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84 responses to “Micro Generation – The Emperor’s New Clothes?”

    • Neil

      There is the reduction in distance from production to appliance and therefore the subsequent improvements in distribution losses. Though I didn’t think that would challenge the factor of 15 you are talking about.

      However the whole issue of losses in the system is an issue worth looking at. I have seen some figures for USA (perhaps they have a much worse system than us) that suggest we could make some big savings at various points along the energy delivery line.

    • Will

      What you’re saying maybe fair today for microgeneration in the context of electricity and particularly in the context of retrofitting microgeneration to buildings today.

      However, the place of microgeneration in renewable heating should not be forgotten. I believe there is massive potential for cost effective and competitive application for solar thermal technology in the UK. Solar thermal is the unsung success story of global renewables, witness its success in Europe and China in particular. Solar thermal has a fundamental role if we are to free up natural gas supply for base load electricity generation as the UK switches off older coal and nuclear plants in the near future.

      Also, whilst I agree that wind is almost at the stage of being one of the ‘low hanging fruit’ of low carbon solutions. It is important not to lose sight of the big picture, it’s not about 10% of this or that, it’s about at least a 60-80% in UK emissions. In this scenario, if the UK wants retain control of any significant percentage of its energy supply the UK has no option but to deploy all proven low carbon technologies to their maximum potential as fast as possible (see http://www.withouthotair.com/). This includes microgeneration and large scale solutions in all forms. As part of this revolution, developing and scaling up installation and other technical skills quickly is absolutely critical and requires nurturing from the start. Let’s be honest, the financial support that microgeneration is getting in the UK compared to big wind is small and will remain that way for the foreseeable future whatever the talk of the government. The support that it does get will benefit the UK in the long term as it is important not to forget that the potential for cost reduction in the immature technologies of micro wind and particularly solar PV is immense compared to the mature technology of large scale wind. There is a long way to go yet.

      The emperor may be naked, but I’d rather that than a fossil fuel/nuclear industry in their carbon cloak hiding their true costs.

    • Damon Hart-Davis

      Hi Dale,

      Nutters like me are prepared to spend our own money (can you say ‘voluntary taxation’) to do our bit pro bono, in exactly the same way that I ponied up the pennies I could then afford for EuroTunnel shares without expectation of financial return… I want to do another round of PV so that we’ll (just) be net generators over the year, even on a small house and with a non-ideal site. (Actually, with my east/west roof surfaces I’m paying an extra 20% to achieve the ~3MWh/y I want to exceed our consumption.)

      Now, if I could buy a chunk of one of your turbines (eg to help my company offset its carbon emissions from Web servers elsewhere in the world) then I would do so. I’d cover almost all my other operations with the same cash that it takes me to put up PV on my roof at home.

      But in fact I still think both are worthwhile.

      One in money terms, the other in ‘engagement’/mental terms.

      And there are some slight transmission/distribution loss and other advantages of possibly as much as 10% in having generation embedded in the DNO end. For example, a decent microgen will end up doing power-factor correction of its surrounding supplies for free as I understand things.

      Rgds

      Damon

    • Rob C

      I would also be interested in purchasing a stake in a turbine

    • Julian

      While I agree to an extent, I think you’re somewhat comparing apples to oranges here, micro and macrogeneration are obviously different, but not just in terms of cost per kWh, they’re also very different in terms of motivation, financing and planning. Yes, the government wants to be seen to be giving those of us sufficiently motivated and flush with the cash to stick PV on our roofs a big hug, especially with the Conservatives banging on about FITs for microgeneration, but if you actually look at the money from government on this, it’s just not really there to support anything that could be considered large scale at the moment.

      Although I admit I didn’t actually read the entire recent BERR renewable energy strategy report (it is 280 pages or so), it’s illustrative renewable technology breakdown to reach the 2020 target (the pretty pie chart on page 8 ) includes microgenerated electricity as less than 1% of it’s proposed renewables mix, compared to 13% onshore wind and 19% offshore wind (NIMBYtastic I know).

      I’d agree it would certainly be odd for government to finance the entire cost of producing 1% of our electricity demand from microgeneration, but if you look at what they’re doing, and even what they’re proposing, that really doesn’t seem likely. As I see it, who’s paying is the big difference with microgeneration, even if the government actually gives the LCBP some actual money, there’s no way in hell they’re going to, even via a FIT, cover the entire or likely even half the cost. I was going to reference page 144’s scenarios here, but either I’m misunderstanding what they mean by “Approximate resource costs in 2020” in terms of getting 1.8 TWh of electricity from domestic producers, or their sums are somewhat wrong.

      The economics of microgeneration are very much in part based upon perceived environmental and homeowner economic value, even the best carbon offsets aren’t quite as good as knowing that you cooked your lunch via your roof, knowing that your energy bills are unlikely to be going up much for the next 30 years, and that you’ve added value to your house. Considering the number of people who want to minimise their carbon footprint and who are happy to put up a reasonable amount of cash to do so is only going to increase, it is in a sense, subsidised by people’s willingness to do something they see as good and effective, even if it’s may not be the most economically effective use of their money to make an emissions reduction. Though if we’re talking pure economics, energy efficiency is generally accepted as the cheapest way to do that, it just suffers from being mind numbingly dull, even if it’s also mind numbingly effective.

