Purchasing energy E nergy is the lifeblood of - Energyzine

 
Purchasing energy E nergy is the lifeblood of - Energyzine
“ Energy in Buildings and Industry and the Energy Institute
                         are delighted to have teamed up to bring you this
                         Continuing Professional Development initiative ”
                             MARK THROWER MANAGING EDITOR

SERIES 15 | MODULE 08 | ENERGY PURCHASING

Purchasing energy
By Paul Bennett, executive chairman of BSSEC

E
           nergy is the lifeblood of         Figure 1: Energy market forces
           commerce, business and
           industry. Organisations are
           now spending more on energy
           than they have ever done
before, and, energy spend will only
go in one direction in the future – up.
Therefore, the purchasing of energy is a
vital activity in the energy management
and procurement profession.
   In this CPD article we will take
a look at the energy markets and
how legislation is impacting future
pricing of energy. We will look at the
two predominant energy sources of
electricity and gas and how these
markets operate and consider the
information needed to procure energy
in these markets. Finally, we will look at
practical steps to take when procuring
energy.
   There are many factors that affect
energy markets and their price and           year carbon budgets have also been            Traded Commodity – Energy is
stability including:                         set until 2032, which act as milestones    a commodity that is traded on the
   Global Supply – Global energy             to achieve the 2050 reduction targets      stock exchange, meaning that prices
producers such as Saudi Arabia and           set by the CCA. The Renewable Energy       constantly fluctuate and there are
the USA have major influence over            Directive requires all members of the      both good and bad times to purchase
oil output and prices. Coupled with          European Union (EU) to commit to           energy. Trading enables energy to be
European gas connections with                producing and promoting renewable          bought in advance, from the short term
Russia it can be quickly understood          energy, with a target of 20 per cent       to much longer term. For example,
that the availability and price of           renewable energy generation by             energy can be purchased for the day,
energy can vary. Factors such as this        2020.5 The Energy Act ensures that         week, month, quarter, season, year
mean that the stability of energy can        energy demands are met despite the         and up to five years ahead. As this
be volatile depending upon global            discontinuation of older power plants      is possible, prices can be locked for
events. While gas in the UK is not           and decarbonisation by investing more      identified volumes (a price lock is a
imported directly from Russia, their         money into new infrastructure and          firm commitment to Take-Or-Pay).
two largest customers, Germany and           schemes. Other measures in place in        Hedging is a different option, behaving
the Netherlands, are connected to the        the UK include the Feed-in Tariffs (FiT)   like an insurance policy where a fee is
UK via two major gas pipelines. 57 per       scheme which promotes the use of           paid upfront to guarantee a capped
cent of the UK’s gas is supplied from        technologies that generate renewable       commodity price. If the market ends
imports1 and this is predicted to rise       and low-carbon electricity typically on    up being higher than the cap, the
to 93 per cent by 20402, with Norway         a small-scale, by requiring electricity    counterpart refunds the difference.
supplying approximately 61 per cent of       suppliers to make payments for the            Capacity – The UK infrastructure is
the gas that the UK imports.3                generation and export of electricity       ageing, has had little investment and
   Political Intervention – Govern-          to eligible installations. Support for     is nearing capacity. 20 per cent of the
ments intervene in the energy market         large-scale generation of renewable        UK’s electricity generation capacity
to attempt reforms – however this            electricity is offered through the         has been lost since 2010 due to the
has directly increased energy costs. A       Renewables Obligation (RO) in which        closure of power stations, and it is
sample of these reforms include the          electricity suppliers source increased     estimated that a further 35 per cent will
Climate Change Act, Renewable Energy         electricity from renewable sources.        be lost by the end of 2030, however
Directive, Energy Act, Feed-in Tariff,       The Climate Change Levy (CCL) is           peak demand is expected to increase,
Renewables Obligation and Climate            a tax applied to the energy bill of        adding further pressure to meet our
Change Levy. The Climate Change Act          non-domestic consumers in the UK           needs.6 Energy distributors charge
(CCA) was enforced in 2008 with the          to encourage a reduction in energy         customers on the amount of energy
aim of cutting carbon emissions by 37        consumption and emissions unless           they use, coupled with the maximum
per cent by 2020 and 80 per cent by          they source or supply low-carbon or        demand, and customers are charged
2050 against a 1990 baseline.4 Five-         renewable fuels.                           on this peak demand whether they

                                                                                                         Produced in Association with

                                                                                 FEBRUARY 2018 | ENERGY IN BUILDINGS & INDUSTRY | 21
Purchasing energy E nergy is the lifeblood of - Energyzine
SERIES 15 | MODULE 08 | ENERGY PURCHASING

