A guide for the use of the Distillers` Renewables Tool

A guide for the use of the
Distillers’ Renewables Tool
Published by: The Scotch Whisky Association
20 Atholl Crescent
Edinburgh
EH3 8HF
Tel: 0131 222 9200
Email: info@swa.org.uk
September 2012
The text of this guide was written by WSP on behalf of the SWA and Carbon Trust.
About this guide
This document is a guide to the Distillers’
Renewables Tool.
The tool is designed specifically with small and mediumsized distilleries (less than 5 million litres/year in mind).
However, the sections on solar, wind, ground source
The Scotch Whisky Industry Environmental Strategy
heat pumps and hydro will be relevant to Scotch whisky
sets tough environmental targets. By 2020, 20% of the
companies of any size.
industry’s energy use should come from non-fossil fuel
sources, rising to 80% by 2050.
The Tool should be used in conjunction with the
associated Future Energy Opportunities: A Guide for
The tool (which is freely available to all) provides a
Distillers.
step-by-step approach to each available renewables
technology and requires no prior technical knowledge of
We would like to thank Carbon Trust Scotland for its
the technology types.
financial support in developing the tool and associated
guidance, WSP Environmental for developing the tool
It is designed to provide distillers an opportunity
and drafting the guidance and the following companies
to screen and assess the financial viability and
that assisted in the development and testing of the
technological suitability of a range of alternative energy
tool: Beam Inc, Chivas Brothers, Diageo, Edrington,
technologies. It assesses how each technology performs
Glenmorangie and Morrison Bowmore Distillers.
commercially for each individual site assessed in terms
of energy yield and commercial business case.
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A guide for the use of the Distillers’ Renewables Tool
CONTENTS
About This Guide
1
How to use the Distillers’ Renewables Tool 3
How Does the Tool Work
3
Getting Started
Step 1: Input Data
4
Step 2: Select a Technology
5
Step 3: Technology Questionnaire
6
Step 4: Technology Assessment
7
Step 5: Financial Assessment & Summary 8
Appendix11
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A guide for the use of the Distillers’ Renewables Tool
How to use the Distillers’ Renewables Tool
The tool has been developed to enable distillers to
The tool provides a summary output, by technology and
understand the suitability of a range of renewable
a detailed 20-25 year financial assessment.
technologies that could be deployed on sites. This
guidance document provides an overview of the tool and
how to use it. Further details on the technologies and
worked examples are contained in the separate Future
Energy Opportunities: A Guide for Distillers.
Getting started
Once you have downloaded the tool to your pc, start off
by reading the home page. This provides an overview
of the tool and the way it works. The tool is structured to
How does the tool work?
take the user through a process of sequential steps and
has been designed to minimise data input.
The tool has been designed to provide an assessment
of technologies at a specified distillery site. It works
Step 1 – This page requires you to input your site data.
by assessing the characteristics of a site with the
You can save the data in the tool like any normal excel
performance requirements of various technologies.
application, so you can return to the model at any time.
The Distillers’ Renewable Tool has been developed
in Microsoft Excel 2010 and has features optimised
for this version. Users of earlier versions of Excel may
experience error symbols or difficulties with macro
execution. We recommend that you use a computer with
Excel 2010 or later installed.
It also offers insights into:
Step 2 – Select the technology you wish to appraise. You
can select one technology at a time in any order that you
choose.
Step 3 - You will be directed to complete a technology
questionnaire; this determines whether or not the
technology is feasible at your site and directs you to the
technology assessment stage.
Whether a particular technology is suitable for use on
Step 4 – Specify the technology parameters for your site
a site
What level of energy (heat and electric) a particular
technology might yield at a particular location
What the technology might cost to buy and to
operate
with reference to your current and forecasted energy
demands.
Step 5 – Repeat for all other applicable technologies by
completing steps 2, 3 and 4 again.
What level of financial return should be expected
What the typical space requirements for particular
technologies might be
The distilling industry renewables appraisals tool works
by matching your site’s geographic location with known
operating parameters and specific technologies as
appropriate. It also uses the site-specific data entered
by you to then further evaluate the suitability of the
technology.
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A guide for the use of the Distillers’ Renewables Tool
All technologies assessed will appear in the summary
table and detailed 20-25 year cost benefit analysis will be
generated for each technology.
Each step is described in further detail on the following
pages.
