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Energymatters
the smart grid: a revolution for renewables
milking the ‘concrete cow’
What future for fracking?
subsidy cuts shock for industry
renewable heat for a historic croft
solar’s bright future in scotland
www.ckdgalbraith.co.uk
ISSUE 10 AUTUMN 2015
CKD Galbraith is Scotland’s leading independent property consultancy. Drawing on a century of experience in land and property management, the firm is progressive and dynamic, employing more than 200 people in offices throughout Scotland.
The firm provides a full range of property consulting services across the commercial, residential, rural and energy sectors.
CKD Galbraith provides a personal service, listening to clients and delivering advice to suit their particular opportunities and circumstances.
Our associate, CKD Kennedy Macpherson, is based in London.
Follow us on Twitter: @CKDGEnergy
Like us on Facebook: www.facebook.com/ckdgalbraith
Join us on Linkedin: www.linkedin.com/company/ckd-galbraith
WELCOME
reneWable enerGy is under increased scrutiny since new Energy and Climate Change Secretary Amber Rudd announced a withdrawal of support for onshore wind developments by shortening the period of eligibility for the Renewables Obligation. Incentivisation has been a key driver to encourage development and reduce carbon emissions – but support must be affordable.
In 2011, due to unexpected take-up, the then coalition Government made drastic cuts to support for photo-voltaic technology, used to convert the sun’s energy to electrical power. This was less than a year after the launch of the Feed in Tariff, yet development continued and subsidy encouraged research and development to deliver energy efficiency even in the not-so-sunny UK! Solar PV deployment in the UK is once again in the Government’s sights and it plans to consult on changes to the support regime to bring costs under control.
Yet climate change continues to be a threat, and President Obama has unveiled ambitious carbon-reduction plans despite scepticism about deliverability in the political landscape of the USA.
Uncertainty of support introduces risk and creates invest-ment uncertainty, yet, as Amber Rudd says, people want low bills, adding: “As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies.”
According to Deutsche Bank, total module costs of solar PV from leading Chinese companies have decreased from around $1.31 per watt in 2011 to some $0.50 today – a fall of 62 per cent – and total costs could decrease a further 30-40 per cent. Coupled with advances in battery technology, these changes could bring a new dawn in which reliance upon fossil fuels is truly diminished. Time will tell, but, despite industry concerns, there is cause for optimism. CalumInnes, Partner
incentives: the great balancing act
energy matters is produced by Allerton Communications, London, UK, and designed by George Gray Media & Design, St Andeux, France. © CKD Galbraith LLP.
a smart eleCtriCity network technology pio-neered in Scotland is being taken to other parts of the UK and could go global
due to the changing nature of power demand and distribution.
The Orkney ‘smart grid’ connects the same amount of renewable generation to the islands’ distribution network as would have been possible by conven-tional network reinforcement – at a frac-tion of the cost.
Utilities traditionally assume worst case scenarios when planning network capacity by using maximum generation and minimum demand, or vice versa. Inevitably this results in occasional wasteful oversupply that’s at odds with both environmental considerations and economic austerity.
Active Network Management (ANM) technology makes better use of the existing network by instructing genera-tors to control their output, in real time, to match available network capacity.
Data is collected centrally from ‘pinch points’ around the network so power flows are monitored and outputs from multiple new renewable generators are controlled.
A central controller identifies when power flows are approaching the limits of network power rating and instructs generators to reduce their output before problems occur. The system is designed to protect the network if generators don’t respond correctly within specified time limits.
Work on the grid began in 2004 when Scottish and Southern Energy Power Distribution initiated studies with the University of Strathclyde to address capacity constraints that limited the Orkney Isles’ significant potential for renewable generation. A spin-out
CONTENTS
4Anaerobicdigestion:Bugsthatmakefuel.
SummerfunatthebigScottishshows.
6Cover story:AsunnyfutureforsolarinScotland.
Subsidycutssendoutshockwaves.
8Renewableheatingforahistoriccroft.
Keepingprojectdelaystoaminimum.
10Whatdoesthefutureholdforfracking?
11Currentratesofsubsidyforrenewables.
