District heating networks: barriers to deployment

Why is the UK lagging behind?

Project duration: August 2012 to December 2012

In the right circumstances, district heating schemes (also called heat networks) can be an efficient way of suppling heat to homes, businesses, schools and other buildings direct from a central source, e.g. a gas or biomass fired power station, through a network of well-insulated hot water pipes.

In some European countries district heating is quite common. In Finland, for example, nearly all apartment blocks, half of all terraced houses, and most public buildings and business premises are connected to a heat network, thereby avoiding the need for all these buildings to have their own individual boiler and gas supply and reducing the cost of energy for consumers.

Not so in the UK, where, heat networks provide less than 2% of the country’s heat demand. But the potential is there with studies showing that a five-fold increase in the number of heat networks is possible.

To understand why we're lagging behind, the Department of Energy & Climate Change (DECC) commissioned research into the barriers that district heating schemes have faced in the past 5 to 10 years. The findings are laid out in a report, Research into barriers to deployment of district heating networks [10MB].

The lead authors of the report were BRE, with CSE contracted to conduct detailed interviews with practitioners who had either successfully installed a district heating system or were in the process of trying to do so.

The interviews aimed to explore particularly the non-technical barriers and opportunities to district heating, asking questions about areas such as the process of developing feasibility studies, financing, organisational decision-making and the importance of government support.

CSE's Nick Banks said: "What became clear from the study was not only how technically complex these projects are but also how demanding in terms of overcoming these non-technical barriers. Without much stronger national support for the technology, appropriate financing and a push from local planning frameworks we will struggle to meet the 14% potential."

The headline conclusions of the report are:

  1. Local authorities have a critically important role in setting the strategic context for, and initiating the development of, district heating networks, due to their local knowledge, capacity for organisation, and key functions as planning authorities and service providers.
  2. It is in the early stages of scheme development where barriers arise, e.g. initial mobilisation, technical feasibility and financial appraisal.
  3. Most schemes that have progressed during the last 10 years have benefited from some form of grant support.
  4. Some form of customer charter and/or standardised contract mechanism would help.
  5. Most viable UK schemes are likely to be small-scale gas-fired combined heat and power plants (i.e. producing both heat and electricity). However, the selling electricity by non-major suppliers remains fraught with difficulty.
  6. There needs to be a stronger sense that district heating is supported by central government.

Photo © Vital Energi | www.vitalenergi.co.uk/Media.aspx

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