HHIC July 2013

JULY 2013 ISSUE 20

HHICCCO

THE RT HON EDWARD DAVEY MP | PROFESSOR MIKE BRADSHAWDR TONY WATERSTON | THE CARBON TRUST | 2OC

Rebelwith a causeTV Naturalist Chris Packham

shouts above the noise

Rebelwith a cause

01 Cover.indd 2 13/6/13 16:53:56

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This issue is bursting with top contributors. If you enjoyed the new series of BBC’s Springwatch then you might have noticed that we have one of its presenters on the cover. I cornered Chris Packham at one of his Wild Night Out talks when he was stuck behind a desk and asked him for an interview. Being a kind chap he agreed and has provided us with an honest and inspiring interview. The Rt Hon Edward Davey MP talks about keeping the bills down and protecting the planet. Have you ever considered the impact of your carbon footprint on health? Well, if the answer is no, then find out more from Dr Tony Waterston, a retired paediatrician and clinical lecturer. The Chancellor of the Exchequer, George Osborne’s ‘dash for gas’ phrase is

WELCOMEFROM YOUR EDITOR

If you are interested in submitting editorial for HHIC Journal, please contact the Editor, Jodie Wiltshire on 01926 513743 or e-mail [email protected] Editor reserves the right to withhold or edit any material submitted for publication. The Editor’s decision is final.Views expressed in HHIC Journal are not necessarily the official view of the Heating & Hotwater Industry Council.The inclusion of advertising, circulation of any advertising literature or enclosures with HHIC Journal does not signify HHIC endorsement of any of the products or items concerned.

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bandied about the media. But what is the future of natural gas in the UK? Professor Mike Bradshaw debates this issue. HHIC has produced some major new research called, ‘Pathways for Domestic Heat’ and Roger Webb in ‘Matter in Question’ reveals more. Are you worried about your brand reputation? James Persad from The Carbon Trust says it is time to get tough on brand crime. I hope you are not eating chips as you read my words. Have you considered what happens to all that fat? Andrew Mercer from 2OC is turning fatbergs into energy to heat schools. Hmmm wonder how many schools I would heat if you melted me down.

Jodie Wiltshire, [email protected], Twitter: @HHIC

CONTENTS

JULY 2013 HEATING & HOTWATER INDUSTRY COUNCIL02

Cover image: Chris Packham www.chrispackham.co.uk

2_3 Contents.indd 2 21/6/13 09:59:03

Chris PackhamChris Packham spent his undergraduate days at the Zoology department of Southampton University. He also embraced Punk Rock and played in a band. Post-graduation and a cancelled PhD, he began taking still photographs and trained as a wildlife film cameraman. The photography continues with exhibitions and invitations to judge prestigious competitions but the camerawork gave way to presenting. Chris began with the award winning ’Really Wild Show’ in 1986 and has been working ever since. Credits include Postcards from the Wild’, ‘Hands on Nature’, ‘Nature’s Calendar’, ‘Springwatch’, ‘Autumnwatch’, and ‘Secrets of our Living Planet.’

Edward David MP Edward Davey was appointed Secretary of State for Energy & Climate Change in February 2012. He is the Liberal Democrat MP for Kingstonand Surbiton.

Professor Mike Bradshaw Professor Mike Bradshaw is currently leading a UKERC-funded research project on global gas security. He is Professor of Human Geography at the University of Leicester and soon takes up the post of Professor of Global Energy at Warwick Business School.

Dr Tony Waterston Tony is a retired consultant paediatrician and clinical senior lecturer whose working life was spent mainly in community paediatrics in inner city Newcastle upon Tyne. He is an editor of the Journal of Tropical Pediatrics and is project director for the Royal College of Paediatrics and Child Health Palestine programme, which is about to establish an MA in a Child Health course for primary care doctors, nurses and trainee paediatricians with Al Quds medical school in the occupied Palestinian territories. Currently he leads the climate change and health campaigning group in Medact (Medical Action for Global Security) and is a local council candidate for the Green Party.

FEATURES

REGULARS

04

10

THIS IS WHO I AM BBC Naturalist Chris Packham shoots from the hip on a range of

issues from biofuel to pests

KEEPING BILLS DOWN AND PROTECTING THE PLANET Rt Hon Edward Davey MP debates what the government

is planning to do

GAS BY DESIGN OR GAS AS DEFAULT?The future of natural gas in the UK Professor Mike Bradshaw on the future role of gas in the UK’s energy system

THE NATURE OF BUSINESS Read a review of Giles Hutchins must read book for everyone

involved in the business of the future

IS YOUR BRAND VALUE AT RISK? James Persad from The Carbon Trust reveals how important brand is

to your business

CARBON, CLIMATE CHANGE AND HEALTH – NOT ALL BAD NEWSDr Tony Waterston explains the impact that your carbon footprint has

on your health

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CONTENTSJULY 2013 ISSUE 20

CONTRIBUTORS

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1232 MATTER IN QUESTIONRoger Webb reveals some major new research called HHIC Pathways

for Domestic Heat to help meet the government’s emission targets

WHERE THERE’S MUCK THERE’S MAGIC Andrew Mercer CEO from 20C reveals how they make renewable

energy from fats and oils

WWW.CENTRALHEATING.CO.UK JULY 2013 03

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2_3 Contents.indd 3 21/6/13 09:59:34

BY JODIE WILTSHIRE


CHRIS PACKHAM

Naturalist and wildlife presenter, Chris Packham is not afraid to speak his mind. He has a ferocious intelligence that he uses to deliver passionate but reasoned opinions. These are fuelled by growing

up listening to music which challenged communities with its nihilistic anger, providing alienated youth with an ideology. It is not always easy to say what you really think, to go against the grain. It

takes bravery and an inner � ght to do so – Packham seems to have both.

Packham reveals: “I was watching a programme I recorded on TV with a load of old punk tunes. It was the sound of the seventies or something. The � rst thing that was apparent not that I needed my

memory refreshing very much was how much energy was involved compared to contemporary music. There was a huge amount of energy, anger and honesty. What I like about this mode of

communication is that it is designed to be immediate. I � nd that motivational and I still listen to this genre of music as it does make me want to get up and do something rather than thinking someone

else will sort the problem out.”

Chris Packham

04 Chris Packham.indd 4 21/06/2013 17:03


TO ME, PUNK IS ABOUT AN INDIVIDUAL AND GOING AGAINST

THE GRAIN AND STANDING UP AND SAYING, ‘THIS IS WHO I AM.’

Joey Ramone

“PUNK WAS DEFINED BY AN ATTITUDE RATHER THAN A MUSIC STYLE”. David Byrne



CHRIS PACKHAM

One of the greatest threats to the natural world is

climate change and over-population. According

to WWF’s Living Planet Report, humanity’s

overconsumption of food, material goods, fossil fuels, and

non-renewable resources is putting a huge toll on the planet,

exceeding its capacity to sustain us. But many of us refuse to

see the bigger picture and focus much closer to home on our

immediate environment.

