using salts in anhydrous and hydrated forms. The technology potentially allows 8-10 times greater storage densities than hot water. Both thermochemical and sorption methods store heat at high temperatures, and their potential within applications that require low grade heat is uncertain. • Hybrid technologies, such as solar thermal/PV collectors to make optimal use of roof space (potentially available from 2020); solar assisted heat pumps and solar assisted biomass boilers. • Smart controls for heating and cooling and to enable technology integration. • Concentrating solar photovoltaics, advanced inorganic thin film technologies, organic solar cells. • Micro-turbine and fuel cell CHP (overall market believed to remain small).

pAge 98 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 8.5 the CoMpetitiVe lAndsCApe �

The buildings sector has a relatively companies entering the market (IBM well developed and mature supply and HP) and a few smaller, independent chain, but one that, by its nature, is companies (Ecova, Pacific Controls) highly fragmented. It also involves a competing through innovative client large number of speciality technology relationships.94 suppliers, installers and manufacturers, In terms of new build and commercial as well as larger Tier 1 building retrofit, again large (often multinational) contractors, consulting engineers and companies are often the primary ESCos. There is a tendency towards contractors. These companies will vertical integration where possible (as subsequently sub-contract to local currently seen in the German SWI installers (providing significant manufacturers) to ensure economies opportunities for those trained in of scale, and security of supply. This cleantech technologies), and equipment has the negative effect, however, of suppliers. reducing choice of materials amongst installers. Some developers will also employ independent architects and project managers who can provide an overarching vision for the sustainable aspect of the project. Equipment is predominantly sourced from well know suppliers and distributors who can maintain low costs through economies of scale, and/or provide acceptable guarantees and standards. From the market perspective, a significant proportion of revenue is incurred by the energy service companies (ESCos) who are responsible for a range of building services, potentially including procurement, ownership and operation of fuel and technologies to produce heat and power for the building(s). Leading ESCos are often large multinationals such as Schneider Electric, Johnson Controls, Honeywell Building Solutions, Danfoss Group and Siemens Building Technologies, with some large IT

94 http://www.pikeresearch.com/research/smart- building-managed-services

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 99 intelligent energy systeMs 9 9.1 segMent deFinition

For the purpose of this report, Intelligent energy systems incorporate a Table 3 below shows the differences ‘Intelligent Energy Systems’ wide range of technologies that enable between the tradition ‘top down’ power encompasses generation, transmission close monitoring and management (via system architecture, and the intelligent and distribution elements of what digital communications) of the ‘transport system: has become known widely as the of electricity from all generation sources ‘smart grid’, plus energy storage. to meet the varying electricity demands Predominantly consumer-side of end-users’. 95 This allows optimal use technologies (such as advanced of existing infrastructure, minimising metering) and transport related costs, and increasing resilience and technologies (EV charging) are not stability. In particular, the flexibility of included. the intelligent system allows increased penetration of intermittent generation. tAble 3 diFFerenCes betWeen existing And intelligent systeMs9596

Existing system Intelligent system Central generation Distributed & central generation Mainly dispatchable generation Accommodates poorly dispatchable generation Passive consumers Active consumption (automatic / behavioural change) Little dispatchability of demand Dispatchable demand (DSR) Passive networks Active networks (with communication) Power flows (downward only) Power and data flows (multidirectional) High redundancy (additional cost) Intelligent use of assets (cost savings, resilience) Utility companies (vertically integrated) Aggregators (ESCos, MUSCos96, etc)

The elements that are covered under generation integration: automated reduce system losses (e.g. high- this report are: control of generation and demand temperature superconductors); to support grid balancing issues • Wide area monitoring and control: • Distribution grid management: a that arise from intermittent and real-time monitoring of equipment range of technologies designed to unpredictable generation, together and performance over large areas sense and remotely repair faults with energy storage to decouple to optimise performance and reduce and to control system response to supply and demand; the impact of disturbances; distributed generation. • Transmission enhancement • Information and communications Examples of the hardware and software applications: a range of technologies technology: the underlying technologies associated with these that help to optimise the efficiency communications infrastructure that categories are given in Table 4 opposite. and controllability of power transfer enables two-way data transmission (e.g. FACTS and HVDC); measure between supply and demand side; network carrying capacity in real • Renewable and distributed time (e.g. dynamic line rating); and

95 IEA, Technology Roadmap, Smart Grids, 2011, http://www.iea.org/publications/freepublications/publication/smartgrids_roadmap.pdf.

96 Multi-utility service companies

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 101 tAble 4 exAMple hArdWAre And soFtWAre teChnologies97

Examples Generation Transmission distribution Hardware wide-area monitoring and control Phasor measurement units and other sensor equipment Software Supervisory control and data acquisition (SCADA), wide-area monitoring systems (WAMS), wide-area adaptive protection, control and automation (WAAPCA), wide area situational awareness (WASA) Hardware Information and communications technology integration Communications equipment (power line carrier, RF mesh, WIMAX), routers, relays, switches etc. Software Enterprise resource planning software, customer information systems Renewable and distributed generation integration Hardware Power conditioning equipment, communication and control hardware for generation and energy storage technologies Software Energy management system, distribution management system, SCADA, Geographic Information System (GIS) Hardware Transmission enhancement High-temp superconductors, high voltage DC (HVDC), Flexible AC transmission systems (FACTS) Software Stability analysis and recovery systems Hardware distribution grid management Switches and capacitors, transformer sensors, remote controlled distributed generation and electricity storage, cross- sectoral energy storage (heat, mobility) Software Distribution management system, outage management system, GIS

Energy Storage into many formats (e.g. chemical, increasingly inefficient reconversion mechanical, electrochemical, kinetic, at timescales > a few minutes) and Energy storage is generally considered thermal, etc) for storage. It should be energy storage in which the energy is to be one of the crucial enablers for noted, however, that there is a clear subsequently used in its stored form. balancing supply and demand as distinction between electricity storage, This might be in the form of heat, via an increasing quantities of intermittent in which the stored energy is returned electric vehicle’s battery or as hydrogen generation are added to the grid. to the grid as electricity (involving fuel. Electrical energy may be converted

97 Adapted from IEA Technology Roadmap, Smart Grids 2011.

pAge 102 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 9.2 MArket groWth trends �

Current Situation • � China’s current 5 year plan technologies,100 although their The number of intelligent infrastructure incorporates an estimated integration into fully functioning systems projects around the world is £400 billion investment in smart is not well developed. growing rapidly although, to date, infrastructure technologies (including Technological developments in most the vast majority of these have been demand side), driven primarily by other areas are proceeding rapidly, demonstration projects at relatively small the anticipated massive increase in although it has been suggested that, scale. electricity demand and commitment globally, R&D into the integration of to wind power. The UK is considered one of the leaders distributed renewable generation has in intelligent infrastructure with, for • � Australia’s National Energy Efficiency been hampered by political nervousness example, Ofgem’s £500 million Low Strategy Document (2009), entitled associated with a reliance on Carbon Networks Fund, which provides ‘Smart Grid, Smart City A new intermittent generation.101 Nevertheless, funding for regional DNOs to trial direction for a new energy era’98, the growing appreciation that an improved distribution grid management presented the business case for a intelligent power system is the only way systems. Other international £65 million investment to develop to enable the substantial targets for programmes of note include the a commercial-scale smart grid renewable generation is resulting in this following: demonstration project. area becoming increasingly prioritised. • � The US Government’s energy • � Within Europe, Italy has led the In Europe, EEGI102 Member states are strategy has a strong focus on way in smart grid implementation running a nine year R&D program that intelligent energy systems. This through the installation of 33 million covers intelligent infrastructure from was confirmed with £2.8 billion of meters and automation of 100,000 distribution networks to the consumer.103 matched stimulus funding for smart distribution substation by ENEL Good progress is being made in grid investments under the American Distribuzione S.p.A (project began understanding voltage control concepts Recovery and Reinvestment Act in 2001). The project resulted in a to maximize the medium-voltage (2009), which created a rapid reduction in service interruptions and network distributed generation hosting increase in the number of trials and it has been estimated that the £1.7 capacity as well as loss reduction in MV implementation projects; billion investment led to cost savings networks. More work is needed around of more than £400 million per year.99 prediction tools and intelligent planning • � In South Korea, the Government has of DER integration, with a future focus a stated intent to implement a ‘smart Overall, there has been an early on interoperability, scalability and grid’ by 2030, and has emphasised emphasis on the consumer-side of transferability to allow rapid rollout. the anticipated benefits from IP the system (i.e. advanced metering development and technology export. infrastructure), as well as on Fewer projects within this group have A £40.5 million pilot programme was ICT integration and transmission been focussed on low voltage networks. launched on Jeju Island, consisting enhancement applications. With Those that exist are concentrating on of a fully integrated smart grid the exception of high temperature voltage control concepts and local system for 6,000 households, wind superconductors (transmission), these balancing in response to distributed farms and four distribution lines. are now considered individually to generation (primarily PV), but in general, consist primarily of mature it is suggested that there is a lack of understanding of the behaviour of low

100 IEA, Technology Roadmap, Smart Grids, 2011, http://www.iea.org/publications/freepublications/ publication/smartgrids_roadmap.pdf.

101 http://www.pikeresearch.com/wordpress/wp- content/uploads/2012/05/SGRI-12-Executive-Summary. pdf.

102 European Electricity Grid Initiative (EEGI) is an industrial initiative under the European Strategic Energy Technology Plan (SET-Plan) and aims to enable the 98 http://www.ret.gov.au/energy/Documents/smart-grid/ distribution of up to 35% of electricity from dispersed and smartgrid-newdirection.pdf concentrated renewable sources by 2020. There have been >200 projects from 22 countries to date. 99 IEA, Technology Roadmap, Smart Grids, 2011, http://www.iea.org/publications/freepublications/ 103 Smart Grids Era-Net, Mapping & Gap Analysis of publication/smartgrids_roadmap.pdf. current European Smart Grids Projects, April 2012

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 103 voltage systems. Almost no projects technologies. CAES; and pumped hydro storage), but are currently focussing specifically on implementation to date has been limited Storage technologies can be integration of energy storage into the by geology, scale and cost. categorised by their rated capacity, distribution networks, primarily due to ‘the maximum rate at which stored Most other technologies are still the high cost of storage options. energy can be delivered to an electricity immature, and there have been few Nevertheless, the incorporation system’ and the length of time it takes demonstration projects to date, primarily of mechanical, thermal, and to fully deplete the store at this capacity due to high capital costs. Where they electrochemical energy storage (discharge time). Current technologies exist, installations involve specialised technologies is widely considered cover a broad spectrum of potential applications, such as localised power a key technological solution to the capacity with associated suitability for quality control. Example technologies increasing penetration of intermittent different applications (Figure 23). are advanced batteries (lithium-ion, renewables. Japan, Australia, China and sodium sulphur, and redox flow), Two commercialised technologies South Korea are now starting to invest supercapacitors, flywheels, and exist for bulk electricity storage seriously in R&D into energy storage advanced CAES technologies. (compressed air energy storage –

Figure 23 storAge teChnologies by rAted CApACity And disChArge tiMe104

10 hours Pumped hydro

CAES Flow batteries (Zn air, VR) 1 hour NaS Advanced lead acid Liion

Lead Acid Flywheel 1 minute NiCd / NiMH Discharge time at rated capacity

1 second 1kW 10kW 100kW 1MW 10MW 100MW 1GW Rated capacity

104 IEA Energy Technology Perspectives, 2012, p223.

pAge 104 PROFITING FROM SCIENCE WWW.MAtrix-ni.org Pike Research’s Energy Storage renewable power, and/or inflexible tracker identified 600 projects around nuclear and coal with post-combustion the world in 2012 with a total installed CCS) whilst stabilising the electricity capacity of 153 GW. The most active system through demand response, fault regions are currently Asia-Pacific detection and optimisation.108 (60,435 MW); North America (38,584 This need for an intelligent system is set MW) and Western Europe (33,075 against a background of: MW).105 However, the vast majority of this consists of pumped hydroelectric • Predicted increase in electricity storage (122 GW, worldwide). demand worldwide, associated both with fast economic growth Current market value estimates include: (primarily developing world) and the • £2.5 billion revenue in 2012 from cross-over between traditional uses renewables integration enabling of electricity (lighting/appliances) technologies. This includes to heat and transport (electric and static volt-ampere reactive hydrogen vehicles) sectors; (VAR) compensators (SVCs); • Existing infrastructure that is ageing synchrophasors; advanced batteries (developed world) and not fit to and compressed air energy storage carry increased load or to balance (CAES); dynamic pricing; demand intermittent and unpredictable response; virtual power plants and generation with peaks in demand. microgrids;106 This includes nuclear and coal Energy storage as an enabler for power generators. renewable generation is thus a new Despite very high levels of predicted field, with limited demonstration to date. investment needs (e.g. £23 billion (NPV) Countries are currently competing on smart distribution upgrades alone hard to establish themselves as in the UK between 2010 and 2050),109 leaders. Speaking about energy this is generally considered to be a cost storage, Chancellor Osborne recently effective alternative to implementing stated that ‘urgent action is needed to incremental upgrades to the ‘traditional accelerate translation of research into architecture’ where this already exists, new technologies and products so that see Figure 24. global market opportunities are realised by UK companies – and ensure the UK is established as an international focus for energy storage research and innovation.’107 Future demand There is international consensus that intelligent energy systems are the critical enablers for permitting high penetrations of low carbon generation (i.e. variable

105 Pike Research EST-2Q12-Executive-Summary, 2Q 2012

106 � Pike Research SGRI-12-Executive-Summary 108 McKinsey EU Roadmap 2050, April 2012.

