How did Britain manage to miss out on building an extensive system of district energy networks, as several of its European neighbours did? And how might this change, now that the UK government is proposing a new Heat and Energy Saving Strategy? COSPP put these questions to the new chairman of the UK CHP Association, Dominic Bowers.
The UK does not have anything like the number of community heating networks that some comparable northern European countries have. Why is that? Did the UK simply opt for gas rather than heat distribution?
The simple answer is that the UK discovered natural gas offshore in the 1960s and, as a consequence, we rapidly became self-sufficient through this resource. The government invested heavily in a national gas transmission network. Of the 25 million UK households, approximately 21 million have a gas connection. So you can see natural gas has very substantial penetration of the market. This makes it more difficult for combined heat and power (CHP) to get a foothold in the UK, at least for the lifetime of this infrastructure.
The situation is very different in Scandinavia, which is the spiritual home of district heating, if you like. Take Denmark for example. It relied on oil for 90% of its energy requirements, so during the OPEC oil crisis of the 1970s it was hit very badly. It had not discovered gas off its coast at that point and relied on the oil for its power stations and domestic heating. They decided to take a brave new route. This largely involved setting a national policy to maximize the efficiency of their energy imports, knowing that they were a small country without many indigenous resources at the time.
It was a similar situation in places like Germany and France. Again, they didn’t have natural gas resources and had only limited coal. The French decided to go nuclear. I know less about Germany, but it adopted a similar approach to the Danes, though it did not embrace CHP quite so wholeheartedly – but then they were able to import gas from Russia.
What the UK didn’t do is use our resources as effectively and prudently as we should have done. If we’d have been more prudent about the use of gas, it would have lasted longer. We should have kept it as a premium fuel only for use by CHP plants. What all this means for the UK is that we’re playing catch-up to a certain extent. In Denmark, district heating provides 40%–50% of their heat requirements nationally. The country is the size of Wales, so not huge, but the percentage is significant. In UK we get 2% from district heating.
The Danes are recognizing that natural gas is a finite resource and they’re extending their district heating networks into gas network areas, displacing gas heating. They have a policy that taxes alternative fuels, which benefits district heating. It is an interesting question whether the UK should follow suit. There’s a consumer disadvantage to this and, in the UK, we have a fully competitive fuel market, so it can’t be done. Government won’t start taxing individual fuels to benefit other fuels.
The Climate Change Levy could be used to promote efficient use of energy, but government has shied away from putting Climate Change Levy on domestic customers for political reasons. This leaves CHP as a viable technology – only where the heat density is appropriate and high enough to justify the investment of relatively expensive infrastructure.
We in the UK are becoming more aware of the possibilities of CHP because we’ve gone beyond a self-sufficiency level with gas and are now importing it. This will become a growing problem, so we have a very real issue which we have yet to grasp. The Danes didn’t fund their networks, but put in place the right fiscal measures to incentivize them to go down that road. The UK government has decided it doesn’t want to be dependent on Russia or other potentially unstable sources of energy, so decided to encourage nuclear electricity and encourage coal-fired generation with carbon capture and storage.
There is a very interesting debate to be had about the form of heating in the future and whether it will be electricity-based – if the UK decides to go largely nuclear. In Sweden that’s what they’ve done: CHP in larger towns and cities, but in more rural areas they put in electric heating largely because of the hydro and nuclear.
In recent years we have seen some new ‘mixed’ schemes being built – those that serve commercial and public sector buildings as well as homes. Is this the way forward?
Most definitely. You need the mix in terms of giving some commercial viability; and technically too, because you want a mix of buildings with differing load patterns through the day.
Given the difficulty of funding district heating infrastructure because of the investment requirements, what developers need is a customer base that both has a long-term future, will be there in years to come, and is mixed/diverse. The public sector has an important role to play as a customer that is there in perpetuity.
The private sector is ready to sign up to long-term contracts, this has been demonstrated through the numerous private-public partnership arrangements. But you and I, as the public, might buy such services for a one, or maybe two-year, period only. To a district heating operator that is a problem. You don’t want customers turning round a year later saying they’re going back to gas boilers. It’s also important that the public sector has targets to achieve in terms of reducing carbon footprint and take-up of CHP, which are both helpful to developers. Clearly, with strong environmental policies pushed through by government, the private sector will be ready to sign up to this kind of energy creation.
Is the UK government’s new Heat and Energy Saving Strategy likely to make a decisive difference?
Early indications are that one of the things being proposed is to make heat planning compulsory for local authorities. Interestingly, that is one of the things that the Danes did in 1976 after the oil price hike. They looked at available heat sources in a given locality and considered the most resource-efficient ways to meet energy demand from these heat sources. It ended up with local authorities saying that high density areas near power stations would get CHP. The fringes of towns got electric heating or individual oil-fired boilers or, later, gas. I think the UK is rather belatedly learning a lesson – we have to consider energy in the round’ and policy has to be geared to the efficient use of energy.
For many years the only energy source that governments have really concerned themselves with was electricity. But that ignored the heat market. One of the things that enthuses me about this new legislation is that it has the word ‘heat’ in it. Over the last two years, the government has recognized that heat is a real issue. It is responsible for a substantial amount of carbon dioxide emissions nationally – about 42%. Given the government’s broader carbon reduction agenda, they are now realizing that if they are to meet their targets, they need to address the heat market. This is great for the CHP market because it is a superb answer to both those things; it produces low carbon heat and electricity.
