On site Generation
This section of the toolkit outlines some of the technologies that could be used by your business to reduce your reliance on the National Electricity Grid.
Please note, in most cases you should follow the steps outlined in the ‘Energy Efficiency’ section of this toolkit to minimise your business’ energy demand before investigating on-site generation. Not only does energy efficiency have a better payback time for most measures, but it will also change how much on-site generation you require. For example, if you install solar based on your current consumption, then upgrade your lights to LEDs, you are likely to find that you do not use as much of the solar generation as expected, reducing your return on investment.
Solar PV
How Does It Work
Solar Photovoltaic panels convert light into electricity by utilising the photoelectric effect. Photons (packets of light) hit the solar panel, releasing electrons. The solar panel uses these free electrons to create an electric current.
Is Solar Suitable for My Business?
All businesses require electricity, so if your business has power demand during the daytime then solar could be considered. The size of your array can be scaled up or down depending on how much power you require (as well as when you require it). Other considerations are how many days per week your business is open, and how much power it requires outside of business hours.
Pubs, restaurants and any businesses which are open every day of the week will always have demand, but hairdressers and offices may only be open 4 or 5 days per week. If your business only has a small amount of residual demand when the premises is shut, then any solar generation on these days will be exported to the grid, saving your business less money. This shouldn’t discourage hairdressers or offices though, as solar can still be viable for them too.
Some businesses don’t need to consider opening hours, as they use a lot of power even when they aren’t open – if you have lots of fridges and freezers for example, or perhaps your business runs lots of computer servers.
Is my Roof Suitable?
If your premises has a roof that is in good condition and is not shaded by nearby trees or buildings then solar might be viable.The ideal roof faces perfectly South, but if your roof faces East or West solar can still work for your business. A solar array on a West facing roof will not generate as much electricity overall, but it could generate more electricity in the afternoon, which may be better depending on when your business has the greatest power demand.
The ideal roof in South Tyneside will also have a pitch of around 400. Solar can be installed on a flat roof or even a wall on the side of your building. A flat roof (with a pitch of 00) generates the most in the summer and little in the winter, whereas a solar array affixed to a wall (with a pitch of 900) will have relatively even generation across the year.
Nearby trees and buildings can be a problem as they might cause shading, which reduces the light reaching your roof, and therefore the maximum generation possible from a solar array. Even if nearby trees are currently small, in a decade or so they could start to impact generation.
How Much Electricity Would Solar Generate?
Solar arrays will generate varying amounts of electricity depending on the factors described above: orientation from South, pitch, shading, and of course how large your system is. As a rough rule of thumb, each kW (kilo-Watt) of solar you install in the North East should generate 800kWh-1000kWh. An example is outlined in the tables below, with a graph further down to illustrate seasonal variability.
Example Roof and Solar Array
| Pitch | Orientation | Roof Area |
|---|---|---|
| 400 | 100 | 50m2 |
| System size | Projected Generation | Year to Year Variability | Estimated cost of install |
|---|---|---|---|
| 10kW | 9500kWh/yr | 330kWh/yr | £12 000 |
So How Large Should My Solar Array Be?
When sizing a solar array your goal is to maximise the amount of generation that is used on-site by your business, instead of exporting to the grid. Each kWh your business uses saves you 30p, while exporting this kWh is worth less (depending on your export tariff, see below). To do this, your electricity consumption during the daytime in the summer needs to roughly match the generation from your array.
In the example above, the most fruitful month is projected to be May, with a projected generation of just over 1200kWh. While most businesses tend to use more energy in the winter (as the heating and lighting is used more, as well as hot drinks, etc) the difference doesn’t tend to be huge. Therefore, this 10kW system might be suitable for a business using 12 000 – 16 000kWh/yr. This is only a very rough estimate though. A solar contractor will be able to advise you in this aspect of solar design, depending on what your business requires.
For buildings with a 3-phase electricity supply, solar installations larger than 12kW require permission from the local gird operator – Northern Powergrid – who will need to establish if the local grid connections are robust enough to handle your excess generation. If the local network cannot handle this export, upgrades can be made to the substations. 3-phase electricity supplies tend to only be used by larger businesses.
When deciding on your system size, you also need to consider what the future consumption of the building might be. Future upgrades might include some form of electric heating and electric vehicle charging points. Both would increase your demand, so if you plan on installing either of these technologies it will be worth discussing this with your contractor when gathering quotes.
How Much Will Solar Cost?
Solar costs around £1200 per kW. Therefore, the example system shown above would be expected cost £12 000. However, this figure is expected to reduce for larger system, so a 100kW array would be expected to cost less than £120 000. More information on the cost of installing a solar PV array can be found at: www.gov.uk/government/statistics/solar-pv-cost-data
How Long Does Solar Take to Pay for Itself?