      What I’m trying to say is that we’re not talking about what we’re going to build, we’re talking about what we’re going to subsidise, to what extent, and how government or utilities should (or shouldn’t) do so. So although I certainly agree that subsiding wind is more cost-effective overall, subsidies aren’t the only factor as to what actually gets built for both macro and microgeneration. As you’ve said on many occasions, the planning system makes it much harder for you to get turbines up and running and I’m sure helps to discourage investment across the board. What I’d love to know is the degree to which the current ROC system actually changes the realities and economics of building wind, and the difference you think putting the money currently going into microgeneration into ROCs for wind would actually make, because obviously if potential microgenerators decided not to bother due to the lack of a subsidy, their money is unlikely to be invested in macrogeneration of renewables either.

      As others have already implied, I seriously doubt I’m the only one who’d happily invest a few thousand pounds, maybe even more, enough by your reckoning to easily produce enough electricity to more than match what a domestic customer like myself uses each year, via a share-type scheme with your company, in exchange for having our electricity bill zeroed out for the next 30~ years via renewable sources (IIRC, the average life of a turbine), and certainly, we’d have a much, much shorter payback time and a much better ROI than microgenerated electricity. Although I really hope I’m wrong, my guess is that it’s not quite as simple as that, and that microgeneration will remain for quite sometime, as one of the few, if not the only way for homeowners to truly know that their electricity, or at least the same or most of the electricity as they use is being generated from new, clean sources as a result of their actions, and at the same time, have their electricity bill reduced or even rendered completely insignificant for 20/30+ years.

      This also doesn’t touch upon the increasing number of companies (mainly in the US) who are leasing PV at rates that lower it’s cost to homeowners considerably (SunRun’s approach here is particularly interesting), and although my guess is that both them and Solar City are currently building it, at least in part, on the generous subsides that exist for PV in California, along with the degree to which PV works well in California.

      Then of course there’s reductions in the cost of microgeneration from the likes of Nanosolar, though since they’re not shipping to mere mortals just yet, and there’s always the possibility that the Makanis of this world will make something equally transformative with wind in the meantime (albeit probably not for microgeneration), it’s a bit of a toss up.

      Furthermore as Will has already mentioned, the economics for micro heat are significantly better than for PV in Britain, especially since the vast majority of energy that we use in the UK is for heating rather than electricity, and because Britain isn’t exactly Russia in terms of natural gas supplies, there’s a stronger case to be made for microgenerated heat. Although it’s a complete and utter guess, I’d be surprised if it turns out that much cheaper, if at all, to make heat from electricity from Big Wind.

      In terms of the lack of CHP, it does exist, though currently mostly in terms of public buildings and community projects, in terms of domestic CHP, Baxi’s little micro-CHP unit is supposed to launch in early 2009 and actually looks pretty nice, though I’m not sure they’ve announced the price yet, and I’d imagine it’ll be at least another year before utility companies and BERR have decided whether/how to handle exports/ROCs from it.

      http://www.opinionsuite.com/berr
      http://www.sunrunhome.com/benefits/superior_solar.html
      http://solarlease.solarcity.com/SolarCityAbout.aspx
      http://www.baxi.co.uk/baxiecogen

    • James

      LOL! Sounds like Dale is preaching to the quire here 😉 I think most of the readers agree with you, and are also willing to take it upon themselves without waiting for procrastinators and fence sitters like politicians.

      I think Damon’s idea is great, give the motivated a way to demonstrate what needs to be done to make great change it this world.

      =-)

    • Damon Hart-Davis

      Just to be clear, Dale, if you *were* thinking of selling turbine shares/leases to get more capex covered, and to give us better and more effective ways to invest our discretionary carbon-offsetting quid, those for my purposes could probably be non-voting, etc, etc, to avoid diluting your control, providing that other reasonable safeguards in the style of ‘flying freeholds’ were in place.

      Rgds

      Damon

    • Martin

      Although I agree with you – there are some advantages to microgeneration not mentioned:

      1) PV produces more electricity in summer and so can help to offest reductions in wind power during summer months, which may become more significant with increasing air conditioning. See study here http://www.eci.ox.ac.uk/research/energy/downloads/sinden-houseoflords.pdf

      2) Microgeneration can reduce reliance on the grid and so give greater energy independence in power cuts (which will becoame more likely). Us peak oil/gas believers worry about this

      3) Solar thermal has major potential to reduce gas demand (not had my boiler on for three months this year now thanks to solar thermal).

      4) Cost of PV will reduce – as they have in Germany, and just as big wind costs have.

      5) As said before, its difficult to invest in bug wind directly apart from projects like westmill etc

    • Damon Hart-Davis

      Hi Dale,

      Are you aware of products such as SMA’s Sunny Backup and Sunny Island that can safely detach the house (or whatever) from a failed grid so the lines-folk are safe but the house lights stay on?

      I’m seriously considering such a system for my next round of PV, since it is happy to have microgen downstream of it keeping the batteries topped up and powering loads.