Using the Tool
STEP 1 – Input data
The input step requires the user to provide site-specific
data. Data required to assess the site for all technologies
includes:
Site name, postcode and location (from the drop
down box which is geographically closest to your
facility). These are required as they drive the site
feasibility for both wind and solar based technologies
as the tool will determine the local wind speed and
solar intensity at a given postcode.
Site area as specified. This helps determine if the site
has enough space/footprint for certain technologies
and therefore whether or not the site would need to
identify other available land.
Process data including energy
use by fuel type.
Associated unit costs. The
tool assumes certain unit costs
but the user can adjust these
assumptions at this stage.
By-products. This provides
information for the biomass
and anaerobic digestion
assessment elements of the
tool.
Any company or site-specific
energy targets. Please specify
as applicable your targets in
relation to carbon reduction
and or renewables targets and
check the boxes.
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A guide for the use of the Distillers’ Renewables Tool
STEP 2 – Select a Technology
Select the technology that you wish to assess.
Please refer to the separate Future Energy
Opportunities: A Guide for Distillers for an
overview of each technology. The guide describes
how the technology works, its suitability for distillery
application, key conditions required for effective
operation, planning concerns and relative cost.
Complete the questionnaire – you will be required
to complete a very brief technology questionnaire.
The technology selection page will advise if it is
worthwhile assessing the selected technology.
Record of site suitability – this page can offers a
quick overview of the questionnaire and whether
the technologies that
have been assessed
are suitable.
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A guide for the use of the Distillers’ Renewables Tool
STEP 3 – Technology Questionnaire
Each technology included in the tool has an
associated, brief questionnaire. The aim of this is to
screen the technologies for suitability. Suitability is
based on the input data entered in step 1 and your
answers to some specific questions.
Read the question and answer yes/no from
the drop down box.
Recommendation. After completing the
questionnaire, the tool will advise if the
technology looks feasible and is worth
assessing.
The user should then chose the ‘go to the
individual technology’ tab or
click back to the technology
list. You can complete all
the questionnaires before
progressing to the detailed
assessment if you wish.
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A guide for the use of the Distillers’ Renewables Tool
STEP 4 – Technology Assessment
Each technology type has its own input tab where users
input the required data. Each technology input tab is set
out consistently. The example used here covers solar
photovoltaic which are building-mounted.
Measure your floor area. Determine the floor area
(m2) for each building that looks to have suitable
space to mount solar PV panels or solar collectors.
Then identify the roof shape(s) for the building(s) in
question and using the correction factor suggested
for each roof space, enter the roof space (m2)
available.
Orientation and inclination. Select the appropriate
roof orientation and inclination using the
checkboxes for solar technologies.
Technology type. Select your preferred
panel type or wind turbine. For further
details on technologies refer to Future
Energy Opportunities: A Guide for
Distillers. The panel choice you make
at this stage will affect the business case
calculations.
Energy utilisation and proximity to
shading. Finally, enter a figure between
0 and 100% to indicate how much of
the generated energy you expect to use
on site and the likely level of shading
the location may experience. The more
energy you use on site, the higher the
cost savings will be realised.
Fuel displacement. Choosing which fuel
you are replacing with renewable energy
will affect the CO2 emissions reduction.
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A guide for the use of the Distillers’ Renewables Tool
STEP 5 – Financial Assessment &
Summary
Following completion of the technology input tab, you will
see that the area in red to the right of each technology will
be populated with the business case assessment for each
technology. These areas are locked and require no user
intervention.
What does this section tell you?
Energy yield – this provides details of the expected
energy yield for the technology per annum, based on
the technology input parameters and in some cases
(such as solar and wind) the geographic location of the
facility. It also predicts how much of the site’s overall
demand will be met through the deployment of this
technology.
Carbon Emissions – The carbon
emission reductions provided by the
technology. This will be important
to some sites which have carbon
emission reduction targets.
Cost Saving – This provides an
overview of the cost savings derived
from the energy savings and policy
incentives, such as Feed-In-Tariffs, and
the associated revenue generation.
This is summarised into a simple
payback and internal rate of return.
Further details on the commercial
business case are reported in the cost/
benefit analysis generated for each
technology. An example of this can be
seen in the appendix to the guide.
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A guide for the use of the Distillers’ Renewables Tool
Summary by distillery and technology
Once the user has completed all the applicable technologies for the distillery, the information is then
summarised in a simple to use table. This breaks the technologies down into power generation and heat/
steam generation.
