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District heating is making a comeback! These heating systems are winning support from the Government, landlords and planners alike as we look for energy-efficient alternatives to conventional heating systems. Casey Cole, Managing Director at Guru Systems, explains how modern-day technology is helping to reignite enthusiasm for district heat.
District heat is enjoying a renaissance.
Having been all but confined to history after the demise of the ‘streets in the sky’ building programme of the 60s and 70s, many are now turning to modern day district heat networks as a long-term solution to providing low-carbon energy to our housing stock.
It is more than 50 years since the concept was first introduced in the UK, and the mistakes of the past have been well documented.
Today, however, the landscape couldn’t be more different.
New technology, with the support of Government financing, means that district heat is now a reliable source of energy that is increasingly easy to monitor and manage.
The Department of Energy and Climate Change estimates that 14% of UK heat demand could be cost effectively met by heat networks by 2030, with the figure rising to 43% by 2050. While in the capital, the Mayor of London has set out plans for 25 per cent of heat and power used in London to be generated through the use of localised decentralised energy systems by 2025.
Planners are similarly championing its use in new housing developments, particularly in London, as they promote an “eco-first” approach to planning permission.
Robin Feeley, Director of L&Q Energy, which manages 2,000 homes on 33 district heat networks across London and the south east, said: “In London in particular, district heat is no longer a choice, it is a necessity and as developers, housing association are having to adapt and fast.
“The technology developed to monitor these networks has come on leaps and bounds in the last few years and in many ways housing associations are leading the way in implementing these advancements and pioneering new technology, including smart meters.”
The 21st century district heat schemes benefits have been widely publicised, as energy is distributed from a central hub, rather than from boilers in individual properties, heat networks are more energy efficient than conventional heating systems and allow landlords to supply low cost heat to their tenants.
Heat networks are notoriously difficult to administer, especially as landlords are not allowed to make a profit from the energy they sell to their tenants. If they charge too much they face legal challenges, if they charge too little they could lose money every time a tenant turns on their heating.
In most cases landlords will set tariffs based on the expected performance of the system – not on real world data that shows how well the network is actually working. This means that if initial assumptions are inaccurate, or there is a sudden dip in efficiency through a fault in the network, costs for landlord could spiral rapidly.
At Guru, we have seen cases of a 100-home scheme losing £65k in 14 months, simply because their tariff had assumed a much better efficiency than was achieved in practice.
The landlord billed their residents every month according to aggregate consumption, but they had not had access to performance data and so did not know their tariff was wrong.
With landlords having to take on the unfamiliar role of energy provider – and facing a raft of technical and legal ramifications – housing professionals are mixing traditional ideas with new technology to bring district heat into the modern age.
Robin Feeley continues: “We spent five years refining our district heat networks to the point where we have a produced a technical specification for our networks. At first, like I am sure many housing associations were, we relied heavily on contractors to specify what we needed.
“Since first installing district heat networks, technology has transformed the way we deliver and monitor the energy we provide to our tenants, to such an extent that we are now revisiting earlier developments to install smart meters where previously we had old-fashioned prepayment meters.”
The majority of landlords have no way of knowing how well their networks are running as the data is collected monthly, rather than being logged minute-by-minute. While many recognise the need to provide cost-effective heating to their residents, the majority have no way of reviewing efficiencies on their networks.
Although older heat meters provide essential data, most of it remains unused due to antiquated data collection systems. Some operators of district heat networks rely on customers to provide readings or send an operative with a radio receiver to collect readings from each meter, while others are using the 20-year-old technology to transmit data on usage from individual homes.
These basic methods mean that if landlords are calculating their tariffs incorrectly or networks are not running efficiently, they can suffer huge financial losses in the months between meter readings.
Today housing associations can monitor key information on how the network is performing – from the central plant right through to each individual’s home – meaning landlords can quickly identify any issues in the network long before costs mount up.
By delivering real-time information on energy usage and payments, smart meters allow registered providers to identify and focus resources on vulnerable residents who are in fuel poverty and in immediate need of support.
The technology to manage and monitor heat networks is constantly advancing. Guru Systems recently won funding from the Department of Energy and Climate Change to develop an algorithm to evaluate the efficiency of schemes.
Using innovative algorithms that build on techniques developed for Big Data applications, the technology will be able to recognise patterns in performance data and identify the likely source of any inefficiency on networks.
As well as identifying the problem, the new system will also propose solutions ranked by cost-effectiveness, while machine learning will ensure the algorithm’s accuracy continues to improve the more data it analyses.
Guru Systems has seen its technology installed on 35 schemes across the UK for landlords including, L&Q, Affinity Sutton, Octavia Housing, and Peabody Trust, and private developers, such as Berkeley and Telford Homes.
