- Email: [email protected]
Can a successful city-wide CHP scheme be launched in the UK?
Profile Can a successful city-wide CHP scheme be launched in the UK? Combined Heat and Power (CliP) is not a new concept, even in the OK. In 1919 The Boots company was establishing its new site beside the River Trent and set up a private power station to produce both electricity and process steam. This has now been running successfully for 67 years. Other industrial undertakings in the UK also use this system. The best known pilot scheme that was undertaken on a residential basis was when the heat from Battersea Station was piped under the River Thames to a housing estate in Pimlico. This has now been discontinued with a heat-only boiler house providing the heat for the District Heating Scheme. To see CHP successfully in operation, however, we have to move outside the UK, particularly to Scandinavia. Their climate is very different from the UK with much colder winters requiring a greater degree of heating, not only in their factories and offices but also in all dwellings. They also have a very different approach to energy. In most cases the generation and the distribution of energy in its various forms is under the control of the municipality, with oil the exception. As far back as the 1920s and 1930s many of the cities were beginning to establish small local district heating schemes even in the centres of the city. These were gradually extended to cover wider and wider areas, until by the 1950s they were in a position to interconnect many of these schemes and in the 1960s and 1970s city-wide networks were being established which were connected to major CHP or cogeneration stations. Once the district heating network is laid down in a city, further benefits can immediately be reaped in that all forms of heat generation can be tapped into the network. These include waste heat from process industries in the city, heat and even power from the burning of refuse and waste material, and in more recent times the marginal energy from warm sewage by means of heat pumps and the burning of gas collected from land infill sites. None of these are likely to be viable in their own right, but once the basic
160
network is established their summation contributes greatly to the overall low cost of energy in the cities. In the UK the fundamental scene is very different. The provision of energy is carried out on a national competitive and mutually exclusive basis by the National Coal Board, the gas boards and electricity generation and distribution boards. Oil, which only meets a small part of the total heat load, is in private hands. In the UK energy sources have been abundant and relatively cheap with vast stocks of coal, and in recent years with North Sea oil and gas. The incentive to optimize energy use has not been great. However, when one looks at the efficiency of power-only generation it can be clearly seen how much energy is being squandered on a national basis. For instance, take the more efficient and modern power stations, these operated at an efficiency of around 37% which means that something like 63% of the input energy is dispersed through the chimneys or cooling towers. Because every effort is made to extract the maximum electrical efficiency from the fuel, the remaining heat that has to be dissipated is very low grade and not usable in that form for normal heating purposes. It is interesting to note that the heat discarded at say Ratcliffe Power Station is sufficient to meet the combined heating needs of the cities of Leicester, Nottingham and Loughborough.
During the big drive in the 1960s to construct public sector housing, many of the larger schemes incorporated district heating, which could well have formed the basis for expanding the network into the areas around, as in Scandinavia. However, at this time the monies available for the district heating schemes were so limited by the housing yardsticks that in many cases the schemes were skimped to the state where the scheme could not operate effectively. This was particularly true of the control systems and the metering which was either omitted or highly unreliable. In addition the technology was new to the UK arid often construction supervision was poor, particulary on the buried mains. This gave district heating in this country a very bad name. Many councils have been suffering from this problem for the last 20 years. It has also been exacerbated by poor management, ineffective maintenance and the employment of low quality and unskilled labour to operate the systems. Together these factors have resulted in there being no incentive to widen the schemes. In fact the opposite has occurred in that several schemes have been disbanded. Arising from these problems the cost of district heating has been high. So there has been no financial incentive and hence clamour from those around to have the scheme extended so that they might share in the cheaper heat facilities. Many incineration schemes have suffered in a similar way from poor management, maintenance and unskilled operation. The cost of running these schemes has been far greater than that originally anticipated and the results in many cases have been discouraging. To establish CHP on a city-wide basis in the UK, all these problems and prejudices have first to be overcome and there has to be a common consensus of industry, commerce and the populace at large that they want to have an efficient 'cheap heat' city, and are prepared to make an effort to achieve it. In 1974, the government appointed Dr W. Marshall to lead a Committee and report on the possibilities of incorporating CHP into the UK. Its main
ENERGY POLICY April 1986
Profile conclusion was that CHP/DH could make a significant contribution to meeting energy demand when North Sea oil and natural gas are in decline. As such a scheme might take 10 to 15 years to install, a start should be made as soon as possible. The Marshall Report in 1979 proposed that there should be a National Heat Board and that the planning and implementation of CHP in a lead city or cities be put in hand. The government did not accept the proposal of a National Heat Board. They believed that CHP should be instituted on a city-by-city b a s i s , n o t as a municipality-run or led operation but as a private utility, financed and operated by the private sector. They did however appoint Consultants, W. S. Atkins and Partners to look at various lead cities throughout the UK to see whether CHP/DH could be established on a commercially viable basis and if so which should receive aid for continuing study. In 1982 Atkins published their report which the government then studied and as a result selected three cities, Belfast in Northern Island, Edinburgh in Scotland and Leicester in England for further and more detailed investigation. The study was to check the viability of establishing a private utility company to generate electricity and heat and to distribute the heat throughout the city. Each city had formed a Consortium. The Consortium, whose members were prepared to commit their own resources to undertake these studies, was drawn from both the public and private sectors. In February 1985, the government announced that three cities had been selected and would be given grant support up to a maximum of £1/4 million each over the next two years in order to prepare a prospectus with a view to floating such a company.
