Conference in Cambridge sponsored by ARM offers unique look at the gamut of grids, metering and power innovations

Smart Grids & Cleanpower 2012

Conference Cambridge sponsored by ARM offers unique look at the gamut of grids, metering and power innovations 

Moving to smart infrastructure requires modernization. There is pressure. This calls for innovation. As renewable input increases, so variability increases. Will embedded, incumbent technologies remain in place through subsidies and regulatory lock-ins? Will interventions result in more lobbying and less market-based-learning about private sector customers? As we remove the need for intrusion into millions of houses to read meters, and deliver more services, so we should meet difficulties around security of data and system. Therein lie many opportunities for entrepreneurs. VCs seeking risk will be assessing these opportunities in clean technology carefully, looking keenly at how policy-making evolves around grants for innovation and R&D, market reform and (de)-regulation, standards, and targets. New products, processes, markets and ancillary services are likely to be created.


Future trends and opportunities often emerge unpredictably from the wider range of technologies being developed. This conference (#SGCP) will stage an innovation pitching competition from sector startups/SMEs, not restricted to the core “metering rollout” in which prizes are offered by sponsors.


Lord Oxburgh will talk in the Cleanpower stream about large, often controversial lower carbon opportunities in the context of an unreliable new-nuclear sector in the UK and implications. Dr Bernie Bulkin, Chair, ORED, DECC will talk about technologies to meet targets, what this means for government strategy.

Professor Ross Anderson of the famed Computer Lab at Cambridge will challenge the smart-meter-rollout plan alongside leading technology providers for rollout and government, in what promises to be an exciting opening session, in the smart grids stream. EON will talk about the growing need for non-energy-generating services of power plants, a source of opportunity for many entrepreneurs. UK Power Networks discuss projects around connecting wind energy to the grid and about network integration in a session focusing on regulation and distribution policy with Ofgem.

Among applications of investible power and grid technology being showcased, the CEO of Eight19, the award-winning offgrid solar company operating in Africa and soon in India, will talk about “powering the unGrid”.

Example Confirmed Speakers/Panellists

  • Lord Oxburgh, Ron Oxburgh, eminent expert on energy
  • Dr Bernie Bulkin DECC – Chair, Office Renewable Energy Deployment
  • Robert Hull, Director, OfGem – E-Serve, Co-ordinating Offshore Wind Rollout
  • Dora Guzeleva, Head of Networks Policy, OfGem, Smarter Grids: Distribution
  • Richard Smith, National Grid, Future development of the UK’s energy networks
  • Cristiano Marantes, UK Power Networks, Projects connecting wind to grid
  • EON New Build and Technology, Greg Payne, Additional Services Opportunities in Power
  • ARM Holdings plc, the Global Chip Design Leader
  • Siemens – Infrastructure & Cities
  • Schneider Electric – Metering & Grid Products
  • Jeremy Nicholson, Senior Advisor, Energy Intensive Users Group, EEF, Chairman of Cleanpower
  • Christine McGourty, Director, Energy UK, Moderator
  • Dr Sarah Darby, Lecturer, Oxford University – Smart Meters & Consumers
  • Prof Ross Anderson, Cambridge University, Computer Lab, Smart Meters: Challenges of System Security
  • Prof John Miles, Cambridge University, Engineering Dept, Clean Energy: At What Price?
  • Keith Dickerson, Committee Member, International Telecoms Union, Standards: Where are we headed?
  • Simon Bransfield-Garth, CEO, Eight19, Powering the unGrid!
  • Peter Sharratt, Head of Sustainability Services, Deloitte
  • Alan South, Commercial Director, Solar Century, Solar sector trends, FiTs, RHI et al
  • Laing O’Rourke, Lessons Learned for Grids from Aerospace & Defence Technology Deployment


6 USPs of the Smart Grids & Cleanpower Conference

1) The only one-day, two stream conference in Europe to cover wider aspects of grid, power, metering technology strategy for emergent future trends (looking at the 80-tail not just the 20-core!)

2) 4 years of assembling the thought leaders, strategists, academics and innovators in the business

3) Refresh and build all your relationships and learning in a single day out of the office

4) Dedicated innovation pitching competition

5) High proportion of delegates are at director level

6) Pricing to suit all key categories of valued delegate for excellent networking

You can attend this year’s 4th Smart Grids & Cleanpower 2012 Conference on 14 June 10am-530pm at Murray Edwards College, CB3 ODR


Tel 01223 303500


Text: Just send “SGCP N delegates” to 07720047402 and we’ll follow up the booking for you.

Online Booking:

Cambridge’s Most Influential People: Review a decade on

The Judge MBA dissertation of Justin Hayward, written in 2001, sponsored by CIR, the local strategy consultancy and technology conferences company, tackled the question of who were the most influential people of the “Cambridge Phenomenon” and how did they interact. This document was placed in the library of the Judge Business School, and labelled as confidential, except after consultation with the author. The author felt that this was right, since the information in the document was in part commercially valuable, and also sensitive to those in the lists and those that might have been on its peripheries. As Hermann Hauser has said at the Jimmy Wales (founder of Wikipedia) fantastic Cambridge Network talk on 8 September 2011, the new list is also a matter of profile, sine qua non, as well as merit.

The Cambridge Business Magazine, with the support of three large companies, has released an update to part of this, the actual list of Top 25 most influential people for Cambridge Business.  This piece considers how many of the new list in 2011 were in the old list of 2001 and to draw any acceptable inferences from this small study.

It is worth bearing in mind, here, that the list obtained in 2001 by CIR was different from the 2011 list obtained by the Cambridge Business Magazine (CBM) in the following ways:

(1) CBM used a panel of 3 people heading up large companies to decide the list, whereas CIR interviewed an initial group of 25 people of prominence in the cluster (by its own reckoning), but then asked each of them (and others that they had named as influential) to list the people that they thought were most influential, so that hundreds of votes were ‘cast’. This process is a little more democratic, and certainly less “oligarchical” and susceptible to bias, yet not “perfectly democratic”.

(2) The CIR list was an “all-time” list, rather than a “now” list. It also potentially included people who were full-time academic leaders for example. This means that there were already names on the list that were inactive in 2001, and clearly some have fallen inactive between 2001 and 2011. The CBM list appears to be those who are still active (for the most part). This point needs clarification.

In numbers, the CIR 2001 generated a list of 117 unique names, from 237 names listed across 25 interviews in answer to the question: “Please give me your list of the most influential individuals for the Cambridge high tech business ecosystem”.

9 people (36%) were on both lists (CIR, 2001 & CBM 2011):

Alan Barrell, Nigel Brown, David Cleevely, Peter Dawe, Hermann Hauser, Walter Herriot, Andy Hopper, Mike Lynch, Michael Marshall.

The 2011 list can be analysed as follows:

16 are entrepreneurs,  8 in ICT, 4 on the biotech side, 2 in industrial areas, and 2 are entrepreneurs (one ICT one on financial services) who’ve moved long since into formal venture capital areas. There were 15 entrepreneurs in the 2001 list. A further 7 in the new list run key business networks. Finally, 2 are consultants, albeit very successful ones, one of whom I’m aware is an active business angel, who has invested in at least one of the other influential entrepreneurs on the list.

There are a few straight swaps: Warren East taking over from Sir Robin Saxby, present and past CEOs of the quintessentially Cambridge success story, ARM,  a story that is yet to unfold and whose importance in the world cannot be overstated. Another straight swap was Billy Boyle, of Owlstone, for Adam Twiss, whose Zeus was at the time soaring. Without checking, Billy is probably the youngest person in the list of entrepreneurs. Brian Moon replaces Paul Auton on the CCL side. The “new entry” of Redgate and Neil Davidson, is welcome, as it shows an element of marketing skill which many (including one other person in the list) have suggested are lacking in the cluster as a whole.

If there is a concern, it would be that there is a dearth of first-time entrepreneurs on the list. On the other hand, the “infrastructure” for helping them must be stronger than ever. It is at least quite clear from the profile of these lists, who one might go and talk to for angel and VC money and mentorship.

If there are silver linings, they are the “game, set and match” success of ARM, and the recent success of Mike Lynch with Autonomy. Some will use this as an example of another “British sell-out”. But Mike Lynch has broken into the “billionaire order of magnitude”, which I don’t think we’ve seen in Cambridge before.

Thank you to CBM for this interesting 2011 update.

