The Manufacturing Sector: Onsite Generation in the 21st Century

By 31 May 2019 General

For years the manufacturing sector has embraced the notion of onsite generation, in reality, the practice goes back to the industrial revolution when mills were ran by hydropower. Ever wondered why most mills are by the river? It wasn’t just for generation but also an essential mode of transport for their supply chain.

In today’s environment, manufacturers are spread far and wide and therefore the working model has had to significantly shift towards one where most are predominantly tied to the grid infrastructure to furnish their power needs. In recent years the energy market has been volatile with ever increasing non-commodity costs to combat this as well as increasing triad charges. In the past the sector used governmental incentives such as Short Term Operating Reserve (STOR), Demand Side Response (DSR) and Firm Frequency Response (FFR) etc and still do to a large extent to offset the rising costs by looking at aspects such as grid balancing, peak lopping or incentive-based operational reductions where possible.

In 2015, Parsons Brinckerhoff were employed by the Department of Energy and Climate Change (DECC) to conduct a high-level study based around the most energy-intensive sectors. They looked at what needed to be done to fulfil the government’s agreement to reduce its emissions to the tune of 80% (1990 baseline) by 2050. The findings in the report weren’t one-sided, they pointed to a level of technological deployment and associated onsite generation across all sectors. (The full report can be found here)

The notion of onsite generation for many manufacturers is perceived as too costly. In our experience there are a variety of sentiments on the subject; combined heat and power is expensive, solar doesn’t work and wind is not viable. But these opinions are generally based on unfounded theories and not facts.

The truth of the matter is until you look at a problem you can’t find a solution. A company who are operating within the upper limits of their KVA in an area where they will never be able to get the distribution network operators (DNO) to increase it, will be unable to expand or grow unless onsite energy generation is factored in.

The question that needs to be asked is not how to generate energy, but what is it that a company wants to achieve by doing so. If KVA is an issue, generation and power usage around a site is carried out when they are working at peak production. A company needs to establish what these peak times are and consequently when they need to reduce their reliance on the main grid and rely more on renewable sources.

Once this has been done, the next step is establishing how. Do they alter their production timetable? Do they generate in certain areas where they are consuming the most around peak times? Or do they investigate alternative energy solutions? thus future proofing their organisation, moving into the next decade and avoid grid reliance totally.

There have been many technological advancements over the last ten years in energy generation which have both reduced the impact on the environment and also reduced our reliance on the grid. Combined heat and power (CHP) and solar are great solutions to many problems, however, there are many more technologies other than these measures, air source heat pumps are extremely popular at the moment and LED lighting will always be an understandable as well as efficient method in reducing energy usage. Voltage optimization and power factor correction are also methods which are highly lucrative in both energy efficiency and money saving (Read more about Energy Efficiency Technologies here).

These measures could be supported by a guaranteed seven-year Non-Domestic Renewable Heat Incentive (RHI) payment, something which looks lucrative and should be explored. The Non-Domestic Renewable Heat Incentive (RHI) is a government environmental programme that provides financial incentives to increase the uptake of renewable heat by businesses, the public sector and non-profit organisations, more information can be found on the Ofgem website here. Another option for funding is our Revolving Green Fund, an exclusive initiative which enables businesses to receive interest-free funds for any energy cost-saving technologies or initiatives.

Those looking into technologies should look at the solution as a multi-technology one, not a standalone measure. A collection of measures which will all add to the end solution, grid management or standalone generation. Something which we can help you do if you’d like to explore your options and talk further with our experienced professionals email or call 02476 997901.


Article written by: Ian Catchpole, Business Development Manager