Playing the generation game

12 May 2010

Decentralised energy generation will be crucial in the fight against climate change, but can construction companies make a move on this burgeoning market? Stephen Cousins reports. 

Most of Britain’s electricity is produced in large centralised power plants fuelled by coal, gas or nuclear. Transmitting power across long distances results in transmission losses of up to 8%, as well as the high costs and environmental scars of pylons and roadworks. But if we can gradually substitute this with a network of local power plants producing electricity at or near the point of consumption, powered by low-carbon or renewable fuels, we can reduce global warming, increase reliability and cut energy bills for consumers. This, in summary, is the argument for a shift to decentralised energy.

The government’s Renewable Energy Strategy sets out plans to source 15% of the country’s energy from renewables by 2020, and is the framework for the shift away from centrally generated supply powering the National Grid. It offers a double opportunity for contractors: the contracts to build the wind-farms, small-scale hydroelectric stations, waste-to-energy plants and district-wide combined heat and power schemes, and the chance to participate in energy services companies (ESCos), involved in the supply and sale of the energy generated.

Costain, for instance, is exploring the waste to energy market, acting both as contractor and in consortiums with energy processing companies such as United Utilities, Viridor or Biffa. “The critical barrier is being at one with the technology you’re adopting,” says Stephen Wells, group strategy and business development director. “You must be confident of it, and with the capabilities of the provider you’re working with. Our preferred position is main contractor with equity stake, or in JV with a technology partner. In the future, we expect to be selling electricity back to the grid.”

Operating at a smaller scale is new entrant Larkfleet Group, a privately owned group of development and building companies. It has recently launched a subsidiary, Lark Energy, to focus on developing and owning low-carbon energy centres for new-build housing developments.

“Contractors not already involved in the big utilities game might find it attractive to get involved in community-scale energy plants,” says Jonathan Selwyn, managing director of Lark Energy. “Compared with traditional gas-fired power stations, biomass plants and CHP plants linked to district heating networks open up more opportunities for construction.”

Adoption of local CHP energy schemes is encouraged by the supplement to Planning Policy Statement 1, Planning and Climate Change, which urges developers and local authorities to consider onsite renewables and move towards neighbourhood-scale decentralised energy sources.

The London Development Agency, for example, has set a target of generating a quarter of the capital’s energy from decentralised sources by 2025, and CHP plants feature in major regeneration schemes at Elephant & Castle, King’s Cross and Wembley City. In Wembley, Mace and EC Harris are working on a concept design for a combined waste-to-energy and CHP facility for developer Quintain Estates.

The Combined Heat and Power Association (CHPA) estimates that about 58 district energy networks, which provide heat and power to local communities, are already being constructed or planned, and that number is set to increase. Both the Labour and Conservative manifestos highlighted plans to give local authorities more power to promote district heating schemes.

“As the residential and commercial market comes back, we’re convinced there will be more of these schemes,” adds Stephen Wells, group strategy and business development director at Costain.

One of the largest so far is in Southampton, where a district heating network powered by an underground aquifer is already supplying heating to shops, businesses and apartments.

Here, groundworks contractor Natta Building has just taken its first step into the market and is installing a £300,000 extension to Southampton’s district heating network, which will link the main heating ring to hotels, offices and residential developments. The contract includes trenching for 1,300m of pipework, roadworks, pipe welding and pipe insulation.

Last year, Galliford Try set up an ESCo joint venture with affordable housing provider Affinity Sutton to deliver energy to 750 new homes, plus commercial and community facilities being built on the former site of Graylingwell Hospital, near Chichester in West Sussex. Apart from helping achieve energy and carbon savings under the Code for Sustainable Homes, it’s hoped the 20-25 year ESCo will help Galliford recoup investment costs (see case study, right).

Halving waste to landfill

Elsewhere, statutory requirements to halve waste to landfill (by 2025, compared with 1995 levels) is also driving the construction of municipal waste-to-energy plants, where the electricity generated is either fed into the national grid, or channelled back into nearby industrial uses. A major incentive for councils is the rapidly escalating landfill tax, which is rising in cost by £8 per tonne each year. A clutch of schemes are awaiting planning permission.

“Construction contracts on PFI waste-to-energy plants will snowball and peak over the next six years,” says Michael Paul, director at construction consultants McBains Cooper. “Some of these will be smaller schemes than previously carried out, with contracts valued at £30-40m. It should open up the market to a hell of a lot of contractors, not just the major nationals.”

