For the purposes of this guide, “on-site power solutions” refers to physical infrastructure that provides sites where electricity is consumed with reduced reliance on electricity from the grid. Typically this physical infrastructure will take the form of on-site electricity generation – often renewable like solar and wind but also frequently using fuelled approaches such as gas and diesel generation – and, more recently, storage of electricity (either in combination with on-site generation or deployed solely for storing electricity taken from the grid).
Overview of the market
Market size
Across Europe there is now a consistent and established trend for greater use of on-site power solutions. Given the comparatively unregulated nature and scale of on-site power solutions, definitive statistics can be hard to come-by. However, while the technologies and drivers vary, published figures for electricity markets including the UK 1 , France, Austria, Germany, Spain, Portugal and Poland consistently show significant growth in the sector.
By way of some examples, in the UK in 2020 2 circa 8% of electricity supplied was derived from on-site generation. In France and Spain in recent years a very significant proportion of new solar PV installations have been installed for on-site consumption. In Germany we see electricity generation plants in the manufacturing and mining sectors making up a circa 14% share of electricity generation in the country, and in Poland 6.4% of annual electricity production (that was exported to the grid) in 2020 came from so-called industrial power plants, which mostly comprises on-site generation.
Technologies
The type of technology used for on-site power solutions tend to be a product of the specific aims and opportunities of each project.
For example, where “greening” of power supply is the main driver, solar PV, wind turbine and fuelled low-carbon generation (such as biomass/waste) are common technologies. Conversely, although renewable technologies can offer resilient and reliable generation, where guaranteed/flexible supply at particular times or on a baseload basis is the overriding objective, gas fuelled generation and battery storage can be attractive.
On-site power solution that produce both power and heat on a combined basis (Combined Heat and Power or “CHP”) – which come in renewably and non-renewably fuelled forms - can also be used to improve efficiency at sites, and are seen from time to time in public building, business park and office developments. These however bring with them the need to find customers for the relevant heat and to develop the relevant pipes and infrastructure to transport such heat.
Small-scale diesel generation is also a relatively common feature at industrial and commercial sites, particularly for short-term back-up generation for times of grid outage. Given the need to reduce carbon emissions we anticipate that such units may well look at cleaner fuels, such as low-carbon hydrogen, in future.
A key constraining factor on the scale and type of technology practicable for any given on-site project tends to be the physical scope and nature of the land available for the potential project together with the land rights and planning/consenting position. These constraining factors will often mean, for example, that a wind farm of significant scale is not practicable and instead immediately point to technologies with a smaller physical footprint.