reach it or not. Demand-side response        Figure 2: Electricity market structure
is a new method to increase the
flexibility of energy consumption which
involves rewarding consumers for
changing their consumption patterns
through new tariffs and schemes, and
technology such as smart meters.
Another method that focuses on
managing demand, improving network
efficiency and reducing the energy
charges for large industrial and
commercial users is the triad charging
system. Consumption is measured
every half an hour, and peak demand
                                                                       The customer enters into a contract with an energy supplier to provide metered electricity.
during the triads is calculated. The                                   Large consumers of electricity are provided with electricity meters to code of practice 5 (up to 1MW), 3 (1MW to 10MW) and 2
triads are three periods during winter                                 (10MW to 100MW) which record consumption over each 30-minute period and are therefore often referred to as half hour meters
where energy demand is at its highest.        Customer                 or half hourly read meters.
Energy suppliers receive charges for                                   Smaller consumers of electricity below the Code 5 threshold are sub-divided into profile classes ranging from domestic users
                                                                       (profile classes 1 & 2) to significant energy users (profile classes 7 & 8). The vast majority of business customers in profile classes 3-8
the transmission and distribution of                                   have manually read meters.
energy that is purchased, which are
then passed on to the customer and                                     The supplier is licensed to supply electricity to the customer and charge them for their consumption. The supplier also coordinates
are known as TUoS (transmission use                                    the associated contracts with the meter operator, meter asset provider, data collector and data aggregator.
                                                                       The supplier uses an electricity meter to bill the customer. The unit charge of electricity is the kWh and is billed per unit consumed.
of network) and DUoS (distribution use
                                              Supplier                 The electricity supplier collects the consumption data through the Balancing and Settlement Code system. This provides accurate
of network) charges. TUoS is where                                     bills for the customer as well as accurate predictions of electricity demand for all parties within the electricity industry. Customers
costs are recovered from running and                                   with a capacity of less than 100kW are entitled to opt into the settlement system if they are prepared to pay additional charges and
maintaining the national grid, and                                     upgrade their meter.
DUoS is where the costs are recovered
                                                                       The generator owns the plant which generates the electricity and is licenced to sell electricity directly to the supplier. Some
for distributing electricity across the       Generator
                                                                       generators are owned by suppliers.
national network.
   Big Players – UK energy companies          Distributor
                                                                       The distributor owns the local distribution network through which the electricity reaches the customer. This includes cables,
                                                                       transformers, meters and other infrastructure assets.
are very large and operate with power,
with the largest known as the ‘Big Six’                                The meter operator has overall responsibility of operating and maintaining metering equipment. The meter operator is contracted
                                              Meter operator
which is comprised of SSE, EDF Energy,                                 to the supplier and normally has a separate contract with the meter asset manager to manage the meter.
British Gas, npower, EON UK and
                                                                       The meter asset manager is contracted to install, commission, maintain, remove and dispose of the meter and to ensure that it
Scottish Power. Suppliers must manage         Meter asset manager
                                                                       complies with regulatory requirements.
commodity costs, transport costs and
government taxes that result from                                      The data collector is responsible for the collection and processing of consumption data from actual meter readings, or the
                                              Data collector
policy to fund renewable energy.                                       determination of an estimate. This consumption information is then passed to the data aggregator.
    Energy Markets Regulator -
                                                                       The data aggregator is responsible for the aggregation of data regarding the electricity supplied to customers. The supplier uses
Regulated by Ofgem in the UK and              Data aggregator
                                                                       this aggregated information for balancing and settlement purposes and to ensure that customers are billed correctly.
Ofreg in Northern Ireland. The Office
of Gas and Electricity Markets (Ofgem)
regulates the monopoly companies             smart meters will provide the UK with               Gas Market                                                  Information needed for energy
which run the gas and electricity            a net economic benefit of £6.2bn.7 As               The gas market is structured as                             procurement
networks. It makes decisions on price        of September 2017, small and large                  customer, supplier, shipper, transporter,                   Once the site information has been
controls and enforcement, acting             energy suppliers are responsible for                meter operator and meter reader.                            collected as previously outlined, the
in the interests of consumers and            the operation of 7.67m smart meters in                 Energy brokers can be used to                            information can be organised for
helping the industries to achieve            domestic properties, and 939,700 smart              procure energy on behalf of customers,                      procurement into a tender pack which
environmental improvements. Ofgem            meters in smaller non-domestic sites.               and provide services such as data                           should include:• site and energy details;
is a non-ministerial department that            In recent years the commodity                    collection, tendering, invoice audits,                         • length of contract period to be
is governed by the Gas and Electricity       price of energy has reduced against                 remote access, standardised reports,                        considered (including options for
Markets Authority (GEMA) which make          projections. However, owing                         market intelligence, budgeting support                      locking and hedging);
regulatory decisions, determines             to renewables obligations and                       and optimisation of commodity cost.                            • payment terms – e.g. net 30 days,
strategy and sets priorities for policy      infrastructure management non-                         When using energy brokers, it is                         net 60 days etc;
and consists of members with a wide          commodity costs of energy are                       important to ensure that they are an                           • trading strategy – frequency of
range of experience from sectors such        predicted to rise. According to the                 independent broker and follow an                            events and volumes to be locked or
as industry, economics, science and the      Committee on Climate Change, energy                 internal or external code of practice                       exposed for hedging;
environment.                                 bills for consumers could increase by 10            ensuring good governance and                                   • agreement for a capital risk position
   Smart Meters - The Smart Meter            to 15 per cent by 2020 and 30 to 45 per             assurance that they are acting in the                       – the absolute maximum position that
rollout is a Government led programme        cent by 2030.8                                      interests of their clients in an honest                     volumes must be locked if triggered;
with the goal of upgrading the UK’s                                                              and transparent manner.                                        • documented approvers who are
energy systems by requiring energy           Electricity Market                                     It is recommended that a written                         authorised to act (names and contact
suppliers to install smart meters into all   The electricity market is structured                contractual arrangement is entered                          details);
homes and small businesses by 2020           as customer, supplier, generator,                   into between the broker and                                    • reporting requirements – e.g.
to save energy and reduce costs for          distributor, meter operator, meter                  customer that defines objectives, key                       trading activities and market conditions
customers. It is estimated that between      asset manager, data collector and data              performance indicators and reporting                        versus budget;
2020 and 2030, the installation of           aggregator.                                         and information sharing.                                       • market intelligence and tracking