Leicester The Leicester City Engineer had been responsible for gathering the Consortium team and he has the full support of the City Council. It is a strong team, consisting of the City Council and the County Council, both sections of the electricity supply industry,
ENERGY POLICY April 1986
CEGB, EMEB and also the National Coal Board. From the private sector there are three companies concerned with g e n e r a t i o n , G E C Research, Hawker Siddeley Power Engineering and Foster Wheeler, one construction company, John Laing Construction and two companies with operational interests, Associated Heat Services and Mainmet Holdings, whose specialist interest is metering. A full time project manager is seconded from John Laing Construction for the period of the study. The consortium is chaired by the city councillor responsible for energy in the city. There is a formal Consortium Agreement between all parties, under which each member undertakes to provide a number of man hours of work as their contribution. When-these are costed at the Consortium rates, they value approximately £50 000 per member. The project is aided by a government grant of up to a £1/4 million. This entails £1 of grant for every £2 expended.
The study The Consortium decided to split the study into three separate stages, the first stage being the data-gathering stage. During the second stage the options available would be studied, analysed, and costed, before final selection and the last stage would be the final design of the proposed scheme and then the production of the report or prospectus. In the data gathering stage, the first area was gathering commercial data. It was believed by the Consortium that in the central area of the city perhaps 80% of the heat usage would be consumed by 20% of the users and so the largest consumers were identified and 250 of these were interviewed with a questionnaire. These users included industry, commerce, the properties owned by the City Council, and the County Council (including schools, polytechnics, police stations, libraries and courts) those in the health service including hospitals, laundries and nurses residences and then the university, with its teaching blocks and halls of residence. A key part of the study was the group heat-
ing schemes on the estates already owned and run by the City Council. A survey of the domestic market would largely be carried out as a 'desk top' operation with sample surveys to follow at a later date. The questionnaires produced for the larger consumers covered three main areas. 1)
2)
3)
The attitudes of consumers towards CHP and the payback period they would require if they were to connect to the scheme. The fuels currently used and the method of heat raising and distribution. Pattern of usage on a daily and annual basis.
This information was checked, correlated and computerized to provide the input for the heat mapping for the city. Ten options for generation of heat and electricity were considered by specialists with very wide-ranging skills within the Consortium. These options fell into two main groups. One was modifying the existing power station at Ratcliffe to allow heat to be taken at a usable temperature which could then be stored and shipped by pipeline the 18 miles from Ratcliffe to Leicester. The other group made use of the old power station site still owned by the CEGB at Rawdykes Road, close to the centre of Leicester. This used to be a coal fired power station which has now been demolished. Two existing gas turbines which are used in peak periods by the CEGB, still occupy part of the site. Several different options were considered for this site, including: • •
•
•
•
building of a new full power station to CEGB standard; the modification and use of the existing gas turbines for both electricity and heat generation; the installation of new gas turbines fired by several different methods; the installation of diesel engines which could be built up in multiples as the heat load throughout the city built up; the modern techniques of pressurized fluid bed boilers;
161
Profile •
the most modern technique of coal gasification combined with
cogeneration. Incineration of waste material was also considered, but the low quantity of material available and the ease of disposal in the Leicester area have at present discounted this as a viable proposition.