Packham believes that this is the case because it is a

global issue and not a local one. “We know that some of the

climate changes we are seeing in the UK are in� uenced by

events in other parts of the planet. For example, our current

wet spring, the shifting of the jet stream, the warming of the

Northern oceans, all these sorts of things are big issues and it

is dif� cult for people to see the tangibility. If we all had a week

in the space station looking down upon the planet, we would

realise just how small it is and how many of us are contributing

to this phenomenon. We just can’t get our heads around the

fact that we only have one planet and what is happening next

door on that planet is having an in� uence on us.

“The primary issue is to keep the planet in a liveable

state for ourselves and all the other species. The luxury of

disagreement over religion and politics will vanish, when

we realise that the main issue is about us surviving. We are

living in a student squat at the moment in abject squalor,

with no regards to tomorrow. We need to think like a � rst

time buyer, with lots of concern about how we are going to

look after our home for the next few years.”

In an ideal world nature and business behaviour would

be more bene� cial to each other. As a society we take so

much from nature and yet not want to conserve it. One of the

issues at the moment is about the folly of pursuing biofuels

at such an environmental cost. Chris Packham loathes

biofuels with a passion. “I wander in a complete cloud of

incomprehension when it comes to biofuels. It was years

ago that the United Nations put its hands up and said that

they had made a massive mistake and biofuels were not

working and we need to get out as quickly as possible. This

has not happened because they had invested in it � nancially.

If you make a mistake you have to put your hand up and

own up to it and try and rectify it. Because they have built

processing plants and integrated so much of it into our lives,

they are incapable of pulling the plug on it.

“And as a consequence of that decision, we have this

immensely destructive force in our environment and it is not

just the palm oil plantations of the Far East. A signi� cant

proportion of the crops planted in � elds in France where I

live are planted for biofuel. They are heavily fertilised and

intensely sprayed and for what? It is criminally insane and no

one has the guts to say we need to stop this.”

Packham feels strongly that economic growth equals

planetary disaster because you cannot continue to grow

when you have a limited resource. “A limited resource is the

diameter of the earth and it is not getting any bigger. You

cannot continue to grow, it really is this simple. Economists

need to take their heads out of their computers and look out

the window and realise that we live on a biosphere that is

not getting any bigger.”

But there are some organisations that appreciate that

business is less about unethical short cuts in the name of

pro� t, and more about value creation through sustainability.

Chris Packham is keen on the Velvet Toilet tissue project

that is part of the SCA group. This project, called the ‘Three

Trees’ Promise, plants three trees for each one used. It

means the company has surpassed the standard industry

practice of other industry tissue manufacturers, and since

2009 it has planted more than three million extra trees.

Packham explains: “This project replants an extra tree

in the ground in Brazil. The organisation is involved with a

Brazilian sustainable forestry company called Amata that

is sanctioned by the Brazilian government and universities.

To date they have put in four million trees into the ground

in a series of projects looking into how they can replant

rainforests so that they will be harvestable. This will create

more wealth for communities who live there. It involves local

communities from the beginning to clear the land, plough and

“ If we all had a week in the space station looking down upon the planet, we would realise just how small it is and how many of us are contributing to this phenomenon.”


WWW.CENTRALHEATING.CO.UK JULY 2013 07 04 Chris Packham.indd 7 21/06/2013 17:04


CHRIS PACKHAM

“I believe what we need to do is generate a greater

tolerance of all these animals because whether we like them

physically or fear them is immaterial - we need them.”



Read more about the ‘Three Trees’ Promise at www.velvetttissue.com Series to watch out for: The Burrowers, BBC2 Summer 2013

Inside the Animal Mind, BBC2 Spring 2014

plant trees and then harvest the trees with the fruit they produce.

A key component is at least a third of the acquired land will be

pristine rainforest to keep those species.

“I am championing this project for two reasons. Firstly, if a

company such as SCA decides to spend this much money

and effort they must be applauded because that is part of the

impetus. We want companies to see it pays for them to take

this approach. Secondly, without their funding conservationists

could not achieve these projects on this scale.”

As Packham notes, the most successful large scale

conservation projects are not funded by government but

are privately supported by corporations and philanthropic

individuals. He continues: “If we enter a dialogue and

processes with these people then we have the ability to

communicate the urgency and the need for action. We need

to be in the same room with them but not in bed with them,

and it is critical that this is not the case. You never want to

watch your words.”

Seeing the effects of global warming � rst hand is quite

a sobering and frightening experience. Packham has seen

many examples of how the natural world is buckling under the

warming of the planet. He presented a highly acclaimed series,

BBC Operation Iceberg as part of a team on an expedition

to the Arctic. It investigated the unknown world of icebergs,

exploring the creation, life and death of these frozen behemoths

for the � rst time. Being part of Operation Iceberg was an

incredible experience for Packham. “When we watched those

giant glaciers disintegrate and compared data from previous

years which showed that just a short while ago there was a

much more extensive body of ice you can see the speed of

the retreat yourself. The retreat is happening in our lifetime and

it is very profound. Yes, it was a very poignant moment and I

thought to myself that I had been reading about this since my O

levels and here it is actually happening before my very eyes. It

was very beautiful and extremely terrifying at the same time.”

But does it make Packham angry that some people still

deny the planet is warming? “I have side-lined climate change

deniers, to be quite honest with you.” He adds: “Initially, we

were the mavericks going back for years now, saying that the

climate is warming. There has been a complete polarisation

here. I think those people who deny the planet is warming

and deny that we are to blame or play a role in it are now the

mavericks. I think the vast majority of the population and

certainly the thinking population, understand that to deny it is

happening is nonsense. They no longer get to me.

“They are a diminishing number of people who have

insidious vested interests, in the sense they are involved with

the petro- chemical industry or some other industry that is

contributing signi� cantly to global warming. This is becoming

transparent and their believability is fading fast. They are of no

consequence really.”

Not surprisingly, considering what people are doing to the

planet and the natural world, Packham is not a great fan of

the human race. “I see them as a disease on the planet. While

there are some � ne human beings and I enjoy the company of

my friends and family, as a species I � nd us very dif� cult to like.

There are too many of us and it is becoming worse. We have to

do something to regulate our population globally, as otherwise

we are doomed. This is not an opinion, it is a fact. Our inability to

address the problem is dangerous and embarrassing.”

As an interviewee, Packham gives the impression he has

no time for sentimentality, nimbyism and people who like

to put the animal kingdom into boxes. He does not care for

people who hold subjective opinions about what is a good or

bad animal. He is scornful of the cute factor and its opposite

- labelling the outsiders of the natural world as ‘pests.’ This is

simply not in his vocabulary. He does not see animals as pests

but considers them successful at our expense.

“We need to understand that in order for ecosystems

to remain sustainable and stable, we need the greatest

complement of species to live there and this includes the so-

called pests. Cockroaches, pigeons, wasps and rats all play

a role. If we decide that we do not like them and want to take

them out of the equation that is a very dangerous precedent.

They have evolved to do a speci� c job,” he adds.

