With commercial energy prices hiking and grid insecurity concerns increasing, blended energy programmes are becoming ever-more commonplace for businesses nationwide. Here, Tim Broadhurst, CCO at CooperOstlund, discusses the discrepancies between energy tariffs and gives his advice for businesses considering adopting combined heat and power (CHP) technology to generate energy on-site.
For the typical householder, choosing a suitable energy provider is relatively straightforward. Simply enter your details into any price comparison website and each of the ‘big six’ will send you an immediate quote.
For any facilities management professional, however, energy management is a considerably more complicated process. There are far more wide-ranging energy plans available for businesses compared to consumers, with prices varying hugely depending on size, type, location, use and payment terms.
Size – While you may expect businesses of all shapes and sizes to pay a similar price per unit for their energy consumption, this is rarely the case. In fact, the larger your business, the better price per kWh you’re likely to receive. While this may seem counterproductive for energy suppliers, costs are calculated based on economies of scale.
Type – Depending on your business type, rates will vary considerably. While the typical office block will be offered a more standard tariff, manufacturing sites are predicted to use more power and therefore will attract better rates. Industrial businesses receive lower prices still, thanks to their ability to receive electricity at much higher voltages.
Location – UK suppliers will charge wildly different rates depending on the location of your site. This can be due to the geography of their own power plants or availability of energy infrastructure. Prices for British Gas’ electricity, for example, vary from a low of 17.38 p/kWh in North Wales to a high of 24.77 p/kWh in the East Midlands – a difference of 42.5%.
Payment terms – In January 2018, British Business Energy conducted research into the commercial price per kWh electricity for each of the UK’s top 11 energy providers. Rates varied from 10.1p to 27.8p, while standing charges varied from 27.4 p/day to 159 p/day. While the lower costs are obviously more attractive on the surface, each provider offers savings (between 40-60%) for fixed-term contract payment terms, with most providers offering rates of less than 10 p/kWh.
Rather than a ‘quick fix’, securing the best possible commercial energy deal is almost a full-time job. But with almost every business depending on the grid for its day-to-day operations, negotiating a complex marketplace, while remaining cost-efficient, is fast becoming critical for time-strapped businesses.
On-site energy generation
As well as being challenging to navigate and increasingly expensive, the UK’s commercial energy market demonstrates two challenging traits – inflexibility and unpredictability. For facilities managers, who need dependable suppliers and consistent overheads, finding a viable alternative is top of the agenda.
Alongside renewable technologies, battery storage and carbon-neutral processes, one such solution is the use of CHP technology to generate energy on-site. Effectively a gas power station, but more than twice as efficient, CHP combusts natural gas to generate electricity and thermal energy (which can be used for space heating or hot water).
With gas prices lower and more stable than mains electricity supply, businesses can realise significant cost saving by self-generating power – a payback of typically less than five years. What’s more, CHP offsets carbon and can thus help to meet Part L of the Building Regulations.
While moving from a centralised to a decentralised energy model may seem daunting, success is simple if you plan ahead. For anyone looking to embrace decentralised energy, the following five points are important considerations.
While using CHP as an alternative to more traditional grid connectivity can save money on your utility bills, maximising efficiency relies on equipment running at full capacity, 24-hours a day. As such, it’s essential to undertake a feasibility study well in advance. By doing so, you’ll be able to specify the perfect solution for your energy requirements – precisely matching engine size, dimensions, location and generation outputs to site demands. The greater your energy consumption, the more you could save!
When it comes to specifying your engine, there is no one size fits all solution. Instead, it’s important to take facility size and energy requirements into close consideration. While an oversized engine will shut down during periods of low demand, an undersized engine will restrict generation capacity. In both situations, incorrect sizing will limit the financial benefits of choosing CHP over grid connectivity. Identifying the perfect balance is therefore a tricky, yet important task.
When it comes to the physical installation of your engine, precision is key. Unlike more standard gas engines, CHP technology is highly sensitive and must be fitted by an expert. We’ve previously visited sites where poor installations – everything from unlevel floors to inadequate housing – is significantly impacting on engine performance. Alongside correctly planning your project, working in partnership with an installation expert is essential to prevent issues in the long-term.
In the same way that a racing car must be professionally tuned to deliver optimum performance, correct calibration of a CHP engine is essential to ensure best possible running efficiencies. In our experience, rushed calibration can impact on outputs considerably. As such, getting it right from the outset is essential to ensure long-term financial savings.
Working at full capability, 24 hours a day, inevitably takes its toll on the performance of any CHP engine. In our experience, poorly maintained engines can see efficiencies fall by as much as 20%. While there are number of simple daily checks you can make, it’s important to work with an established CHP maintenance provider to action the servicing intervals outlined by your manufacturer (typically 2,000, 10,000, 20,000, 40,000 and 60,000 running hours).
As the UK’s leading gas engine specification and maintenance expert, CooperOstlund has worked with countless companies nationwide to deliver effective CHP installation projects. From initial site surveys and installation, right through to lifetime maintenance provision, we can save up to 40% every year on our clients’ utility bills.
It’s an inconvenient but unavoidable fact – the National Grid is no longer fit for purpose. A centralised system is not the answer to the UK’s energy future, especially with an oligopoly of energy providers and dated logistics network.
While hydrogen and renewables may be considered blue sky thinking for the future, we need to address the issue of fluctuating commercial energy costs and embrace solutions to meet today’s escalating demand for mains supply. CHP technology offers an efficient and cost-effective solution to provide controllable, self-generated energy, delivered on-demand.