By CivilServiceWorld

11 Jul 2012

The fitting of small-scale renewable energy generation equipment on the government estate could help cut costs and reduce CO2 emissions. But Nick Schoon finds that nobody is leading on this potentially important agenda

Low carbon, green energy sources are changing the face of Britain. Any long journey now includes views of big white wind turbines on hilltops or horizons, and rooftop photovoltaic panels have become a suburban commonplace.

Yet when it comes to the huge estate of land and buildings owned by central government and its agencies, small-scale clean energy sources – microgeneration, or microgen – remain a rarity. The civil service, like the great majority of public and private sector organisations, continues to run almost entirely on national electricity and gas grids powered overwhelmingly by fossil fuels.

Though we’re starting from a low base, government policies and subsidies are leading to a rapid expansion of non-polluting forms of energy supply in Britain. The EU’s renewable energy directive, for example, requires 15 per cent of UK energy supplies to come from renewable sources by 2020. But the prospects of any rapid growth in microgen on the government estate appear poor. However strong the business case for generating one’s own heat and electricity from free sources such as sunshine and waste matter – and the case is getting stronger – microgen remains mainly a matter for enthusiasts, pioneers and those who want to make a pro-environment statement. And even if civil service facilities managers fit that mould, they may struggle to find the support and resources required to get microgen projects off the ground.

The coalition government, like its predecessor, backs microgen. After all, widespread adoption would boost security of energy supply, insulate microgenerators from volatile gas and electricity prices, and help cut UK CO2 emissions – and the government has tough, legally-binding CO2 reduction targets under the Climate Change Act 2008.

A range of policies and subsidies support the alternatives to fossil fuels. One is the Renewables Obligation, which supports larger-scale renewable electricity generators like wind farms. For smaller-scale microgenerators, Feed In Tariffs (FiTs) pay a stable, premium and inflation-proofed price for electricity from a range of small-scale, non-fossil fuel energy sources such as photovoltaic panels and hydropower. And last November a new Renewable Heat Incentive (RHI) opened for applications, offering guaranteed payments for generating your own heat from renewable sources such as wood waste and organic waste biogas.

The energy and climate change department (DECC) announced its intention to cut FiTs last year, provoking much protest from the renewables industry and a legal challenge. But government argues, fairly convincingly, that the new regime still provides sufficient support to make installation of microgeneration commercially viable.

The government’s newish CRC Energy Efficiency Scheme gives civil servants another reason to look at generating their own heat and power on-site. This is, in effect, a carbon tax under which more than 2,000 large energy consumers in the public and private sector (including all Whitehall departments and the devolved administrations) pay £12 per tonne of CO2 emissions caused by their fossil fuel consumption, excluding transport fuels. The Ministry of Defence (MoD) had over 1.75 million tonnes of CO2 covered by the CRC scheme in its first year, according to the first CRC performance league table, costing it some £20m.

But while there are good reasons to consider installing microgen, managers can find plenty of reasons not to. Most energy managers have little experience in the field, and the installation and maintenance of electricity or heat generating systems involves disruption, complexities and risks – not least that the system may not deliver as much energy or be reliable as was promised. Rather than develop the necessarily expertise and absorb the risk of doing something new, many people prefer to find ways of saving energy and getting a better deal on grid power.

Perhaps the biggest hurdle, though, is lack of investment capital. Renewable energy sources can provide their owners with free heat and power plus premium prices for the electricity they export to the grid, but upfront costs for installing systems reach into the tens of thousands. Managers can get funding for efficiency schemes which recover their upfront costs inside a few years. But in the energy field, such investment is focussed on schemes which cut energy use rather than installing microgen; it is much easier to find examples of the former with rapid paybacks.

Matt Foley, the MoD’s head of energy, says he has a £105m ‘spend to save’ budget for the next three years, but this will be focussed almost entirely on ways to reduce energy use such as better management systems, boiler optimisation and low energy lighting: “In the first two years, we think we can spend the money on schemes with very aggressive paybacks: just two years. But that would generally preclude renewables,” he says.