107 � http://www.hm-treasury.gov.uk/speech_chx_091112. 109 Ernst & Young, Smart Grid: a race worth winning? htm April 2012.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 105 FIGuRE 24 SECTOR aNd TEChNOlOGy SPECIFIC SMaRT-GRIdS’ COSTS aNd BENEFITS TO 2050 (BaSEd ON OPTIMISTIC 2dS SCENaRIO)110 111 112 113 114

2 Benefits Overall system 0 Retailer Distribution 2 Transmission Generation

USD trillion 4 Costs 6 Consumer Advanced metering 8 Distribution min max min max min max min max min max Transmission OECD Americas OECD Europe OECD Asia Oceania China India

Notes: min minimum; max maximum

The benefits are believed to be This includes significant investment • � World market for smart grid particularly strong for early movers, (approximately £1.6 billion) in R&D, technologies projected as £16 billion who are subsequently able to reap the as set out in the European Electricity for 2021113. benefits of product and knowledge Grid Initiative Roadmap; • � Revenue from smart grid renewables export. There are also some market value integration will grow from £2.5 Predicted growth for the sector is forecasts for relatively short term billion in 2012 to just over £8 billion therefore extremely high over the next growth: in 2018 (see Figure 25)114. Within 10-20 years. This is reflected in stated this projection, growth is particularly • � The value of smart grid projects investment requirements, such as: strong in advanced storage in the US is predicted to reach technologies and microgrids (75%). • � The European Union has put £40 billion by 2018 (catalysed forward a spend of £80 billion to by approximately £10 billion of implement the smart grids across the Government incentives), associated community by 2030111. with 280,000 direct new jobs112.

110 Source IEA Energy Technology Perspectives, 2012, p217. IEA’s 2DS model looks at technology options and policy pathways that ensure an 80% chance of limiting long-term global temperature increase to 2°C. Within this framework, annual improvements in energy intensity must double, from 1.2% over the last 40 years to 2.4% in the coming four decades.

111 http://www.guelphhydro.com/pdfs/Smart%20Grid%20Gowlings-KPMG%20Presentation.pdf

112 Illinois Smart Grid Market Inventory, Feb 2012.

113 World Smart Grid, 2nd Edition from SBI Energy

114 Pike Research SGRI-12-Executive-Summary

pAge 106 PROFITING FROM SCIENCE WWW.MAtrix-ni.org FIGuRE 25 MaRkET valuaTION FOR SMaRT GRId RENEwaBlES INTEGRaTION TEChNOlOGIES115 116 117

$14000

Transmission $12000 Storage

$10000 VPP

Microgrids $8000 DR

($ Millions) $6000

$4000

$2000

$ 2012 2018

Energy Storage efficiency and increases costs with for large-scale, long term electricity comparatively little scope for increased storage, pumped hydro or CAES Next-generation CAES and pumped revenue. in reality become uneconomic over storage, as well as advanced batteries, storage periods of a few days. Yet are believed to have the potential to In an electricity market with highly weather patterns that shape the output catalyse the energy storage market, volatile price variation, electricity storage of most renewable energy sources with innovations in efficiency, footprint may conceivably be worthwhile for tend to have durations of several days, and system flexibility.116 However, there arbitrage, but profitability falls off rapidly weeks and perhaps longer. are significant barriers around current with increasing storage duration (more costs, supply chain gaps and the need than a day) as it drastically reduces the On the other hand, electricity storage for innovative business models.117 In opportunity to ‘sweat the asset’ of the for periods of seconds and minutes falls particular, electricity storage suffers store itself. into the category of power conditioning the major drawback that it reduces and ancillary services, which are Although frequently cited as options likely to be of considerable value on

115 Source: Pike Research, Smart Grids Renewables Integration 2012

116 Pike Research ESG-12-Executive-Summary, 4Q 2012.

117 Barton, J, and Gammon, R., The production of hydrogen fuel from renewable sources and its role in grid operations, Journal of Power Sources 195 (2010) 8222–8235

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 107 a grid with significant penetrations of interconnectors. Another is to focus Ultimately, the 80% CO2 reduction renewables. Thus a healthy market on the opportunities offered by energy target provides well-defined focus for supercapacitors, flywheels and storage. for constraining scenario options advanced batteries may be anticipated at 2050; however, the multitude of Energy storage generally offloads the as decarbonisation of power systems transition pathways that could lead to burden of ownership of the storage progresses. However, timing is critical, this destination makes the shorter term asset (hot water tank, vehicle battery, and the recent bankruptcies of A123 far more uncertain. Thus, while there hydrogen tank) onto the customer, and Beacon Power show that those is a possibility that two-way electricity who pays up front (handsomely, in the who are highly exposed ‘ahead of the storage might only occupy a niche in case of transport) for the privilege of curve’ face a perilous balancing act. the long term (primarily in regions where undertaking energy storage on behalf of there is strong demand for electric Despite these drawbacks, there are the grid. heating and transport), there is a strong some strong market forecasts for Thus, far from placing additional burden possibility that a market may flourish in electricity storage over the next 8-10 on the grid, electrically powered thermal the shorter term. Investment in two-way years: and mobility application in fact provide electricity storage should therefore be • £22 bn global market for electricity vital energy storage opportunities to undertaken with caution and with an exit storage technologies by 2020 enable grid balancing. Although this strategy that recognises its transitional (with strong growth from £6 bn in results in greater overall demand on the potential. 2015).118 grid, its management can be greatly assisted by such dispatchable demand. • £19 bn annual global market (with installed capacity of approximately The extent to which this type of demand 62,000 MW) for long duration, response reduces the need for two-way utility scale energy storage electricity storage has not been fully (Compressed Air, Pumped Storage, accounted for in most models. One NaS Batteries, Advanced Lead exception is a multi-sectoral energy Acid, Batteries, Flow Batteries, and model,122 which shows that one-way Lithium Ion Batteries) by 2022, led energy storage can, under certain by North America, Europe and Asia- scenarios, almost eliminate the need for Pacific.119 long duration two-way electricity storage in a UK system envisaged for 2050. This • £7.5 bn market for advanced does not include short-cycle (second batteries in the Asia-Pacific region and minutes) power conditioning and (with a significant increase in growth ancillary services (as described above). from 2017), and a cumulative installed capacity of 25,082 MW Hydrogen is another option as a by 2022. NaS, advanced Li-ion and one-way energy storage technology. advanced flow are the dominant Hydrogen has yet to be addressed in technologies.120 the general energy storage debate, because it requires embracing a multi- Other commentators121 suggest that sectoral view that is not yet universally alternative options to electricity storage accepted. For this reason, it has are both cheaper and more carbon the potential to derail the numerous friendly. One option is to build new predictions that ignore its potential. transmission lines and more

118 http://smartgridsocialnetwork.com/profiles/blogs/ illinois-smart-grid-market-inventory-released

119 Pike Research ESG-12-Executive-Summary, 4Q 2012.

120 � Pike Research ESAP-12-Executive-Summary, 4Q 122 Barton, J, and Gammon, R., The production of 2012. hydrogen fuel from renewable sources and its role in grid operations, Journal of Power Sources 195 (2010) 121 IEA ETP 2012 8222–8235

pAge 108 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 9.3 geogrAphiC VAriAtions in deMAnd And groWth �

As an enabling set of technologies, In addition to the investment seen in rollout of different aspects of intelligent China and South Korea, examples are: energy systems in different parts of the • � Japan’s Federation of Electric Power world will vary enormously in response Companies has announced the to local factors including: development of a smart grid that • � Status of the existing infrastructure; incorporates solar power generation by 2020 with government investment • � Pattern of anticipated growth in of over £80 million; electricity demand; • � Africa - With scant ‘dumb’ grid • � Generation mix; legacy, plus significant new • � Market/regulatory structures. investment (notably from China) and burgeoning demand for Europe, North America and other power (particularly for mobile OECD countries are characterised by telecommunications), the continent ageing transmission and distribution is ripe for the implementation lines. The growth in intelligent of intelligent energy system infrastructure here is driven by the technologies. Intelligence is need for upgrading, coupled with the a necessity in the numerous requirement to integrate renewable autonomous micro-grids and remote generation, but is likely to be power installations, but increasingly incremental. Intelligent systems will of relevance to its overstretched allow ‘lean’ upgrading, enabling the peri-urban and urban networks; existing grid to ‘do more with less’. • � India - Aside from the fact that As seen above, significant investment the major investments are internal is already underway in the developed rather than from China, the situation world. in India is similar to that of Africa, Opportunities for large scale smart especially in terms of the practical grid deployment may be particularly drivers related to both off-grid and high in rapid growth (China and grid connected power systems. India) and developing (in Asia and India’s growth in electricity demand Africa) economies where escalation of growth (2007-2050) may be as electricity demand is particularly acute, much as 500%.123 but where there is currently a less well established infrastructure.

123 IEA, Technology Roadmap, Smart Grids, 2011, http://www.iea.org/publications/freepublications/ publication/smartgrids_roadmap.pdf.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 109 9.4 CritiCAl suCCess FACtors For MArket deVelopMent �

Institutional and technological factors This is particularly challenging impact of perturbations to the system, in and supply chain development will all since electricity transmission and particular that of distributed generation contribute to the successful deployment distribution is usually a highly at different scales. For example, of intelligent systems, but the ability regulated sector, and to date there generation and storage devices that can to coordinate diverse and complex has been reluctance/inability on be connected to distribution systems technologies into an optimised system is the part of Governments to make are typically much smaller than those of over-riding importance. rapid or large scale changes. connected at the transmission level, Development and demonstration and the number of individual devices Institutional Factors of new regulations and business can increase substantially, creating • � Synchronised and active involvement models to address these barriers is ever greater complexity for monitoring, from a very broad range of essential in the near term (to 2020). control and management.126 stakeholders (Government, utilities, • � Development of universally Specific technology challenges regulators, and consumers), who are acceptable solutions to issues include:127 often motivated by different factors. of cyber security: the collection, • � Better and more consistent • � High level of collaboration across analysis and transfer of vast amounts monitoring to gain consensus over national boundaries. For example, in of data, presents a whole set of new the impact of increasing renewable Europe, the successful functioning challenges around security and data generation on grid operations, in of the smart grid is seen as closely management. particular on low voltage networks. linked to the development of a single • � Overall strong leadership and vision Potential for research, simulation European Electricity Market, with to overcome the current levels of and eventual demonstration via electricity balancing over very large uncertainty over the speed and microgrids. Near term. areas improved through multiple direction of development. interconnectors.124 • � Real time monitoring of processes Technical & Supply Chain (voltage, flows, short-circuit) to • � Development of innovative business development Needs allow control measures to avoid models that can take account of incidences, or implement self healing the value of societal benefits (e.g. Although some mature technologies and demand response. Near term. carbon reduction, job creation, exist within the intelligent energy security of supply, outage declines), infrastructure landscape, the • � Cyber secure communications 125 and ensure that the costs and combination of traditional hardware technologies to ensure secure benefits are shared fairly across the technologies with software exchange of data and, for example, entire system. communications technologies, across to enable micro-grids to connect a complex, multi-layered network of to and disconnect from centralised • � Simultaneous evolution of supply and demand systems, is novel systems. In many cases, metering, regulatory and market models (e.g. and requires significant innovation and control and communications system investment, transmission collaboration. There are still a great technologies exist, but are expensive charges, trading and pricing) with many technical challenges, starting with to install. Near term. the development of intelligent a need for a better basic understanding infrastructure that incorporates (through real time monitoring and data flexible generation and demand. analysis, as well as modelling) of the

