FiT for Investors

Posted on August 19, 2012 by Doug King

Aviva, on of the UK’s largest financial investment operations has bought up 23MW of domestic PV installations from Homesun, one of the UK’s largest installers of “free” solar panels.

How does Homesun provide people with free solar panels? It allows homeowners to benefit from the electricity generated (if they are at home during the day to use it) but keeps the Feed in Tariff (FiT) payments. Obviously Homesun will have done their homework to ensure that all their installations are on optimally sited roofs (they don’t do installations in Scotland) and as a business I’d guess that they are knocking out installations for little more than £5,000 each with a return of £1,000 PA from the FiT. Of course Homesun don’t use their own money for the installations, they borrow money and now pay a hansom return on those loans, keeping a healthy profit for themselves into the bargain.

Does this sound familiar? In March 2010 I wrote in this blog that FiTs were a public subsidy for the rich and I have gone into print predicting that they would become a means of funneling tax payer’s money to the bankers.

So why would Aviva be interested in Homesun? When the financial markets are in turmoil investors run for low risk investments, typically gilts, but with concerns about sovereign debt even those are not guaranteed anymore. So imagine the attractiveness of a government guaranteed annual payment well in excess of the rate on gilts. That is what Aviva bought when it bought Homesun’s 23MW portfolio, a guaranteed annual income of around £9M. No wonder they were happy to pay some £100M for it.

As I’ve said before: everybody wins, the homeowner with free electricity, Homesun’s shareholders and Aviva’s investors. The only people who lose are those who Homesun judged to have unsuitable roofs, who will fund the FiT payments through increased electricity bills.

Since the recent cut in FiTs, Homesun no longer offers “free” PV installations.

Language Barrier

Posted on April 20, 2012 by Doug King

I’ve just had the pleasure of being keynote speaker at Black Architecture’s first breakfast briefing, talking on the subject of Eco-Porn in building design. The event was a huge success and stimulated a lot of high level debate about how the property industry can take the sustainability agenda forward and also deliver substantial additional value for clients and occupiers. (Sorry -Chatham House Rules)

One of the key issues that did arise from the discussions however, was that of language. It is becoming clear to me that we designers do not speak the same language when we talk about sustainability as is spoken by property investors and those who appraise buildings. This results in the standard tick-list approach to environmental appraisal, as we see embodied in rating systems such as BREEAM and LEED, becoming the default intermediary for communicating sustainability between parties. Unfortunately, any rating system that is simple enough that it can be applied universally, by expert designers and non experts assessors alike, must contain elements of compromise. At the moment, that compromise appears to be manifesting itself in a loss of essential energy performance and operational information.

Don’t get me wrong; I am a great fan of environmental rating systems in raising the aspiration for building design. But I don’t believe that when appraising a building we can substitute a single overall rating for all the richness of information that we can convey through proper communication. Building occupiers are increasingly interested in maintenance and running costs and we need to be able to drill down within any rating system to interrogate the underlying performance data and understand how the performance is achieved.

For instance a potential tenant should be able to draw comparisons between a BREEAM Excellent building achieved through energy conservative design which will save them money and one achieved by attaching Eco-Bling post-factum which will cost them far more in the long run. This will require intelligent translation between techno-babble and econo-speak. I’ve said it before and I’ll say it again many times I am sure: if we designers want to be at the forefront of the sustainable property revolution, then we really need to learn a new language to communicate our ideas; that of finance and economics.

No More London Please

Posted on August 10, 2010 by Doug King

Another building that has been getting quite a bit of publicity recently for all the wrong reasons is 7 More London. This new office for PriceWaterhouseCooper is the first building in the capital to be awarded a BREEAM Outstanding rating. Yet when you look at it, this conventional, air-conditioned, steel and glass monstrosity probably should not have even passed Part L of the Building Regulations. Its saviour is that elixir of apparent carbon goodness, biodiesel.

Now is it just me, or is there something fundamentally wrong about an environmental rating system that allows you to construct a building that is just as energy guzzling as all the rest, but then feed its hunger with a scarce and valuable renewable fuel source?

Biodiesel is hardly sustainable, you simply need to look into its impacts on land use and food production to understand that, but it will have a valuable role to play in maintaining essential freight transport in the future. Unless, that is, we consume it all in running un-necessary air-conditioning for poorly designed, inefficient buildings. Actually this is true of all renewable energy sources, we simply cannot generate sufficient to waste it on gratuitous consumption. Oh and by the way I’d love to know how the biodiesel is to be delivered to the building.

The impending energy crisis is likely to be so severe that we will need every drop of fuel available from what-ever source we can find, simply in order to maintain our quality of life. We certainly cannot afford to pretend to be environmentally responsible by rushing to exploit a new resource before anyone else gets there. That’s how we got into so much trouble over fossil fuels.

Kinetic Road Plates

Posted on July 25, 2010 by Doug King

The issue of kinetic road plates came up again today. Doesn’t it sound like a great idea – harvest energy from cars passing over a compressible ramp in the road to drive a generator? Free energy, as long as people keep driving cars.

But hang on – where is this free energy coming from?

Well, since energy cannot be created nor destroyed, it clearly must come from the car’s engine as the only power supply in the vicinity. In order to compress the ramp the vehicle must first drive up it’s incline. The increase in gravitational potential energy created by raising the mass of the car is then converted to kinetic energy as the ramp gently compresses and drops the car back down to road level, driving a generator to create electricity. But, in order to raise the car up the ramp in the first place consumes more fuel, exactly like driving up a hill.

So, rather than harvesting free energy, the kinetic plate is actually stealing a little bit of energy from each car passing over it. That energy must be replaced by burning more fuel; it’s just that the amount of fuel taken from each car is so small that you’d be unlikely to notice.

Now one of the first adopters of this technology is a national supermarket chain – very clever – the supermarket also sells fuel from its own petrol station, so they are onto a double winner. The store gets a free supply of energy from its customers and then sells more energy to the same customers to replace the energy it has stolen from them.

Don’t Mourn Windsave

Posted on March 21, 2010 by Doug King

Windsave, manufacturer of domestic wind turbine distributed through B&Q. went bust recently. Their Chief Exec blamed delays in implementing Government Policy, but I wonder…..

In their original marketing Windsave suggested their turbines would generate 1000kWh and provide “up to 30% of the electricity your household needs, based on average wind speeds and suitable locations”. For a £1,500 price tag this looked to a lot of people like a good deal, and many, including some reputable businesses were persuaded to part with cash.

Unfortunately the reality fell far short of the promises. A survey last year by the Energy Savings Trust found no instance of a micro wind turbine in an urban or suburban location which generated more than 200kWh per year. In some cases the control electronics consumed more mains electricity in the course of a year than was generated from the wind.

The failing was not Windsave’s alone; any rooftop turbine in an urban situation is in the boundary layer where airflow is turbulent and most of the energy has been dissipated through friction. It is simply not possible to generate any sensible amount of wind energy under these conditions.

Nevertheless Windsave seriously overstated the performance of their product. The public backlash started early, with numerous blogs by eco-enthusiasts describing woeful generation from their machines. Windsave were forced into serial retractions of their claims for performance and finally removed all performance information from their website.

If we mislead the public by overstating issues, when they discover the truth they will never afford us credibility again. It is crucial that we avoid doing this when it comes to debating renewables in the context of national energy policy.