Memorandum 5
Submission from 2OC
1 EXECUTIVE SUMMARY
1.1 2OC is a Geo-pressure company, making
use of the natural pressure within gas pipelines to drive turbines
to produce carbon free electricity. Geo-pressure, sometimes known
as "sub-surface" pressure, is a naturally occurring,
regenerating force, responsible (in part or whole) for such widespread
phenomena ranging from artesian wells and hot springs, to earthquakes
and volcanoes.
Geo-pressure drives natural gas around our pipeline
network. Before it can be delivered into our homes and offices,
the pressure has to be reduced. 2OC taps into this release of
excess pressure to drive turbines, which produce clean electricity.
1.2 In December 2006, OFGEM approved Geo-pressure
for inclusion in the Renewables Obligation Order. This enabled
2OC to go ahead and sign an agreement with National Grid to begin
work on a £50-60 million pilot project installing turbines
on two sites in London. (See attached Document 1 page 8/9 Press
Release from 2OC and National Grid)
There is potential to install up to 2,000 turbines
on existing brownfield sites in the UK, producing up to 1,000
MW (1GW) of local distributed power—the equivalent to a
nuclear power station.
1.3 2OC's plans to roll this technology
out across the UK have recently been put in doubt following the
DTI's consultation document on the future of Renewable Obligation
Certificates (ROCS) which states:
"The Government views the eligibility of
electricity generated from geopressure where it occurs in conjunction
with fossil fuel (eg natural gas) as an anomaly in the legislation
and wishes to exclude geopressure associated with fossil fuels
from the RO on the grounds it is not a renewable source of electricity.
Geopressure not associated with fossil fuels will continue to
be eligible". (Renewable Energy—Reform of the Renewables
Obligation. DTI May 2007 Para 3.10 and Q5: p. 20)
The DTI then asks: "Do you agree with the
proposal that Geopressure occurring in conjunction with fossil
fuel should be excluded from the RO?"
2OC would like to ask the Committee to consider
including support for Geo-pressure, even where it arises in conjunction
with fossil fuels, in your final report, because it can make an
immediate contribution to reducing UK carbon dioxide emissions.
2 SUBMISSION
AUTHOR ANDREW
MERCER, CEO 2OC
Mercer is an entrepreneur who runs a successful
business leadership company called Footdown. He is passionate
about the need to tackle man-made climate change and is keen to
do all he can to reduce UK carbon emissions. He is currently going
ahead with plans to demolish his existing home on the outskirts
of Bath and build what will be one of the country's first purpose
built carbon- neutral houses. He recently set up "Entrepreneurs
with conscience" a not for profit organisation trying to
encourage the UK's most senior business leaders to adopt sustainable
practice. It is supported by Greenpeace, Friends of the Earth,
The Climate Group.
It was through his mentoring business connections
that Mercer first became aware of technology being manufactured
and sold by Cryostar in Switzerland. Essentially, this was a turbine
fitted within a gas pipeline which could be used to generate electricity.
The turbine was driven by the natural Geo-pressure within the
pipeline. Mercer thought it was an idea that would work well in
the UK given our existing gas pipeline network.
Mercer realised that Geo-pressure energy, could
not compete with the cheapest forms of electricity generation
like gas or coal-fired and turned to the government to see what
support was available for this fledgling low-carbon business.
It was not forthcoming. Undeterred, Mercer pushed ahead with his
plans and National Grid expressed an interest in the technology.
In December 2006, OFGEM accepted 2OC's arguments
that their Geo-pressure energy did qualify for price support under
the Renewables Obligation Order (ROO) and was able to access price
support via the Renewable Obligation Certificate (ROC).
For Mercer, this was the culmination of many
years' work and huge personal/financial investment on his part
and his private backers. It enabled him to set up a joint venture
with National Grid, who saw the technology as enabling them to
generate all their internal energy needs within a very few years.
The two pilot projects in London are now going ahead, as the Joint
Venture spends an estimated £50-60 million on installing
turbines.
However, the DTI is now querying OFGEM's decision
to grant ROO status to 2OC, because of its connection to natural
gas. It is asking for opinions on this by 6 September 2007. Mercer
is now embarking on a lobbying and PR campaign to persuade the
DTI that removing ROO from 2OC is wrong and goes against everything
the government says it is doing to encourage new forms of renewable
energy and technologies to help reduce the UK's carbon emissions.