Or are other drivers likely to prove more important? How should the government promote community energy?
Interestingly, there is some possibility that global events might overtake the UK agenda. The big climate change meeting in Copenhagen in December could be significant. America is finally behind measures to address the threat of climate change and there may well be global initiatives that go beyond any current British legislation. For example, an appropriately structured carbon tax regime would definitely promote CHP and cause a step-change in the uptake of the technology.
What’s going to be very interesting is keeping a close eye on how policies develop in the United States. As a global company with headquarters in New York, my company, Parsons Brinckerhoff, is well-placed to be under the skin of the agenda and to gather advanced intelligence on this. Where Obama leads, the world will follow. If he’s serious, it could be the thing that does it for CHP.
The government could also prohibit the development of power stations in remote areas. We need decentralized, localized energy provision. That’s the Danish model and, to a certain extent, the German model. You want energy centres to be local to high density residential and commercial areas. They also need to be powered by a variety of fuels, including, for example, waste – that’s already being done in Scandinavia, France and Germany.
All we’re doing is rather belatedly picking up on something others have adopted and refined. There’s no technology risk here, because it already exists. It’s not like developing renewables like micro-wind, hydrogen fuel cells or photovoltaics. CHP is an entirely understood, known and well-characterized technology.
Community energy versus building-connected microgeneration – how should a balance be struck between these?
This is actually ‘horses for courses.’ I don’t see a conflict between these two. Microgeneration is a very useful component of a low carbon future. But at the moment I think it should be restricted to developments where there isn’t sufficient heat load density to develop district heating. There’s an interesting link back to local heat plans here. Planners may split the allocation of district heating and micro-CHP along population or commercial density lines.
The country needs all these low carbon sources to be rolled out, and rolled out fast, if we’re to achieve the carbon targets necessary to protect the planet and meet government targets. Let’s not get into a fight over patches.
Is biomass likely to prove any more than a minority player as a fuel for community energy? Or municipal waste?
We need to differentiate between different forms of biomass. Municipal solid waste, and other forms, are a very appropriate form of fuel for CHP because they can be generated locally. A lot of people are getting concerned about waste being transported vast distances and being dumped on other communities. Waste should actually be prioritized for use in CHP. That is to a certain extent happening in the legislation that supports CHP.
There is clearly a role for biomass district heating in areas which are off the gas grid – like northern Scotland and large parts of Wales where the gas grid doesn’t reach. But in these areas quite a lot of forestry and biomass is available. It makes sense to use that biomass locally in this way. The economics make sense too, as district heating won’t be competing with natural gas, but with oil, propane and electricity.
Dominic Bowers heads Parsons Brinckerhoff’s Energy Solutions group in London, UK. He is also chairman of the UK Combined Heat and Power Association.
Decentralized energy studies for London and Edinburgh
Parsons Brinckerhoff (PB) has carried out two major studies into the scope for decentralized energy systems for the capital cities of both England and Scotland.
The UK government’s aspiration is to reduce carbon dioxide emissions by 60% (from 1990 levels) by 2050. Building on Parsons Brinckerhoff’s investigation of the potential for CHP and district heating (DH) in London, the Greater London Authority and Greenpeace adopted a policy position that encouraged the investigation of the potential for support of a decentralized energy system (as an alternative to the current centralized remote system).
The aim of the study was to understand the degree to which decentralized energy (DE) technologies could assist in mitigating the threat of climate change by reducing carbon dioxide emissions during the production of heat and electricity. The issue of energy supply security was also identified as crucial.
PB’s analysis utilized GIS (geographic information system) mapping techniques to undertake an assessment of the potential for CHP and DH technologies throughout London; using predetermined minimum heat densities to identify zones that would support these technologies. Adopting assumptions taken from published industry literature, and using the GIS outputs, modelling was undertaken to identify to what degree London would benefit from adopting a DE strategy incorporating CHP, DH and micro-renewable technologies.
PB’s report – Powering London into the 21st century compared four scenarios: two assuming a centralized energy supply future, featuring new nuclear power stations, and two decentralized energy scenarios based on CHP and renewables. The analysis concluded that the widespread adoption of decentralized energy technologies would allow London to reduce its carbon dioxide emissions in line with the 2050 target, exceeding those achieved with a centralized system. Also DE would reduce fossil fuel demand within London, compared to a centralized energy future.
Building on the London project, Greenpeace, WWF Scotland and City of Edinburgh Council, wished to understand the degree to which Edinburgh could support the deployment of decentralized energy technologies – with the aim of contributing to Scotland’s and the UK’s carbon dioxide emissions reduction targets, and becoming less dependent on fossil fuels, thereby developing a more secure energy system.
The analysis utilized GIS mapping techniques to undertake an assessment of the potential for CHP and DH across central Edinburgh – and in other areas in which other low- and zero-carbon technologies would be more appropriate. Adopting assumptions taken from published industry literature, energy modelling was undertaken using the GIS outputs, to identify to what degree Edinburgh would benefit from adopting a DE strategy.
The benefits were measured in terms of quantifying the contribution that Edinburgh could make towards meeting carbon dioxide emission reduction and Scottish renewable energy targets; and illustrated how a switch to decentralized forms of energy would reduce dependence on fossil fuels, principally gas.
The final analysis has not yet been completed but the indications are that the technical potential for decentralized energy in Edinburgh would have a significant impact on reducing carbon dioxide emissions in line with the 2050 target, and would reduce the fossil fuel demand, compared to a centralized energy future.