News: Profile
Oiling the way for renewables
With oil prices reaching well in excess of $100 a barrel less than six months
ago, the renewable industry could quite easily make the case for switching to
alternative energy sources. Yet as oil prices now slip towards new six year lows,
Stephen Davies, commercial director of TGE Group, remains bullish about the
future for renewables
A
s the price of oil continues to
slip, triggered by a worldwide
slowdown in the demand for oil,
the ongoing expansion of global
production and an aggressive extraction of
shale in the US, there’s an extra pressure
on renewable providers to show how the
technologies can offer a financially viable
alternative.
With some forecasters suggesting that
prices will remain low for at least the next five
years, what does this mean for the renewable
industry? Will solar, wind and biomass
buckle under the pressure of this low-priced
petroleum glut? We think not and here’s why.
Energy market dynamics have changed
significantly in the 21st century. In fact, when
it comes to electricity, oil and renewables
hardly mix at all anymore. According to the
International Energy Agency, diesel and other
petroleum-based fuels now account for only 5
percent of global power generation, compared
to 25 percent in 1973.
Let’s also look at how the solar industry
has matured from the mad rush to solar back
in 2012. The industry has consolidated and
importantly the long-term cost of large-scale
solar energy, for example, has dropped 20
percent just in the past year and nearly 80
percent in the last five years. Land-based
wind energy costs have fallen by 15 percent
in the last year, and by 60 percent in the past
five years.
We should also remember that the UK
government, whatever the colour it may be
after the election, is committed to achieving
its renewable energy targets of ensuring that
15 percent of all energy consumed would be
from renewable sources by 2020.
Will solar, wind and biomass
buckle under the pressure
of this low-priced petroleum
glut?
So what does the future look like
for renewables? Our clients continue to
approach us as they look to invest in the
future, to meet their own energy targets, save
money and to keep a cautious outlook as oil
prices remain very unpredictable.
We are also increasingly getting involved
in some innovative schemes where a range of
renewables are used to maximise the returns
and generate the required power, heat or
energy needed for a site.
One such example is the work we
have been doing with Bellway Homes on
the design, build and operation of a series
of District Heating Systems (DHS) for three
residential phases at its award winning
Barking Riverside development.
Rather than rely on a traditional oil
boiler, the brief was to provide renewable
Price war: The long-term cost benefits of
switching to renewables will outlive any short
term gain from falling oil prices, says Stephen
Davies, commercial director of TGE Group
heat systems that meet the developer’s
environmental build targets, whilst providing
residents with lower energy costs. The
schemes used a mix of air source and ground
source heat pump technology to provide
hot water and heating for a total of over 200
homes and five retail units.
All three schemes are supported by an
innovative energy management scheme,
allowing each home to be billed individually
for the energy it consumes with the renewable
systems saving residents up to 70 percent on
their heating bills. As owner/operators, TGE
Group works with the landlords, monitors
and remotely reads the heat meters, whilst
reacting quickly to any alarms or temperature
changes.
The combination of renewables and
taking an innovative approach to energy
management will continue to bring significant
savings and stability for at least the next 20
years. This approach offers both customers
and therefore those in the industry, stability,
savings and a positive outlook regardless of
what happens in the unstable oil markets.
www.renewableenergyinstaller.co.uk | 11