Power to the people

Today, it's all change. BG Technology launched its Minigen system earlier this year, which ranges from 500 kW down to 28 kW. And ABB, the huge power sector conglomerate, has recently announced its 'Alternative Energy Solution', which, as well as a strong focus on renewable energy, contains a commitment to micro-turbine systems of 100 kW and below.

Systems are currently being trialled by several companies for the domestic market at between 3 kW(e) and 800 W(e), with thermal outputs between 4 kW and 10 kW.

The higher efficiency benefits from large power plant have been largely swept aside with the advent of combined cycle gas turbine (ccgt) systems, which have brought flexible commercial plant at efficiencies approaching 45% down to lower than 100 MW. With the advent of fuel cells, breakthroughs with the Stirling engine and other micro-turbines, the technology for very small-scale power plant is coming of age.

What's available?

The marketplace is beginning to see the emergence of commercially available technology that can deliver cost-effective, small-scale chp.

BG Technology's MiniGen system was rolled out in January this year for the horticulture industry. A 28 kW(e) system is already running in Stratford-upon-Avon, for a company producing 20 million bedding plants a year. More recently the system has been made available for hotels, offices, leisure centres and schools.

Innovative micro-turbine technology from the US company, Capstone, provides the basis of the MiniGen system. The units are physically small, with lower-end models being little bigger than a washing machine. Features include air bearings and an air-cooled design, which reduces maintenance costs. Key design features of the range, according to BG Technology's Roy Dann: "are high efficiency, low maintenance and very low combustion emissions."

"For large-scale greenhouse applications the extremely low emissions performance allows MiniGen to be vented directly into the greenhouse, maximising thermal efficiency," he said.

There are a number of key drivers for the small-scale market. First, the technology, where big advances in Stirling engines and micro-turbines have begun to be noticed by investors.

Whispertech is a New Zealand-based company, where senior engineer Don Clucas has re-engineered the Stirling engine in several novel ways. Clucas has used new materials which can withstand the wide pressure variations inherent in the Stirling design, including a 'wobble yoke' which converts the up-and-down motion of the pistons into a rotary motion to drive the generators hence produce electricity.

Whispertech, working with EA Technology in the UK, is developing engines as small as 800 W. Other main players include Sigma, a Norwegian company, BG Technology, (originally an offshoot of British Gas), Capstone Turbine Corporation from California (which has a joint venture agreement with BG Technology), and more recently, ABB in a joint venture with Volvo. Sigma is focusing on systems ranging up to 3 kW for electricity and 8 kW for heat, while BG Technology is trialling systems as small as 1 kW.

Russell Benstead, principal consultant for EA Technology, and involved with micro-chp for a number of years, fully expects "to see the first commercial units for sale in the 2002 heating season, with sales greater than 50 000 units per year by 2005 or 2006".

The main advantages of micro-chp are efficiency and cost. When compared to a heat-only boiler and importing electricity, the system is between 15% and 25% more efficient. Overall efficiencies are in the 85% – 90% range, depending on use. That's up to half a tonne of carbon per year saved from a single home, and considerably more in the services sector.

Which brings us to the second driver for micro-chp: the opening up of the market and the need for companies to provide value-added services and retain customer loyalty.

Russell Benstead believes that micro-chp for both the services and domestic sector could best be provided through an energy services company delivery service. "The companies could essentially take responsibility for the running of the energy system," he suggests, "as well as develop standard contracts with the local distribution companies."

Roy Dann of BG Technology agrees, and feels that, "The key issue is how to take away the perceived risk of a new technology, and domestic sector service companies may be the best option." SIGMA, the Norwegian company, has built its whole approach around service delivery, with an estimated cost of around $1100 to the companies contracted to install and operate the chp units.

“Summer electricity outputs for domestic chp could be much smaller unless the use of air conditioning grows in the UK”

The cost driver

Current estimates of the price premium for micro-chp are about £500 – £600 above condensing boilers. Due to higher efficiency levels though, this would suggest around a three to four year payback on investment.

Much depends on how you do the sums. Jeremy Harrison of EA Technology argues that micro-chp is "the cheapest generating option given an honest comparison". By this he means that with on-site power, micro-chp has zero distribution costs, in contrast to the bigger power plant, where this may add £300/kW – £600/kW.

Even where micro-chp pays for some of the distribution costs, the margin is still large. Like all new technologies, some financial assistance would help develop these markets. The Energy Savings Trust (EST) is already talking of offering a 'cash-back' system similar to the one offered for gas condensing boilers.

The overall market for domestic micro-chp is potentially very large. Russell Benstead suggests that, of the one million boiler replacements market per year in the UK, up to half could be suitable for micro-chp. With business mainly in the boiler replacements market or for large new homes, the overall potential is ten million homes or around 10 GW – 15 GW of capacity.

In Germany, the potential is seven million homes and up to 10 GW of generating capacity. Though the capacity would not be 'firm', Harrison argues, "The large numbers of units would mean a lower diversified risk of plant failure and a certain proportion of the total could be assumed to be 'firm' on a statistical basis."

What about the varying demand from homes? Unlike shops and offices, summer electricity outputs for domestic chp could be much smaller unless air conditioning grows in the UK. In winter evenings, there may be an excess of electricity available to export to the grid.

Attempts have been made in the Government's current Utilities Bill to bring in the option of 'net metering'. In essence, this allows small-scale generators to export and get a fair price, up to the cost of importing it from the grid. While neither BG Technology nor Whispertech have based their economic calculations on the possibility of net metering, Roy Dann of BG Technology admits that, "It would allow more flexibility to optimise the economic viability of micro-chp for the home."

After ignoring net metering for a long time, the Department of Trade and Industry (DTI) is currently assessing options for introducing some kind of system akin to net metering. The DTI is also reviewing recent proposals for electricity distributors to 'actively' manage their systems in order to accommodate much more distributed generation.

So what of the future?

Judged solely on the progress and plans in the market so far, the role of micro-chp for thousands of shops, offices, schools, hotels and small businesses seems set to grow inexorably. The domestic market is more uncertain and critically depends on cost, changing perceptions, and effective marketing.

Looking to 2002 – 2003, when BG Technology and others expect commercial domestic units to be on sale, Roy Dann feels that the future of micro-chp and other small-scale distributed power is "tied up with the emerging role of embedded generation in the UK".

"As a company, we see a lessening of the dominance of large-scale power generation," he said. "Security of supply will increasingly be an issue as fewer companies are prepared to pay for large amounts of spare power plant capacity. This will lead to reduced power quality and a growing demand for reliable, quality power supply sources. In this scenario, distributed power and micro-chp will become very important."

David Green, director of the Combined Heat and Power Association (CHPA), argues that the technology of micro-chp is not the real issue, but the policy environment which can encourage or hold back its development.

"At present it's very finely balanced, and the Government really needs to get issues such as net metering and the role of distribution companies in encouraging embedded generation sorted out," he said. "Subject to that, I see a very bright future for domestic level and small business micro-chp."

With the Utilities Bill set to come into law in July, and two major consultations still underway on the changing role of the electricity network, the next two years is definitely going to be a period of 'watch this space'. For new building developers, opting for an on-site chp system is no longer the exceptional option it used to be. With ABB now building a $1 billion a year business around small-scale power units and systems, the 'norm' is changing pretty rapidly. As William Gibson, the sci-fi writer who coined the term 'cyberspace' once said: "The future has already arrived, it's just distributed unevenly."