Hungarian deal boosts RES propects

Renewable Energy Sources has signed a deal with Hungarian heat pump designer Thermo Kft, one of Europe’s leading heat pump designers
John Penman

A frozen Norwegian lake was the unlikely setting for Harry Burt’s conversion to renewable energy.
Until then, his career had been spent almost exclusively in the construction sector, working as a senior director with companies such as Miller Group and Bovis.
But on a visit to view a specialist Norwegian house, he was intrigued to discover its heating was generated from under the frozen lake.
“I had actually parked my car on the lake next to a jetty and asked about the heating system and was astonished to be told that it came from under my car,” recalled Burt.
Ground, air and water-source heat pumps convert low-level energy stored in the ground, water and air to provide heating, cooling and hot water for homes and commercial properties. The principle is similar to how fridges operate. They are relatively common in Europe but not the UK.
Heat pumps dominate the Swedish market due to the colder climate and need for reliable cost-effective heating. Two out of three consumers there choose heat pumps when changing heating systems.
Burt knew of the principle behind heat pumps but was surprised they could operate at such low temperatures. In fact, it is possible for air-source heat pumps to extract useful heat from the air at temperatures as low as minus 15°C.
For every unit of electricity used to power the pump, 3-4 units of heat are produced, making it a hugely efficient way of heating a building.
“We were used to low energy bills in the UK until very recently so there’s been no incentive to use much more efficient systems, but the story in Scandinavia is totally different,” he said.
“They have been doing this sort of thing for years and the result is that heat-recovery systems are an integral part of their residential and commercial buildings.”
Now, driven by rapidly increasing energy costs and government legislation which will require residential and commercial property sellers to include energy ratings, interest in heat-recovery technology in the UK is on the rise. In his office at Stirling University’s Innovation Park, Burt is ready to play a major part in exploiting that interest.
Although he saw the gap in the market, Burt admits he did not predict that by the time his firm Renewable Energy (Scotland) was up and running, the cost of energy would be so high and dominating the newspaper front pages.

“It helps focus people’s minds on the cost of heating their homes and offices and there seems little prospect of prices coming sharply down,” he said.
Now, just a year after starting RES — which employs seven people — he is on the verge of finalising a round of funding designed to propel the company to its next stage. Staff numbers will double by the end of this year.
Its backers have been mainly high net worth individuals. But although it remains relatively small, a target of £4m turnover by 2010 has brought it onto the radar of Scottish Enterprise’s Fast Track Growth programme.
RES has signed a deal with Hungarian heat-pump designer Thermo Kft, giving it instant access to Kft’s designers. Kft is one of Europe’s leading heat-pump designers.
RES aims to train and develop installers and engineers, which will allow it to significantly boost the number of systems it instals and maintains and to target commercial contracts for the first time. It is now installing a system for a hotel in the east of Scotland.
“These commercial deals can be worth up to £500,000 a contract so you can see the potential for growth,” he said.
To find how big that potential is, Burt has commissioned Stirling University to study the size of the market. The results will stay private to give him a commercial edge, but his confidence suggests he believes it will back his judgment.
That judgment has been backed by others. The Energy Savings Trust’s recent report into growth potential for micro generation, which includes solar, biomass and windpower as well as heat pumps, suggested there was potential for 500,000 units by 2015 and 2-3 million by 2030. Heat-pump systems are part of that mix.
“I am loath to talk about the size of the potential market. It could be huge and there are many options for micro generation but I think that none has the advantage of heat pumps, which can create three times the energy it costs to run them,” said Burt.
The systems are not cheap. A typical air-based system for a big house costs around £9,000, but grants can cut costs by a third. Payback, through sharply reduced bills, is possible in a few years. Burt recognises that even then, the figure is steep.
“When you are talking about a retro-fit, it is expensive. But in most cases it may be that someone is replacing a boiler at the same time, so that would cost a couple of thousand pounds in itself,” said Burt.
“But it has to be considered in the context of continually high energy prices and the need to reduce our carbon footprint. Commercial properties will have to consider their energy ratings from next year. The collaboration with Thermo Kft gives us the clout to bid for major commercial contracts,” he said.
All the major housebuilders are looking at ways of building more energy-efficient homes but the market now is tough. Burt hopes that by the time it comes back, he can persuade them RES should play a part.
But RES is just one player in a field that is rapidly becoming attractive to others. All the major central heating boiler manufacturers are investing in research for the design of heat pumps. Burt believes the Hungarian deal, government legislation and rising gas bills give RES the edge on rivals.
“The timing is in our favour,” he said. “In six months, this will be a totally different company and then in another six months, totally different again.”