Contractors usually carry out civils construction work on waste-to-energy plants as part of an overall PFI contract for construction and plant supply. “This is set to become a growing market over the next five to six years and the building contractors who get involved now are the ones who will pick up all the work going forward,” Paul says. “Civils construction can account for 40-50% of the overall PFI cost. For contractors, as they tend to just handle construction, it’s fairly low risk and there’s currently not a great deal of competition in the market.”

So far, few contractors have been willing to take the lead role on such PFI deals, which would mean assuming on-going responsibility for production and maintenance. However, Anthony Coumidis, director of engineering and environmental initiatives at McBains Cooper, points to the opportunities: “Contractors are not usually prepared to accept that level of risk, but those with the vision can expect large profit margins, especially if they sell the energy produced. It’s similar to feed-in tariffs on photovoltaics, people will become more interested when they see how much money they can make.”

Perhaps the biggest barrier to builders wanting to enter the decentralised energy market is familiarity with the technology. Waste-to-energy plants, for example, can run on a baffling range of technologies from gasification, plasma arc gasification and anaerobic digestion to fermentation.

In CHP schemes, complications include being able to match the power capacity of the energy facility to the year-round energy demands of the associated development, to deliver the appropriate technology and avoid expensive over-specification.

But for contractors that can see their way through the thicket of technical challenges, the drive towards energy decentralisation presents significant opportunities. At Lark Energy, md Jonathan Selwyn hopes to gain first-mover advantage and a long-term stake in the evolving low-carbon economy. “With the requirement to build to more stringent standards on sustainability, there will also be a requirement to source energy from low carbon sources. So we will be involved in sourcing low carbon energy solutions, and the ownership of the assets too.”



Four hydropower stations planned for sites on the River Thames could pave the way for a new generation of schemes across the UK. The Environment Agency (EA) will this month approve three pilot projects to construct and operate sustainable hydropower schemes on weirs at Bell near Egham, Sunbury and Teddington, while a fourth scheme at Romney weir, designed to deliver power to Windsor Castle, goes live at the end of the year.

The Romney weir station will be built and run by hydropower specialist South East Power Engineering and will deliver 200kW, providing electricity to power Windsor Castle during the day, and feed into the National Grid at night.

The EA will lease the three other sites to private developers to design, build and operate plants, with each one likely to link to a local development. “The schemes can plug into the grid but our preference is for something that would also serve the local community,” says Andrew Wybrow, Thames Hydropower project manager for the EA.

The EA has designated about 4,000 weirs across the UK as “win-win opportunities” where a hydropower scheme would not harm fish, could improve the local environment and generate renewable electricity. The EA began exploring the potential of hydropower after publication of the government’s Renewable Energy Strategy, which said it could provide up to 1% of the UK’s energy.


Waste to energy

Costain is leading construction operations on the £3.8bn Greater Manchester Waste PFI, the largest municipal waste management scheme in western Europe. When completed it will produce 8MW of electricity from household waste.

Under a £397m design and build contract, the contractor will construct a total of 40 schemes across the city’s boroughs, including recycling depots, waste transfer stations and waste treatment plants.

Any waste that can’t be recycled will be processed in five state-of-the-art mechanical biological treatment (MBT) plants, which sort and separate the material, then digest it to a residue that can be burned to create energy.

While some the electricity generated will be used to power the MBT plant, the rest will be sold to the grid to provide revenue for the PFI.

Costain began looking at the waste and waste-to-energy sectors six years ago, says business development director Stephen Wells. It realised it needed a full understanding of modern waste recycling and processing technologies, so increasing its knowledge and contacting waste operators became a priority.

“We looked at models for dealing with waste, got to grips with regulation, legislation, discharge consents and met with operators to establish ourselves in market,” he adds.

Based on its successful experience on the Manchester project, the contractor plans to become an equity investor in future waste-to-energy schemes.


CHP district heating

Galliford Try Renewables (GTR) is installing its first CHP district energy network, for a £7.5m, 738 home zero carbon housing project at Graylingwell in Sussex. The development, for the Homes and Communities Agency, is being built on a former hospital site by Galliford Try subsidiary Linden Homes and Affinity Sutton Housing Association.

The onsite energy centre will use CHP units to provide heating for the homes, several shops and a local pub, via three district heating mains. The electricity generated will be fed into the national grid.

District heating was vital to achieving net zero carbon emissions, says Colin Taylor, GTR project development manager: “We first tackled the energy-efficient design of the building fabric. Any carbon that could not be cut we had to offset using renewable energy sources. We have an offsite wind turbine, and the remaining carbon will be offset using two CHP units to provide all the heating requirement.”