Casey Cole is Managing Director of Guru Systems, which provides smart payment and energy-efficiency technology systems for local energy networks
This feature was originally published in the April edition of Housing Association and Building Maintenance Magazine. To read more great articles, visit www.habmonline.co.uk
The introduction of the Non-Domestic RHI in November 2011 helped to trigger significant growth in small scale district heating. REHAU realised this potential and it was one of the drivers in our decision to invest in UK district heating pipe production in the Spring of that year.
Since then, a small scale district heating market which has been until now, dominated by sub 200kW biomass boilers has recently broadened to include CHP solutions (gas and renewable), anaerobic digestion and heat pumps as well, showing just what a wide range of heat source options are possible.
Moving forward, the likely reduction in the 200kW small biomass tariff on 1st July 2015 may actually have a positive effect on best practice system design, discouraging possible over/under sizing of the plant. I’m certainly hoping to see more projects sized more appropriately in the future regardless of the heat source chosen, with the emphasis shifting from tariff banding to optimum efficiency.
Polymer district heating pipe can easily accommodate up to ca. 2MW in a single 160mm pipe, making it the material of choice for many of these small to medium scale schemes. Steel pipes are ideally suited to large, city-wide projects which require bigger pipe diameters (eg 500-1000mm), whereas polymer pipes offer significant installation savings on the small to medium sized projects.
The emphasis needs to be on reducing flow/return temperatures since this is what makes schemes more efficient in terms of heat losses, and reduces capital costs because it allows the smaller pipe sizes to be used. This message was reinforced recently in the CIBSE Code of Practice which encouraged specifiers to focus on the importance of good system design. Training courses on this Code of Practice and manufacturer-led training such as CPD courses and design courses are key to ensuring best practice in this growing industry.
Personally, I hope that more community-based heat pump schemes are installed as they are ideal in terms of efficiency and pipe sizing because of the lower flow temperatures which heat pumps demand.
Obviously, there is understandable concern in the industry about the possible changes to the RHI after 2016 and what impact they might have on future deployment of district heating in the UK, but I remain confident that, with the right focus on efficiency and cost effectiveness, it will still have a major role to play in the UK heat market.
A well installed and correctly operated CHP can give thousands of pounds in energy savings and significantly reduce carbon emissions.
The Association for Decentralised Energy’s case studies show that CHP can reduce energy bills by up to 30%, and see quick investment paybacks. As energy bills continue to rise, CHP investments help users hedge against rising prices and control their energy costs.
These benefits are leading to significant growth in small-scale CHP, located in office buildings, hospitals, leisure centres and care homes, all across the UK. Industry surveys estimate at least 100 MW of new small-scale (<2 MW in size) CHP capacity was installed in 2014, and we expect continued strong growth in 2015.
Each of these hundreds of energy users saw an opportunity to make significant cost savings while also using CHP’s higher efficiency to reduce their carbon emissions.
However, CHP only provides these benefits if it is sized and installed correctly and ultimately operated properly. A CHP solution needs to be based on a number of considerations including technical, financial and operational factors, not just to meet planning or building regulation requirements.
Contractors, consultants and customers may have limited experience with CHP, and so it is important they understand the key steps necessary for successful CHP installations. By including the supplier in the early stages of the project’s design all the players involved can ensure the value of their investment is more secure and that their reputations are protected.
Data is king
When first considering whether CHP is the right investment for you or your customer, it is important to collect as much information about the site's requirements including energy demand and heat to power ratio, opportunities to export, and alternative energy efficiency options to create a detailed model.
If you do not take care at this initial stage, there is a significant risk you will oversize your CHP plant, it will run inefficiently and potentially lose you money, instead of saving it.
It is important to begin consulting a CHP supplier even at this very first step, as they can provide you with support to make sure you invest in the right equipment.
Don’t just drive away
For most energy users, expecting to operate a CHP without support is akin to jumping into a race car without any instruction. You might move forward, but probably not at the speed you hoped. And you may even cause some very expensive damage.
That is why it is important contractors and their customers secure operation and maintenance contracts, to help protect the long-term investment and make sure the CHP is run optimally.
In order to make sure you make the right investment decision, consider life cycle cost instead of just capital cost. A cheap CHP might cost you a lot more in the long run.
Three key operational principles
Some key operation requirements to keep in mind when designing and operating CHP is to:
- Ensure a large difference between flow and return temperatures.
- Operate your CHP in preference to boilers for a higher overall efficiency.
- Consider a thermal store to help manage demand and take advantage of price signals.
Once your CHP is installed, get a performance test sheet to check your CHP meets the original performance specification. Also make sure your CHP continues to meet the standards of the CHP Quality Assurance (CHPQA) scheme, as most CHP financial incentives require continued CHPQA accreditation.
