The Association for Decentralised Energy (ADE) ran a Combined Heat and Power Conference in London (last week) and BasePower was proud to join the speaker line-up.
The theme of this year's conference was “Clearing the Hurdle; how to deliver a CHP business case.” First up was Helena Crow, CHP lead at the new Department for Business Energy and Industrial Strategy. She shared what the government is doing to support the growth of CHP as a viable technology, and gave an update on issues including the government’s view on barriers to wider CHP adoption and Ofgen's review of embedded benefits.
Tim Rotheray, director of the ADE, then put forward the ADE’s view of the Government’s new industrial strategy. He highlighted that there is a real need for joined-up thinking as past CHP policy has tended to be siloed. Notably, the Government’s own prediction is that, mainly due to ‘policy cost’ increases, electricity and power supply prices will rise significantly from the point of £80-90 per MWH in 2016 to a potential price point of £140 in 2030. As policy cost represents the major chunk of energy cost, this makes the argument for putting energy generation at the point of demand even stronger.
Tim argued that CHP schemes are far quicker to implement than traditional coal fired plants, give users greater control over energy and resilience, and improve business productivity and competitiveness.
The remainder of the afternoon’s sessions focused on strengthening the business for CHP, through to assessing risks and securing finance, with various speakers drawn from the public and private sector. George Fowkes, co-founder of BasePower, shared the company’s view of the available market mechanisms. He compared a dozen revenue sources and their attractiveness against their risk, giving a “BasePower score” to their overall effectiveness.
From BasePower’s perspective, although the traditional CHP revenues of power and heat sales (via private networks) are still the strongest, the numerous, newer emerging revenue streams e.g. the Capacity Mechanism and frequency response, require less capital to compensate for their higher risk. Their strength as part of an investment case is growing, especially in conjunction with traditional revenues.
For a copy of the Basepower Market Mechanisms Grid please contact us.