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The Role of Onsite Energy


Generation in Delivering
Zero Carbon Homes
A report from the Renewables Advisory Board
By Element Energy with EST

URN NUMBER: 07/1555


The role of onsite energy generation in delivering zero carbon homes

Foreword

The former head of the Prime Ministers Strategy Unit,


Geoff Mulgan, said that Governments frequently overestimate
their power to change things in the short term, but underestimate
it in the long term. The current government cannot be accused
of committing this error with its proposal for all new homes to be
zero carbon by 2016. The policy is both far-sighted and bold.

This report for the Renewables Advisory Board and it doesnt meet the technology stimulation
(RAB) by Element Energy is the first detailed objectives of the policy. We consider that there is a
analysis of the role that onsite generation could strong justification for using this policy to support
play in delivering the policy. Element have the development of local, decentralised zero
produced a strong report built on rigorous carbon generation, at the same time that other
modelling and extensive peer review by the policies, such as the Renewables Obligation, are
construction sector and the renewables used to decarbonise the grid.
industry. It provides some genuinely new
insights into the technological and regulatory This report shows that the zero carbon homes
choices created by the zero carbon policy. policy could create a new market for onsite
renewables worth 2 billion a year. This is
The Department of Communities and Local a market additional to and bigger than that
Government (CLG) has been clear that it wants created by the Renewables Obligation, and
the zero carbon homes policy to stimulate new one that benefits renewable power and heat
technology and reduce the cost of low carbon generating technology.
technology for existing homes. The report
suggests that this can be achieved if Ministers are Nevertheless the report demonstrates that
prepared to accept the trade off between cheaper there are some big challenges to its delivery.
remote generation, and the technology forcing The biggest weakness of the policy is the lack
benefits of more expensive onsite generation. of demand for onsite renewable technology
Purists will argue that decarbonising the grid using before 2016, and the capacity gap that
remote wind farms would be a more economically this will create. By proposing to jump from
efficient way of meeting the policys goals, but this approximately 25% carbon saving from total
is not straight forward because of planning risk, energy demand in 2015 to 100% savings in

A report from the Renewables Advisory Board 


The role of onsite energy generation in delivering zero carbon homes

Foreword

Our central recommendation is therefore that Government finds new


ways of bringing forward demand for renewables before 2016

2016, CLG will create a big step change in system to require zero carbon standards in the
demand in the final year that will require new largest developments before 2016. The zero
construction industry skills, and very large carbon homes policy is a powerful driver
expansion in manufacturing and installation for change, which could bring significant
capacity. We believe that this capacity gap will industrial and environmental benefits to the
cause the policy to fail if it is not addressed now. UK. Nevertheless it can only stimulate the
necessary learning and investment if we can
Our central recommendation is therefore translate the Governments aim for 2016 into
that Government finds new ways of bringing bigger steps towards the zero carbon goal
forward demand for renewables before 2016, before then.
as part of an explicit strategy to build capacity
in both the construction sector and in the UK
onsite renewables industry. It could do this by Matthew Spencer
mandating a minimum renewables requirement Chair, Microgeneration Working Group,
in new development, or use the planning Renewables Advisory Board

A report from the Renewables Advisory Board 


The role of onsite energy generation in delivering zero carbon homes

Recommendations
from RAB

This study outlines a number of important issues for


consideration by government and business. RAB
has chosen to highlight the three that we think are the
most critical for government to address:

