Market Opportunities in the Microgeneration Sector

Table of Contents

• DATAMONITOR VIEW
  • CATALYST
  • SUMMARY
  • SOURCES
• ANALYSIS
  • There are currently seven types of mainstream microgeneration technologies in use
    • Microgeneration is the decentralized generation of zero or low-carbon heat and power
    • Solar photovoltaic systems use energy from the sun to create electricity
    • Solar thermal systems harness energy from the sun to provide domestic hot water
    • Ground source heat pumps extract stored solar heat from the ground
    • Biomass fuel involves burning wood or other organic materials to produce energy
    • Wind energy refers to energy obtained from turbine engines powered by wind
    • The Stirling engine combined heat and power boiler uses a heat engine to simultaneously generate both electricity and useful heat
    • A fuel cell produces electricity through a chemical reaction similar to that found in a battery
  • In Europe, microgeneration is a nascent and fragile market
    • Microgeneration is currently a cost-inefficient and unreliable alternative to large-scale offshore wind generation
    • A range of constraints currently prevents the wide-scale deployment of microgeneration
    • Insufficient optimization of the legislative and regulatory environment is a key limiting factor
    • With greater commercialization, microgeneration could become part of a mass market decentralized energy system
  • In the UK, microgeneration technologies display strong medium-term potential
    • The household microgeneration sector has seen rapid engagement but is still relatively small
    • The Low Carbon Buildings Programme provides grants of up to £2,500 per property
    • Microgeneration technologies could produce cost competitive energy by 2020
    • Microgeneration could deliver significant CO2 benefits
    • By 2050, 30% to 40% of the UK' s electricity demands could be met through microgeneration technologies
  • Utilities' future profits may be significantly influenced by the success of their engagement with microgeneration
    • As it stands, microgeneration is neither a threat nor an opportunity
    • For microgeneration to reach its full potential, large utilities will have to get involved
    • Microgeneration could be far too important to ignore
    • Utilities recognize the future commercial, environmental and strategic potential of microgeneration technologies
• APPENDIX
  • Further reading
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
  • List of Figures
    • Figure 1: Microgeneration technologies achieve more CO2 reduction than most other home energy efficiency measures
    • Figure 2: Solar PV are the most widespread microgeneration technology
    • Figure 3: Solar water-heating is usually the most effective microgeneration renewable energy system
    • Figure 4: GSHP systems are composed of a ground heat exchanger, a heat pump and a heat distribution system
    • Figure 5: Biomass fuel is considered ' green' if the organic material originates from a renewable source
    • Figure 6: Small wind systems are not generally cost-effective at present
    • Figure 7: CHP systems generate both power and heat
    • Figure 8: Fuel cell technology is not yet widespread or commercially viable
    • Figure 9: Current microgeneration installations use a number of different technologies
    • Figure 10: Phase 1: householders can apply for grants of up to £2,500 per property towards the cost of installing a certified product by a certified installer
    • Figure 11: Grounds source heat pumps, biomass, and domestic CHP will be cost effective in 2008
    • Figure 12: Micro hydro is currently cost effective with EEE
    • Figure 13: By 2050, wind is expected to save the highest proportion of CO2 emissions
    • Figure 14: Combined electricity output of microgeneration technologies in 2050 would account for 25% of the UK' s current electricity demand