By making thE Existing nEtwork morE EfficiEnt, wE ’rE dEfErring thE nEEd for far morE costly and disruptivE upgradEs.
“
Page 2 | Energy Matters Autumn 2015 | www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy
www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Autumn 2015 | Page 3
company , Smarter Grid Solutions (SGS), was set up to develop and deliver an ANM system to meet SSEPD’s objectives.
ANM launched in 2009 and by 2012 30MW of new renewable generation had agreed contracts to connect.
The system is ideally suited to today’s more complex networks featuring multi-ple renewable-energy generation points, each with smaller capacity than, say, coal-fired installations – and customers generating surplus power to sell back into the network. Meanwhile, wind and solar investors have been quick to develop new capacity to secure subsidies in advance of Government cutbacks.
Connecting this level of renewable genera-tion on Orkney by conventional network upgrading and reinforcement would have cost around £30 million, with long lead times and substantial environmental impact. The total cost of developing and delivering the Orkney Smart Grid has been around £500,000. With the one-off research and development investment developing the technology, that’s £1 mil-lion or a saving of 30 times.
Today, the Orkney smart grid continues to evolve. Smarter Grid Solutions is at the forefront of smart grid technology and is working with SSEPD to enhance the ANM system. The technology enabled SSEPD
to create the Orkney Registered Power
Zone (RPZ), a desig-nation awarded through
Ofgem to reward innovation.
Similar drivers operate throughout the UK and SGS has been quick to identify an opportunity. A smart grid is due to go on stream on the Isle of Wight in winter 2015 with it starting to control generators by September 2016. SGS is talk-ing to other network operators
the smart grid: it’s all about control
and suppliers and new entrants such as large-battery suppliers. With offices in Glasgow, London and New York, the company is positioned to apply the technology internationally.
“Active Network Management saves money because you don’t have to rein-force the existing network with more current carrying capacity and costly components such as copper wires,” said
Andrew Urquhart, Active Solutions Manager, Future Networks, Scottish and Southern Energy Power Distribution. “It is a key enabler of development of renewable energy.
“There are challenges, but we can work with all industry participants to make power distribution more sustainable. By making the existing network more efficient, we’re addressing long-standing constraints and deferring the need for far more costly and disruptive upgrades.”
An innovative power grid established in Orkney is set to spark revolution in renewable energy distribution. PeterCurtain reports.
aCtive netWorK manaGement on orKney
volatility in Grain prices, ever-increasing energy costs and growing pressure for the Government to meet renewable energy
targets all mean that more farms and estates with a large in-hand farming enterprise are asking if they should install their own anaerobic digestion plants.
The answer is, in some cases, yes. For those with either electricity or gas grid capacity available nearby, and/or an on-site heat demand, AD can work well.
We are currently investigating the feasibility of installing a 1MW plant on a client’s estate in the west of Scotland. The estate has a 1,000-acre in-hand farming enterprise, growing wheat, barley and oats.
Over the past five years, due to price fluctuations, gross margins per acre have ranged from –£85 to more than £140, before subsidy.
This has led to significant uncertainty in the farming budget, which has been
the main driver behind investigating the opportunity for investing in anaerobic digestion.
We are still in the very early stages of feasibility, but the benefits do seem to be numerous. The annual fertiliser bill is significant and it seems that this cost could be reduced by about 80% by spreading the nutrient-rich digestate, a high-quality by-product of the AD process, rather than buying synthetic fertiliser.
The system will of course need to be
it is EssEntial to account for dEgrEssion whEn considEring thE financial rEturns from anaEroBic digEstion.
“
our enerGy team hadasupercoupleofweekendsattheRoyalHighlandShowandtheScottishGameFair,writes Anneka Fraser, an Associate in CKD Galbraith’s Edinburgh office.
Thankyoutoallofyouwhostoppedbyourstandstoenjoyaglassofbubblywithusandhelpedmaketheeventssosuccessful.
Arecord188,449attendedthe175thRoyalHighlandShowatInglistoninJune–almost10,000morethanlastyear.TheScottishGameFairatSconePalacePark-landswasalsoabigsuccess.