                                     For details on how to obtain your Energy Institute CPD Certificate, see entry form and details on page 24

22 | ENERGY IN BUILDINGS & INDUSTRY | FEBRUARY 2018
Purchasing energy E nergy is the lifeblood of - Energyzine
SERIES 15 | MODULE 08 | ENERGY PURCHASING

 Figure 3: Gas market structure.                                                                                                                                          gas-come-from
                                                                                                                                                                        • Vaughan, A. (2017) Qatar crisis
                                                                                                                                                                          highlights rising UK energy reliance on
                                                                                                                                                                          imports [Online] Available from: https://
                                                                                                                                                                          www.theguardian.com/business/2017/
                                                                                                                                                                          jun/08/qatar-crisis-highlights-rising-uk-
                                                                                                                                                                          energy-reliance-on-imports
                                                                                                                                                                        • Office for National Statistics Digital
                                                                                                                                                                          (2016) UK energy: how much, what type
                                                                                                                                                                          and where from? [Online] Available
                                                                                                                                                                          from: https://visual.ons.gov.uk/
                                                                                                                                                                          uk-energy-how-much-what-type-and-
                                                                                                                                                                          where-from/
                           The customer enters into a contract with a supplier for the provision of gas.
                                                                                                                                                                        • The National Archives (2018) Climate
  Customer                                                                                                                                                                Change Act 2008 [Online] Available
                           The largest consumers are provided with daily metering. Smaller consumers without daily metering are termed non-daily metered.
                                                                                                                                                                          from: https://www.legislation.gov.uk/
                           The supplier is licensed to supply gas to the customer and to charge them for their consumption. The supplier also coordinates                 ukpga/2008/27/part/1/crossheading/
                           the associated contracts with the meter operator.
                                                                                                                                                                          the-target-for-2050
                           Gas is invoiced in kilowatt-hours (kWh) consumed, and supplied on a ‘firm’ or an ‘interrupted’ basis. A firm basis ensures that the
  Supplier                 customer will have constant gas availability during the period stated in the agreement. Gas supplied on an interrupted basis to
                                                                                                                                                                        • European Commission (undated)
                           industrial and commercial organisations costs less, but the organisations agree to an interruption at short notice as specified in             Renewable energy directive [Online]
                           their contract. This would occur when there is a shortage of gas in the market.                                                                Available from: https://ec.europa.eu/
                           The cost of gas consists of a price for the gas itself and a price for transportation, both of which vary between summer and winter.           energy/en/topics/renewable-energy/
                           The customer will pay a total price to its supplier.
                                                                                                                                                                          renewable-energy-directive
                           The shipper buys gas directly from the producers and sells this to the supplier. To keep the level of gas in the UK network at a             • EDF Energy (undated) Energy in the
  Shipper
                           constant level, the shippers balance the amount of gas in the system with that which is being consumed.                                        UK [Online] Available from: https://
                                                                                                                                                                          www.edfenergy.com/future-energy/
                           The transporter (or network operator) owns the gas pipeline system. The supplier needs consumption information for billing and                 uk-energy
  Transporter              the transporter needs the same information to ensure balance in the network. As a result, most meters on the customer’s side of
                           the network are owned and maintained by the major gas network owner, the National Grid.                                                      • Department for Communities and Local
                                                                                                                                                                          Government, Department of Energy
  Meter Operator
                           The meter operator is responsible for keeping the meter in order and contracts a meter asset manager to install, commission,                   and Climate Change, Department
                           maintain, remove and dispose of the meter and to ensure that it complies with regulatory requirements.
                                                                                                                                                                          for Work and Pensions and Ofgem
                           The meter reader gathers gas consumption data which is fed back to the Supplier for the purpose of billing and also for the                    (2015) 2010 to 2015 government
  Meter Reader
                           shipper to ensure the gas on the network is balanced.                                                                                          policy: household energy [Online]
                                                                                                                                                                          Available from: https://www.gov.uk/
                                                                                                                                                                          government/publications/2010-to-
  Details                 Gas                                                                  Electricity
                                                                                                                                                                          2015-government-policy-household-
  Contract expiry date
                          Expiry date and the notice period for switching, giving notice to    Expiry date and the notice period for switching, giving notice to          energy/2010-to-2015-government-
                          avoid rolling over to the next period.                               avoid rolling over to the next period.                                     policy-household-energy#appendix-7-
  Site name and           All site addresses are required along with the information           All site addresses are required along with the information
                                                                                                                                                                          smart-meters
  postcode                below.                                                               below.                                                                   • Committee on Climate Change (2014)
                                                                                                                                                                          Energy prices and bills report – Results
                          Peak demand capacity in KW.                                          Low voltage or high voltage connection.
  Connection type                                                                                                                                                         and key messages for commerce
                          Daily or non-daily metered.                                          Maximum demand reached in the past 12 months (KVA).
                                                                                                                                                                          and industry [Online] Available from:
                                                                                               MPAN (Meter Point Administration Number) which is the                      https://www.theccc.org.uk/wp-content/
  Meter details           M number – unique identifier for the gas supply point.
                                                                                               unique identifier for the electricity supply point.                        uploads/2014/12/EPB-Report-launch_
                                                                                                                                                                          Commercial-Industry.pdf
                          Monthly usage over the past 12 months.                               Annual kWh consumption in the past 12 months.
  Annual consumption      Maximum use on any day.                                              Monthly, weekly and daily half hourly profiles are best. Shows
                                                                                               night and day and wintertime peak use during the 4-7pm period.          Further Reading
                                                                                                                                                                       • CIPS A Guide to Purchasing Energy and
                          Impacts of any energy efficiency programmes.                         Plans to reduce usage during Triad DUoS peak periods.                     Carbon Footprint Impacts
  Changes in the future                                                                        Availability promise.                                                   • CIPS Negotiating Energy Supply
                                                                                               Impacts of any energy efficiency programmes.                              Contracts
  Availability            Firm or interruptible.                                               Capacity (KVA).                                                         • EMA Electricity Procurement
                                                                                                                                                                       • Energy Institute Energy Management
  Other                   Gas pressure.                                                        Details of power factor.                                                  Essentials – Module 2: Metering &
                                                                                                                                                                         Buying
 requirements;                                         The procurement process should                         conditions effected by macro events
    • contractual requirements (including           be well planned with identified time                      such as political or economic supply                     Useful Links
 data collection and data visibility);              frames for:• preparation of data e.g.                     situations that effect price stability or                • Ofgem - www.ofgem.gov.uk
    • assessment methodology                        four weeks;                                               volatility. Unexpected factors such as                   • Ofreg - www.uregni.gov.uk
 (including consideration to renewable                 • tender period e.g. four weeks;                       cold weather may affect the timing of                    • Chartered Institute of Purchasing and
 energy, cost, data provision, payment                 • review e.g. two weeks;                               the tender process.                                        Supply - www.cips.org
 terms, options for price fixing and                   • interviews e.g. one week;                                                                                     • Major Energy Users’ Council - www.
 hedging, risk, clear invoicing, reporting             • decision and appoint e.g. one week;                  References                                                 meuc.co.uk
 and account management preferences);                  • Total of 12 weeks                                    • https://www.britishgas.co.uk/                          • Energy Institute – www.energyinst.org
    • tender return date; and                          Planning when to go to market                            the-source/our-world-of-energy/                        • Committee on Climate Change - www.
    • contract award date.                          may be a decision based upon market                         energys-grand-journey/where-does-uk-                     theccc.org.uk

