ENERGY WHITE PAPER: Keeping the lights on in the cheapest, cleanest way

As the electricity supply industry changes from burning fossil fuels to new low carbon generation, there is a great opportunity to utilize combined heat and power, which is the cleanest, most efficient form of energy generation. The White Paper recommends investment in renewable energy, mainly large wind farms, nuclear power and fossil fuels with carbon capture and storage. It does not claim that its proposals will ensure that electricity will be generated efficiently, but only that it will be cheaper and cleaner. Much of the electricity industry is wasteful and inefficient, but the most polluting capacity will be phased out during the coming decade. The White Paper states that in past decades electricity has been inexpensive, but we have now used up much of our cheap, irreplaceable fossil fuels and will have to buy more on the global markets. It has also left a legacy for the future of £billions to cover the costs of nuclear waste disposal and an untold sum for the future costs of climate change.

The electricity industry has achieved good reliability and freedom from blackouts and the White Paper makes useful proposals for ensuring that this continues in the future. There is however, little support for distributed generation, although the White Paper accepts that combined heat and power (CHP) is more efficient and further consideration is being given to this. Our present electricity generating system is only about 35% to 40% efficient because the heat is not utilized and there are losses during transmission from central power stations. For comparison, combined heat and power systems achieve in the region of 85% efficiency, with fuel cells generating a high ratio of valuable electricity.

Fair terms for competitors?

The White Paper aims to provide a liquid market for investors, which will enable both existing energy companies and new entrants to have access to the investment they require. However, Government policies discriminate against fuel cell combined heat and power, which is the most efficient technology, as systems over 2kW do not qualify for Feed in Tariffs (FITs). Fuel cells are already providing electricity, heat and cooling in hospitals, schools, supermarkets, office buildings and at wastewater treatment facilities, but their wider implementation has been held back by competition from cheap fossil fuels which are not covering their external costs and have an established infrastructure. Fuel cells could become competitive if they received the same support as other technologies while they are being fully developed and economies of scale achieved. The new Green Deal should encourage solutions which save both electricity and heat.

Major changes to the electricity grid

During the coming decade, about a quarter of the installed electricity generating plant, in the region of 20GW, will have to be replaced and the electricity system will contain more generation from intermittent renewables, as well as inflexible base load generation with nuclear power. The UK has a legal obligation to obtain 15% of all our energy from renewable sources by 2020 and the Climate Change Committee has advised that the electricity generating sector should be largely decarbonized by the 2030s. Fuel cells can be the most efficient and cost effective means of reducing greenhouse gases and commercial production is already starting in the USA, South Korea and Germany.

Load balancing and storage.

Energy storage will help to smooth out the supply from intermittent renewables. This will allow electricity from the sun to be used for lighting homes in the evening and for large quantities of energy from wind farms to be stored for use in CHP systems or to power transport. According to a report by the Bow Group, local hydrogen storage will have the following benefits:

  • improved efficiency as supply matches demand
  • the need for fossil fuel back-up is removed
  • lower carbon emissions
  • less investment in infrastructure costs
  • reduced stress to the system as ramping up and down is minimized
  • grid stability and continued freedom from blackouts
  • community, business and individual self-sufficiency.

However, further technical improvements and cost reductions are necessary to make wind power with hydrogen storage competitive with diesel generators. It is recommended that there should be a renewable energy storage incentive (RESI) to build up a distributed renewable system which generates, stores and utilizes green energy at the point of use.

OFGEM estimated that up to £450 million per annum could be required to balance the electricity load from intermittent renewable energy, including the use of stand by fossil fuel power stations. Fuel cells will not incur these additional costs as they can be easily ramped up and down and they can operate 24/7. Electric vehicles, both battery and fuel cell powered, will provide an important means of storing electricity at times of low demand.

