Alex lockton th white

1. RENEWABLE ENERGY AND THE
BENEFITS TO BUSINESS
ALEX LOCKTON, T H WHITE
19TH APRIL 2016
WWW.THWHITE.CO.UK

2. • 183 year old privately owned Group of 10 divisions, based in Wiltshire
• Diversified and stable business, 25% staff owned private company
• Energy Fire and Security is the building services division
– Active in Security and Fire for 20 years, NSI Gold Accredited
– Designing and Installing renewable energy since 2010 with 100’s of years of
experience
WHO ARE T H WHITE?

3. • Current legislation
• Renewable Energy – benefits to
business
• Example renewable solutions
and how they work
• Current funding and subsidies
RENEWABLE ENERGY - BENEFITS TO BUSINESS
T H White Energy, Fire & Security
Helping customers make buildings
safer, greener and more efficient for
generations.

4. CURRENT
LEGISLATION

5. • UK Government (DECC) International
Commitments
– Climate Change Act - UK government is legally bound
to deliver 80% Co2 reduction vs 1990 levels by 2050
– EU ETS, UK 21% emissions reduction 2020
– Renewable Energy Directive, UK15% by 2020
– Carbon budgets in place to 2027 currently
– EU proposing 2030 framework
– UK COP 21 Paris Agreement
• UK Local Policy and Measures
– Subsidies (FIT, RHI, ECO, Green Deal)
– Planning regulation (Commercial Landlords 2018,
MEES)
– Innovation Grants (Innovate)
– ESOS
• Other UK relevant activity
– National Grid investing £21bn by 2021 to make grid
more low carbon
CURRENT LEGISLATION
https://www.theccc.org.uk/

6. RENEWABLE
ENERGY
BENEFITS TO
BUSINESS

7. • Energy security - Limitless source of power and heat
• Gives you control back over your energy bills
• Shield against rising energy costs
• Diversification income
• Green credentials which attract clients
• Healthier lifestyle and better legacy for our families
• Cost of doing nothing
*CBI Jan 2016, Open Letter to Uk Government, co-signed by 19 other major businesses
RENEWABLE ENERGY – BENEFITS TO BUSINESS
“The way we power our
economy is being
transformed. Building on the
ambition of the recent Paris
Agreement, much more of our
energy will come from
renewable and other lower-
carbon sources. New
technologies will also change
how we store and use the
power they provide. This
transition is being led by
businesses, who have
increased the UK’s use of
renewable energy for our
electricity supply from 11% to
25% in just three years.”
CBI*

8. Energy security - Limitless source of power and heat
• There’s enough sunlight that falls on the earth in just one hour to meet the
world energy demands for a whole year!
• Home grown energy (and storage) gives some measure of control back
Potential Threats to Energy Security
• Wars
• Migration
• International trade issues
• Speculation in oil and gas markets, gas often linked
to oil prices
• Sources of fossil fuels are often in very volatile areas
RENEWABLE ENERGY – BENEFITS TO BUSINESS

9. Gives you control back over your energy bills
• Shield against rising energy costs
• Middle Hill Farm, Mixed farm with 1200 acres and
400 head – 51% of electricity from solar
• Typical dairy farm 0.47p – 1.8p/litre of milk – in a
market where many are under margin threat a
51% saving in electricity could mean survival
• A company renting their roof to a solar developer
can reduce the cost of some of their electricity
units by up to 40-50% at no capital cost
RENEWABLE ENERGY – BENEFITS TO BUSINESS

10. Diversification income
• When factors are right some businesses add an
extra income stream to their business
• Simple model Solar / storage rent per acre
• Anaerobic Digestion = rent OR multiple income
and savings streams (waste cost saving, income
from subsidy, savings from energy produced,
fertilizer created and sold)
• IRR 10%+ possible even in post subsidy
environment
RENEWABLE ENERGY – BENEFITS TO BUSINESS

11. Green credentials which attract clients (and save the world)
• Utilities revolution: Ovo Energy, Good Energy, Community
Energy
• Supermarket supply chain requirements
• RE100 Group a recent example including major international
companies: IKEA, Goldman Sachs, Google, Nestle, Unilever,
Marks and Spencer
RENEWABLE ENERGY – BENEFITS TO BUSINESS