For details on how to obtain your Energy Institute CPD Certificate, see entry form and details on page 24

                                                                                                                                                              FEBRUARY 2018 | ENERGY IN BUILDINGS & INDUSTRY | 23
SERIES 15 | MODULE 08 | FEBRUARY 2018
                                                                    ENTRY FORM
ENERGY PURCHASING
Please mark your answers on the sheet below by placing a cross in the box next to the
                                                                                                                                                                                                                                                              How to obtain a CPD accreditation
correct answer. Only mark one box for each question. You may find it helpful to mark the
answers in pencil first before filling in the final answers in ink. Once you have completed
                                                                                                                                                                                                                                                              from the Energy Institute
the answer sheet in ink, return it to the address below. Photocopies are acceptable.                                                                                                                                                                          Energy in Buildings and Industry and the Energy Institute are delighted to
                                                                                                                                                                                                                                                              have teamed up to bring you this Continuing Professional Development
                                                                                                                                                                                                                                                              initiative.
                                                                                                                                                                                                                                                                 This is the eighth module in the fifteenth series and focuses on Energy
  QUESTIONS                                                                                                                         6 What is the current interval between
                                                                                                                                      carbon budgets in the UK?                                                                                               Purchsing. It is accompanied by a set of multiple-choice questions.
  1 By how much does the Climate Change                                                                                             ■ 6 months                                                                                                                   To qualify for a CPD certificate readers must submit at least eight of the
    Act aim to reduce emissions by 2050?                                                                                            ■ 1 year                                                                                                                  ten sets of questions from this series of modules to EiBI for the Energy
  ■ 20 per cent                                                                                                                     ■ 5 years                                                                                                                 Institute to mark. Anyone achieving at least eight out of ten correct answers on
  ■ 40 per cent                                                                                                                     ■ 10 years                                                                                                                eight separate articles qualifies for an Energy Institute CPD certificate. This can be
  ■ 60 per cent                                                                                                                                                                                                                                               obtained, on successful completion of the course and notification by the Energy
  ■ 80 per cent                                                                                                                     7 Which of the following is NOT a component                                                                               Institute, free of charge for both Energy Institute members and non-members.
                                                                                                                                      of the electrical market structure?
                                                                                                                                                                                                                                                                 The articles, written by a qualified member of the Energy Institute, will appeal
  2 Which of the following is part of the ‘Big                                                                                      ■ Supplier
                                                                                                                                                                                                                                                              to those new to energy management and those with more experience of the
    Six’?                                                                                                                           ■ Meter operator
                                                                                                                                                                                                                                                              subject.
  ■ Bulb Energy                                                                                                                     ■ Shipper
                                                                                                                                                                                                                                                                 Modules from the past 14 series can be obtained free of charge. Send
  ■ Ecotricity                                                                                                                      ■ Data collector
                                                                                                                                                                                                                                                              your request to editor@eibi.co.uk. Alternatively, they can be downloaded
  ■ EDF Energy
  ■ Flow Energy                                                                                                                     8 Renewables obligations and infrastructure                                                                               from the EiBI website: www.energyzine.co.uk
                                                                                                                                      management are predicted to make non-
  3 The Renewable Energy Directive aims to                                                                                            commodity energy costs do what?
    achieve how much renewable energy                                                                                               ■ Become eliminated                                                                                                       SERIES 14                                                                                                                                                                                                                                        SERIES 15
    generation by 2020?                                                                                                             ■ Remain the same
                                                                                                                                                                                                                                                              MAY 2016 - APR 2017                                                                                                                                                                                                                              MAY 2017 - APR 2018
  ■ 10 per cent                                                                                                                     ■ Decrease
  ■ 20 per cent                                                                                                                     ■ Increase
                                                                                                                                                                                                                                                              1 Biomass                                                                                                                                                                                                                                        1 Lighting Technology
  ■ 40 per cent                                                                                                                                                                                                                                               2 Behaviour Change                                                                                                                                                                                                                               2 Boilers & Burners
  ■ 70 per cent                                                                                                                     9 Which is NOT a piece of legislation that                                                                                3 Energy Management Standards                                                                                                                                                                                                                    3 Compressed Air
                                                                                                                                      aims at improving energy efficiency or
                                                                                                                                      the use of renewables?                                                                                                  4 Air Conditioning                                                                                                                                                                                                                               4 Water Management
  4 What is the maximum number of
    Megawatts that a code of practice 5                                                                                             ■ Feed-In tariffs                                                                                                         5 Internet of Things                                                                                                                                                                                                                             5 Combined Heat and Power
    electricity meter allows?                                                                                                       ■ 2018 IET wiring regulations                                                                                             6 Training for Energy Management                                                                                                                                                                                                                 6 Drives & Motors
  ■ 1                                                                                                                               ■ Renewables obligation                                                                                                   7 Data Centre Management                                                                                                                                                                                                                         7 Underfloor Heating
  ■ 10                                                                                                                              ■ Climate change act                                                                                                      8 Metering & Monitoring                                                                                                                                                                                                                          8 Energy Purchasing
  ■ 100                                                                                                                                                                                                                                                       9 Battery Storage                                                                                                                                                                                                                                9 Photovoltaics*
  ■ 1000                                                                                                                            10 Which of the following correctly defines
                                                                                                                                       ‘hedging’?                                                                                                             10 Demand Side Response                                                                                                                                                                                                                          10 Heat Pumps*
  5 Electricity generators sell electricity                                                                                         ■ A commodity that is traded on the
    directly to whom?                                                                                                                       stock exchange Annual consumption                                                                                 * ONLY available to download from the website after publication date
  ■ Customer                                                                                                                        ■ Prices can be locked for identified
  ■ Supplier                                                                                                                                volumes
  ■ Distributor                                                                                                                     ■ The collection and processing of
  ■ Meter operator                                                                                                                    consumption data from actual meter                                                                                                                       “ Energy in Buildings and Industry and the Energy Institute
                                                                                                                                                                                                                                                                                               are delighted to have teamed up to bring you this
                                                                                                                                                                                                                                                                                               Continuing Professional Development initiative ”
                                                                                                                                                                                                                                                                                                   Mark Thrower Managing Editor
                                                                                                                                                                                                                                                                                                                                                                                                                                                     “ Energy in Buildings and Industry and the Energy Institute
                                                                                                                                                                                                                                                                                                                                                                                                                                                     are delighted to have teamed up to bring you this
                                                                                                                                                                                                                                                                                                                                                                                                                                                     Continuing Professional Development initiative ”
                                                                                                                                                                                                                                                                                                                                                                                                                                                          Mark Thrower Managing Editor
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 “ Energy in Buildings and Industry and the Energy Institute
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 are delighted to have teamed up to bring you this
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 Continuing Professional Development initiative ”
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      Mark Thrower Managing Editor

                                                                                                                                      readings                                                                                                                        SERIES 15 | MODULE 07 | underfloor Heating                                                                                                           SERIES 15 | MODULE 06 | drives & Motors                                                                                                      SERIES 15 | MODULE 05 | combined heat & power