124 Sustainable and Secure: How to tackle flexibility challenges in an integrated EU power market? October 2012, Günther OETTINGER, EU 126 � IEA, Energy Technology Perspectives 2012 Commissioner for Energy, Speech/12, http://ec.europa. eu/commission_2010-2014/oettinger/headlines/ 127 European Technology Platform Smart Grids, Smart speeches/2012/10/doc/20121030_ces.pdf. Grids SRA, Strategic Research Agenda Update of the SmartGrids SRA 2007 for the needs by the year 2035, 125 � Illinois Smart Grid Market Inventory, Feb 2012. March 2012.

pAge 110 PROFITING FROM SCIENCE WWW.MAtrix-ni.org • � Grid modelling technologies, e.g. to that facilitate grid balancing and • Demand response. Certain aspects design and demonstrate new HVDC efficiency to accommodate more are currently well recognised (e.g. and adapted HVAC transmission stochastic or inflexible power domestic demand), but others systems; to monitor in real-time generation. This will require new generally overlooked (industrial scale the ageing of present electricity arrangements in the wholesale demand scheduling, grid-to-fuel materials; and to predict generation market; retail market (involving time- (hydrogen), etc). Key technologies output of volatile intermittent sensitive pricing (e.g. time-of-use include smart home hubs for generators and demand of flexible tariffs) to incentivise curtailment or domestic demand control and new- customers. time-shifting of demand at certain generation low-cost electrolysers for times); and aggregator scale (e.g. smart production of fuel. Potentially • � Dynamic pricing systems, able to pooled distributed generation & widespread by 2025. take account of rapid changes in demand loads). supply and demand. • Virtual power plants – aggregations • Cross-cutting integration of of automatic demand response, • Automation and control of active numerous disciplines, which must be storage and generation resources, resources. coordinated by those able to take a likely to be well established by 2025. • Cost effective and efficient energy whole-system approach. Broadly well accepted (if not well storage, in particular over longer defined) concept. key Emerging Technologies time periods (> 1-2 days), and at all • Advanced batteries – such as Ionic scales. Current R&D into electrical As described above, many of the liquid batteries (a redox or ‘flow’ storage is focussing on new technologies within this sector are battery which stores and releases materials to address cycle limitations currently emerging. Specific highlights energy by the electrochemical and reduce cost. This should be include: reactions of liquids as they pass coupled with further modelling • Inverter technologies (e.g. micro- through a membrane) show promise to evaluate the potential role for inverters) – believed to have the but are at a very early stage. two-way electricity versus one-way potential to be disruptive in their energy storage. Some progress • Supercapacitors and enhanced ability to connect distributed expected to 2020, but significant ultracapacitors (with greater renewables to the AC grid. commercialisation 2020-2025. storage densities) based on nano- • Voltage compensation (e.g. static materials.129 Specific supply chain challenges that VAR compensators) – a well need to be addressed include: recognised suite of technologies that • Commercial scale demonstration help to maintain delivery of constant that spans the traditional top down voltage. Potential commercialisation boundaries (generation/transmission before 2020. etc.). • Smart DC networks – such as • Development of internationally low voltage DC micro-grids in recognised codes and standards to buildings which, for example, can ensure safety and interoperability, help to reduce system losses across national boundaries. As a that occur through conversion of highly regulated industry, the level micro-renewable electricity to AC. of existing codes for products and Potentially widespread by 2025. processes is particularly high. • Microgrids – small-scale power • Collaboration across sectoral systems that use a combination boundaries in order to merge of energy generation and storage traditional engineering sectors devices to serve local customers. (power infrastructure) with digital Often categorised as campus, communications. military, remote, community, and commercial & industrial, microgrids • Development of innovative and viable are currently exhibiting strong business models for distributed growth (led by the US). They can be generation and energy storage used autonomously or connected to (currently payment during upload central system, where they increase and offload is often not economically flexibility. Powerful R&D tool for viable). testing and planning.128 • Development of new trading mechanisms: financial instruments 128 � MIT Energy Futures, Autumn 2011 129 MIT Energy Futures, Spring 2012

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 111 9.5 the CoMpetitiVe lAndsCApe �

The complexity of the intelligent energy Flexitricity provides STOR (short term system means that there are a great operating reserve) services to National many levels at which different types of Grid in the UK, using small scale assets companies can enter the market. owned by commercial clients. The transmission and distribution systems are dominated by utilities (some of which have regional monopolies) and their corporate tier 1 service providers. However, there is considerable scope for innovation around the supply of energy to consumers, with the potential rise of ESCo and MUSCo models, and the anticipated cross-over from other consumer-facing sectors, e.g. telecoms, supermarkets, banks etc. In terms of technology development and manufacture, a number of well-known engineering and electronics corporates are active in the sector, including Siemens, ABB, Schneider, GE, Honeywell, and many more. Telecoms giants (Cisco, SAP, Arqiva etc) are highly engaged in the communications and data management elements. Battery development is also dominated by larger companies, such as AES Energy Storage, Sumitomo, ABB, and S&C Electric. Nevertheless, there are significant opportunities for innovative SMEs to provide novel technologies and services. Two key recent examples are: OPower (recently exceeded 250 employees from a micro-SME in 2007), provides software platforms for intelligent energy applications, including dynamic rate structures and automated energy efficiency. pAge 112 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 10 � geotherMAl 10 10.1 segMent deFinition

Broadly, geothermal energy exploitation can be classified into two segments: geothermal-based heating and cooling applications, and geothermal-based electricity production. The technology and infrastructure for each of these applications is quite different and they also require different scales of operation. • Geothermal-based direct heating and cooling systems exploit the higher temperatures which occur naturally several hundred metres or more below the earth’s surface through the use of boreholes and geothermal pumps. A heat exchanger essentially transfers the heat from below the surface to the point where it is needed. Geothermal energy is used directly for a variety of purposes, including space heating, snow melting, aquaculture and more. • Geothermal power plants, conversely, normally need to be located where there is significant near-surface geothermal activity giving rise to sufficient steam or vapour to drive turbines to generate electricity. Hence they can be located only in regions where such geological activity is present – for example, tectonic and volcanic zones.

pAge 114 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 10.2 MArket groWth trends �

Current situAtion It is estimated that geothermal electricity significant growth is expected in the generation reached 69 TWh in 2011. East African Rift Valley.133 For example, The global market for geothermal Kenya has 200 MW of existing capacity Globally, there is approximately electricity generation grew only slightly but aims to expand this to meet 50% 11,224 MW of installed geothermal in 2011. An estimated 136 MW of its electricity needs from geothermal 130 electricity generation capacity. of generating capacity was added energy by 2018. There are also plans Total geothermal energy supply (i.e. during2011 – in Iceland, Nicaragua for new capacity underway in South direct heat plus electricity generation) and the United States – bringing total America, including Peru and Chile. accounted for an estimated 205 TWh global capacity to 11.2 GW. Most of the Significant geothermal energy capacity of global energy consumption in 2011. new capacity arose in Iceland, where is now being developed across Europe. Two-thirds of this output was delivered 90 MW was added to an existing CHP As of 2011, Europe had a total installed as direct heat and the remainder was facility. delivered as electricity. The United capacity of 1,600 MW for geothermal States is the global geothermal market Geothermal power plants operate in energy, producing 10,900,000 MWh of leader with 3,086 MW of installed over 20 countries, with the large share electric power through 59 geothermal capacity. Seven countries account for of global capacity centred in eight power plants, 47 of which were in EU 88% of global capacity. countries: the United States (1.3 GW), member states.134 the Philippines (1.9 GW), Indonesia The EU has 109 new power About one quarter of geothermal direct (1.2 GW), Mexico (1.0 GW), Italy plants under construction or under heat is used for bathing and swimming (0.8 GW), Iceland (0.7 GW), New investigation. By 2015, Europe is applications, more than 13% for space Zealand (nearly 0.6 GW), and Japan expected to have about 1,600 MW of heating (mainly via district heating), (0.5 GW).132 While only 46 countries installed geothermal energy capacity, and the remainder for greenhouses, were considering geothermal power with an additional 1,800 MW to be industrial purposes, aquaculture, development in 2007, this figure under development or investigation by agricultural drying, cooling and other had risen to some 70 countries with 2018. uses. projects under development or under At least 78 countries were using direct consideration in 2010. Future demand geothermal energy in 2011, up from A significant increase in the rate The IEA forecasts that global 72 in 2005. The top five countries with of deployment is expected as the geothermal electricity generation geothermal heat capacity – the United geothermal market continues to increases from 68 TWh to more than States, China, Sweden, Germany and broaden. It is anticipated that advanced 300 TWh, and capacity from 11 GW to Japan – accounted for about two-thirds technologies will allow for development over 40 GW between 2010 and 2035. of total global capacity. China led in of geothermal power projects in new Most of these projected increases direct geothermal energy use in 2010 markets. Droughts in East Africa are occur in the United States, Japan and in (21 TWh), followed by the United States driving interest in geothermal power, to Asia (Philippines and Indonesia). African (18.4 TWh), Sweden (13.8 TWh), reduce dependence on hydropower. countries, particularly North Africa, also Turkey (10.2 TWh), Japan (7.1 TWh) While exploration costs are tempering increase their use of geothermal for 131 and Iceland (7.0 TWh in 2011). the growth rates in the region, electricity generation.135

133 Geothermal Energy Association (GEA, 2012) Geothermal: International Market Overview Report

130 Geothermal Energy Association, Washington D.C. 134 Geothermal Energy Association (GEA, 2012) International Market Overview Report May 2012 Geothermal: International Market Overview Report

131 REN21 Renewables 2012 Global Status Report 132 REN21 Renewables 2012 Global Status Report 135 IEA (2012) World Energy Outlook 2012

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 115 The geothermal energy market is likely to see significant investment over the next ten years, though growth will be unevenly spread throughout the world as each region is influenced by diverse factors. By 2020 it is anticipated geothermal power will gain ground on wind and solar in terms of market share, but will still account for only a small proportion of the overall renewables market. Geothermal potential is at risk of remaining under-utilised due to high upfront costs of exploration and development. It is estimated that between 3.6 GW and 14.4GW of new geothermal capacity will be present by 2020. Under business as usual conditions, a CAGR of 3% is expected over the next decade; under high growth projections this figure could rise to 9% CAGR, or some 25 MW of installed capacity.

pAge 116 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 10.3 geogrAphiC VAriAtions in deMAnd And groWth

Global geothermal electricity generation is predicted to increase from 68 TWh to more than 300 TWh and capacity from 11 GW to over 40 GW between 2010 and 2035.136 Most of these projected increases occur in the United States, Japan and in Asia (Philippines and Indonesia). African countries, particularly those located in the rift valley region, also increase their use of geothermal for electricity generation. Global development is partly being driven by regional institutions which, in addition to financing geothermal projects, are enhancing regional cooperation within an emerging renewable energy sector. Examples include the African Rift Geothermal Energy Development Facility (ARGeo), which has underwritten drilling risks in six African nations and is backed by UNEP and the World Bank. Geothermal development appears to be increasingly supported by a global financial market. Countries including Australia, China, Germany, Iceland, Italy, Japan, and the US, are also promoting novel schemes to support geothermal development projects around the world. Forms of support other than financing, including technology sharing, training, and geological surveys are also being endorsed by outside governments.137

136 IEA (2012) World Energy Outlook 2012

137 Geothermal Energy Association (2010) Geothermal energy: international market update

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 117 10.4 CritiCAl suCCess FACtors For geotherMAl MArket deVelopMent �

Institutional Factors geothermal industry is increasingly key Emerging Technologies using binary technology that can • In nearly every case, national policies • Several companies now manufacture employ more moderate and low are driving growth in the strongest small-scale geothermal power units temperature resources to generate markets, while the current world that can be constructed off-site electricity. leader – the United States – appears and then integrated into a plant’s to be growing more slowly due to • The creation of more viable sites design for production. An example regulatory and policy uncertainty. through hydraulic fracturing, of this technology can be found in a known as enhanced geothermal United States oil field, where brine • Energy and economic security are systems (EGS), is not close to water which would otherwise be compelling drivers for the adoption full commercialisation. With only a discarded as a by-product of oil and of policies supporting geothermal few EGS projects in operation, the gas development is used to produce development in countries like Chile economics are not fully understood geothermal power. and Japan. and there are concerns about • There are also reports that lithium • Introduction of differentiated induced seismicity. in geothermal brine could be used economic incentive schemes • Technologies for exploitation of to generate additional revenue for for both geothermal heat and super-critical fluids. owners of geothermal projects. geothermal power. One project such project is under • Reduce drilling costs via new drilling • Establish streamlined and time- development in the Salton Sea in technologies, improving hard rock effective procedures for issuing California in the USA. and high temperature /high pressure permits. drilling, and improving borehole • Geothermal power generation • Expand the knowledge of EGS instrumentation and monitoring. is becoming more attractive technology and provide sustained through the flexibility afforded • Among notable recent demonstration and substantially higher R,D&D by new technologies such as projects is a new Kalina Cycle resources to plan and develop EGS combining ‘flash’ plants with binary EcoGen unit completed by Wasabi plants over the next 10 years. bottoming cycles – expanding Energy of Japan in early 2012. The productive resources, and reservoir Technical & Supply Chain innovation in this unit centres on the enhancements (EGS). development Needs miniaturisation of the Kalina Cycle technology, incorporating next- Specific emerging technologies and generation micro-turbine technology technical challenges which need to be from United States-based Energent addressed include: Corporation. • New technology appears to be A further innovation is the underpinning geothermal expansion • development of a low temperature in some regions which have already bottoming cycle at a flash seen significant development of their geothermal plant in the United conventional resources. In the US States, with the potential to add and Europe, for example, the 10% additional power and improve efficiency.

pAge 118 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 10.5 the CoMpetitiVe lAndsCApe

Manufacturing opportunities exists in heat pumps, components and material production. Opportunities in the service and contracting sector range from exploring geothermal locations to the installation, operation and maintenance of geothermal facilities. In the utility scale sector, the five leading turbine manufacturers in terms of total capacity of operation are Mitsubishi, Toshiba and Fuji of Japan, Ansaldo / Tosi of Italy and Ormat of Israel, which collectively account for over 80% of current global capacity. Key features of the geothermal development market include long project lead times of up to seven years from resource discovery through to commercial exploitation, and the tight availability of capital. Prospecting companies frequently need to investigate potential geothermal resources at risk, often leading to self-funding in the initial stages. Policy and tax framework uncertainty creates further risks for developers, for example, in the United States.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 119 hydroeleCtriC 11 11.1 segMent deFinition �

Hydropower is a capital-intensive • � Mini-hydro: From 100 kW to 1 MW pumped at times of low electricity technology with long lead times for that can be either stand-alone, mini- demand from the lower to upper basin, development and construction due grid or grid-connected; and then released to create electricity to the significant feasibility, planning, at times of high electricity demand • � Micro-hydro: From 5 kW to 100 kW design and civil engineering works (and price). Technically, pump storage that provide power for a small required. There are two major cost schemes are not renewable energy community or rural industry in remote components for hydropower projects: sources due to the power deficit areas away from the grid. they give rise to, but are helpful in • � The civil works for the hydropower Bloomberg New Energy Finance reports moderating demand peaks, and the plant construction, including any increasing interest in smaller scale variable rates of generation arising from infrastructure development required hydro investments in particular due to other renewable technologies. to access the site and the project trends away from the risks associated development costs; with newer, less proven renewable • � The cost related to electro- energy technologies. mechanical equipment. Large hydropower systems tend to be The project development costs connected to centralised grids in order include professional fees (investment to ensure that there is sufficient demand banking and legals, engineering to meet their generation capacity. Small design, programme planning and hydropower plants can be, and often feasibility assessments, environmental are, used in isolated areas off-grid or in impact analysis), licensing, social and mini-grids. In isolated grid systems, if relocation programmes, biodiversity large reservoirs are not possible, natural mitigation measures, historical and seasonal flow variations might require archaeological mitigation and water that hydropower plants be combined quality monitoring and mitigation. with other generation sources in order to ensure continuous supply during dry There are various scales of hydropower periods. The continuity and reliability of contributing to global capacity figures, water resources is clearly a key success though these do tend to vary according factor in hydro schemes. to local market definitions: In storage schemes, a dam impounds • � Large-hydro: 100 MW or more water in a reservoir which in turn feeds of capacity feeding into a large a turbine and generator, which is electricity grid; frequently constructed within the dam • � Medium-hydro: 20 MW to 100 MW itself. Run of river installations use the almost always feeding a grid; natural flow and hydrostatic ‘head’ of a river, or a diverted channel, to drive a • � Small-hydro: From 1 MW to 20 MW turbine and generator. Pumped storage usually feeding into a grid; schemes incorporate an upper and lower reservoir, with water being

11 PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 121 11.2 MArket groWth trends �

Current Situation Hydropower is a fully mature technology Four countries (China, Brazil, Canada in use in 159 countries. It provides and the United States) together produce Global hydropower capacity (including 16% of the world’s electricity (about half the world hydropower generation; pump storage) is increasing, and at 3 500 TWh in 2010), more than nuclear ten countries produce 70% (Table 5). the end of 2010 accounted for over power (12.8%), much more than wind, More than 35 countries obtained more 1,000 GW worldwide.138 The average solar, geothermal and other sources than half of their total electricity from annual growth rate of about 2.5% is combined (3.6%), but much less than hydropower in 2009. small in comparison with wind and fossil fuel plants (67.2%) (IEA, 2012). solar growth rates, but should be In OECD countries, hydropower’s viewed against a large baseline. Over contribution is 13% (about 1 400 TWh the last decade, electricity generation in 2008). This is smaller than in non- from new, additional hydro capacity OECD countries (19.8%, about has kept pace with generation from all 2100 TWh in 2008), where it has other renewables combined. Emerging increased by an annual average 4.8% economies in Asia (led by China) and growth rate since 1973.139 Latin America (led by Brazil) have become key markets for hydropower development, accounting for an estimated 60% of global activity. TaBlE 5 138 139 TOP TEN hydROPOwER PROduCERS* 2010140

Country hydro electricity (Twh) Share of domestic electricity generation market (%) China 694 14.8 Brazil 403 80.2 Canada 376 62.0 United States 328 7.6 Russia 165 15.7 India 132 13.1 Norway 122 99.3 Japan 85 7.8 Venezuela 84 68.0 Sweden 67 42.2 * Excludes transboundary transmissions

An estimated 25 GW of new hydropower capacity came on line in 2011. This increased global installed capacity by nearly 2.7% to approximately 970 GW. China accounted for almost half of the 25 GW new installed capacity in 2011 (Figure 26), with Canada, Brazil, India and Vietnam each accounting for 5-8% of new capacity in the same year. Globally, hydropower generated some 3,400 TWh of electricity during 2011, including approximately 663 TWh in China, followed by Brazil (450 TWh), Canada (373 TWh), the United States (325 TWh) and Russia (153 TWh).141

138 International Renewable Energy Agency (IRENA, 2012) Renewable Energy Technologies: Cost Analysis Series Vol.1 Power Sector - Hydropower

139 IEA (2012) Technology Roadmap Hydropower

140 Source IEA Hydropower Roadmap (2012)

141 REN21 (2012) Renewables 2012 Global Status Report

pAge 122 PROFITING FROM SCIENCE WWW.MAtrix-ni.org FIGuRE 26 NEw INSTallEd hydROPOwER CaPaCITy By COuNTRy 2011142

Rest of the World 25%

Canada 5% China 49% Brazil 6%

India 6%

Vietnam 8%

Future demand The most rapidly expanding hydro markets are in those countries seeking to meet increasing overall energy demand, driven by industrialisation and demand from under-served populations. Under the IEA’s new policies scenario, the generation forecasts for hydropower reach 5,677 TWh in 2035, its share in total electricity generation dropping only slightly to 15% (Figure 27). Projected growth in hydropower production in OECD countries – where the best resources have already been exploited – is considered by the IEA to be limited. Nearly 90% of the increase in production between 2010 and 2035 is in non-OECD countries, where the remaining potential is higher and electricity demand growth is strongest.

142 Source: Renewables 2012 Global Status Report

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 123 FIGuRE 27 INSTallEd hydROPOwER CaPaCITy IN SElECTEd REGIONS 2011-2035143 144

600 90% Additional

GW capacity 500 75% to 2035 2011

400 60% Share of renewables in 2035 300300 45% (right axis)

200 30%

100 15%

0 0% OECD China India Other Asia Brazil Africa

Global hydropower capacity is projected to increase from 1 067 GW in 2011 to over 1,680 GW in 2035. China’s capacity almost doubles, to 420 GW, bringing its total installed hydropower capacity in 2035 close to that of the entire OECD in 2011. Capacity jumps from 42 GW to 115 GW in India, from 89 GW to over 130 GW in Brazil and Africa continues to develop some of its significant hydro potential.144

143 Source: IEA World Energy Outlook (2012)

144 IEA (2012) World Energy Outlook

pAge 124 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 11.3 geogrAphiC VAriAtions in deMAnd And groWth �

The global technically exploitable Mattagami River without new dam Elsewhere, Japan has significant hydropower potential is estimated construction.147 However, the IEA also pumped storage capacity (some at more than 16,400 TWh per year. reports significant new hydro projects in 26 GW), which was originally installed This potential is not however evenly mature markets, such as the proposed to accommodate baseload nuclear distributed geographically. The five 1,550 MW Romaine Project in Canada generation, but is increasingly being countries with the highest potential which is scheduled for completion geared to harmonise variable outputs (China, United States, Russia, Brail and within the next decade.148 from renewables. In the United Canada) could in the future produce States, pumped storage capacity is Pump storage schemes have around 8,360 TWh annually. The approximately 22 GW, with some traditionally served electricity markets next five countries (DR Congo, India, 2.7 GW pending licensing and a further during periods of peak energy demand Indonesia, Peru and Tajikistan) with 34 GW having been issued ‘preliminary and hence higher prices. They the greatest potential could generate permits’, a stage in the consenting presently account for some 99% of around 2,500 TWh per year. These ten process. South Africa is due to bring global storage capacity. Increasingly, countries account for about two-thirds new pumped storage capacity on line however, pump storage technology is of global hydropower potential.145 in the next few years through its Ingula being deployed in grid networks which facility, while China is reported to be The IEA’s hydropower technology derive an increasing proportion of their enhancing its pumped storage capacity roadmap146 suggests that most of electricity from variable renewable from 50 GW to 80 GW under its the future growth in the hydropower resources. For example, interconnectors current five year plan.150 sector will come from large projects in between Norwegian hydro stations and emerging economies and developing Danish electricity grids provide system Chinese financial institutions are countries. In these countries, large and balancing for Denmark’s substantial promoting loans for hydro development small hydropower projects can improve wind turbine capacity. Hydropower in Africa, often with Chinese contractor access to modern energy services and can be ramped up or backed down involvement. A small but promising alleviate poverty, and foster social and depending on the variable amounts of market for low capacity (<1 MW) economic development, especially for electricity the grid from Danish wind hydropower applications is emerging local communities. farms. in Asia, sub-Saharan Africa, and South America. The small hydropower market In industrialised countries with mature Globally, 130-140 GW of pumped in China is driven by rural electrification hydropower sectors, there will generally storage is in operation, and an programmes of the Chinese be a greater emphasis on upgrading estimated 2-3 GW was added during government. At present, more than or redevelopment of existing plants the year. Much of the existing capacity 30% of the China’s counties depend where additional commercial benefits or is in the EU, with 45 GW of pumped on small hydro to meet their electricity enhanced capacity can be realised. For storage provided by 170 stations requirements. This percentage is rising example, RusHydro of Russia is seeking in 2011. An additional 480 MW continuously. In 2009, the country had a to replace all obsolete hydropower of capacity was commissioned at cumulative installed capacity of 51 GW equipment by 2025. In North America, Austria’s Limberg II in 2011. A further of small hydropower, making China the the average age of installed units is over 60 pumped storage schemes are largest hydropower market in the world 40 years. Ontario Power Generation expected to be built in Europe by in terms of installed capacity. (Canada) is adding 450 MW of new 2020, particularly in Germany, Austria, capacity to current plant on the Lower Switzerland and Spain.149

147 REN21 (2012) Renewables 2012 Global Status Report

148 International Renewable Energy Agency (IRENA, 2012) Renewable Energy Technologies: Cost Analysis 145 IEA (2010) Renewable Energy Essentials: Series Vol.1 Power Sector - Hydropower Hydropower 149 REN21 (2012) Renewables 2012 Global Status 150 REN21 (2012) Renewables 2012 Global Status 146 IEA (2012) Technology Roadmap Hydropower Report Report

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 125 11.4 CritiCAl suCCess FACtors For hydro MArket deVelopMent