12. Healthier lifestyle and better legacy for our families
Macro Factor
• World Health Organisation predicts that between
2030 and 2050 climate change is likely to cause
around 250,000 deaths from malnutrition, malaria,
diarrhoea and heat stress.
Your future team!
• According to a recent study by MonsterTRAK, the
division of job-hunting megasite Monster for college
students and recent graduates, 80 percent of
young professionals are interested in securing a
job that impacts the environment in a positive
way, and 92 percent give preference to working
for a company that is environmentally friendly
RENEWABLE ENERGY – BENEFITS TO BUSINESS

13. COST OF DOING NOTHING
• Unchecked climate change, Citi said, could cost the world $72 trillion
by the middle of the century. But the big surprise in Citi’s report was the
cost of building the low-carbon economy: the world can spend $2 trillion
less in total on energy infrastructure and ongoing fuel costs than it would
in the business-as-usual scenario. So we save $2 trillion and avoid
losing up to $72 trillion in economic activity.

14. • Intermittency – sun not always shining
• Its complicated
• Bankable Warranties - new supply chain
• Government involvement – how reliable
• Practical building and infrastructure constraints
• Is it easy to adopt and operate once it is installed
RENEWABLE ENERGY – RISKS TO BUSINESS

15. Intermittency – Sun not always shining
RENEWABLE ENERGY – RISKS TO BUSINESS

16. Its complicated... It’s true, one size often does not fit all
• Lots of advice out there
– Carbon Trust
– Regen South West
– Renewable Energy Association
– Various trade associations
• First step – Look at your data. We can help you find some
• Next Step – Make a plan, most of you could have one through ESOS or ISO
• Likely that renewable energy will not be first measure you tackle first – huge
returns from energy efficiency possible first
RENEWABLE ENERGY – RISKS TO BUSINESS

17. Bankable Warranties - New supply chain
• Example: Hanwha Corporation, diversified Fortune
500 business, acquired QCells with over 30 years cell
manufacturer
• As market matures there has been some
consolidation
• Solar, Wind, Biomass, Hydro Technology is well
established and even storage can make some claim
• AD, Hydrogen and emerging technologies can be
treated as pilots OR work with manufacturers and
integrators to provide guarantees
• Key is due diligence at procurement stage and
choosing right partners to guide you along the
way
RENEWABLE ENERGY – RISKS TO BUSINESS

18. Government involvement – How reliable
• To date since the inception of the feed in tariff there have been no
retrospective reductions to installed renewable generation capacity
• The only rules which have changed are ones affecting future or new
installations
• It is true some forms of government have political agendas which can have an
effect
• To a man or woman, not a single installer of renewable energy likes subsidies
• However, to give some comfort: Both On shore wind and Solar can both
exist without subsidy and give double digit returns in the right
circumstances.
RENEWABLE ENERGY – RISKS TO BUSINESS

19. Practical building and infrastructure constraints
• Design is biggest difference due to the specific benefits in harnessing the
natural resource and converting into useful on site energy
• Most enabling works fit with common construction, project management
principles and CDM
• Ask to see examples of working technology:
– Solar PV on roofs 750,000, Solar farms over 500
– Solar thermal very limited on commercial scale
– Wood fired Biomass 5,000 Non domestic RHI schemes
– Anaerobic Digestion circa 150 operational
– On shore wind sites 927
– Hydro stations100+
– Heat Pumps 10,000
RENEWABLE ENERGY – RISKS TO BUSINESS

20. Is it easy to adopt and operate once it is installed?
• All energy infrastructure requires training on
handover
• All energy infrastructure should offer a
maintenance solution
• MCS installers have minimum guidelines for
handover packs
• Larger installations have more detailed
requirements and can be made to suit
• There are more installations in the market and
more experience to help deal with them if things
go wrong
RENEWABLE ENERGY – RISKS TO BUSINESS

21. Source National Grid Summer Outlook 2016
CONTINUES TO GROW DESPITE GOV CUTS
National grid predicting continued growth of renewables and in their summer report
Highlighting their need for better forecasting for solar and wind

