ADE: Keep your friends close, but your heat closer…
For many years, the traditional approach to generating energy centrally has dominated, with the vast potential for local authorities to play a role the UK’s low carbon energy transition overshadowed. Yet forward thinking local authorities, from Aberdeen to Southampton, have quietly begun to develop and operate their own energy projects.
In the November 2015 Spending Review, Government announced £300m in funding will be made available for up to 200 heat networks, providing a starting block for district heating opportunities across the UK. With the right policy framework in place, district heating could revolutionise the way Britons heat their homes and other properties in the years to come.
According to government estimates, just short of 500,000 UK households are already connected to district heating systems with the figure predicted to rise to as many as 4m by 2030. But it is not just homes that can be connected; commercial properties, public buildings, schools and swimming pools can all receive their heating and cooling needs from heat networks. The value of the total UK district heating market is estimated to be £400m in 2012, and district heating delivers additional value through carbon savings.
District heating is already delivering at scale in London, Nottingham, Edinburgh, Sheffield and Exeter. Thanks to strong planning regulations and recent Government-backed feasibility studies funded through the Heat Networks Delivery Unit (HNDU) there are planning applications in excess of 150 local authorities. In London alone, Mayor Boris Johnson has committed to ensuring that 25 per cent of London's energy is delivered by decentralised energy by 2025. Increasingly, local authorities are seeing district heating as a key tool to control energy costs and tackle fuel poverty while reducing carbon emissions and providing jobs for local people. Seizing the opportunity of decentralised energy generation can provide new long-term income streams for communities and councils, particularly in an environment where local government budgets are under pressure.
The ownership and operation of heat networks often fall upon two or more stakeholders from various backgrounds such as local authorities, private companies, building developers, contractors and investors. Resources to bring together these stakeholders, and the time and energy to learn new skills to deal with the necessary planning and financing of a district heating project, often come as a challenge which deters many council officers and councillors.
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