“And typically one thing that we struggle to live with, in

many if not all parts of the world, are large predators. We

want to take them out of the equation too, because they

con� ict with our interests, such as by eating our farm stock. I

believe what we need to do is generate a greater tolerance of

all these animals because whether we like them physically or

fear them is immaterial - we need them.”

Packham seems the type to always rage against the machine

and we need more people like him. Music, like nature, has

inspired him to want a better world. “One particular track which

I have always liked is by a band called Penetration and the track

is called, ‘Shout Above The Noise.’ The mantra of the piece is

that if you want to make a difference you’ve got to get up and

do it yourself. I have listened to that track for the past 35 years of

my life. Every time I hear it, I say yes, that is what it is all about.

It is about not being intimidated and refusing to take a no for an

answer. It is about � nding the energy to make that difference.”


Image: Robert Shuttleworth


ED DAVEY MP

The government has a duty to help keep bills down and help people to manage the cost of living – and that’s what we are relentlessly focused on doing.

There’s a lot of help available to the most vulnerable, such as the Green Dealand the Energy Company Obligation, and the Warm Home Discount. and the Energy Company Obligation, and the Warm Home Discount.

KE

EPING BILLS DOWN AND

PR

O

TECTIN G T H E PLA

NE

T

The Green Deal is designed to

improve the energy effi ciency

of the nation’s housing stock

and help households save money on

their bills. It’s a scheme that will be

in place for the long-term, but fi gures

are showing a very encouraging

start. Already, more than 18,000

people have had assessments

carried out on their homes.

Under the Warm Home Discount,

two million households were helped

this winter and more than one million

low income pensioners received £130

off their bills.

But my Department has been

concentrating on keeping bills as low

as possible over the long-term - and

for everyone. Already our policies are

keeping bills lower than if government

did nothing – by an average of £65.

Some people think climate change

policies to support things like wind

farms are what are behind high bills.

But they couldn’t be

more wrong.

The biggest single factor driving bills

higher is global oil and gas prices. They

have been rising remorselessly, fuelled

by demand in growing economies like

China. And, they’re likely to keep rising.

55% of people’s gas bills and 37%

of their electricity bills are made up of

wholesale energy costs alone.

The government can’t control the

global market and drive down these

international wholesale prices.

What we can do is take steps to

put a cushion between these global

prices and the bills we all pay at

home – insulating our economy as

well as our homes and businesses.

Through investment in domestic

sources of low carbon energy like

nuclear, wind and wave power, and

other renewables, we are looking to

diversify supply and help cushion

consumers from volatile fossil fuel

prices in the future.

“Some people think climate change policies to support things like wind farms are what are behind high bills. But they couldn’t be more wrong.”

10 Ed Davey.indd 10 21/6/13 10:14:08

Image: Robert Shuttleworth


KE

EPING BILLS DOWN AND

PR

O

TECTIN G T H E PLA

NE

T

The reforms we are making to the

electricity market through the Energy

Bill will help incentivise £110 billion

investment from the private sector,

with a focus on home-grown clean

energy infrastructure.

The policies we have in place are

not just about building new power

stations; they are about improving the

energy effi ciency of our housing stock

and our businesses.

Through the Green Deal we are

encouraging people to improve their

homes, make them warmer and save

money on their heating and electricity

bills. The Energy Company Obligation

will ensure that the households and

properties that need it the most benefi t

from energy effi ciency improvements.

Smart metering will help households

manage their energy usage, and

provide more accurate billing.

We’re also helping those who

aspire to generate their own electricity

through the feed-in tariff, under which

solar panels still represent a fantastic

long-term investment.

And while support for renewable

heat is not funded through consumer

bills, over 10,000 householders have

already taken advantage of money

off renewable heating kit through the

Renewable Heat Premium Payment.

We recently announced an increase

to voucher levels under the scheme.

Money off vouchers available have

been increased to £2,300 for ground

source heat pumps, £2,000 for

biomass boilers, £1,300 for air source

heat pumps and £600 for solar

thermal systems.

In 2020, bills will on average be

around 11 per cent lower, than they

would be if we were doing nothing.

And that assumes fossil fuel prices

do not rise radically, in which case

savings would be even larger.

Let’s be clear - bills will still likely

be higher than they are today. But

they will be £166 lower than if we sat

on our hands, left ourselves exposed

to global price shocks and left future

generations to deal with the threat of

climate change.

This government is proving that

helping to tackle climate change, and

diversify energy supply, doesn’t have

to cost the earth.

In fact it creates green growth and

green jobs. These are benefi ts that

will stretch across the country, as

low carbon supply chains spring up

and make some of our once-thriving

industrial heartlands prosper again.

The move to a clean energy

sector will place the UK at the

leading edge of a new global green

energy market worth around £3.3

trillion. This is a revolution the UK

cannot afford to pass up.

So, our policies are not only about

tackling climate change, diversifying

supply and creating jobs, but also

about saving money on bills too, with

the interests of the consumer front

and centre.

“The biggest single factor driving bills higher is global oil and gas prices. They have been rising remorselessly, fuelled by demand in growing economies like

China. And, they’re likely to keep rising.”

BY EDWARD DAVEY MP,SECRETARY OF STATE FOR ENERGY AND CLIMATE CHANGE

10 Ed Davey.indd 11 21/6/13 10:14:20

MATTER IN QUESTION

JULY 2013 HEATING & HOTWATER INDUSTRY COUNCIL12 JULY 2013 HEATING & HOTWATER INDUSTRY COUNCIL12 WWW.CENTRALHEATING.CO.UK JULY 2013 13 Matter in Question.indd 12 13/6/13 17:07:45


BY ROGER WEBB, HHIC DIRECTOR“Thi

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Heat is the single biggest reason we use energy in our society. According to the government’s 2012 report: The Future of Heating – A Strategic framework for low carbon heat in the UK, we use more energy for heating than for transport or the generation of electricity. We in the UK will spend around £33 billion on heat across our economy.

JULY 2013 HEATING & HOTWATER INDUSTRY COUNCIL12 WWW.CENTRALHEATING.CO.UK JULY 2013 13 Matter in Question.indd 13 13/6/13 17:08:07

JULY 2013 HEATING & HOTWATER INDUSTRY COUNCIL14 WWW.CENTRALHEATING.CO.UK JULY 2013 15

MATTER IN QUESTION

Matter in Question.indd 14 13/6/13 17:08:31


Professor David Mackay, chief

scientific advisor to the Department of

Energy and Climate Change (DECC)

devised a model for 2050. It presents

a zero carbon electric pathway to a

low carbon future. Mackay believes

that within 40 years transport, heating

and industry need to be electrified,

electricity supply may need to double,

and the grid must be decarbonised

and able to cope with intermittent

renewable generation.

This distant, all or nothing solution

appears detached from the current

reality, fails to offer a staged approach

“The industry requires consistent and clear policy making rather than the

mixed signals, delays and confusion of recent years. We would like to

work in partnership with DECC to develop a framework to deliver this.”

in failing to recognise the continuing

role of non-electric sources of supply,

and takes no account of the forces

which drive human behaviour.

