APPENDIX 36
Memorandum by The Micropower Council
The Micropower Council is pleased to respond
to the Committee's inquiry into the Government's Energy Review
and, in particular, its investigation of the capacity of microgeneration
to meet a substantial proportion of UK electricity demand in the
medium and long-term.
Our response to the Government's Energy Review
which provides further, more detailed, information on the contribution
micropower can make in meeting four of Government's Energy White
paper objectives, including meeting future demand for electricity
is attached.
Domestic scale micropower technologies have
a major role to play:
— Reducing Emissions: ~1MtC
of annual carbon savings can be obtained by any of:
— 1m biomass-fired heating systems
or heat pumps (one in every 26 homes);
— 6m gas-fired microCHP (one in every
four homes);
— 7m (~1kW) micro-wind, (~1kW) PV or
solar hot water (one in every three to four homes);
— Supply Security: 1GW new CCGT
baseload power station's electricity would be displaced by any
of:
— 1m biomass-fired heating systems
or heat pumps (one in every 26 homes);
— 3m gas-fired microCHP (one in every
eight to nine homes);
— 7m (~1kW) micro-wind, (~1kW) PV or
solar hot water (one in every three to four homes);
— Home Heating: Fuel consumption,
and therefore cost, is either eliminated or permanently lowered,
particularly when micropower technologies are combined with energy
efficiency measures;
— Competitiveness: The use of
micropower technologies:
— reduces both economic and energy
waste leading to greater economic competitiveness; and
— enhances competition in the energy
sector as the only real alternative to network-based, gas and
electricity supply.
Micropower Technologies capture "hearts
and minds", resulting in behavioural change that reconnects
consumers with their use of energy and results in positive behaviour
change:
"The most striking finding is the difference
in `energy intelligence' between mainstream households with no
micro-generation and those who have acquired the technologies
passively . . . Having come from a similar starting point, these
new DIY energy generators exhibit in general a wholly new grasp
of energy issues and control over their energy use".[106]
Micropower technologies replace low efficiency
centrally produced electricity with high efficiency clean power
produced where it is needed without incurring excessive transportation
losses; micro-heat technologies displace the use of gas and other
fossil fuels for heat production in the home and local community.
The number of installations required to deliver
the equivalent of a CCGT is well below the mid to long term market
potential for most of these technologies and no allowance has
been made in the numbers quoted above for technological developments
that could lead to major performance enhancements in the future
(in particular the potential for fuel cells CHP technologies).
In addition, the total potential contribution
from decentralised generation which includes microgeneration in
larger applications and community schemes is considerably greater.
A mass market capability cannot be delivered
overnight; the rate at which micropower technologies are installed
and the eventual market size will be dependent on many factors
including Government market transformation policies, the removal
of barriers to the development of small scale heat and power technologies,
and future movements in fuel prices.
Some indication of the potential market is given
by a number of recently published studies:
— the SBGI's updated projections for
micro-chp (micro-CHP Updated projections SBGI)[107]—indicates
that this technology can take 30% share of the boiler replacement
market by 2015 and that 5.6 million homes could have microCHP
installed by 2020;
— the EST study (Potential for microgeneration
Study and analysis[108])
has been quoted as saying that 30-40% of the UK's electricity
demand could be met by microgeneration devices by 2050; and
— in a more ambitious and environmentally
focussed scenario, the report on the 40% House (40% house project
report (Environmental Change Institute of Oxford University March
2005[109]))
suggests that there could be more than 50m low and zero carbon
technologies providing heat and hot water in the domestic market,
under the "40% House" scenario, by 2050. [110]
Taken together these studies demonstrate that
the market potential for micropower is very substantial. Looking
forward there are a number of factors that will facilitate its
development in the mid to long term.
— The micropower industry is new and
very diverse. Over the next five to 45 years there is the potential
for considerable innovation and for future micropower technologies
to deliver even higher efficiencies and fuel savings than can
be delivered by current technologies.
— The industry is a long way from mass
market production/installation and significant economies of scale
are available that should move them beyond niche market application
to real alternatives to conventional technologies accessible to
everyone.
— The market itself is subject to major
changes over this period. By 2050:
— almost all gas and electricity infrastructure
will be replaced and should[111]
be better able to accommodate decentralised power production;
— all existing power stations will
be closed (and even some yet to be built will have closed by then);
— there is the potential for major
technological innovation in related areas that further facilitate
the efficient deployment of microgeneration:
— Smart metering should be
the norm aiding customer choice and, amongst other things, allowing
consumption to better aligned with production;
— improved power flow management;
— improved small scale storage
capabilities could emerge (eg dc/battery application within homes);
and
— fuel availability and price movements
will change the relative economics of different technologies over
time.
— The diversity of the industry means
that different technologies can be used in different situations
and the industry should be able to respond very flexibly to any
changes in the heat and power market.
The nature of the market with bulk sales of
small scale technologies also allows for smooth market build up
as new capability is added incrementally over time.
106 Sustainable Consumption Roundtable seeing
the light: the impact of microgeneration on the way we use energy.
October 2005. Available at: http://www.ncc.org.uk/responsibleconsumption/seeing_light.pdf Back
107
http://www.sbgi.org.uk/index.php?fuseaction=sbgi.viewFile&id=8013060 Back
108
http://www.dti.gov.uk/energy/consultations/pdfs/microgeneration-est-report.pdf Back
109
http://www.eci.ox.ac.uk/lowercf/40house.htmlreport Back
110
Table 7.2. Back
111
How quickly this happens will depend on how quickly an appropriate
regulatory framework and correct investment incentives for monopoly
infrastructure providers are put in place. Back
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