Archived decisions

Hampshire County Council

Buildings, Land and Procurement Panel

20 March 2007

Yateley School - CHP Feasibility

Report by the Director of Property, Business and Regulatory Services

Contact: Steve Hall Ext: 7771 email: [email protected]

1.	Summary

1.1	Following a report to the Panel on 11 July 2006 a preliminary feasibility study has been undertaken to determine the financial, technical and environmental viability of using CHP plant to provide electrical energy and heat to the buildings comprising the Yateley Schools campus.

1.2	This report sets out the results of the feasibility study and highlights the capital cost of the proposals, running costs and savings in CO₂ emissions by adopting CHP on the site. Two options are considered, the whole of the site being served by the CHP plant and only half of the site with the highest thermal demand.

1.3	Alternative capital investment strategies are also explored in brief to give other approaches to achieve the CO₂ emissions reduction that a CHP installation could offer.

1.4	The report concludes that:

	(i) The load profiles (thermal and electrical) of the site are (at least an initial investigation) suitable for the use of CHP

	(ii) The cost of either of the options is high in capital terms and even with the most advantageous energy tariffs, payback periods are in excess of ten years (and as much as 20 years in the current tariff arrangement).

	(iii) Adopting a CHP scheme will not address the inherently inefficient use of energy on the campus and will not improve the condition of the buildings or engineering services.

	Recommendations

	That the Buildings, Land and Procurement Panel advise the Executive Member for Policy and Resources that:
	(i) CHP is not adopted for the Yateley School campus

	(ii) The Director of Property, Business and Regulatory Services produces a strategy of investment in the site to reduce CO₂ emissions and energy use, and improve the condition of the buildings and engineering services.
2	Introduction

2.1	This report examines the site suitability, anticipated installation cost and simple pay back period for a combined heat and power plant at the Yateley School campus.

2.2	In terms of suitable electrical and thermal base loads, the nature of the buildings and their use lend themselves to consideration of CHP. The Yateley site comprises the Secondary School, Infant and Junior Schools (and their respective swimming pools) and library. This will provide a year round thermal load for the CHP plant as well as a base electrical load.

2.3	A full feasibility study would be necessary to determine the optimum size of CHP unit if this initial study indicates that CHP would be viable. Capital costs and whole life costing would be included as part of the further analysis as would detailed monitoring of electrical and thermal loads across the site. Sizing the CHP involves determining the monthly thermal and electrical load profiles which in itself can be a lengthy process gathering real-time load data across the site.

2.4	Before committing to a full and detailed feasibility study, this report puts together an initial budget capital cost for a CHP scheme based on some early provisional of site loads. The aim of this is to give an early indication of the likely cost, payback and carbon savings for the scheme and hence whether further detailed analysis warrants additional work.

2.5	The budget costs in the report have been based on reusing existing pipework and electrical distribution networks. Location of the CHP plant and trenching for the underground pipework and cable distribution around the site will also affect the budget costs and whilst this has been allowed for based on an anticipated location for the CHP plant, the final location will affect the costs. The rates used to establish the budget costs have been gathered from a variety of sources including published industry cost data and rates for current project work.

3.	Proposed schemes

3.1	This report examines two options for the provision of CHP on the campus:

	Option 1

	Inclusion of the whole site within the CHP scheme. It does not allow for any modification and alteration of the facilities within the buildings except for that work necessary to link the buildings to the new CHP plant.

	Option 2

	Inclusion of only half of the site within the scheme. This would include the buildings within the half of the site that contains the two swimming pools, ie the junior and infant schools, the associated swimming pools, the library (assuming replacement of existing electric heating with `wet' radiator and underfloor system), the main sports hall and main swimming pool.

3.2	The second option was included since it was felt too much of the cost for Option 1 may be dominated by the costs associated with the underground pipework distribution across the site. Option 2 gives a denser concentration of load adjacent to the CHP plant and reduces the extent of trenching required.

3.3	In all cases existing heating and DHWS boiler plant has been retained in each block. Hot water from the central CHP will be distributed underground to each boiler where it will connect with the existing system to serve as a preheat (via cross plate heat exchanger) on the heating return.

