Power Engineering - Connective Energy to lead the UK's new recycled heat market

27 July 2006 - The UK's Carbon Trust today announced the creation of a commercial subsidiary - Carbon Trust Enterprises - to develop new low carbon business ventures. Today's move supports the Carbon Trust's remit to accelerate the transition to a low carbon economy and also demonstrates the business opportunities this creates.

The first new commercial business developed by Carbon Trust Enterprises is Connective Energy, a three-way joint venture with Mitsui Babcock Energy Limited and Triodes Renewables, which aims to become a leading supplier of low carbon heat solutions.

The Carbon Trust's analysis shows that about 45 per cent of the UK's industrial primary energy consumption is currently wasted as heat released into the environment. It estimates that 40 TWh of this wasted heat could be re-used. This is equivalent to the heating needs of Greater Manchester, and represents a core market potential of up to £1bn ($1.84bn) a year in the UK alone and an annual carbon saving potential of 7.5 million tonnes CO2e.

Connective Energy will capture this wasted heat at source and transfer it in the form of steam or hot water to other industrial or public sector consumers in the same area, providing a stable, low cost heat supply. The joint venture will identify, develop, finance and operate the pipeline infrastructure required to capture and transfer the heat.

Mitsui Babcock, recognised globally for its advanced steam generating technology, will provide the technical knowledge and expertise to the venture, whilst Triodes Renewables brings the financial expertise of Europe's leading ethical bank.

One of Connective Energy's prospective first customers is Wienerberger Ltd., a brick manufacturer with factories throughout the UK. Connective Energy would supply waste heat from a nearby small power station to the dryer chambers at one of Wienerberger's factories in Warnham, West Sussex. Stephane Vissière, Wienerberger's Energy Manager commented: "We are delighted to be working with Connective Energy to make good use of reclaimed waste heat. Wienerberger takes the impact that its business has on the environment seriously and this project could lead to carbon savings of nearly 7,000 CO2e tonnes annually, as well as generating revenue through energy savings for our company."

Tom Delay, Chief Executive of the Carbon Trust commented:"Our core aim is to help companies and public sector organisations cut carbon to combat climate change. To make that a reality we need new ideas, new thinking and new businesses. Carbon Trust Enterprises will lead the way by developing exciting low carbon businesses, bringing opportunities for co-investment and partnering to the wider market.

"Connective Energy will be the first of several businesses that we plan to roll out. The prize is enormous. If we can capture heat that is currently being wasted, we can recover energy amounting to almost five per cent of the total energy consumption of the UK industrial, commercial and public sectors. This is good for our customers, good for our investment partners and good for the environment."

Iain Miller, chief operating officer of Mitsui Babcock commented: "Connective Energy is part of our strategy to invest in and develop environmentally sound energy technologies and solutions. It is exciting to be exploring this market, not least as our launch comes weeks after Government highlighted the need for efficient energy use in its Energy Review, outlining a particular desire to exploit combined heat and power through distribution networks."

James Vaccaro, Head of Triodes Investment Banking added, "We're in a strong position to contribute to Connective Energy's commercial and financial structuring capacity."

Other businesses in development by Carbon Trust Enterprises include a venture that will help businesses, particularly those in the food and drink sectors, build solutions that reduce waste, energy costs and carbon by converting production waste into electricity and heat. Ongoing development activity is taking place to identify other new business opportunities for launch over the next 12 to 18 months. Over time, it is intended that these businesses will become a portfolio of commercial low carbon ventures and services, including spin-outs, joint ventures and fee-based services.

The Carbon Trust works with UK business and the public sector to cut carbon emissions and develop commercial low carbon technologies. An independent company set up by Government to help the UK meet its climate change obligations, the Carbon Trust creates practical business-focused solutions to carbon emission reduction through energy efficiency, carbon management, and investment.

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