ENERGY: Taking Forward The City Region’s Unique Renewable Energy Opportunities Simon Pringle, head of sustainability, BDO (chair) Mikele Brack, director, public sector at GE, on combined heat and power Richard Goodfellow, head of energy and utilities, Addleshaw Goddard and member of the LCR Green Economy Panel John Carolin, director of business development, Biogen

Download pt 1 contains slides from: Mikele Brack, director, public sector at GE, on combined heat and power Download pt 2 contains slides from: Richard Goodfellow, head of energy and utilities, Addleshaw Goddard and member of the LCR Green Economy Panel John Carolin, director of business development, Biogen

Island mode 11 th September 2012 Mikele Brack Director, Public Sector GE Global Operations Distributed Generation: The business case for CHP

5 Variable generation Large Generation Variable generation Active Distribution Networks Smart(er) grids & meters, energy storage Active Demand Time of use tariffs Inflexible Generation Distributed Generation Generation Demand Variable Generation The Changing UK Energy Market Changing Generation Mix & Demand Profiles

The Changing UK Energy Market What does this mean? ~75GW Increasingly digital Increase in urban population 15% generation low carbon Regulation to support energy efficiency Carbon pricing ~110GW Today‘s Energy Market Tomorrow’s Energy Market Backup generation becoming more important & valuable 8 GW reserve Generation – 7% 9 GW Coal Retirements 37 GW of renewables on line Residential bills will double Significant coal power plants Predictable demand Low levels of renewable generation 4 GW reserve Generation – 5%

The Power Delivery Model is Evolving

CHP - Cogeneration

Fuel flexibility and tailor-made solutions Landfill gas Sewage gas Associated petroleum gas Special gases Biogas Greenhouse applications Cogeneration (Natural gas) Coal mine gas Island mode

Business Benefits Summary - CHP CCHP – Combined Cooling Heat & Power – 4 year payback Reduced Energy OPEX Reduced CO2 Reduced Risk Increased Security CCHP: coolth, heat & electricity Energy costs typically 20% Asset payback is now < 4 yrs Guy’s & St Thomas’ (6MW): £1M/pa savings Savings may increase with new government policies around CHP Exposure to rising energy prices Guy’s & Thomas’ savings increased by 30% in last 3 years Assuming energy prices rise faster than interest rates, economics continue to improve >85% efficiency: reduces C02 Hot water and building heating provided from waste heat, absorption chillers create cooling Assuming 1 MW: annual CO2 reduction –1k tonne Key part of Government Energy Policy for decentralised energy GE Confidential - Distribute to authorized individuals only. Community facilities & developments CCHP becomes primary source, grid secondary, significantly reducing risk of delays from DNO outages

Optimising Distributed CHP Additional Equipment for new or retrofit facility Gas Diesel Backup Grid Backup Export Electricity Heat for Building Electricity for Building Virtual Power Plant - STOR GAS ENGINE & CHP MODULE Balance of Plant – Back Up Generation, Switchgear and UPS Optimise CHP Design Install Factory & Site Testing Commission Maintain Optimise BOP Design Install optional Factory & Site Testing Commission Maintain Modify existing equipment for synchronisation to grid Switchgear mods Synchronisers Remote Terminal Units (RTUs) for communications GE hosted Bureau for the automated management of the customer owned assets. (Communications – via wireless/ethernet etc) Jointly Optimise Overall System Design & Service Package for Critical Plant

What is STOR? Harnessing existing back up assets to generate new income Short Term Operating Reserve (STOR) This is the provision of additional active power from generation provided by ‘Asset holders’ who have installed standby capacity. Asset Holders – Capacity …are paid for making their generating capacity available to the National Grid Asset Holders - Generation …are also paid when the generation is utilised by the National Grid (at times of peak load, or where traditional generation has failed). Examples are any industry with currently installed standby generation – eg – water utilities, hospitals, banks, data centres, farming… Aggregator GE Energy manages the aggregation of multiple smaller generation providers (Asset Holders) into 3MW lots which are required by NG.

Why is STOR required? Less Predictable Generation & Changing Demand Challenges ScenarioSTOR Hot sunny day, air conditioning on maximum England are in the World Cup Final Emergency mtc -1 GW generation goes off line Grid reserve capacity is now critical Asset Holders spare backup generation sits available Grid sends signal to generation Generation comes on until it is not required Backup generation goes back into standby mode New inflexible generation, wind & solar Changing demand patterns from Electric Vehicles Changing customer behaviour Increasing demand for power