3.4	It is proposed that the CHP plant would be located to the rear of the existing main school sports hall between the sports hall and tennis courts, subject to site and planning agreements.

3.5	Following a site survey, this would appear to be the most suitable location in terms of optimising the extent of underground pipework network and utilising access to a bigger proportion of dig in the soft, as opposed to hard landscaped ground.

3.6	The location is relatively central, offers reasonable access for new incoming gas etc and is discreet in terms of position on the site. A purpose made plant room will need to be constructed with all necessary attenuation.

3.7	It is generally accepted that CHP units should run for at least 5000 hours per year. For a six day operational week this equates to approximately 16 hours a day (ie 0600 hrs to 2200 hrs). Whilst the schools may be open for this period for early morning cleaning, normal school activities and late evening community use, it is unlikely that the full heating and electrical load will be imposed for the whole of this time. Reduced running periods of 4000 hours and increased period of 6000 hours have also been analysed to give a comparison of the effect of the reducing or increasing running hours.

4.	Option 1

4.1	Loads and sizing

	A provisional load analysis for the whole site would suggest a CHP unit capable of base heating load in the order of 400 kW and electrical base load of 150 kW. The closest match to these loads from commercially available CHP machines would result in the selection of a 207 kW(T) 140 kW(E) unit.

4.2	Cost analysis

	Table 1 summarises the financial performance of Option 1. As the data used for the analysis was a first approximation of the thermal and electrical loads a sensitivity analysis based on +/- 20% of hours run has been included. An attempt has been made to model the effect of the changing gas and electrical tariffs by comparing the cost analyses when the tariffs change.

	The total build cost for this option amounts to £785,000 (see Appendix A).

	A maintenance cost for the CHP plant of 1p/kWh has been recommended by a major supplier of CHP plant and this has been factored into the costs.

Table 1

Option 1 Analysis (refer to Appendix B for example calculation)

(i) Tariff 3p/kWh gas and 9p/kWh electricity


	Hours run
	4000	5000	6000
Energy cost savings (£/yr)	35137	43922	52706
Payback years	22	18	15
CO₂savings per year (tonnes)	200	250	300

(ii) Tariff 4p/kWh gas and 11p/kWh electricity


	Hours run
	4000	5000	6000
Energy cost savings (£/yr)	43116	53896	64675
Payback years	18	15	12
CO₂savings per year (tonnes)	200	250	300

(iii) Tariff 5p/kWh gas and 12p/kWh electricity


	Hours run
	4000	5000	6000
Energy cost savings (£/yr)	45496	56870	68243
Payback years	17	14	11
CO₂savings per year (tonnes)	200	250	300

See Appendix B for calculations

5. Option 2

5.1 Loads and sizing

Analysis of the loads for the reduced number of buildings shows a base load with some modulation or heat dumping during summer of 182 kW thermal and 118 kW electrical to match to a commercially available CHP unit. A CHP unit with this load profile was selected for the purposes of comparison in Option 2.

5.2 Cost analysis

The table below summarises the financial performance of Option 2. Due to the lack of a full feasibility being carried out, a sensitivity analysis based on +/- 20% of hours run has been incorporated. An attempt has been made to model changing gas and electrical tariffs by comparing the differences in savings when these change. The total build cost for this option amounts to £505,000 (see Appendix A). A maintenance cost of 1p/kWh has been allowed for.

Table 2

Option 2 Analysis

(i) Tariff 3p/kWh gas and 9pkWh electricity


	Hours run
	4000	5000	6000
Energy cost savings (£/yr)	25416	31766	38120
Payback years	20	16	13
CO₂savings per year (tonnes)	141	176	211

(ii) Tariff 4p/kWh gas and 11p/kWh electricity


	Hours run
	4000	5000	6000
Energy cost savings (£/yr)	30737	38422	46106
Payback years	16	13	11
CO₂savings per year (tonnes)	141	176	211

(iii) Tariff 5p/kWh gas and 12p/kWh electricity


	Hours run
	4000	5000	6000
Energy cost savings (£/yr)	31342	39177	47013
Payback years	16	13	11
CO₂savings per year (tonnes)	141	176	211

6. Financial implications of Options 1 and 2

6.1 The capital cost of Option 1 would be in the order of £790,000 and even with the most beneficial tariffs a payback of over ten years is expected.