Institutional Factors • Geographically, a notable proportion Specific supply chain challenges that of future hydropower potential need to be addressed include: is located in regions which are • Administrative bottlenecks are • The market’s maturity means presently less attractive to investors, restricting the growth of small generally that hydropower does such as central Africa, or where hydropower markets - administrative not face similar supply chain there are mature and consolidated hurdles leading to a delay in permits challenges as other renewable value chains, for example China, and plant approvals are major energy technologies. Supply chains Brazil and North America. challenges for the development and value chains are well catered of small hydro. Many countries Technical & Supply Chain for through local and international currently have very long consents development Needs suppliers. In mature markets such procedures. Complicated and time- as the EU, significant order backlogs consuming licensing procedures are being managed through Specific emerging technologies, and coupled with red-tape in many M&A activity, while technology technical challenges which need to be countries have been major stumbling diversification is also prompting addressed include: blocks in the development of small acquisitions. hydropower installations worldwide. • A key feature of the sector in • While hydrokinetic solutions show comparison with other renewables Many larger scale hydro projects potential in lower flow / smaller • is that hydropower technologies have a poor environmental and social hydrostatic head situations, the are generally mature and well responsibility track record, attracting market appears to be early stage proven. The Francis turbine is a opposition from international NGOs and relatively fragmented. reactionary turbine and is the most and indigenous people. In turn this widely used hydropower turbine. • Options for new entrants to respond has placed international financial Francis turbines are highly efficient to supply chain issues are relatively institutions (IFIs) under scrutiny for and can be used for a wide range limited, especially prospective their loan adjudication procedures of head and flow rates. The Kaplan entrants from outside established when financing such projects. reactionary turbine was derived hydropower geographies. Governments, IFIs and other from the Francis turbine but allows funding institutions have increasingly key Emerging Technologies efficient hydropower production at regarded larger scale hydro heads between 10 and 70 m, lower projects as high risk ventures. In than for a Francis turbine. Impulse While hydropower is a mature response, organisations such as the turbines such as Pelton, Turgo and renewable technology, technological World Bank have published good cross-flow (sometimes referred to as innovation and R&D are promoting new governance protocols for dam and Banki-Michell or Ossberger) are also applications, for example: reservoir projects addressing issues available.152 such as local people’s land rights • � There is a move towards developing and environmental assessment151 • The market for emerging cheaper installations for low flow and technologies, while active, is tending small head applications to enable to concentrate on smaller scale the exploitation of smaller rivers and generating applications, such as shallower reservoirs. hydrokinetics.

151 see for example http://web.worldbank.org/WBSITE/ EXTERNAL/PROJECTS/EXTPOLICIES/EXTOPMANU AL/0,,contentMDK:20066616~menuPK:64701637~pag 152 International Renewable Energy Agency (IRENA, ePK:64709096~piPK:64709108~theSitePK:502184,00. 2012) Renewable Energy Technologies: Cost Analysis html Series Vol.1 Power Sector - Hydropower

pAge 126 PROFITING FROM SCIENCE WWW.MAtrix-ni.org • Variable-speed generation technology. • Efficient tunnelling techniques. • Integrated river basin management. • Silt erosion resistant materials where water comes into contact with mechanical plant. • Hydrokinetic technologies are being developed to extract energy from linear flows in rivers rather than requiring a vertical or hydrostatic head. While there are several marine hydrokinetic technologies, those employing river flows generally rely on a horizontal rotor creating rotational energy that is converted into electricity by a generator. Rotational devices used in water currents are conceptually similar to wind turbines which have assisted the technological development of the water-based applications.153

153 International Renewable Energy Agency (IRENA, 2012) Renewable Energy Technologies: Cost Analysis Series Vol.1 Power Sector - Hydropower

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 127 11.5 the CoMpetitiVe lAndsCApe

The IEA estimates that hydropower is in operation in more than 150 countries worldwide. However, the IEA also suggests that equipment manufacturing is limited to comparatively few countries. A few companies have a global manufacturing base, while others have a more localised approach. All significant players have branched out from providing goods and services to only national markets. The IEA reports hydro companies increasing sales and orders during 2011. For example, Dongfang Electric of China reported the production of 11 hydro-electric turbine generating sets (2.5 GW) in the first six months of 2011, with a profit margin of over 18%. Voith (Germany) reported that sales were up 6% and that there was a significant increase in forward orders, up 81% over the previous year. Other companies – including Andritz (Austria), Alstom (France), IMPSA (Argentina) and Toshiba of Japan – reported increased sales and / or order backlogs. Larger manufacturers have been investing in new plants and acquiring smaller firms involved in the development of new technologies. For example, Alstom has moved into the Indian market, expanded its Tianjin (China) turbine factory, and reached agreement with RusHydro on a joint manufacturing facility in the Russian Federation. Voith is reported as having spent 82 M on R&D in 2011, has a new turbine component manufacturing facility in Brazil, and a new facilities in Austria. Andritz continued to expand its Chinese facility for large hydro components, and IMPSA continued construction of its new Brazilian production facility during 2012. pAge 128 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 12 CArbon CApture And storAge 12 12.1 segMent deFinition �

The carbon capture and sequestration again dehydrated and compressed temporary storage and loading facilities (CCS) sector consists of a suite of for transport. The remaining at the port; specifically designed ships; technologies, used to reduce CO2 hydrogen rich fuel can be burnt and unloading and (possibly) temporary emissions from large energy users, in modified turbines to produce storage facilities at the geologic storage including power stations, natural gas electricity. site. processors, refineries, and a range • Oxy combustion: fuel is burnt in The cost of storage is highly variable, of other industrial facilities such as oxygen rather than air, resulting in a depending on local geology. Although steel mills, cement plants and biofuel flue gas containing CO2 and water. there is a great deal of experience in production plants. Some of the flue gas is recycled, using similar geological storage for CO2 is separated from a stream whilst the remainder is dehydrated comparable processes (e.g. acid gas of mixed gases, then compressed, and transported. This process injection, natural gas storage, enhanced transported and injected into a deep requires very high volumes of oil recovery), the quantities involved in geological formation (storage). Within oxygen, and an associated expensive CO2 storage are much larger, and the some sectors (e.g. gas processing, and air separation unit. behaviour of CO2 in the subsurface is fertilizer production), pre-combustion not known. For processes without inherent CCS, carbon capture is already an integral technology is available for all steps Storage may be offshore, with potential part of the basic process and the involved, but is at different stages of for cross-over of expertise from oil and related technologies are commercially maturity and few systems have yet gas industry. available. This is known as ‘high purity’ been demonstrated at scale. All parts CO2. of the process are capital intensive and The three main methods of carbon require additional energy input. The capture are: increase in consumption of resources (fuel and water) for electricity generation • Post combustion: CO2 is separated with CCS in order to produce the same from flue gas consisting mainly of amount of electrical energy has been nitrogen with 4-15% CO2. There estimated at 17-30% depending on type are a range of separation processes of plant.154 This is measured as a rise in including use of membranes, the levelised cost of electricity (LCOE). cryogenic distillation and absorption (currently most cost effective CCS involves transport of large and mature). Due to the low quantities of fluid CO2 via pipeline or concentration of CO2 in the post barge, potentially over large distances. combustion gas, this requires large Although there is already some scale equipment able to process experience of pipeline transportation large quantities of gas. (e.g. for oil recovery), more research will be needed to determine appropriate • Pre combustion: CO2 is separated siting and safety aspects of pipelines, from high pressure input fuel gas as well as technical challenges such (syngas), obtained from gasification as exposure to contaminants and of fossil fuel or biomass, and then impurities. A ship transportation system removed via solvent processes and would require CO2 liquefaction,

154 IEA, Energy technology Perspectives, 2012, http:// www.iea.org/W/bookshop/add.aspx?id=425

pAge 130 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 12.2 MArket groWth trends �

Current Situation use of fossil fuels if emissions reduction • Growth rate in deployment, targets are to be reached. In addition: measured by the increase in the Progress in demonstrating CCS has annual CO2 capture relative to the been slow and there are currently no • Since CCS is associated with fossil- installed base, is largest between large scale power plants (100s MW) fuel based electricity generation (as 2020 and 2025; with CCS, globally. This is primarily well as biomass), it adds a flexible, due to the fact that CCS has no other dispatchable low carbon option to • By 2050, the majority of carbon benefits besides CO2 reduction, and the generation mix; capture (>70%) takes place in does not generate revenue unless non-OECD countries, with China • Retrofitting CCS to existing power there is a price on CO2 emissions accounting for >33%; plants is feasible, in particular to (i.e. a carbon price). On the contrary larger, more efficient plant (generally • OECD Americas (>50%) and is it highly capital intensive and, once those installed within the last 10 OECD Europe (>20%) have installed, can increase operating costs. years). This is particularly important a relatively high share of early However, there are eight large- in regions (e.g. China and India) deployment (2015-2020) but, scale industrial projects (LSIPs)155 where significant growth of coal-fired together, only account for 20-30% of in operation (storing about 23 million power is anticipated. the total by 2035. tonnes of CO2), and an additional Numerous models incorporate CCS into • By 2050 approximately 20% of eight projects in construction. Two of their visions for 2050:157,158 generating capacity in the UK (all these are in the electricity generation remaining fossil fuel generation) uses sector (Kemper County in the US and • CCS accounts for >20% of required CCS.159 Boundary Dam in Canada) and should emissions reduction to 2050, provide important early insights into requiring 1000s individual CCS • CCS from power generation construction and operating problems projects; dominates in OECD Americas and (scheduled to begin operation in 2014). China. In China this represents • CCS accounts for a cumulative 61% of all coal-fired generation CCS in the iron and steel, and cement mass of 123 GtCO2 captured in the country in 2050. In OECD manufacturing industries remains a between 2015 and 2050, split Europe deployment is equal between challenge, and considerable work is equally between power generation generation and industry. Elsewhere needed to implement R&D and scale and industrial applications; demonstration in these sectors.156 industry CCS is dominant; • Electricity generation with CCS Future demand • Industry CCS is dominated by could reach 3.5 GW by 2015 and processes that produce high-purity CCS technologies are believed to 16 GW by 2020 (69% associated CO2 pre-2025, but post-2025 have the potential for very significant with coal-fired power); there is growth in CO2 capture impact on CO2 emissions reduction. • This would require total investment from biomass conversion and other Although alternative solutions exist of approximately £2.2 trillion, of industrial processes. for electricity generation, in the case which $0.5 trillion is required in of heavy industry, CCS often offers China; the only means to reach the emission reduction targets. It is also the only suite of technologies that allow continued

155 Defined as projects involving the capture, transport and storage of CO2 at a scale of: at least 800,000 tonnes of CO2 annually for a coal-based power plant; or at least 400,000 tonnes of CO2 annually for other emission-intensive industrial facilities (including natural 157 http://www.decc.gov.uk/assets/decc/11/cutting- gas-based power generation), Global CCS Institute, THE emissions/carbon-capture-storage/4899-the-ccs- GLOBAL STATUS OF CCS, 2012. roadmap.pdf.

156 Global CCS Institute, THE GLOBAL STATUS OF 158 IEA, Energy Technology Perspectives, 2012, 2DS 159 http://www.eti.co.uk/presentations/article/ccs_ CCS, 2012. Scenario. exploiting_the_opportunity

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 131 • The increase in LCOE ranges from 33% for NGCC with post- combustion capture to 64% for pulverised coal (PC) plants with post-combustion or oxy-combustion plants. Nevertheless, without CCS, the investment required for an equal amount of CO2 emission reduction from the electricity generating sector would be 40-57% higher. Future market forecasts include: • Global market for carbon capture and sequestration will be worth between £80 and £140 billion by 2030.160 • Benefits for UK-based firms involving new advanced coal- and gas-fired power generation plant, including that fitted or retrofitted with CCS is estimated to be between £1.5- 3.0 bn/yr by 2020 and £3.0-6.5 bn/yr by 2030, with the UK taking about 2-3% of the world market. The UK has particular strengths in project management, engineering and financial & legal services, and is expected to capture a greater share of these markets.161 However, there have been significant project cancellations and delays in CCS projects over the last two years, due diverse reasons, such as loss of funding and insufficient energy storage regulations, and it is highly unlikely that initial 2020 targets required to meet stringent emissions reduction will be met.162 In addition to the 16 LSIP projects described above, an additional 59 are in the ‘identify, evaluate and define’ parts of the pipeline (the majority in the power sector) with the first peak of projects coming online expected in 2018-2020.