CIR hosts a marker map of all high tech companies in the Cambridge cluster at If you are a new company with IPR or working on innovations in product or service, and not yet listed, please contact CIR via










Future of High Value Manufacturing

High Value Manufacturing (HVM) is a concept that is widely used and accepted now. The concept was beneficial to manufacturing businesses in that it encouraged the sector to think about whole businesses and to consider a wider range of aspects of business such as time-to-market, societal and environmental issues, marketing and global strategy at a new level of focus.

In previous common usage was the term “high value-added manufacturing”. This term was limited to meaning that the finished product is worth much more than the input materials. This is crucial to but only part of what is meant by the newer term ‘HVM’. “High Value” here refers also to the benefits to society of the presence of a business that requires above average at-hand expertise, which tends to provide more high quality, well paid, interesting work, locally, than would a pure licensing technology business (See J Hayward presentation at “HVM East Conference 2003”, for evidence of this, and “Defining HVM”, IfM Cambridge U (2006), where Dr F Livesey mentions the ‘social value’ of HVM). “High Value” also refers to the environmental benefits of this kind of manufacturing, which takes us away from ‘smokestack’ industrial businesses. (CIR ran an HVM conference on this aspect in April 2008 – environmental sustainability through closed loops and sale of service business models, see also “Towards a Sustainable Industrial System”, Professor Evans (Cranfield) et al, 2009). HVM could go some way to finding more modern means to stimulate innovation and growth, compatible with a more connected and advancing world.

This more holistic view of the manufacturing business concept, which has obviously been developed over a long period of time, but with focus by academics and others under the phrase HVM, has been more marketable, and has arguably improved the image of the sector or the relevant parts of it.

A search for the phrase on Google now yields many hits and there are institutions in academia, government and industry, with the “HVM” in the name, which did not exist when the phrase was coined in 2002 by CIR as it began writing a report on and defining it.

This HVM as we understand it today in 2011 after these iterations and developments is just the start of something, that when properly and fully embraced, can go much further. Not all manufacturing companies have taken the HVM idea on board and are therefore not maximising value. And as the world globalises, and markets become freer and fairer, the areas where HVM can thrive and work will expand. Some contend that this is a risk, others say it is an opportunity (see Kaletsky in FT January 2011).

When we first wrote down a definition of HVM, which emerged from an analysis of what regional technology manufacturers told CIR in the market research (“High Value Manufacturing in the East of England”, J D Hayward, CIR 2002) we noticed how much more there was to it than linear “high value-added manufacturing”. This latter meant simply that the product assembly would be of much greater value than the previous stage of input or inputs, and was common usage. With the phrase “HVM”, used repeatedly in Cambridge and elsewhere from 2002 onwards at the conferences and in reference to the reports written, it became clear that it was nonlinear and multifaceted. The nonlinearity comes from the interdependence of innovation, marketing and operational choices made by the HVM business.

And this leads to a change of mindset, reflected in, for example, academic institutions responsible for teaching and research into manufacturing formerly focussed on the act of manufacturing and all things to with ‘lean’, now covering everything from manufacturing to distribution to management to marketing to strategy and location selection to finance to energy efficiency and so on. Those institutions were perhaps doing all these things decades ago, but there is a renewed consciousness of it, as they themselves position themselves to be, in part, commercial per se.

What HVM was and is still about was a range of inputs and ultimately, more than one type of positive output or benefit. And these in turn, were, of course, found to interrelate in various ways or be relatively independent. There is surely more, interesting academic work to be done in this area.

Some of the inputs were R&D and reinvestment in it, IPR strategy, time-to-market, novelty or difficulty of process or manufacture, novelty of market. And outputs now included not just product price for sale compared to price of materials, but also social and community benefits and getting towards sustainability environmentally. Ultimately, ‘sustainability’, with all its current confusion as a term, will necessarily mean both viability and environmentally; a nice dialectic synthesis!

It is satisfying to be able to tell the story of 20 conferences and events stemming from the HVM definition of 2002, the report about the East of England scene for HVM in 2002, and then the similar report in 2005 for the South East and the academic reports that then appeared from then on, refining and taking ownership of the concept. I would like to thank James Gray, the then Chief Executive of Invest East, a sister organisation of the RDA EEDA, for accepting an unsollicited proposal for a small amount of funding for the HVM Report of 2002 and the first conference of 15 November that year. I would also like to thank Professor Sir Mike Gregory CBE for being sympathetic towards the idea and conference, and for going on not only to Chair the first conference, but to chair a handful of conferences that CIR organised under the HVM banner in Cambridge and elsewhere. This has led not least to a wealth of case studies that could be used for teaching and development purposes.

And this is just the beginning. HVM businesses are a candidate DNA entity for the industrial system of the future: they will not damage the environment or people in society, while remaining viable and thriving. There is a 2x2x2 matrix with seven undesirable possibilities and only one desirable!

When we quite naturally have such a system, that is when we can prosper in the original sense of the word.

The 10th Anniversary of the HVM Series, where we will bring together old friends, and many new ones, young and wizened to discuss just this appealing future, takes place in Q4 2012: do contact us if you wish to know more.









Summary HEAT10 Conference Expo 2 December

We asked:
What segments within energy saving for the built environment result in big reductions in energy use? How big are these priority opportunities? What do the markets look like structurally and who are the players in the supply chain? What is the role of ICT?

How will electric vehicles be integrated into smart cities and how quickly and deeply? How big are these opportunities? How will the energy companies of the future work with customers industrial, commercial, residential? How is the government planning to revolutionise the delivery of energy efficiency? And if we understand these areas, what are the market barriers to them? What should we do: act as role models? Lobby for logical sets of actions by others? Do nothing or wait-and-see?

Delivering heat is the top use of energy in the UK. Of this, in terms of carbon emitted per person per year, space heating is the largest single contributor, making up half the total. That total is slightly more than the total carbon emitted from passenger-km.

How do we achieve 80% reduction? Plenty of examples of role models are there, and known. People have put on lots of jumpers and built passive house. But these are relatively few and far between still. The question is how how do we get the whole country to change? Some barriers are: resource constraints (money, materials, tradesmen, etc), achieving what was planned or promised and delivering value. On this last, the speaker did not see moving backwards, i.e. constraining peoples’ lives as a way ahead. We must deliver comfort and freedom as people wish, but at the same time do it at much lower carbon.

The heat database was shown as a distribution: 8m households in the UK giving data on energy use. It was absent obvious, strong correlations between energy use and the physical attributes of the household or the social status of the occupants. This meant a tough task to move the mean, median and mode of the distribution to lower levels. The speaker showed how an optimal balance of demand and supply technologies deployed to achieve the 80% reduction in CO2 from 1990 levels was a sweetspot that could save the UK tens of billions of pounds. While people now spend £1200 on energy on average a year, one needs to spend between £20,000 and, say £70,000 on energy saving technologies to achieve these reductions on average. Spread over 40 years even (if such were possible) this would still represent a proportion of the energy bill itself corresponding to between 42% and 146% both of which are probably unpalatable to the vast majority of householders. But on a more optimistic note, this represents a huge opportunity for suppliers in more upbeat and urgent conditions.

Looking at the turnover rates of various markets, the appliances area, like smart phones and gadgetry is extemely fast, whereas that of network-facing billing and metering, the energy and utilities, companies is very slow. The worst outcome for everyone is that the fastmoving ICT companies and consumers end up shunning this market because the energy companies seem to conservative, risk-averse and slow-moving.

Even something that delivers real value to houses, like central heating, has taken 50 years to get it into most houses. Having said that, an optmistic note on infrastructure: when we have made a decision to make a switch, e.g. to natural gas, it has happened very quickly. You can mobilise and change infrastructure quickly and then you live with it for a long time.

We need to look at the whole supply chain: find opportunities, have customer contact, analyse and plan, IS, inventory, off-site, distribution, on-site, QA, monitoring and control. But the rate limiting factor is probably the awareness, and agreement of householder to do what is needed to the house.

Remaining opportunities for efficiency improvements in houses were limited. The undone work on windows, insulating lofts and walls ranged from 12-22% of them – the majority have been completed.

The question of scale is interesting for the CIR Conferences series, particularly HEAT and Smart Grids & Cleanpower which cover the two ends of the scale from building up to national infrastructure. Factors such as operating effectiveness through capital efficiency through finance availability vary with scale. This is another thicket of complexity for us to work through for the optimal approaches.

