Is this the Real Answer for Cheap Green Energy?

Ever since the first serious concerns were raised about man-made climate change a generation ago the world has been caught on the horns of a dilemma. The choice has too often seemed to be between securing the kind of short-term economic growth which the developed world expects and the developing world desperately needs  on the one hand, and paying more now in order to secure the future of our world on the other.

It is small wonder that green energy solutions are still seen as something of a luxury accessory, perhaps affordable in times of prosperity, but pushed into the background at times of world recession, when achieving growth and combatting fuel poverty becomes an even bigger concern.

But could it be that a large part of the answer is beneath our feet, or that at least it might be: an answer that could have a huge impact on the UK as it already has had in similar countries. For once I am not  talking about fracking, but about something that has been around for a century, though the technology continues to evolve in exciting ways.

The heat network rests on the fundamentally simple idea of producing heat (or cooling) centrally, in the most efficient and environmentally friendly way, and then distributing this through highly insulated underground piping, to homes, offices, hospitals, factories and anywhere else that needs it. Often this simply taps into heat that would otherwise be pumped wastefully straight into the atmosphere.

Different measures could radically affect the growth of Heat Networks in the UK

 Such networks not only distribute heat but can store it, for hours or potentially  months, ironing out the wild and often unpredictable fluctuations in both and supply and demand and making it much more practicable to use ‘green’ power sources, such as wind or photovoltaic that are inherently unreliable, not to mention biofuels. Even where gas is still used there is scope for greater efficiencies, especially where the opportunity is taken to use generated combined heat and power (CHP)

 So why is it that this technology accounts for only about 1% of the UK’s current heating needs while in Denmark, with an only slightly colder climate, the figure is over 60%. In fact most European countries already make much greater use of this resource than the UK does, as do countries as diverse as China, Japan and the USA.

In fact the benefits of district energy are already recognised by many UK hospitals, universities and industrial plants and office complexes, frequently powered by CHP systems which offer added security of supply. So why has the residential sector been so slow up until now?

Part of the answer lies in how the UK population lives: predominantly in individual houses which are more expensive to connect, and in most cases owner occupied or privately rented, making it much harder to convert individual householders to heat networks. The relatively low rate of house building in recent decades hasn’t helped either. Gas prices that are low by international standards have also reduced incentives to innovate in this direction.

However the last few years have seen a sea-change, with far more new homes tapping into heat networks, especially new flats, spurred on partly by enhanced incentives from government and encouragement from local planners, but also by a growing Energy Services industry that is prepared to make substantial investments in order to make a long term return.

Here at BSRIA we have recognised this trend, and so decided that a fresh look at the UK district energy market was needed. The result is a report which examines the market, the main players and what has drawn them into the market. It also considers the main positive drivers along with the biggest barriers to future development, and what can be learned from experience outside of the UK.

Our research indicates that the UK District Energy market is already worth over £400 million annually (including capital investment), and that it is growing at the fastest rate in its history, so that we expect it to exceed £500 million by

This blog was written by BSRIA’s Henry Lawson

2015).

The overview takes in different possible initatives on the part of national, and local government, as well as the EU, which could speed up development or hinder it, and at the key changes in technology which are likely to make a difference in future.

If you want to know how big this market is likely to be in two or five years’ time and what the prospects are for the future, then this should be an indispensible read.

To find out more about the report or to purchase it contact our Worldwide Market Intelligence team on 01344 465610 or wmi@bsria.co.uk