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Government axes support for Green Deal!

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The Government has announced that it will offer no further financial support to the Green Deal Finance Company (GDFC), citing lack of interest and concerns over industry standards as reasons for the decision.

The Government’s withdrawal of funds will have no impact on existing Green Deal Finance Plans or existing Green Deal Home Improvement Fund applications and vouchers.

The ‘Green Deal’ rolled out in 2013 as an initiative designed to help business and home owners employ more green technologies in and on their properties. Applicants were granted loans that would be paid back through energy bills over a period of time. The scheme also offered cash-backs and incentives on things such as double-glazing, insulation and boilers.

For both home owners and businesses, the building would effectively be responsible for the costs of all the improvements and these costs would be repaid through the energy bill related to the property. Upon the sale of the property in question, the new owner would take over the energy bills pertaining to the previous owner’s Green Deal loan.

There were no upfront costs for the applicant to incur at the outset. The only cost would have been the assessment, which might be waived or enveloped by the provider depending on the deal struck between the provider and the business (or home owner) applying.

The golden rule of the Green Deal was that the expected financial savings must be equal to or greater than the costs attached to the energy bill. And yet the plug failed to engage.
According to the Heating & Hotwater Industry Council, (HHIC), the news came as no surprise;
“This policy failed to engage with both installers and consumers, and delivered little in terms of energy efficiency. Its demise therefore is expected and understandable.”
Interestingly, the Government has not come up with a replacement scheme to reduce the UK’s carbon footprint. The Department of Energy and Climate Change (DECC) has, however, expressed interest in working with the building industry and consumer groups to agree a new “value-for-money approach.”

If you missed out on the Green Deal and are thanking your lucky stars but inadvertently lamenting the loss of the opportunity to eco-up your business and save money in the long term, perhaps this was just a learning curve and the best policy is yet to come. Here’s hoping.

Source: bbc.co.uk – “Green Deal funding to end, government announces” and Hvnplus.co.uk – “Government ends Green Deal Finance Company funding”.

If you’d like further information, feel free to contact the CH Systems team on 0208 302 8149 or info@chsystems.cc.

How your business can reduce energy consumption in the face of rising tariffs

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Rising prices and tough carbon reduction targets have made energy a critical issue for government, civil society and business – and both industry and policy makers have a lot to say about the matter.

Hot in the press at the moment is whether energy-intensive industries should be asked to reduce energy consumption in spite of the fact that said energy use (that might be deemed excessive in light of reduction targets) drives business profits? A debate is raging in the face of government incentives to solve ‘the energy crisis’ by implementing time shifts (tapering energy use across the day by charging customers more for energy at the most popular times of day) on businesses in an effort to change behaviour.

Energy policies have not yet been honed by government but what is clear is that some sort of reduction will be forced, and even if your business is not energy-heavy it’s nonetheless a good idea to cut energy consumption before flexibility is no longer an option.

According to a survey by greenwisebusiness.co.uk, the most common reasons that UK company owners have not cut their energy consumption are:

  • insufficient time or resources
  • not being able to quantify the expected returns
  • energy efficiency being a lower priority than other business considerations

Logic says that the best way to cut consumption would be to address the aforementioned hindrances. Here’s how:

Assign ‘ownership’ to a member of staff: if time is short and resources are minimal, appoint someone with the specific task of overseeing an ‘energy project’; this could be someone already on staff or someone new who is brought in on a contract basis. The idea would be for the project manager to identify the primary areas of energy consumption (including lighting, heating, cooling and powering equipment) and to then work out how best to cut consumption; investing in new equipment can make a dramatic difference to energy bills, for example.