So in the long run, what do we do as a nation to implement the large energy efficiencies now made law out to 2050? There are an infinite number of combinations of things we could do. We know we can achieve the 80% reduction targets to that year. The sustained value is critical and the affordability. And who are actual making these choices? At the householder level, car companies know a lot about who in the house makes the choices on cars and why. This is not so regarding the investments needed in energy systems for households and buildings generally. We need also to understand the supply chain and limiting factors around delivery rates of solutions, and indeed quality or reality of those ‘solutions’. On scale, many small improvements doesnt always add up to a few big things.

Public sector having trouble raising finance – how will we see cashflow to renovate buildings. 80% of buildings we will occupy in 2050 are standing now. So retrofit is going to be important. What is an energy performance contract? This is a contract that acts for a set of buildings, whose energy usage rate is guaranteed by the ESCO. In public sector language, it is a spend-to-save scheme, you are buying future energy performance. Practically, the EPC is a 4 stage process. Stage 1 is a desktop audit, checking which buildings can be retrofitted and estimating savings. Stage 2 qualifies this and the qualification must be close to the audit claims. A 30% saving cannot reduce to 3% at stage 2. Stage 3 is the implementation and stage 4, the guarantee. The energy saving can be converted to a monetary amount saved and this in turn can be used to pay the staff of the ESCO, forming a real partnership. LDA has set up a framework called REFIT to do large public sector energy saving contracts. Anyone in the public sector can use this framework. There are 12 ESCOs available to choose from to carry out projects. EPC should be off-balance sheet, funded by service not assets. They can be funded in 3 ways: write a cheque for cash; go to public works loan board; use a bank loan or asset finance. None is ideal. The EPC should find out the savings during and after the EPC programme, cost of kit and service. This ratio gives breakeven and ROIs and other financial measures. But these are difficult to prove upfront. But if the ESCO will guarantee the EPC then banks and lenders generally may be happy to lend against the projects. Sophisticated lenders may be able to hedge both energy costs and carbon emissions.

A number of pilot projects are being run around the UK.

In summary, the objective is normally to finance on the P and L or revenue account (public sector).

Electronics can also be part of the energy efficiency solution. Electronics are moving into a wide range of new areas: sensors and monitoring, and others. There is a broad move towards the internet of things, where objects are connected to the internet and each other. This move seems inexorable. This means more energy use in buildings coming from more gadgetry. But this can be mitigated in a few ways at chip design level. It can be mitigated by efficiency improvements to motors. It can be improved by devices running or standing by at much lower or zero power. And as things take on shared use, the hardware has more chip commonality and can be reused.

Electricity is very inefficient, it was claimed. 12.4% of fuel use is in its delivery. 28.7% of fuel is wasted in electricity losses. And more than 50% of electricity is used in motors.

Moving to smaller, more efficient computers, i.e. from desktop to laptop to netbook, will improve energy efficiency considerably.

Data centres could be improved to obtain an 87% reduction in emissions through virtualisation, smart cooling, storage and CPU.

Poor design exists especially around TVs, game stations. There is also scope for saving around how these are used.

All in all, it will be a tough battle to reduce energy usage absolutely as demand increases for devices and connectivity. Those increases can be reduced through energy efficiency. Companies in the field of electronics design will surely thrive as they introduce more efficient technology. Culture change will not be their priority, even with a squeaky clean CSR policy. Leaders at the conference in this area certainly appeared to be taking seriously the problem of mitigating the energy demand increases at the small scale level.

1.5 billion meters in the world now. No single company can build the smart grid. It is an effort by a partnership of companies. Interoperability will be very important: we must make sure it not a silo; it should have more than one use.

We are to build in many wind farms to the grid. What happens when there is no wind? We need to build the new grid for intelligence, avoiding needing to build so many new power stations. Intelligence also in energy management, and within the generators. So we need to be able to look at the whole system.

The whole system needs to be smart, not just smart in silos.

Changing demand patterns is really important, but there is no agreement on how to do that. It is a political question as much as a logical one where costs vary to manage demand and supply.

The stick of tougher regulation and compliance is the practical result of political will. But how is this fairly set?

Microgeneration in houses and districts and peer to peer trading of loss-free electricity obviously mean consumer participation in the delivery chain.

The CIR Conferences will continue to focus on new service and business model opportunities.

The Smart Grid will also be an innovation platform for a world of companies kept out of the undynamic grid of today.

The new business models have been talked about above around EPCs. This will lead to more monitoring and control of consumption and cost of energy in an atmosphere of heightened corporate sustainability and responsibility policy.

In the new ecosystem of energy management, you have regulators defining prioritisation; you have renewable generators, who want to produce power when it is windy (or sunny), power that we must maximise; you have the DNO who want to make sure their network is robust and secure – a critical aspect; and you have the energy retailer that wants to buy cheap and sell higher the electricity. What energy retailers do wont particularly affect the grid directly. It was argued that the above creates tensions as well as technical challenges, which implies the need for regulation done well, with understanding of the whole picture and connected to long run goals.

Smart meters continue to play a pivotal role in the smart grid. They will give near real time meter reading, not needing visits. This leads to more accurate forecasting and billing which energy provider like, as perhaps do most consumers. Extra home energy information can lead to strongly lower consumption, again given the new customer involvement. But it also enables time-of-use pricing, much more detailed than as in Economy 7. Pricing could vary hourly for example. Customers could run programmes to analyse this data automatically, and to automate their choice of demand response. This would last long after they might become used to the novelty of home energy data from monitoring and metering.

In modern design product lifecycles including for smart energy, an area of growth for product design work, the product is making first contact with the customer (perhaps a utility company) much earlier in the process, for extended trials. They will buy in large numbers. This means developing and making a demonstration in a single design iteration that works like the real thing, through rapid development with a multidisciplinary team. Rapid can mean 3-4 months. This is a case of understanding the route to market and developing an approach to suit this route.

It is contended by some and not others at the HEAT conference that you can change consumer/customer behaviour.

There must be benefits to consumers in the this evolution which seeks to decarbonise energy and provide security of supply for the long run.

TOU tariffs, demand response and microgeneration all have the potential to make life more complex and overall worse for the consumer. This would be bad for the market. So we must strive to unravel that complexity and stay focused on consumer benefits. We repeatedly overestimate the appetite of the mass market consumer for screens and technology.

Visibility of pricing, through alerts for example, and automation could work in favour of TOU price choices.

Consumers do not think about consuming energy, they think in concrete terms of appliance use. And motivation without empowerment leads to frustration. With empowerment, action follows. Being social animals, motivation comes from role modelling and reputation, and from collaboration.

Homeworking and the obligation of large companies to report carbon emissions of employees has meant companies are able to help consumers know more about their footprints and what to do about it.

People are not going to be moved towards utilities web portals for their energy data. This is only one of many places and not the favourite.

Consumer behaviour change goes through in three stages: reveal, reduce and renew. We reveal through ‘usage shock’ and better tariff options (diagnostics). Then we reduce by establishing active behaviour change around smarter use, turning things off or down, more efficient appliances. And finally, through self-generation the bills and emissions can come down yet further.

In Holland smart meter roll out was rolled back as a result of not taking consumers along and informing them properly: It is vital to put consumers at the centre of our thinking.

Energy information is dull. We must watch out for schemes for behaviour change that do not help the energy situation and lead us down yet more wrong paths. This may seem good for business in the short run, but ultimately it is not going to help business either.

There is a shift to DC: web, lighting – everything above the waist. Design is an issue and one cuts out a lot of losses by keeping to a smart DC network with variable power.

Distributed storage sent back to the grid doesnt make sense, but DC storage and use as DC does.

Provide energy through a DC connected energy harvester. Retain the energy and provide power to a smart DC network.

Channels to market for SME tech providers include energy retailers, retailers, installers, and possibly government and own-brand websites direct.

In a talk entitled: The challenge of retrofitting homes for low carbon, the government, DECC, appears to have taken on board that retrofitting will be key, rather than new builds, which are relatively easily legislated in for much higher efficiencies on a timeline. We note in passing however that that aspect too is unlikely not to miss targets in the next 6-10 years.

Governments are said to be good at setting long run targets, such as to 40 years maturity, since they probably wont be in power when the time comes. But the 80% cut versus 1990 emissions for 2050 is a landmark piece of legislation. The legislation is coupled with binding interim targets called carbon budgets. These are total levels of carbon capped within 5-year periods from now 2008 onwards, when the Climate Change Act was agreed. Then the long run target law is coupled with an accountability framework: a committee that has access to government officials, in meetings and through auditing.