      Rgds

      Damon

    • Damon Hart-Davis

      Hi Dale again…

      BTW, thanks for your comments above.

      And a further thought on the Sunny Island stuff and grid support: I’d like to be able to program it to detach from the grid (or pull enough power from the batteries to spill slightly onto the grid) both when frequency is low, and at times of peak demand (eg 4pm-8pm winter) as discussed before.

      I’m unable to estimate embodied energy costs of the battery bank and losses compared with the reduced grid energy costs/carbon at the moment, ie to work out if it helps the planet or not overall rather than just being an expensive toy for me.

      Rgds

      Damon

    • tayga

      Hi Dale

      Just found you and this is my first post here. As a government-funded researcher in alternative energy technologies I am as aware as anyone of our government’s catastrophic underestimation of the imminence and seriousness of the impact of climate change and peak oil.

      To be honest, I don’t trust them with my family’s future wellbeing. You are absolutely right in your assessment of the options for generation and in your efforts to get the message to the people who make the decisions.

      However, I think that only those of us who are prepared to take the solution in to our own hands will avoid the worst of the coming energy crises.

    • nommo

      Unless you are ‘off-grid’ or want to be – microgen isn’t as useful as showing support for big wind in your locality.

      Why not join forces with your local Green Party, Transition Initiative, or start up your own..? It might not even cost you a penny… just a little time…

      Tayga – you are absolutely right – governments are mostly concerned about power of a different nature than the one we are discussing here! They will only take action if there is a threat of them losing their position of power through lack of action.

    • Damon Hart-Davis

      Hi,

      Some of us live in suburbia where big wind just wouldn’t work, supported or not.

      So I think solar is *especially* useful for us townies to show we’re serious.

      Rgds

      Damon

    • nommo

      Hello Damon – I was reading that solar was actually more ‘efficient’ per sq ft than wind in the right location (I think that was in Withouthotair?). If I had any disposable income – I too would be experimenting.

      I am one of those nutters who want to build a mud house on the edge of some woodland with no grid supply.

      Well.. there’s nothing wrong with dreaming as long as it doesn’t distract one from reality 😉

      In the meantime – I switched my domestic supply, attempted to reduce consumption and am now looking to work with other like-minded people in my community to try and shift things to a larger scale.. it’s not easy though!

      I wish someone would propose a big wind turbine near me, we live in an AONB so a turbine is very unlikely currently (although huge fugly mobile masts, pylons, water towers, church spires and flag poles are not a problem!). I think even in urban/sub-urban locations there are opportunities to support ‘big wind’ though – there are an increasing number of sites being proposed that are closer to where the people live and work (rather than the sheep!).

      I am mulling over a Transition Initiative in our village… but I am a bit scared of the neighbours! lol

    • Damon Hart-Davis

      Hi Dale,

      Wow! Thanks for the comprehensive reply.

      As regards the space efficiency issue of PV we have a small enough roof area that I will have to cover almost all of it to generate on average the ~2.5MWh we use after extensive conservation (was nearer 10MWh/y just a year ago). And we don’t have enough to cover our use day-by-day in winter. I use ~18% module efficiency PV.

      As to the £500 for ownership in some way, you have one or two reserved from me!

      Rgds

      Damon

    • Stuart

      Damon,

      I’m a nutter like you – buying shares in Eurotunnel for social rather than economic reasons (the cost/revenue projections were even then clearly wilder than the 2012 Olympics). Mind you the two return trips a year are a reasonable dividend.

      I have solar thermal and a 65w PV panel to get my head around renewable economics.

      Frankly the best money I spent was replacing my old gas boiler with a new one. Payback 2/3 yrs (even less after the next price increase). Solar thermal is OK (10 year payback?) and having a hot shower courtesy of the sun makes it feel even better. But PV is a joke unless you are off grid. Pound of electricity per pound spent I can think of much better ways to cut carbon.

      Returning windpower investment. Why a turbine? Surely that has some of the issues of buying your own microgen turbine? The results will be highly dependent on location, equipment and luck (aka reliability).

      Surely better if we could take shares in Ecotricity as we did with Eurotunnel? The return on investment is averaged over its entire turbine stock and takes into account the economics of delivering it. There is no seperate accounting. Much simpler. We need to think bigger, not in building individual turbines, but making companies like Ecotricity stronger. Not that Ecotricity will by itself deliver wind energy to the UK – but by example help to shame the majors and encourage the politicians into making more rational decisions about our renewable future.

      Involving people in renewable politics is good. Involving their money in renewable returns is more likely to concentrate the mind and sharpen the focus 😉

    • Ted Marynicz

      There are already solutions (such as the SMA Islanding kit) that allow grid-tied power generation when the grid is available and separate, battery-based usage if the grid fails. No need to re-invent anything here – except to reduce the price.

    • paul

      Hello all – I was searching for confirmation of the usage of G83 codes yesterday and came across this useful page – I thought I would share it in case it comes in handy for anyone (it does seem to be written for Proven Wind customers though). This page by Energy Networks Assoc also contains some useful links and documents for ‘distributed generation’.