1. Create strong, early stimulation to the require the industry to grow to supply a UK
onsite renewables sector to avoid the high market of over 2 billion pounds per annum
risk of a supply gap in 2016 from a very low base in the years before 2016.
Early demonstrators from the social housing
We consider this to be the biggest risk to the sector will help but are unlikely to stimulate the
success of the zero carbon policy. The policy scale of investment needed in the supply chain.
creates a very large new market for onsite
renewables, but the proposed approach to We recommend that Department for
its implementation creates a steep ramp up Business, Enterprise and Regulatory Reform
in demand in 2016, which the renewables (BERR) and RAB carry out further work with
sector is unlikely to be able to meet without the finance community and the renewable
strong and consistent stimulation over the sector to develop investment and capacity
next eight years. Specifically, the transition building strategies for onsite renewables
from Code for Sustainable Homes (CSH) level We recommend that CLG urgently explore
5 to level 6 introduces a substantial additional ways of changing policy to stimulate demand
demand for renewable electricity, and as for onsite renewables in advance of 2016,
such could create an unsustainable spike in eg mandating a minimum percentage of
the demand for onsite electricity generation. renewables for developments over a certain
These electricity generating technologies would size, or encouraging local authorities to require
not be significantly stimulated by the gradual CSH level 6 through planning regulations
introduction of the code in the preceding years. for the largest urban extensions and new
towns in advance of 2016. Whilst the largest
Without sufficient onsite renewables supply developments constitute a small proportion of
some homes would not be able to comply the homes built they are generally the easiest
with building regulations and the rate of house and most cost effective sites in which to
building would slow. Current proposals will achieve zero carbon standards.

A report from the Renewables Advisory Board 


The role of onsite energy generation in delivering zero carbon homes

Recommendations from RAB

2. Accelerate the technological and offsite generation is allowed on a large scale


commercial development of biomass CHP and with a low buy out price it could therefore
undermine the Governments objectives of using
For the zero carbon policy to be achievable the policy to encourage the development of new
it is essential that sub 1MW biomass CHP is technologies and increasing the availability of
technically proven and commercially deployable technology to cut emissions in existing homes.
by 2016. This requires a huge technology Local offsite generation is encouraged in the
acceleration effort at UK and European levels. current Code for Sustainable Homes and whilst
It is also important that larger scale CHP and this study does not consider its impact we
district heating is culturally and commercially believe that it could provide some technology
attractive in the UK, since it offers a relatively diversification benefits. CLG has said that it will
cheap route to compliance. decide on its approach to offsite generation at a
later date.
We recommend that the Department for
Innovation, Universities and Skills make R&D We recommend that CLG clarifies the role
into sub 1MW biomass CHP a national priority and differentiates remote offsite and local
We recommend that the deployment offsite generation within the next year, to
of biomass CHP is a priority of the new provide early certainty to the construction
Environmental Transformation Fund. and the onsite renewables sector
We recommend that local offsite generation
3. Minimise the use of remote offsite is encouraged in ZCH policy implementation,
energy generation in meeting zero but that rules are set carefully to ensure that
carbon standards it contributes to the development of new
decentralised energy networks, and that long
The use of remote offsite renewable generation term operational and maintenance costs are
is likely to be required if the Government wants met by developers as part of the compliance
to meet CSH level 6 in all new homes, but the process
way this is allowed will have a huge impact on We recommend that the use of remote offsite
technology innovation and deployment, since it generation is kept to a minimum by setting a
will benefit mature technology already supported tight cap on its use, and a high buy out price
through the Renewables Obligation. If remote for any offsite generation fund.

A report from the Renewables Advisory Board 


The role of onsite energy generation in delivering zero carbon homes

Contents

Foreword...................................................................................................................1
Recommendations from RAB...............................................................................3
Executive summary................................................................................................7
Introduction........................................................................................................... 17
Model description................................................................................................ 18
Outline................................................................................................................. 18
Inputs.................................................................................................................. 19
Developer choice................................................................................................. 19
New build housing future projections......................................................... 20
Rate of new build................................................................................................ 20
Breakdown of housing by type............................................................................ 21
Development size................................................................................................ 22
Low and zero carbon homes............................................................................. 25
Energy demand in modern homes....................................................................... 25
Code for sustainable homes................................................................................ 27
Zero carbon homes............................................................................................. 27
Low and zero carbon technologies................................................................. 29
Technologies included in the model..................................................................... 29
Restricting technology uptake............................................................................. 30
Resource limitations............................................................................................ 31
Cost assumptions............................................................................................... 32
Results and analysis........................................................................................... 34
Baseline technology uptakes............................................................................ 35
Baseline scenario description.............................................................................. 35
Technology costs and zero carbon home feasibility........................................... 36
Technology uptake.............................................................................................. 38
Selecting technologies......................................................................................... 41
Uptake change over time.................................................................................... 44
Market size.......................................................................................................... 45
Baseline summary............................................................................................... 46
Sensitivities........................................................................................................... 48
Code for sustainable homes level 5 legislation/appliance offsetting...................... 49
High efficiency homes......................................................................................... 52
Consumer behaviour sensitivity to operating costs........................................... 56
Consumer behaviour valuing biomass storage.................................................. 59
Grid CO2 intensity................................................................................................ 61
Sensitivity to allowing a mains gas connection..................................................... 65
No technology development................................................................................ 68
Biomass CHP availability..................................................................................... 71
Heat pump COP factors...................................................................................... 74
Partial offsetting allowance.................................................................................. 77
Partial offsetting with no gas connection.............................................................. 80