22. EXAMPLE
TECHNOLOGIES
AND HOW THEY
WORK

23. • Frome Medical Centre,
owned by Frome Renewable
Energy Co-op (FRECO)
• FRECo raised £300,000 in just 5 days
to fund the Medical Practice & Football Club
• 6% p.a. return, lifetime carbon saved
1500 tonnes of carbon
plus £188,000 for a community fund
• 560 solar panels generate 130,291kWh
SOLAR PV ROOFTOP EXAMPLES

24. • New manufacturing site refurbishment in Kent
• Objective reduce CO2 and energy costs
• 670 x 260w Q Cell Solar panels
• 2 x Fronius Agilo 75kw central inverters
• 173,852kwh a year, payback 6.5 years
(not including any tax allowance)
SOLAR PV ROOFTOP EXAMPLE

25. • Chelworth Solar Park, owned by Wiltshire Wildlife Community Energy
• £1.2m Community Energy funded site
• WWII airfield NAAFI site, Nature reserve
• 1mwp, 4,000 Hanwha solar panels &
42 SMA inverters
• Power for 275 houses in North Wiltshire
• 375 tonnes Co2/annum
SOLAR PARK EXAMPLES

26. • Whitehall garden centre,
district heating system
• 2 x 199kw Wood Pellet
Automatic boilers
• 509,832kwh heat
requirement
• 2 restaurants, 2 kitchens,
Large Retail area, WC’s
• 6 types of heat emitters
BIOMASS EXAMPLE

27. • Energy Storage Building
• Commercial building purpose built
for power storage
• No capex by site owner
• Minimum 10mwp
• Requires 10,000ft2 and grid
capacity
• From £20k / annum rental income
for 25 years
• Site owner owns building after 25
yers
ENERGY STORAGE FUNDED EXAMPLE

28. • Hypothetical Example
• Large commercial site with 1.0mw base
load year round
• One major underground 11kv line to site in
rural location
• Manufacturing plant on site has high value
output – loss of production due to grid
failure a major issue
• Solar array on site generating
1,700,000kwh / year
• Combination of UPS, grid benefits income,
time shifting, arbitrage, voltage smoothing
ENERGY STORAGE SELF PURCHASE EXAMPLE

29. FUNDING,
TARIFFS AND
SUBSIDIES

30. Common models
• Finance Lease – spread fixed payments, tax deductable
• Bank loan
Lower risk long term solutions with no capex
• PPA
• Community energy
• Crowd funding
• ESCO
• Reduce risk, reduce pain to find the best lifetime solution
Grants
• Innovate UK
• LEP
Self liquidating blended models
• Using solar to fund a new roof
• Blending solar and LED for shorter payback
• Blending new fire system with LED and solar to pay for all three
FUNDING SOLUTIONS

31. Source: Bristol Coop
EXAMPLE: FUNDED PPA
Funder
EPC Partner
Electricity
Supplier
(Optional)
Contractor
Maintenance
Provider
Your
building
Can be individual companies
or one company
Outcome:
Lower risk
cheaper
electricity for
20 years at no
capital outlay

32. Source: Bristol Coop
EXAMPLE: COMMUNITY FUNDING MODELS

33. • FIT – Feed in Tariff
• ROCs – Renewable Obligations certificates (under consultation)
• RHI – Renewable Heat Incentive
• CFDs – Contracts for a difference
• ECO Funding
• Innovate UK Grants
• LEP grants
• Feasibility study grants
• District heating grants
• Local authority grants
• Community funds
GRANTS AND SUBSIDIES

34. FEED IN TARIFF

35. RENEWABLE HEAT INCENTIVE

36. TECHNOLOGY
APPENDICES

37. • Photovoltaic solar generates power from sunshine
• Incredibly successful renewable technology
• Generated more power than coal for first time this month
Rooftop Solar
• Rooftop solar is close to subsidy free
• Politically very popular
• Storage deals with intermittency
• Best returns where power used on site
Solar Farms
• Planning permission harder in rural setting
• Private wire and industrial sites are attractive
• Fewer developers, but community energy
• Locations near buildings needing power have
better returns
SOLAR PV

38. • UK has seen over 100,000 installed
• Generates hot water from sunshine
• Commercial applications tend to suit high hot water usage
• Dairy, B&B, hotels, care homes
Sport clubs
• Commercial Solar thermal can
deliver 30% of annual DHW
• RHI no longer available
SOLAR THERMAL