    • Chris

      There was an interesting story in the paper not long ago..

      http://www.guardian.co.uk/environment/2008/jul/23/solarpower.windpower

      If it is really possible for the UK to harness enough wind power to power itself 3/4 times over and enough hydroelectric/tidal power to power a substantial percentage of Great Britain, as I have heard it is, then maybe some day we will be selling clean energy to much of Europe via HDVC’s?

      With regards to working out the costs of microgeneration. Obviously it is very expensive. But with such an erratic energy market – and both green & non-renewables rocketing in price, the true cost to the consumer over a long period of time is very complex to work out. My dad bought solar panels, not PV’s, but water heating panels. He worked out that over the last quarter gas bill he only saved about £3 on the same quarter of last year (before he had the panels). This is however no reflection on how much power he’s generated. His panels are with a near perfect south facing aspect and his gas has been switched off all summer plus some of spring. This is more a reflection of rocketing energy prices, and in some ways the costs over the life of the panels (about 30 years apparently) will get smaller as prices continue to go up. Centrica/British Gas have just announced a 35% rise on gas (the biggest ever single increase) and 9% rises on electricity! Eeek! So you can understand why taking more control of home energy and the increased financial stability of micro-generation appeals to some people even if initial costs are astronomical.

    • Damon Hart-Davis

      Hi,

      I believe that the SMA equipment has suitable approvals (possibly EN rather than G83, but I suspect that our DNO can be talked round given that the supplier is well known), but I have yet to establish for sure.

      Rgds

      Damon

    • Ricardo

      I too would like to invest money into a macro wind turbine. I have just purchased a house and was wanting to fit it out with a micro wind turbine. However if Ecotricity were offering shares in a large scale turbine I’d rather spend the £2000 on that.

      And how many small investors such as myself would be needed to fund a whole turbine?

    • Rex

      And what are the maintenance costs like on these big wind turbines?

      How does maintenance of big wind compare to maintenance of hydroelectric and PVs?

    • Scott

      While location is obviously much more important, you didn’t mention hydro Dale? In an ideal location, I would have thought that this would be much more efficient (and possibly cheaper in the long term) than solar, perhaps even better than wind?

    • paul

      On the topic of community ownership/investment – I came across this little Danish island today. I am surprised I haven’t come across Samsø before!

      Could a similar model work on a larger island I wonder..?

    • Damon Hart-Davis

      Paul, the Eigg scheme is also interesting.

      Clearly more do-able at low population densities, but the economics of macro-wind seem compelling, even if the ‘community’ has to be virtual and spread out across Ecotricity’s client base for example. That’s what we have a grid for, after all!

      Rgds

      Damon

    • Steve Thayne

      Dale,

      I take your points on the costs of PV – but what about the emerging technology of thin film PV? This is set to bring the cost down dramatically, to less than the cost of oil….could change the maths underlying your arguement dramatically.

      Best wishes,

      Steve Thayne.

    • Damon Hart-Davis

      Steve,

      My understanding is that maybe half of the cost of microgen PV is the installation/admin cost of having trained workmen fiddling with your roof and meeting H&S and building and grid codes, so even if the PV itself was free then macro wind would still probably be much cheaper by Dale’s calculations.

      However, I hope I’m wrong.

      Rgds

      Damon

    • Steve Thayne

      Hi Damon.

      So do I. And companies like Nanosolar do seem to have made a significant breakthrough, in being able to literally print thin film solar as if off a printing press. Their factory is now producing, though orders mean we can’t buy from it for at least a year. They anticipate a 1 gigawatt annual production from this one factory

      http://www.nanosolar.com/blog3/

    • Thomas Lankester

      @Dale
      ‘Others may come along, like CHP, but for now it’s the stuff of legend – try getting your hands on one.’
      No probs. We had our WhisperGen fitted 30 months ago and it shares 1/3 off our winter ‘leccy usage. Paid for itself in a year. Not used much in the summer due to the solar panel providing most of our hot water and less in the spring and autumn due to the new wood stove (microgen?).

      A few points on PV.
      1) no one has mentioned ‘peak shaving’ where the PV kicks in at the same times as all the offices have their AC belting out during a heat wave. Electricity is at a premium but the market fails to deliver the spot price to the home owner so they don’t benefit. Reducing / capping peak local load also reduces the need to upgrade power grids and put in more / bigger pylons (which really are ugly, unlike turbines).

      2) the power per unit area really is a useful metric as usable land (i.e. where you can get permission to put productive macro-turbines, with grid connection) will start to have a premium. The existing built environment is ideal being brownfield already, grid connected and is close to users.

      3) diversity in renewables improves robustness. Big wind is way more cost effective now but we need to look to times of cheaper PV costs and have a balanced renewable generation portfolio.

    • EverythingsGoneGreen

      With the UK government being so tight (not to mention short-sighted, stupid, wasteful and in the pickets of big business) where do we begin to get the message through and the funding secured to go Big wind?

      The figures you present, Dale, mean that we could have already had the funds for 18% of our energy generation from wind if we hadn’t been fighting pointless wars overseas (see the very foot of this article for estimated £18 billion spend on Iraq/Afghanistan)

    • alex honey

      I have enjoyed scanning through this blog, most enjoyable rant on all things green.