In 2006, carbon emissions had fallen 3% versus 1990 levels. So a further 77% to go over the 44 years from 2006!

Electricity generation was the highest contributor, followed by domestic transport, then residential and commercial heat and in similar amounts, industrial heat and processes. Taken together residential, commercial and industrial heat is the highest segment.

In the residential segment (heat), since 2008, the government claims that the levels of emissions have come down by 5% and to 2020, the target is to fall another 29%.

In houses, there are three ways to fill the gap: reduce energy needed through insulation, better heating systems and controls; producing low carbon heat through solar thermal and heat pumps; and finally: behaviour – attitudes and enabling technologies.

The way government looks at reaching this target, is to break down the achievement of the target into segments: policies, zero carbon homes, smart meters, and ‘whats left?’ It then tries to predict the effect of these areas of action in terms of contribution to the target. Existing policies are supposed to produce 60% of the target. Zero carbon homes a very small amount of 3%. Smart meters about 6%. New policies of Green Deal, the Future Energy Company Obligation including the Renewable Heat Incentive are supposed to produce the remaining 30% of the needed reductions to 2020 in this segment.

Looking at the usual graph of approaches to reductions ordered by cost effectiveness, solid wall insulation and lofts and cavity walls, those that remain to be done, seem to be a logical area to focus on. There are 10m, 7.5m, and 2.3m further lofts, cavity walls and solid walls to insulate respectively.

There are barriers to delivery, as noted before, that government is aware of. These are barriers that exist even when money can be saved in taking action.

From a consumer survey by government, some people, 20% of households, are aware but just not interested in loft insulation. Does this mean 80% are engaged and likely to go ahead? And many people are overestimating costs without checking the reality.

Will the Green Deal policy, in development now, to be completed late 2012, really be a Game Changer? This will try to plug the information and awareness gap with marketing and co-ordination. The idea is to get high street and utility brands on board. Brands that people cannot avoid being aware of. They will sell energy efficiency products and provide energy efficiency advice. There will be independent surveys to individual households. Then finance: Green Deal Finance will provide all or a good chunk of the money needed upfront. The construction industry and building trade generally has a fairly bad reputation. The government is keen to make sure this does not hamper the roll out of greener buildings. There will be accreditations so that people can show that they are qualified to install a given set of measures. The financing is designed to be taken from savings in the energy bill of the householder who has installed the measure. This will mean the bill will not go down as much, or not at all for a time, but this is still better than not having carried out the installation.

For those who or technologies which cannot obtain the Green Deal Financing, there is an additional piece of legislation, the Energy Company Obligation, which causes the energy companies to subsidise installations. Theoretically, all consumers would then be covered for all reasonable types of installation.

The Green Deal applies to non-domestic buildings as well. In this segment it is much more focused on electricity use. Business sector emissions amount to 214MtCO2, of which electricity causes about 100 MtCO2.

The CRC applies to less energy intensive industries, such as universities and supermarkets etc.

At the other end of the scale, of the nearly 5m organisations in the UK, 99% are SMEs, about 2m operate out of domestic premises (so dont be embarrassed if that is your business!)

CIR Conferences looks forward to meeting you again at Smart Grids and Cleanpower 2011 23-24 June Cambridge, for the followup conference. (see and

Summary of Smart Grids 2010 Conference

Summary of Smart Grids and Cleanpower 2010


This summary is based on comments made by speakers and sometimes other participants at the conference 24-25 June 2010. It may not everywhere be coherent, but each sentence should carry the weight of an expert opinion. Some statements may be contradict each other! All lines are to be taken in this context. We have tried to remove names of companies and obvious plugs for products or services, though the originators of some comments will be straightforward to deduce.

Conference summary

This is an interesting conference because a lot of people are talking about smart grids and this event considers the move from the slower world of utilities and energy to a pace of change like that in telecoms and internet: the energy efficiency play and how we understand and begin to focus more on the end consumer.

Smart grids defined: the blind and the elephant

The phrase smart grid is often not well understood among consumers,
but even among industry players the idea is still nebulous.
The smart grid involves flow of power or material in more complex
ways than before, encompassing dispersed microgeneration and generation at
levels above micro through to full power station scale. It also means charging
structures and even disconnects that differ from past grids.

Smarter in the smart grid means being better at managing power generation and transmission.

Part of the picture involves the smart meter. Smart meters should be readable remotely, give pricing and consumption information, manage consumption, give fault details, to name some new capabilities.

Definition of the smart grid: a grid in which the usage and generation of all users is integrated intelligently to provide efficiently secure, economic, and low carbon electricity supplies.

The smart grid is the internet of energy. There will be dynamic ICT features.
We need to be able to monitor energy usage in real time, and send information back to those who can increase or decrease supply, so that outages are avoided. This can’t be done when you
have a static grid and are not reading meters continuously and acting upon the forecast data intelligently.

There is crossover between smart grid and meters. We will be using more energy not less.
Since the number of devices in the home has been and is forecast to continue to accelerate, the total energy consumption in the home is forecast to rise. The increase in energy efficiency and lower energy consumption per new device doesn’t appear to be able to keep the overall energy consumption from rising in any medium term projection.

We will need demand-side management (as well as demand response – see below). This will involve changing the load independently of the consumer.
It may mean addressing millions of devices in a space of less than 5 minutes.
This requires that the communications network can broadcast/multicast.

But smart grids are not just about smart meters, it is also about smart use of your networks and resources. Organisations need to meet power demand with less power generation. One can help them increase, for example, solar and wind integration features through a smart distribution management system, and in energy storage.

Smart grid market structure and market drivers

Who are the stakeholders in the smart grid market?

  • Consumers;
  • Governments;
  • Utilities and vendors;
  • Telecoms.

For governments the keys are security of supply, consumer cost and choice; and hitting CO2 reduction targets set.

For consumers rising bills, bill shock and environmental concerns. Consumers drive fantastic change through. The key ratio for them is cost of energy as a percentage of disposable income (basically). This is rising; what end users pay for electricity across industrial, domestic and others shows a sharp rise from 2003 onwards which has been tending to make the matter more politicised.

The consumer will become better informed, have more choice and become more motivated on cost and emissions. Smart metering means monitoring energy consumption and seeing how to cut bills; it also means accurate bill payments and avoiding visits to read meters; credits for sending back power to the grid from home generation, e.g. solar PV.
Smart meters can be made the consumer’s friend with good planning; there is a risk of increased complexity. There is a lot going on in the smart home over the next decade: online connectivity, smart appliances, smart meters, microgeneration, home energy storage, eVs. This has the potential to make the consumer’s life better more convenient simpler and cheaper.

For utilities, commoditised business and ageing infrastructure; business model; customer loyalty and ARPU; smart meter expectations. Smart meters mean managing peak loads, dynamic monitoring, peak pricing, load forecasting improvements, billing accuracy, CO2 reduction demands met, providing a better service: in short an opportunity and a threat to their market share.
Consumers and utilities interact very little at present, and they broadly do not monitor or manage energy consumption. Through what we are discussing here, we will usher in the ‘engaged consumer’.

For telecoms, agile players, finding the unique proposition, adding value and keeping customers, broadening customer relationships into new services.

Smart meters are the key to a single smart grid which has a dedicated spectrum and channels, according to Arqiva, DECC and others.
Cost of digging up infrastructure of from GBP 750mn to GBP 20bn
according to an Imperial College and ENA study quoted.
What is the benefit of smart metering? From GBP 480mn to GBP 10bn.

The wireless network is not believed able to get inside houses and control meters, therefore a dedicated, secure and reliable infrastructure is recommended. A single team or group should look after the network.
The network should be universal and the installation process needs to be very simple, avoiding repeat visits for maintenance and upgrade (over at least the life of the metering equipment to be installed.)

Smart grid business models, economics and value propositions

Business models for smart energy services can be segmented into walled garden and open models. The walled garden is secure and private but may require change of meter, may limit innovation and investment in it, and cause market distortion or slow roll-out. The open business model opens up the market, promotes competition and investment, but may have security and privacy issues. It may also not exclude walled garden models needed in some remaining areas.

Smart meters will drive the smart grid, but they are really just the beginning.