So what isthe problem?Well let’s start with putting you in

the picture clearly and simply.

By 2027 the government’s target

for domestic heating is 50.2 million

tonnes of carbon dioxide emissions.

We are currently on 80 million

tonnes of CO2.

One of the problems is that the

UK has one of the oldest stocks of

residential buildings in Europe. These

homes are not energy efficient and all

add to higher carbon emissions that

are detrimental to the planet. With

these differing property types a one

size fits all approach will not work

when it comes to installing suitable

technologies. Today, 1.5 million

boilers are sold every year. To meet

the government’s 2027 target, only

500,000 boilers should be sold, with a

mix of other technologies.

This is a huge change. Part of this

adjustment will require consumers

to come on board and play their

part. But human behaviour is hard

to influence and it may mean that

to create the right kind of demand

the carrot of incentives needs to be

backed up with the stick of regulation.



MATTER IN QUESTION

Our scenarioHHIC has come up with its

own scenario on behalf of the

industry to take the UK towards

a decarbonised society. We

commissioned research and

analysis for Pathways for Domestic

Heating from Delta Energy and

Environment. This research

supports our view that we need to

keep a number of options open for

as long as possible.

Despite Professor Mackay’s

modelling, DECC itself has released

an updated view for domestic heat

to 2050, concluding that gas will be

an important part of the energy mix

to 2030 and beyond. Our scenario

includes heating products that will

lower the carbon emissions through

their energy efficiency. As part of

our research, we looked at different

property types and with the help of

our industry came up with products

that would be suitable.

It is vital that we have a mix of

energy products and we believe

that the government needs to

acknowledge this openly. The

industry could produce these

modern products by 2027 at

volumes which would support

progress to the 2050 target. This is

why we have opted for a balanced

mix of technologies that can be

taken to 2030. Timing is critical to

ensure that the UK is on the correct

trajectory for meeting the binding

2050 targets.

Our research pathway shows the

government how the industry can

help them meet the figure of lower

carbon emissions through product

development. The government must

be serious about meeting these

targets as to deliver our scenario

will require huge investment from

industry to develop new and

innovative products. But the pace

that the government is prescribing

means that industry also has to do

this much faster too.

Being part of this change will

also require consumers to come on

board and play their part. But human

behaviour is hard to influence and

it may mean that to create demand

once incentives have been offered,

regulation is the next best step.

There will be greater opportunity

for consumers to choose specialist

technologies that will be suitable for

their properties.

But we cannot kick-start any of

this into action if the government only

present a long-term ambition without

any realistic intermediate targets.

They need to instil confidence to our

industry. For our manufacturers to

bring new low carbon technologies

to the marketplace they need to

be certain that the government is

committed to its targets.

What do we require the government to do?We require that it puts an

intermediate scenario in place,

a pathway to get to 2030 that

would provide industry with more

security. The heating industry needs

assurance that government policy

will be in place before they invest

heavily in product development

and innovation. If this does not

happen then under business as

usual, the market will continue

to demand condensing boilers

with less numbers of renewable

and low carbon products. Electric

heating and heat networks have a

strong role to play but so do low

carbon gas appliances. Current

government policy is not giving

us the confidence and we cannot

make the necessary investments

because the government has not

yet developed a credible pathway

and set of policies that enabled us

to meet the 2030 target.

What do we want?The industry requires consistent and

clear policy making rather than the

mixed signals, delays and confusion

of recent years. We would like to

work in partnership with DECC to

develop a framework to deliver this.

The framework can consist of a mix

of interventions, such as incentives,

regulation, finance solutions such as

the Green Deal, or tilting the playing

field through taxes. A good example

is the car industry that the European

Commission has set output based

performance standards for vehicles.

If we are given this assurance

to invest and with the right

interventions from the government

to help create demand, then we will

invest and innovate.

We will play our role in offering

solutions to the market.

For further information on the HHIC Pathways

for Domestic Heat contact Roger Webb at [email protected]

12 Matter in Question.indd 16 21/06/2013 12:30


“Our research pathway

sho

ws

the

gove

rnm

ent h

ow th

e ind

ustry can help them meet the figure of low

er carbon emissions through product development.”


BY PROFESSOR MIKE BRADSHAW

PROFESSOR MIKE BRADSHAW

or gas as

JULY 2013 HEATING & HOTWATER INDUSTRY COUNCIL18 18 Gas by Design.indd 18 21/6/13 10:29:27

In recent months there has been a good deal of discussion about the

future role of gas in the UK’s energy system. The debate has been

prompted by numerous government policy statements and reports,

worries about the imminent closure of coal-fi red power stations and the need to import expensive liquefi ed

natural gas (LNG), and by the growing controversy surrounding

the prospect of domestic shale gas. Has all of this activity created any greater certainty about the future

role of gas in the UK?

To address this question it is necessary to adopt a ‘whole systems approach.’

This is because future demand for gas—and the need to invest in its associated

infrastructure—will largely be determined by the success or failure of the

government’s wider energy strategy. This has at least fi ve key elements: energy

effi ciency and demand reduction, the development of renewable energy,

the electrifi cation of the economy, the construction of a fl eet of new nuclear

power stations, and the deployment of carbon capture and storage (CCS).

The problem is that, while we have numerous strategies, plans and road maps

that will deliver an 80 per cent reduction in emissions by 2050, we are already

behind where we need to be on just about every element. For example, there is

currently no private sector commitment to build the next generation of nuclear

power stations. Equally, progress on CCS is delayed. There is also considerable

distance yet to travel if the UK is to meet its 2020 target of 15 per cent of energy

production from renewable sources. Finally, although demand reduction and

“There is alsoconsiderable distance yet to

travel if the UK is to meet its 2020 target of 15 per

cent of energy production from renewable sources.”

WWW.CENTRALHEATING.CO.UK JULY 2013 19 Gas by Design.indd 19 13/6/13 17:13:45



energy effi ciency programmes are the

logical things to do, history suggests

that they seldom realise anything like

their full potential.

Any delay in the implementation of

the various elements of the strategy

will mean more gas in the UK’s

energy mix for longer than expected.

The high level of uncertainty is

abundantly clear in National Gird’s

projection for future gas requirements.

The difference in required gas

supplies in 2019-20 between their

‘Gone Green’ projection—(realisation

of the government’s energy strategy)

and their ‘Slow Progression’

strategy—(more limited progress

on key elements of the strategy)—is

25.1 bcms. That is, between just

under 73.8 bcm and 98.9 bcm of

gas supply. By 2030 the difference

is even more signifi cant: 56.8 bcm in

Gone Green and 88.5 bcm in Slow

Progression. This uncertainty about

future demand presents a major

challenge for those seeking to source

gas for the UK market, for those who

need to invest in future gas-fi red

power generation capacity, and for

those who need to invest in new

pipelines and processing and storage

facilities. All of these are in the private

sector and need a sound business

case on which to base their decisions.