      With all the rain about currently, I am surprised at the lack of comment on micro-hydro. I am sure that I read there are about 13,000 suitable sites around the UK.

      The BIG advantage, is that one can treat it as base load, as rivers/ streams generally do not vary a great deal in flow rates too much over a 24 hour period.

      Even in flat Norfolk, my village sports a former water powered saw mill with a spare water wheel just waiting for someone to “weld” a generator to it! I hail from Kent originally and my home village had a “hammer pond” which drove iron industry hammers, again most of the civils structures are still in place. These projects just need a champion to drive them through the EA and funding red tape.

      Perhaps Dale would like to set up a company called “Wetricity”!

    • Scott

      I think micro-hydro is certainly something that needs to be taken into consideration. I’d love to get myself a little pad powered by micro-hydro, and even an electric car to use any excess! 🙂 However it looks like lots of already existing sites are old mills with acres of land and thus very pricey.

      As a curiosity, how does micro-hyrdro stack up against your other figures Dale?

    • Damon Hart-Davis

      Dale,

      With PV ‘maintenance’ for domestic microgen is mainly cleaning the panels once in a while AFAIK, though it’s also said that while the panels tend to have a long life, inverter failures happen sooner.

      Mentally I expect to replace my inverter every 10 years, but I may well die before my panels do so completely… %->

      Rgds

      Damon

    • Jonny Holt

      I have just been looking at the Greenbird site and notice that your colleague Richard Jenkins is collaborating with you on the development of a vertical axis turbine for use in built up areas.

      Having only skimmed through this blog I might have missed any specific mention of that project in other postings, but I can’t help feeling thatit seems to sit uncomfortably with the tenor of your opening rant. No offence intended, and I do understand that the maths do not add up in terms of planet saving.

      However, I believe that many others – like me – would dearly love the opportunity to have such a machine on our urban roofs, not only as a badge of faith but also as a means of acheiving independence from the grid for when the power cuts kick in, as they surely will. Get the storage and grid isolation problems sorted and the orderly queue will form.

      Btw, your comment “since I started this I’ve had it in mind to find a way to link the new build to peoples bills, so that our customers can see their bills reduce as we build” really caught my interest!

    • Damon Hart-Davis

      Turbines on roofs are generally considered a poor idea because of (a) the turbulent wind and (b) the vibration they transmit through the structure potentially shaking it apart and in any case making sleep difficult for example!

      Rgds

      Damon

    • alex honey

      Avoid mini chp (one designed for a single dwelling) one set of trials found that overall they were 18% LESS efficient than using mains gas and electricity.

      Much more importantly, why would anyone want to rely on gas from mafia controlled Gazprom to provide electricty and heat and cooking???

      We as a Nation have about 10 years to invest our way out of an extremely horrible mess that comes with Peak Oil in around 2015-2020.

      What you need ladies and gemtlemen is access to as many different forms of energy that you can stuff into your home at a sensible cost.

      So in my very old energy inefficient cottage, I have oil combi, wood burning stove, an old multi-fuel rayburn (looking at trying to reinstall back boiler into main heating system), plug in electric panel heaters, ecotricity supplied of course! My plan for the future, is to redevelop the garage (away from main house wihich is listed) into an energy centre, pv Will come down in price, vertical axis wind turbine or biomass stirling engine and the ability to disconnect from grid. I have rolls of insulation in the loft to roll out this autumn (at least 300mm deep please) and all windows are being slowly upgraded (not made of money you know!). Finally, with an eye on peak oil again, I jacked the day job (40,000+ miles in a company car) became self-employed working from home and each year the veggie patch grows a little larger!!!!

      I might sound like an old duffer with nothing better to do, but actually 30 something with two small kids and growing realisation that the post war (1945) good times are nearly over (ask Warren Buffett) and we need to be prepared for some very stormy seas ahead.

      Dale, speed up your build programme, please!

      Good luck to all!!!

    • Jonny Holt

      Damon,

      Thanks for the warning about vibration induced sleeplessness, but I had just about discounted the practicality of a roof-mounted turbine anyway. I was powered by metaphor!

      However, my understanding of vertical axis (Darrieus) turbines is that they do not suffer from vibration to anything like the same extent as conventional, horizontal axis machines – not least because the generator can be mounted at ground level. Additionally, as they are always “turned into the wind”, they are more appropriate in built up areas, being less susceptible to turbulence.

      Please can you or anyone put me right on these points if I have mis-understood the relative benefits.

      Dale,

      Please can you tell us a bit more about the ‘Urbine (after you have got your speed records, of course!)

    • Damon Hart-Davis

      Hi Jonny,

      Have a good read of the site below, which is all about home-brew power, and people being warned off VAWTs in general since they are VERY hard to make work effectively:

      http://www.fieldlines.com/

      Rgds

      Damon

    • Chris Cook

      Hi Dale

      Quite right. It’s about the numbers.

      But I’ve come to the conclusion in recent years (form a background in energy markets – I was a Director of the International Petroleum Exchange and recently gave evidence to the Treasury Select Committee in relation to oil markets) that it’s also about the legal and financial structures or “enterprise model” we take for granted.