A report from the Renewables Advisory Board 


The role of onsite energy generation in delivering zero carbon homes

Contents

Allowing 100% offsite electricity import................................................................ 83


Allowing buy-out of appliances at ROCs value, and no gas connection.................. 87
Sensitivity summary............................................................................................. 90
Market size sensitivity.......................................................................................... 92
Technology supply............................................................................................... 94
Current microgeneration markets........................................................................ 94
Impact of the Code for Sustainable Homes before 2013 / 2016.......................... 95
UK technology manufacturing opportunity........................................................... 97
Employment impact..........................................................................................105
Installer personnel............................................................................................. 105
Maintenance personnel..................................................................................... 107
Skills availability and training.............................................................................. 108
Specific specialist skills...................................................................................... 110
The industry perspective.................................................................................111
Barriers posed by the housebuilding industry.................................................... 111
Barriers posed by low carbon technologies....................................................... 114
The onsite energy industrys perspective........................................................... 115
Conclusions.........................................................................................................119
General findings................................................................................................ 119
Markets and technology.................................................................................... 120
Regulation......................................................................................................... 122
Commercial issues............................................................................................ 123
APPENDICES . ................................................................................................125
A. Appendix - CO2 intensity factors................................................................... 125
B. Appendix - Baseline builds and costs........................................................... 127
C. Appendix - House inputs.............................................................................. 128
D. Appendix - Energy costs............................................................................... 129
E. Appendix - Biomass storage costs............................................................... 130
F. Appendix - Technology assumptions............................................................ 131
G. Appendix - Installation times......................................................................... 161
H. Appendix - List of consultees........................................................................ 162
I. Appendix - Model description....................................................................... 165
J. Appendix - Results from workshops barrier exercise..................................... 169

A report from the Renewables Advisory Board 


The role of onsite energy generation in delivering zero carbon homes

Executive summary

The Department for Communities and Local To understand the impact of the proposed
Government (CLG) has proposed a far reaching regulation, we have pursued a twin track
target that by 2016 all new build housing should approach involving a detailed dialogue with the
be zero carbon meeting level 6 of CLGs Code microgeneration and house building industry
for Sustainable Homes (CSH). This is to be and a techno-economic model of the likely
achieved through the building control system, effect of the legislation.
whereby the Part L Building regulations will be
gradually tightened according to the energy i. Industry dialogue
performance levels defined in the Code for In order to obtain industry input into the
Sustainable Homes, towards the eventual modelling assumptions and the likely barriers to
Code level 6 energy standards in 2016. CSH onsite energy technologies, we held:
6 requires that there are net zero carbon
emissions arising from all energy uses in a Three stakeholder workshops, with
home. participants from: house builders, architects,
developers, microgeneration industries, and
This is an ambitious goal, as there are very few trade associations
(if any) genuinely zero carbon developments Detailed telephone conversations with
existing in the UK today. The implications of house-builders and housebuilding
meeting CSH 6 are not yet clear and there are associations
ambiguities around the definition. However, Detailed conversations with selected
what is clear is that the new policy offers a microgeneration industry representatives
substantial opportunity for the UKs nascent Peer review input from the RAB
onsite energy generation sector. Microgeneration group

The Renewables Advisory Board (RAB) has These discussions lie behind many of the
therefore commissioned a study to assess the conclusions in this report.
role of onsite energy generation in the delivery
of the Governments proposed zero carbon ii. Modelling approach
homes policy (ZCH) . It has been produced To understand the impact of the legislation, a
by Element Energy, working with the Energy techno-economic model of the choices likely to
Saving Trust and RAB, with financial support face developers when attempting to meet the
from BERR. zero carbon homes regulation has been built.