6.2 It is likely that there will be periods when the electricity generated by the CHP exceeds the demand of the site. During these periods it may be able to export the surplus energy back to the `grid' but this will depend on being able to agree a suitable tariff with the electricity supply company. Although possible in principle, export tariffs are usually a fraction of the value of a supply tariff and cannot be counted upon in offsetting cost of power to the site.

6.3 Depending on the heat load or whether electricity could be exported viably at the time will determine whether the CHP runs or note. The full economic viability of this would only be drawn out by detailed analysis and beyond the remit of this feasibility study. Hence the sensitivity of the hours run ranging from 4000 to 6000 hours per year.

6.4 The feasibility study would suggest Option 2 would perform slightly better than Option 1 in terms of paybacks with figures ranging from 11 to 20 years, depending on the energy tariff (Option 1 paybacks of 11 to 22 years). The build cost of Option 1 of £790,000 also makes this a very high initial capital investment which is dominated by costs associated with infrastructure distribution around the site.

6.5 Option 2 with a capital cost of £505,000 would be the preferred option. More detailed analysis, typically whole life costing may also demonstrate an improvement on the 11 to 20 year payback. However, CHP units are designed for a life of no more than 20 years and the cost of replacement would feature in the analysis.

6.6 The majority of the buildings and engineering infrastructure on the Yateley Campus are now at least 15 years old and as such, whilst generally adequate, are not the most efficient systems in terms of their technology or application. It is also a fact that the vast majority of buildings on the site are not particularly energy efficient compared to modern day standards. Whilst the installation of CHP will mean the generation and delivery of primary energy is more efficient (by using the waste heat from the generation process) it does not mean the buildings consume any less energy. Installation of a CHP will not make those buildings any more energy efficient nor would it improve the condition of the buildings or engineering services in the longer term.

6.7 It could therefore be strongly argued that the money should be spent in ensuring the buildings consume less energy. Measures such as upgrading/improving heating and zoning controls, variable speed drives, replacing lighting, improving the building fabric etc should be considered as, as well as lowering the energy consumption of the buildings, investment would be made in improving the condition of the buildings so reducing the long term maintenance liability.

6.8 Whilst the Yateley Campus has the type of facilities that would lend themselves to the potential for the use of CHP, the particular issues pertaining to the site in this instance do not make it such a viable proposition.

6.9 CHP has a role to play in the local product of heat and power for certain applications. Where other more favourable situations present themselves, CHP should be considered as part of the CO₂ reduction strategy as a integrated approach of the whole project.

7. Alternatives to CHP

7.1 The following areas have been identified as potential for improving energy efficiency and CO₂ reduction on the campus.

Item	Budget cost £
Relighting	185,000
Heating and zoning controls upgrade	50,000
Variable speed pumping	25,000
Thermostatic radiator valves	20,000
Swimming pool modifications	20,000
Total	300,000

7.2 It is estimated these measures would achieve a 19% saving in gas consumption and a 9% reduction in electricity consumption if applied across the whole of the site. This in turn would achieve an annual saving (based on current tariffs of 3p per kW gas plus 9p/kWh electricity) of just over £20,600 per annum giving a simple payback of 15 years. In addition, carbon emissions would be reduced by 200 tonnes per annum.

7.3 An investment totalling £1m is being made in the re-cladding of SCOLA block B during the next eighteen months. Phase 1 of the works, to be undertaken in the summer of 2007, is valued at £390,000 and Phase 2, following in 2008, at £614,000.

7.4 In addition, in the summer of 2008, works to the value of £80,000 to replace corroded underground pipework will be undertaken on the campus which follows on from works in excess of £50,000 to repair and replace underground pipework in the summer of 2006.