Another factor in government’s low take-up of low carbon energy for its own land and buildings is, arguably, a lack of central direction and leadership. Today there is no target, aspirational or otherwise, for adopting green energy across Whitehall. There used to be targets for departments to source at least a tenth of their electricity from renewable sources and at least 15 per cent from combined heat and power (CHP) plants – which provide both electricity and useable heat, cutting CO2 emissions. But these have been dropped under the coalition; and while the new departmental greenhouse gas emission reduction targets are ambitious – stipulating a 25 per cent cut over the year, against a 2009-10 baseline – there’s no requirement to increase microgen use. Almost all of this saving will come from cutting consumption of gas, electricity and transport fuels; and cuts in staff numbers are likely to do much of the job without the need for renewables.

The government has no special funds or programmes aimed at promoting its own use of microgen. Eight years ago it set up Salix, a not-for-profit company which has financed thousands of energy saving projects in the public sector through a mixture of loans and grants. These include a low-carbon combined heat and power plant at Quarry House in Leeds, where the departments of health and work and pensions have large offices; but this is fuelled by gas rather than a zero-carbon renewable energy source. Salix has rarely funded renewables – and at the moment, is not offering central departments any help at all.

CSW could not find a department willing to take lead responsibility for promoting installation of microgen across the government estate. The Cabinet Office and energy department (DECC) suggest each other as the prime candidate. And no one has been tasked with keeping tabs on how much microgen capacity Whitehall and the devolved administrations are installing, or how much of the energy they use comes from renewable sources. The Cabinet Office’s own Centre for Expertise in Sustainable Procurement might have been the organisation best suited to take that role, but it was recently disbanded.

The fullest disclosure to date of the government’s own microgen efforts came a year ago, in response to a series of parliamentary questions asked by Labour MP Huw Irranca-Davies, a former environment minister now shadowing the department. He asked all the major departments what they had done to use low carbon energy sources, and their future plans.

Most of them could point to at least one or two such installations – the environment department, for example, has low carbon office buildings in Surrey and Northumberland which between them have a few micro-wind turbines, a biomass boiler, photovoltaic panels and solar water heating. There are solar water heaters on several British embassies, photovoltaic panels on a couple of court houses, and the odd heat pump and biomass boiler – but almost nothing on departments’ London HQs.

A minority, including the communities department, drew a microgen blank. Some, such as Number 10 and the Treasury, pointed to the difficulty of getting planning permission for photovoltaic panels and micro-wind turbines on their venerable listed buldings.

Even DECC revealed that it was generating no green heat and electricity of its own, despite leading the UK’s drive for renewable energy. The department points out that its scope to install green power is limited, given that it is a small department with authority over only two buildings in Whitehall.

The impression given by these departmental answers is that there is no strong impetus across the government estate to ramp up microgen. The achievements to date have largely been based on bygone funding programmes, and came during that long-gone, pre-recessionary age when spending was less constrained. The business department’s small photovoltaic installation on its Victoria Street HQ, one of very few such government microgen plants in London itself, was funded by the now-defunct Low Carbon Buildings Programme.

However, the Ministry of Defence – which has a vast estate and many suitable sites – has a fairly big portfolio of microgen schemes. Foley says the department hopes to have 270MW of CHP generation capacity installed by 2020. That’s enough to supply a significant chunk of the armed forces’ total consumption.

Much of this capacity would be fuelled by natural gas, and therefore represent a low carbon rather than a really green, clean energy source. But Mr Foley also sees biomass (wood waste and crops grown for fuel) and biogas (produced by anaerobic digestion of organic material such as food waste and farm manure) providing a substantial amount of the fuel.

He hopes to see the MoD pursue four or five pilot microgeneration projects drawn from a long list of opportunities at sites scattered across the country, “provided we can make the business case stack up.” Much will depend on the single private sector strategic partner for facilities management which the Defence Infrastructure Organisation intends to appoint next April. That partner, Foley hopes, will be able to leverage in new funding for energy investments – though energy saving will remain the primary focus.

If government departments are unable to afford to install microgen using their own funds, there is the option of getting the private sector to do the job. For example, a large roof area atop an office could be given over to a company which installs photovoltaic panels. The bulding’s owner would then buy all the electricity it needed from its own roof, paying a pre-agreed price which competes with grid power prices and rises only in line with inflation.

Susannah Wood, head of sales at Solar Century – one of the UK’s leading and longest-established photovoltaic installers – says this business model can work for both partners under the current FiT regime. “We’re finding a lot of interest among rural-based businesses with significant power bills,” she says. “They’re quite canny and commercially aware, and they like the idea that their electricity costs will rise no faster than general inflation.” Wood, along with others in the microgen industry, would like to see central government doing more to install green energy sources on its own land and buildings. To date, schools and councils have led the way in the public sector, she says.