GTR is building the entire energy infrastructure, including 7,000m of pipework for the heating mains and connections to each dwelling. The energy centre will have four natural gas boilers, two natural-gas-fired CHP engines, two 48,000 litre thermal stores and a BMS. “The energy centre’s designed to be flexible, so we can upscale the CHP plant when more buildings are linked to the network,’ said Simon Hyams, director of GTR.


Why we specified...

Construction Health

Action Toolkit

Richard Keeling, operations director, Axis RDB

As a refurbishment and construction firm we spend a lot of time on health and safety. But, as with many SMEs, we had no foolproof procedure for assessing the fitness to work of operatives and subcontractor employees.

Most sites have some level of pre-screening, which usually relies on individuals’ honesty or basic medical checks, but Constructing Better Health [the national scheme for occupational health in the construction industry] gives you access to information and software to manage employee work-related health data. The Construction Health Action Toolkit (CHAT) is particularly useful. It’s a database to which you upload information and compare the employee’s job title with a health assessment matrix.

It’s very useful in instances when you are planning to put a specialist to work on a higher risk trade, such as removing paint containing lead, and you want to check if they have suffered any related health problems in the past. They might have been stripping lead for 20 years and your job might be the one that makes them seriously ill. CHAT will also tell you if a machinery operator has a history of epilepsy, for example.

I have all my guys on the database and a list of jobs approaching. The system allows the office administrator, or the manager on site, to update and monitor health checks. It will tell you “Joe Bloggs hasn’t had blood test this month, he needs to go for a statutory medical”.

We belong to the Constructing Better Health scheme, so our employees carry a CBH card which identifies them to site managers as having completed fitness for task assessments and health checks.

Builders need to sign up to this service, it’s free as part of CBH membership and the database integrates very effectively into a contractor, labour and subcontractor management system.

Product news

“Inject energy into your parking space!” says photovoltaic specialist Enerqos France, which has updated its photovoltaic sun canopy for cars. Sun4park shelters cars in bad weather and in summer it cools them while capturing solar energy. Electricity is generated using PEC polycrystalline solar panels fitted to the canopy roof. The panels have the lowest carbon footprint on the market, Enerqos France claims. Sun4Park modules can be slotted together and each one includes a prefabricated concrete base, so no need for foundations.


Pilot push-in ear plugs from Sperian are designed to provide protection against occupational noise hazards over long periods of time. The bell-shaped ear plugs feature ergonomically designed “push-in” stems, which are easy to insert, 

fit snugly in the ear canal, and can be worn for several days at a time without compromising hygiene or protection, according to the manufacturer. Made
from the company’s patented Max polyurethane
foam, the ear plugs are easy to wash and do not obstruct the ear canal.


ArmaWeave high security fencing has been given the Secured by Design award by the Association of Chief Police Officers. Manufactured by Zaun, the tensile woven fencing requires no welding, and because the gaps in its steel mesh are very small, intruders cannot climb up it. This also means there is little space for an intruder to insert a blade or cutting tool, which can be a problem in traditional welded mesh fences, says Zaun. ArmaWeave is available in 12mm x 12mm or 12mm x 50mm patterns, in heights from 2.4m to 5.2m, and in a variety of colours.



Tips of the Trade: Mitigating fire risk on site

01 Be legal

Health & Safety legislation, and insurance requirements, means construction sites must have adequate fire detection and evacuation warning systems to protect site personnel. With corporate manslaughter legislation now in force, site owners and developers who flout H & S legislation are likely to be harshly treated by the courts. 

02 Use new technology

As construction sites are constantly evolving, permanent hard-wired fire warning systems are often not practical. Also, with refurbishment projects, there may be a need to deactivate the permanent fire systems while work is under way. To deal with the specific needs of the construction sector, wireless technology is a proven alternative. Wireless systems can easily be moved or extended as work progresses, and are equally suited to refurbishment projects.

03 Choose the right system

When selecting smoke detectors for a fire alert system in construction, these should be specifically designed for building sites, with greater tolerance to dust and particulate contamination.

04 Make a noise 

The system should also involve a combination of 1) break glass units, which will alarm when the glass window is broken; 2) klaxons for mounting on a wall, with a break glass window to trigger a loud audible local alarm warning; 3) sirens for evacuating the whole site, with about 150dB of output to deliver a very loud fire alarm warning.

05 Fast response

Wired or wireless systems work best when they are linked to a remote monitoring centre manned throughout the year. When any of the units are activated they will send a signal to the remote centre so that appropriate action can be taken.


By Richard Lang, managing director, Tag-Guard

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