The network The Consortium felt strongly that it had insufficient experience within its members for many aspects of the network and that it would be prudent to appoint a consultant to advise on such matters. They were looking for a consultant with the widest possible experience, not only in the design of the network itself, but also in the strategy of building up a network, cost optimization of the scheme and its operation. Ideally, they should also have experience over a period of time of the running and management of a city-wide CHP scheme. Thus the search was extended to Denmark, Sweden and Finland as well as the UK. Ekono Oy of Finland proved to meet all these criteria and they are now appointed and providing advice to t h e C o n s o r t i u m on N e t w o r k strategy. This includes selecting the optimum temperature and pressure at which to distribute the heat to the various users throughout the city, having particular regard to the industrial needs of Leicester. Their advice on the latest methods of stratified heat storage, pumping and water hammer throughout the system is already being appreciated. Their experience in the materials to be used for the distribution mains should save the repetition of many failures that have occurred in the past. Ekono have developed a number of software packages for use on such networks and these will be fully utilized on the project. All Scandinavian countries have employed the 'build-back' system of establishing their city-wide network. This means starting with small local systems each connected to a heat only boiler house, which are gradually expanded and finally connected to a
162
main CHP station of some type. In the UK this presents commercial problems in the early days because this local District Heating Scheme would be in direct competition with the other forms of energy in the area. The underground mains would have to be financed while still showing a return on the operation. An alternative system is to invest sufficient funds in the system very rapidly to the stage where it is practical to generate electricity as well as heat, which will provide additional income. This can be used to pay for the mains and to provide cheaper heat to the consumers to make it attractive to them to connect to the system. It is at this point that financing becomes far more critical than the technical problems.
Financing In a similar way to the appointment of technical consultants, it was considered that although certain companies within the Consortium had expertise in the financing field, a specialist f i n a n c i a l c o n s u l t a n t s h o u l d be appointed. This consultant would advise on the financing of the project, the cashflow in both the short term and long term and in the formulation of the prospectus. This would be in the form of a Memorandum of Information which would be used to stimulate interest from prospective financiers in raising finance for the project. Four merchant banks were approached, from whom Lloyds Merchant Bank was finally selected as the financial advisor. Costing for various activities including the capital costs for the generation plant and the operating costs for all aspects of the system will all be built up by the members of the Consortium from their experience in these fields. However, in assessing the cashflow for each year there are a number of substantial unknown factors on which a view has to be taken. The first involves the government's attitude towards CHP. To this end a coordination group drawn from the three cities being granted aid, together with Sheffield, Newcastle and London, meet to discuss items of joint interest. These items include: the legis-
lation required for establishing private CHP companies; the organization and operation of a CHP company; the rating of mains and plant; the standards of buried mains; and the tariffs for the sale of heat and electricity. Take the rating of mains as an example, at present the basis of rate assessment for private CHP mains is different from that for private electrical or gas mains and is very much to the disadvantage of any CHP company. The government has undertaken to look at this, but until the matter is resolved it presents a considerable financial burden to any prospective company. Outside the areas of joint discussion lie the wider factors affected by the government's attitude towards CHP. Will the benefits of CHP on the overall national energy consumption or the social or environmental benefits of CHP incline the government towards grants in some form? Such grants would be similar to the grants made by the Department of Energy for insulation or for conversion to coal. Perhaps the most indeterminate of all unknown factors is the cost of fuels in the years ahead. Projections only a few years ago showed the cost of oil rising very rapidly until the turn of the century. This has not happened and for the last few years oil in real terms has been virtually stationary. It seems likely, however, that both oil and gas will rise substantially over the next two or three decades. In the long term, however, CHP could be a very good investment, particularly one based on coal. In Leicestershire the new coal field in the Vale of Belvoir should be coming on stream at the time when CHP should be developing in the city. With modern equipment and production methods very economical coal should be provided readily to the city. It is the cost of this fuel that is most likely to reduce in real terms over the next few years. It is with these factors in mind that the CHP company may require financial assistance in the early days. This assistance might come in a number of forms, including government grants, CEGB involvement in some of the
ENERGY POLICY April 1986
Profile capital items and discounted loans at economical rates from perhaps European funds. In the longer term, once the original network is installed and paid for, it should be possible to extend the network to more marginal premises and still provide energy at prices competitive with all other sources.