The suppliers of home energy management products and services can range from simple displays through to full home automation even when there is a lot of supplier pricing data to react to from the future, smart grid.

There will be energy services in homes that happen under the bonnet like engine management systems.
The controls can switch between entertainment or savings modes!
It still needs something in the home to give that information. How do you get the consumer to buy that equipment, just as they will pay for TVs etc? There may be a feeling that it should be free like Google.

Channel partners can help raise awareness: trusted brands.

The broadband market shot up when the telcos subsidised the GBP 40 connection fee and gave away the modems.
The barriers were removed. In turn, the energy and metering market needs hardware subsidies, easy installs and service bundling.

Installation should be simple and done by the customer, and data should be available anywhere.

New companies need to be where the customer is – online and open.

Smart phones are a major opportunity. Apps are great because they mean suppliers can get their DNA into a lot more places very quickly.

Coming from the telecoms gateway to the (smart) home, these companies, rather than trying to retail energy, could be exciting the customer with energy information about and control of their home, and thus increasing average revenue per user.

Value is where the information is, how data converts to useful info. Telling a consumer that changing the temperature to a given level on the washing machine would save a given amount of money.

We are in the early market stages: we need to know what is home energy management.

The market is going to change alot. It is going to get more complex for the customer. Time-of-use tariffs, grid microgeneration and feedback and FITs etc are part of this. The utilities can help with this complexity, as well as new entrants and partners.

Everything, anywhere is good: a given customer will want to transact in a given way. If we do not provide this then they may disconnect. What are my priorities therefore? We should be putting effort into understanding and engineering the routes to customers because that is where the value is.

We have multiple touchpoints through the buying cycle.

What we are talking about here is changing behaviour:
the barriers to change are addressed in two ways: by product design and by services.

Segmentation tells us where the potential value is.

We’re in this interesting shift from producer-efficient supply chains, which bring down cost, over to customer-effective demand networks, which is about value generation and management.

We optimise how we spend our money by segment, offer, channel, by buying cycle stage.

DECC says that major changes to the way power is generated, transmitted and consumed are taking place now. The real value is in understanding the consumer.

Background and recent history

What has focussed attention on change towards the smart grid?

  • Poor customer service perceived – the super-complaint allowed.
  • Concern about security of power supply.
  • Pollution connected to global warming.
  • We are not alone (Other EU nations similar problems).


Billing accuracy improvements would need smart metering, which could cost more, argued the suppliers. A benefit of this is improved energy efficiency. But a public information campaign was thought to be cheaper than smart metering installations in achieving this. Still, the ball was rolling for smart meters.

The price shock in 2005 for gas did not alleviate by trading around the region as planned for (Russia-Ukraine issues; financial hedging issues). Prices went up by a factor of 5 and electricity went up as a result by a factor of 2.5. So the problem of energy security came to the fore. We need a much better and more flexible energy budget.

Surprisingly, of about 1000 TWh of electrical energy produced by the UK annually, about 60% is lost.

The grid includes the national as well as local area and private ones. Mean electricity consumption rate is about half a kW.

CHP, has been around for some time, and works well in terms of efficiency.
Heat doesn’t travel well and tends to work better on local scales. This fact may shape the grid in the future.

We hope to learn how to recognise good solutions as and when they become available.

Alarm bell of virtual power plants and virtual storage. This looks like the banking system in some ways!

The government-sponsored, powerful report from Nicholas Stern suggested strongly that the sooner you act on climate change and environmental degradation, the less it costs you (to do what you can to reduce human impact towards it). Is the energy supplier the right party to be helping us reduce energy use and emissions. But some of our bill is earmarked for reinvestment in work on greater efficiency and lower carbon economies.

We need a way forward that allows us all to participate in the planning. Without this there are greater risks of losing buy-in.

The keys to the smart grid are

  • appropriate communications
  • data security

. The three core aspects of the smart grid are

  • improved performance
  • new architecture
  • new applications

to obtain the types of power transmission and distribution with smart metering needed.

Network storage is part of the solution.

What the smart grid equipment vendors are doing

A million smart meters deployed in USA with an investment of USD200 mn. (Ed. This implies an investment of $200 a smart meter).

Management of smart resources – smart crews. Logistics of installing many meters in short time. Software enables MRO and installation workforce to be smart and save 10-20% of costs while smoothing and destressing processes for users and workers.

We could upgrade infrastructure and layer new technology (internet) on it without compromising lifestyle.

Accurate billing and monitoring enables the supplier to save money.

The energy sector as having high growth in use of energy efficient electronic chips. Two-thirds of electrical power is currently wasted. Such chips can help reduce the energy loss section of increased energy demand and they are key to greening technology, especially in electricity. Efficiencies come from designs at the core, not just system level. Zero load should mean zero power.

$44 bn is spent on powering servers – energy efficiency in this, not just in direct smart grid tech is important.

Demand response

For demand response, you tell the customer what they are paying now and will be paying over the next hour or day or more for their power. Then, smart or any devices under watch, can be told to go on only when electricity is cheapest or cheaper.

On markets, an investment bank has said in 2009 that the Advanced Metering Infrastructure market will be worth $30bn by 2030, and that the demand response market will be worth $30 bn, and smart transmission and distribution will be worth $50bn. Today in 2010, all these areas put together are worth $20bn.

At either end of the transaction, the energy supplier will automatically send digital data to the consumer about pricing. The smart consumer will have programmed settings to act upon this information. The result will be the varied usage behaviour of the consumer. This is the theory! The sending of such data to the consumer may become mandatory in the coming years. In this scenario, the consumer can actually decide to reduce their own bill in various ways that could be automated, rather than by manually changing behaviours.

There is also the case where the supplier can actually dictate whether certain appliances can be used at certain times (hours of the day or night). This eventuality was actually not one of the original goals for the UK grid, but in any case, has been an area which energy-intensive industrial users have been familiar with for some time. This ability would also help the suppliers do forecasting, through tracking, iteration and intelligent-learning.

Further, the supplier would also be able to take automated prepayment or crucially, disconnect the consumer without their permission, on failure to pay. This latter obviously has political and social implications and will need more piloting and discussion.

Smart meters save energy by encouraging off-peak energy use, and by helping the consumer know which appliances use what amount of energy. Appliances will also be linked up.

There are fundamental drivers to the disconnect market: the smart grid depends on them.

Smart meter roll-out challenge

DECC will mandate a GBP 8bn roll-out of smart meters in all homes in the UK by 2020, starting late 2011.

Some early installment players are British Gas, npower and First Utility. These are set to reach several hundred thousand by the end of 2011.

In Holland, they tried to mandate the use of smart meters in the home and it failed. There was resistance and it was voted down. The plans must be trusted; the consumer must know what is going to happen with their data.

Funding for smart meters

Since 2001, private funding of $3.6 bn for smart meters. US stimulus of $3.4bn for smart grid initiatives. ENEL in Italy doing mass deployment now of smart meters. There are projects in the UK, France, Germany, Spain, Netherland; Taiwan, and to follow are: Brazil, China, India, Japan and the Philippines.

Getting new consumption off-grid through ‘DC micronets’

We expect high loads to be monitored and controlled in the home. DC micronets will become common, taking ‘offgrid’ parts of new consumption, such as lighting and electronics. These DC micronets will also drastically reduce installation costs for microgeneration such as solar PV. An example of a partial offgrid solution, is the home-office, whose lighting, computing power and other electronics could be provided for by a small, inexpensive solar PV with DC micronet installation.

DC has the advantage of not needing an adaptor. These are the heavy, often hot blocks that are attached to the plug cable. They can use up an extra 50% of the power being consumed. DC fridges were cited as using about 15% of the energy of DC-AC fridges (standard ones). There is potential to expand DC systems to incorporate more appliances as more power is produced and or efficiencies improve.

The point was made that this should lead to persistent change, or in the jargon, the Return-To-Drawer period goes to infinity, the end of the product life. The controls and advice on smart meters and new systems should have content, be easy to understand, reprogramme and should match lifestyle (have market focus).

Long-lasting batteries for energy storage could play a role in offgrid and or DC based solutions.

Standards for the smart grid

Are there too many or too few standards for the smart grid to meet? We need them to enable good markets and competition was contended. As of 2010 the telecoms and utilities worlds are not communicating very well in this area (and perhaps others).

As well as the Battle of the Gateways (to the home) there will be the Battle of the Standards which should enable not only the utilities to get a share of the market.

