March 2011<br />Green Energy Futures<br />Jeff Kenna<br />
A changing world ....<br />
The Greatest Market Failure?<br />
Beware of group thinking<br />Don’t<br /><ul><li> Short Term
 Group Think
 Wrong Measures</li></ul>Do<br /><ul><li> Long Term
 Independent
 Sustainable </li></li></ul><li>Seizing opportunities<br />
A Tale of Two Strategies<br /><ul><li>Hummer – 346 gms C02/km
General Motors in Liquidation
Leaf  – 0 gms C02/km
Nissan in profit</li></li></ul><li>What needs to happen: 					2 tonnes per person by 2050<br />2050 Target<br />
How can we get there?  <br />Fuel mix in a transition to low carbon society<br />
UK: The Energy Challenge Ahead<br /><ul><li> Decommissioning of nuclear power stations
 Closure of coal power stations –      	Large Combustion Plan Directive
 Rising oil and gas prices
 Political instability in oil & gas rich countries
 Lack of investment in energy infrastructure
 Climate change and sustainability
 Rising energy demand</li></li></ul><li>Consequences<br /><ul><li> Need to decarbonise our energy system
 Increasing electricity prices – 		Minimum 25% real increase by 2020
 Massive investment - £200bn by 2020
 Large scale energy efficiency improvements
 12% of energy to be local by 2050
 Large scale expansion in renewable energy</li></li></ul><li>UK in Europe<br />European renewable energy targets – actual ...
Policy and Legislation<br /><ul><li> Kyoto Protocol
 European Union 20/20/20 Legislation
 UK Climate Change Act
80% cut in CO2 by 2050
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Boost your marketing strategy - Green Energy futures

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Presentation from Business Link's 'Boost your marketing strategy' event at Center Parcs Longleat Forest on 2nd March 2011. Dr. Jeff Kenna's (Camco) presentation looks at green energy futures and how businesses can make the most of current and up and coming opportunities.

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Boost your marketing strategy - Green Energy futures