160 http://gigaom.com/cleantech/carbon-capture-and- sequestration-could-reach-221b-by-2030-study/

161 AEA, 2010. Future Value of Carbon Abatement Technologies in Coal and Gas Power Generation to UK Industry. March 2010, http://www.decc.gov.uk/ assets/decc/What%20we%20do/UK%20energy%20 supply/Energy%20mix/Carbon%20capture%20 and%20storage/1_20100629105946_e_@@_ futurevalueCATUKindustry.pdf

162 Global CCS Institute, THE GLOBAL STATUS OF CCS, 2012

pAge 132 PROFITING FROM SCIENCE WWW.MAtrix-ni.org FIGuRE 28 lSIPS By aSSET lIFECyClE aNd REGION163

5 Number of Projects 0 Identify Evaluate Define Execute Operate Total United States 0 7 9 4 4 24 Europe 4 8 7 0 2 21 Australia and New Zealand 0 4 0 1 0 5 Canada 0 1 3 3 1 8 China 9 2 0 0 0 11 Middle East 0 1 2 0 0 3 Other Asia 1 1 0 0 0 2 Africa 0 0 0 0 1 1 Total 14 24 21 8 8 75

In the near term, there will be a focus on projects that can benefit from EOR revenue, but this is not sustainable in the longer term, since EOR is unlikely to provide the storage capacity necessary for CCS to be a major contributor to CO2 abatement. Policies are needed that encourage investment in the use of dedicated geologic storage. Planned power generation projects are most often for post-combustion technologies (45%), followed by pre-combustion (33%) and oxyfuel combustion (14%). Recent growth has been marked in China, with a focus on coal-fired power plants.

163 Source: Global CCS Institute, THE GLOBAL STATUS OF CCS, 2012

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 133 12.3 geogrAphiC VAriAtions in deMAnd And groWth

The US currently has the largest number of planned and active LSIPs. Continued progress is largely driven by domestic demand for CO2 for use in EOR. China is undertaking R&D and small scale demonstration in CCS, with a growing number of LSIP in planning. Most of these projects involve major state-owned power, oil, or coal companies, as well as a wide array of international partners. In the UK, the Government is supportive of CCS technology development, and the CCS Roadmap was published in April 2012. Following the failure to proceed with the demonstration project at Longannet, the Government has now set aside £1 bn to support capital costs of early CCS projects, alongside Electricity Market Reforms (including a carbon price) that should enable CCS to compete with other low carbon technologies. The ETI has estimated overall CO2 technical storage capacity at 78 GT in the UK, the majority in non-chalk aquifers, but only a small proportion of this (15 GT) is required to meet emission reduction targets.164 Globally, power sector CCS will be dominated by China, followed by the US to 2050, primarily areas in which the use of coal-fired power stations continues. From 2030, industrial CCS sees strong growth in India, Africa and other developing Asia, as well as China.

164 http://www.eti.co.uk/presentations/article/ccs_ exploiting_the_opportunity

pAge 134 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 12.4 CritiCAl suCCess FACtors For MArket deVelopMent

Successful development of CCS • Appropriate contractual • Achieving support from the public is technologies is heavily reliant on arrangements for risk sharing in essential. In both Germany and The institutional support and technology/ publicly-funded demonstration Netherlands, public opposition has supply chain development. projects are needed. In the UK, negatively influenced the potential DECC’s first Demonstration exploitation of the technology. Institutional Factors Competition was ultimately dropped Technical & Supply Chain • Comprehensive and consistent as a result of a lack of clarity development Needs policy support is required, regarding commercial risk. including: incentives that encourage It is widely acknowledged that a • Development of universally accepted technology-based R&D (near term); great many technological challenges frameworks and standards for appropriate planning regulations; remain in all parts of the CCS chain. In effective and safe storage (including technology-neutral incentives, such recognition of this, the UK Government, long term liability) is crucial. There as CO2 pricing (longer term). This for example, has recently launched a has been some progress in this area is crucial to counter the lack of co-ordinated R&D programme worth in EU, US, Canada and Australia additional benefits (outside CO2 £125m (2012-2016). The technology in the last few years. For example, emissions reduction) associated is largely immature, with validation the EU CCS Directive (2009/31/ with the technology. The UK is now of demonstration projects expected EC)167 contains standards for taking a leading role in policy setting 2020-2025, and full scale commercial environmentally safe geological with the launch of a strategy ‘CCS systems with >45% efficiency by 2025- storage of CO2 for the lifetime of the Roadmap’.165 2035.168 site, including measuring, monitoring • This needs to be coupled with and verification (MMV), and closure, credible commitments to reduce requirements. All sites will require a CO2 emissions from the generation permit to ensure there is no risk of and industrial sectors, and a clear leakage, and the EU ETS has been long term price for carbon in order adjusted to ensure that allowances to attract private investment of would have to be surrendered sufficient scale. for any emissions resulting from leakage. • Comparative economics with other abatement pathways should be • Methods to address the length of used to highlight the benefits of the planning process are required. deployment. Although investment For example, once identified, the in CCS is very high, modelling storage system alone can take up suggests that pathways that omit to 10 years to become operational CCS incur higher costs in order to (selection, appraisal, drilling, testing, reach carbon emission reduction licensing, and construction). targets.166

165 http://www.decc.gov.uk/en/content/cms/emissions/ ccs/facilitating/facilitating.aspx 167 � http://ec.europa.eu/clima/policies/lowcarbon/ccs/ 168 DECC, CCS Roadmap Supporting deployment of 166 IEA, Energy Technology Perspectives, 2012 directive/index_en.htm Carbon Capture and Storage in the UK, April 2012.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 135 Specific technology challenges • Definition of the potential for use include: of captured CO2 in enhanced oil recovery projects. This is currently • Use of CCS typically results in an one of the most cost-effective increase in resource input to the methodologies for storage, but may process (fuel and water). More not have application in the long term. research is needed to improve the efficiency of the CCS technology key Emerging Technologies itself and its integration into power Specific highlights include: generation or industry processes. • New absorption processes, Adaptation of technology for range • including new solvents for use with of fuel types. post-combustion technologies (e.g. • Options for transport of liquefied advanced amines and ammonia) that CO2. There are many existing can reduce the energy penalty of uncertainties, e.g. around pipeline capture; safety, potential for road/ship • New absorption processes based tankers, leakage scenarios. on new materials such as carbon- • Methodologies for accurate based sorbents (e.g. activated assessment of the impact of carbon), metal organic frameworks bioenergy with carbon capture (MOFs), zeolites, immobilised amine (BECCS) on emissions, including sorbents, and regenerable solid the overall carbon footprint of sorbents (e.g. limestone or chemical biomass production and use (i.e. full looping concepts). MOFs are well life cycle calculations). recognised as having considerable potential for carbon capture,170 but • Increased understanding of global have been limited to date by the technically available storage energy intensive manufacturing and related cost of exploitation. process. New manufacturing Development of an internationally techniques are now overcoming accepted methodology for these limitations.171 assessment. • Membrane-based separation, with • Monitoring tools for storage (e.g. the potential to reduce the number of leakage detection), in particular steps required to separate H2 from in the marine sub-surface CO2 in pre-combustion CCS. environment.169 • Innovative use of captured CO2, Specific supply chain challenges that e.g. for algal growth in biofuel need to be addressed include: production. • Large scale demonstration projects to show integration and viability of all three aspects: capture, transport and storage.

170 � http://www.chem.tamu.edu/rgroup/zhou/PDF/095. pdf 169 For example, the ETI launched (June 2012) a £5m competition to demonstrate and test marine and shallow 171 http://www.moftechnologies.com/carbon-capture. subsurface monitoring tools for marine storage. html

pAge 136 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 12.5 the CoMpetitiVe lAndsCApe

The CCS industry will require input • In the US, it has been suggested from a variety of sectors, but will be that leading edge players, who dominated by large scale corporate are most likely to benefit from players. CSS, include subsurface service providers, utilities, oil and gas • Carbon capture. In the power sector majors, and niche-enhanced oil this will be dominated by power recovery producers. A handful of generators (including pulverised market leaders are expected to coal, CCGT, IGCC etc.) and their consolidate market share leadership Tier 1 process engineering suppliers. from 2020 (Figure 29). For example, in the UK, EDF Energy, E.ON, Petrofac (via subsidiary CO2 DeepStore) and Rolls Royce have been collaborating on a £3m ETI Project (2011-2014) to create gCCS, a modelling environment for techno-economic decision support to reduce risk and optimise process design. In the industry sector, there will be a variety of large scale and multi-national end users (e.g. cement manufacturers, steel mills), with the opportunity for knowledge transfer from existing sectors that produce high-purity CO2. • Transport will involve network operators (for pipelines) and their equipment suppliers; with the potential for shipping and land transport companies to get involved. • Storage. There is significant potential cross-over with the oil & gas and marine industries (for offshore storage) in this part of the supply chain. Activities include geological surveys, site assessment (e.g. MMV requirements), CO2 injection, and post operation monitoring.

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 137 FIGuRE 29 MajOR PlayERS IN ThE uS CCS SuPPly ChaIN172

172 IHS Emerging Energy Research, Global Carbon Capture and Sequestration Markets and Strategies: 2010–2030 November 2010 Market Study Excerpt pAge 138 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 13 lArge sCAle solAr pV 13 13.1 MArket groWth trends �

Solar - Current Situation geographical distribution of new which quadrupled in size in one year. systems further expanded. The top The United States (1.9 GW), Japan countries for total installed capacity (1.3 GW) and Australia (0.8 GW) The solar PV market has expanded in 2011 were Germany, Italy Japan were the next largest markets. Other significantly in recent years, with and Spain, closely followed by the countries which demonstrated notable cumulative growth in the global market United States. The leaders for installed growth included Canada (364 MW) between 2000 (1.4 GW) and 2011 solar PV capacity per inhabitant were and India (300 MW), both of which (almost 70 GW). all in Europe: Germany, Italy, the more than doubled their previous year’s Almost 30 GW of new solar PV Czech Republic, Belgium and Spain. installed capacity.176 capacity came online worldwide in The European Union dominated the Solar - Future demand 2011, increasing the global figure global PV market – Italy and Germany by 74% to almost 70 GW. Much of accounted for 57% of new generating the capacity was installed during a capacity in 2011. The EU installed Figure 30 shows the IEA’s predicted notable end-of-year surge driven by an estimated 17 GW and connected solar PV gross capacity additions, an anticipated reduction in FITs and nearly 22 GW to the grid. With a total of average unit costs, and investment a less favourable policy framework in 51 GW by year end, the EU accounted requirements up to and beyond 2030. established markets, and considerable for almost 75% of the world’s total The data indicate that electricity price reductions for PV technologies. installed solar PV capacity. PV alone production from solar PV in 2035 could Operational solar PV capacity at the end accounted for almost 47% of all new be over 26 times greater than in 2010, of 2011 was approximately ten times EU electricity generating capacity which increasing from 32 TWh to 846 TWh. the global total in 2006, and the annual came online last year.174,175 Its share in total generation is predicted average growth rate exceeded 58% to rise under a ‘new policies’ market Outside the European market, China over this period.173 scenario to just over 2% in 2035, driven accounted for the largest total of PV partly by ongoing production cost In 2011 six countries added more than installations (2.1 GW), a market reductions and a supportive regulatory 1 GW to their grids, and the and energy policy framework. FIGuRE 30 173 174 175 176 SOlaR Pv GROSS CaPaCITy addITIONS, avERaGE uNIT COST, aNd RESulTING INvESTMENT REquIREMENTS177

2700 2012 2015

2400 2016 2020 2100 2021 2025

1800 2026 2030 2031 2035 1500 Dollars per kW (2011) 1200

900

600

300 $222 billion $246 billion $217 billion $238 billion $335 billion

0 0 100 200 300 400 500 600 Gross capacity additions (GW)