Business Case GE provide STOR income stream Also provide guaranteed maintained backup infrastructure MW Available 1 Available Hours Per Year 7008 Running Hours Per Year 55 Availability Income £ 19, Utilisation Income £ 10, Other savings due to STOR (existing service) £ 4, Total Income £ 33, Fuel ( aprox 265 litres £.63 p/l) £ 9, Asset owner benefit from STOR £ 24, GE undertakes service as a turnkey provider, maintain, operate and trade backup asset Annual health check and remedial reporting Annual asset servicing* 24 hour reactive service Electronic Management System Complete maintenance and performance history (from date entered into GE STOR) Contractual and “bid-in” services

Natural gas fueled CHP More than 3,500 natural gas fueled cogeneration units with an electrical output of more than 4,700 MW worldwide Highly efficient generation of power, heat and cooling Minimizes transmission losses Enhanced total efficiency – greater than 95% Reduces fossil fuel use and greenhouse gas emissions

Landfill gas More than 1,350 Jenbacher landfill gas engines with an electrical output of more than 1,300 MW worldwide Organic decomposition produces fuel gas 1 million tons of waste power 1 MW plant for more than 15 years Waste from a city of 1 million can power 8 MW plant

Sewage gas More than 460 Jenbacher sewage gas engines with an electrical output of more than 330 MW worldwide Sewage fermentation produces fuel gas Waste water from city of half a million powers 1 MW plant Covers 100% of energy needed for sewage plant

Special gas Industrial waste gases - Power produced from steel and chemical industry waste gases - Industries become more energy efficient Synthetic gases from gasification - Highly efficient power generation with biomass and waste gasification

Five decades of experience with gas engines 1948 Serial production of diesel engines and compressors 1951 Start with production of diesel locomotives st gas engine st LEANOX ® gas engine st 20 cylinder gas engine J World‘s smallest 20 cylinder gas engine in the 3 MW power range J World’s 1 st 24-cylinder 4 MW engine J Presentation of “High Efficiency Concept” J st cogeneration module

The right engine for each individual output requirement JMS 208 GS-N.L JMS 312 GS-N.L JMS 316 GS-N.L JMS 320 GS-N.L JMS 612 GS-N.L JMS 616 GS-N.L JMS 620 GS-N.L JMS 420 GS-N.L Electrical output [kW] Thermal output (70°C/90°C) [kW] Natural gas NOx 500 mg/m 3 N (Dry exhaust gas; based on 5% O 2 ) JMS 412 GS-N.L JMS 416 GS-N.L JMS 624 GS-N.L Product line 2009 (50Hz)

Overall DCHP Business Case OPEX > CAPEX over 10 years CHP efficiency & service, eBoost and VPP drive overall economics Reduced time to breakeven 10 year NPV Between 0.3 to > £1M net differenceUp to £8M difference in NPV

Service Offering GE & Clarke – Distributed CHP Provide advice on overall DCHP system design Provide total service package for the life of new and existing facilities On site technical expertise (mechanical & electrical), hardware support, integrated spares and repairs programme Provide VPP for new and existing facilities Retrofit design, install & commission metering and RTU solution Act as the STOR trader for facilities- harnessing our existing GE infrastructure GE & Clarke Energy – Total Lifecycle Support

Clarke Energy A brief introduction… Economic & Environmental Savings from a Decentralised Power Solution Combined Heat & Power Tri/Quad - generation CHP Case Study Quad-gen Case Study Guy’s & St Thomas’ Hospitals Trust (UK) 1 off GE Jenbacher JMS620GS- NL generating set (3MW e each) on each site Low & High Temperature Hot Water and Steam generation Both schemes save the Trust £1.5m in energy bills and 11,500tonnes CO 2 emissions per year GE Confidential - Distribute to authorized individuals only. Coca-Cola Hellenic Bottling Company (NI) 5 off GE Jenbacher JMS620GS- NL generating sets (3MWe each) Low Temperature Hot Water heat 90°C Absorption cooling to produce chilled 6°C CO2 recovery from the exhaust used in the bottling process

Higher STOR bid price likely to be less successful in tender STOR Bid price – volume scenarios modelled: Assume utilisation payments cover operating costs only Average accepted capacity has fallen from a peak of 100% in 2007/8 Three tenders per year: Success in all three tender equates to being available for 3800 hours per year ROC STOR Economics STOR Capacity Price Average accepted capacity price increased by 25% in 2009/10 STOR Capacity Volume STOR Revenue Projections ScenarioSTOR Bid PriceSTOR Tender Successful High Volume£7.00/Mwh3 out of 3 High Price£9.00/MWh1 out of 3 Base£8.00/MWh2 out of 3 Revenue results for 1 x 1250kW ROC Backup Gen Ability to harness existing backup generation as new revenue stream

CHP Reference in London The Shard

Landfill Reference in London Beddington landfill

WWTP Reference in London Hogsmill WWTW

Waste Gasification ELSEF Project East London Sustainable Energy Facility