On the power generation side

of the equation, the government’s

response is the Gas Generation

Strategy and the creation of a

Capacity Market. The recently

appointed Minister for Energy,

Michael Fallon, has described the

Capacity Market as an ‘insurance

policy’ to ensure continued security

of electricity supply. The aim is

to pay generators to ensure that

there is suffi cient future generating

capacity to meet all eventualities.

The idea is that new gas power

generation capacity will be needed,

but that the load on that capacity

will be signifi cantly lower than today

Fracking - Roan Plateau near Rifl e, Colorado

Gas by Design.indd 20 13/6/13 17:18:32


“The physical availability of gas will probably not be the issue,

the price that consumers have to secure that gas may well be.”

Gas plant in Norway




because gas will primarily be acting

as back up to intermittent wind

energy. In effect the CCGT operators

will be paid to install capacity, and

then generate at much lower loads

than is currently economical.

Unfortunately, the industry’s

response has been to postpone

decisions on future investment

in gas power. However, the

insurance policy is just as likely to

be needed to compensate for the

non-replacement of nuclear base

load in a timely fashion and/or the

failure of renewable energy sources

to expand as quickly as anticipated.

In other words, it is an insurance

against policy failure, but even

more worryingly for some, it also

creates the possibility of a change

in direction.

In such a scenario, in the absence

of CCS, high levels of unabated gas

fi red generation beyond the mid-

2020s will certainly compromise the

government’s emission reduction

targets. There are those, such as

the Committee on Climate Change,

who advocate that the government

should hold its nerve and press

ahead with the rapid development

of low carbon energy. Others,

including the Chancellor of the

Exchequer it would seem, advocate

further development of gas power

generation as a more cost effective

means of reducing emissions. The

two camps are probably arguing

at cross purposes, short-term gas

can contribute to decarbonisation

if it replaces coal, longer-term gas

as fossil fuel can only really remain

in the mix with CCS if emission

targets are to be met. However, if

CCS is available then gas will have

to compete against coal and much

will depend on the relative cost of the

or gas as

Gas in the desert – Quatar



two fuels, the cost of carbon and the

cost-ef� ciency of CCS when applied

to the power generation plant.

The argument that I have made

thus far is that there is signi� cant

uncertainty about future gas demand

and that this is a source of insecurity,

as it makes future investment dif� cult

to commit to. The government hopes

that its capacity market will address

this situation. However, there are

also legitimate concerns about the

cost of future gas security of supply.

Natural gas production in the UK

peaked in 2000 and the UK became

a net natural gas importer in 2004.

In a very short period of time the UK

has become a substantial importer

of natural gas, though the situation

at present is complicated by the

impact of economic recession and

resurgence of coal. Nonetheless,

provisional � gures from DECC

for 2012 show that indigenous

production covered about 53 per

cent of domestic demand, down

from 58 per cent the previous

year. This is because although

domestic gas demand fell by 5.6

per cent during 2012, domestic

production fell by 14.1 per cent.

All of the projections suggest that

domestic conventional production

will continue to fall, so the level

of imports will be determined by

what happens to demand. Both the

Gone Green and Slow Progression

scenarios discussed earlier show

gas import dependency reaching

80 per cent by 2030; the key

difference is the physical volume of

gas demand and thus the absolute

amount of gas that will need to be

sourced from external suppliers.

The rapid growth in UK gas

exports has been enabled by

a reorientation in the national

transmissions system, the

construction of new pipelines from

Norway and interconnectors to

Europe and the development of three

LNG terminals. Therefore, the UK

now has the necessary infrastructure

in place to deliver substantial

amounts of imported gas to market.

The one issue that remains is

storage. It is generally accepted

that as the UK can no longer surge

production from the North Sea in

times of high demand, so additional

storage capacity should be built.

Who should pay for it remains an

unresolved issue.

The UK gets its gas from four

sources: by pipeline from the

UK continental shelf, by pipeline

from Norway, by pipeline from

continental Europe (identi� ed in the

statistics as from Belgium or the

Netherlands) and as LNG. Each

of these supply vectors exposes

the UK to a rather different set of

risks. To simplify the situation we

can say that, one the one hand, the

UK is now increasingly exposed to

developments in EU gas markets

through imports and exports via the

two interconnectors; on the other

hand the UK is increasingly exposed

to developments in the global LNG

market. In 2012 only 27 per cent of

UK gas imports were in the form of

LNG. However, the year before, the

share was 46 per cent and 80 per

cent of those imports came from

Qatar. In fact, in 2011 two countries,

Norway and Qatar, accounted for

80 per cent of the UK’s gas imports.

Thus, while the UK has the capacity

to source gas imports from multiple

sources, these imports are currently

highly concentrated geographically.

Moving forward, there are concerns

that as LNG imports increase, as

they are likely to do as coal is forced

out of the mix, UK consumers will

have to pay higher prices to attract

LNG cargoes. It is noteworthy that

Centrica recently signed a deal with

Cherniere Energy to deliver LNG

from the US for 20 years starting in

2018. This came after Centrica failed

to reach a long-term agreement

with Qatar, which has increased

its exports to Japan in the wake of

the Fukushima disaster. For the

moment supplies from Norway

are seen as secure and could

even increase in the near future to

maximise the infrastructure that

has been put in place, however,

there is uncertainty into the 2020s

as the � elds supplying the UK

pipelines decline, production

moves further north and Norway

prioritises Continental European

markets. Of course, the hope is that

by then the UK will have access to

indigenous shale gas production.

But the scale and pace of UK shale

gas development is itself far from

certain and it would be imprudent to

assume that it will compensate for

declining conventional domestic gas

production. Equally, domestic biogas

can help to sustain indigenous

production, but the reality is that

the UK’s gas import dependence

will continue to increase through

the remainder of this decade and

will remain high thereafter. The key

uncertainty is the level of future

gas demand and thus the absolute

amount of gas the UK industry

will need to source from external

markets. Whatever the volumes,

UK policy makers and the suppliers

and consumers of natural gas now

need to pay far more attention to

developments in the European gas

market and the global LNG market

than they have in the past.

The reality is that certainty about

future gas demand in the UK will

remain elusive. This is because it

is dependent on the wider success

or failure of the government’s

energy strategy. All of the current

indications are that key elements

of that strategy will be delivered

late and some possibly not at all.

Thus, we will have need of more gas

for longer and we should now be

planning for that eventuality, rather

than assuming that it will always

be available as the default position.

The physical availability of gas will

probably not be the issue, the price

that consumers have to secure that

gas may well be.

“There are those, such as the Committee on Climate Change, who advocate that the government should hold its nerve and press ahead with the rapid development of low carbon energy.”

18 Gas by Design.indd 23 27/06/2013 11:04


THE NATURE OF BUSINESS

The

of Business

The

of Business

Book Review.indd 24 13/6/13 16:55:09

25 WWW.CENTRALHEATING.CO.UK JULY 2013

of Business

“If we do not conduct our business within the constraints of the system, we will inevitably

go out of business.”

