"Overview of Renewable Technologies" Laurie Tennant, Engenius

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"Overview of Renewable Technologies" Laurie Tennant, Engenius

  1. 1. Profit from Renewable Energy Sustainable Business Network Chewton Glen Hotel, 20 January 2011 Laurie Tennant, Engenius Limited
  2. 2. Since 01 April 2010 it has been possible to achieve good returns on investment in generation of electricity from renewable resources, thanks to Feed-in Tariffs which started on that date. Qualifying Technologies: •Wind •Solar-electric •Hydro-electric •Biomass for electricity production •Anaerobic Digestion for electricity production •CHP and micro-CHP (the electricity content of Combined Heat and Power) – including NG-fuelled Non-qualifying Technologies: •Tidal •Wave •Anything else eg landfill & sewage gas for generation, fuel cells Feed-in Tariff
  3. 3. 5kW Wind Turbine
  4. 4. Solar-electric (PV) on school building
  5. 5. Anaerobic Digester
  6. 6. Micro-Hydro Turbine
  7. 7. The Feed-in Tariff for electricity Technology Scale 2010-11 Tariff p/kWh Annual change3 AD1 (electricity) <5MW 9.0 0 AD1 (CHP1 ) <5MW 11.5 0 Biomass <50kW 9.0 0 Biomass 50kW-5MW 4.5 0 Biomass (CHP1 ) <5MW 9.0 0 Hydro <10kW 17.0 0 Hydro 10–100kW 12.0 0 Hydro 100kW–1MW 8.5 0 Hydro 1-5MW 4.5 0 Micro-CHP1 <50KW [T.B.A in Autumn] PV1 (New build2 ) <4kW 31.0 - 7 % PV1 (Retrofit2 ) <4kW 36.5 - 7 % PV1 4-10kW 31.0 - 7 % PV1 10–100kW 28.0 - 7 % PV1 100kW–5MW 26.0 - 7 % PV1 (stand alone2 ) <5MW 26.0 - 7 % Wind <1.5kW 30.5 - 4 % Wind 1.5–15kW 23.0 - 3 % Wind 15–50kW 20.5 - 3 % Wind 50–250kW 18.0 0 Wind 250–500kW 16.0 0 Wind 500kW–5MW 4.5 0 Existing RO1 sites <50kW 9.0 0 1 Abbreviations: AD=Anaerobic Digestion, PV=Photovoltaic (solar), CHP=Combined heat and power, RO=Renewables Obligation 2 The consultation document doesn’t define these (but see below) 3 The annual 'degression' see question near bottom of this page
  8. 8. On 01 June 2011 HMG will introduce a similar scheme in respect of renewably-generated heat energy, called the Renewable Heat Incentive. Details are not yet known but qualifying technologies are expected to include: • Bio-mass for heat generation • Bio-fuels (for heat generation; probably not for traction) • Anaerobic Digestion (gas for on-site heating and export as bio-methane to the gas grid) •Ground- and Air-source Heat Pumps • Solar-thermal • CHP and micro-CHP (the heat content of Combined Heat and Power) In almost every case the appropriate technology will be dictated by local conditions (site, environment, commercial, ethical). The Renewable Heat Incentive
  9. 9. Air-source Heat Pump photo courtesy Mitsubishi Electric Co
  10. 10. Solar-thermalphoto courtesy New Homes directory
  11. 11. Ground-source Heat Pumpphoto courtesy Eco House Agent
  12. 12. The Renewable Heat Incentive
  13. 13. Grants for not-for-profit may be available through funds such as CSEP and electricity companies, but LCBP funds will cease when the relevant tariffs come into effect, or before if funding is exhausted. For farmers, see: www.seeda.co.uk/rdpe Soft loans are available in some circumstances from Carbon Trust; private financiers have also entered the market eg Triodos Bank and Bridgegreen. Commercial loans will be secured on revenue streams arising from the tariffs. Many mortgage lenders are happy to add the cost of microgeneration equipment to the loan. Enhanced Capital Allowances do not apply unless equipment is on the ECA list – electricity generation isn’t at present: http://www.eca.gov.uk/ Funding
  14. 14. SBN Presentation, 8 Dec 2009, UKSA: Profit from Renewable Energy All exclusive of VAT Units Before FIT After FIT Before FIT After FIT Gross Capital Cost £ 30,000 30,000 117,500 117,500 Equipment lifetime years 15 15 25 25 Tariff guarantee period years 20 25 Annual Maintenance (life ave) 8% 8% 1% 1% Depreciation (straight-line) £ 2,000 2,000 4,700 4,700 Expected annual output MWh 20.0 20.0 20.0 20.0 Proportion exported 50% 50% 10% 10% Amount Exported MWh 10.0 10.0 2.0 2.0 Imports avoided MWh 10.0 10.0 18.0 18.0 FIT Tariff £/MWh - 230 - 280 FIT credit £ - 4,600 - 5,600 Export Premium £ 600 500 120 100 Avoided cost of imports £ 900 900 1,620 1,620 Total Value of Generation £ 1,500 6,000 1,740 7,320 Add-back Corp Tax on deprcn £ 460 460 1,081 1,081 Annual maintenance (ave) £ 2,400- 2,400- 1,175- 1,175- Net annual income £ 440- 4,060 1,646 7,226 Total lifetime income £ NA 60,900 41,150 180,650 Internal Rate of Return 6.7% 6.1% Net Present Value £ 4,642 24,291 Payback period years 10.0 10.8 Based on: Export Rate pre-FIT 6.00 p/kWh = 60.00 £/MWh Export Rate post-FIT 5.00 p/kWh = 50.00 £/MWh Import Rate 9.00 p/kWh = 90.00 £/MWh Assumed real rise of Imp rate 10% pa Marginal rate of Corp Tax 23% Discount rate, ave over lifetime 5% pa © Engenius Limited 2009 WIND TURBINE, 10kWe PV ARRAY, 23.5kWp Two Examples
  15. 15. Tomorrow’s Energy Price?

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