                                                                                                                                                                                                                                                                      Underfloor heating                                                                                                                                   Energy-efficient                                                                                                                             Combined heat & power
                                                                                                                                    ■ A fee is paid upfront to guarantee a                                                                                            comes of age                                                                                                                                         drives and motors                                                                                                                            as an energy source
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        By Wayne Ward, managing director at Building Services Sustainability & Environmental

                                                                                                                                      capped commodity price
                                                                                                                                                                                                                                                                      By Patrick Waterfield, principal environmental engineer at JCP Consulting Ltd                                                                        By John Pooley, John Pooley Consultancy Ltd
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Consultancy Ltd

                                                                                                                                                                                                                                                                      T                                                                                                                                                    T
                                                                                                                                                                                                                                                                                                                                                                                                                                                                          table 1. Potential savings estimated by CeMeP

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        C
                                                                                                                                                                                                                                                                                   he Romans (and before          underfloor heating – a brief timeline                                                                                he amount of energy used
                                                                                                                                                                                                                                                                                   them the Ancient Greeks)                                                                                                                            by electric motors is around                                                                                                                    ombined heat and power         variety of fuels (e.g. mains gas, gaseous    is slightly higher (20-40 per cent).
                                                                                                                                                                                                                                                                                   realised the benefit of                                                                                                                             45 per cent of all global           Area of potential savings                             Potential saving                                      (CHP), or cogeneration, is     waste fuels, commercial waste fuels              These internal combustion engines
                                                                                                                                                                                                                                                                                   underfloor heating via the      Neolithic period   Evidence of stone-covered trenches in dwellings in Asia and Aleutian Islands                     electricity consumption. This                                                                                                                   a highly efficient process     etc.) in an engine or turbine that’s         are best suited for small sites which
                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Increased use of energy-efficient motors              10 per cent
                                                                                                                                                                                                                                                                                   hypocaust system - the term                                                                                                                         gives rise to around 6,000Mt                                                                                                                    that capitalises on the heat   connected to an alternator. During           a high demand for hot water in
                                                                                                                                                                                                                                                                      is derived from Greek words literally           5,000 BC        Evidence of “baked floors” found in Korea and Manchu;                                of CO2 each year. Motor-driven systems          Electronic speed control                              30 per cent                                           generated as a by-product      this process, a significant amount of        comparison to electricity. The ratio of
                                                                                                                                                                                                                                                                      meaning “under-burning”. A fire was lit                                                                                                              are also estimated to account for 65            Mechanical system optimisation                        60 per cent                            of the generation of electricity. Coal and    heat is created as a by-product, which       heat to power is approximately 1.5:1 but
                                                                                                                                                                                                                                                                      at underfloor level and the heat drawn          3,000 BC        Korean fire hearth used as both kitchen range and heating stove;                     per cent of industrial electricity use.                                                                                                      gas-fired power stations can often be         is usually wasted in conventional            decreases with size.
                                                                                                                                                                                                                                                                      through a sub-floor void under action                                                                                                                As a result, they need to be a focus for        Total                                                 100 per cent                           seen expelling wasted heat energy as          power generation. However, in a CHP              Unit sizes vary from 50kWe –
                                                                                                                                                                                                                                                                      of flues in the walls (which also allowed       1,000 BC        Ondol-type system used in the Aleutian Islands and present-day North Korea;          energy-saving activity.                                                                                                                      clouds of steam from cooling towers.          application, the heat from the exhaust,      1,500kWe.
                                                                                                                                                                                                                                                                      the relevant wall areas to act as heat                                                                                                                  Electric motors are normally                                                                                                              CHP systems exploit the heat energy           oil cooling circuits and water jacket is         They are used in: smaller
                                                                                                                                                                                                                                                                      emitters).                                       500 BC
                                                                                                                                                                                                                                                                                                                                      Greeks and Romans scale up the use of conditioned floors (and walls) with            purchased as part of an item of                potential for retrofit improvements.          in other elements of the system is more         that would otherwise be wasted in             recovered and distributed to a nearby        (decentralised) hospital buildings,