LINK(S) TO CORPORATE STRATEGY
	Yes	No
Hampshire safer and more secure for all		_
Maximising well-being	_
Enhancing our quality of place	_

This proposal does not link to the Corporate Strategy but, nevertheless, requires a decision because:

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1 Published works

2 Documents which disclose exempt or confidential information as defined in the Act

........................

BLPP0307B

Yateley CHP Feasibility Budget Cost Summary

Costs - Option 1

	£
CHP unit installation	205,000
Electrical supply to CHP plantroom	1,500
Gas supply and meter to CHP plantroom including trenching	30,000
Construction of CHP plantroom	100,000
CHP controls	20,000
Underground	90,156
Cable	16,620
Trenching	73,000
Existing boiler room mechanical modifications	108,000
Electrical main incomer modifications with existing supply	10,000
Heat meter sub metering £2,000 per block (9 No. blocks)	18,000
Testing and commissioning	10,000
Sub total	682,276
Preliminaries (site set up, Herris fencing etc) at 15%	102,341
TOTAL	784,617

Yateley CHP Feasibility Budget Cost Summary

Costs - Option 2

	£
CHP unit installation	140,000
Electrical supply to CHP plantroom	1,500
Gas supply and meter to CHP plantroom including trenching	30,000
Construction of CHP plantroom	80,000
CHP controls	Included
Underground	45,078
Cable	8,370
Trenching	67,000
Existing boiler room mechanical modifications	60,000
Electrical main incomer modifications with existing supply	7,500
Heat meter sub metering £2,000 per block (9 No. blocks)	10,000
Testing and commissioning	10,000
Sub total	459,448
Preliminaries (site set up, Herris fencing etc) at 15%	45,944
TOTAL	505,393

Calculations

Energy cost saving per kWh of electricity generated (source CIBSE AM12:1999)

Where:

ECS = C_e	(λŋ_CHP- ŋ_B)	x C_g
	ŋ_CHPŋ_B

ECS	=	Energy cost savings in p/kWh
C_e	=	Average cost of imported electricity in p/kWh
C_g	=	Cost of gas in p/kWh
Ŋ_CHP	=	CHP plant electrical fractional efficiency based on HCV
Ŋ_B	=	Conventional boiler fractional efficiency based on higher calorific value (HCV)
λ	=	Heat to power ratio of CHP plant

Note: The maintenance cost in p/kWh is subtracted from the ECS

Energy cost saving in £/yr

= ECS x CHP electrical output x hours run per year

CO₂ savings per year

= (CO₂ generated by fuel input to CHP) - (displaced CO₂ from reused heat and electricity generated by CHP)

Example calculation

Energy cost savings

C_e = 9p/kWh

C_g = 3p/kWh

ŋ_CHP = 0.35 (manufacturers published data)

ŋ_B = 0.65 (CIBSE published data)

λ =	207 kW	= 1.478
	140 kW

ECS = 9+	[1.478 x 0.35 - 0.65]	x 3
	0.35 x 0.65

= 7.25p/kWh

ECS = 7.24 - 1p/kWh maintenance

= 6.25p/kWh

Cost savings = ECS x electricity generated - hours run

= 6.25 x 4000 x 140

= £35137 pa

CO₂ emissions savings

CO₂generated by fuel to CHP = Input (kW) x CO₂ per kWh

= 399 x 0.19

= 76 kg/kWh

Displaced electricity = 140 kW

CO₂ saved from displaced electricity = 0.568 kg/kWh (from Building Regs)

= 140 x 0.568 = 79.5 kg/kWh

Displaced heat from boiler generated by CHP = 207kW x 0.19

= 46 kg/kWh

Therefore saving = 79.5 + 46 = 125.5 kg./kWh

Generated by CHP = 76.0kg/kWh

Net saving = 49.5 kg/kWh

For 4000 kWh per annum 4000 x 49.5 = 198 tonnes CO₂ saved by CHP unit

1000

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Section 100 D - Local Government Act 1972 - background papers