39. • Wood fired Renewable heat using pellets, chip or logs
• Very good commercial scale products on offer
• Excellent alternative to oil or LPG
• District networks, estates, campuses
• More applications in drying wood, grain
And process heat becoming possible
• RHI drop in March 2017, invest now for better returns
• Oil price is affecting ROI currently but some grants available
• Increase in use of waste wood burners for workshop heat
WOOD FIRED BIOMASS

40. • Generates heat and power from methane from
waste or “digested” feed via bacteria
• Over 100 operational at scale
• Smaller systems becoming available
• Subsidy support of RHI and FIT likely to change
• Move towards sustainable rating of fuel
• Move towards more waste streams and mixing for
Greater efficiency
• Manure, grass, grain, waste food, maize
• Food waste return on investment excellent
AD

41. • Highly successful and one of cheapest forms of electricity generation
• Old issue of intermittency mitigated with storage
• Wind resource can be predicted
• Politically difficult due to visual impact
• Market conditions distorted by government
• Preference for offshore by government
• Planning permission and market stability are biggest issues
ON SHORE WIND

42. • Generates electricity from water
• Very established technology at large scale
• Feed in tariff available
• Very efficient technology
• Long service life
• Location to good
water resource and grid are key
• Electricity sold by Hydro is considered higher value and reliable
• Planning permission, grid and groundworks are major factors
HYDRO

43. • Generates heat from latent solar heat in ground, air, or water
or recovered heat from processes
• Very popular with government
• Optimum locations are:
– Off gas grid
– New build
– With underfloor heating
– Heating / cooling office location
• Commercial heating /Air con systems very common
• Air to air, air to water, ground to air, ground to water
water to air, water to water, recovered heat
• RHI currently available
HEAT PUMPS

44. • Generates heat and power by burning forms of gas
• Growth in new products in market in recent years
• Mostly gas network solution, but also Biomass
and Aneorobic Digestion
• Produces power and heat so business models
That utilise both make most money
• Likes steady usage profile to get most benefit,
Base load
• Micro CHP is expensive
• Some subsidy Tariffs available
CHP

45. • Game changing technology, removes the old
issue of renewable energy intermittency
• Large scale models work commercially when
factors align
• Smaller scale bigger rollout mid 2016
• New business models
– Lets you use more renewable energy on site
– Generate and sell at peak times
– Grid pay you money
– Voltage management
– Emergency back up supply
• Use smart meters to work out your profile
STORAGE TECHNOLOGY

46. HYDROGEN
• A fuel cell converts the chemicals hydrogen and oxygen into water, and in the
process it produces electricity.
• The other electrochemical device that we are all familiar with is the battery. A
battery has all of its chemicals stored inside, and it converts those chemicals
into electricity too. This means that a battery eventually "goes dead" and you
either throw it away or recharge it.
• With a fuel cell, chemicals constantly flow into the cell so it never goes dead --
as long as there is a flow of chemicals into the cell, the electricity flows out of the
cell. Most fuel cells in use today use hydrogen and oxygen as the chemicals.
• Heat and power
• Vehicle fuel at fuelling stations
• Requires small input of electricity
• Zero emissions (water)
POTENTIAL TECHNOLOGY FOR THE FUTURE

47. OUR PARTNERS
Fire Security Heat Lighting &
Communications
Power
Generation
& storage
Honeywell
EMS
Tyco
Glover
Firemark
Key
Partners
Specialists
Hanwha
Fronius
Saft
REC
Solaredge
Seab
Moixa
Huawei
Euroheat
Hertz
Mitsubishi
Daikin
Ideal
Viessman
Worcester
Bosch
Broag
Lighting
Services
Hausmate
Phillips
Honeywell
Vanderbilt
Controlsoft
Paxton
Pelco
Avigilon
Risco
Dycon

48. PARTNER HIGHLIGHTS
Merging of divisions is an opportunity to rationalise supplier base and reposition our offer
Key partners are emerging with significant support for our business in next year
Multi $bn company
No. 1 in Intruder panels in UK
No. 1 in Fire in UK
Elite Partner Status - T H White
•Design support
•Enhanced service support
•Top 10 in UK status
Multi $bn company
No. 1 in solar manufacturer globally
Diversified business
Key Partner Status - T H White
•Stock availability
•PPA Funding 2016
•Top 10 in UK status

49. T H WHITE GROUP