 Code for Sustainable Homes a step change in sustainable


home building practice - CLG 2006

A report from the Renewables Advisory Board 


The role of onsite energy generation in delivering zero carbon homes

Executive summary

The uptake model assesses an exhaustive set solutions developers will most likely choose
of onsite technology combinations which are to satisfy the zero carbon legislation. Using
available for a range of different developments a stock model, these predictions enable
with the aim of meeting zero carbon. These the examination of total annual uptakes for
options are assessed in terms of their capital renewable and onsite technologies to 2025. An
cost, running cost and other metrics. These outline schematic of the model is illustrated in
metrics are then used to predict which the figure below.

Figure i Schematic
INPUTS TECHNOLOGY CONSUMER CHOICE of uptake model.
ASSESSMENT A number of
technical inputs and
assumptions are
Characterise new build used to assess the
housing to 2025 Define energy demands feasibility of achieving
for each dwelling regulation for each
Dwelling types
house type using a
Development size All energy demands
Urbanity number of technology
2 efficiency scenarios
Tenure combinations. For
each suitable option,
a consumer choice
32 dwelling types calculation predicts
energy demands which technologies
are most likely to be
Regulation requirements
used.
CO 2 targets
Limitations
Applicable technology
solutions
Developer choice
Can a set of
technologies be used? Consumer decisions
Sizing of technologies based on cost and other
to meet legislation factors.
Low and zero carbon Assessment of costs
technologies and performance

Performance and cost


projections RESULTS
Suitability for different
dwelling types Technology uptake
Cost
Number of homes not
meeting legislation

A report from the Renewables Advisory Board 


The role of onsite energy generation in delivering zero carbon homes

Executive summary

Change in uptake over period 2013 - 2025

250,000 2013
Number of dwellings affected

200,000
2016

150,000

2020
100,000

2025
50,000

0 Figure ii Uptake of the


top 10 technologies
PV chosen by developers
H
P
P 20 over the timescale of
C H d
s in 25 the model base case
as roC l w P 20
om M
ic al C
H in
d
g
20 assumptions. The
i m 20
B :P S
a s s
o
W
a tin W 16 units are number of
m H r 20
iu m ic e SH d homes per year which
ed Low B io M
i c
H in
le
r 13
r W oi
M
g e c t e B have the technologies
r e rg
La El La as installed.
G

The baseline results for uptake for the top securing faster uptake of existing technology
ten technologies available to developers are and bringing new technology to the market
illustrated graphically for 2013, 2016, 2020 and through the proposed zero carbon homes
2025 according to the baseline assumptions in policy. However, there are a number of
the model. technical, regulatory and commercial
challenges to achieving high levels of onsite
The main findings from the modelling and generation.
consultation exercise are discussed below.
2. The rate of installation of onsite generation is
iii. General findings highly sensitive to the rules set around the use
1. Onsite energy generation is important for of offsite generation, which is generally cheaper,
the delivery of the governments objectives of but offers lower additionality.

A report from the Renewables Advisory Board 


The role of onsite energy generation in delivering zero carbon homes

Executive summary

3. Onsite energy generation is likely to be installed Space for equipment is a key limitation for
in the vast majority of homes built to Code level 6 onsite renewables in the majority of housing
if the use of offsite generation is capped at below developments.
50%. In the whole of the UK this could result in
onsite generation being installed for between 7. The ability to generate sufficient renewable
250,000 and 300,000 new homes a year. electricity will become the key factor for
compliance with CSH level 6. It is not likely
4. Patterns of uptake of renewables will be to be possible to meet CSH level 6 in 12% of
affected by the detailed rules set in new Building modelled homes (36,000). These are principally
Regulations, and modifications to the Standard urban flats in developments of less than ten
Assessment Procedure (SAP) and the Code dwellings which lack the space for renewable
for Sustainable Homes (CSH), eg setting high electricity generating technologies. The degree
minimum heat loss parameters will reduce to which most of these developments miss CSH
the viability of CHP and could require greater level 6 is small, and equates to 20kg CO2 per
uptake of more expensive renewable electricity dwelling, equivalent to 50W of PV per flat. CSH
technologies. level 5 can be met in all developments.