173 REN21 (2012) Renewables 2012 Global Status Report

174 IEA (2012) World Energy Outlook 2012

175 EPIA (2012) Global Market Outlook for Photovoltaics until 2016

176 EPIA (2012) Global Market Outlook for Photovoltaics until 2016

177 Source: IEA World Energy Outlook 2012, ‘New Policies’ scenario.

pAge 140 PROFITING FROM SCIENCE WWW.MAtrix-ni.org Over the forecasting period, EU solar combined cycle plants – solar capacity is predicted to increase to fields integrated into large combustion some 146 GW, accounting for 5% of its plants, mainly conventional fossil-fuel electricity generation in 2035 (from 1% fired plants. in2010). In the United States, capacity CSP - Future demand is predicted to increase from 4 GW in 2011 t 68 GW in 2035. Other countries Most CSP projects are presently in the with large estimates of installed solar PV pilot or prototype stages. The world’s capacity in 2035 are China (113 GW), first multi-MW projects were installed in India (85 GW) and Japan (54 GW).178 2011, contributing to an annual installed total figure of 450 MW. In early 2012 CSP - Current Situation there was an estimated 1,760 MW in More than 450 MW of generating operation.181 CSP growth is expected to capacity was installed in 2011, bringing accelerate internationally, with projects global capacity to almost 1,760 MW. under construction or development in, Globally, there were approximately for example, Australia (250 MW), China 1,318 MW of cumulative installed CSP (50 MW), India (470 MW) and Turkey. capacity at the end of 2010, with nearly Under the IEA’s global energy trends 20 GW in the pipeline.179 ‘New Policies’ scenario, CSP electricity In 2010, there were three CSP plants generation is predicted to increase installed in the United States, totalling substantially from 1.6 TWh to around 78 MW, and nine CSP facilities installed 280 TWh, and installed capacity from in Spain, totalling 450 MW. 814 MW 1.3 GW to 72 GW between 2010 and of CSP was under construction by the 2035.182 While larger scale projects in end of 2010, with 10 GW in the United the near term remain focused on Spain States’ pipeline. Spain and the United and the United States, it is predicted States have been the largest markets that other regions will promote CSP to date, although CSP projects operate during the later years of the IEA’s at differing scales in at least 20 other forecasting period, including North countries.180 Africa, the European Union, India, Australia and South Africa. In 2035, While the United States is the second CSP capacity is forecast to be highest largest market in terms of total installed in China, followed by the Middle East. capacity, the demand side has to date been underpinned by federal loan guarantees. There appears to be some uncertainty over the future of federal policy which in turn is contributing to market uncertainty. Egypt, Morocco, Algeria, Thailand and India all launched their first CSP plants in 2011. All facilities in the Middle East and North Africa region are integrated

178 IEA World Energy Outlook

179 REN21 (2012) Renewables 2012 Global Status Report � 181 REN21 (2012) Renewables 2012 Global Status Report 180 EPIA (2011) cited in US Department of Energy (2011) 2010 Solar technologies market report � 182 IEA (2012) World Energy Outlook

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 141 13.2 geogrAphiC VAriAtions in deMAnd And groWth �

Solar Pv Australia, Taiwan and Thailand. The construction. Spain accounted for the third most significant region is North large majority of capacity additions America, with progress in both the in 2011, while several developing Global PV cell production continues Canadian and United States markets. countries launched their first CSP to demonstrate significant growth, Elsewhere, the Middle East and North plants. Market activity expanded from with global cell production capacity Africa represent medium- to long-term Spain and the United States into increasing at a three-year compound opportunities (2020-2035). There is also new regions. CSP has faced recent annual growth rate (CAGR) of 66%. market interest in South Amercia in the challenges due to rapidly falling PV A majority (59%) of all PV cells were medium- to long-term. prices and political change, which produced in China and Taiwan in 2010, slowed development in the Middle East which also retains 62% of global cell Globally, Europe’s development is and North Africa region. production capacity. Europe maintained rivalled only by the recent market its position as the second largest uptake in Australia. The historic As in the global market, parabolic cell producer, with 13% of global pioneers of PV technology production trough technology dominates the production. Japan held a 9% share of and generation, the United States and Spanish market. This is due mainly to a the market, while North America was Japan, have fallen behind Europe in supportive regulatory framework, which in fourth place with 5% of PV cells terms of PV market penetration. The made the development of CSP possible, produced globally in 2010. In mid more mature PV markets generally but also provided a strong position 2011, the global solar PV value chain correspond with mature economies to the technology that was then most comprised some 250 wafer producers, – after OECD countries the BRIC mature. To date Spain has been the about as many manufacturers, and more nations are emerging as players, only market with utility-scale solar tower than 400 module producers.183 although it is anticipated that China powers in operation. The 19.9 MW and India will significantlyout-perform Gemasolar solar thermal plant, which 2011 and early 2012 were marked by Brazil and Russia. The Middle East and started operation in 2011, was the latest many bankruptcies, insolvencies and Africa score last on the future market of three power towers to come on line. closures of facilities in Europe and penetration list, although there is some The Gemasolar plant was also the first China. A boom and bust cycle has near-term potential in South Africa and CSP facility able to operate for 24 hours severely damaged the Czech market, Middle East states.185 under certain operating conditions, due for example, and curtailed the Spanish 184 to night time storage capability. market. Without a supportive EU CSP or member state policy and fiscal The United States continued as the framework in place, the market could second largest concentrated solar contract to 10 GW capacity growth CSP sales in 2011 were USD 545 thermal power market in terms of per year. With a supportive policy and million, and the installed capital cost of total capacity, ending 2011 with some financial framework, there is potential CSP was estimated to be worth USD 500 MW in operation. Although no 186 for a 20 to 25 GW market in Europe. 9.5 billion by year-end. Parabolic new CSP capacity was completed trough plants presently dominate the during 2011, more than 1.3 GW was Within the electricity generation market, but new central receiver and under construction by year’s end, all segment of the value chain, Europe Fresnel plants were commissioned supported by federal loan guarantees, is followed by the Asia-Pacific region, during 2011 and others were under which includes China, Japan, Korea,

183 REN21 (2012) Renewables 2012 Global Status 185 EPIA (2012) Global Market Outlook for Report Photovoltaics until 2016

184 EPIA (2012) Global Market Outlook for 186 REN21 (2012) Renewables 2012 Global Status Photovoltaics until 2016 Report

pAge 142 PROFITING FROM SCIENCE WWW.MAtrix-ni.org and all expected to begin operation prior An interesting trend is the integration the 150 to 250 MW range. Increasing to 2014. Elsewhere, at least 100 MW of concentrating solar thermal size helps to reduce costs through of capacity was in operation at the end technology not only in hybrid systems economies of scale, but appropriate of 2011. Some of the milestones and with coal- or gas-fired plants, but also plant size also depends on proven highlights in the international market with other renewable energy systems. technologies.189 over the last couple of years included: For example, a recently-completed Some projects are also integrating solar project near Barcelona in Spain • Egypt bringing 20 MW on line at cooling solutions that significantly includes biomass along with CSP. While the end of 2010, as did Morocco reduce water demand, an advancement CSP has faced challenges associated (20 MW), followed by Algeria that is important in the arid, sunny with rapidly falling PV prices and the (25 MW), Thailand (9.8 MW), regions where CSP offers the greatest Arab Spring (slowing development in and India (2.5 MW), all of which potential. For example, in Spain, a the region), the ability of CSP to provide commissioned their first CSP plants number of companies established joint thermal storage and thus dispatchability, in 2011.187 ventures, especially with Japanese as well as the possibility to easily companies. While some firms used this • India adding the first segment of a hybridise with other energy sources, are opportunity to strengthen their market solar power tower in Rajasthan that expected to remain attractive technical positions, others, like Solar Millennium may ultimately generate 10 MW, due propositions. (Germany) and Stirling Energy Systems for completion by early 2013. In general, the industry remains (USA), could not deal with liquidity • Other countries with CSP capacity vertically integrated, with individual issues and went bankrupt. which did not add new facilities in companies involved in many parts of 2011 are Italy, Iran, and Australia, the value chain, from technology R&D where a solar/coal-fired plant to project operation and ownership. generates power and steam. Extensive supply chains are emerging in Spain and the United States, with • CSP growth is expected to an increasing number of companies accelerate internationally, with involved in the CSP business. projects under construction or Abengoa’s Spanish Solana project, for development in several countries, example, encompassed 70 companies including Australia (250 MW), China across 26 United States states. (50 MW), India (470 MW), and There is also a trend towards lasting Turkey. At least 100 MW of CSP partnerships between technology capacity is under construction in developers and EPC (engineering, the MENA region, with more in the procurement, construction) pipeline. contractors.188 Start-ups with new • South Africa completed an technologies are trying to find their international tender in 2011 and place in this very competitive industry. awarded contracts to build 150 MW The standard size of CSP projects is of capacity, and the national utility increasing in some locations. Due to Eskom plans another 100 MW. regulatory and FIT restrictions, typical • Several other countries, including plants in Spain have been no larger than Chile, Israel, Italy, Mexico and Saudi about 50 MW, but new projects in the Arabia expressed interest in installing United States are tending towards CSP plants, or started drafting the legislation needed to support CSP development.

187 � REN21 (2012) Renewables 2012 Global Status 188 REN21 (2012) Renewables 2012 Global Status 189 REN21 (2012) Renewables 2012 Global Status Report Report Report

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 143 13.3 CritiCAl suCCess FACtors For solAr pV And Csp MArket deVelopMent �

Institutional Factors • Development and implementation • CSP firms have begun to expand of complementary smart grids, grid their development efforts to include • Set long-term targets, supported management tools and enhanced a variety of technologies in order to by a transparent and predictable storage technologies. increase product value. For example, regulatory and policy framework to BrightSource Energy (USA) build investor confidence, including • By 2030, new CSP technologies announced in late 2011 that it would financial incentives to support may include the substitution of add molten salt storage to three solar PV’s and CSP’s evolution biogas and solar fuels for natural power tower projects in the United to a competitive commodity in the gas as a back-up fuel in power States. AREVA (France) is using electricity market. plants; hydrogen from solar towers molten salt storage technologies, / large dishes introduced in natural • Design and implement a regulatory and is integrating CSP into existing gas grids; production of solar-only framework to facilitate large-scale gas and coal plants to increase hydrogen to manufacture liquid PV and CSP grid integration. their efficiency; and GE unveiled a fuels; and solar production of other new ISCC power plant that joins its • Establish internationally-recognised energy carriers (e.g. metals) for the combined cycle gas turbines with standards and design codes for PV transportation sector. eSolar’s (USA) technology.190 products and components. key Emerging Technologies • Increase public R&D funding and Technical advances are critical for ensure sustainable, long-term market success. These include funding. technology advances in efficiency • Develop new mechanisms to support and size, to integration advances with the exchange of technology and electricity grids, and development of deployment best practices. supporting infrastructure. Examples of Technical & Supply Chain these opportunities over the period to development Needs 2030 include: Advances in existing crystalline Specific technology challenges that • silicon technologies and thin film need to be addressed include: technologies. • There is a need for continuing Emerging concepts and innovation along the solar PV and • technologies include, plasmonics CSP value chain – advances in and quantum wells. production efficiencies (e.g. thin film technologies), and developments of • Enhanced training, education and organic construction materials. awareness to ensure that there is a skilled workforce. • During 2011, in response to challenges posed by the complicated • Many solar PV manufacturing firms economic environment, CSP firms are pursuing vertical integration found it necessary to strengthen strategies. This includes expansion their positions by developing even into project development to remain more competitive technologies and, competitive and to generate at the same time, obtaining the new revenue streams. In Japan, financing needed to close their new manufacturers are involved in direct projects. retailing, installation and after- sales service, for example. In the • Specific supply chain challenges United States, some developers are that need to be addressed include: partnering with property developers, enhanced training, education and and leasing is becoming an awareness to ensure that there is a increasingly important model. skilled workforce along both value chains.