The utility company The composition and responsibilities of new private utility companies still have to be determined. The most similar precedent that can be quoted is that of the private water companies which existed until quite recently. It is likely that government legislation will be required to establish such companies defining both the rights and obligations of the company. Rights to carry out such work as excavating the highway, rights of compulsory purchase, rights of access, and obligations covering the whole field of consumer protection.
year later and the earliest realistic time for any consumers to be connected to the new heat sources would be 1989-90. What really is the prospect of CHP in Leicester? There is a very good possibility that this Consortium will show that a commercially viable Combined Heat and Power Company could be established in Leicester. The reality depends on enthusiasm of the people of Leicester and the will of the government to see it go ahead.
In order to give credibility to the Prospectus, the major potential heat users in the city will be approached to give their backing to a tentative agreement setting out the most likely form of the company, the tariff charges and conditions. The methods of metering are also being considered. These include the fairly sophisticated metering of the larger users and also the metering at domestic level. This could be on a pre-payment basis if required. Phase 1 of the study is now virtually complete; it is hoped to complete the second phase by Spring 1986 and to produce the Prospectus during the Summer. Following the publication of the Prospectus, discussions would have to take place with the banks and funding institutions as well as with the government. This stage is likely to take a considerable number of months, if not a year, so it is unlikely that serious design work could commence until Summer 1987. Contracts could be let a
lan Jarvis Leicester Combined Heat and Power Consortium Leicester, UK
The views expressed in this paper are those of the author and do not necessarily represent those of all the Consortium members.
Marine and Petroleum Geology published jointly by Butterworthsand the Geological Society The last fifteen years has seen a radical expansion in petroleum exploration activity throughout the world, paralleled by substantial and allied growth in marine geological and geophysical research. Successful petroleum exploration now requires full integration and application of many diverse techniques and concepts arising from subdisciplines within geology, geophysics and geochemistry. Innovative theoretical models of basin evolution and studies of modern environments can have equally relevant and important applications. The scope of MARINE AND PETROLEUM GEOLOGY is comprehensive and includes original papers on marine geology, petroleum geology, geophysics and geochemistry.
MARINE AND PETROLEUM GEOLOGY provides an international forum for the exchange of multidisciplinary concepts and techniques of direct relevance to all concerned with marine and petroleum geology. It is ESSENTIAL READING for geologists, geophysicists and explorationists in industry, government and academia working in the following fields: • • a •
Marine geology Sedimentary geology Basin analysis and evolution Continental margins
• • • •
Organic geochemistry Physical properties of sediments Reserve/resource estimation Geophysical interpretation
Editor-in-Chief Dr. D.G. Roberts, British Petroleum, London, UK
• • • • •
Seismic stratigraphy Structural geology/tectonics Thermal models of basin evolution Formation evaluation techniques Well logging
US Regional Editor Dr. D Scholl, US Geological Survey, California, USA
For further details and a sample copy please contact:Mrs. Sheila King, Butterworth Scientific Ltd, PO Box 63, Westbury House, Bury Street, Guildford, Surrey GU2 5BH, UK Telephone: 0483 31261.
ENERGY
POLICY
April 1986
163
160
network is established their summation contributes greatly to the overall low cost of energy in the cities. In the UK the fundamental scene is very different. The provision of energy is carried out on a national competitive and mutually exclusive basis by the National Coal Board, the gas boards and electricity generation and distribution boards. Oil, which only meets a small part of the total heat load, is in private hands. In the UK energy sources have been abundant and relatively cheap with vast stocks of coal, and in recent years with North Sea oil and gas. The incentive to optimize energy use has not been great. However, when one looks at the efficiency of power-only generation it can be clearly seen how much energy is being squandered on a national basis. For instance, take the more efficient and modern power stations, these operated at an efficiency of around 37% which means that something like 63% of the input energy is dispersed through the chimneys or cooling towers. Because every effort is made to extract the maximum electrical efficiency from the fuel, the remaining heat that has to be dissipated is very low grade and not usable in that form for normal heating purposes. It is interesting to note that the heat discarded at say Ratcliffe Power Station is sufficient to meet the combined heating needs of the cities of Leicester, Nottingham and Loughborough.
