Reliable, affordable energy is central to the UK’s future economic success

Currently, the UK uses more energy for heating and hot water than for any other purpose. Heat accounts for over a third of UK carbon emissions and almost half of its energy usage. Heat networks, otherwise known as district heating, have been utilised in Europe for more than forty years becoming cleaner and more energy efficient over time.

It’s also a growing market with the global district heating market set to exceed $250bn (£191bn) by 2024, driven by the implementation of the Paris Climate accords by national governments, aimed at reducing carbon emissions. Thus far the UK has lagged behind its European counterparts in the adoption of such heat networks, however heat networks represent a sizeable investment opportunity for the UK across distribution, generation, storage, controls and customer interface.

Heat Networks in Practice 

There are numerous examples of heat networks in use across the globe. Consolidated Edison of New York, for example, operates the New York City steam system, the largest commercial district heating system in the United States, which has operated continuously since 1882.

In Japan there are 87 district heat systems in operation serving 148 districts. But it is in Europe where heat networks have seen the largest market penetration thus far. 

Denmark’s story, in particular, demonstrates the benefit of adopting widescale heat networks as a primary heating source. Denmark was a net importer of oil when the 1973 global oil crisis struck. The quadrupling of oil prices forced the country to switch off street lights, shut down factories and even led to a ban on people driving one day a week.

Following the crisis Denmark decided to wean itself off oil and invested heavily in renewable energy and heat networks. Some 64 percent of homes in Denmark are connected to a heat network and the country has been a net exporter of oil since 1997.

Heat networks can deliver cost effective, low carbon heat, in the form of hot water or steam, from the point of generation — often referred to as the energy centre — to the end user through a network of insulated pipes. A heat network is one of the most cost effective ways of reducing carbon emissions from heating.

Their efficiency and carbon saving potential increases as they grow and connect to each other and the government has identified them as an essential part of our future clean energy infrastructure.

Varying in size, scope, and heat source; a heat network could service the heat requirement of just two buildings or an entire city as is the case in Copenhagen for example. In Copenhagen 98% of the city’s buildings are supplied by 21 municipal and community owned local networks, making it one of the largest and most successfully integrated groupings of heat networks in the world.

Many heat sources can input to a heat network, including recovered heat, biomass and biogas fuelled boilers and combined heat and power (CHP), fuel cells, heat pumps, geothermal sources, electric boilers, and solar thermal arrays.

Many of the cheapest sources of low carbon heat can only be used if there is a network to distribute the heat. A key characteristic is their ability to capture and redistribute heat otherwise wasted by electric power stations, factories, computer server farms and public transport systems for example thus reducing emissions and energy demand.

Warming up to the benefits

Heat networks can also be adapted to different primary fuel sources and in that respect are considered technology agnostic. A heat network using gas fuelled CHP may convert to a renewable heat source in the future instantly reducing the emissions across all the properties connected. As a result, heat networks are expected to play a crucial role in helping the UK meet its climate change obligations and reduce carbon emissions.

Carbon emissions from Denmark’s heat networks are 40 percent lower than those from individual gas boiler systems. Moreover, households connected to the networks in Copenhagen pay around 50% less compared to using the default fuel source in Denmark (oil heating).

Given that 11% of households in the England alone are classified as fuel poor, widespread adoption of heat networks could be instrumental in providing reliable, affordable heat to all. Heat networks also offer a means of providing the UK with greater energy security in an increasingly uncertain world. 

Moving Forward

Maximising the potential of heat networks within the UK energy market clearly requires Government support in the short term at least. In October, the Government announced the launch of the Heat Networks Investment Project — a £320m scheme to help accelerate the adoption of low carbon heat technologies in England and Wales across the public, private and third sectors.

The scheme offers grants and loans to support the commercialisation and construction of heat networks. Across all three decarbonisation scenarios outlined in the Government’s Clean Growth Strategy, it is suggested that 1 in 5 homes could be connected to a heat network by 2050, up from just two percent of the overall UK heat demand across the domestic, public, industrial and commercial sectors today.

Conservative estimates are that more than £15bn of new capital investment in heating infrastructure is likely to be required by 2050 in order to achieve the level of deployment required to meet our carbon targets. Self evidently this can’t be afforded by public funds alone.

A key part of the government’s strategy is to unlock the sector’s investment potential and the recently opened Heat Networks Investment Project will seek to draw in third party funding into high quality schemes i.e. those which deliver carbon savings, consumer benefits and positive returns.

For the scheme to be a success, public and private sector collaboration is key but for the market to be transformed at pace and for the government’s vision to be realised, it’s vital.

By Ken Hunnisett of Triple Point