                                                                                                                                                                                                                                                                                                                                      hypocausts;                                                                          equipment, for example, an air                    Before looking at the elements of a        significant. Potential savings estimated        traditional electricity generation, to        heating system. This reduces the             hotels, leisure buildings, individual
                                                                                                                                                                                                                                                                                                                                                                                                                           handling unit. This means in most cases        motor-driven system it is important to        by CEMEP (European Committee of                 produce both electricity and heat in a        requirement to burn additional gas           university buildings, small residential
                                                                                                                                                                                                                                                                                                                                      Asia continues to use conditioned surfaces but replaced in Europe by the open
                                                                                                                                                                                                                                                                                                                       500 AD                                                                                              the end user is not the direct buyer           consider the purpose of the system.           Manufacturers of Electrical Machines            single process.                               in a boiler or central heating system.       buildings on a district heating scheme.
                                                                                                                                                                                                                                                                                                                                      fire and early forms of the modern fireplace;
                                                                                                                                                                                                                                                                                                                                                                                                                           of the motor. The end user often only          For example, a water circulation pump,        and Power Electronics) are shown in                 The UK government states that             Energy from CHP is nearly always                 Gas turbines are the most common
                                                                                                                                                                                                                                                                                                                                                                                                                           becomes a motor purchaser when                 how is it controlled? Is it running           the table above.                                installing CHP saves organisations            produced locally to its end user, which      prime mover on larger scale CHP units.
                                                                                                                                                                                                                                                                                                                                      Countries in the Mediterranean Basin use various forms of hypocaust-type
                                                                                                                                                                                                                                                                                                                        700           heating in public baths and homes (and also use heat from cooking to heat the        replacing the motor. When specifying           24x7 when only needing 8x5? The                                                               around 20 per cent of their energy            limits the amount of energy loss due to          In a gas turbine engine, a fuel is
                                                                                                                                                                                                                                                                                                                                      floors);                                                                             systems that include motors, the end           magnitude of savings here (in the             Focus on whole system                           costs and reduces CO2 emissions by up         transmission.                                burned (normally natural gas) in a
                                                                                                                                                                                                                                                                                                                                                                                                                           user should consider specifying what           region of 75 per cent) is many times          This suggests that 90 per cent of the           to 30 per cent. The main drawback with           Excess electricity generated can          combustion chamber, causing heat
                                                                                                                                                                                                                                                                                                                        1000
                                                                                                                                                                                                                                                                                                                                      Ondol continues to evolve in Asia, with the fire furnace moved outside and the       performance level(s) they require from         the potential savings in the motor and        savings potential occurs outside of the         CHP is that to gain maximum efficiency        be sold to the grid, and any shortfall       and pressure to force air down the
                                                                                                                                                                                                                                                                                                                                      room entirely floored with Ondol in Korea;
                                                                                                                                                                                                                                                                                                                                                                                                                           the drive system.                              drive system.                                 motor – hence a focus is required on            it is recommended to be operated for          in electricity can be purchased from         unit to drive a series of turbine blades.
                                                                                                                                                                                                                                                                                                                                                                                                                              Ideally, all the energy efficiency                                                        the whole system.                               around 4,500 hours per year.                  the grid. As battery technology is           The pressurised air drives a generator,
                                                                                                                                                                                                                                                                                                                        1400          Hypocaust-type systems used to heat Turkish Baths of the Ottoman Empire;             aspects of a motor-driven system are           Motor is heart of the system                     This approach is reinforced by                   CHP has been proven worldwide                                                          generates electricity via an alternator.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      increasingly reducing in cost, further
                                                                                                                                                                                                                                                                      Source: http://mcauleyhistory.edublogs.                                                                                                              addressed at the system design stage.          The heart of the system is the motor, to      European Standard EN 50598 Part 2 -             to be an effective means of reducing          benefit can be derived by storing the        The expelled heat is utilised by a
                                                                                                                                                                                                                                                                      org/2012/10/24/the-roman-villa-project/           1500          Wide-scale adoption of floor heating in China and Korea;                             However, electric motors are not only          which is added motor control – ranging        Energy efficiency indicators for power          operating costs and environmental             generated electricity for use during         heat exchanger to provide hot water.