Redesigning for resilience

We need real change in our world and this is why Hutchins’s book sets out a new business paradigm. It is not written in meaningless business jargon as the structure takes the form of nine easy-to-read modules and you can just dip leisurely in and out.

Author, Giles Hutchins presents the challenge to the prevailing ‘business as usual’ model, explains the pressing need for transformational change, and reveals the concepts and mindsets necessary to

inspire the businesses of tomorrow.

Book Review_Nature of Business.indd 25 13/6/13 17:44:52


THE NATURE OF BUSINESS

Book Review.indd 26 13/6/13 16:55:35


Going beyond current approaches

to responsible and green business,

Hutchins focuses on the emergence

of new ways of operating and

creating value in an increasingly

volatile and interconnected world.

He makes the compelling case that

businesses should seek to mimic

behaviours and organisations found

in nature, which offer fi tting models

for businesses capable of fl ourishing

in chaotic and uncertain times.

It is teeming with case stories

from UK-based giants such as

Apple, Coca Cola, Nike, Toyota,

Unilever, Nokia and Virgin. These

examples illustrate practically

how companies are integrating

sustainability as part of their

business plan. They are all hugely

successful, household names that

realise it is important to replenish

what is taken out. The reason

for this is not only for profi t but

to create better partnership roles

with charities that could benefi t

communities in other parts of the

world. M&S has joined forces with

Oxfam, Kenco with the Rainforest

Alliance and Unilever with the

National Childbirth Trust.

The idea of the ‘aware’ company is

explained. The more thoughtful values

and behaviour of employees who

connect with those of the business,

the more conscious that business will

become. This is more powerful than

any business goals or targets.

The fi rm of the future, he argues,

will build resilience, optimise, adapt,

integrate systems, navigate by

values and support life-building

activities. It will be a business

inspired by nature for the greater

good and ultimately the well-being of

our planet.

The Author:Giles Hutchins is a management consultant with over 15 years of business and IT transformation experience, formerly with KPMG and Atos International. His

passion is exploring ways of applying nature’s inspiration to sustainable business transformation. Drawing on a range of theories and practices (such as biomimicry,

cradle-to-cradle and industrial ecology),he applies them to the challenges businesses face today, providing practical insight

and guidance to help organisations redesign for resilience in these volatile times. Giles blogs at http://thenatureofbusiness.org

Join in the online discussion atwww.businessinspiredbynature.com/natureofbusiness

Book Review_Nature of Business.indd 27 13/6/13 17:47:58


THE CARBON TRUST

Use your detective skills to investigate worrying areas

28 Brand at Risk.indd 28 21/06/2013 17:17

29

BY JAMES PERSAD

A small but critical role of a Head of Brand has forever been to ensure that their business and its associated partners are adhering to correct, consistent and proper use of the brand assets available to them. If necessary we or one of our team are required to intervene in order to make sure something heinous looking or sounding doesn’t make it out of the door into the public domain.

WWW.CENTRALHEATING.CO.UK JULY 2013

But what about the biggest

brand asset of all, the actual

product or service being

sold? As the horsemeat scandal

developed into a full blown supply

chain crisis, you may have read

the recent headlines about the

contents of what certain brands

have been making and selling, their

very products and services, and

shuddered at the thought of a major

environmental, health or safety related

breach of trust with your customers;

the impact this has on your

favourability scores, the damage to

your businesses share price and the

erosion of a reputation that you have

nurtured over the months and years.

From what speci� c ingredients go

into your products if you’re a food

and drink brand, to your damage to

the environment if you’re a petro-

chemical brand, the impacts of an

environmental, health or safety related

“Public trust in all sorts of institutions, including business, as well as politics and the media, has been at an all-time low for a few years, having been eroded by various scandals.”


JULY 201330

THE CARBON TRUST

breach of trust can be far reaching.

Indeed a major crisis of trust can

sometimes spell the end of the line

for individual employees, for business

areas and occasionally for entire

brands themselves, as you know.

In a world where even relatively

minor misdemeanours are shared

with unforgiving speed around the

globe, no brand is safe.

Public trust in all sorts of

institutions, including business, as

well as politics and the media, has

been at an all-time low for a few

years, having been eroded by various

scandals. The signs are that this trust

is stabilising, however, and brand

guardians need to do much more to

make sure that this trust is respected,

fed and watered to ensure it blooms.

Edelman, a corporate affairs

agency, has just published its global

trust barometer. “...the number one

reason reported for trusting business

less over the last year was wrong

incentives driving business decisions

(28%)”(Source: Edelman Trust

barometer 2013).

It is no longer good enough from

a governance point of view for brand

guardians to claim ignorance of

what is going on in their wider

business from a reputational

and environmental risk

perspective. The technology

and retail brands employing

workers overseas in far eastern

supply chains have suffered

knocks to their reputations

over the welfare of these

employees, as have those car

brands that end up having to

recall a model because of the

corporate drive to put out new

cars without the nuts and bolts

being properly road tested.

It is all very well having

a crisis management plan

in place but by that time

it is often too late and the

brand damage is done. Trust in a

brand takes an age to develop and

moment to destroy. It is the brand

team’s responsibility to poke their

noses in, often where they are not

necessarily wanted, to ensure that

the organisation is staying honest

to its customers and stakeholders,

and behaving in a way that is

sustainable. Taking responsibility for

breaches of trust applies to CEOs

as we have seen in the banking and

petro-chemical world. This should

also apply to Heads of Marketing

and Brand, who are uniquely

positioned with the media budgets

at their command to ensure that

good governance practices and

suitable corporate behaviour is

taking place across their organisation

and deep into their supply chains.

It is made easier with the tools and

expertise available to help guide

these interrogations and make them

relatively simple to conduct - even

across a large organisation, its

seemingly complex supply chain and

into its customers use and disposal

of the products or services they buy

from you.

what is going on in their wider

workers overseas in far eastern

employees, as have those car

corporate drive to put out new

cars without the nuts and bolts

“It is all very well having a crisis management plan in place but by that time it is often too late and the brand damage is done. Trust in a brand takes an age to develop and moment to destroy.”



Use your detective skills to investigate worrying areasEnvironmental, Health & Safety

risks are top of many corporate

risk registers. These are a classic

method of monitoring a variety of

risk likelihoods and impact levels

within an organisation. Ownership

of these registers is often only

con� ned to compliance or company

secretariat roles though, which

do not traditionally contain the

deeper understanding of the brand

required to appropriately appraise

or score certain risks from a brand

damage perspective.

It would be wise for heads of

brands to ensure they are involved

in the development of the EH&S

risks being measured and reviewed

and also in the monitoring and

scoring process, as they may well

be able to spot an impending brand

risk sooner than other members of

the team.

At this point they need to clearly

describe the brand value at risk

resulting from the risk identi� ed, and

go and communicate this description

in writing and verbally to the

appropriate colleagues so that they

are left in no doubt about the potential

consequences if the risk materialises.

In this way wider team members

will understand more about the

brand risks associated with their

activities, the impacts that these can

have on their roles, their business

areas and the company itself should

those risks materialise, and take the

appropriate steps to mitigate against

them before they happen.

