by NICK ROSEN on MARCH 1, 2005 - 3 Comments in ENERGY
by Jerome Baddeley, Iskra Wind
by Jerome Baddeley, Iskra Wind
Over the last few months UK legislation on planning permission for small turbines has changed, and the selling of power back to the grid means small scale wind energy is now accessible and viable.
Until this year planning laws did not differentiate between giant wind farm scale turbines and the sort of utility scale, farm machinery type turbines most people use on their smallholdings or remote homes. Turbines were either tiny battery charging units seen on yachts or immense power generating units installed by utility companies. This made it difficult for small generators to get planning permission. In the last few months a piece of national planning policy (PPS22) has laid out the distinctions, making it harder for planners to turn down small turbine applications. We have already had several successful applications using PPS22.
The economic case for schools, communities and farmers is now incredibly attractive. With up to 50% grants available from the government Clearskies programme; valuable emissions trading certificates awarded for every unit generated; the ability to sell excess power back to the grid, it is now possible to recoup the cost of purchase and installation of a small turbine in under 5 years. With low maintenance turbines designed to last 20 years that leaves 15 years of steadily increasing income generation and savings as the cost of grid electricity climbs.
Wind power has always been a farming technology. The first windmills invented in Persia (modern day Iran and Afghanistan) in the 7th century AD were used for grinding flour and irrigation. Flour mills used to sit atop every hill in the UK. As the use of wind power has changed, technology that was used for mechanical work can now be used to generate electricity where it is needed, for farms or remote community use.
The company I work for, Iskra wind turbines, produces a 5kW turbine which sits on a tower anywhere between 12 and 25 m high and has a rotor diameter of 4.8m. Compared with a wind farm scale turbine it is a small piece of machinery.
Clearly assessing the economics is all-important when deciding whether to invest capital in an expensive piece of kit like a wind turbine.
There are 3 ways a turbine can pay for itself
1. Money saved through reducing consumption of another purchased energy source usually grid power though sometimes diesel, oil or gas.
2. Money made by selling power back to the grid.
3. Money made from the sale of tradeable certificates, which you earn from the government, because you are generating renewable power.
Money made by selling power back to the grid.
The laws governing who can generate and export back to the grid and how much they can generate have very recently been changed. It is now possible for an owner of a small turbine to purchase and run a relatively cheap export meter for small generators called a non-half hourly, NHH meter, similar to your domestic supply meter. The meter costs the turbine owner about 50 per year to operate. There are electricity companies that will buy any excess that you generate. The best price Iskra have seen is from a company called Green energy that will pay 3p per unit for the electricity in autumn and winter months when there is a high demand and also luckily lots of wind!
To export in this way a contract must be signed between the electricity company and the generator, where by the generator will buy from the supplier when they need electricity i.e. on non-windy days, and the supplier will buy from the generator when there is excess. The generator will also need to get the OK to attach to the grid from the company that maintain the grid infrastructure in their area; the district network operator or DNO. Usually the DNO will just say fine go ahead once notified.
Money from the sale of tradable certificates.
Worldwide, governments are trying to encourage a market in carbon and pollutant emissions to increase the value of renewable technologies and generation, giving financial incentives to clean generators and consumers and taxing polluters. This is all part of the attempt to meet Kyoto targets for reductions in greenhouse gasses. This good news for small generators, if you register with OFGEM as a generator you receive these certificates whether you use the power yourself or not, you can then sell them on. There are two major schemes that are relevant to turbine owners.
Renewables obligation certificates. ROCs
Power companies must produce a certain amount of their power from renewables. To prove they have done this power companies get issued ROCs for every unit they produce in this way. If power companies do not have enough ROCs at the end of the year they are penalised. As you can imagine they are quite keen to get their quota.
As a small generator, if you register with OFGEM, you can also receive ROCs. All you need to do to receive your quota is to send a photo of your meter, with the daily paper, to OFGEM each month and they will send you the certificates.
1 ROC is presented for every megawatt hour (1000 kW/units), their value fluctuates with the market demand. Visit http://www.nfpa.co.uk for the latest prices. The variation has been between 5.2p per kW/unit and 4.7p kW/unit in the last 2 years.
Levy Exemption Certificates or LECs
Companies and statutory organizations, like schools, consume a lot of power. If they buy power from renewable sources they pay less energy tax (levy) than from non-renewable sources. For every kW of power they obtain from Renewable sources they gain levy exemption certificates. Not enough certificates-more tax.
As a generator you receive certificates for every megawatt you generate these are currently trading at about 5 per mWh or 0.5p per kWh.
Making it easier
This all sounds complicated and heavy on the paperwork, and it can be. There are however brokers and agents that will do all the paperwork, monitoring and trading for you. They will take a cut obviously, but it does then leave you able to sit back and just wait for the cheques. One broker we have identified is Trade link solutions (http://www.tradelinksolutions.com), and there are others.