During the big drive in the 1960s to construct public sector housing, many of the larger schemes incorporated district heating, which could well have formed the basis for expanding the network into the areas around, as in Scandinavia. However, at this time the monies available for the district heating schemes were so limited by the housing yardsticks that in many cases the schemes were skimped to the state where the scheme could not operate effectively. This was particularly true of the control systems and the metering which was either omitted or highly unreliable. In addition the technology was new to the UK arid often construction supervision was poor, particulary on the buried mains. This gave district heating in this country a very bad name. Many councils have been suffering from this problem for the last 20 years. It has also been exacerbated by poor management, ineffective maintenance and the employment of low quality and unskilled labour to operate the systems. Together these factors have resulted in there being no incentive to widen the schemes. In fact the opposite has occurred in that several schemes have been disbanded. Arising from these problems the cost of district heating has been high. So there has been no financial incentive and hence clamour from those around to have the scheme extended so that they might share in the cheaper heat facilities. Many incineration schemes have suffered in a similar way from poor management, maintenance and unskilled operation. The cost of running these schemes has been far greater than that originally anticipated and the results in many cases have been discouraging. To establish CHP on a city-wide basis in the UK, all these problems and prejudices have first to be overcome and there has to be a common consensus of industry, commerce and the populace at large that they want to have an efficient 'cheap heat' city, and are prepared to make an effort to achieve it. In 1974, the government appointed Dr W. Marshall to lead a Committee and report on the possibilities of incorporating CHP into the UK. Its main
ENERGY POLICY April 1986
Profile conclusion was that CHP/DH could make a significant contribution to meeting energy demand when North Sea oil and natural gas are in decline. As such a scheme might take 10 to 15 years to install, a start should be made as soon as possible. The Marshall Report in 1979 proposed that there should be a National Heat Board and that the planning and implementation of CHP in a lead city or cities be put in hand. The government did not accept the proposal of a National Heat Board. They believed that CHP should be instituted on a city-by-city b a s i s , n o t as a municipality-run or led operation but as a private utility, financed and operated by the private sector. They did however appoint Consultants, W. S. Atkins and Partners to look at various lead cities throughout the UK to see whether CHP/DH could be established on a commercially viable basis and if so which should receive aid for continuing study. In 1982 Atkins published their report which the government then studied and as a result selected three cities, Belfast in Northern Island, Edinburgh in Scotland and Leicester in England for further and more detailed investigation. The study was to check the viability of establishing a private utility company to generate electricity and heat and to distribute the heat throughout the city. Each city had formed a Consortium. The Consortium, whose members were prepared to commit their own resources to undertake these studies, was drawn from both the public and private sectors. In February 1985, the government announced that three cities had been selected and would be given grant support up to a maximum of £1/4 million each over the next two years in order to prepare a prospectus with a view to floating such a company.
Leicester The Leicester City Engineer had been responsible for gathering the Consortium team and he has the full support of the City Council. It is a strong team, consisting of the City Council and the County Council, both sections of the electricity supply industry,
ENERGY POLICY April 1986
CEGB, EMEB and also the National Coal Board. From the private sector there are three companies concerned with g e n e r a t i o n , G E C Research, Hawker Siddeley Power Engineering and Foster Wheeler, one construction company, John Laing Construction and two companies with operational interests, Associated Heat Services and Mainmet Holdings, whose specialist interest is metering. A full time project manager is seconded from John Laing Construction for the period of the study. The consortium is chaired by the city councillor responsible for energy in the city. There is a formal Consortium Agreement between all parties, under which each member undertakes to provide a number of man hours of work as their contribution. When-these are costed at the Consortium rates, they value approximately £50 000 per member. The project is aided by a government grant of up to a £1/4 million. This entails £1 of grant for every £2 expended.
The study The Consortium decided to split the study into three separate stages, the first stage being the data-gathering stage. During the second stage the options available would be studied, analysed, and costed, before final selection and the last stage would be the final design of the proposed scheme and then the production of the report or prospectus. In the data gathering stage, the first area was gathering commercial data. It was believed by the Consortium that in the central area of the city perhaps 80% of the heat usage would be consumed by 20% of the users and so the largest consumers were identified and 250 of these were interviewed with a questionnaire. These users included industry, commerce, the properties owned by the City Council, and the County Council (including schools, polytechnics, police stations, libraries and courts) those in the health service including hospitals, laundries and nurses residences and then the university, with its teaching blocks and halls of residence. A key part of the study was the group heat-
ing schemes on the estates already owned and run by the City Council. A survey of the domestic market would largely be carried out as a 'desk top' operation with sample surveys to follow at a later date. The questionnaires produced for the larger consumers covered three main areas. 1)
2)
3)
The attitudes of consumers towards CHP and the payback period they would require if they were to connect to the scheme. The fuels currently used and the method of heat raising and distribution. Pattern of usage on a daily and annual basis.