Theenergysectorhasrecentlybeendealttwoconsiderableblows—theROC(RenewableObligationCertificates)schemeisendingin2016,ayearearlierthanexpected,andtheClimateChangeLevyexemptionisalsotoendearlierthan expected.
Inspiteoftheuncertainty,wewereencouragedtohearsomanytalkingpositivelyaboutthefutureofrenewableenergyinScotland.Themarketmaytreadwaterintheshortterm,butwearesure
thatconfidenceinothertechnologieswill grow.
DidyourchildenteroursunflowergrowingcompetitionattheSconeGameFairinJuly?ThecompetitionresultswillbeannouncedattheendofAugustwiththetallestsunflowerentrywinninga£150vouchertoGoApe,Scotland’snumberonetree-topadventure.Gotowww.ckdgalbraith.co.uk.
Forthoseofyouwhomissedoutonthefun,we,andourcompetition,willbereturningtotheshowsnextyear,sobesuretocomeandseeus!
l CKD Galbraith’s energy team had a strong presence at both the Royal High-land Show and the Scottish Game Fair.
Page 4 | Energy Matters Autumn 2015 | www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy
in July the Department of Energy and Climate Change published a consultation document on removing
pre-accreditation from the Feed-in Tariff. This is available to solar photovoltaic (PV) and wind projects above 50kW and all hydro and anaerobic digestion (AD) projects.
The British Hydropower Association is ‘disappointed’, complaining of ‘completely unexpected’ news. It has begun its own consultation with a view to responding and putting questions to DECC about its ‘motives’.
In an update to its members, the industry association said it had established some answers by DECC about the changes. If pre-accreditation is removed, the Government will honour:
• Pre-accreditations already pre-accredited but not accredited,
• Applications for pre-accreditations that are not yet pre-accredited,
• New applications for pre-accreditation made prior to the change of legislation.
The Government’s Comprehensive FIT Review (CFR) should be published at the end of August 2015 and the consultation will run for eight weeks. This will be enacted before April 2016, says BHA. “In the CFR, it is likely that cost controls will be applied by amending degression mechanisms.”
Until the outcome of the CFR is known in early 2016, the future development of schemes is uncertain.
“However,” said BHA, “for those schemes already in process there is no change and therefore the next two years will be busy [for those] trying to build all the pre-accredited schemes.”
energy team out in strength at big summer events
move to end Fit pre-accreditation ‘disappoints’ hydro group
designed around the feedstocks which grow well in the area. For example, maize is fast becoming the established front-runner in terms of energy crop for AD, but there is little point designing a west-coast plant to run on maize, as the climate is unsuitable for this crop. The plant is therefore being designed to run primarily off grass silage, supplemented with whole crop cereals and rye, together with manure and energy beet, where these can be sourced locally.
In essence, the plant operates in much the same way as the digestive system of a cow – AD is often referred to as a “concrete cow” system. As with cattle, the fuel can be varied throughout the year, provided new feedstock is introduced gradually, so that the bacteria inside the digester (as with a cow’s stomach) can adjust accordingly.
One key issue to consider is the degression in both Renewable Heat Incentive (RHI) and Feed-in Tariff (FIT). This is the regular decrease in the subsidy rate offered for each scheme, according to the level of uptake of that particular technology in the preceding period. It is
essential to account for degression when considering the financial returns from AD, particularly given that the time from feasibility to commissioning can be fairly lengthy for AD plants. Once accredited however, the tariff rates are fixed (index-linked) for 20 years.
Another important consideration is the introduction in February this year of new sustainability criteria under the RHI. These take effect from September and require evidence to be provided on both land use and greenhouse gas (GHG) emissions for each consignment of crop
feedstock, though waste feedstock, such as slurry or manure, will be exempt from the criteria. If an energy producer is unable to demonstrate both criteria have been met, RHI subsidy can be withheld.
