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

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

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

Launching BSRIA Business

BSRIA open day, 1970

BSRIA membership open day, 1970

A resurgence of popular interest in the ’70s comes as no great surprise if you consider the ways in which the last double-dip recession resonates today. For example, deregulation and the boom in mortgage lending in the 1970s played no small part in the current volatile housing market.  

The BSRIA Statistics Bulletin has its roots in the 1970s, as we recognised at that time a need for better market intelligence to help businesses get the competitive edge. It’s still a tough market and members tell us that our data to inform future business strategy is valuable – but we’ve subsequently made many improvements to the publication. I’m pleased to say that this month we’re launching a new suite of business services for our members including the new Business Bulletin: 

Total consultants workload during last three months compared with the same period last year.

Total consultants workload during last three months compared with the same period last year.

New services:

  •  Business Bulletin (replacing the Statistics Bulletin) offering quarterly analysis and data on the economic outlook, construction market, M&E contracting and more. We also provide unique data from BSRIA’s Consultants’ Workload Survey. If you work for a consulting engineering  company and would like to contribute to our quarterly survey, please get in touch.
  • Business Network – register  for the launch of the first of a series of business networking opportunities on 11th September.
  • Monthly e-newsletter with the latest business information and technical resources – sign up here.
  • Online business resources on our members-only web pages www.bsria.co.uk/business.

The July issue of the Business Bulletin will be included in our quarterly members mailing (also look out for more information in the next issue of Delta T).

Do let me know if you have any further suggestions…and I’d like to hear a few stories about what it was like for your business in the ’70s…and some pictures please!

Integrated working – is it the right time again?

For those of us who remember back to the early 1990s, the current drive of the Government’s construction strategy to get better value from construction by reforming procurement may seem like a case of history repeating itself (see The Latham Report “Constructing the Team”, 1994).

What is interesting to note is that both reports followed severe recessions in the construction sector which had themselves followed relatively long periods of growth in construction output. Of course this might be no more than coincidence, or it may be an attempt to embed some much-needed structural changes at a time when the industry is experiencing a buyer’s market, so that when times improve there is less tendency for the industry to revert to type.

I welcome the kinds of change that are now mooted: involving suppliers at the time they can add value to a project, which generally means earlier than usual; clients focusing on specifying output performance and designers/contractors working together to develop integrated solutions; supply chains engaged on serial orders that will encourage research and innovation.

We need more fundamental changes

I believe, however, that this will need a wider set of more fundamental changes to be put in place than just exhorting traditionally separate disciplines to work together. There are a number of hidden drivers that I suspect will also have to be tackled for this change to be effective.

These include the fragmentary nature of the client, the underlying power of the finance and insurance industries, and the tendency to think short-term.

A fragmented client comes from devolution of budgets, which itself promotes budgetary responsibility, but which also means that more organisations become occasional clients and don’t have the chance to develop the skills to deal with a sophisticated and confusing industry.

Finance and insurance underpin many of the choices made by developers and designers in terms of the technical standards they build into their schemes – no landlord wants to be left holding a difficult-to-let office block because the permitted floor loadings are outside the norm, irrespective of whether this capacity is ever needed. Manufacturers may feel the need to offer warranties to give their customers a safety net – difficult to achieve when a technology is new and may be favoured from an energy efficiency point of view.

Short term thinking is natural, but is often the enemy of good decision-making. It drives lower capital expenditure at the expense of higher operational costs. This may come from governments not seeing beyond the next election, or officials not seeing beyond their current posting, or organisations behaving as though they were not going to be around for more than a few years. Which is all understandable, but not really defensible. We have tools to help make good, long-term decisions – such as life-cycle costing – all we need to do is not be afraid to use them.

Integrated working for all supporting stakeholders

In my view, the desire for more integrated working must not be restricted to the primary members of the construction industry, but must also extend to all the supporting stakeholders and really engage with the operators and maintainers of buildings and infrastructure – a distinction which is unnecessarily perpetuated by the separation of CAPEX and OPEX budgets inside client organisations.

So, is it the right time for integrated working?

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