The date in this article come from a home of about 90 sq metres (approximately 1000 sq ft), which is about 20% larger than the UK average dwelling. Because the house is detached, with a larger exposed wall area, energy bills are likely to be higher than a terraced house or a semi-detached of the same size.  But the householder has done substantial eco-renovation on the house, including filling the cavity wall and insulating the floors and loft. The windows are double-glazed. His final action was to install a new air source heat pump, put in place by specialists. He knew that a heat pump could only possibly be effective in a well-insulated house but he thought his work would mean that his family would benefit finacially from the new heating system. So far, this hasn’t been the case

My rough calculations suggest that this well insulated house probably loses about 200 watts per degree of temperature difference between the inside and the outside. That is, if it’s 10 degrees outside and 20 inside, it will need a heating system that provides 2000 watts, or 2 kilowatts. The key question : is a heat pump a good way of providing this?

The big advantage of this relatively new technology is its potential ability to use relatively small amounts of electricity to create larger amounts of heat. (No – this doesn’t break the laws of thermodynamics, see here).  The effectiveness of using heat pumps to cut our energy bills depends crucially on how much heat you get out for every unit of electricity you put in. Manufacturers will usually quote ratios of three or four. This householder’s experience suggests that the real figure may be as low as 2 or below.

At that level it makes no sense in cash or carbon terms to use a heat pump. Even for homes with cheap rate meters (‘Economy 7’) for night electricity, the average 24 hour price of power is about 8.5p per kilowatt hour at the moment.  Mains gas – which isn’t available around the home whose electricity usage I am reporting here – is about 3.5p per kilowatt hour. In other words, a heat pump which converts one unit of electricity into only two units of heat costs more than 2 units of gas. The carbon dioxide emitted at the average power station to produce a unit of electricity is also over twice as much as the direct emissions from burning gas in a home boiler. If the figures at this home are typical, heat pumps don’t work well in the UK. (This is a strange finding – they really do work well in some other countries such as cold Sweden and nobody seems to be sure why things aren’t the same in the UK).

The failure of many air source heat pumps to save money in Britain must, I suspect, be down to poor expertise among installers. Heat pumps are fiddly to operate and require delicate adjustments. Unfortunately, until this problem is solved, no householder will be prepared to be the guinea pig for a technology that often seems to struggle in (relatively) cold weather. Some sources suggest that the problem arises because the pump ices up – but this doesn’t explain why the same problem doesn’t occur in colder countries

The numbers

We’ve had a wide range of external temperatures over the last couple of weeks. It started quite warm but the last few nights have been very cold by UK standards, with the thermometer dipping to as low as minus 7 degrees in the local area.  As the chill worsened, the efficiency of the heat pump dropped dramatically.

*The difference between the average external and internal temperatures

** The average heat loss from the house’s walls, windows, door, floors and roof per degree of temperature difference multiplied by the average temperature difference.

** The metered use of electricity over a typical 24 hour period

In the early part of this short study period, the electricity consumption figures were poor but not excessively so. The family was getting 10 degrees of heating of his house from the pump for about 25 kilowatt hours a day. This meant the ratio of heat output to power input was about 2, well below the level promised by the manufacturer but still nearly enough to justify using a heat pump. But as the thermometer fell, the bills went up. He was getting about 100 kilowatt hours of heat for each 100 kilowatt hours of electricity he used. This means that in cold weather the unlucky householder is spending eight or nine pounds a day on electricity (multiplied up, £250 a month) but, even more strikingly, he would be better off if he simply installed a few electric heaters in the main rooms. In fact, if I were advising him, I’d say he should turn off the pump whenever outside temperatures fall below about 7 degrees.

The householder has been worried about the performance of his expensive new heat pump since it was put in. He’s had the people who installed it round, as well as the main contractors for the insulation improvements, just  in case they could find out whether the house had major temperature leaks. His concerns seem warranted because his pump is costing far more than it should do. This story  is repeatedly heard across the UK – it’s now time to really find out why many of the heat pumps installed in houses come nowhere near achieving the benefits claimed by manufacturers.

This will to have to change. Without cheap, robust and very large scale electricity storage, electricity grids are going to find it very difficult to cope with the unpredictability of vastly greater supplies of electricity from wind, wave or sun. HIghview Power, a UK company that has operated in what private equity calls ‘stealth mode’ for several years, went public yesterday with an intriguing proposal for a new form of energy storage – air liquefaction. The energy commentators read the press release and politely yawned. Were they right?