Default figures produced by Ofgem can be used for GHG emissions, but the suggestion is that these have been set at a level which makes the Government-imposed limits unachievable if default figures alone are used. So keeping accurate records and reporting on feedstock production will be increasingly
important in the AD sector.
milking the most from the ‘concrete cow’
Anaerobicdigestionisaseriesofbiologicalprocessesinwhichmicro-organismsbreakdownbiodegradablematerialintheabsenceofoxygen.Theresultisamixtureofmethaneandcarbondioxidegases(biogas),someorganicmaterial(digestate)andwater.
l bioGascanbeburnedtoproducebothheatandelectricity,whilemethanecanbeusedasvehiclefuelorinjectedintothegasgrid.
l DiGestateisastable,nutrient-richsubstanceandcanbeusedforarangeofproductsandpurposes:mostusefullyasafertiliser,richinnutrients,butalsoasfeedstockforethanolproduction,andinlow-gradebuildingmaterialslike fibreboard.
l Water,aftertreatmentwithintheADprocess,maybereturnedtothe watercourses.
What is anaerobiC DiGestion?
Anaerobic digestion may operate like a cow’s insides but, as CharlotteMaclean reports, it can generate strong financial returns.
Charlotte Maclean is an Associate Rural Surveyor, in the Stirling office of CKD Galbraith.
[email protected] 434 603
www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Autumn 2015 | Page 5
Page 6 | Energy Matters Autumn 2015 | www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy
in spite oF the saDly preDiCtable head-lines following the General Election about wind farm ‘subsidy’ debates in Westminster, the fact remains that if the UK is to meet its decarbonisation and climate change commitments, at least cost to the consumer,
onshore renewables – and particularly solar PV – will con-tinue to feature prominently in our national energy mix.
The future for solar PV in Scotland should therefore be one of optimism. The Scottish Government’s support for renewables, the availability of land with viable irradia-tion levels and pockets of available grid capacity – all mean solar farms are likely to be seen more regularly in Scotland.
Of course, challenges remain. At present the Feed-in Tariff (FIT) standalone solar market has been hit hard by suc-cessful deployment rates over the past six months, result-ing in a high degression rate. This, in turn, means we are
unlikely to see much more deployment under the FIT until capex prices reduce to such levels that the hyper-degressed FIT becomes viable again.
Larger solar installations – in the region of 25MW (about 125 acres) – can withstand larger grid connection costs, which opens up areas previously constrained for smaller scale development. When this is considered with the fall-ing price of solar panels and EPC contract prices, we are likely to see such solar farms being able to compete with wind farms and therefore entering the Contracts for Differ-ence (CFD) auction process.
Bearing this in mind, and with greater panel efficiencies, the lower irradiation levels which prevented developers venturing into Scotland previously should no longer be viewed as a barrier.
The key question in such a political climate is: can solar survive without subsidies? As a unified industry we are
driving down the cost of all aspects of development and construction to enable grid parity to be achieved, so that solar development can stand alone without the need for government-led subsides. We are not quite there yet. However, if future progress matches that which has been achieved over the past five years, RES sees real grid parity being met in the next few years.
RES believes that Scotland will be a key location for solar in the coming years, with both utility-scale and commer-cial roof-mounted installations helping to address climate change at lowest cost to UK consumers and opening up opportunities for landowners in the process.
Rebecca Meek is a Solar Developer for RES (www.res-uk.com), a renewable energy company providing services in the UK and globally to develop, engineer, construct and operate projects that contribute to a low-carbon, sustainable future.
scottish solar’s sunny outlookWell-planned Scottish solar projects in the right location will continue to attract support, says RebeccaMeek.
sinCe the last issue of Energy Matters, there have been far-reaching changes in UK Government policy towards renewable energy, and it seems
more is to come. Some may be surprised, but the Conservative manifesto at the last General Election was clear on the changes it envisaged if they achieved a majority.
The Energy Bill announced in the Queen’s Speech in May proposed that major wind farm planning applications (in excess of 50MW) in England and Wales would no longer require consent from the Secretary of State and that the final decision would be made by local planning authorities. These changes do not affect Scotland or
Northern Ireland, where these powers are devolved, but developers with sites in England and Wales have raised concerns about potentially prohibitive levels of extra time and cost.