The answer to this question depends on the following factors:
- How much your business pays for each kW of electricity.
- How much your business is paid for each kWh of electricity it exports.
- How much of the generation is used by your business (instead of being exported).
- How quickly your solar array degrades.
- How quickly the cost of electricity rises.
The Cost of a kWh
For many businesses, a flat rate is paid for each kWh – perhaps 30p. However, this can sometimes be cheaper overnight, and at the weekend. You should pay attention to this when calculating returns as if you have cheaper electricity at the weekend then you’ll be making less of a saving compared to week-days.
For larger businesses, the true cost of a kWh is often broken down into a series of smaller costs. A base rate is paid usually paid, with additional levies on top of this such as the Climate Change Levy, and DUoS charges (which add different amounts to each kWh depending on what time of day that electricity is used).
Make sure you understand your bills and how much you are paying when installing solar so the correct expected returns can be calculated.
Smart Export Guarantee (SEG)
Generation you do not use will be exported to the grid. Most suppliers offer an export tariff and you can choose a different supplier to your current electric and gas supplier too. Current SEG tariffs vary from 2p/kWh to 15p/kWh.
Further Information, provided by Ofgem and The Energy Saving Trust, can be found by clicking the links below:
https://www.ofgem.gov.uk/environmental-and-social-schemes/smart-export-guarantee-seg
https://energysavingtrust.org.uk/advice/smart-export-guarantee/
Self-Consumption
This is how much of the electricity generated by your solar array is used on site by your business as a percentage of the total.
Smaller systems (less than 30kW) are not typically fitted with monitors to measure how much you use and how much you export, so it is assumed they use 50% of generation. If you are considering solar, a two-way smart meter could be installed so you can be billed correctly.
System Lifespan
Your solar panels will degrade over time, turning less light into electricity. However, after 25 years your panels should still provide you with 80% of the power they did when they were new. Many manufacturers will give you guarantees on the longevity of their panels, with some offering you a warranty for the panels losing less than 10% efficiency over their 25 year lifespan.
Your inverter connects the system to your electricity supply, transforming DC current generated by the panels into AC current which can be used in your business. Typically, inverters need to be replaced after 10 years and will cost between £1000 and £3000 to buy and install a new one. You should factor this in when considering your overall return on investment.
System Lifespan
| Panels | Inverter | Mounting Frame |
|---|---|---|
| 25 years + | 8 – 12 years | 25 years + |
The Future Cost of Electricity
The cost of electricity is always predicted to rise but the question is: by how much? If the average increase across the market each year is 7%, then your bills will double every 10 years on average. If you use this assumption when investigating future costs, it can make your total returns after 25 years look enormous. However, you should be sceptical of any projection that far into the future. Always ask your solar contractor to justify this assumption.
A more conservative estimate should be used for your own predictions: 4%. The difference between these two figures is illustrated below.
Maintenance
Solar arrays have no moving parts and a lifespan of 25 years, during which they are unlikely to require much maintenance. Many solar panels having a built-in coating which resists dust and dirt to maximise efficiency. However, bird poo can be an issue and you should try to keep the panels free from this as much as possible, as it will not be affected by the dirt resistant coating and can cause damage to the panels.
Netting
A common issue with having a solar array on your roof is that birds will try to nest in it. As described above, you will want to keep birds away as their poo can reduce generation and even damage the panels. A simple solution is to affix netting to the outside of the panels, which should prevent any birds from nesting. This is recommended for any business installing solar in South Tyneside.
Wind Turbines
How Does It Work?
Kinetic energy is extracted from the wind and used to turn a turbine which generates electricity.
Is Wind Suitable for my Business?
Statistically, this is highly unlikely. As described below, South Tyneside does have excellent potential to extract energy from the wind to generate clean, cheap, renewable electricity. However, there are specific conditions needed to install a wind turbine which will work effectively. These conditions will not be met by the majority of businesses in the borough.
What Conditions are Needed For an effective Wind Turbine?
Firstly, and most importantly, the wind resource must exist – it must be a windy site. The map below is taken from a wind speed database generated using the topography of the land. This means it is only a rough indicator of the viability of wind turbines, as there are other factors to consider below. However, a minimum wind speed of 5m/s is required for wind turbines to work. 6m/s is good, and anything above is excellent. As the map below (showing the expected wind speeds at a height of 25m) indicates, there is potential for wind energy to be utilised in some areas of South Tyneside. You can explore the predicted wind speeds in South Tyneside and beyond by following this link: https://www.rensmart.com/Maps#NOABL
Please note: This data can only be used as a guide and should be followed by on-site measurements for a proper assessment.