Each technology is also accompanied by a detailed cost/benefit analysis which provides a 20-25 year financial
breakdown showing annual operating costs and cash flow and Net Present Value (NPV).
These can be adjusted by the user based on individual company circumstances. The assumptions are
detailed in the appendix to this guide and on the input and assumptions tab. The tool is set to use the default
values currently built in and these can be adjusted. The financial assessment will be affected by adjusting the
assumptions and this should only be carried out with evidenced based information.
It is advised that the user keeps a record of any specific assumptions that they use over the default values
and makes reference to the source of the information.
Graphical Summary by technology
To provide a further summary of the technology options, the tool provides a graphical breakdown, by each
technology of what the picture would be in terms of energy conversion systems, heat consumption and
electricity consumption.
This also provides the user a summary of technology viability.
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A guide for the use of the Distillers’ Renewables Tool
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A guide for the use of the Distillers’ Renewables Tool
Appendix: Example of a cost-benefit analysis produced by the
Tool
Input Variables
Variable
SYSTEM
WIND POWER
Inflation
2.0%
2.0%
6.8%
TARIFFS/
RENTAL
2.0%
CAP
EX
Year 2
Year 3
Year 4
Year 5
Year 10
Year 15
Year 20
Num ber
500
818,885
Degradation
Availability
%/year
%/year
0.50%
1%
Installation costs
£/kWp
£
3,000
O&M
£/kWp
£
40.00
£
40.00
£
40.80
£
41.62
£
42.45
£
43.30
£
47.80
£
52.78
£
58.27
Generation Tariff
Export Tariff
Grid Elec Cost
£/kWh
£/kWh
£/kWh
£
£
£
0.175
0.020
0.090
£
£
£
0.175
0.020
0.090
£
£
£
0.179
0.020
0.096
£
£
£
0.182
0.021
0.103
£
£
£
0.186
0.021
0.110
£
£
£
0.189
0.022
0.117
£
£
£
0.209
0.024
0.163
£
£
£
0.231
0.026
0.226
£
£
£
0.255
0.029
0.314
Generation used on site
%
kWh/yr
50%
409,442
409,442
403,300.76
397,251.25
391,292
385,423
357,371
331,444
307,398
Annual yield
kWh/yr
818,885
818,885
806,602
794,503
782,585
770,846
714,741
662,888
614,797
Cost of system
Revenue from generation tariff
Value of electricity saved
Revenue from export tariff (ONSITE)
£
£/yr
£/yr
£/yr
£
£
£
£
1,500,000
143,305
36,850
8,189
O&M
Total
Cashflow
£/yr
£
£
-£
20,000
Unlevered IRR
Year one yield
Generation tariff income over 20 years
Average annual generation tariff income
Export tariff income over 20 years
Saving in grid purchased electricity over 20 years
Average annual saving in grid purchased electricity
Simple Payback
NPV
Benefit to Cost ratio (B-C)
11
Year 1
Unit
kWp
kWh/yr
ONSITE
6.0%
Year 0
Turbine Size
Annual output
%
%
£
£
£
£
£
yr
£
£
£
£
£
£
£
-£ 1,500,000
£
£
£
143,305
36,850
8,189
£
£
£
-£
20,000 -£
-£ 1,500,000 £ 168,344 £
-£ 1,500,000 -£ 1,331,656 -£
10.80%
20.56%
2,998,181
149,909
171,325
1,244,519
62,226
8.91
680,743
0.16
A guide for the use of the Distillers’ Renewables Tool
143,978
38,765
8,227
£
£
£
20,400 -£
170,571 £
1,161,086 -£
144,655
40,780
8,266
£
£
£
20,808 -£
172,893 £
988,192 -£
145,335
42,900
8,305
£
£
£
21,224 -£
175,316 £
812,876 -£
146,018
45,130
8,344
£
£
£
21,649 -£
177,843 £
635,033 £
149,482
58,144
8,542
£
£
£
153,067
74,929
8,747
£
£
£
156,738
96,560
8,956
23,902 -£
26,390 -£
29,136
192,266 £ 210,353 £ 233,118
296,187 £ 1,310,139 £ 2,428,078
Registered Office of the Association
20 Atholl Crescent Edinburgh EH3 8HF
t: 0131 222 9200 f: 0131 222 9237
e: contact@swa.org.uk
w: www.scotch-whisky.org.uk
London Office
14 Cork Street, London W1S 3NS
t: 020 7629 4384 f: 020 7493 1398
e: london.office@swa.org.uk