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Cogeneration Systems Top 2,000 in United Kingdom in 2013, On-Site Utilities Gain Traction

Thursday, 16 October 2014 09:52 AM

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WHITEFISH, MT / October 16, 2014 / According to the SmartestEnergy’s Energy Entrepreneurs Report, manufacturers in the United Kingdom increased their investment in commercial-scale on-site power by an estimated £53.3 million (US$91.4 million) to a total of £164.3 million (US$281.7 million).  Rising energy costs and concerns over continuity of energy supply were motivating forces behind the 36-percent jump in investment.  Solar photovoltaics projects accounted for the largest portion of the increase.  Solar PV technology is used across many industries worldwide to disconnect from the grid or reduce the amount of electricity pulled from the local grid, such as the case with several NFL stadiums, thanks in part to a partnership between the NFL Environmental Program and local utility Public Service Enterprise Group (NYSE: PEG).

Combined Heat and Power (CHP, cogeneration), the simultaneous generation of usable heat and power in a single process, also saw an increase in schemes in the U.K. during 2013.  The Department of Energy & Climate Change (DECC) released a special report late in September on CHP usage, showing a net increase of 59 schemes from 2012 to 2013.  This took the total number of CHP schemes in the U.K. to more than 2,000.  Discussing the rise with Paul Hamblyn, Managing Director of EuroSite Power, Inc. (OTC: EUSP), Mr. Hamblyn noted that the total number of CHP units operating in the U.K. is actually higher.  The number of CHP schemes referred to by the DECC is taken from a specific set of statistical data, which won’t include CHP units that aren’t registered for CHPQA, a voluntary DECC quality assurance program required for determining eligibility for various benefits designed to encourage the development of CHP Schemes.

Cogeneration systems are versatile in the source fuels, with biogas and natural gas popular choices.  Caterpillar (NYSE: CAT) this month launched a location-independent, quick install CHP system.  The on-site modular power plant can be assembled in less than two weeks to deliver continuous or intermittent power fueled by either natural gas or biogas, making it ideal for not only light industrial applications, but also for the mining and energy industries.

While renewable fuels are growing in popularity, the DECC report showed that natural gas is still the fuel of choice for CHP systems in the U.K., used as the source fuel in two-thirds of schemes.  It also happens to be the source fuel of choice for EuroSite Power, an On-Site Utility provider and servicer of CHP and chiller systems to the U.K. and Europe headquartered in Watford, England.

EuroSite Power offers to its customers a program that guarantees discounted energy costs with no capital outlays.  Collateral benefits of the company’s On-Site Utility solution include increased cash flow, reduced taxation and a minimized carbon footprint.  Offering a guaranteed discount to the current prices from a traditional utility company may seem impossible, but EuroSite Power is able to make the promise due to the intrinsic qualities of CHP and structured business model.

In a CHP system, natural gas is used to power an engine to create electricity.  If that were the end of it, CHP would have no value.  However, nearly all of the “waste” heat that is produced from the engine is captured and reused for other applications, such as heating water, space heat or even for cooling systems.  Therefore, whatever fuel was used to meet the demand for those applications (albeit electricity, natural gas, propane, etc.) is no longer needed.  To make the numbers work, EuroSite Power selectively targets organizations that have large hot water demands, such as hotels, leisure centers and fitness clubs, healthcare facilities, schools and housing districts.  The customer stays connected to the grid; only drawing upon it for any shortfall in electricity as the numbers are matched to meet 100% of the thermal demand.  The customer only pays EuroSite Power for energy that comes from its system.

When the numbers are all crunched, this two-for-one model always comes out less expensive for the customer, not to mention the emissions being captured cuts down on greenhouse gases and criteria pollutants.  Paul Hamblyn says in a video on the EuroSite Power website that savings vary based upon the type of building and system installed, but are typically between £15,000 and £20,000 (US$24k - $32k) annually for its customers.

EuroSite Power signs long-term agreements (typically 15 years) with its customers with a discounted rate locked in for the length of the contract.  EuroSite Power maintains ownership of the CHP system, giving it an asset it can re-use at the end of the contract if the client doesn’t renew.

As mentioned, the number of CHP systems in the UK climbed over 2,000 in 2013.  The widening acceptance is helping EuroSite Power expand its footprint as well.  In September, the company signed agreements worth approximately £3.78 (US$6.26) million with two hotels belonging to FJB Hotels.  Under the terms of the two 15 year agreements reached with FJB Hotels, CHP systems will be installed, owned and operated by EuroSite Power at The Haven Hotel and Sandbanks Hotel, both located on the exclusive Sandbanks peninsula in Poole, UK.

To get a better understanding of the reduction of pollutants, consider that together the CHP systems installed will produce up to 3,326,917 kWh of total energy per annum, while saving up to 472 tonnes of CO2 – equivalent to taking 100 cars off the road each year.  That sales news came less than a month after EuroSite Power disclosed it had installed and began operating one of its CHP systems under similar terms for Crow Wood Leisure, Burnley, UK.  The 200kWe CHP system at the leisure club, luxury spa and restaurant, will generate about 2,532,178 kWh of total energy per annum while saving up to 450 tonnes of CO2 each year.

The new contracts bring EuroSite’s portfolio of UK systems to 32 with a value to the company of £57.28 (US$94.60) million from units totaling 3,288 kW electrical capacity.

The United Kingdom has been a trendsetter for alternative energies and the latest data shows that pattern continued again in 2013, including the cities of Yorkshire and Humber now using CHP to generate a stunning 24% of total electricity generation.  The United States is no slacker either by any stretch of the imagination with initiatives in place to meet national goals under an Executive Order of more CHP capacity by 2020 as the world cumulatively pushes for cleaner, more efficient energy sources to reduce expenses and curb emissions. 

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Except for the historical information presented herein, matters discussed in this release contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Emerging Growth LLC is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. Emerging Growth LLC may from time to time have a position in the securities mentioned herein and may increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice. Emerging Growth LLC may be compensated for its services in the form of cash-based compensation or equity securities in the companies it writes about, or a combination of the two. For full disclosure please visit: http://secfilings.com/Disclaimer.aspx 

SOURCE: Emerging Growth LLC  

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