BSEE


COMBINED HEAT AND POWER


The rising cost of energy has le many UK


companies under increasing pressure, yet for most, adopng a permanent soluon to oset this impact may be financially unviable. Taking this into account, Ma Watson, sector specialist for manufacturing at Aggreko, explains how implemenng combined heat and power (CHP) technology on a temporary basis can oset the impact of energy costs and allow UK businesses to beer compete against their global counterparts


nergy bills can make up around 20 to 25 per cent of the average UK plant’s overall operational budget. When considered alongside the fact that energy costs have risen by 37 per cent on average in the manufacturing sector alone, it is clear that this is becoming an increasingly large issue for UK companies. Yet due to the UK’s ageing asset base and ongoing capex constraints, most companies may not be in a position to adopt a permanent solution and tackle this problem head-on. With that in mind, a growing number of companies are taking action to cut costs. However, these smaller steps are precisely that – small. Larger actions must be taken and meaningful change enacted if UK companies are to remain competitive on the world stage. The rising cost of energy is hampering our ability to challenge our global competitors, placing the country at a significant disadvantage. Furthermore, this situation could be worsened by the possibility that the grid will not be able to maintain the energy supply UK businesses require, further stunting overall growth and competitiveness.


Remedial action


Decentralised energy solutions could offer a remedy to this situation. The technology can enable a future where electricity is produced on- site, reducing industry’s current overreliance on the national grid. Indeed, businesses are becoming increasingly aware of this option, with a recent survey by Aggreko finding that 49 per cent of energy decision makers surveyed identifying lower energy costs as the main motivation behind adopting a decentralised energy solution. Consequently, many large manufacturing, commercial and industrial organisations are opting for decentralised energy as an independent source of power, allowing them to cut energy bills, meet sustainability and carbon emission targets, and remain globally competitive. However, the majority of companies may not be able to adopt such a solution, as organisations frequently do not have the funds to invest in a permanent installation. Aggreko’s survey further identifies this issue, saying that while 43 per cent of respondents had considered generating their own electricity, 38 per cent had had their request of investment turned down in the last five years due to capex constraints.


As such, companies can find themselves in a gradually worsening situation, where remedial action is too expensive yet energy bills continue to spiral. These companies cannot afford the technology to evolve past this situation due to short-term concerns, meaning they cannot access the more efficient systems and technologies available that would give them a competitive edge.


22 BUILDING SERVICES & ENVIRONMENTAL ENGINEER OCTOBER 2019


Bridging the energy gap E


Combined heat and power


One key challenge facing businesses in particular, is that while financing a permanent solution may not be possible, continued inaction is not an option. There is a solution that allows these companies to still be proactive about reducing their energy bills. Indeed, through CHP, companies can reduce competitive imbalances and disadvantages while also making operational efficiency gains.


Otherwise known as cogeneration, CHP involves taking advantage of the large quantities of otherwise wasted heat created when generating electricity. Otherwise discarded in conventional power plants, can be used to produce hot water and steam that could be used in numerous processing applications.


By re-deploying what would otherwise be a process byproduct, a CHP solution can in turn reduce wasted energy and ensure that businesses are not, quite literally, throwing money away. The ability to capture these by-products as an energy source will in turn reduce that business’s dependence on the national grid, fostering growth and relieving stress on ageing, at-capacity energy infrastructure.


A further benefit of CHP technology is that by providing power and heat from a single source, emissions can be lowered by as much as 30 per cent. As well as lowering costs and increasing efficiency, this has the added benefit of helping businesses reach increasingly stringent sustainability targets.


A bridging gap solution


It cannot be denied that a CHP system represents a substantial outlay for any business. However, the expense associated with a permanent installation


can be circumvented by hiring the equipment as a ‘bridging gap’ solution. As a result, plant owners and operators can realise the benefits of a CHP solution, without the obstacle of prohibitive costs. This provides an off-balance sheet option with no requirement for depreciation of tangible assets. Furthermore, hired solutions come with maintenance capability to ensure product optimisation and support if any issues are encountered, giving business stakeholders further peace of mind.


The large outlay required to purchase such equipment outright also ensures that businesses would have to wait for years to see a return on their investment, which some companies may not be able to justify. However, when compared to taking power from the national grid, CHP packages can provide up to 40 per cent savings on a business’s regular energy bills. Consequently, long-term hire can lead to a much more competitive market, and give companies the option to build capital to purchase a permanent installation, while still enjoying the benefits of the technology in the short-to-medium-term. By hiring equipment instead of opting for an immediate purchase, companies can increase their own competitiveness while avoiding the challenges associated with capex constraints. Considering that the capex crunch continues to be an ongoing concern for UK businesses, the temporary hire of CHP technology offers a way to adapt and reduce the economic harm associated with rising energy costs.


For those ready to take the next step, but unsure of the options available, there are many incentives available, such as Good Quality CHP under the Combined Heat and Power Quality Assure Programme.


www.aggreko.com/energy Read the latest at: www.bsee.co.uk


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