District heating is on the move

Last November at the BSRIA Briefing, I shared my thoughts about how CHP and Energy Supply Contracting models can possibly contribute to building a low carbon community. CHP is a low carbon technology but is only suitable for a larger scale site with a good base load to have better efficiency. ESCOs using the Energy Supply Contracting model can avoid a client’s upfront cost on implementation. However, no matter how good the solution and technology is, capital is always the barrier. Recently, I came across two pieces of news that I would like to share with you. It looks to me things are now moving.

First, the Scottish government announced in March a new £2.5 million District Heating Loan Fund. Registered social authorities, SMEs and ESCOs can apply for funding. The fund will offer loans of up to £400,000 to support low carbon and renewable district heating in Scotland.

Second, Leicester City Council is going to extend the current district heating network across the City of Leicester. The Council signed a 25-year contract with an ESCO to maintain and operate the plant. The ESCO will be responsible for part of the capital investment and there is additional funding from the Community Energy Saving Programme (CESP). It is predicted that the project will help the Council to reduce at least 10% of their carbon footprint.

It seems funding is coming and district heating is on the move. Are you aware of this move?

As an aside I noticed National Grid runs a program called Short Term Operating Reserve (STOR). Under this scheme, National Grid buys electricity power from privately owned generating facilities. The need for STOR is because at certain times of the day, the National Grid needs reserve power in the form of either generation or demand reduction to be able to deal with actual demand being greater than forecasted demand.

The question is, how will STOR influence large scale CHP in the future?…