“It is no longer good enough from a governance point of view for brand guardians

to claim ignorance of what is going on in their wider business from a reputational and

environmental risk perspective.”

James joined the Carbon Trust in 2009 as a Marketing Manager to

provide expertise on data driven marketing campaigns. Since then he has

expanded his marketing role across other areas of the organisation and

into brand awareness activity alongside data driven comms.

Prior to joining the Carbon Trust, James was a Director at a Digital

and Direct marketing agency in Covent Garden. He delivered award

winning campaigns in global and London based agencies for 11 years,

across many sectors (FS, auto, travel, retail, FMCG, B2B, tech, charity)

and disciplines including Advertising, DM, Digital and Sales Promotion.

James has a BSc in Management Sciences from the LSE.

Brand police – make sure your brand is in order


BY DR TONY WATERSTON

DR TONY WATERSTON


NOT ALL BAD NEWS

AND HEALTH

Dr T.indd 32 13/6/13 17:22:27

BY DR TONY WATERSTON


NOT ALL BAD NEWS

AND HEALTH“Air pollution is already a major

menace in large cities and is the result primarily of the burning

of oil, coal and gas. Increased motor traffic and particularly

diesel fumes are high in particulates and very polluting.”

Dr T.indd 33 13/6/13 17:22:43


DR TONY WATERSTON

As a paediatrician interested in public health, I am a member of the Climate and Health Council, the UK’s leading independent

organisation of health professionals campaigning on climate change. See the website at: www.climateandhealth.org

On the website you can fi nd many articles and illustrations about the health effects of climate change.

http://www.climateandhealth.org/health_impacts.html

If you were to ask the average member of the British public about how he or she will be affected by the excessive use of fossil fuels, I suspect their health would be low on the list of answers. I would surmise that their responses from the more aware would include global warming, melting icebergs, sea level rise, reduction in car use, species extinction. Others might say, it’s not my problem, or that oil will last a long time yet. In fact health will be hugely affected, and for the better, if we can reduce our fossil fuel dependence. Health will be incrementally worse if we carry on as we are.

What are the results of excessive use of fossil fuels?This may seem an obvious question but the effects of their excessive use of

fossil fuels are multiple:

• Depletion of oil, coal, gas

• CO2 rise with consequent

climate change

• Pollution of the atmosphere in cities

• Production of waste which does not degrade

• Obesity owing to heavy use of motor vehicles

The top two effects are fi rstly

so-called ‘peak oil’, which means

that we have reached the maximum

rate of extraction and reserves are

diminishing. Secondly, climate change

owing to the greenhouse effect.

Peak oil which will be

accompanied by pressure on

reserves of all non-renewable

products including minerals and

water will lead to energy price rises

which will affect fuel and transport

costs. This will have a knock-on

effect in increasing prices of most

other services including food.

The poorest will be most affected

since a higher proportion of their

income is spent on food and they are

less able to absorb price increases.

Hence, there will be increasing

malnutrition unless renewables

quickly take over from oil as an

energy supply. For transport this

means greatly increased investment

in electric cars, buses and trains.

Air pollution is already a major

menace in large cities and is the

result primarily of the burning of oil,

coal and gas. Increased motor traffi c

and particularly diesel fumes are high

in particulates and very polluting.

This pollution increases the burden

of respiratory infections and asthma

and is a likely cause of the recent

increase in asthma in children living

in urban environments.

The production of non-degradable

waste such as plastics is also

damaging to health, particularly

plastic bags whose use is increasing

exponentially in countries which do

not regulate their use.

Obesity as a result of less active

travel is covered below.

How will healthbe affected in low income countries?Already the impact of climate

change in Asia and Africa

is considerable though little

publicised. The seminal Lancet

paper of 2009 which headlined

climate change as the greatest

global threat to health of the 21st

century is a major source of data:

http://issuu.com/climateandhealth/

docs/ucl-lancet_-_managing_the_

health_ef/1

AN

D H

EALT

HA

ND

HEA

LTH

Let me set out what these impacts are likely to be, and how we could improve our health and wellbeing through a carbon

reduction programme.

32 Dr T.indd 34 21/6/13 10:42:47


“Glacier melting in the Himalayas is

projected to increase flooding and will

affect water resources within the next two to

three decades.”

Dr T.indd 35 13/6/13 17:23:13


DR TONY WATERSTON

The health effects of climate changein low income are?

• Increasing malnutrition owing to drought and increasing costs of fertiliser

and imported food

• Increasing vector borne disease (eg malaria, trypanosomiasis) as higher

temperatures will favour insect spread

• Increased water borne diseases

• Direct impact on health of increased temperatures

• Higher ozone levels leading to respiratory involvement

• Sea level rises leading to fl ooding of low lying states

• Weather extremes affect crop growth and yield.

There will be a differentially

greater impact on the most

vulnerable in the community,

namely children, mothers and the

elderly. Also the poorest will suffer

most and hence there will be a

widening of health inequalities.

A useful reference on climate

change in Africa is: http://know.

climateofconcern.org/index.

php?option=com_content&task=a

rticle&id=105

In Asia too, we see marked

changes and the World Bank has

stated that ‘Climate change is

no longer an issue for the distant

future. Climate change is already

taking place, and the South Asian

countries, particularly the poorest

people, are most at risk.’ For

example, glacier melting in the

Himalayas is projected to increase

fl ooding and will affect water

resources within the next two to

three decades; crop yields could

decrease up to 30% in South

Asia by the mid-21st century;

mortality due to diarrhoea primarily

associated with fl oods and

droughts, will rise in South Asia.

See: http://go.worldbank.

org/0XAV4BYO60

“The impact of changing weather on agriculture and food growth leads to higher

food prices and malnutrition.”

Dr T.indd 36 13/6/13 17:24:05


It has been suggested by the

Faculty of Public Health in its

report called: ‘Sustaining a Healthy

Future’, that there is a close

connection between fossil fuels,

climate change and obesity in

that as we drive and fl y more, we

walk and cycle less. The sedentary

behaviour we see now in the rich

North and which the well off in the

South are now mimicking is one of

the main determinants of obesity,

which has now reached epidemic

status. Active travel on foot or by

bike (the ultimate green machine

with a zero carbon footprint) is likely

to lead to much lower obesity rates

which were of course, the norm in

the past. They are also benefi cial

to mental health and to community

social capital (the interaction

between people which generates

a greater sense of community spirit).

So, the health impact of the

present profl igate overuse of

carbon is already great and will

become ever more obvious in both

rich and poor countries, affecting

the most vulnerable fi rst. On the

other hand, the health benefi ts of

carbon reduction are huge. If we

can bring this case to the decision

makers, as well as to the general

public, the course for the future

becomes very clear.

