Chasing the dream

The UK Government has decreed that by 2016 all new homes must be zero-carbon. It is a challenging target that will need micro-generation to blossom to achieve.

As circle squaring exercises go it is hard to think of a more difficult one faced by this or any future government.

On the one hand, Britain needs more homes - three million by 2020 is the ambitious target set by the government - to cope with a growing population, more single occupancy households and the fact that we are living longer. On the other hand, climate change remains the greatest of challenges. 

Traditionally, more homes means more carbon emissions, with domestic properties currently accounting for 27 per cent of the UK's CO2 output. So, how do we build more while keeping emissions from those new buildings to a minimum?

The government's challenge has been to set a rigorous sustainability target for the building industry. By 2016 all new homes must be zero carbon, it announced in 2006. Just what they mean by zero carbon has yet to be decided; and there is still huge doubt as to what part on-site micro-generation using renewable energy sources will play in delivering that target.

But play a part it undoubtedly will, despite the cries from some zealots in the green movement that micro-generation is getting it wrong (macro-generation makes more sense, they argue).

The trouble is, to date, its role has been minuscule, and 2016 is now only eight years away. In the traditional consumer model of technology take-up, micro-generation is still only the preserve of the innovator with capital to spare. And our industry lags behind that of many other countries in Europe.

Last year 130,000 solar panels went up on roofs across Germany. In the UK, just 300. The UK's renewable energy industry as a whole employs about one-tenth of Germany's. Yet, if a report by the Energy Saving Trust for the Department of Business, Enterprise and Regulatory Reform (BERR) in 2005 is to be believed, micro-generation has the potential to supply 30-40 per cent of the UK's electricity by 2050. This would, however, require a 'massive' uptake of the technology.

A consensus seems to be emerging that the 2016 target will focus minds and will give a boost to the micro-generation industry. Prices for technology and installation are high in the UK because supply is weak. As supply kicks in to meet the expected demand, we should see prices drop. That could create a new market for onsite renewables of £2bn per year, a report by the Renewables Advisory Board (RAB), claimed last year.

Meeting deadlines

The difficulty, says Matthew Spencer, chair of RAB's Micro-generation Working Group, is that the 2016 target leaves everything until the last minute. Demand for micro-generation won't spike upwards until we approach the deadline, which means we could face a 'capacity gap'. The government's timeline calls for modest 25 per cent reductions in carbon emissions from new homes in 2015, then a major leap to 100 per cent reductions (Level 6 of the Code for Sustainable Homes) the following year.

"This potential capacity gap represents a significant danger to the delivery of this policy," Spencer told E&T. "The current timetable leaves very little opportunity for learning or early investment." In other words, for the micro-generation industry it is a case of why invest now when the technology is not needed.

Spencer has argued for the planning system to begin demanding higher carbon reduction standards of larger developments now. This would, he argues, allow economies of scale and capacity to be built up earlier by the industry. You could also start stoking demand now, adds Spencer, by bringing in a minimum requirement for onsite renewables in new developments - an extension of the so-called Merton Rule.

The UK's fledgling micro-generation industry also continues to be hampered by a poor system of incentives and grants, coupled with a general lack of government support.

The key government grant mechanism, the Low Carbon Buildings Programme, has come in for a huge amount of criticismand suffered reductions in the maximum amount of grant available last May from £15,000 to just £2,500. Until then the scheme had, in many respects, been a victim of its own success with massive over-subscription for the funds available - a paltry £10m in total.

Since the grant ceiling was reduced demand has fallen - returns on investment have become as low as 2 per cent. In March this year, the Renewable Energy Association, which represents the industry, dubbed it the SLOW Carbon Building Programme and claimed the new level of grant available held no attraction for householders and put renewable energy "beyond the reach of all but the wealthiest households". The knock-on effect on the industry would be "more redundancies and bankruptcies", Howard Johns of Southernsolar, a supplier of solar energy systems based in East Sussex, says.

The problem, argues Spencer, is that the programme has operated in a policy vacuum. "What's been missing is an overall strategy for delivering micro-generation. Strategy to date has not been strong enough to deliver big shifts in the market and mainstream the technology. We need a coherent strategy and policy objectives, which includes what to do with existing homes and involves a technology-by-technology approach because each has different opportunities and barriers to uptake."

This April did see the removal of the requirement for planning permission for some micro-generation technologies. Permission is now no longer needed, "as long as there is clearly no impact on others". The change covered solar panels, ground and water source heat pumps and biomass systems. Free-standing and building-mounted wind turbines should be added to this list, subject to clearance from the European Commission later this year.

For proponents of the technology, however, there remains one crucial obstacle - the absence in the UK of a so-called 'feed in tariff' - as operates in Germany, France, Spain and many other European countries.

This means micro-generation producers are able to get a 'fair price' for any electricity they are able to export back to the grid. That amounts to about 35p/kwh in Germany, while in the UK, where there is no feed in tariff, that amounts to 18p/kwh at the very best. However, micro-producers of renewable energy do get a payment under the renewables obligation scheme for every unit they produce.

