Government ‘has heat network numbers wrong’

Chris Jennings: Government missing significant carbon savings by focusing on 2,000 large UK heat networks
Chris Jennings: Government missing significant carbon savings by focusing on 2,000 large UK heat networks

Decc says there are 2,000 heat networks in the UK. But actually, says Chris Jennings, strategic development manager at consultancy Sustain, there are 100,000 small ones that could be decarbonised with the right energy efficiency policies in place.

It’s “great” government has started to focus on heat, says Jennings. The downside is it “appears mostly interested in infrastructure projects – large scale heat networks across city districts.”

That approach ignores the opportunity to “decarbonise an estimated 100,000 existing small-scale heat networks within commercial and residential buildings”.

“We know the government has not clocked this, evidenced by a void in policy and their rollout of the heat network metering and billing regulations 2014 which were completely under-planned and under-resourced for the huge scale of the task,” Jennings continues.

He says Decc should stop referring only to the 2,000 large-scale district heat networks on its radar.

“Energy efficiency policy should include the huge opportunity with building-level communal heat networks – carrot and stick to ensure owners and operators invest in proper low-carbon design and operation of their networks,” he says, underlining that correct operation is just as important as design.

Procuring efficiency

Energy efficiency should be “at the heart of the market’s procurement” when heat systems inevitably come to the end of their life, he says.

“Too often procurement is conducted via open request to contractors to design, supply and install replacement systems without first carrying out an options appraisal of new technology, an appraisal of the current system’s performance, or even an evaluation of the building’s actual heat requirements,” Jennings continues. 

“Hence simple like-for-like swaps happen where new boilers of the same size and controls are installed, missing the opportunity to reduce life cycle costs and decarbonise.”

Incentive issues

Technologies such as CHP, solar thermal or heat pumps can require significant investment in heat distribution and emitters to make the system suitable. But Jennings says there is little incentive to invest.

“Payback periods are very long, even with income from schemes such as RHI, because they do not allow for the system upgrade costs. The most popular low carbon technology for retrofit to existing systems are biomass boilers where system upgrade is not required and so RHI payments cover the boiler cost. Research by Decc shows many of these are inappropriately sized to maximise income from RHI and not to be the most efficient installation.”

Jennings says the non-domestic RHI provides insufficient incentive for heat pumps.

“Heat pumps need more costly distribution systems and there is no allowance for that in the RHI.” There is also little thought given to distribution system efficiency “apart from incentives such as ECAs for additional thickness pipe insulation”.

Jennings believes “more could be done” to incentivise upgrades of existing systems and higher quality new systems “where we have seen 50% losses from the distribution system between the boiler and the heat loads.”

Meanwhile, the current support mechanisms do not support storage.

Both heat and electrical storage are “vital supporting technology” but currently expensive, he says, but storage “will not succeed in the short to mid-term without support to lower costs”. Jennings thinks an RHI or FIT type subsidy may be necessary.

Ideal policy?

Asked what a policy to decarbonise heat might look like, Jennings replies: “Some policy that recognises the opportunity of decarbonising the vast number of small-scale heat networks (single building or very localised district heating) to drive both better design and better operations and maintenance. Ideally a unified approach by Decc and DCLG to pull together planning, Building Regs, the Energy Efficiency Directive, the Energy Performance of Buildings Directive, domestic energy efficiency policy (er, where is it?), small-scale heat network policy, metering, the Energy Company Obligation, subsidy (FIT, RHI plus any other such as energy storage). Don’t forget about the huge opportunity of aggregated savings from addressing the nation’s often woefully inadequate legacy communal networks.”

Manufacturers must innovate

But Jennings thinks decarbonising heat is not solely down to government. “Manufacturers could do their bit too,” he says.

“For example why are heat pumps so expensive relative to a gas boiler? With an increasing spark gap (the price difference between gas and electricity) the operating cost of heat pumps relative to gas is a challenge without being propped up by subsidy and this can be compounded by high capital cost.”

This interview is also published in our free 2016 heat report. It contains a survey of Energyst readers about their views on technologies, subsidies and regulation, as well as views of other experts on how to decarbonise heat at lowest cost. Download it here.

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Free report: Financing energy efficiency

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