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                                                                                                                                                                                                                                                                      hypocaust/                                                                                                                                           efficient machines they are highly             from a simple starter to a variable           drive systems and motor starters. (This         damage in domestic, commercial and            peak times, subsequently further             Typical entry temperatures are in the
                                                                                                                                                                                                                                                                                                                        1600          Heated flues in floors and walls used in greenhouses in France;                      reliable, typically with a life span of over   speed drive (VSD). Then, unless a             standard covers performance in the              industrial scenarios. It is widely used in    reducing reliance on the grid. In            region of 900-1,200oC, with exhaust
                                                                                                                                                                                                                                                                         Slightly earlier (ca 1,000BC) were                                                                                                                15 years. This means that opportunities        direct drive system, a transmission           power range 0.12kW to 1,000kW.)                 countries like the Netherlands, Finland       addition, this helps to reduce reliance      temperatures in the region of 500oC
                                                                                                                                                                                                                                                                      the traditional Korean “Ondol” (warm              1700          Hypocaust type system used to heat public baths in modern day Iraq;                  to upgrade existing motors may be              system (typically belts or gearbox) is           While motors come in a wide variety          and Denmark. In Finland, 82 per cent of       on the grid at times of fluctuating          depending on the scale of the turbine.
                                                                                                                                                                                                                                                                      stone) dwellings, which also featured                                                                                                                limited. Although the scope for motor          connected to the ‘load machine’. While        of types and sizes, the three-phase,            electrical power generation in 2012 was       demand.                                      The heat to power ratio can be as
                                                                                                                                                                                                                                                                      a form of underfloor heating. The                 1800
                                                                                                                                                                                                                                                                                                                                      Beginnings of the European evolution of the modern water heater/boiler and           replacements may be limited, there             there have been developments in               ac, cage induction motor is the most            produced via cogeneration. Germany is            There are multiple types of CHP           high as 5:1 in certain applications if
                                                                                                                                                                                                                                                                      Ondol used smoke from the cooking                               water-based piping systems (eg in John Soane house and museum, London);              will be ‘legacy’ systems that offer the        motor efficiency the scope for savings        common motor encountered in energy              on-course to provide 25 per cent of the       engines, each suited to different output     ‘supplementary firing’ is undertaken
                                                                                                                                                                                                                                                                      fire, i.e. heat that would have been                                                                                                                                                                                                                                                              country’s power through cogeneration          requirements. The size of the unit will      (which enables control over varying
                                                                                                                                                                                                                                                                      generated anyway, making better use               1864          Ondol-type system used at Civil War hospital sites in America;                                                                                                                                                                    by 2020.                                      depend on the calculated or estimated        amounts of heat.
                                                                                                                                                                                                                                                                      of the fuel. Indeed, there is evidence of                                                                                                                                                                                                                                                             It is believed that the first CHP         base heat load (CHP is most economic             These setups are reported to be very
                                                                                                                                                                                                                                                                      similar features in excavated Neolithic                         Liverpool Cathedral heated with system based on the hypocaust principles (also                                                                                                                                                    application was undertaken in the             when the unit is sized slightly over the     reliable. However, they are very loud
                                                                                                                                                                                                                                                                                                                        1904
                                                                                                                                                                                                                                                                                                                                      installed in various UK churches in Victorian times);
                                                                                                                                                                                                                                                                      settlements.                                                                                                                                                                                                                                                                                      United States in 1882 with the Thomas         baseload heat load).                         units, have a lower electrical efficiency
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Edison-designed Pearl Street Station,            An internal combustion engine in          than reciprocating engines and are not
                                                                                                                                                                                                                                                                                                                                      Frank Lloyd Wright designs the floor-based radiant-heated Herbert Jacobs
                                                                                                                                                                                                                                                                      Heating elements or cables                        1937
                                                                                                                                                                                                                                                                                                                                      house;                                                                                                                                                                                                                            the world’s first commercial power            a CHP unit works in a similar way to         efficient at periods of low demand.
                                                                                                                                                                                                                                                                      An underfloor heating (UFH) system                                                                                                                                                                                                                                                                plant. This plant burned coal to              the engine in a motor car. The unit              Smaller units (up to 500kWe) have
                                                                                                                                                                                                                                                                      essentially comprises heating elements                          The first standards for floor heating are developed in Europe. Water-based                                                                                                                                                        generate enough electricity to power          burns a fuel (normally natural gas or        a low electrical efficiency (around
                                                                                                                                                                                                                                                                                                                        1980
                                                                                                                                                                                                                                                                      - either PVC piping carrying warm                               Ondol system is applied to almost all residential buildings in Korea;                                                                                                                                                             approximately 400 lamps, and the              compression-ignition diesel) which           20-30 per cent) so have to be used
                                                                                                                                                                                                                                                                      water (“wet” system), or electric heating                                                                                                                                                                                                                                                         waste bi-product of heat was used to          generates motive power. The power is         with a recuperator to preheat the air
                                                                                                                                                                                                                                                                      cables - located beneath the floor                              Floor heating becomes a traditional heating system in residential buildings                                                                                                                                                       warm neighbouring buildings. The              turned into electricity via an alternator.   to ensure it qualifies as ‘Good Quality
                                                                                                                                                                                                                                                                                                                        1985          in Middle Europe and Nordic countries and increasing applications in non-