      As an entrepreneurial developer you are always restricted by access to capital, whether Equity (where outside investment would dilute you) or Debt, which is risky, expensive and of course less accessible now, post “Credit Crunch”.

      I advocate – and have been developing in Scotland with Norwegian government funding – a simple but radical “Energy Partnership” framework, where investment essentially comes from “unitising” renewable energy (“MegaWatts”) and energy savings (“NegaWatts”)and selling the units forward to investors.

      ie not shares or debt as we know them Jim, but Units redeemable against energy consumed or indeed, against “energy loans” received to (say) retrofit CHP.

      This “asset based” model wipes the floor with conventional “deficit-based” financing, and is the sort of thing that a hippy like you might find appealing, I suspect…

      If so, please contact me off line.

      Best Regards

      Chris Cook

    • alex honey

      Chris,

      really interesting entry about financing, being an old cynic what’s in it for the Norwegian Government?

      Do these financial instruments only work on large projects or could they scaled down to say providing renewable energy for 40 houses, utilising an ESCO type approach?

      regards

      Alex

    • Chris Cook

      Hi Alex

      In fact, the “Capital Partnership” was the “micro investment” element of our “Hanseatic Microfinance Initiative”.

      The other element, maybe even more radical, and what really attracted the Norwegians, is a form of mutualised “Peer to Peer” “micro credit” and procurement support tool, using a risk sharing mutual guarantee mechanism we call a “Guarntee Society”.

      Rather than interest being paid for bilateral “Trade” credit created peer to peer between Seller and Buyer, a provision is made into a mutually owned default fund, for the use of a mutual guarantee. Also Buyers may – with the Seller’s agreement – settle credit in “money’s worth” rather than money ie optional barter settlement.

      Plus operating costs,for the use of the system.

      In both cases, micro credit and micro investment the result is “banking” without a bank as middleman, but with institutions formerly known as banks acting as service providers, no longer putting capital at risk by creating credit based upon it.

      I digress.

      We see our proposed “Community Energy Partnerships” (we are looking for pilot schemes) as “micro-ESCO’s”.

      The difference is that we see our partnership approach as aligning the interests of stakeholders in a way that Companies fundamentally never can – whether “For Profit” or “Not for Profit”.

      This is because all Companies (and “look alikes” eg Industrial and Provident Societies) suffer from an inherent “Principal/Agency” conflict between the interests of “Owners”, and their agents, the Directors and Management.

      In tightly held Companies like Ecotricity that this conflict is minimised, but it’s still there if ther are paid employees.

      The short answer is we plan to start as small as necessary, and simply link and network “micro” together to create “macro” scale within a common framework.

      Essentially the outcome is not an “Organisation” but “self organisation” within a LLP as framework agreement.

      This could give rise to a networked partnership between a consortium of service providers, and a consortium of service users, with capital provided by service users “paying forward” for production.

      Best Regards

      Chris

    • Damon Hart-Davis

      Hi,

      I’ve heard it suggested more than once that buying PV or other microgen can usefully be thought of as ‘prepaying’ for electricity, ie “paying forward” as the capital markets people (an you!) say!

      Rgds

      Damon

    • alex honey

      Chris,

      Can you give a practical example of how these funding arrangements might work.

      For instance taking our local sawmill as an example. owned by a charuty, about 3kW available about £100k to connect up to the grid and gubbins etc. Payback through traditional routes about 30 years. How does your system overcome these numbers? As I presume this would be a common result for many projects in termss of payback. I am interested in the who owns what, maintenance, who receives any income etc etc

      Very interested in the concept, just trying to understand it fully, please bear in mind that I am just a simple civil engineer!

      Could you renovate a street of terrace houses with this system, as the payback period could be much lower with these project types.

      kind regards

      Alex

    • alex honey

      Damon,

      Can you get your Dad to rig us something at the local watermill? I have always loved his “homemade” machines on the telly.

      Regards

      Alex 🙂

    • Damon Hart-Davis

      Adam didn’t build most of those gadgets, but he is looking into getting run-of-river hydro and water-source heat-pump for his new house… B^>

      Rgds

      Damon

    • Chris Cook

      Damon, Alex

      The criteria for the model are:

      (a) “MegaWatts”

      How much revenue from sales of electricity will an investment in renewables produce over the expected life of an asset, after a %age for operating costs.

      (b) “NegaWatts”

      How much energy will be saved over a period by investing in energy saving (where operating costs don’t really come into it much).

      While the model reduces financing costs dramatically, it can’t make a silk purse out of a sow’s ear.

      Buying PV and other microgen – which is the point of this thread – costs a very large amount indeed (albeit reducing with new technology) per Kilowatt Hour produced over the expected life of these assets.

      So the only people who would invest in microgen currently are either altruists or optimists.

      Answering Alex specifically…

      The model would reduce payback time due to the fact that financial costs (eg interest on loans) are cut.

      But it wouldn’t do more than that if all you did was connect to the grid and sell your juice “wholesale”.

      How a Community Energy Partnership works is that the asset is “owned” by a “Custodian” member of the CEP Limited Liability Partnership.

      This would be your charity.