190 REN21 (2012) Renewables 2012 Global Status Report

pAge 144 PROFITING FROM SCIENCE WWW.MAtrix-ni.org 13.4 the CoMpetitiVe lAndsCApe �

Solar Pv European countries have now imposed Farm from First Solar. Pacific Gas and volume caps, reducing or suspending Electric Company will buy the electricity Many solar panel producers are the applicable feed in tariffs. This has from Topaz under a 25-year power facing the combined challenge of caused uncertainty for investors and purchase agreement.193 fewer financing options and falling raised risk premiums. For example, prices as a result of competition from For the past three years, US renewable First Solar announced its withdrawal rapid manufacturing growth in China. developers have been able to rely on a from the European market following the The bankruptcy of US solar panel federal renewable grant which provided introduction of a less favourable policy manufacturer Solyndra, a key business a grant in lieu of credit for 30% of framework in some key geographies. within the US government’s green qualifying construction costs for the stimulus programme, was a high profile In North America, the total value majority of renewable projects. This example of the challenges facing parts of deals for solar assets more than reduced their need for other sources of the sector. Similarly, the US company doubled, from US$2.5bn in 2010 to of capital, such as tax equity. The grant Evergreen Solar filed for bankruptcy. US$5.2bn in 2011. US$1.4bn of the programme expired, however, at the end Elsewhere, BP announced its exit rise was attributable to French oil and of 2011 putting renewed focus on the from the solar sector after 40 years of gas major Total’s purchase of SunPower need for investors with tax appetite. research and development. The move Corporation. Part of the increase was The China National Bluestar deal, was, however, followed by a decision by the result of distress sales by some and the more recent purchase of US India’s Tata Power to buy out its 51% solar companies but it may also reflect solar company SunPower by Total, stake in their 22-year-old joint venture, signs of the US solar market picking up highlight the trend towards global Tata BP Solar – India’s solar market is pace and growing in significance. consolidation and growth in solar. expected to grow to 800 to 1,200 MW North American deal value was also At the domestic level within China by 2014-15 and the country has a enhanced in 2011 by Canadian income the solar sector remains fragmented target of 20,000 MW of solar power fund Enbridge’s addition of US$1.2bn across small producers, and is in by2022.191 worth of wind and solar assets into its need of consolidation. China’s Five There were also larger combined portfolio. These include the 80 MW Year Plan2011-16 stresses that the deals for solar and wind assets in Sarnia Solar Project in Ontario. The government will back efficient providers Spain and Italy, most notably private attraction for funds like Enbridge in such and pressure inefficient providers to equity firm Bridgepoint’s US$880 M projects is the prospect of long-term leave the market. Reuters reports a purchase of 11 windfarms from cash flows. draft proposal from China’s Ministry of Spanish construction group ACS, and Industries and Information Technology Similar motivations, together with UK private equity firm Terra Firma’s (MIIT) envisaging the creation of one or energy mix repositioning, prompted US$933 M purchase of solar PV two big solar makers and about eight to MidAmerican Energy Holdings, the developer ReteRinnovabile from Italian ten medium-sized ones. utility company owned by Warren grid operator Terna.192 Buffett’s Berkshire Hathaway, to make European over-capacity in solar its first investment in solar power. It equipment manufacturing has driven the announced in December 2011 that it cost base down, causing governments will purchase the 550 MW Topaz Solar to re-evaluate the amount of support provided to solar projects. Many

191 PWC Renewables Deals Outlook 2012

192 PWC Renewables Deals Outlook 2012 193 PWC Renewables Deals Outlook 2012

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 145 Japanese and Chinese buyers have led expansionist renewables deal activity but the scope for companies from other countries, such as Korea and Singapore, was highlighted in some smaller deals. South Korean conglomerates Hanwa Chemical Corporation and SK Group featured in moves to invest in China’s Solar Fun Power Holdings and US thin film solar PV manufacturer HelioVolt respectively. CSP Most CSP plants presently in operation or under construction employ parabolic trough technology the most mature CSP technology in the market. Further technology improvements and significant unit cost reductions are required to make CSP plants competitive on a large scale. The average capacity factor of CSP plants is forecast by the IEA to increase over the period to 2035, because of the deployment of thermal storage technologies.194 Reflectors, receivers, and turbines are the three major components in CSP technologies that are currently being installed worldwide. Table 6 lists the major manufacturers of each of these components.

194 IEA (2012) World Energy Outlook

pAge 146 PROFITING FROM SCIENCE WWW.MAtrix-ni.org tAble 6 Csp CoMponent MAnuFACturers

Reflectors Receivers / Engines Turbines Alanod Areva ABB eSolar Babcock & Wilcox Alstom Flabeg Babcock Power GE-Termodyn Guardian Infinia MAN Turbo Patriot Solar Group Pratt & Whitney ORMAT PPG Industries Schott Siemens ReflecTech Sener Rioglass Siemens Solel

Glass has until recently been the Patriot Solar Group introduced a clear, and synergies in the CSP technical leading material for CSP reflectors. acrylic plastic surface with an aluminium field.197 The only other major solar However, 2010 saw a range of polymer or zinc backing, while Alanod-Solar was receiver manufacturer is Schott Solar and alloy options becoming competitive manufacturing nano-composite-coated, Systems, a company that recently when compared with traditional glass anodized alloy Miro-Sun mirrors. became a significant player. In 2009, reflectors. Historically, Flabeg has been Glass manufacturers such as Rioglass Schott expanded its North American the primary manufacturer of bent glass suggest that polymer films suit only sales operations, began collaborating reflectors, providing products with 95% smaller installations with less serious with NREL to develop an improved or better reflectivity. PPG Industries durability requirements. Some suggest absorber coating for receivers. For and Rioglass also manufacture glass that while polymer films have lasted turbines, ABB, GE-Thermodyn, and reflectors, but aim to lower capital through weathering and accelerated Siemens are major manufacturers, and costs of glass and increase durability. life-cycle tests, their real-life durability in companies such as Alstom, MAN Turbo, Emerging companies such as large CSP plants have yet to be proven and ORMAT are looking to gain market ReflecTech and 3M are offering polymer before they can displace traditional share.198 films with equal, if not better, reflectivity, glass technology in the market.196 and are up to 60% lighter, and said For receivers, Solel was historically the to be more durable than glass. Alloy market leader. However, in late 2009, mirrors are also contending with glass Solel was purchased by the German reflectors. The mirrors had comparable turbine manufacturer, Siemens. Solel performance and durability, while continues to manufacture the same being lighter and therefore less labour- solar receivers that are installed in a intensive to manufacture and install.195 number of high-profile CSP plants; only now with Siemens’ financial backing

197 CSPToday.com October 2009 Market intelligence brief

195 US Department of Energy (2011) 2010 Solar 196 CSPToday.com January 2010 Market intelligence 198 US Department of Energy (2011) 2010 Solar technologies market report brief technologies market report

PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 147 Appendix

list oF 2publiCAtions AEA, 2010. Future Value of Carbon heat, March 2012 Osborne MP, to the Royal Society, Abatement Technologies in Coal and November 2012 DECC, The UK Renewable Energy Gas Power Generation to UK Industry. Strategy, July 2009 IEA, A SUSTAINABLE AND RELIABLE March 2010 ENERGY SOURCE, A review of status E4Tech, Biomass conversion routes, AEA, UK and Global Bioenergy and prospects, 2009 2012 Resource, A report for DECC, 2011 IEA, Accelerating Progress for a EIA, Annual Energy Outlook 2012 with Australian Government’s National Sustainable Energy Future, 2006 Projections to 2035, 20122 Energy Efficiency Initiative, Smart Grid, IEA, Climate Policy Uncertainty and Smart City: A new direction for a new EIA, International Energy Outlook 2011, Investment Risk, 2007 energy era, 2009 2011 IEA, Energy Technology Perspectives, Barton, J, and Gammon, R., The Energy Watch Group, Renewable 2012 production of hydrogen fuel from Energy Outlook 2030 - Energy Watch renewable sources and its role in grid Group Global Renewable Energy IEA, Key World Energy Statistics 2012, operations, Journal of Power Sources Scenarios, 2008 2012 195, 2010, 8222–8235 Ernst & Young, Renewable energy IEA, Marine Renewable Energy: Global BNEF and Frankfurt School of Finance country attractiveness indices, 2012 and Canadian Overview, 2012 & Management, Global Trends in ETI, CCS: Exploiting the opportunity, IEA, Technology Roadmap: Bioenergy Renewable Energy Investment 2012, May 2012 for Heat and Power, 2012 A report commissioned by UNEP’s Division of Technology, Industry and European Commission, Transition IEA, Technology Roadmap: Carbon Economics (DTIE), 2012 towards a Low Carbon Energy System Capture and Storage, 2012 by 2050: What Role for the EU?, 2011 BNEF, Global renewable Energy Market IEA, Technology Roadmap: China Wind Outlook, 2011 European Technology Platform for Wind Energy Development 2050, 2012 Energy BP, BP Energy Outlook 2030, Jan 2012 IEA, Technology Roadmap: Smart Grid, European Technology Platform Smart 2012 BP, Statistical review of world energy, Grids, Smart Grids SRA, Strategic 2012 IEA, Technology Roadmap: Solar Research Agenda Update of the Heating and Cooling, 2012 Business Wire, The Market for Energy SmartGrids SRA 2007 for the needs by Efficiency Retrofits in Commercial the year 2035, March 2012 IEA, Technology Roadmap: Solar Buildings Will Nearly Double by 2020, photovoltaic energy, 2012 Exxon Mobil 2012, The Outlook for Reaching $152 Billion Worldwide, July Energy: A View to 2040, 2012 IEA, Technology Roadmap: Wind 2012 Energy, 2012 Garrad Hassan, Energize renewables, Cleantech Group, Global Cleantech 2012 IEA, World Energy Outlook, 2010 100, 2011 GHK, In-depth Technology Innovation IEA, World Energy Outlook, 2012 Committee on Climate Change, Fourth Assessment for Solid Wall Insulation, Carbon Budget, May 2011 IHS Emerging Energy Research, Global Final report to DECC, September 2012 Carbon Capture and Sequestration DECC UK Renewable Energy GIGAOM, Carbon capture and Markets and Strategies: 2010–2030 Roadmap, July 2011 sequestration could reach $221B by November 2010 Market Study Excerpt 2030: Study, December 2009 DECC, 2050 Pathways Analysis Institute for Building Efficiency, DECC, Bioenergy Strategy, April 2012 Global CCS Institute, THE GLOBAL Johnson Controls, DRIVING STATUS OF CCS, 2012 TRANSFORMATION TO ENERGY DECC, CCS Roadmap: Supporting EFFICIENT BUILDINGS Policies and deployment of Carbon Capture and Green IT Review, Market for energy Actions: 2nd Edition Big Picture, June Storage in the UK, April 2012 efficient building products and services 2012 goes through the roof, December 2011 DECC, Energy Flow Chart 2011 Jian-Rong Li, Yuguang Ma, M. Colin Greenpeace, The Energy [R]evolution DECC, Fossil Fuel Price Projections, McCarthy, Julian Sculley, Jiamei Yu, Scenario, 2012 October 2011 Hae-Kwon Jeong, Perla B. Balbuena, GWEC, Global Wind Energy Outlook Hong-Cai Zhou, Carbon dioxide DECC, Oil Price Projections, October 2012, 2012 capture-related gas adsorption and 2011 separation in metal-organic frameworks, HM Treasury, Speech by the Chancellor DECC, The future of heating: A Coordination Chemistry Reviews, 2011 of the Exchequer, Rt Hon George strategic framework for low carbon 2 PROFITING FROM SCIENCE WWW.MAtrix-ni.org pAge 149 KPMG and Gowlings, Smart Grid Information Breakfast, April 2009 Marine Institute, Marine Foresight Series No. 1, Marine industries global market analysis, March 2005 Mckinsey, EU Low Carbon ROADMAP 2050, A report for the European Climate Foundation, 2011 Mckinsey, The global energy picture, 2010 MIT Energy Futures, Autumn 2011 MIT Energy Futures, Spring 2012 MOF Technologies, Carbon Capture, 2012 Oeko-Institut (Institute for Applied Ecology), Global Bioenergy Potentials, 2011 Offshore Valuation, The Offshore Valuation, 2011 Pike Research, Executive Summary: Smart Building Managed Services, 2012 Pike Research, Executive Summary: Smart Grid Renewables Integration, 2012 Platts, Insight: 2012 Global Energy Outlook, 2012 Practical Action, Poor people’s energy outlook 2012, 2012 PWC, 100% renewable electricity: A roadmap to 2050 for Europe and North Africa, 2010 PWC, Crisis or not, renewable energy is hot: To reap the rewards, governments and companies should act now, March 2009 REN21, Renewables 2012: Global Status Report, 2012 SBI Energy, Using ‘smart grid’ market as a proxy, World Smart Grid, 2nd Edition, 2012 Smart Grid Network, Illinois smart grid market inventory, February 2012 World Bank, Application of EA to Dam and Reservoir Projects, January 1999 World Bank, Background Paper to the 2010 World Development Report: Thirty-five Years of Long-run Energy Forecasting, May 2010

pAge 150 PROFITING FROM SCIENCE WWW.MAtrix-ni.org MATRIX

MATRIXNORTHERN IRELAND SCIENCE INDUSTRY PANEL NORThERN IRElaNd SCIENCE INduSTRy PaNEl innoVation PoLiCy Unit FORESIGHTdEPartmEnt AND oF EntErPriSE, HORIZON SCANNING UNIT DEPARTMENTtradE and inVEStmEnt OF ENTERPRISE, TRADEnEtHErLEigH AND INVESTMENT NETHERLEIGHmaSSEy aVEnUE MASSEYbELFaSt AVENUEbt4 2jP BELFAST BT4 2JP

PROFITING FROM SCIENCE www.matrix-ni.org PROFITING FROM SCIENCE WWW.MAtrix-ni.org