In the US, some 2000-3000 companies are involved in the smart grid at some level.
Standards are essential. If not you have more complexity. This shift is already a complex problem.
People want to sell equipment and services in all markets.

The energy suppliers have suggested that the internet is not reliable enough for some aspects of the smart grid.
There is a huge gulf between electricity and telecoms service providers.

The EU M/411 smart metering mandate is to recommend interoperability standards on smart meters, so that the consumer can know what their consumption is, but to ensure that smart meters in different markets work to the same standards. The timescale is to set this by September 2011.

The machine-to-machine standards which would operate on a generic platform does not yet have the buy-in of the energy service providers.

There is a new ITU focus group on smart grids; trying to produce global standards, and identify the impact on standards development.


Analogue displays more important than digital ones.
There are two kinds of displays – direct and indirect feedback.
Push displays: simple, direct feedback, always on – like the clock on the wall.
Pull displays: Indirect feedback – something has to pull you in to get that extra information to understand what is going on.

Try the so-what test on what info the display is giving you.

Field trials are expensive but important. Push displays looked at more than pull displays; nag factor of whether or not hitting targets. Backlights for displays important (being able to read them easily).

Top-down, the low-hanging fruit for macro government issues around energy and emissions is energy efficiency in the home. How do we get there?

Smart appliances that, e.g., turn on automatically when the sun is shining for a home with PV will be ideal as the consumer doesn’t have to think or even do.

If a consumer’s consumption is trending much higher than usual at that time, then an alert and a suggestion as to what it might be, would be useful.

A simple dashboard that brings together all this for electricity, water and gas where used, is important: interoperability.

Big Retail and smart grids

A large retailer carbon footprint for its sphere of influence splits up into 3 contributory factors. The footprint of the supply chain is ten times that of the direct footprint. And the footprint of customers is ten times greater again than that of the supply chain, dwarfing the direct footprint. So the responsible thing to do is to work with customers on emissions and the environmental questions. It also helps with regulation and with energy security. And of course, it saves money. It is normal now for such a large retailer to state that it wants to lead in the transition to a low carbon economy.
Achieving this has three parts. They could aim to reduce direct footprint by 50% by 2020; to reduce supply chain footprint by 30% in the same time and to help their customers reduce their footprint by 50% by 2020.
(Ed. When we look at the relative importance in terms of emissions saved for these three areas, if the first, direct saving is worth 1 unit, then the supply chain aim is worth 6 units and the customer aim is worth 50 units. But putting one’s own house in order probably makes much of the second aim happen and some of the third, if the company is outgoing enough about its efforts in stores and in marketing.)

The overwhelming trend is that people / consumers are concerned about emissions and environment.
Overcoming the price barrier for green is key; the example large retailer sold more energy saving light bulbs in a week than it had done in a whole year when the price was artificially reduced to a low level.
The next barrier is information: carbon labelling can be important although this perhaps only speaks to the most engaged consumers as of now.

Meeting energy demand as a nation (or not…)

GBP 200bn needed in investment in energy infrastructure by 2020 for secure, affordable and sustainable supplies.
About 20% of this is needed for new energy network infrastructure.

New network energy companies need to be focused on resource productivity to support the Ofgem core mandate.

About a fifth of the consumer’s energy bill today is attributable to network costs.

The grid in its current form is now seen as not being fit for purpose.

‘It is likely that the UK will need around 30-35GW of new electricity generation capacity over the next two decades and around two thirds of this capacity by 2020. This is because many of our coal and most of our existing nuclear power stations are set to close. And energy demand will grow over time, despite increased energy efficiency, as the economy expands.’ UK Government.

Renewables in 2010 produce 5% of capacity and apart from tidal, which is a fraction of renewables, this does not replace base load anyway.

There is a disconnect between the capacity deficit, opening up to over 20GW in the late 20-teens and continuing to grow to over 40GW by 2024, and the statements of government confidence that all will be covered.

If you have planning permissions and funding etc for new nuclear, it would take somewhere between 5 and 10 years, but 10 years is safer, to bring significant power on stream.

We heard that EOn is planning new nuclear to be begun now for production start around 2017: 7 years.

If we got out of coal completely, it would be made up by China and India in 6 months, through their usage increases.

The government suggests we shall build 3000 windmills in the North Sea by 2020, which corresponds to one every day until 2020. But current installation rate is 1 every 22 days.

In the home, emissions fell by 4% between 1990 and 2005, despite home numbers and home electronics increasing their contribution to emissions by 12%. Targets are for a 20% reduction by 2020. But where is the evidence of increased effort in this direction?

The speaker suggested that keeping the power on nationally is a higher priority than climate change targets.

We can’t wait for CCS to be installed on new coal stations; the technology is not ready at scale yet.
Fusion experts at JET have said that there is no chance of a contribution from fusion before 2050.

Demand reduction across all sectors for 2050 targets will be essential.

Turning the theoretical emissions reduction targets into reality will require more than political will: it will require nothing short of the biggest peacetime programme of change ever seen in the UK.

This is a fairly bleak picture; in 2018 when we run into large scale brown-outs, it will have been the practical engineers, not the theoretical physicists, who will have to admit they were too quiet in the period before that time.

All the more reason to push forward strongly with consumer engagement at all levels, smart grids, smart homes, energy efficiency, and clean power.

Summary ends – we hope to see you on 3 December 2010 and 23-24 June 2011!

Definition of High Value Manufacturing

Let’s go back to discuss also the foundations of our conference series and consulting work that began in 2002.

The working definition dating from our first conference on HVM in 2002, was (such that):

A. Not just about linear ‘value-add’
B. A function of time-to-market
C. Intellectual property is above average
C1. Reinvestment in R&D is above average
D. Lower volume or even demo/prototyping stage;
E. New or unfamiliar processes and product types.

F. Typical sectors:
Electronics; printing & displays; medical devices & biotech; aerospace; automotive & motorsport; energy & environment (now called cleantech); materials and nanotechnology.

In January 2006, the IfM said in its report “Defining HVM” that it was:

1. Value is more than profit
1a. HVM companies create financial, strategic and social value
High Value Manufacturing (HVM) companies have strong financial performance but they also generate significant value externally. For example, at a strategic level HVM companies
may be significant contributors to national R&D investment. In terms of social impact,
2. HVM companies may be measured for environmental performance, sourcing policies or their community involvement.
3. There is no simple definition of high value manufacturing; e.g. manufacturing is not production and vice versa.

Home Energy and Technology (HEAT) 2008 Conference Summary

Conference Home

A buzz of over 100 people and 10 exhibitors discussed for 10 hours in 12 talks, 5 special elevator pitches, 2 panel sessions, and 3 hours of social networking, ways to cut in a big way emissions to do with the built environment, as well as ways of building their businesses. The sins of greenwashing: ‘every little helps’; vagueness (what are the figures?); lack of proof; lying; hidden costs or omissions; mentioning only the better of two bad things; were all at the forefront of the minds of delegates at this independent conference on home energy and technology. 

The day began with a description of the difficulties for the early pioneers: solar thermal with storage of heat. Few had such systems, according to a quick audience survey, but the experience in building them into an old house were clear: hire specialists, do not choose builders who don’t care about energy matters. If it is not in their hearts and minds, they will not enjoy the work and you will waste effort and money just getting them to install it properly, and indeed do all the basic things needed to facilitate it, such as lagging all pipes and cutting out drafts.
Using a super efficient solar accumulator tank, much larger than a normal one, and with vastly greater insulation, one could reduce the loss of energy from it to 40-100W as compared to nearly 500W from a normal tank, thus reducing temperature loss overnight to 2-3C, rather than 25-30C. By taking in energy from solar thermal flatplate panels or collectors, one could heat this water and store that energy as a thermal store; and then use it for the radiators and hot water taps. By early March in Cambridge, an average system is heating the water up to more than 40C on a day with a decent run of sunshine.

An example was given of a very careful person’s carbon footprint: but air travel to visit relatives in the US made it very difficult to be significantly below average. The solar thermal system led to a heating-related emissions level of just one third the national average.

The keynote speaker in the morning stated that energy use was set to increase by 57% between 2002 and 2025 according to EPRI, ACEEE and IMS research.
With a chip design company, he was focused on efficient end-use of energy, with the other two pillars of sustainable energy mentioned as renewables and efficient delivery of primary energy to end-use. Poor efficiency of electrical output used in motion was singled out at the area his company could do most with regarding reduction of energy use, and was half of all electrical energy consumption. He suggested that 60% of energy in electrical motors could be saved and that small motors were the best places to look to achieve this (those of less than 10-20kW power).

