Why micro-CHP may not be renewable (yet) but it has the right attitude towards energy.
I recently went to a marine energy conference to see if there was anything the mCHP industry could learn from their approach. Marine energy is a new field in a commercial sense and although it is mostly pilot projects at this point there was a lot of talk about the need to scale-up to become commercially viable and the cost advantages of scaling up a single generator in size. Pilot projects, it was said, could only become a commercial reality if they become as big in output as offshore wind farms are now. The end goal for marine energy was therefore clear, they saw success as fewer but bigger units.
As I sat there politely listening I realised that succeeding by scaling-up to ever bigger and bigger generators was in complete contrast to what I saw as scale and success for the micro-CHP industry. For us in micro-CHP, scale means manufacturing and selling a large number of small power output units. We will achieve larger and larger sales (greater market penetration) as we produce ever smaller in output units so that the products become more affordable to a larger section of the market and a better investment for users as we more closely match their energy needs (better payback).
And so as industries, marine and micro-CHP could not be more different: the ‘big’ industry is trying to produce a lot of electricity and do it cheaply, whilst micro-CHP is sizing small, looking only to match the needs of our customers. This highlights the fundamentally different (and better I think) attitude of micro-CHP compared to large scale energy generation, a difference between just matching a need and providing an abundance. Micro-CHP asks consumers to place a value on the energy that they are using and consider if an investment can make them use less. Big energy on the other hand inevitably asks consumers what they would do with more energy for the same price. We will always need big energy (and Marine energy sounds great) to power our industries and offices, but the attitude of ‘more for your money’ is a relatively bad one for energy (just like for other industries such as plastic and meat) and sends the wrong signal to society about how we can afford to be wasteful and complacent. The attitude and focus of micro-CHP on energy efficiency is a much better one.
The advantages of micro-CHP over large power go beyond a better customer ‘attitude’ to the energy problem. Larger and larger power generation plants have their drawbacks even if they are cheap per unit of electricity produced. The renewable type typically have no inertial mass and so don’t provide inertial support to the grid, in fact they add more risk to the grid from their failure at any point by being so big, and will require extra cost investment in back-up batteries to simulate inertia (non-synchronous generation risk). Furthermore, the greater amounts of power must also be distributed to everyone so that they can use it, meaning upgrades and reinforcements to the electricity grid and further cost. On the other hand micro-CHP units are so small in power output individually they present no risk when they drop their connection to the grid and their potential for flexibility and modulating output up and down could actually add to grid stability instead of taking away from it. On top of that mCHP doesn’t ask for electricity grid reinforcement to fundamentally make money as a business, instead it eases grid reinforcement problems as they make demand disappear.
That is not to say that micro-CHP doesn’t have its downsides. Micro-CHP is a natural gas using technology and so is carbon polluting (at least using current fuels, hydrogen may change that) and is a relatively expensive investment for consumers today. Both these factors needs to be considered delicately; the first is acceptable if we consider it replaces fossil fuel burning elsewhere on the grid and the second suggests a need for a targeted subsidy (more on this in another post).
There are therefore a handful of good reasons to support micro-CHP and to want it to thrive in our energy ecosystem. A focus on big power alone won’t solve all our energy problems and more progress needs to be made in energy efficiency and in the public appreciation of the cost of energy. Especially if we are to decarbonise heat, people have to appreciate energy enough that they invest in their homes. Micro-CHP might not have the greenest ‘credentials’ but it is a technology that starts that investment conversation with consumers and that’s why it has the right attitude.