Making waste heat an asset will be key to developing low carbon, efficient energy systems, argues Pinnacle Power’s Toby Heysham
The energy world is developing faster and faster every day. This manifests itself not only in technological advancement, but also in the structuring of systems – both legally and financially. There is a mindset shift as we move away from systems which are not running properly – systems that are oversized and inefficient – into a world where users do not accept this. This is particularly relevant in large energy-consuming residential blocks, hotels, educational and health facilities.
Energy systems are no longer just a spent cost, they are an asset – an asset that needs to be managed pre- and post-construction.
The traditional approach to procuring mechanical services is to procure contractors to design, value engineer, and build. Then you procure someone else to operate the system and, finally, employ a customer services team to manage customer service and billing. This disjointed approach often creates problems at each stage. Designers over-design, builders look for savings post-design and there is a general lack of coordinated commissioning. This leaves you with ineffective systems, endless snags and contractors shrugging shoulders and looking elsewhere in an endless blame game while users suffer.
With this in mind, think: How many heating systems run at a peak of 30% of their designed capacity? How many buildings have oversized pipes and excessive heat loss? How many system complaints are being received, which are a nightmare to sort out?
There are two routes available:
1. Sell a long-term heat agreement to an energy services company (ESCO) provider, allowing you to capitalise on the inherent value of the energy system from day one. This allows taking a lump sum or capital contribution to the cost of build in return for a long-term agreement to take energy. That provider then also takes the risk of the system running properly and in line with service standards.
2. Keep the energy system in-house but ensure that the operator and designer and commissioning engineers are the same company or contract. This means you have a single point of responsibility and the operator will know what is actually needed – and what works – rather than how best to manage PI risk. If you then add in the customer service, passing on the risk of collecting revenue, you will have a system which works. If this is all done by one party, the issues which plague developers/builders post-completion are massively reduced.
Either way, both options will ensure the design is honed to allow for efficient design and operation. Plant and pipes are sized properly, unnecessary valves are removed and you will typically save around 20% of the build cost.
Low-carbon generation moving forward?
Within the built environment the pressure to bring down the carbon content is focused on heat and, in the past, people were pushed towards biomass boilers (now out of fashion) or to Combined Heat and Power (CHP) engines.
The problem is that the national grid is decarbonising very quickly, leaving gas-fired CHP looking like it will struggle to deliver the carbon performance required.
So, what do you do? One option is to do nothing and carry on. This is no doubt a problem for all urban buildings, so you could ignore it until someone comes up with a solution! The forward-thinking Scots, however, have realised that there is a solution, one which is becoming commercially viable. There is a recognition that a heat pump/CHP combination with low temperature circuits should be linked into networks. This hits the carbon targets, however it is higher cost.
So, how do you mitigate this cost? You extract value from the Renewable Heat Incentive and heat sale contracts and structure the system into a vehicle which allows taking this value. This is the mindset shift we must adopt.
What about the amount of waste heat which is being vented into the sky every day? In the UK, 100% of heat demand could be met with the UK’s waste heat. The issue we have is capturing and distributing it. The government understands this and heat is the next big focus as we reach limits on renewable electricity.
We have realised that venting huge quantities of heat is an odd thing to do when around 30% of our carbon emissions come from heating; so a baby step government has taken is that it becomes commercially mandatory for the subsidised electricity producers to look for heat users nearby.
If you can have very low cost or even zero cost heat, which is essentially a waste product, there is the opportunity to bring down the cost of the build and heat production dramatically. This too often goes onto the ‘too difficult pile’ for the electricity provider and the builder/developer, but linking the two together is where the real value sits.
In conclusion, all new buildings – from hospitals to housing developments – should be looking to either extract value via an ESCO approach or to bring down build costs through a joined-up design, build and operate approach.
It is possible to drive value with both the distribution of energy and the generation of energy. The really clever bit, though, is when you link the two together and join generator and user to eliminate waste, providing both heat and electricity.
Toby Heysham
Director
Pinnacle Power
toby.heysham@pinnaclepower.co.uk
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