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                                                                                                                                                                                                                                                                      surface. In the case of wet systems,                            residential buildings;
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Pearl Street Station CHP was thought to       The wasted heat will be used to heat         CHP’ as defined by the UK CHP Quality
                                                                                                                                                                                                                                                                      the pipes are usually laid in a sand/                                                                                                                                                                                                                                                             be about 50 per cent efficient.               a body of water, or sometimes to             Assurance Programme.
                                                                                                                                                                                                                                                                      cement “dry” screed or self-levelling                                                                                                                                                                                                                                                                 Today, CHP plants are able to work        create steam. Exhaust gases can be               It is possible to get micro turbines as
                                                                                                                                                                                                                                                                                                                        2010          71-storey radiant conditioned Pearl River Tower in Guangzhou, China;
                                                                                                                                                                                                                                                                      liquid screed on top of insulation on                                                                                                                                                                                                                                                             at an efficiency around 85 per cent,          as hot at 600oC, which produces              integrated packages with absorption
                                                                                                                                                                                                                                                                      a concrete floor slab, though they                                                                                                                                                                                                                                                                which is thought to be 25-35 per cent         low temperature hot water (LTHW)             cooling to enable tri-generation.
                                                                                                                                                                                                                                                                      can also be laid in a dry screed on a       conducts it to the floor covering where              arrays and mats which can be laid in a                                                                                                                                                           more efficient that the separate energy       temperatures of up to 95oC.                      They find use in: hospital buildings
                                                                                                                                                                                                                                                                      suspended timber floor. The screed          it is radiated into the room. Electric               thin screed or tiling adhesive layer or                                                                                                                                                          systems it replaces.                             Electrical efficiency of these units is   with a district heating system,
                                                                                                                                                                                                                                                                      absorbs heat from the piping and            types are found in the form of cable                 direct under a wood floor, for example.                                                                                                                                                              Electricity is generated by burning a     low (20 per cent), but thermal efficiency    universities (with district heating), large

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