How will health be affected in the UK and Europe?The health effects of climate change in high income countries are more subtle

and less easy to directly ascribe to the origin and development of humans

(anthropogenesis). A World Health Organisation report in 2008 set out the likely

effects and the need to introduce urgent protection measures. See:

http://www.euro.who.int/__data/assets/pdf_fi le/0016/74401/E91865.pdf

The health effects of climate change in Europe:

• Extreme weather events such as heat waves, hurricanes and fl ooding

• High temperatures leading to direct heat events

• Increased infectious disease vectors

• Impact of changing weather on agriculture and food growth leading to

higher food prices and malnutrition

• Increase in the frequency of respiratory diseases due to higher ground-

level ozone concentrations in urban areas.

• Changes in pollen distribution related to climate change.

So in low income countries,

climate change will massively affect

health. The impact is already being

felt and is being described by major

organisations such as the World

Bank yet the rest of the world seems

to be ignoring it.

These changes are more gradual

and insidious, and hence less easy

to ascribe to a single cause. For

example, in Newcastle last year we

had three episodes of severe fl ooding

an exceptional occurrence. However,

people complained it has not kick-

started any behavioural changes in

relation to carbon conservation, nor

to calls for action on climate change.

How can we reduce the excessive use of fossil fuels?Friends of the Earth covered some of the

issues in relation to energy companies in

the article in HHIC in 2011. The answers

are clear and the policies available and

include investment in renewable energy

and conservation measures, domestic

carbon trading, pollution charging,

promotion of sustainable transport

and measures to reduce motor traffi c.

The continued search for economic

growth rather than sustainability has

to be challenged. All that is required is

the political will and this is singularly

lacking in the present government.

What would be the health impact of such action?The Climate and Health Council

has clearly spelled out that

measures to promote low carbon

living will be hugely benefi cial to

health. The health benefi ts of low

carbon living are:

• Reduction of air pollution

leads to less respiratory

infections and asthma

• Reduction in motorised

traffi c leads to less vehicle

accidents and less pollution

• More active travel leads to

less cardiovascular disease,

less obesity and better

mental health

• Reduction in meat intake

will lead to lower carbon

emissions, less cardiovascular

disease and stroke, and less

bowel cancer.

See also http://www.bmj.com/

content/344/bmj.e1018

AND HEALTHAND HEALTH

Dr T.indd 37 13/6/13 17:25:38


2OC

It started as a chat between three friends who wondered if it would be possible to build a profitable business and to help tackle climate change. That was nearly seven years ago, but in May 2013 work finally began on 2OC’s Combined Heat and intelligent Power plant (CHiP) at Beckton in East London. Intelligent, because it makes use of heat in the adjacent gas Pressure Reduction Station (PRS) run by National Grid.

Fatbergs.indd 38 13/6/13 17:26:28

39 WWW.CENTRALHEATING.CO.UK JULY 2013

By Andrew Mercer

Fatbergs.indd 39 13/6/13 17:26:50


2OC

Image courtesy of Thames Water

Fatbergs.indd 40 13/6/13 17:27:11


Our renewable power and

heat will be fuelled by

fats/oils and greases

(FOGs) derived from restaurant

chains and food manufacturers and

scraped from the walls of London’s

109,000km of sewers. FOGs coat

sewage tunnels like cholesterol

in a blood vessel and every year

are responsible for around half

the 80,000 blockages which cost

Thames Water £1m per month to

clear. A dedicated team of ‘fl ushers’

hack and chip the hardened fats from

the walls, which then fl oat as so-

called ‘fatbergs’ down to traps and

fi lters where they can be recovered.

But where there’s muck, there’s

power and heat, - lots of it.

Thames Water has signed a

£200m Power Purchase Agreement

with 2OC to provide renewable

power and heat for the country’s

biggest sewage works and its only

desalination plant. Our CHiP plant,

using a 2-stroke marine diesel engine

will generate 135GWh of renewable

electricity. Only a 2-stroke has the

tolerances required to burn the FOGs

derived fuel. Thames will take just

over half of that power, the rest being

sold into the National Grid. Waste

heat from the engine will be used in

the sewage works, and there should

be a surplus for any local housing

scheme nearby.

What makes the 2OC platform

unique is the use of heat in the PRS.

The huge drop in pressure at the

Beckton plant requires the gas to be

pre-heated. This is currently done

by two colossal gas boilers. When

the CHiP plant becomes operational

in the fi rst quarter of 2015, waste

heat from the engine will provide the

pre-heating and a turbo-expander will

recover that renewable thermal energy

to generate even more power. 2OC

owns the IP on this application, which

gives the plant world beating overall

effi ciency in the high 90s per cent.

So, how did such a smart idea,

take so long? An initial £400m joint

venture with National Grid to roll

out 8 CHiP plants came to grief in

2010 when the looming Renewable

Energy Directive prevented energy

distributors from owning generation

assets. 2OC acquired the old joint

venture for £1, halved its workforce

and set about the task of refi nancing.

With the fi nancial crisis into its third

year and biting ever deeper and

seemingly endless tinkering with

the Renewables Obligation, this

was not the ideal time to be seeking

investment into a new project.

Thankfully, Deutsche Bank and

iCON infrastructure were both

impressed with the technology and

the team that was putting it together

and provided the debt and equity

“Thames Water has signed a £200m Power Purchase Agreement with 2OC to provide renewable power and heat for the country’s biggest sewage works and its only desalination plant.”

38 Fatbergs.indd 41 21/6/13 10:28:46

2OC

needed to get the fi rst project away.

With a blue chip customer like

Thames Water and 2OC’s inclusion

within the Renewables Obligation,

the deal that was put together in

March 2013 was the one positive bit

of investment news in a sector where

doubt and uncertainty over the

Electricity Market Reform (EMR) has

left many projects in limbo.

2OC still has licenced consent

from Ofgem to roll out its technology

on another seven PRSs. The team is

currently focused on getting Beckton

built and operational by the end of

March 2015.

But we are also looking to the future.

Will we stay in renewables, or should

we concentrate on gas? How about

fuel cells? Could we do something

in partnership with wind and help its

problems with intermittency? One

thing is for certain - future projects will

not take quite so long.

JULY 2013 HEATING & HOTWATER INDUSTRY COUNCIL42 WWW.CENTRALHEATING.CO.UK JULY 2013 43 38 Fatbergs.indd 42 21/6/13 10:45:35

The author: Andrew Mercer is CEO of 2OC Ltd, the renewable

energy company he helped to found. An accountant by profession

and entrepreneur by instinct, he sold his software company

One Meaning to Oracle in the 90’s dotcom boom. He is also

the founding Chairman of Footdown, a business leadership and

mentoring company. Here he describes how a conversation at a

Footdown meeting led to a multi-million pound deal involving a

really smart use of waste heat.

www.2oc.com

JULY 2013 HEATING & HOTWATER INDUSTRY COUNCIL42 WWW.CENTRALHEATING.CO.UK JULY 2013 43 Fatbergs.indd 43 13/6/13 17:28:10

THE RT HON EDWARD DAVEY MP | PROFESSOR MIKE BRADSHAWDR TONY WATERSTON | THE CARBON TRUST | 2OCINDUSTRY COUNCIL

HEATINGHOTWATER

01 Cover.indd 1 27/06/2013 11:00

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HHIC July 2013