UK Trends in Microgeneration Adoption

Transcription

1 UK Trends in Microgeneration Adoption Robert Harper Sustainable Technology Manager

2 Microgeneration, a Global Perspective The fastest growing energy technology in the world is grid-connected solar PV, with 5% annual increases in cumulative installed capacity in both 26 and 27, to an estimated 7.7 GWe. Rooftop solar thermal collecting capacity increased by 19% in 26 to reach a level of 15 GWth globally. Global Biomass and geothermal energy are now commonly employed for both power and heating, with recent increases in a number of developed countries. Mandates for incorporating microgeneration into new construction represent a strong and growing trend at both national and local levels. 1.5 million homes have rooftop solar PV feeding into the grid worldwide. Rooftop solar thermal collectors provide hot water to nearly 5 million households worldwide. There are more than 2 million ground-source heat pumps in use across 3 countries providing building heating and cooling. Source: [Renewables-Global Report, 2 RWE npower, RWE Group

3 Microgeneration, a Global Perspective Geothermal direct-heat utilisation is growing much faster than geothermal power, with recent growth rates of 3-4% annually. This trend will accelerate with the commercialisation of air source heating units, and combined HVAC systems for residential markets. The largest country shares of renewable annual investment were in Germany, China, USA, Spain, Japan and India. Investment in Germany increased to over $14 billion in 27, mostly in wind and solar PV, and investment in China was $12 billion, mostly in small hydropower and solar thermal systems. Global Annual Growth Rates of Renewable Energy Capacity, Biomass heating Geothermal power Biomass power Large hydropower Small hydropower Ethanol (annual production) Solar hot water/heating Solar PV, off-grid Geothermal heating Wind power Biodiesel (annual production) Solar PV, grid-connected % 1% 2% 3% 4% 5% 6% 7% Global renewable energy capacity grew at rates of 15-3% annually for many technologies during the fiveyear period The growth of grid-connected solar PV eclipsed all of these, with a 6% average growth rate. All technologies in light blue are predominantly microgeneration systems. Source: [Renewables-Global Report, 3 RWE npower, RWE Group

4 UK Microgen Industry, Reality or Rhetoric? Slow Growth Not All Technologies Commercial 12, 1, 8, 6, 4, Fuel Cells dchp Solar PV Biomass GSHP Hydro Wind Solar Hot Water 2, Microgeneration growth in the UK has been slow despite introduction of various government measures Solar thermal is the only technology with a mature supply chain Certain technologies still very much cottage industries; only several hundred systems installed every year Wind Hydro GSHP Biomass Solar Hot Water Solar PV dchp Fuel Cells Limited growth (exc SHW) has been driven by government capital grant incentives, a blunt policy instrument What are the challenges? Scale, 15% Renewables by 22 Cost-effectiveness, commercial viability with other industries 4 RWE npower, RWE Group

5 Renewables Directive Proposed National Targets 5 RWE npower, RWE Group

6 Commercial Drivers Political & Environmental DTI Microgeneration Strategy (Mar 6) Option to have target Research into behaviour Support for 8m LCBP Link Ofgem & ENSG Identify non-tech barriers HMG Energy Review (Jul 6) Demand-side options 22 statement on EE Fiscal incentives Planning & Energy Bill (May 27) Allows LA to set higher EE ratings than B.Regs Merton Rule commitment April 7, microgeneration in PDR CC&SE Act 26 (Jun 6) RAB Zero Carbon Homes (27) Suppliers Obligation Post 211 Changed EEC to CERT CSH 4-6 growth forecast Future of CERT Obligation for export Fuel poverty alleviation Promotion of microgen Strong PV outcome Need for fiscal incentives B.Reg changes in 21 ESCO options Hybrid options Develop energy services GHG reduction targets Gearing-up period CO2 targets 6 RWE npower, RWE Group

7 Commercial Drivers Economic HMT 26 Budget VAT reduction 5% LCBP funding 8m ECA for B2B microgen HMT 27 Budget Tax exempt earning on export reward and RO payments for electricity % VAT on self-build housing for microgen Feed-In Tariff consultation Significant debate Step change in support Cost recovery? Fiscal support level p/kwh Strong NGO / Tory support Stern Review (Oct 26) CC represent real economic risk 1% impact in the future, 1% GDP impact now Engages money-men Significant stakeholder BERR 22 Renewable Energy Strategy 32% of bulk electricity from renewables. Massive growth Introduction of renewable heat and transport Significant drive for on-site generation in built environment 7 RWE npower, RWE Group

8 Commercial Drivers Social Day After Tomorrow (24) Mainstream movie Impact of climate change Discussion of Carbon emissions Raises CC profile Power to the People (Feb 6) FT economic editor Discusses decentralised generation in terms of security of supply Raises the question of bias towards large scale generation npower Retail Position on Green (Nov 7) Strong consumer messages on green in all sectors Sustainability is the key commercial word, M&S Plan A Green is now main business, not just CSR Al Gore s Inconvenient Truth (Jun 6) Mass media fall out for climate change awareness High level of consumer reaction Significant stakeholder impact FPAG Annual Report (27) It remains the case that the only sustainable way to end fuel poverty is through energy efficiency Includes microgeneration BERR Defra Fuel Poverty Strategy (27) The low Carbon buildings programme is hoping to attract bids from social housing providers seeking to install microgeneration 8 RWE npower, RWE Group