5. The very steep ramp up of demand after 8. Since building regulations are applied uniformly
2016 when CSH level 6 becomes mandatory to all housing developments the government will
creates a particular challenge for the either (a) have to set building regulations at level 5
manufacturers and installers of onsite generation of the Code and use planning regulations to get to
equipment because of the very low levels of level 6 for larger developments, or (b) it will have to
demand before then. This is a particularly acute allow for offsite generation of renewable electricity.
capacity hurdle faced by the suppliers of onsite Modelling suggests that offsite generation to meet
renewable electricity technologies which are 5% of total energy use will be required if all homes
not currently expected to receive any significant are to meet CSH level 6 if gas connections are
market stimulation before 2016 but which need permitted, or 20 30% of total energy use if a gas
to be installed at a huge rate after that date. connection is not allowed.

6. Nearly a third of all new homes are currently 9. The proposed timescale for the ratchet up
built in developments of less than ten dwellings, of code levels results in very little installation of
and a half of all new homes are in developments onsite renewables until 2016, after which there
of less than 50 dwellings. Large urban extensions is there is a huge step change in demand. The
and new towns of greater than 1000 homes proposed tightening of building regulations in
constitute less than 10% of all dwellings built. 2010 and 2013 do not contribute significantly to

A report from the Renewables Advisory Board 10


The role of onsite energy generation in delivering zero carbon homes

Executive summary

Annual cost of all Technologies in 2016

900
Figure iii Market size
for each technology
800
- under the modelled
700 base case - for
achieving CSH 6 in
600 2016. The graph
Annual cost (millions )

shows the new build


500 market only.
400

300

200

100

0
SHW
PV

Micro Wind

Medium CHP
Medium Wind

Gas Boiler

Community Micro

Large CHP
Electric Heating

Large Wind

Micro Biomass Boiler

Air Source HP
Low H:P MicroCHP

High H:P MicroCHP

Medium Community

Community Air Source

Large Community
Medium Biomass CHP

Large Biomass CHP

Community Ground
Ground Source HP
Biomass Boiler

Biomass Boiler
Biomass Boiler

-100
Source HP
HP

-200

the building of capacity in the onsite renewable policy level. For example large wind farms have
electricity industry. a substantially lower cost in terms of pounds
spent per tonne of CO2 saved than PV systems.
10. Likely future demand for onsite generation The zero carbon homes policy is designed to
outstrips current UK supply for every technology stimulate uptake of new technologies and will
and for biomass CHP, small wind and microwind therefore not always produce the lowest cost
it could exceed global supply. This indicates that carbon savings in the short term.
the need to build a multi billion pound onsite
energy generation industry in a very short period iv. Markets and technology
will be the greatest challenge created by the 12. The market for onsite energy technology
proposed zero carbon homes policy. in 2016 in the base case scenario is 2.3
billion a year at 2007 prices. This suggests
11. The model suggests that enforcing that the policy could generate a market for
CSH 6 by 2016 stimulates uptake of PV and renewable heat and non-ROCable renewable
other relatively expensive renewable energy electricity larger than the market created by
technologies, if offsite generation is not allowed. the Renewables Obligation. The graphic above
These are clearly not the lowest cost low carbon summarises the potential size of the market for
electricity technologies on a national energy each technology.