Scaling up from microgen, departments have the option of building entire wind farms on their estates. In 2006, the government’s Carbon Trust set up Partnerships for Renewables to get big turbines installed on public sector land. The partnership offers to investigate whether sites are commercially viable and likely to survive the planning process; then, given planning approval, it will finance the installation and give the landowner a share of all electricity sales.

This August the partnership, now a for-profit limited company with private sector shareholders, plans to start building its first, 4.6MW wind farm on Ministry of Justice-owned land next to Standford Hill prison on the Isle of Sheppey.

John Mills, the partnership’s head of communications, says that few big public landowners take the initiative in forging ahead with renewable energy development. “Generating electricity from wind just isn’t their core function,” he says. “That’s why we were set up.”

Although the first projects have taken several years to come to fruition, Mills is confident that the potential is huge. He’s now working with the Forestry Commission in Scotland, British Waterways, the Environment Agency and a number local councils, and has secured planning permission for three more projects. About 20 other projects are in the pipeline, and Mills urges any senior civil servant who may have a potential site to get in touch.

While big schemes like this are attractive to outside bodies such as Partnerships for Renewables, however, private funders are less interested in taking the lead on microgen schemes. This leaves departments handling the research, negotiations, legal costs and, of course, the risks. Any further expansion of microgen across the government estate will depend heavily on individual facilities and energy managers’ green inclinations and willingness to innovate.

If the top of government was providing more in the way of aspiration, guidance, direction and even a little funding to promote civil service uptake of microgen, it could make a big difference. But CSW couldn’t even find a department or unit taking overall responsibility for the agenda, let alone one offering help or support. For the moment, at least, civil servants eager to pursue this agenda will have to do so on their own.


The main types of microgeneration
Photovoltaic panels generate electricity, even on cloudy days. You need a large roof space – South-facing if it slopes – which isn’t overshadowed. The economics stack up better in the South of England.

Solar water heating: use the sun’s energy to help meet hot water demand through the year.

Micro wind turbines: now reckoned to be a poor bet in urban locations because surrounding buildings prevent smooth, steady windflows.

Ground and air source heat pumps use low grade heat extracted from the earth, groundwater and surrounding air, year round, to warm buildings.

Combined heat and power (CHP) plants use the large amounts of heat which would otherwise be wasted when a fuel is burnt to generate electricity. CHP plants can be small, powering and heating single buildings, or large enough for entire cities. If they burn fossil fuels, they are low carbon compared to conventional fossil fuel, electricity-only power stations. If they burn energy crops which are certain to be replanted, they become a renewable energy source.

Biogas systems use bacteria to digest organic waste in a sealed tank, producing methane gas which can be burnt in a CHP plant.


The Environment Agency and microgen
The Environment Agency is a green energy leader among government bodies, with photovoltaic panels on 17 of its 86 office buildings, a couple of biomass-burning boilers, a touch of hydropower, and one large ground source heat pump providing much of the heat for its Bristol HQ.

It also operates a couple of small, 15KW wind turbines and is hoping to develop a wind farm in Lincolnshire with Partnerships for Renewables .

“At sites where we’ve installed renewables, we’ve noticed an impact on staff behaviour,” says Simon Dawes, the agency’s head of internal environment management. He finds that in these locations, people are more likely to switch off their computer monitor screens at night and recycle waste. “If they can see that we’re doing our bit, they’re perhaps more likely to do theirs.”

This enthusiasm for microgen is driven in part by the agency’s self-imposed carbon reduction target: to cut annual CO2 emissions by a third between 2006 and 2015. There is no specific target for microgen, but the agency has invested in carbon savings as an alternative to purchasing voluntary ‘carbon offsets’ covering its CO2 emissions, and some of this money has helped install microgen.

Any future investments will be considered on a case by case basis, says Dawes: he’ll want to be certain that savings will cover the upfront costs before giving the go-ahead. But he thinks a continued, gradual increase is likely – he is projecting 315MW/hours of green heat and electricity generation this year, compared to 301 in 2011. If so, it is because the agency staff who manage its energy consumption, buildings and transport fleets at local and regional level are minded to look positively at green energy alternatives.

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