The future’s bright for UK district energy and heating
Simon Woodward of the UK District Energy Association argues that, with support from government, district energy can play an important part in achieving the UK’s long-term energy, affordability and sustainability goals for heating homes and buildings.
The district energy sector has been gaining recognition as the next revolution in the way we deliver energy to our homes and businesses. District energy is one of the most cost-effective ways to decarbonise an urban area because it enables an entire community to be switched to a more sustainable power source collectively, rather than tackling the carbon footprint of each building in isolation
District heating is widely practiced in Scandinavian countries where levels of uptake are very high compared to the UK. In Denmark, for example, over 60% of heat is supplied by a heat network, whereas in the UK this is only around 2%. The reasons for this are many, but largely are largely driven by the fact that until recently there was no clear direction from the government that it supported local energy networks and no targets set for implementing this technology. Instead, the Department for Business, Energy and Industrial Strategy (BEIS) focused efforts on generation technologies such as wind and PV. Which as can be seen from the recent reduction in government support they clearly believe now to be a mature technology (or one which the government no longer wants to support, depending on your point of view). Together with a “business as usual” approach from the UK M&E sector, this meant that district energy was often discarded as an optionwhich was seen as too complex or expensive.
However, in recent years the landscape has changed for district energy with many local authorities introducing planning requirements to support the development of schemes. Nowhere is this felt more than in London where it is hard now to find a major new build development which is not incorporating a district energy network as a result of planning regulations.
Then, in 2016, the Heat Network Investment Project (HNIP) was launched by BEIS. This scheme aims to provide £330 million of capital support to enable local authorities and private sector organisations to develop district energy schemes. Such government funding is vital to the future of district energy in the UK, with the potential to lay the foundations for its long-term growth.
A successful pilot
The pilot phase of HNIP closed for applications in November 2016, resulting in £24 million being awarded to nine district energy projects across the UK in April 2017.
The winning projects include the Sheffield District Energy Network, involving extracting energy from a waste plant; a gas combined heat and power (CHP) scheme in Barking, London, called the Becontree District Energy Scheme; and a heat pump project named the Colchester Northern Gateway. These are all now under construction, and are expected to begin providing fairly-priced , sustainable heating to local homes and businesses in the very near future. The next phase of funding for the full scheme is will open in late 2018
The case for district energy
District energy schemes offer a host of benefits that give them a strong claim to be a vital part of the UK’s future energy mix.
Key to this is that district energy networks are not a specific method of generating low carbon or renewable energy, but can used energy from a range of sources; from gas-fired CHP, to biomass, geothermal, solar and even waste heat from industry or energy from waste plants. Indeed, a network can even have a range of energy sources at the same time or over its lifetime. This allows the people in charge of it to switch energy sources over the life of the network according to whichever is the most cost-effective or environmentally sound at the time using a delivery mechanism which is “generation technology agnostic”
In addition to their sustainability advantage, district energy schemes also have the potential to support the economic regeneration of the area they are operating in. The local community can benefit from heat set at a lower cost than the whole life cycle costs of heat from a gas fired boiler. District energy can address fuel poverty for vulnerable households, while reducing overheads for small businesses. All of this can potentially boost tax receipts for local authorities, as the economy of the area grows.
District energy is a concept whose time has come for the UK energy infrastructure sector, but state support is needed to ensure new schemes get the funding they need to come to fruition whilst the sector is in the current embryonic state. While it is very good to see that over the next two years over £300 millions will be put into the sector it is important that this support, whether financial or regulatory, continues long into the 2020’s. The good news is that the key output for the government from this injection of cash is the production of a sustainable sector. We all need to work together to make sure this is achieved.
In the meantime, local authorities don’t need to wait on signals from Government or the next round of HNIP support to lay the groundwork for networks in their local areas. They can start immediately by gathering the information they need to create the best initiatives for their communities through heat mapping, energy masterplanning and detailed feasibility. All of these are supported through BEIS’s Heat Network Delivery Unit which offers funding towards the cost of these tasks.
Simon Woodward is chairman and technical director of the ukDEA.
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