      A “Developer/Operator” member (could be a mini consortium) develops, maintains and operates the kit, in return for an agreed proportional share of its production – or rather the revenues from the sale of the production.

      It is therefore in their interests to provide the best possible kit, and maintain it to the best possible standard, because that way they make more money.

      The “Investor” is a consortium of Investors who buy “Shares” redeemable in (say) 10 Kilo Watt Hour Units, or the revenue from sales of these Units to a utility.

      Customers use electricity as now, pay the utility, and the utility buys from customers, as now.

      In the CEP model the utility would do the billing, and offset Units presented by individuals to the CEP for redemption against those individuals’ bills.

      Where it gets interesting is where there are Investors who are local consumers, and the potential for a private wire.

      Because this cuts out the utility, and allows investors to redeem or sell Units locally at a local retail price, rather than the utility’s lower “wholesale” price.

      It can even be economic to use local battery or mini pumped storage solutions, (ie store energy at times of low local consumption and release it locally at peaks) rather than sell to utilities.

      As you say, the paybacks on energy saving schemes, eg ground source heating and retrofit CHP are even better.

      Here, “heat loans” could be made to the property – not the occupier. In Berkeley, California, it is planned for low interest municipal loans for funding solar PV to be made and repayments collected in this way through “property assessments”.

      How this might work – this is early thinking – is by an addition to water rates (“Hot Water Rates”?), whereby payments are made to repay the “Energy Loan” received from Investors.

      The water company would collect an amount calculated on a Cost per Btu.

      The consumer would then pay a reduced bill for energy (Btu’s) actually consumed, and would repay the “energy loan” to the Pool at a minimum of x btu’s per year at the market price per btu.

      As you can tell, I haven’t got to the bottom of all detail of the “NegaWatt” concept yet, but the architecture is pretty clear, and pretty persuasive.

      One of the likely outcomes is that quite a few of the Units created might never be redeemed, or would not be redeemed for years, but circulate locally instead, and this would essentially confer a “seignorage” benefit of what would have become a local energy-based currency.

      http://www.kilowattcards.com/template/index.cfm

      gives an insight into the potential for monetising energy…

      Best Regards

      Chris

    • Scott

      Thanks for the update there Dale. I’m currently working just down the road from Stroud, so would be interested to know more about your project once the scheme is underway.

      Hopefully at some point in the near future I’d like to go down the self-build route and set up a little hydro, although finding the right location can be a bit of a challenge.

    • simon mallett

      Just a few thoughts on microgen etc.
      Solar PV, expensive, minimal returns etc. But, on a new roof when designed in from the start, cost comes down (I’m not buying slates or tiles) even more so if I’m considering an expensive specialist roof covering. Surely better to use PV than individually made wood shingles? I know of a new school near Ashford with a lovely but hugely expensive roof, South facing that would have been cheaper to make with Solar PV!
      My solar PV roof went in on a new roof, I saved £5K on slates! Okay the PV was still more expensive, but surely I can choose where to spend my hard earned money!
      Wind Power, I’m on top of the North Downs, my trees grow sideways. I agree that big wind is more effective, but where else should I invest my spare cash – in an Icelandic bank? Surely a working micro wind turbine is better than a bigger screen TV?
      Perhaps microgeneration is also a consumer choice, plastic windows or wood framed, hot tub or solar water heating? My solar thermal is certainly saving me money, especially when heating oil hits 60p and more! My solar PV and wind, as long as they have a real and relatively short carbon pay back, the financial payback is largely irrelevant, its a great hobby! As is looking for more interesting ways of insulating my house, weatherboarding with insulation under it, saves making my rooms smaller and when painted it looks great! Again the real economic savings are minimal when compared to loft insulation and cavity wall, but my weatherboarding also soaks up carbon – its wood, its acting as a carbon store for the next 100 years or so and its incrementally saving energy.
      My kids are starting to understand what we are doing, my 10 year old is giving a presentation at his school to pursuade them to buy an OWL to monitor their electricity. Once he’s done that it will be a wind turbine
      Again, I agree that big wind is far more effective a means of generating electricity (not necessarily energy) than most forms of micro. But micro gets the user closer to the means of generating, they get to understand where power comes from and can relate to it, they will tend to switch off lights more readily than somebody who buys their electricity from a wire that comes to their house and they will look at the overall energy consumption which tends to come down.

      Off subject… Hi Damon, hope you are well!

      Simon

    • Damon Hart-Davis

      Hi,

      (Yes Simon, alive and well!)

      My local council is hopefully going to say yes in the next day or so to my next round of PV, and are already interested in (a) the performance data and (b) what effect a highly-visible installation will have on the thinking of people around us ie in considering their own PV or more likely their current use of electricity.

      I hope in fact that a few people will come to our door and ask about what we’re doing. I shall have a power meter or two to lend out and maybe an Ecotricity info pack (c’mon Dale, what about a £5 referral fee and a nice A4-printable summary for some viral marketing?). I’ll try not to bore them to death… B^>

      Rgds

      Damon

    • simon mallett

      On the subject of planning permission for microgeneration, my brother is looking at installing a wind turbine, he’s just a bit futher along on the North Downs and approached his local council. They were quite candid and said that they had been instructed – from Govt – to approve all domestic wind turbines. Neighbours (even all neighbours) objecting was not to be considered grounds for refusal. The only exceptions were such as preservation areas or similar.