Secondly, a wind turbine needs space. Using the map above as a reference, the wind speeds in South Shields should be just above 6m/s at a height of 25m above the ground. However, friction with the ground as well as obstacles such as buildings, trees, and even small walls will slow the wind dramatically below the estimated speeds. Wind turbines are usually most suitable in wide open spaces such as on hilltops or in large fields.
Unfortunately, most businesses in South Tyneside are unlikely to have a premises which meets these criteria. Certainly not most of the businesses which this toolkit is aimed at.
The last condition that needs to be met for an effective wind turbine is scale. Turbines are expensive, so to be worthwhile a business needs to install a large turbine as well as having a large (and consistent) electricity demand. There is still a difficult hurdle to overcome even if your business meets the criteria above, which is planning permission. Any turbine larger than 11m tall must be granted planning permission.
Local authorities must apply the National Planning Policy Framework (NPPF) when considering wind turbine project applications. A link to the NPPF can be found below:
https://www.gov.uk/government/publications/national-planning-policy-framework–2
Planning permission is difficult to attain for wind turbine projects due to a footnote on page 46. Although this footnote has been recently altered there are still hurdles to overcome when applying for a wind turbine project.
Although planning permission is not needed for micro wind turbines up to 11m, the estimated average wind speed at this height is unlikely to be sufficient to consistently generate sufficient electricity to make the turbine worthwhile. In addition, any trees on your premises (although beneficial to our environment in many other ways) would also create an obstacle for prevailing wind, which would also reduce your output.
Planning Permission
Planning permission is not needed for micro wind turbines up to 11m. The following criteria must be adhered to:
- The wind turbine must adhere to the MCS planning standards
- The installation must not be sited on safeguarded land.
- One turbine is considered permitted development and the property must not have an Air Source Heat Pump installed already. Otherwise, you need to ask for planning permission.
- The highest part of the wind turbine blade must not exceed 11.1 metres
- The distance between the ground and the lowest part of the wind turbine needs to exceed 5m
- The turbine’s height + 10% is the distance that the wind turbine needs to be from the boundary of your property.
- The swept area of the wind turbine cannot exceed 3.8m2.
- If you live in a conservation area/world heritage site, the closest part of the wind turbine needs to be further away from any highways than the closest part of the house.
- Permitted development rights are not applicable for an installation on a listed building or on a building in a conservation area/world heritage site.
- The blades cannot be coated in a reflective material.
- When no longer needed for Microgeneration, the wind turbines are removed as soon as practically possible.
Unfortunately, wind turbines generate more power the taller the turbine is – as wind speeds increases the further from the ground you get. The “swept area” is the circle traced out by the tips of the blades as they spin, and this limitation will also greatly reduce the amount of the available wind resource you are able to utilise.
So, while it is possible to install wind turbines, their size, and therefore generation, will be curtailed by the planning requirements.
How Much Electricity Can a Wind Turbine Generate?
A wind turbine’s generation is linked to how big it is as well as the wind speed at its location. Unlike with solar, which is generally assumed to have the same resource across the borough (every year), wind speeds fluctuate depending on the location (and year to year), so estimating the output requires more on-site measurements to be taken. A rough guide is provided below.
If you were to install a 5kW turbine and it generated at maximum capacity all year (8760 hours) it would generate around 43 800kWh (5kW x 8760hrs) However, the wind will not always be strong enough to meet the rated wind speed for the turbine, and there will be times it will need to be taken down for maintenance and servicing.
The amount of energy a turbine generates divided by the maximum possible is its capacity factor. For smaller wind turbines (less than 20m tall) this might be somewhere around 20%. So, for a 5kW turbine this would be 8760kWh. (43 800 x 20%)
How Much Does a Wind Turbine Cost to Install?
A small turbine (5kW) might cost £40 000 to install, although the install cost can vary greatly depending on manufacturer, on-site conditions, planning and design costs.
How Long Does a Wind Turbine Take to Pay for Itself?
If a 5kW turbine generates 8760kWh/yr, and your business is paying 30p/kWh then if all the generation is used then your business will save £2600/yr. Therefore, under these assumptions the turbine will pay for itself in 15 years. Again though, this figure is a very rough guide. The generation, how much of it you use, the cost of your electricity, the cost of install could all fluctuate.
Summary
For most businesses in South Tyneside, wind is not currently recommended.
For the few businesses where it may be viable, there are still significant planning hurdles to overcome. In most cases therefore, wind should not be considered until the business has followed all of the steps in the ‘Energy Efficiency’ section and also looked into solar panels too.
However, wind still presents an excellent opportunity for some businesses to generate their own power from a clean, sustainable source and if your business has identified an opportunity to utilise wind at your premises then you should keep an eye out for updates to policy.