The claim was that switching to energy efficient motor driven systems can save Europe up to 341 billion kWh/Euro 31 billion per year in electricity (according to BERR, Eurostat and SEEEM 2006). This would translate to about 42 billion kWh for the UK, which is 2 kWh a person a day. This is a small amount of our energy, perhaps about 11% of our electrical energy usage in the UK (not including losses in conversion). In the UK we all use about 125 kWh/day across all types of energy, 18kWh a person a day is in electrical usage but a further 27kWh a person a day is in losses from the primary sources of electrical energy. (see Mackay “Sustainable Energy”).

The speaker went on to say that a range of stakeholders benefit from energy efficiency: Who? Manufacturers can have a more reliable product; service providers should have fewer product returns; The customer has lower energy bills; The government is helped with its energy (sustainability and security) policy; and last but not least, the environment is better protected.

The next speaker presented micro and nano scale energy re-cycling techniques. He looked at savings in electronic design for packaging, air conditioning battery packs. His intelligent output driver would “reduces power losses in driven load by up to 75% and reduce the number of components in a system.” He promised technology for the future which would recycle energy within chips.

Another speaker suggested that refrigeration is a significant source of emissions and inefficiencies and could be helped by better technologies.

Two speakers talked of the need to measure energy and emissions (in the home) through smart metering, so that the homeowner could make better decisions. For example, putting washing into a tumble dryer might be 10% of ones energy bill, whereas putting that washing on the line costs zero or near zero energy and emissions, though it takes more time and effort. The point is that by knowing what the ‘big tickets’ are one can address those and not waste too much time on those which are not, such as phone chargers (less than 0.1% of the average bill).

Looking at the grid for electricity as a whole, another speaker showed a picture of the US from the sky at night, looking very bright across of high percentage of the land mass, and said that $1000Bn of investment was needed to right an aging grid seeing increasing demand.

She noted the stringent regulations on carbon emissions to come. The upgraded smart grid would see many distributed resources complementing central renewable generation of various kinds. This would make grids more resilient to various problems such as faults and natural disasters and would be optimised for variable load factors. The grid would provide higher quality power. Time of use pricing would become more visible and wholesale markets better integrated (“market empowerment”).

The smart grid would not only do all the above, but enable energy storage as needed, so as not to waste it so much and to reduce the overall levels needed to be generated. There would be benefits to utilities and demand smoothing with distributed generation and storage.

The speaker talked of a ‘jigsaw puzzle’ involving utility company and consumer and their settlement based around a number of factors: consumption or ‘negawatts’ (not); small scale generation; large-scale generation; and efficient distribution.

There was a business opportunity for those controlling the home side of the smart grid; consumers would see benefits from the smart grid, which this speaker claimed was real, not theoretical.

The idea of patenting inventions and various other legal areas such as trademarks and copyrighting were presented as ways to procure competitive defence, offensive strategy and licensing models and last but not least as a bargaining chip/selling point and valuation driver in negotiations.

The solar session followed after lunch networking.
The first speaker talked of solar thermal. He had carried out pilot studies with various types of household: e.g. two adults and a child; three children; one adult and two children; two adults and so on. Generally, over one year, they diverted from 30% to 70% of their gas usage to ‘free’ solar.

He went on to show that solar thermal and air source heat pumps gave the biggest ‘bang for buck’ on CO2 emissions reductions as compared with PV and micro-wind. PV was not far off the pace; wind was very low.

BERRs renewable energy strategy document suggested 7 million solar thermal installations was the target. This would correspond to a quarter of all homes? The HEAT audience survey showed about 3% having installed solar thermal technology.

A speaker on transparent solar energy said that “PV is one of the world’s fastest growing industries -averaging 34% cagr for 30 years and 44% in past 5 years with doubling in 2008 alone. Its installed capacity was only 252MW in 2008, 3073MW in 2007 and some 5000MW in 2008. The PV market was worth some Euro 6bn in 2007 and projected to be worth Euro 10bn in 2008 growing to Euro 30bn by 2012. The forecast for 2013 is $100bn revenues and 23GW (LuxResearch); production doubled in 2008 and forecast to reach 29000MW in 2012. Commercial investment in PV in 2007 alone has been Euro 32bn rising 77% over the previous year.

PV’s growth was reflected in application shift. In 1997 only 8% PV was grid connected. In 2007 90% was grid connected”. Yet, he went on, “the opportunity is just touching the surface. Germany and Spain alone represent 70% of demand and Japan and California most of the

PV market drivers are energy security, fuel costs/cost volatility (grid parity within reach), global warming and imposed regulations and feed-in tariffs.

Another PV speaker looked at how PV was first “off-planet” then “off-grid” and now “on-grid”.

A chart was shown giving the price of PV generated electricity in 1990 to 2040, with worst case values coming down to Euro 40 cents in 2010 and then down to Euro 20 cents in 2020 and on down to Euro 10 cents by 2035. Best case prices were at Euro 18, 13 and 5 cents at those corresponding dates. Prices reached those of the grid between 2008 and 2020 for highest grid prices and between 2020 and 2034 for lowest grid prices.

A chart of countries’ situations showed Italy reaching grid parity now, California, Spain and Australia reaching it well before 2020, and other nations trailing, notably China and India. The south of the UK appeared to fall just after the 2020 grid parity curve.

Examples were given of EU nations’ feed-in tariffs, such as France, where a very favourable, guaranteed tariff payment to those people generating PV of Euro 57 cents per kWh. It is clear that for most systems this would mean that there would be a net income back to the customer for that 20 year period. The UK lags badly this kind of initiative, and one wonders what political capital problem there can be in implementing it. One hopes given France and Germany have done it, this is not the reason why the UK cannot follow: the UK can decide to it in spite of this, if needs be.

The business model resulting from such FiTs was presented, giving a claimed 12-14% IRR (which takes into account capex for the installation). The building owner would lease her roof space for the system thus obtaining an income from it that wasn’t there before, the PV developer would install it, and the third party investor would benefit from that positive IRR.

An alternative model was that the bank would finance the installation by a service company for a homeowner, who would obtain a small income for ten years and a larger one for a further ten to twenty years. The service company would also design the system and arrange the finance with the bank.

It was estimated that from 20% up to 59% of electricity in the largest 5 Western European states could be derived from solar PV: 178 to 512 of 860 Terawatt hours a year.

The industry’s target as of 2008 was 12% of EU electricity to come from PV by 2020, corresponding to a 350GWp (Gigawatt peak power).

A member of the audience discussed his own PV system and claimed that it had provided more than half of his electricity on tap and had paid for the entire bill through selling back to the energy ‘provider’.

The final speaker in the solar session had a rather different technology, that of concentrated solar power. This works by converting heat produced from solar thermal energy directed from a system of mirrors to steam and then the steam drives turbines that create electricity, which is sent into the grid.

The speaker suggested that carbon capture and storage doesn’t work, because the CO2 leaks out and was susceptible to natural shocks. He also claimed that it was uneconomic and not ready.

He described nuclear energy as “one major incident from shutdown” and cited the power plants, fuel reprocessing and toxic nuclear waste as possible causes of this. He noted the 10-15 year implementation timescale that was almost as bad as for CCS.

He noted the challenges for renewables of load-matching, financing and political collaboration.

Concentrated solar power was beneficial in that it had lower costs, higher cell efficiencies and low areas needed.
It could be applied to cooling as well as heating. Also: air-conditioning; desalination; power generation and water pumping.

The CSP technology would also meet green targets reduce business exposure to energy price spikes and decouple the timing of projects from the availability of the power grid or gas networks.

There was a discussion on ‘Solar communities’, timely infrastructure, walking communities, mobility, lower cost long term and silent energy. The idea was that cities have become, like SUVs, ‘unfit for purpose’.

In the final session, an investment fund spoke of energy efficiency as key to the energy problem. They showed a German Advisory Council chart claiming that solar would provide just under 25% of global primary energy by 2050, with fossil fuels and nuclear still at 50%, and other renewable carriers making up the 25% or so combined. By 2100, they foresaw that solar energy would represent 75% of the mix, with fossil fuels and nuclear having reduced right down to 10-15%.