The economics of this technology look interesting. What is even more compelling is that you could bolt together a large plant using conventional components freely available today from a variety of major suppliers. Unlike some of the really wacky suggestions for storing energy, we pretty much know that Highview’s ideas will work.  A 350 kW pilot plant alongside the Slough power station has been through extensive testing for the last six months or so.

So how does it operate? You take ambient air and put it through a liquefaction plant using electricity. (Hundreds of these plants around the world today make liquid nitrogen, oxygen or natural gas).  Liquefaction works by expanding a gas, which causes its pressure, and thus its temperature to fall. This technology is a hundred years old. The process uses substantial amounts of energy.

Allowing liquid air to expand increases its volume many hundred fold. This will produce high pressure in any sealed container. If the gaseous air is allowed to escape through a turbine, electricity can be generated. This second phase produces about 55% of the input energy, says Highview. This relatively low number can be improved to perhaps 70% by using waste heat from nearby  industrial processes, such as the hot water from the cooling processes in a nuclear or fossil fuel power station.

How does efficiency this compare? Here are some very rough figures for other means of storing electricity.

(A previous article on Carbon Commentary assessed the economics of using stored hydrogen for electricity production).

The huge advantage of Highview’s plant, if it works as planned, is that each of the main alternative storage technologies have intrinsic problems. Hydrogen is inefficient and the equipment is expensive. Compressed air requires large amounts of storage. Lithium batteries are expensive and don’t like being discharged too often. (Other battery systems are less problematic but they have other disadvantages). Pumping water uphill is cheap and well-understood. There just aren’t many places where it can be done economically.

Highview quoted me a figure of £1,000 per kilowatt of output power. Let’s be clear about what this means. The Slough pilot plant can produce 350 kW of electricity. So the cost of a commercial plant would be about £350,000. (The cost of the pilot was much greater, of course). The Slough kit can deliver about 2.5 megawatt hours when fully charged. That is, it can work for seven or eight hours at full power. If it can be achieved, £1,000 per kilowatt of electric power is highly competitive with most other storage technologies, particularly since operating costs are so low.  A large pumped hydro plant would be comparable, but hydrogen could be four or five times as expensive.

Build an air liquefaction plant and expansion plant to Highview’s designs and what do you get? A megawatt plant would have a capital cost of a million pounds or so. To be cautious, we’ll assume £2m. This plant can be used in several different ways.

First, it can respond to short-term grid problems. Highview says it might take the plant a couple of minutes to start producing useful power to respond to a power station failure or grid problem. This isn’t quite fast enough for the real (but rare) emergencies when gigawatts suddenly disappear from the grid. But is good enough to help respond, for example, when wind farms start having to close because of excess wind speeds. The reverse situation, when National Grid has to pay wind operators to close down because of an excess of national electricity supply, can be addressed by Highview plants. They can also absorb surplus power while the generator close down other sources of supply.  National Grid pays for the small producers, such as the emergency diesel generators at hospitals and sewage farms to be available to produce electricity at less than half hour’s notice. The disadvantage is that these facilities can’t take in surplus power whereas Highview’s plants can act like batteries, either taking in electricity or discharging.

Second, they can provide extremely useful ‘peak shaving’. Electricity demand varies throughout the day. Individual large customers pay both for their total usage of electricity and for the amount of capacity they are using at the times when the total UK demand is at its peak. Such a customer might invest in Highview’s system to reduce its annual capacity payments. Each time the real-time grid information indicated that a peak in electricity was being reached (usually at around 5pm in the winter), the air liquefaction plant would be switched to electricity production, minimising the peak demand of the user and hence reducing the payment for maximum capacity used. In countries such as South Africa, which have electricity grids that are sometimes unable to cope with peak demands, Highview technology could be particularly useful.

Third, the plants could use electricity when it is very cheap and sell it when it is expensive. Typically this means storing power at night and then discharging at the early evening peak. But remember that if the efficiency (input electricity versus output electricity) is only 55%, the price difference will have to be large to make this worthwhile.

What the plants cannot do – because they will never have enough capacity to work uninterruptedly for days – is to replace wind power at times when the turbines are stalled because of metrological conditions. We will always need to have gas turbines for these events. Nevertheless, air liquefaction looks to be potentially the cheapest and most robust way of adding the several gigawatts of energy storage capacity that the UK grid needs if it is to deal with the unpredictability of 10,000 offshore wind turbines. At present, I suspect the financial calculations won’t quite provide the incentive to make the investments necessary. But  the future electricity market will only work if there is a strong financial signal that encourages storage investments. It must happen eventually. Venture capital really should be interested.

