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Markets for clean energyNovember 2006

The UK market for renewable energy technology is set to expand at a spectacular rate. Abdel Eljidi predicts the technologies likely to become household names, and those likely to remain on the sidelines.

Renewables are this Labour government's white heat technology. Ostensibly, its carbon reduction strategy is pinning a lot on the take-up of clean energy generation, but as reported elsewhere in this issue, it depends on what Labour means by renewable. While the government has set a target of 10 percent of energy to be generated from renewable sources by 2010, Labour wants nuclear to be major part of the UK's energy strategy.

So is there a future for forms of energy generation not powered by enriched Uranium?

Photovoltaics

Photovoltaics come in many different types, although the majority are made from silicon-based materials. They can be categorised into thick crystalline, thin-film polycrystalline, and amorphous types.

In 2003, the UK market for photovoltaics was small at 1.8 MW. The government had been reluctant to sponsor anything except demonstration projects, but a new support programme launched in 2003 made the future for photovoltaics more positive. The technology has recently been boosted by the new domestic production at Sharp's new factory in Wales and the Romag-BP joint Venture for building integrated photovoltaics.

With government investment seed-corning the manufacturing base, BSRIA believes that the market for photovoltaics could grow from 7.5 MW in 2007 to 18.3 MW by 2010, and to 44.7 MW by 2014 - a compound growth rate of around 27 percent.

Solar thermal collectors

Solar collectors have gained popularity in a large number of international markets as one of the most energy efficient alternative technologies for the provision of sanitary hot water.

Although the technology varies from one country to another in terms of shape, size, components used, and manufacturing techniques, the principle remains the same. The products can be categorised as glazed flat-plate collectors, evacuated glass-tube collectors, and unglazed plastic or low temperature collectors.

Glazed flat-plate collectors and vacuum tubes are widely used for solar water heating and space heating systems in all types of buildings. Unglazed plastic collectors are used exclusively for lower temperature applications, such as outdoor swimming pools or the agrarian business.

Flat-plate solar collectors are likely to dominate the market for the next five years, particularly as they can be easily integrated with roofs, have a long life, and perform better than other types of collector.

Heat pumps

Heat pumps are refrigeration devices that can extract heat from the air, water, or the ground. The technology is able to operate in reverse to provide cooling. Heat pumps are available in three basic types of heat pump: air-to-air, air-to-water, and ground source heat pumps.

The air-to-air heat pump market is the largest in volume, supplied by the global air conditioning industry. The main markets for water heating are China, Western Europe, Japan and USA.

The UK heat pump market has been relatively small compared to other European countries such as France and Germany. However, the market is growing from a smaller base, estimated to be around 800 units in 2005 compared to an estimated 500 units in 2004.

Ground-source heat pumps dominate the market (81 percent) whereas air-to-water was estimated to represent 19 percent of total installations in 2005. Very few companies market the small exhaust-air heat pumps for the generation of hot water only.

BSRIA believes that the future for heat pumps in the UK looks promising. Manufacturers and importers of mostly Swedish and German heat pumps are confident that tighter energy efficiency requirements in building legislation will be tightened to include the refurbishment market. Most suppliers of conventional heating equipment have already diversified into heat pumps.

Combined heat and power

Small-scale combined heat and power (CHP) is plant with an electrical generating capacity of less than 1 MWe. Worldwide, this accounts for the vast majority of CHP installations but a relatively low proportion of generating capacity.

Small-scale CHP is associated with industrial plants, or commercial or housing developments where there is sufficient local demand for heat and power to reduce the need for extensive distribution networks. Mini-CHP plant represents the smallest of these applications - smaller commercial, institutional and multi- dwelling sites.

There are three types of micro-CHP technology being developed: fuel cells, Stirling engines and Rankine engines (external combustion engines), and micro-CHP based on internal combustion engines.

In the short term, fuel cell-based appliances are unlikely to provide an economic means of producing the thermal output required for heating-led applications, and external combustion and other developments are unlikely to achieve the electrical efficiencies necessary for viable power demand led operation at the level of the individual dwelling.

BSRIA believes that development and wider commercial availability of attractive fuel cell-based micro-CHP appliances will not immediately render other technologies obsolete. The main potential for fuel cell-based appliances is in power-led applications or where there is low thermal demand.

With the UK set to become the world's largest condensing boiler market in 2005, micro-CHP must be compared to Sedbuk A boilers (greater than 90 percent efficiency) and Sedbuk B rated boilers (86 - 90 percent efficiency) as the new standard in conventional heating. During 2004, the condensing boiler became very price competitive as economies of scale helped to push down prices.

As a consequence there could be a greater marginal cost of micro-CHP products. While there should be some positive effect on installers being trained for more energy efficient heating, it cannot be assumed that the condensing boiler revolution about to take place in the UK will assist the market for alternative heating technologies.

For more information contact Worldwide Market Intelligence at BSRIA:

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