This information was checked, correlated and computerized to provide the input for the heat mapping for the city. Ten options for generation of heat and electricity were considered by specialists with very wide-ranging skills within the Consortium. These options fell into two main groups. One was modifying the existing power station at Ratcliffe to allow heat to be taken at a usable temperature which could then be stored and shipped by pipeline the 18 miles from Ratcliffe to Leicester. The other group made use of the old power station site still owned by the CEGB at Rawdykes Road, close to the centre of Leicester. This used to be a coal fired power station which has now been demolished. Two existing gas turbines which are used in peak periods by the CEGB, still occupy part of the site. Several different options were considered for this site, including: • •
•
•
•
building of a new full power station to CEGB standard; the modification and use of the existing gas turbines for both electricity and heat generation; the installation of new gas turbines fired by several different methods; the installation of diesel engines which could be built up in multiples as the heat load throughout the city built up; the modern techniques of pressurized fluid bed boilers;
161
Profile •
the most modern technique of coal gasification combined with
cogeneration. Incineration of waste material was also considered, but the low quantity of material available and the ease of disposal in the Leicester area have at present discounted this as a viable proposition.
The network The Consortium felt strongly that it had insufficient experience within its members for many aspects of the network and that it would be prudent to appoint a consultant to advise on such matters. They were looking for a consultant with the widest possible experience, not only in the design of the network itself, but also in the strategy of building up a network, cost optimization of the scheme and its operation. Ideally, they should also have experience over a period of time of the running and management of a city-wide CHP scheme. Thus the search was extended to Denmark, Sweden and Finland as well as the UK. Ekono Oy of Finland proved to meet all these criteria and they are now appointed and providing advice to t h e C o n s o r t i u m on N e t w o r k strategy. This includes selecting the optimum temperature and pressure at which to distribute the heat to the various users throughout the city, having particular regard to the industrial needs of Leicester. Their advice on the latest methods of stratified heat storage, pumping and water hammer throughout the system is already being appreciated. Their experience in the materials to be used for the distribution mains should save the repetition of many failures that have occurred in the past. Ekono have developed a number of software packages for use on such networks and these will be fully utilized on the project. All Scandinavian countries have employed the 'build-back' system of establishing their city-wide network. This means starting with small local systems each connected to a heat only boiler house, which are gradually expanded and finally connected to a
162
main CHP station of some type. In the UK this presents commercial problems in the early days because this local District Heating Scheme would be in direct competition with the other forms of energy in the area. The underground mains would have to be financed while still showing a return on the operation. An alternative system is to invest sufficient funds in the system very rapidly to the stage where it is practical to generate electricity as well as heat, which will provide additional income. This can be used to pay for the mains and to provide cheaper heat to the consumers to make it attractive to them to connect to the system. It is at this point that financing becomes far more critical than the technical problems.
Financing In a similar way to the appointment of technical consultants, it was considered that although certain companies within the Consortium had expertise in the financing field, a specialist f i n a n c i a l c o n s u l t a n t s h o u l d be appointed. This consultant would advise on the financing of the project, the cashflow in both the short term and long term and in the formulation of the prospectus. This would be in the form of a Memorandum of Information which would be used to stimulate interest from prospective financiers in raising finance for the project. Four merchant banks were approached, from whom Lloyds Merchant Bank was finally selected as the financial advisor. Costing for various activities including the capital costs for the generation plant and the operating costs for all aspects of the system will all be built up by the members of the Consortium from their experience in these fields. However, in assessing the cashflow for each year there are a number of substantial unknown factors on which a view has to be taken. The first involves the government's attitude towards CHP. To this end a coordination group drawn from the three cities being granted aid, together with Sheffield, Newcastle and London, meet to discuss items of joint interest. These items include: the legis-
lation required for establishing private CHP companies; the organization and operation of a CHP company; the rating of mains and plant; the standards of buried mains; and the tariffs for the sale of heat and electricity. Take the rating of mains as an example, at present the basis of rate assessment for private CHP mains is different from that for private electrical or gas mains and is very much to the disadvantage of any CHP company. The government has undertaken to look at this, but until the matter is resolved it presents a considerable financial burden to any prospective company. Outside the areas of joint discussion lie the wider factors affected by the government's attitude towards CHP. Will the benefits of CHP on the overall national energy consumption or the social or environmental benefits of CHP incline the government towards grants in some form? Such grants would be similar to the grants made by the Department of Energy for insulation or for conversion to coal. Perhaps the most indeterminate of all unknown factors is the cost of fuels in the years ahead. Projections only a few years ago showed the cost of oil rising very rapidly until the turn of the century. This has not happened and for the last few years oil in real terms has been virtually stationary. It seems likely, however, that both oil and gas will rise substantially over the next two or three decades. In the long term, however, CHP could be a very good investment, particularly one based on coal. In Leicestershire the new coal field in the Vale of Belvoir should be coming on stream at the time when CHP should be developing in the city. With modern equipment and production methods very economical coal should be provided readily to the city. It is the cost of this fuel that is most likely to reduce in real terms over the next few years. It is with these factors in mind that the CHP company may require financial assistance in the early days. This assistance might come in a number of forms, including government grants, CEGB involvement in some of the
ENERGY POLICY April 1986
Profile capital items and discounted loans at economical rates from perhaps European funds. In the longer term, once the original network is installed and paid for, it should be possible to extend the network to more marginal premises and still provide energy at prices competitive with all other sources.