The UK Government has also unveiled changes to support mechanisms for both large-scale onshore wind farms and solar projects. In June, Energy Secretary Amber Rudd announced the renewable obligations (RO) scheme will end a year early for onshore wind farms. The announcement incorporates a grace period for projects that have achieved key milestones (obtained a planning consent, accepted a grid offer and held land rights) but the news has sent shock waves through the onshore wind industry.
Under existing UK Government policy,
onshore wind farms would still have been eligible for Feed-in Tariff contracts for difference beyond April 2016. This has been brought into doubt as DECC and Amber Rudd have suggested that onshore wind may be excluded from future rounds of CFD auctions. If so, onshore wind farms would potentially be without subsidy from April 2016. Further announcements are expected in the coming months.
Onshore wind is not the only technology affected by policy changes. In July, the UK Government announced that it was opening a consultation process for an early closing of the RO scheme from 1 April 2016 for new solar PV projects of more than 5MW and on the removal of the pre-accreditation of (FIT) PV projects over 50kW.
This would be a double blow to the solar industry. As pre-accreditation guarantees tariff levels well in advance of commissioning a project, RO is a favoured support mechanism for solar developers and its removal would mean a reversion to the FIT. The impact on the solar industry is unclear, though this may encourage developers to look at large scale (5MW-plus) projects to address this change in subsidy.
The retrospective changes affecting solar and wind are being made because schemes have been developed in greater volumes than envisaged. Unchanged, DECC predicted that the £7.6bn Levy Control Framework budget, aimed at limiting spending, would be exceeded by some £1.5bn by 2020–21.
Some renewable technologies have matured, and their reliance on Government support should be reduced, but the speed, volume and retrospective nature of some of these policy changes may impact on investor confidence in
the industry.
www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Autumn 2015 | Page 7
driving down the cost of all aspects of development and construction to enable grid parity to be achieved, so that solar development can stand alone without the need for government-led subsides. We are not quite there yet. However, if future progress matches that which has been achieved over the past five years, RES sees real grid parity being met in the next few years.
RES believes that Scotland will be a key location for solar in the coming years, with both utility-scale and commer-cial roof-mounted installations helping to address climate change at lowest cost to UK consumers and opening up opportunities for landowners in the process.
Rebecca Meek is a Solar Developer for RES (www.res-uk.com), a renewable energy company providing services in the UK and globally to develop, engineer, construct and operate projects that contribute to a low-carbon, sustainable future.
thE spEEd, volumE and rEtrospEctivE naturE of somE of thEsE policy changEs may impact on invEstor confidEncE in thE industry.
“
l RES’s7.2MWFourBurrowssolarfarmnearTruro,Cornwall,isnexttotheirFourBurrowswindfarm.
subsidy cuts send out shock waves
Michael Fletcher is an energy specialist in the Stirling office of
CKD Galbraith.
[email protected] 01786 434 600
Budget-led restrictions on renewable energy subsidies were necessary, but they will affect the industry. MichaelFletcher reports.
last summer we reported on an interesting project where we are wrestling with the challenges of incor-porating renewable heating solutions into a historic building.
The Category A listed croft house, at Braemar in the Cairngorms National Park, has a heather thatched roof and dry stone walls – and does not comply with current U-values, the official meas-ure of heat loss. As previously explained, we are having to work within the constraints imposed by the property’s protected status in installing a suitable heating source that will help maintain the fabric of the building.
The solution selected is a ground source heat pump, which operates by extracting energy stored in the earth’s crust. In essence this is latent solar energy – the soil has been warmed by the sun’s rays and this retained energy is collected by fluid passing through an underground collec-tor loop which then enters the heat pump. This energy is extracted and transferred to the distri-bution system, which in this case is an underfloor heating matrix.
The heat pump works by a system of evaporation and condensation, similar to a domestic fridge where heat energy is extracted from the contents and released at the back of the unit.
The advantage of this technology is the high coefficient of performance (COP), whereby the energy extracted from the ground is effectively free. In this case it is expected the system will have a COP of 3.0 where for every kW of electrical energy used to drive the compressor and pumps, 3kW of heat will be delivered. Time will tell!