A report from the Renewables Advisory Board 11


The role of onsite energy generation in delivering zero carbon homes

Executive summary

13. The modelling suggests that the zero will reduce if heat demand can be aggregated
carbon homes policy will not only meet the across different parcels of land in a large
Governments objective of accelerating the development, and if housing developments can
uptake of existing technology, but that it could be linked to nearby commercial heat demand.
also meet its objective of developing new
technology. The new build market will drive 16. The high uptake of biomass CHP is critically
significant economies of scale in manufacturing dependent on the technological development
which should be reflected in lower costs for onsite of sub 1MW plant. The market for sub 1MW
renewable technology and stimulate an increase in biomass CHP technology could be worth over
uptake in existing homes. This impact on existing half a billion pounds per annum from 2016 if
homes has not been quantified. technological and supply capacity constraints
are overcome. Biomass CHP on this scale is
14. Technologies that are likely to experience not currently commercially mature, though pre-
the highest level of uptake are biomass combined commercial trials are underway.
heat and power (CHP) and photovoltaics (PV) but
this is highly sensitive to the level at which offsite 17. Biomass CHP uptake is also dependent
energy generation is allowed. on a number of other factors including the
attractiveness of communal heating to
15. Biomass CHP is likely to be the first housing developers, the commercial offerings
technology considered by a developer, where available for the management of CHP and
wind energy is not viable, because of its heat networks, and the assumption that the air
relatively low capital cost and its ability to meet quality impact of emissions from biomass plant
power and heat loads under the zero carbon will not be a significant constraint to its use in
regulations. The cost of using biomass CHP urban areas.

A report from the Renewables Advisory Board 12


The role of onsite energy generation in delivering zero carbon homes

Executive summary

Biomass CHP MWe Figure iv Baseline


demand for biomass
Current global production capacity (MW) 10.0 CHP against current
Current UK production capacity (MW) 2.5 national and global
capacity.
2016 baseline demand 216

2016 baseline net market value (millions) 716

2016 baseline demand

Current UK production
capacity (MW)

Current global production


capacity (MW)

0 50 100 150 200 250

18. The projected annual uptake of biomass use is permitted then PV could be significantly
CHP is substantially larger than the current reduced although this is highly sensitive to the
worldwide industry capacity for the technology. offsetting costs. The use of PV would also be
This is both an opportunity and a threat and lower if Biomass CHP systems were power-led,
suggests that substantial effort will be required resulting in large amounts of heat being dumped.
to foster a UK industry. The graph above It is assumed that this is neither desirable nor
illustrates the current and forecast market for permissible in most urban situations.
the technology.
21. Micro gas fired combined heat and power
19. Zero carbon standards will drive high uptake with a low heat-to-power ratio is also projected
of PV because it requires no additional space and to have high uptake if gas connections are
can be integrated into the fabric of the building. allowed on zero carbon developments,
Despite its high cost PV could be installed on 70% because SAP currently credits onsite electricity
of new homes (200,000) from 2016. generation with a carbon benefit above that of
imported grid electricity. If the SAP methodology
20. The market for PV could be worth over is changed then gas CHP uptake is negligible.
0.8 billion a year by 2016, if offsite generation is Notwithstanding this methodological issue,
not allowed. If offsetting all appliance electricity the use of gas boilers and gas CHP is likely

A report from the Renewables Advisory Board 13


The role of onsite energy generation in delivering zero carbon homes

Executive summary

to lead to homes being unable to maintain 24. The model suggests that heat pump
zero carbon standards later in their life. This installations are not stimulated by zero carbon
is due to the carbon content of grid electricity legislation because they increase the need for
falling significantly over the coming decades onsite renewable electricity production, which
if the electricity industry responds to climate is the main constraint to compliance with CSH
regulation and carbon pricing. As with biomass level 6. However, its uptake will be higher if it
CHP, the technology for low heat to power is chosen as an alternative to electric heating
systems (essentially fuel cell based CHP) is where large-scale wind or biomass power
not currently commercially mature. This means production is feasible.
significant technical and market development
would be required for the technology to fulfil its 25. The size of the overall market for onsite
potential by 2016. energy technologies and the markets for each
specific technology are very sensitive to the
22. Electric heating may be favoured by way in which the legislation is enacted and
developers where large-scale wind power is an the rate of technology development. Specific
option because of its simplicity and low cost, legislative sensitivities are the level of offsite
and features strong growth up to 2025. electricity permitted and its cost, and the
degree to which gas connections are permitted
23. Solar water heating (SWH) is not widely under the legislation. The main technological
used to meet CSH level 6 because of its relatively sensitivity is the rate of development of two
high capital carbon abatement cost. However, technologies which are not commercially
it may be the dominant renewable technology mature, low heat to power CHP (fuel cells) and
used to meet Code level 4 from 2013, if it is not sub 1MW (medium) biomass CHP. The error
disincetivised by SAP methodology. This may bars in the graph below illustrate the sensitivity
result in a very short but big demand for SWH of the market sizes to the uncertainties in
until CSH level 6 becomes statutory in 2016. legislation and technology development.