Plan and evaluate: often energy saving measures cost up front but save money in the long term. A good way to quantify returns is to clearly outline project requirements to prospective suppliers, which enables a detailed picture of which company offers the best deal. All proposals should provide whole life costings for the proposed solution, showing both the upfront capital cost of the equipment as well as the running costs (including estimated energy consumption and maintenance). Also make sure you receive quotes from at least three established suppliers to have a good framework for comparison. It is worth evaluating the success of different energy efficiency projects at regular stages after their completion. This helps demonstrate the return on investment for future projects; to identify which measures are delivering the biggest benefits and can highlight future enhancements to business operations. – As suggested by greenwisebusiness.co.uk.

Change behaviour: the best way to make energy consumption a business priority is to start with the basics; something as simple as turning off heating outside normal opening hours can result in significant energy savings without the need for major investment. Also encourage staff to take simple steps to reducing energy use on a daily basis (turn switches off at the socket, make sure lights are turned off when rooms aren’t in use etc.) – before you know it; saving energy will be habit.

It’s important to remember that when it comes to energy consumption, the effort it takes to cut energy use will ultimately save your business money! The more effort you put in, the more return you will see.

Sources: Theguardian.com – “Is it fair to ask energy-intensive industries to reduce consumption?” and Greenwisebusiness.co.uk – “Beating the barriers to energy efficiency in association with the CARBON TRUST

If you’d like further information, feel free to contact the CH Systems team on 0208 302 8149 or info@chsystems.cc.

Use of heat pumps grows as government looks to subsidise low-carbon heat sources

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Global warming is a reality that has incentivised a world-wide search for alterative heating sources (and methods) in an effort to reduce the emission of the greenhouse gases that are responsible for warming of the earth’s temperature, resulting in the likes of: extreme weather conditions, an adverse change in ecosystems and a rise in sea level as glaciers and ice sheets melt.

In order to reduce its carbon footprint, the UK recently made history with the launch of a pioneer scheme that uses sea water as a source of heat. New technology has enabled the implementation of a system that will see historical home Plas Newydd in Wales warmed by a heat pump.

The 300kW marine source heat pump cost £600,000 – a bill footed by the National Trust. Water pipes had to be laid to extract the water from the sea and also transport it to a heat exchanger, which sucks warmth from the water and uses it to heat the Plas Newydd building. But the initial pay-out should pay off, as the scheme is expected to save around £40,000 a year in operating costs.

Electricity is used to work the system’s pump and exchanger, which only manages to be efficient if the final heat is usable at a relatively low temperature – Plas Newydd sits happy at 55C.

Roger Harrabin, environmental analyst writing for the BBC, says that heat pumps are a good alternative to the use of fossil fuels and may be the way forward when it comes to decarbonising UK heating systems – but only in certain instances. Properties close to a water sources with low-grade heating requirements are perfect project candidates, especially if the current heating system is expensive to run; much like at Plas Newydd – not being connected to the gas grid, the house relied on expensive oil heating for warmth.

In an effort to promote low-carbon energy projects, the Centre for Sustainable Energy (CSE) has rolled out a National Heat Map, which shows the rivers in England that have the highest potential for water source heat pumps. The Heat Map is a tool that will help identify locations where heat distribution is most likely to be beneficial and economic thus prioritising locations for more detailed investigation.

As a business looking to cut energy costs, heat pumps might not be the ideal method, not yet anyway, but here’s something to bear in mind: Tobi Kellner, co-author of the “Zero Carbon Britain Report” for the Centre for Alternative Technology at Machynlleth in mid Wales told the BBC news that in a future where most electricity is produced from renewables, heat pumps would become the method of choice – whether heat is extracted by ground, water or air.

For more detailed information on the marine source heat pump project at Plas Newydd, and for mention of other projects of similar ilk, read “Plas Newydd: Heat from the sea to warm historic house” on Bbc.co.uk. And CLICK HERE to find out about the CSE’s National Heat Map.

If you’d like further information on the Renewable heating Initiative, feel free to contact the CH Systems team on 0208 302 8149 or info@chsystems.cc.

