Advanced Responsible Thinking

Source: Energy Digital

Date :22/05/2007 14:56:42

If we are going to meet Gordon Brown’s target to cut carbon emissions 60 percent by 2050 we’ll need some lateral thinking.

James Hurley looks at a benchmark project

Growing public concern over the potentially dire environmental impact of profligate energy consumption is often met with apparent political and corporate indifference. Energy giants have even been associated with downplaying the link between climate change and fossil fuel emissions. The controversy that surrounded Exxon Mobil recently when it emerged that a think tank partly funded by the company had offered $10,000 to scientists willing to criticise an authoritative UN study on climate change is a memorable example of this.

CHP conversion

It’s refreshing to hear of a company finding innovative ways of adapting its operations in anticipation of a changing market. Slough Heat and Power, a multi-megawatt power station based on Slough Trading Estate, was burning oil and gas until 2002. It has turned itself into a bio-fuel burning and combined heat and power (CHP) power station in the intervening years, but Dr Andrew Ellis, the company’s MD, says the movement towards a cleaner power-station was in fact a much longer process than this might suggest.

“The conversion started as long ago as 1988,” he explains, “when a decision was made to go from gas-firing to coal-firing. We already had a small CCGT (combined cycle gas turbine) at the time.” In a CCGT, the waste heat from the gas turbine is used to make steam to generate additional electricity via a steam turbine. “Someone took the view in 1988 that coal was the fuel of the future in terms of price and availability, so we installed two boilers that burned coal. This was on the back of the privatisation process where you could get a good price for the electricity.”

As part of effort to boost the use of landfill gas, wind turbines, and energy from waste qualified in the early 1990s, Slough Heat & Power secured the only levy for a co-firing of a waste fuel with coal. “We managed to get 40 percent of the output of our coal burning boilers qualified as renewable,” explains Dr Ellis. “That finished in 1998 so we were doing renewable electricity generation in the mid 1990s. Once that finished the cost of installing the boilers for that purpose hadn’t been recovered. The cost was written off because we simply couldn’t sustain the business as it was. We ended up with an asset worth £60 million but with a book value of zero.”

With the 2002 introduction of the ‘Renewable Obligation’, which requires licensed electricity suppliers to source a specific and annually increasing percentage of the electricity they supply from renewable sources, Slough Heat & Power was presented with a solution to this problem. “For about three years we tried to work out what to do next with our boilers. We’d already been looking at woodchips so we hit the deck running when the renewable obligation came in. In five years we’ve managed to convert these boilers to use 95 percent woodchip and five percent high sulphur Scottish coal from pretty well 100 percent coal. So it’s an asset that was written off that is now producing the vast majority of our renewable output.”

A reliable energy provider

Slough Heat & Power has built a reputation for the reliable provision of electricity at a competitive price. As Dr Ellis points out, the customers that the power station serves are not large corporations looking to score publicity points, but small companies for whom reliability and cost are imperative.

“It’s important to remember that a lot of the companies are small, so their main aim is day-to-day survival. Green issues have very quickly moved up the corporate agendas in small companies as well as big ones, but of course the most important aspect is our reliability. The upside for the customers is they’re part of a green generating station, and secondly their interruption minutes are a lot less than the national average. The average here is about two minutes per annum. The national average is about 80.”

The majority of the electricity produced by the power station is sold on to customers of the Slough Trading Estate. “We have our own distribution network as well as the generating station so the electricity we generate is sold onto our own customers within the estate down our own wires. That effectively makes us an unlicensed monopoly, which is quite unusual in the UK. This is allowed because trading estate owned by our parent company so effectively it’s seen as a private estate. To get around this side of things we have a best price guarantee, if somebody comes up with a better price we match it.”

Slough Heat & Power has shown that the use of renewable energy can be driven by economic imperatives. “We had another good year last year, increasing our renewable output in total mainly by replacing what was gas fired steam going out to the trading estate with 100 percent renewable steam,” says Dr Ellis. “We’re doing it because using renewable fuels is convenient. There is no renewable scheme in this case, no government incentive. In fact we’ve had relatively large steam customers move on to the estate because we’re here. One of them services the airlines. Bearing in mind they’re getting a lot of flak about global warming, there’s not much they can do about fuel consumption but they can cut down on all the peripheral activities.”

It may be that many more power stations emerge that follow the example set by Slough Heat & Power, but Dr Ellis says this will only happen when the economic conditions demand it. “If climate change is as drastic as the scientists tell us then the carbon price is going to escalate and that will impact the way people are doing business. We’re just seeing the balance tip now as people see the benefit of renewable, but things will only change long term when it becomes consistently economically favourable to use renewable energy instead of fossil fuels.”