A report from the Renewables Advisory Board 14


The role of onsite energy generation in delivering zero carbon homes

Executive summary

Net value of markets in 2016

1,400 Figure v Graph


showing baseline,
1,200 upper and lower
Net value ( millions)

bound ranges for


1,000 the market size for
each technology, as
800 stimulated by the zero
carbon legislation in
600 2016.

400

200

0
PV
Air Source HP

Large Wind

High H:P MicroCHP


SHW

Ground Source HP

Micro Wind

Large CHP
Small Wind
Community Air Source HP

Low H:P MicroCHP

Medium CHP
Micro Biomass Boiler

Community Ground Source HP

Large Biomass CHP


Medium Community Biomass

Medium Biomass CHP


Community Micro Biomass Boiler

Large Community Biomass Boiler


Boiler

v. Regulation will want to retain liability for energy generation,


26. The model predicts the installation of its infrastructure and fuel supply.
2,700 community heating networks a year in
the UK from 2016. To be most cost effective 27. It is not yet clear how any additional running
the networks will require to be brokered at the costs for biomass heat and power systems will
master planning stage, before large sites have be dealt with in the regulation of zero carbon
been divided up amongst different developers. standards and in the commercial deals offered
They will also require the development of to developers, since there will be a strong
commercial Energy Services Company (ESCo) incentive for developers to avoid these costs.
models since discussions with the construction In this case they will either be passed on to
sector suggest that very few housing developers the home owner, or biomass will be replaced

A report from the Renewables Advisory Board 15


The role of onsite energy generation in delivering zero carbon homes

Executive summary

with lower cost fuels such as gas after a home knock on consequence on the delivery of zero
has been approved as compliant with building carbon regulations. An additional 8,000 FTE
regulations. There is anecdotal evidence that are expected to be required to maintain onsite
some new developments in London are not energy generation, including over 4,000 needed
using installed biomass systems and are relying for biomass CHP maintenance.
on parallel gas systems once buildings have been
passed as compliant with low carbon regulations. 30. The construction sector is accustomed
to simple and robust warranties for building
vi. Commercial issues products. It is likely that those businesses in the
28. The net additional cost of onsite technology renewables industry that can first develop such
needed to meet CSH 6 is predicted to be products that can be specified through existing
less than 1,000 per dwelling for a large procurement routes will dominate the market.
development of rural flats that can use wind
power, to around 13,000 per dwelling for an 31. There is a need to satisfy developers that
urban development of less than ten houses that reliable mechanisms exist for the ongoing
use micro CHP and PV. The average cost is operation and maintenance of site wide
circa 6,000 per dwelling in small, medium and systems, possibly through the use of ESCos.
large urban developments. These costs only Currently there is very little understanding of the
relate to the energy / CO2 aspects of the Code implication of an ESCo for a new development,
and do not include building fabric costs, or main and few commercial offerings.
contractor overheads.
32. The creation of a very large new market for
29. The numbers of people expected to be onsite renewable energy is a big opportunity for
employed in the installation of onsite renewables the UK to secure new business and manufacturing
is 4,600 Full Time Equivalent (FTE) under capacity. With at least two elections between now
the base scenario, which is a relatively small and 2016, investors may well perceive that the
proportion of the estimated 200,000 people market for onsite renewables carries high political
employed in the UK as electrical engineers and risk. Creating a good investment environment will
plumbers. However, low recruitment into the require strong and consistent market signals in the
electrical and plumbing trades could have a intervening period.

A report from the Renewables Advisory Board 16


The work described in this report was carried out under contract to the Renewables Advisory Board:
 he views and judgements expressed in this report are those of the contractor and do not necessarily reflect
T
those of BERR or the Renewables Advisory Board.
www.renewables-advisory-board.org.uk

RAB (2007) 0177


First published 2007