The utility company The composition and responsibilities of new private utility companies still have to be determined. The most similar precedent that can be quoted is that of the private water companies which existed until quite recently. It is likely that government legislation will be required to establish such companies defining both the rights and obligations of the company. Rights to carry out such work as excavating the highway, rights of compulsory purchase, rights of access, and obligations covering the whole field of consumer protection.
year later and the earliest realistic time for any consumers to be connected to the new heat sources would be 1989-90. What really is the prospect of CHP in Leicester? There is a very good possibility that this Consortium will show that a commercially viable Combined Heat and Power Company could be established in Leicester. The reality depends on enthusiasm of the people of Leicester and the will of the government to see it go ahead.
In order to give credibility to the Prospectus, the major potential heat users in the city will be approached to give their backing to a tentative agreement setting out the most likely form of the company, the tariff charges and conditions. The methods of metering are also being considered. These include the fairly sophisticated metering of the larger users and also the metering at domestic level. This could be on a pre-payment basis if required. Phase 1 of the study is now virtually complete; it is hoped to complete the second phase by Spring 1986 and to produce the Prospectus during the Summer. Following the publication of the Prospectus, discussions would have to take place with the banks and funding institutions as well as with the government. This stage is likely to take a considerable number of months, if not a year, so it is unlikely that serious design work could commence until Summer 1987. Contracts could be let a
lan Jarvis Leicester Combined Heat and Power Consortium Leicester, UK
The views expressed in this paper are those of the author and do not necessarily represent those of all the Consortium members.
Marine and Petroleum Geology published jointly by Butterworthsand the Geological Society The last fifteen years has seen a radical expansion in petroleum exploration activity throughout the world, paralleled by substantial and allied growth in marine geological and geophysical research. Successful petroleum exploration now requires full integration and application of many diverse techniques and concepts arising from subdisciplines within geology, geophysics and geochemistry. Innovative theoretical models of basin evolution and studies of modern environments can have equally relevant and important applications. The scope of MARINE AND PETROLEUM GEOLOGY is comprehensive and includes original papers on marine geology, petroleum geology, geophysics and geochemistry.
MARINE AND PETROLEUM GEOLOGY provides an international forum for the exchange of multidisciplinary concepts and techniques of direct relevance to all concerned with marine and petroleum geology. It is ESSENTIAL READING for geologists, geophysicists and explorationists in industry, government and academia working in the following fields: • • a •
Marine geology Sedimentary geology Basin analysis and evolution Continental margins
• • • •
Organic geochemistry Physical properties of sediments Reserve/resource estimation Geophysical interpretation
Editor-in-Chief Dr. D.G. Roberts, British Petroleum, London, UK
• • • • •
Seismic stratigraphy Structural geology/tectonics Thermal models of basin evolution Formation evaluation techniques Well logging
US Regional Editor Dr. D Scholl, US Geological Survey, California, USA
For further details and a sample copy please contact:Mrs. Sheila King, Butterworth Scientific Ltd, PO Box 63, Westbury House, Bury Street, Guildford, Surrey GU2 5BH, UK Telephone: 0483 31261.
ENERGY
POLICY
April 1986
163