A company offering the construction of code 5-6 “passive homes” under modern methods of construction, in very short timescales from partial kit form, gave a highly interesting talk. Clearly, since we are currently generally at code level 3, this would be a tremendous leap-frog. Housing associations are very interested in passive homes, for obvious reasons. The current building industry slump clearly isn’t helping this type of development go ahead.
The speakers told the conference that: “Domestic property contributes 27% of UK’s CO2 emissions. The Government is seeking to reduce the emissions from new homes to zero carbon in all new housing by 2016.”

Space heating was claimed to be just under 60% of household energy consumption.
Assuming that the space heating causes approximately the same level of emissions per unit energy as the rest of the energy use, this means that by eliminating the need for space-heating we could save a maximum of 16% of our CO2 emissions nationally by building or retrofitting to only Passive Houses. Of course this is unlikely! But for any new builds, it can be done.

What is passive house? The speaker likened it to a super efficient thermos flask rather than a wasteful hot-plate for a jug of coffee. With the thermos flask, the coffee remains hot for a period of time, and the flask is “off-grid”.

The aim is to keep the heat within the house. One uses heat exchanger coils to transfer heat from outgoing ‘used air’ to the fresh air coming in. That is, a mechanical ventilation system with heat recovery provides clean and healthy air around the clock, eliminating the need to air the house manually. The building is airtight. The design is such that the southfacing aspects allow in warmth through triple-glazed windows. The walls are thicker. More sustainable materials than concrete and steel are typically used. The way that heat is lost through the roof and floor is dealt with with new technologies. While nothing is ever perfect, this set of arrangements makes the house vastly better at keeping in heat.

The first offsite-manufactured Passive House in the world was built in Ireland in 2003, in just 25 days!

The UK Government wants 3 million new homes built by 2020….35% to be social and affordable! All new homes to be zero-carbon from 2016. This speaker claimed the solution was to apply pre engineered, offsite manufactured, Passive
House technology to all new homes in UK.

We look forward to 2009 seeing you for continuing conversations and discussions on 19 June, 25 September, 3-4 December!

HVM (Closed Loops) 2008 Conference Summary

Summary of HVM Closed Loops Conference Discussions

The conference began by stating that the overall aim was to increase prosperity of a net positive kind, while reducing net use of finite natural resources. This tends to equate to an improved quality of life.

We saw that the ‘anthrosphere’ was in a ‘closed loop’ with the ‘ecosphere’. This is the statement that man is inexorably connected with nature, and that to all intents and purposes the ‘natural world’ is finite, as we are disconnected by great distances from other mineral resources in the universe. We are working in a closed system fed by the sun’s energy. Delegates were shown a diagram showing resources taken out of the ground in one place, ending with a picture of a landfill site somewhere else. This system was patently based on ‘open loop’ principles, and in contrast to the obvious global ‘closed loop’ that had been shown immediately prior.

The concept that ‘closed loops’ could preserve the capital or value in materials and products was then laid before delegates. Two speakers separately made the point that the tighter and shorter those closed loops, the better, but with stipulations that we shall mention below. Clearly, if we tend to close loops at the level of finished products, this tends to be preferable to closing loops, for example, by mining landfill sites at the end of the usage chain.

It was noted that closed loops within plants and factories were highly desirable, such as in the use and reuse of water. Water flows within closed loops for decades within domestic central heating systems, for example, and this principle can be applied with great effect to industrial situations. The anecdote of Edward de Bono was given, where he suggested to an industrialist that if they sent water output from the plant into the river upstream of the plant, then this would ensure incentives for processes to clean up the water being used. In Austria, it is common for management and staff to live slightly downstream of their factory outputs on the river. It was noted that regulations tend to force more reuse of materials within plants.

In the packaging sector, re-use was described as working well in closed loop shipping, especially for bulky, high value items and when suppliers and customers are grouped near to each other. Similarly to the ideas presented in the automotive ‘sale of service’ talk, more costly packaging which lasts much longer was shown to be more economic, whilst clearly more sustainable.

A long list of benefits of reusable packaging were presented. But the speakers covering this suggested that savings and benefits must be carefully and ‘holistically’ assessed, case-by-case, ideally modelled for all estimable parameters and tested in practice.

The example of the decline in doorstep delivery in electric floats of milk and other goods was given. Bottles made of glass used to be taken back and multiply reused; now, we use and throw away polythene cartons whose production is resource costly. The price of delivered milk was shown to have diverged from supermarket carton milk in the years from 1995 to 2004.

Reverse logistic chains were discussed, and said to be made more difficult by variability which leads to high labour inputs, inventory, poor plant use and lower recovered value.

Many categories of ownership transfer models were discussed, which provide incentives for reducing net use of resource by recycling and reusing materials and products. Examples were ‘mandatory take-backs’, ‘deposits’, ‘buy-back’, ‘lease’ and ‘service’ models. In the service model, which was discussed at various stages of the conference, ownership remains with the supplier. The customer then tends to take more care of the used items, and the supplier will tend to provide the cheapest and longest lasting way to meet the service requirement (calculations for the supplier involve ‘Total Cost of Ownership’). This way, interests are aligned so as to avoid use of resource.

The case of beer was discussed. Here, there are several ownership models extant for a single commodity: pub retained glass vs festival bought glass, kegs and bottles and so on.

Closed loops were said to be just one way to improve resource productivity. One can reduce or eliminate use, reuse, recycle or just reduce impact of disposal. Some methods had apparent tensions, such as investing more materials into products in order to extend product life. This was discussed further later in the context of plastics.

It was suggested that businesses should “systematically and persistently seek opportunities for savings”. This might involve planning, trialling, monitoring and reviewing while searching for new opportunities. Not unnaturally, it was felt that independent advice could lead to great improvements that internal thinking might miss.

In a talk on lean thinking, ‘work’ and ‘waste’ were discussed. If customer needs were met better, value was being added. Processes that did not add value, but allowed the supplier to meet regulations were a necessary other aspect of ‘work’. Any other activity is ‘waste’. An example was given where a company performing an analysis of work and waste showed that about 60% of effort being put in was “non value-added work or plain waste”.

Human factors in service-provision were seen as crucial: the interface between people, procedures, machines and the environment. With a persistent rational approach, great gains could be made.

A pivotal talk on sale of service with an example in automotive, suggested that: ‘being less bad is no good’. This refers among other examples, to the continual improvements in efficiencies of petrol and diesel driven, steel-based vehicles (which are highly technologically mature). The obvious basis to this statement is that the number of vehicles shall continue to rise, and that resources used in this manner shall eventually run out. That is, technical resource productivity is necessary but not sufficient in solving global environmental problems. We do need closed loops too, and energy efficiency will be paramount in this, which was the subject of another, electronics sector talk.

It was also argued that vehicle technology is no longer fit for purpose, nor the process by which private transport is provided for society. With sales of product, if one “makes more money from selling a car, one makes more money from selling more cars. A company that sells a (private) transport service rather than vehicles has a financial interest in reducing cost and maintenance and increasing reliability, ownership cycle and product life, as well as energy efficiency. Thus currently opposed interests of society and manufacturers are aligned by sale of service instead of product. Longevity becomes a competitive advantage and the market becomes self-regulating. Problems exist in switching, as this must involve the entire supply chain, and design becomes more crucial”.

A talk on industrial symbiosis suggested that there were projects extant which greatly reduced waste. Relatedly, waste was seen as a business opportunity that is growing. If one can reduce the cost of recycling and improve the quality of recycled output, then the opportunity grows further. Recycling was said never to be 100% efficient, and pirating of products and materials was stated later to be a real problem for closing loops. The point that reprocessed materials often had reduced strength and uses was made; environmental benefits had to be in a compromise with mechanical properties.

There is no single approach that is right for every situation. Later speakers asked the audience to make sure that they were backing approaches that, all things considered, were having the desired effect. They challenged the audience to be wary of fogs of commercials making false claims that amount to “green-washing”, the popular press offering misleading, out-of-context anecdotes, and to appealing but sometimes emotive rather than rational comments of certain other voices.

The organisers CIR hoped that the forum and future fora should provide a place for knowledge to be exchanged, that might enable us to more towards our stated goals. Please see the below link for more information about 2008 Conferences, which we hope all past delegates will attend.

Past HVM Conferences – Programme Talks and Video Podcasts

Forthcoming Conferences