As the UK strives towards a net zero-carbon future, it’s crucial for businesses to be on the front foot, which means careful attention to managing energy assets. Energy prices will only continue to rise to meet the cost of network balancing and infrastructure requirements and, in light of this, a change in our national mindset is necessary.
While it’s important to secure energy supply and make use of on-site generation wherever possible – thereby reducing costs, carbon footprint and reliance on the grid – that’s not the end of the story. Once in operation it’s imperative to monitor these assets, whether solar, biomass, district heating, wind or hydro, to make sure they are being run to their full potential. In our experience, smaller on-site generation schemes are frequently under managed.
As an example, we recently advised on a rooftop solar asset and found the operation and maintenance contract had lapsed, leaving the owner with no access to meter data or associated income. Were the installation to be off line, it would stay that way until an operation and maintenance agreement (O&M) was put back in place.
Issues like this usually come to light too late, particularly at valuation or sale, and we have seen under-managed renewable generation reducing the sale price of commercial property by 5 per cent.
According to the Renewable Energy Public Database, there are 3,700 MWs of renewable generation with an installed capacity of 5MW or less. If all these sites were expertly managed, performance could increase upwards of 5 per cent per asset, effectively increasing the installed capacity across the UK.
Even apparently well-managed sites could see performance improvements if strategies are rigorously scrutinised. On a >10MW wind farm in Scotland, the O&M provider was meeting the warranted 95 per cent availability. However, by building a strong day-to-day relationship with the turbine engineers, annual availability was increased and maintained at 98 per cent, equating to a potential additional £20k per annum.
There are around 33.8 GWs of total operational renewable generation capacity in the UK – optimisation improving performance by even as little as 1 per cent would increase the amount by 338 MWs. Despite this, few owners audit the performance and processes of their asset managers to ensure best practice and optimum income.
If the UK is to achieve a net-zero carbon future, it is essential that full use is made of the renewable capacity already in place.
Listen to the podcast: Balancing energy demand versus reduced carbon emissions