    • Damon Hart-Davis

      Shame, it’s a dubious thing to do, since for most urbanites the micro wind turbine wouldn’t even repay its energy cost, never mind financial.

      Even my nice little MotorWind http://www.earth.org.uk/wind-power-pilot-autumn-2007-MotorWind.html delivers a contribution to my small off-grid system too small to measure, even having sited it as best as I can…

      Rgds

      Damon

    • simon mallett

      I agree. Unless its blindingly obvious, I would see sensible reason to object, or for planning to be refused, is if there was no realistic chance of the system working as designed. This might mean a professional survey with an anemometer.
      On a similar subject, I was speaking to a solar thermal panel company, they had a customer insist that the panels went on the north side of the house as that was where the neighbours would be able to see them. They refused the contract.

    • Damon Hart-Davis

      Hi Dale,

      Looking forward to hearing from Ecotricity.

      Meanwhile my PV extension is now due for next week! B^>

      Can your bloke at least mail me ASAP a bunch of single-sheet fliers and maybe some of your window stickers to hand out to the local kids who will be interested and might get their parents interested?

      Rgds

      Damon

    • paul

      Hi Damon,

      I will sort you out with some bits 🙂

      Would you drop me a mail with your preferred postal address?

      Paul

    • derek thomas

      Has anyone experience of PV tracker systems which are up to 40% more efficient than roof mounted PV systems. I want to install a Lorentz Tracker system for home use.

      Derek

    • Simon Mallett

      Suggest contact Ian Tansley of True Energy (do a web search) he helped develop Center for Alternative Technology in Wales (CAT) and I know has lots of experience with Solar PV tracking. You will certainly get a balanced view, he’s very approachable

      Simon

    • Clive Burke

      Hi Dale,

      As some one who has done it all, from micro solar and wind (Windsave and my own system) to being a founding director of Adam Twine’s super duper Westmill wind farm (really terrific man that Adam!), I do feel that all new houses perhaps aught to be fitted with solar hot water panels – especially new builds. I currently have a small scale wind turbine development facility down at Westmill, and am helping a small Chinese company develop a ‘913’ sized turbine. I once drove a ‘Smiths Cabac’ milk float 200 miles across the country when I moved to Oxfordshire from Lincolnshire some years – that was some adventure!
      Oops – didn’t mean to ramble!

      Have you ever heard of VRB energy storage, the DTI are angling to part fun the UK’s first VRB plant, Google ‘Sorne Hill VRB’ This refers to the Irish wind energy storage project, which is expanding. My interest in VRB energy storage is partly political, on the one hand, it will help derail the nauseating nuclear power gravy train, and on the other, it will shut the NIMBY’s up for good, blowing their ‘intermittent and unreliable’ argument out of the water.

    • Simon Mallett

      Clearly there needs to be pretty well equal support for development of energy storage as there is energy generation. However, most of this storage – all some sort of battery – seem to rely on chemical reaction and/or catalysts whether variations on traditional batteries that store the electrolyte in bulk in a charged or discharged form, or hydrogen that is generated, then reacted using a catalyst (or burnt). I’m not sure of the sustainability – what happens when we reach ‘peak’ platinum. As an alternative can I suggest: http://www.mdi.lu/english/autres.php a scalable solution without long term requirements to deal with hazardous waste.

    • alex honey

      Dave,

      from my limited knowledge, i believe you get the same output by reflecting mirrors onto a small pv cell as you do my having lots of pv cells. i guess this contraption would be easier to set up with mirrors or could you set up the bimetallic strips to reflect the sunlight somehow directly onto the pv cell? talking of Nottingham uni (great bunch of guys there by the way) Tarmac are building a house with solar thermal (and pv) on a low angled roof (22o) “to maximise the winter sun”. I know that I am not bright so I am hoping someone can explain how this roof will work in the winter. surely if the sun is low in the sky you want the roof nearly vertical (~70o) to capture the most of the winter sun (not nearly horizontal)? I know the BEDZED boys have designed it, so I am sure I am the idiot not them, but it does seem counterintuitive. Visit

      http://www.tarmachomesproject.co.uk

      to see for yourself.

      I guess some of you guys will be kicking about Ecobuild next week admiring all the Greenwash, I’ll see you there! I am on a stand greenwashing!

    • Damon Hart-Davis

      My feeling is that for the added cost, complexity and maintenance you’re almost certainly better off just buying more non-tracking PV with the same money in almost all cases.

      Arguments rage, eg search at http://www.fieldlines.com/ but in any case if you are in a UK urban area your permitted development rights don’t include tracking panels AFAIK!

      Rgds

      Damon

    • Dave Howey

      Alex, haven’t looked at the site you mention yet (will do). My take on this is that tracking-PV is great (especially in the tropics), but may not pay for itself. However as an engineer and hobbyist if I had a few hundred watts of PV to play with, I would definitely give it a go out of pure curiousity. I like the simplicity of the bi-metalic strip idea (rather than using mirrors or whatever).
      Dave