Energy Security

Energy security is equally important. The Government is arranging for an assessment to be made every year to ensure that sufficient generating capacity is installed to meet future requirements and avoid blackouts at times of peak demand. Fuel cells could contribute to energy security as they can be powered by a variety of fuels including: biofuels from waste; hydrogen obtained via the electrolysis of water when there is surplus wind, solar or marine energy; off peak nuclear power; and fossil fuels with carbon capture and storage. Highly efficient fuel cell CHP systems will help to conserve depleting resources of natural gas.

An important source of renewable energy to power fuel cells is the tremendous energy store locked up in existing landfill sites. The clearing, reclamation and restoration of the older sites could deliver massive benefits by recovering and recycling metals and converting all the plastics and other organic material into useful end products. This would be a high value energy exporting, profit making cleanup programme, providing millions of tons of usable energy on our doorsteps. Converting this energy has massive benefits, by producing green energy locally, reducing traffic to traditional generators, restoring and reclaiming land, removing potential pollutants, creating employment and avoiding investment in polluting technologies. Fuel cells can be powered by biogas obtained from the organic waste.

Renewable methane may also in future be obtained from sustainable sources, by extracting C02 from the atmosphere, alongside large scale concentrating solar power or wind farms, which could produce hydrogen when electricity demand is low. This process would help to stabilize C02 in the atmosphere and would provide sustainable fuel for efficient high temperature fuel cell CHP systems. The fuel cells would continue to utilize the existing natural gas infrastructure, thereby involving less investment in the new hydrogen infrastructure.

Innovative SMEs need funding to develop and bring new products to market. At a recent public meeting in London, Prof John Loughhead, Executive Director of the UK Energy Research Council (UKERC) likened fuel cells to electric light technology, which took decades to reach the market due to the strong lobbies for existing gas lighting. “Waves of electric light manufacturers were bankrupted until the gas light companies could no longer compete and people became accustomed to electricity”, he said. In the age of globalization it is even more difficult, as potentially helpful bankers have to refer decisions to central computers which still do not take into account external costs. At a recent public meeting the representative from the Energy Technology Institute, which receives £500m of taxpayers’ money, dismissed fuel cells as being too expensive. This is misleading, as it applies to any technology under development which is starting low volume production. In fact the main objective of scientists and engineers is to reduce costs by developing materials and techniques to improve the logistics for volume production.

The public wants a choice of clean, efficient technologies, rather than having decisions made for them by central government and global corporations. Fuel cells could be introduced alongside innovative micro wind energy technologies which operate in variable wind speeds in urban areas, as well as photovoltaic systems. Businesses and communities could use their waste to generate electricity on site. Once small scale production is underway, manufacturing could increase at exponential rates. The Government’s proposals for micro-generators are of little assistance to innovative SMEs, as they are directed at helping system installers and fail to address the lack of finance for product development.

Future energy

In the future, electricity and heat will increasingly be generated on site by highly efficient fuel cells. There will not be separate fuel sources for electricity, heat and transport, but more electricity and heat will be generated on site, with electric vehicles acting as load levellers. For instance, in a future Europe where vehicles are powered by electricity, if 25% of drivers used their electric vehicles as power plants to sell energy back to the inter-grid, all the major power plants in Europe could be eliminated. The Government’s Renewables Roadmap generally supports the global energy industries, which do not want to make substantial changes from the present inefficient central generation of electricity. This arrangement also gives them a separate market for heat.

The age of dirty and inefficient combustion will be over, when electrochemical energy conversion enables clean, efficient production of electricity and heat. Energy will be stored as hydrogen, just as digital is now the universal data storage. Many scientists and engineers realize that, in the words of Jeremy Rifkin, the same design principles and smart technologies that created the internet and the vast distributed global communications networks are beginning to be used to reconfigure the world’s power grids. This will mean that people can produce renewable energy and share it, just as they now produce and share information, creating a new decentralized form of renewable energy use. Combined heat and power generation, alongside efficient renewable technologies, will enable businesses, communities and individuals to ensure their own future security of supply. This will enable them to choose the cleanest energy, which will also be the cheapest, not just for them, but for future generations.

Jean Aldous,
Fuel Cell Power,
July 2011

Appendices:
I Government Policies
II Related Technologies
III Global Warming Gases


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