Combined Heat and Power (CHP)
This is another niche technology which is only viable for businesses with specific energy needs. Examples might include large hotels, leisure centres and manufacturing businesses. Although this is not an entirely sustainable option (as the gas burned will produce CO2 emissions) for many businesses it can be a more efficient solution than their existing one.
How Does It Work?
Gas is burned to generate steam which turns a turbine, and the excess heat is drawn off and made use of (unlike standard systems, where the excess heat is usually wasted).
Is it Suitable For My Business?
Combined heat and power is suitable for businesses with very high energy consumption – using lots of both gas and electricity. The vast majority of businesses in South Tyneside would not be suitable for this technology.
Another good reason to consider CHP might be because your business has a limited grid connection and which restricts how much power you can draw from the National Grid at once, but still have high energy requirements.
Summary
It is unlikely your business will require CHP unless it has very high energy requirements or a restrictive connection to the National Grid, but for suitable businesses this can prove to be an effective solution (albeit a temporary one if your business has Net Zero ambitions).
Battery Storage
Battery storage is another technology which has seen rapid improvements in recent years in terms of performance and affordability. Unfortunately, should you install battery storage the direct benefits to your business are limited.
How Does It Work?
Electrical energy is converted into chemical energy and stored in the battery when there is an abundance of renewable energy such as solar, or when the electricity on the grid can be purchased cheaply. This energy is then released later when there is no renewable energy available (such as overnight for solar) or when the price of electricity is higher.
Is Battery Storage Suitable for My Business?
As with other technologies in this chapter such as wind and CHP, battery storage is only viable for a small number of niche businesses with specific business needs.
There are only a handful of scenarios where battery storage is suitable for most businesses in South Tyneside. This includes businesses with a very expensive electricity tariff (and solar), businesses with a variable tariff which fluctuates between very cheap and very expensive, businesses with a restrictive grid connection or some combination of the above. In addition, for larger businesses which require resilience to power supply (e.g. food storage companies with large fridges)
In order to pay for itself, a battery needs to discharge electricity at a more competitive rate than it is stored at. Some examples are below:
- A battery can store 10kWh. It is charged up from empty every day by the excess power from the business’ large solar array, then discharges completely overnight. The excess solar would be sold for 5p/kWh, and the cost of grid electricity is 30p/kWh. So, every kWh of electricity the battery stores up and then discharges will save the business 25p, or £2.50 every day. Each year, the battery will save £912.50. (365 x £2.50). Batteries typically last for about 8 years, so this battery will only pay for itself over its lifespan if it costs less than £7300
- A business pays 50p/kWh at peak time (4pm – 7pm) but only 20p/kWh overnight. If they install a 10kWh battery that charges overnight and discharges between 4-7pm it will save the business £3 each day, or £1095/year (365 x £3).
Cost
The cost of installing a battery depends on how much electricity it can store, how quickly it is able to discharge this electricity, as well as the manufacturer and quality. Small batteries which can store only a few kWh can be as cheap as £5000, but enormous batteries capable of providing a backup power source can cost millions of pounds.
Can a Battery Reduce My Business’ Greenhouse Gas Emissions?
For reporting purposes, an average carbon intensity factor is used when calculating your carbon emissions. However, this is just for simplicity and the grid’s carbon intensity fluctuates throughout the day – it is most intense at peak times between 4pm – 7pm on weekdays (as fossil fuels must be used to provide power when demand is greater than the supply of clean power). Therefore, battery storage can reduce emissions by a small amount although this will not show up in your emissions reporting.
Installation Area
Battery storage is less effective at lower temperatures, so wherever you decide to locate the physical batteries themselves must be a reasonably warm area/room and must not be subject to large temperature fluctuations.
Lifespan
All batteries will degrade over time, but you can expect current models to retain at least 70% of their original capacity after 10 years. Typically, the capacity will drop off fastest in the first couple of years before stabilising. For a battery to be economically viable for your building the overall saving your battery makes must be greater than the cost of the battery itself.
Summary
Battery storage can complement solar panels or variable electricity tariffs nicely, but for most businesses in South Tyneside they aren’t worth considering until all other efficiency options have been investigated and exhausted. With such a small ROI, unless your business has a specific requirement for capacity or backup it would be wise to invest your money in other areas.
Power Purchase Agreements
Although installing your own source of clean, renewable energy can have enormous long-term benefits to your business, the up-front costs can often be too steep for an investment to be seriously considered. A power purchase agreement involves a third party installing some form of energy generation on site with the intention of selling most of the power generated to the business. This energy could be generated from wind or solar, or sometimes combined heat and power systems.