9 Commercial Drivers Technology CLG Changes to PDR All on roof solutions of less than 2mm above roof surface to be PDR, exceptions of listed buildings and areas of outstanding natural beauty Net Zero New Build (21) 25% of new builds should comply with CSH level 6, net zero carbon Eco-towns begin roll-out across UK. 8 tests sites across England & Wales Net Zero New Build (214) 1% of total new builds should comply with CSH level 6, net zero carbon Potential for off-setting options in non-conducive conditions e.g. urban Net Zero New Build (214) 6% of new builds should comply with CSH level 6, net zero carbon 1% CSH Level 6 for SH/HA 9 RWE npower, RWE Group

10 Market forecasts (In s ta lla tio n s ) T h o u s a n d s 6, 5, 4, 3, 2, High growth scenario Current Growth Scenario Low growth scenario 22 RES consultation Double banded ROCs Introduction of FIT? 22 RES Targets Introduction of CSH level 6 1, RWE npower, RWE Group

11 Model Description Stakeholder forecast Determine Key milestones Understand split of technologie s Apply Logistic growth model Calculate S curve Calculate technology breakdown s Calculate technology Outputs Determine Milestones Technology breakdown % 7.2% 6.44% 13.57% 23.46%.1%.8% Hydr o Wind GSHP Solar PV ASHP Fuel Cels Solar Ther mal Breakdown by technology Technology Breakdown Millions 35 3 UK Market Total Installations Biomass dchp 13.4% % ASHP Biomass dchp Fuel Cells GSHP Hydro Solar Thermal Solar PV Wind Apply Growth Multiplier t 1 x n = t 2 x n = t 2 /t 1 x = n t 2 /t Calculate Outputs kwp, kwh, s, tco 2 Total Wind Installations 11 RWE npower, RWE Group T hou san ds Forecast 5 per.mov. Avg.(Forecast)

12 J1 npower Forecast Model Microgeneration Market Adoption Model (MMAM) Hydro Wind GSHP Solar PV ASHP Fuel Cells Solar Thermal Biomass dchp Technology Breakdown RES Targets Introduction of FITs Introduction of CSH Level 6 Actual figures Primary Assumptions: npower growth model based on logistic S growth curve model Introduction of Code for Sustainable Homes Level 6 signals beginning of significant growth for microgeneration. 12 RWE npower, RWE Group

13 Slide 12 J1 Alpha model used JAMEC3, 2/8/28

14 Model Breakdown: Power Technologies Hydro Wind Electricity technologies ,8 1,6 1,4 1,2 1, Solar PV 212 TotalHydroinstallation volumes 213 Total PV installationvolumes Thousands Total Wind installation volumes Installations (Stock) Solar PV 7,297 1,525, 1,586,992 1,651,55 1,718,64 Hydro ,462 2,5 Wind 2, ,61 191,64 276,842 4, Growth in solar PV not expected to takeoff until post 211 Cost remains significant barrier to growth Current legislation will not be enough to transform and grow the market Solar PV is expected to be a technology of the masses but generate less than wind Wind will not see high volumes anticipated by BWEA: High volume micro-wind still encountering problems; Growth seen in larger (1kWp+) systems, but; Planning still remains an issue Hydro will always remain a fringe technology and growth will be negligible However, significant potential for hydro more than 2, water mill sites 13 RWE npower, RWE Group

15 Model Breakdown: Heat Technologies Thousands 3,5 3, 2,5 2, 1,5 1, ASHP Total ASHP installation volumes dchp 219 Total dchp installation volumes Thousands Fuel Cells Installations (Stock) ASHP , 333,54 8,351 1,92,497 GSHP 7,565 6, 95, , ,986 Biomass 74,287 3,2, 4,153,995 5,392,399 7,, Fuell Cells 21 5, 46,416 43,887 4,, dchp 4,63 2,4, 3,872,154 6,247,324 1,79,416 Solar Thermal 162,74 1,75, 2,275,54 3,35,72 4,5,667 Th ou sand s ,5 2, 1,5 1, Total Fuel Cell installation volumes Solar Thermal 29 TotalSolar thermalinstallationvolumes Heat technologies Heat pumps will see anticipated growth levels: Requirement for on-site generation Match with heating systems Electricity prices Fuel cells will also not see anticipated volumes- technology not yet commercially viable Main growth of heat technologies expected dchp: Take share of boiler replacement market twin generation Efficiency gains Skill set already available within workforce Solar thermal will see significant growth but not expected to meet previous forecast expectations 14 RWE npower, RWE Group

16 Conclusions Difficult to forecast where the microgeneration industry is headed: significant growth in the sector is expected, although current economic climate introduces considerable risk to planning. Problem is that growth is dependent on government legislation: not all technologies are commercially viable, significant investment in the supply-side is needed. The industry needs to deliver on Government s expectations: whether or not the industry will generate the environmental and commercial savings expected, is yet to be decided 15 RWE npower, RWE Group