To find out more about Mercer, Footdown and
2OC please visit www.2OC.co.uk and www.Footdown.com
3 FACTUAL INFORMATION
Geo-pressure a renewable form of energy
3.1 In April 2006 the Renewables Obligation
Order (ROO) came into force imposing an obligation on all electricity
suppliers in England and Wales to produce evidence that it has
supplied customers in Great Britain specified amounts of electricity
generated by using renewable sources. The ROO does not define
renewable source nor does it set out a list of those technologies
which are capable of qualifying as a renewable source. However,
Section 32 of the Electricity Act defines renewable sources as:
"... sources of energy other than fossil
fuel or nuclear fuel ... [including] waste of which not more than
a specified proportion is waste which is, or is derived from,
fossil fuel".
The Chambers 21st Century Dictionary (2004)
defines "renewable energy" as:
"any energy source that is naturally occurring
and that cannot in theory be exhausted eg solar energy, tidal,
wind or wave power, geothermal energy".
The New Oxford Dictionary of English (1998)
defines renewable as:
"a source of energy that is not depleted
by use, such as water, wind, or solar power".
3.2 In the legal submissions to OFGEM, 2OC
argued that Geo-pressure occurs naturally and cannot in theory
be depleted by use. Since Geo-pressure is not a substance or object,
it cannot be regarded as waste.
In a report requested by the DTI and commissioned
by 2OC, Dr Tony Batchelor of GeoScience Ltd describes how Geo-pressure
(or sub surface pressure) is a naturally occurring and constantly
regenerating force which begins hundreds, sometimes thousands
of metres below surface and is responsible (in part or whole)
for such diverse natural phenomena as artesian and hot water springs,
geysers, volcanoes and earthquakes. In simple terms, as long as
planet Earth continues, so will Geo-pressure. (The nature and
source of sub surface pressures—Report by GeoScience
Ltd to 2OC. June 2007)
Geo-pressure: How will it help the UK to meet
its targets to reduce CO2 emissions?
3.3 Geo-pressure could knock several percentage
points off UK carbon emissions by 2010. It is proven technology
already in operation in Switzerland, Germany, Holland and Italy.
It is hugely efficient operating at around 85% efficiency. This
compares with efficiency rates of 45-55% for nuclear; about 30%
for wind; around 20% solar.
The primary goal of the UK's energy policy is
to cut carbon dioxide emissions by some 60% by the middle of this
century, with real progress by 2020.
The 2OC National Grid joint venture could result
in savings of 10MtC by 2020; with an annual on-going reduction
of 1MtC. 1MtC is the equivalent to the amount of carbon emitted
by the whole of the National Health Service. (Source: Climate
Change Programme Review Consultation document)
This is the equivalent of between 4 and 6.6%
of the total UK reductions goal worth between £350 million
and £1.4 billion in carbon credits.
(These carbon-saving calculations were undertaken
by 2OC according to the conversion factors and procedures set
out by DEFRA and validated by environmental consultants Enviros.)
Geo-pressure: How it works in generation
3.4 When gas emerges from the ground it
does so thanks to Geo-pressure. This pressure is very high and
the gas could not be used safely by end users. At several points
in the system, the gas passes through "pressure let-down"
stations, at which the pressure of the gas is reduced by squeezing
it through a valve. Reducing the pressure in this way releases
energy.
No gas is burned or used up in the process. It is
the natural Geo-pressure of the gas which drives the turbine (which,
incidentally, can be held in one hand) to produce the power.
3.5 Electricity from Geo-pressure has the
added advantage of generating power during peak periods on the
grid, daily as well as seasonal peaks. As gas demand increases,
so does Geo-pressure generation. Gas demand is closely linked
to electricity demand, so Geo-pressure generates electricity at
the most useful time, reducing the need for surplus capacity on
the grid and of course, helping to mitigate the negative aspects
of burning gas.
3.6 Geo-pressure technology requires no
extra land-take and has very limited visual impact on what are
already existing brownfield industrial sites. This means there
are likely to be few, if any planning problems. 2OC would simply
being adding a small turbine to plant already in situ.
There are over 2000 pressure-reduction sites
in the UK that could host a Geo-pressure turbine, adding up to
a total capacity of around 1000MW or 1GW. This is equivalent to
the output of an average nuclear power station.
2OC, in partnership with National Grid, is making
plans to roll out Geo-pressure technology across the gas network.
Geo-pressure: The costs of generating electricity
3.7 2OC estimates that the capital cost
of generating capacity through geo-pressure is around £1
million per MW capacity, or £1,000 per KW capacity. By comparison,
large-scale wind energy costs between £600-£1,500 per
KW capacity. (Source: Wind Power in the UK: A guide to the
key issues surrounding onshore wind power development in the UK,
Sustainable Development Commission 2005) Add in that Geo-pressure
operates at around 85% capacity, much higher than the 27-28% for
wind and that it can generate power at peak periods as discussed
in 3.5 above.