The collector loop can be located either hori-zontally in a system of trenches or vertically through a bore hole. In this case the property has a reasonably extensive site and a collector loop extending to 400 metres in total has been laid horizontally about 1.2 metres deep in a series of loops gathering at a central manifold.
The internal heat distribution system comprises
a matrix of underfloor heating pipe , sandwiched between a lower insulation layer of expanded glass cobbles and overlayed with limecrete to provide a solid floor which remains permeable to moisture.
The house is small, so the heating plant is housed in an adjacent steading building which forms part of the listed building group, showing how the buildings would have been occupied histori-cally. The heat distribution is via insulated flow and return pipes leading from the heat pump to a manifold located within the croft house.
The use of such a heating system in a historic building of this scale and type is somewhat experimental, so to provide a baseline to monitor
performance of the remediated structure, much work went into recording the thermal perform-ance of the house before work began.
Incorporating renewable heat technology in such an unconventional structure has added to the complexity of an already less than straight-forward project. But it will be interesting to see how the building works as modern living space following completion.
There will be a further update in Energy Matters following completion of the
works and commissioning of the heating system.
Calum Innes, based in Perth, is head of CKD’s energy team.
[email protected] 01738 456 075
CalumInnes provides an update on installing renewable heat technology in a Highland croft house.
heating a historic highland house
thE advantagE of this tEchnology is thE high coEfficiEnt of pErformancE.
“
Page 8 | Energy Matters Autumn 2015 | www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy
Environment custodians are keen to help deliver sustainable projects, says KennyTaylor.
i reaD With interest in the last issue of Energy Matters, Alex Reading’s article ‘Small scale hydro: time is of the essence’. In it, he warns of underestimating
the time taken for discharging conditions on planning consents, and the risks associated with an already con-strained construction window.
Our role at Scottish Natural Heritage with regard to renewable energy proposals is to help deliver sustain-able projects which minimise environmental impacts, predominantly through engagement at the pre-app and application stages.
Our Service Statement for Planning for Development reads: ‘Where planning obligations are incorporated into the consent, we expect the developer to meet those obliga-tions (e.g. need for a habitat management plan, construc-tion management plan, monitoring) without further reference to us.’
Producing a good quality, focused Environment State-ment with adequate information for assessment, and taking account of our advice should help in placing the right development in the right location. And following our guidance and making use of online planning tools should minimise the need for further consultation.
For most developments this should be the case. But there are matters that require further input from us, including:
• Pre-construction surveys triggering species licensing requirements,
• Responding to reporting on protected species surveys that have triggered ‘down-tool’ periods, possibly leading to a risk of an wildlife crime/offence being committed (e.g. protected species in trees to be felled),
• Significant changes to the design for which the CMS/CEMP doesn’t cater,
• A breach of conditions relating to the natural heritage where advice is required.
In an effort to avoid delays, we recommend the following:• Know your site and its sensitivities,• Communicate these to the whole project team,• Familiarise yourself with ecological calendars, for
surveys and mitigation work,• Plan for works out of the winter season – and get the
best forecasting that you can,• Maintain mitigation measures,• Understand the requirements of wildlife and
environmental law,• Apply for licenses in
good time.
All queries relating to a pro-posed development should be made via the local SNH area office.
Kenny Taylor is a Renewable Energy Policy and Advice Officer at Scottish Natural Heritage.
how to keep project delays to a minimum
l Above:ThegroundsourceloopbeinginstalledattheTomintoulCroft.
l Left:Thegroundsourceheatpumpisinanoutbuilding.
l Below:Installingthelimecreteovertheunderfloorheatingpipes.
l Topleft:Thecroftinthe1890s.
www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Autumn 2015 | Page 9
Page 10 | Energy Matters Autumn 2015 | www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy
What future for fracking in britain?
Economics and Finance, recently pre-sented on the outlook for UK oil and gas exploration in light of reduced oil prices, taking cognisance of called-for reductions in taxation to incentivise investment.
The analysis behind the forecasting is extremely complicated. However, the results appear to indicate that both a sub-stantial increase in the price, plus reduced taxation, would be needed to stimulate exploration, since most opportunities are in challenging locations which have high exploration and production costs.
