The UK energy regulator OFGEM has given National Grid consent under its gas transporter licence, which will allow renewable energy company Blue-NG to develop new Combined Heat and Power (CHP) plants at eight of its gas network sites.

Blue-NG will use a new ultra-efficient CHP model fuelled by bioliquid to generate green electricity at pressure reduction station sites owned by National Grid. The ChiP (Combined Heat and intelligent Power) plant is the first of its kind in the world and is already attracting global interest.

Blue-NG will use liquid biomass from sustainably grown energy crops to fuel its engines. These will produce electricity and heat. Some of the heat will be used in the process needed to reduce gas pressure in the National Grid network so that it is safe to use in homes and industry. Using this otherwise wasted heat will enable National Grid to turn off its existing gas heaters which prevent the gas from freezing. The rest of the heat will be used to generate more electricity or for district heating. ChiP has an electrical efficiency rating which peaks at 86%, making it around a third as efficient again as the next most electrically efficient generator. Blue-NG is now working towards accreditation under the Renewables Obligation Certificate.

Blue-NG has already won approval from London Thames Gateway Development Corporation (LTGDC) to begin construction of its first plant at National Grid’s Beckton site in East London. The company has signed up to a Section 106 agreement with LTGDC, which guarantees sustainable procurement of crops and a commitment to the research and development of so-called ‘2nd generation’ fuels and technologies.

Beckton will produce enough electricity (20MW) to power over 60,000 homes and the potential to provide heat (5MWt) for district heating. Construction is due to start early next year and the plant should start generating renewable electricity in 2010. There are plans to develop another seven sites, with potential for many more nationwide. A planning application for a second pilot in Southall will be submitted in November.

Commenting on the decision by OFGEM, Blue-NG’s Chief Executive Andrew Mercer said:

“Blue-NG’s ChiP has a real contribution to make in reducing the UK’s carbon emissions while helping to maintain secure and more affordable power from renewables. Our sustainable procurement policy, drawn up with the support of Greenpeace means that renewable energy will be generated in the East End, for Londoners, helping the city to achieve its sustainability goals. And where London leads, the rest of the UK and the world will follow.”

John Sauven, Executive Director of Greenpeace said: “This is very welcome news from the regulator. Decentralised energy generation from genuinely sustainable renewables, has a huge role to play in reducing carbon emissions and OFGEM has recognised that.”

Mark Fairbairn, Executive Director of Gas Distribution at National Grid commented:

“This decision by OFGEM will help the UK to mitigate climate change. National Grid is already planning to cut its own greenhouse gas emissions by 80% of 1990 levels. Blue-NG is now poised to become a major contributor to the UK’s mix of renewable energy sources for the 21st century.”