Geo-pressure: Recommendations for action
It is the hope of 2OC that this submission provides
sufficient prima facie evidence to the Select Committee that Geo-pressure
technology as utilised by 2OC and National Grid—offers a
cost-effective way of achieving significant carbon savings—around
10% of the projected UK shortfall from the 2010 target.
2OC has always had faith in the technology.
However, its full contribution will only be realised if the take-up
of the technology is helped by government recognition and support
through ROO.
OFGEM has accredited Geo-pressure within the
current Renewables Obligation, as has the DTI. However, the DTI
consultation document on the reform of the Renewables Obligation,
outlined in 1.3 poses a very specific threat to our business plan.
We fail to understand why the DTI, having accepted
along with the Regulator that Geo-pressure is renewable, now,
only weeks later, seeks to exclude it, because we make use of
natural gas as the carrier? We must emphasise again that no gas
is used or burned in this process.
Natural gas will be a source of energy in this
country for decades to come—are we really going to waste
the Geo-pressure which delivers it? And the same technique (tapping
into excess Geo-pressure) can be used with imported gas arriving
(under huge pressure) by ship—Geo-pressure will continue
long after the UK's gas reserves have been used up. Again, are
we going to cast it aside because it is somehow "tainted"
by a link to a fossil fuel?
2OC respectfully asks the Select Committee to
consider responding to the DTI after taking into account the evidence
submitted above.
June 2007
Supplementary material
DOCUMENT 1 (2OC AND NATIONAL GRID JOINT PRESS
RELEASE 23 MAY 2007)
NEWS RELEASE
WEDNESDAY 23 MAY
2007
Gas Pressure in National Grid's Pipelines
to be used to Generate Renewable Energy
— National Grid and 2OC to use innovative
geo-pressure technology to tackle climate change.
— Pilot schemes agreed that could generate
over 45MW.
— Moves National Grid towards its target
of sourcing all its internal electricity needs from renewable
sources by 2010.
National Grid and geo-pressure energy company
2OC have today announced an agreement to form a joint venture
that will use innovative technology to generate renewable electricity
from natural gas pressure in the pipe network.
The joint venture between National Grid and
2OC will build pilot projects to generate electricity at two of
National Grid's gas pressure reduction stations, with the potential
for work to start on six further sites in spring 2008. Initial
investment for the first eight sites would be between £50
and £60 million, and the first two projects could potentially
be at Beckton near the proposed Olympic complex and at Fulham.
Construction is expected to begin in the first quarter of 2008
and the sites will be producing renewable power in early 2009.
All eight sites, once up and running, could provide National Grid
with all its internal electricity needs. National Grid Chief Executive,
Steve Holliday, said, "It's clear that for society to tackle
climate change—and for us as a company to reduce our carbon
footprint—we need to start thinking of new ways to meet
our energy needs.
"As a company, we have already reduced our
emissions by 35%, beating the Kyoto 2012 target of 12.5% emissions
reduction for the UK and we are on target to reduce emissions
from our operations and offices across the company by 60% well
before 2050. Today's agreement with 2OC is a great step forward
and will help us meet all our internal energy needs from renewable
sources by 2010".
Natural gas is driven through the pipe network
under pressure, which must be reduced by a pressure reduction
station before being safely delivered to homes and businesses.
By installing a turbine generation system at some of these stations,
the energy created by reducing the pressure can be harnessed and
used to generate renewable electricity.
Andrew Mercer, Chief Executive of 2OC said,
"With this agreement we hope to make a real difference to
the way the world thinks about exploiting the many sources of
clean, renewable energy that exist today. We are excited about
working with National Grid to enable them to meet their internal
energy needs from renewable sources and reduce their carbon footprint.
Showing leadership in the fight against climate
change and being passionate about finding new sources of clean
energy are core values of 2OC".
It is expected that each of the pilot installations
will generate between 5 and 13MW of electricity and whilst the
actual generation capacity will depend on the characteristics
of the site, a feasibility study has indicated that renewable
energy could be generated at around 200 of National Grid's sites.
John Sauven, Director of Greenpeace UK said,
"If we are to solve the problem of climate change we cannot
afford to leave any stone unturned in the hunt for solutions.
The work done by 20C in developing geo-pressure shows the potential
for finding clean, renewable sources of energy and we're delighted
with National Grid's commitment to this project. Greenpeace believes
that this renewable resource can become an important part of a
new energy system that will help tackle the problems of climate
change and energy security".
| 