Unconventional gas throws up political challenges in that it is unpopular with voters, but it is likely that it will have to form some part of the solution in the UK. We have invested heavily in the gas grid, but North Sea production has fallen from its peak 1999 and reserves are dwindling. Oil and gas prices are driven by glo-bal factors, but circumstances closer to home are likely to have a bearing on the
pressures to make fracking a reality.
Calum Innes, based in Perth, is head of CKD’s energy team.
[email protected] 01738 456 075
Unconventional gas is a politically sensitive issue, but it is bound to be part of the solution to our energy needs, says CalumInnes.
We have previously reported in Energy Matters on the subject of unconventional gas
production via ‘fracking’, the process whereby water, chemicals and sand are pumped at high pressure into shale deposits lying perhaps several kilometres below the surface to fracture the strata and permit trapped methane gas to be extracted.
Following concerns due to tremors poten-tially induced by drilling and a rising tide of unrest and concern from communities over the implications of gas extraction in their neighbourhoods; the rush for uncon-ventional gas has been curtailed with no new wells drilled since 2011.
In Scotland, the Government has taken a cautious approach to fracking. Earlier this year, the minister announced a public consultation phase, along with looking at public health impacts and increased regulation. So there is effectively a moratorium on the granting of planning
consents for all unconventional oil and gas developments.
The UK Government has been more supportive of the concept, though this aspiration received a blow when an appli-cation by Cuadrilla Resources to frack near Blackpool was rejected despite the backing of the council’s planning officer and official legal advice saying refusal would be “unreasonable”. The decision was hailed as a major victory for green campaigners, but in all likelihood there will be a protracted appeal process which could potentially see fracking given the go-ahead at the site.
Producing heat from using renewable sources is a laudable aim of government, but we remain reliant on gas, which has long been the dominant choice for primary heating fuel, especially in the residential sector.
Professor Alexander Kemp, Professor of Petroleum Economics and Director of Aberdeen Centre for Research in Energy
Feed-in tariff rates (non pv) From 01/10/2015 to 31/03/2016*
Total installed Tariff capacity p/kWh (Kw/MW)
Anaerobic ≤250 9.12 Digestion >250≤500 8.42 >500 8.68
Hydro ≤15 15.45 (generating >15≤100 14.43 station) >100≤500 11.40 >500≤2MW 8.91 >2MW 2.43
Wind ≤1.5 13.73 >1.5≤15 13.73 >15≤100 13.73 >100≤500 10.85 >500≤1.5MW 5.89 >1.5MW 2.49
CHP** (30,000 units) ≤2 13.45
Renewables ≤50 10.66 Obligation Order***
Export Tariffs**** 4.85
ExportTariffs****Alleligibleinstallations
* Ofgem statistics published 31 July 2015. Rates are in pence per kilowatt hour.
** For period 15/03/2013 – 31/03/2016. *** For period 01/04/2010 – 31/03/2014.
Eligible Installations with a declared net capacity of 50kW or less commissioned on or before 14 July 2009 and accredited under the ROO on or before 31 March 2010.
**** On all eligible installations on or after 01/12/2012.
Contracts for Difference (CFDs) As at 26/06/2015
Technology Strike price range (£)
Advanced Conversion 114.39 – 119.89 Technologies
Energy from waste with CHP 80.00
Offshore Wind 114.39 – 119.89
Onshore Wind 79.23 – 82.50
Solar PV 79.23
renewable obligation Certificates (roCs)* For period 01/04/2015 to 31/03/2016
Technology ROCs/MWh
Anaerobic Digestion 1.9
Hydro 1
Offshore Wind 1.9
Onshore Wind 0.9
Solar PV (building mounted) 1.5
Solar PV (ground mounted) 1.3
* ROCs buy-out price set at £44.33/ROC by Ofgem.
www.ckdgalbraith.co.uk | Twitter: @CKDGEnergy | Energy Matters Autumn 2015 | Page 11
the reneWable enerGy inDustryissettoundergoamajorshake-upastheWestminsterGovernmentreviewsincentiveentitlementsacrosstheboard.