Both of these assumptions are probably wrong. One credible source sees the cost of offshore wind falling to levels competitive with gas, albeit over several decades. And foreign interest in offshore wind is growing as the best onshore sites are completed. A Chinese study estimated the potential for exploitable wind power offshore is about 750 gigawatts, perhaps ten times the UK’s likely resource. Over the next few years China plans enormous investments in sea-based turbines. Similar opportunities are available in the US.

First, a couple of points as to why should the UK want to specialise in offshore wind. The country’s territorial waters are blessed with relatively high wind speeds compared to even the best onshore sites. The UK’s resources are about 40% of the total wind power available to Europe. Installation of turbines is difficult but the UK is well placed because of its expertise in putting oil and gas platforms safely in place in deep, rough water.

Early development of offshore farms has been expensive in the UK (and elsewhere) partly because of difficult construction conditions, a shortage of fixing vessels, limited competition between offshore turbine manufacturers and low levels of historical reliability of installed equipment. The push to develop larger and larger farms, usually with increasingly large individual turbines, should reduce capital and operating costs as operators get more experience. Perhaps as importantly, a large number of turbine manufacturers are in the process of introducing new models suitable for the rough UK conditions. The scope of steep reduction in costs is certainly present, a point denied by the Policy Exchange author Simon Less.

The engineering consultants Mott MacDonald provided an estimate for the recent Committee on Climate Change report on low carbon electricity. The consultancy gives the following prospective figures for 2040. Gas with carbon capture (CCS) is probably the least costly way of generating  electricity from fossil fuels without adding significantly to CO2 concentrations.

Offshore wind – £60-£96 per MWh
Gas with CCS – £95-£104 per MWh

(Numbers on pages 7-9 and 7-10 of http://hmccc.s3.amazonaws.com/Renewables%20Review/MML%20final%20report%20for%20CCC%209%20may%202011.pdf

But you might well ask whether any technology that takes thirty years to get to cost competitiveness is worth backing to that point. The answer is that a large number of expensive wind farms will have been put in place before the experience gained reduces the cost to reasonable levels. (For information, the current wholesale price of winter electricity is about £60 per megawatt hour). Yes, it might take about £100bn to get to the Mott Macdonald 2040 figure but the issue we face is that no technology –other than onshore wind – is likely to be much better. And getting tens of thousands of onshore turbines across all the UK’s western coasts is not looking politically feasible.

The Policy Exchange recommendation seems to be that we should spent a lot more on basic research in low carbon technologies.  However the arguments why this would achieve faster and cheaper results than a hard-nosed push for cheaper offshore wind through heavy subsidy of early turbine parks are simply not made in the think tank’s paper.

The more obvious error is to assume that no other countries are particularly interested in offshore wind.  Having opened its first intertidal wind farm just three weeks ago, China says it wants 30 gigawatts of offshore wind by 2020. The exploitable resources of 750 gigawatts compares to the 30-35 that the UK has plans to develop in the next decade or so.  That’s right, China alone sees a market twenty times the size of the UK.

Recent semi-official suggestions are that the cost of the Chinese intertidal farm will run at about £80 a MWh are probably highly optimistic, but show what might be achieved elsewhere in shallow waters.

The US has a similar sense of the value of offshore wind resources, with a figure of just over 1,000 gigawatts being seen as possible at sites with wind speed of more than 7 metres a second average wind speed and in water less than 30 metres deep. Total potential resource might be four times as much, approximately enough to power the whole US at capacity factors of 30%. (It should be admitted that progress in actually building the wind farms off the US coast has been lamentably slow and dogged by controversy. An excellent site off Cape Cod has been blocked by powerful local residents for years).

In Europe, the UK leads in offshore wind but other countries continue to invest in new turbines. 235 wind turbines were installed in European waters in 2011, averaging over 3 megawatts each. Germany, Sweden, Belgium, Denmark, the Netherlands, and Finland all now have offshore wind farms. The German decision to abandon nuclear virtually obliges it to focus on Baltic wind farms as the most significant source of low carbon electricity over the next ten years. The European Environment Agency says total EU installed offshore wind will rise 17 fold by 2020.

The list of other countries beginning to develop wind grows by the month. S Korea has just announced its first major play, a 2.5 gigawatt farm off the south-western coast. Canada has recently announced firm plans for a pathbreaking development off Ontario.

The UK’s enviably rich offshore resources and its leading world position in the development of complex wind projects miles from a coast give the country a major set of potential advantages in exporting construction and engineering skills around the world. The relentless negativity about wind from an intelligent think-tank is disappointing.