Creaking roofs

"The feed in tariff partly explains why Germany is doing so well, and why roofs in southern Germany are creaking from the number of solar panels," says Dr Jim Watson, deputy director of the Sussex Energy Group. "The level you set it at it could make a big differ--ence. In the UK it's a lottery, what you get depends on the supplier you use, who all say they lose money by paying for electricity exports."

While the government has made no specific announcement on the possibility of a feed in tariff for the UK, recent noises have been more encouraging with environment secretary Hilary Benn announcing the government would "investigate" their possible introduction last November.

More intelligent forms of incentives are also required, says Spencer. "I'm not sure that government grants are the way forward. Why not offer people reductions in their council tax? Or you could offer people a lower rate of stamp duty when they come to sell their house if they have installed micro-generation technology; or you could use energy performance certificates so they demonstrate what's been done and change the sale value of the house."

The question also remains for those charged with meeting the 2016 target: which of the micro-generation technologies can offer the quickest wins and the shortest payback times, and are some simply non-starters?

Work by house builder Barratt at its eco-village site in Chorley, Lancashire concluded recently that ground source heat pumps and photovoltaic (PV) roof panels worked "very well" in trials as did micro combined heat and power units. Solar hot water systems only proved to be "reasonably satisfactory" - perhaps a measure of the fact that they supply most hot water when it is needed least (mid-summer) and least when it is needed most (mid-winter).

Micro wind turbines were not surprisingly "disappointing", confirmation of the now widely accepted view that, unless you live on the coast or on top of wide open moorland, they are a non-starter (David Cameron, take note).

"You have to look at what's most suitable for each site," says Simon Lewin, head of Technical Consultancy & Training at the Centre for Sustainable Energy. "And if you start from the assumption that you want to decarbonise the energy supply you have to have a mix - so that means centralised renewable energy, chp, and micro-generation. At the moment less than 2 per cent of our energy comes from renewables, with microgeneration a fraction of a fraction."

The prize associated with increasing that fraction is great though, argues Watson. "If you really want micro-generation to make a big contribution it means transforming the energy market into something radically different. It means changing from a top down to a bottom up approach. Tinkering with the current system won't bring forward substantial amounts of micro-generation.

"We need a shift so energy suppliers supply services rather than supplies so you can attract the people who find it too difficult to install micro-generation. That means giving those companies a real incentive to go into people's homes and say how they can reduce people's emissions - how they will install the technology for people and make it work for them."

From the government, that means a range of incentives are needed to cater for these different market segments - both the innovators who will do things off their own back and the mass market who want companies to take care of everything for them.

"The prize if we can do that is to really engage people with their energy use," concludes Watson. "People will become more actively aware of where their energy comes from, and it will be generated more closely to it's point of use.

"One effect will be to make people more likely to conserve energy. At the moment with our centralised system it's out of sight and out of mind. That's perhaps the way some people like it, but I have serious questions about whether we can meet issues like security and climate change while keeping it out of site out of mind."

Micro-generation technologies - what's available?

The most common low energy or renewable micro-generation technologies are solar photovoltaics, biomass, wind turbines, small scale hydro, solar thermal hot water and ground source heat pumps.

Solar photovoltaics generate electricity from the sun's energy using cells that create an electrical field when light shines on them. They only require daylight to work, although of course the stronger the light the greater the amount of electricity produced. An average domestic system (of between 1.5 and 3kW peak) costs between £5,000 and £8,000 per kW peak.

Biomass (aka bioenergy or biofuels) micro-regeneration uses organic matter to create energy. Although CO2 is created in this process, because an equivalent amount of carbon is absorbed by the fuel during its production it is classed as 'carbon neutral'. A wide range of plant and agricultural material can be used either to provide space heating through stand alone stoves or to run a hot water/central heating boiler. A stand-alone room heater costs about £3,000 while a typical boiler for a three bedroom semi will set you back anything from £5,000 to £12,000 to install. And of course there's the fuel to pay for - unlike renewables.

Modern wind turbines use (you guessed it) wind to turn aerodynamic blades that turn a rotor to create electricity. Costs depend on turbine size and its location - but you can now get a 1kilowatt version from B&Q! The effectiveness of small scale wind turbines are, however, limited by their dependence on the strength of the wind and its direction. They are not recommended for locations with significant obstructions (hills, buildings etc) which can reduce wind speed and create turbulence, or if annual windspeeds are less than 6m/s. This effectively rules them out for most urban settings.

Small scale hydro plants use moving water's kinetic energy to turn a turbine to create electricity. Obviously this requires a nearby source of running water (stream etc), and high capital costs mean it can be better to create 'community' schemes. In theory such technology can deliver a more reliable electricity supply than other renewable technologies, even opening up the possibility of being able to sell excess power back to the grid.

Costing typically between £3,000 and £4,500 solar water heating systems are among the more developed of the micro-generation technologies. Solar panels, a heat transfer system and a hot water cylinder are used to deliver up to a third of a home's hot water needs from the sun.

Ground source heat pumps provide space heating and hot water by transferring heat from the ground into a building, although this requires electricity to pump the heat. Costs depend on property and location but typical 6-8kW system costs £7,300-£11,800 plus the price of connection to the distribution system. Because they require the digging of an underground borehole or trench, they can be more suited to new build developments where this can be done at the same time as the foundations.

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