TheCKDEnergyteamhasresearchedthecurrentsubsidyregimetoproducethisreferenceguideforthemostpopulartechnologies.
Subsidylevelsaresubjecttochange,sothefiguresgivenhereareforguidanceonly.CurrentdetailsofFITrates,ROCsandCFDscanbefoundontheDepartmentofEnergyandClimateChangewebsite,www.ofgem.gov.uk/environmental-programmes.
non-Domestic rhi*Tariffs that apply for installations with an accreditation date on or after 1 July 2015* Financial support provided to the owner/s for a period of 20 years and index-linked for inflation. Tier 1 and 2**: Tier 1 is paid until the system has operated up to 15% of the annual rated output (i.e. the equivalent of 1,314 hours at the rated capacity of the installation). For the rest of the output in the year, the Tier 2 tariff applies.
Tariff name Eligible technology Eligible Sizes Tariffs p/kWth
Small commercial biomass Solid biomass including Tier 1 (<200kWth) 4.40 solid biomass contained Tier 2 (<200kWth) 1.17 in waste Medium commercial biomass Tier 1 (≥200kWth <1MWth 5.18 Tier 2 (≥200kWth <1MWth 2.24 Large commercial biomass ≥1MWth 2.03 Solid biomass CHP systems*** Solid biomass CHP All capacities 4.17 Water/Ground-source heat Ground-source & water- Tier 1 (all capacities) 8.84 pumps source heat pumps Tier 2 2.64 Air-source heat pumps*** Air-source heat pumps All capacities 2.54 All solar collectors**** Solar collectors <200 kWth 10.16 Small biogas combustion Biogas combustion <200 kWth 7.62 Medium biogas combustion*** ≥200 kWth ≤ 600 kWth 5.99
Large biogas combustion*** ≥ 600 kWth 2.24
* Source: Ofgem.Tariff rates are displayed in pence per kWth and apply from 1 April 2015. They include Retail Price Index (RPI) uplift of 1.6%.
** Source: www.rhincentive.co.uk. *** Commissioned on or after 4 December 2013. **** Accredited on or after 21 January 2013.
Current renewable energy subsidies
Domestic rhi*Applications submitted for the period 01/07/2015 – 30/09/2015. Financial support provided to the owner/s for a period of 7 years.
Technology Tariffs p/kWth
Biomass boilers and stoves 7.14
Air-source heat pumps 7.42
Ground-source heat pumps 19.10
Solar thermal 19.51 * Source: Ofgem.
Feed-in tariff rates (pv) From 01/10/2015 to 31/12/2015*
Capacity Description** 01/07/15 to 01/10/2015 01/10/2015 to 31/12/2015 (kW) Rates*** Rates***
Higher Medium Lower Higher Medium Lower
≤4 Retrofit or new build 12.92 11.63 5.94 12.47 11.22 5.94
>4≤10 Other than stand-alone 11.71 10.54 5.94 11.30 10.17 5.94 >10≤50 11.71 10.54 5.94 11.30 10.17 5.94 >50≤100 9.63 8.67 5.94 9.63 8.67 5.94 >100≤150 9.63 8.67 5.94 9.63 8.67 5.94 >150≤250 9.21 8.29 5.94 9.21 8.29 5.94 >250 5.94 5.94 Stand-alone 4.44 4.28 ExportTariff 4.85 4.85
* Ofgem statistics published 31 July 2015. Rates are in pence per kilowatt hour.
** Where a system type is used to specify a tariff band, the following definitions apply: Retrofit means installed on a building which is already occupied. New Build means where installed on a new building before first occupation. Stand-alone means not attached to a building and not wired to provide electricity to an occupied building. If no type is specified, the tariffs apply to any installations that are not Stand-alone.
*** Where higher, lower and medium rates are shown: The higher rate prevails if neither of the following conditions apply. The lower rate is payable where the system provides power to a building, and the building does not have an EPC certificate showing its energy efficiency in bands A to D. The medium rate is payable where the system owner has a total of 25 FIT-registered PV installations.
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