Installing metering can also help monitor performance and confirm your investment is delivering, and you can change its operation if not.
People are important too
Make sure relevant staff are trained properly and made aware of the importance of operating your new CHP correctly. For contractors and consultants, this means making sure there’s a careful handover process, so that the energy centre operator will understand their investment. Small changes to a CHP's operation can have a big impact on its efficiency. For example, making sure staff do not over increase boiler temperature in response to cold weather as this will impact flow and return temperatures and overall efficiency.
By getting advice from experts and making sure you are involving the operator and the CHP supplier at the early stages, consultants, contractors and customers can ensure their CHP investments deliver the expected carbon and cost savings. The Association for Decentralised Energy’s new advice note for contractors, consultants and customers is designed to help users make sure they avoid some of these key pitfalls when installing and operating CHP, and maximise the benefits. You can download the full advice document here.
by ADE Director, Dr Tim Rotheray
As we near the general election, the Association for Decentralised Energy reviewed the parties’ manifestos to better understand what they will mean for the decentralised energy sector and energy users.
The first thing the jumps out is the continuing focus on the supply side rather than appropriately balancing demand and supply.
The Conservative Party’s manifesto has very little on demand, and includes a lower ambition on household energy efficiency than in the last parliament. Likewise Labour's focus on efficiency while more ambitious and developed than the Conservatives, stops at homes. Both Labour and the Liberal Democrat manifestos commit to energy efficiency as an infrastructure priority, which is a welcome proposal for the sector, but given that the evidence points to cutting waste as key way to ensure least cost emission reductions, there remains limited detail. Unfortunately, energy waste reduction remains an afterthought in energy policy.
Despite loud concerns over the past two years from businesses on their growing energy costs, there is nothing from any of the parties manifestos which shows the importance of improving industrial and business energy productivity or managing their costs is on their radar. It appears to be a real missed opportunity for all the major parties.
Energy costs and the energy market
The Conservative's focus on the cost of energy will be welcomed by users, but the promise to remove relatively low-cost onshore wind subsidies risks undermining this claim.
In addition to a 20-month price freeze, Labour's commitment to resetting the market raises the spectre of yet more regulatory uncertainty, although the proposals will be well received by some in the local energy sector who find the current electricity market inaccessible. It does not seem clear if Labour is aware of the weariness of change that exists in the sector or in the amount of effort and time which such changes require. I remember former energy minister Charles Hendry promising that establishing certainty required a short period of uncertainty, suggesting a period of six months. That was the start of EMR. The EMR process is now almost finalised, five years since it started, and it has not actually reformed the mechanics of the market at all. Labour commits to doing this in 20 months -- I remain sceptical that 20 months will be long enough to effect the change they are calling for.
The Liberal Democrat manifesto reflects their experience gained in government and their aim to own the green energy file in comparison to the other main parties, and it shows. They have the most well thought through positions. The legacy of being in government is clear, however, as commitments to new nuclear (without ‘subsidy’) and a celebration of EMRs successes may ring a little hollow to industry insiders. That said, the focus on efficiency and as the only manifesto to properly consider heat is encouraging to see.
It will be interesting to see how these well-thought through proposals could be implemented if they are able to gain a place in a new administration.
The other parties
Of the other parties, the one most worth a focus is that of the Scottish Nationalists, due to their likely influence in a new Labour government. Their manifesto has an understandable focus on Scotland, but their concerns on Scottish transmission charging costs will face significant challenges considering the industry just reviewed this issue in 2014. A new northern generator transmission discount could be envisaged but that would hugely impact on Ofgem's requirement to for network costs to be ‘cost reflective’ and could result in competition concerns from generators in England and Wales.
Interestingly, as heat and efficiency are entirely or significantly devolved, these areas of policy remain untouched as areas that are already addressed by the Scottish Government. The SNP has a very strong focus on encouraging renewable electricity investment, due to the Scottish wind and tidal resource. This focus almost inevitably sets up areas of tension on the cost of energy policy for the major parties, between the other parties’ interest in driving down decarbonisation costs and the SNP’s desire to support the Scottish renewables industry.
What will we get?
All in all, there is high level agreement on meeting our decarbonisation targets and on further investments in household efficiency, although in both cases the scale vary quite greatly. With so little detail from the Conservatives there appears the most potential agreement will come from the Lib-Lab-SNP pledges, although the devil is in the detail.
Given the current polls showing a minority parliament, it looks like a clear direction on energy policy could be very challenging after May.
The ADE member ENER-G have curated a fantastic collection of articles and guides over the past year creating a sizeable resource for learning more about combined heat and power in different settings. Here is a comprehensive list of topics they have covered! Click the title to read more.