  1. 1. March 2011<br />Green Energy Futures<br />Jeff Kenna<br />
  2. 2. A changing world ....<br />
  3. 3. The Greatest Market Failure?<br />
  4. 4. Beware of group thinking<br />Don’t<br /><ul><li> Short Term
  5. 5. Group Think
  6. 6. Wrong Measures</li></ul>Do<br /><ul><li> Long Term
  7. 7. Independent
  8. 8. Sustainable </li></li></ul><li>Seizing opportunities<br />
  9. 9. A Tale of Two Strategies<br /><ul><li>Hummer – 346 gms C02/km
  10. 10. General Motors in Liquidation
  11. 11. Leaf – 0 gms C02/km
  12. 12. Nissan in profit</li></li></ul><li>What needs to happen: 2 tonnes per person by 2050<br />2050 Target<br />
  13. 13. How can we get there? <br />Fuel mix in a transition to low carbon society<br />
  14. 14. UK: The Energy Challenge Ahead<br /><ul><li> Decommissioning of nuclear power stations
  15. 15. Closure of coal power stations – Large Combustion Plan Directive
  16. 16. Rising oil and gas prices
  17. 17. Political instability in oil & gas rich countries
  18. 18. Lack of investment in energy infrastructure
  19. 19. Climate change and sustainability
  20. 20. Rising energy demand</li></li></ul><li>Consequences<br /><ul><li> Need to decarbonise our energy system
  21. 21. Increasing electricity prices – Minimum 25% real increase by 2020
  22. 22. Massive investment - £200bn by 2020
  23. 23. Large scale energy efficiency improvements
  24. 24. 12% of energy to be local by 2050
  25. 25. Large scale expansion in renewable energy</li></li></ul><li>UK in Europe<br />European renewable energy targets – actual versus target<br />
  26. 26. Policy and Legislation<br /><ul><li> Kyoto Protocol
  27. 27. European Union 20/20/20 Legislation
  28. 28. UK Climate Change Act
  29. 29. 80% cut in CO2 by 2050
  30. 30. Feed in tariffs
  31. 31. Renewables Heat Incentive
  32. 32. Carbon Neutral Homes from 2016
  33. 33. 15% energy from renewables by 2020 (30% electricity; 12% hear; 10% transport)
  34. 34. Green Deal; Green Investment Bank</li></li></ul><li>Feed in Tariff scheme overview<br />The Government has used powers in the Energy Act 2008 to introduce feed-in tariffs to incentivise low-carbon electricity generation (up to 5 MW)<br />Scheme went live on 1st April 2010<br /><ul><li> Payments to generators will comprise two parts:
  35. 35. Generation tariff
  36. 36. Payment made for every kWh generated & metered
  37. 37. Export tariff
  38. 38. Payment made for every kWh exported to the grid
  39. 39. Payments will be made by electricity suppliers to generators.
  40. 40. Large suppliers are designated mandatory suppliers, and have to participate by law.
  41. 41. Small suppliers may participate if they wish
  42. 42. Maximum capacity for the scheme is 5 megawatts (5 MW)
  43. 43. Eligible low-carbon electricity technologies are – solar PV, new Anaerobic Digestion, hydro, wind, micro Combined Heat & Power
  44. 44. The scheme will result in higher costs, that will be passed through to electricity users in form of higher bills...</li></li></ul><li>A new paradigm: timing is important<br />
  45. 45. Solar Photovoltaics<br />
  46. 46. Solar Energy – Some Facts<br />Area needed to meet UK annual electricity from PV<br /><ul><li> Solar energy falling on a household roof is 4x the energy it uses
  47. 47. PV costs have come down 35% in the past 4 years
  48. 48. Germany has 7.5 GW of pv – supplying 1.2% of national electricity
  49. 49. From 2016 new houses in UK will be zero carbon
  50. 50. Feed in tariff makes solar pv financially viable in the UK</li></li></ul><li>Some German PV Facts<br /><ul><li> Industry turnover €10bn
  51. 51. No of businesses: 10,000
  52. 52. No of jobs: 53,000
  53. 53. Export Earnings: €6bn/yr
  54. 54. Installed Cost €4000/kW
  55. 55. Market growth 2001-2008: 80% per year</li></ul>10 MW solar farm in Bavaria<br />
  56. 56. Solar radiation in Germany and UK<br />
  57. 57. The UK Opportunity<br /><ul><li> Assume follow German growth rate at half capacity
  58. 58. Would meet 3.2% UK electricity by 2020
  59. 59. Market of £10bn/year
  60. 60. 250,000 new houses per year = 1000 MW of pv/year</li></li></ul><li>Market Factors<br /><ul><li>PV Performance
  61. 61. Costs and Finance
  62. 62. Planning
  63. 63. Grid Connection
  64. 64. Commercial</li></li></ul><li>PV Performance<br />Output depends on:<br /><ul><li>Solar radiation
  65. 65. Temperature</li></ul>1 kW array will give approx 850 kWh/year in UK<br />10% annual variations<br />
  66. 66. Costs and Finance<br />10 kW Small Business System<br />Cost: £32,000<br />FIT: £3,100<br />On site: £800<br />Export £5<br />Total £3,905 (12%)<br />100 kW Large Business System<br />Cost: £300,000<br />FIT: £27,000<br />On site: £4,500<br />Export £2,000<br />O&M £3,000<br />Total £30,500 (10%)<br /><ul><li> 25 year contract
  67. 67. RPI linked
  68. 68. Tax advantages
  69. 69. Can be leased
  70. 70. Can be debt financed
  71. 71. Good pension investment</li></li></ul><li>Planning<br /><ul><li> Household systems are permitted developments unless conservation zone or AONB or listed buildings
  72. 72. But still a grey area for planners
  73. 73. Commercial systems will need planning permission
  74. 74. Will need some pioneers to test the water </li></li></ul><li>Grid Connection<br /><ul><li> Less than 3.6 kW no permission
  75. 75. Smaller than 100 kW should be no problem
  76. 76. MW size can connect to 11 kV network
  77. 77. Will need grid connection study </li></li></ul><li>Commercial Issues<br /><ul><li> Different business models
  78. 78. Performance Guarantees
  79. 79. Raising Debt
  80. 80. Offsetting risk
  81. 81. Ownership and roof renting
  82. 82. Track record and skills of contractors
  83. 83. O&M</li></li></ul><li>Community Energy Companies<br />One vote per investor <br />Minimum £500; Maximum £20,000<br />Tax relief on investment (20%)<br />Elected Board of Directors<br />Invests in each spv<br />Other investors<br />
  84. 84. Producing your own energy: The Benefits<br /><ul><li> An investment opportunity
  85. 85. 8-10% inflation proof
  86. 86. Long term & better than banks
  87. 87. Positions your company
  88. 88. Value add to local community
  89. 89. Supports global and national targets
  90. 90. Secures low cost electricity; hedge against price rises</li></li></ul><li>Ban Ki-Moon Speech to World Business Leaders<br />We meet at a critical moment in human history….<br />Climate change is the defining challenge of our time. I also believe it is the most potent game-changer for business over the next century. It is an opportunity we must seize. <br />I want to challenge you. I want to see you in the vanguard of an unprecedented effort to retool the global economy into one that is cleaner, greener and more sustainable. <br />This will not be easy. Fundamental change never is. But, if we get it right, we can reasonably look forward to sustained growth and prosperity. <br />If we get it wrong we face catastrophic damage<br />to people, to the planet<br /> – and to the global marketplace. <br />
  91. 91. Camco is an international leader in identifying opportunities and providing solutions to carbon risk. <br />
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