A multipronged plan for heat
There is no single way to decarbonise heat cheaply, but there are options if the UK starts the planning process now.
17th June 2016 by Networks
Heat is an issue. It represents almost half of UK energy use and a third of UK carbon emissions. The UK won’t meet its carbon-reduction targets set out in the Climate Change Act – or fulfil its commitments made in the Paris Agreement – without a long-term plan to move to low-carbon heating.
A recent report into the ways in which the UK might manage decarbonisation of the heat system, undertaken by the Centre for Energy Policy and Technology at Imperial College, says formulating a plan should be a pressing concern for the UK government. Early planning and preparation will make the transformation of this significant sector as cost-effective as possible, and keep unavoidable disruption in both streets and homes to a minimum. It will also allow the mass rollout of low-carbon technologies to get started in the 2020s.
The government appears to be attuned to this need. In November it announced that the budget for the Renewable Heat Incentive (RHI) is to increase to £1.15 billion in 2020/21 – from £430 million in 2015/16 – and, in the Budget, heat networks received £320 million of support for the next five years. How this money would be best spent is now being discussed.
No silver bullet
As well as calling for a plan, the Imperial College report also concludes that there is “no silver bullet” – no single low-carbon solution to replace natural gas. The key problems are meeting the huge seasonal variations in demand and the required ramp rate, both currently addressed by the UK’s significant capacity to store natural gas. The electrification of heat, once considered “the silver bullet” for decarbonisation, has largely been abandoned because the peak heating load would be five to six times what it is today, requiring huge increases in generating capacity.
The report concludes that to deal with the variation in geography, housing types and occupancy, three solutions will have to be deployed to different extents. Electrification, alongside repurposing the gas grids for hydrogen and installing heat networks, will be the main solutions for heat. But none of these solutions is the perfect fit. A major element of the report is weighing up the attractiveness of each approach, bearing in mind the cost and disruption implementation will cause. None of the solutions is without drawbacks, as the diagram, left, shows.
Each solution will be applicable within suitable properties if pilot schemes and further preparatory work is done to address the problems that have been identified. One important area of concern is managing the disruption to homes and businesses – either through streetworks or the replacement of appliances – during the transition. The report warns that if the transition is not well managed “it could become a major social and political issue, even where the technical and economic justification is favourable and the end outcome itself is uncontroversial”. The choice of solution and the rate at which it is deployed may well be determined by customer acceptance rather than cost.
The report recommends that decisions should be made locally rather than seeking a single approach at national level, but government should at the earliest opportunity establish a system of governance for heat. The relevant parties are likely to be the National Infrastructure Commission and Ofgem because the current governance arrangements are “not fit for purpose”. It is also vital that a national infrastructure programme for energy efficiency is started, because investment in this area can reduce the scale of the space heating challenge for all options.
Repurposing gas grids
The main benefit of reusing the existing gas grid over other options is that most of the infrastructure is already in places. But there will still be plenty of disruption because domestic appliances will have to be replaced with hydrogen-ready ones.
This disruption could be minimised by regulating for the installation of such appliances in advance. Hydrogen has similar storage requirements to natural gas, so it should be able to meet the demand peaks and ramp rates, albeit at three times the pressure of natural gas.
The main difficulty with using hydrogen is that it is expensive to produce, either through the electrolysis of water or through steam methane reformation of natural gas. This is dependent on carbon capture and storage, which the government is no longer supporting. It scrapped its £1 billion CCS competition last year.
However, one potential source of gas for conversion to hydrogen in the future could be hydraulic fracking. This took a major step forward last month when North Yorkshire Council approved Third Energy’s plans to frack near the village of Kirby Misperton, the first time such an application has been approved since the ban on fracking was lifted in 2012. The company will fracture the well in multiple places over an eight-week test period.
Decarbonising the electricity sector is well under way, and once sufficient low-carbon generation is operating, it could meet the extra requirements of the heat sector. Highly efficient heat pumps are suitable for less densely populated environments where traffic disruption is less of an problem, and are particularly effective for well-insulated properties such as flats in high-rise buildings where gas-fired boilers are not used. But the cost and disruption required to install the equipment could put many customers off the technology. Any penetration of heat pumps is likely to require upgrades for local networks to avoid short-term fluctuations in service quality.
Budget cap mechanism
On the announcement of the increase in funding for the RHI, the government also proposed a raft of changes to the mechanism. These included a new budget cap and changes intended to promote the deployment of technologies “likely to be strategically important in the long term”, such as heat pumps.
As a consequence of these changes, government is reviewing the current air-to-water heat pump tariff and will potentially amend the ground source heat pump tariff. It is also seeking to drive up the performance of heat pumps installed under the RHI.
District heat networks can supply heat efficiently and at low cost to areas of mixed use with strong “anchor clients” such as municipal buildings, offices and leisure centres.
However, it can also be suitable for less densely populated areas as part of community energy schemes – as well as for flats in high-rise buildings. Sources of heat for such networks – generally from sustainable biomass, geothermal, waste heat and heat pumps – are available, although limited. Currently heat networks fall outside Ofgem’s remit, leaving customers unprotected, although the Heat Trust, a voluntary independent protection scheme, was set up last year.
If this growing area were regulated, consumer protection would be bolstered, and operators and developers would have statutory powers that would simplify access, land purchase and wayleaving. But it would also help lower the cost of capital, which currently leaves many commercially funded schemes too expensive to progress.
Among the changes to the RHI scheme suggested by the government is a proposal to scrap support for solar thermal generation because of the declining number of installations since 2010. However, solar thermal technology could be potentially important for the district heating sector in the future.
Integrated Electric Heating Project
The Energy Systems Catapult last month announced that EDF Energy’s UK research and development centre will be extending its existing open source BuildSysPro modelling tool to highlight the specific opportunities and challenges of providing heat through various forms of electric heating.
The Integrated Electric Heating Project is a key strand of the Energy Technologies Institute’s Smart Systems and Heat programme. The programme was instigated to model the interaction between the heating system, control system, building fabric, weather and consumer requirements across a number of domestic UK building archetypes and household types. The intent is to create economical and future-proof heating systems.
The catapult is currently delivering the first phase of the programme on behalf of the ETI. The modelling for the Integrated Electric Heating Project is due to be completed this winter
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