Government gears for launch of ‘business friendly’ Renewable Heating Incentive

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The price of energy increased notably over 2013’s winter months – whilst energy providers profited, many business and home owners buckled under the burden of hefty payments. In reaction, the government has put plans in action for the late-Spring launch of a Renewable Heating Incentive (RHI) aimed at cutting energy bills as well as CO2 emissions (the heat used in homes, public buildings, businesses and factories account for half of all the UK’s carbon emissions).

The scheme (covering England, Scotland and Wales) is an effort to diversify the UK’s energy supply in the face of the threats and challenges emanating from climate change; it will provide long term support for renewable heat technologies, from ground-source heat pumps to wood-chip boilers. And the RHI has business owners (both big and small) in mind. Not only is the scheme environmentally friendly (using solid biomass in place of fossil fuel can reduce harmful CO2 emissions by as much as 90 per cent) but it is also financially attractive, flexible and on a practical level, relatively easy to build into a building’s existing energy arrangement.

So, the question: if you buy into the RHI, what does it mean for your business? – How will it save your business money? And what practical steps need to be taken to implement the scheme?

Mike Hefford, Head of Renewable Technologies at Remeha Commercial, says that biomass heating offers significant fuel cost savings of between 50 to 80 per cent when used as an alternative to heating oil, LPG or electric systems. Hefford explains as follows:

Commercial end users can benefit from up to 8.8p/kWh of heat generated, depending on the size of the biomass system. The rate for large biomass plants of greater than 1MW has also recently doubled to 2p/kWh (although payments of other sizes remain unchanged). Tariffs for domestic biomass have also been confirmed at 12.2p/kWh from spring 2014. Payments, administered by Ofgem and made quarterly over a 20-year period, equate to around 15 to 20 per cent return on investment. The Government has recently introduced a degression mechanism that will trigger an automatic fall in tariff levels for biomass installation smaller than 1MWh once 120% of expected deployment is reached. This does not apply to biomass installations of 1MWh but, under the RHI, this capacity and above will be required to report quarterly on the sustainability of their biomass feedstock.

In translation: the RHI implies lower operational costs and savings for faster payback. Hefford argues that of all the possible renewable heating solutions for commercial and industrial applications, biomass is likely to bring the most important benefits and savings. Something that must, however, be noted that switching to a renewable heating system will cost you money. According to Hefford, while biomass heating is a mature, proven technology, as with all technologies it pays to employ the experts to design the appropriate low carbon system for your particular needs. In light of which, perhaps you’re a business or organisation that is interested in taking part in the scheme but are unable to raise the initial capital cost?

Firstly, the point of the RHI is to support the industrial and commercial sectors as it is these sectors provide the most cost effective way of increasing renewable heat. It is therefore crucial that renewable heat becomes a viable option for businesses. The Government expects that the RHI will stimulate the market to provide a number of different financing options, which could cover both the capital costs (e.g. cost of installing the equipment) and ongoing operational costs (e.g. fuel costs) for the lifetime of the installation. Possible finance models include:

  • Energy suppliers – providing renewable heating as an option alongside their current package of services.
  • Banks and other lenders – lenders to finance upfront capital costs for an assigned proportion of the RHI through a contractual arrangement.
  • Energy service companies – a combination of local authority, community and energy company expertise in a body that provides a finance package to deliver renewable heat technologies using RHI payments.
  • Public sector financing – local authorities are potentially able to take advantage of economies of scale.

Applications to be part of the Non-Domestic Renewable Heat Incentive, and for financial support, should be made online (to Ofgem) and can take up to six weeks to approve, depending on the complexity of the proposed heating installation. – CLICK HERE for more information, and to apply for the RHI.

If you’d like further information on the Renewable heating Initiative, feel free to contact the CH Systems team on 0208 302 8149 or info@chsystems.cc.

Sources: Gov.uk – “Renewable Heat Incentive”; Remeha.co.uk – “Turning up the heat for biomass”