Utility Week

22 | AUGUST 2021 | UTILITY WEEK Policy & Regulation Analysis Zoning in on heat networks Despite recent growth, heat networks remain a niche technology in the UK. As part of our Countdown to COP campaign, Tom Grimwood looks at how heat zoning could change that. W hile the decarbonisation of heat has become one of the most con- tentious topics within the energy industry right now, one thing that most observers seem to agree on is that heat net- works have a signi cant role to play. In its most recent Future Energy Scenar- ios, National Grid Electricity System Opera- tor forecast that up to ve million homes – representing around one in six households – could be connected to low-carbon heat net- works by 2050. The Climate Change Commit- tee has also suggested a similar gure in its net zero reports. The fact that heat networks have escaped the con… ict that surrounds many other heat- ing technologies partly re… ects the fact that they are not themselves a source of heat but a way of delivering it to homes and busi- nesses more e† ciently. As such, in the areas where they are suitable, they represent a no- regrets option that is compatible with vari- ous futures. Nevertheless, heat networks remain relatively niche in the UK. According to a market report produced by the Association for Decentralised Energy (ADE) there were around 17,000 heat networks across the country in 2018 – approximately 5,500 dis- trict heat networks and 11,500 communal heat networks. There were close to half a million connections, nearly 450,000 of them domestic, meaning they served less than 1 in 50 of the roughly 27.5 million households in the UK at the time. Heat zoning One mechanism being considered to take heat networks into the mainstream is zon- ing, something which the ADE called for in a report last year. "Zoning is the process of identifying areas of land upon which speci c policies, laws, regulations or powers apply," the trade body explained. Local authorities would be given "a duty to create energy masterplans that use zoning to determine which national heat and energy e† ciency policies and regulations apply in a particular area". "UK government and, where devolved, Scottish government and Welsh government should retain the ability to set policy within zones, whilst local planning authorities are able to direct the location of these zones," the report added. "Di˜ erent technologies will require di˜ erent forms of support to be deployed at scale. National government should work with industry and experts to identify what the best policy is to incentivise di˜ erent heating and e† ciency solutions for each zone type. "This is likely to involve a combination of planning policy, building regulations, sub- sidy, taxes, levies and exemptions, as well as tailored communication and engagement strategies." Speaking to Utility Week, ADE policy o† cer Amy Ritchie says heat zoning would "allow the development of strategic net- works that are either already in place or being developed new. "It would allow government funding to be directed to those areas of the country and there's no confusion about where they should be." Ritchie adds that local authorities would need to be "adequately resourced to deliver what is expected of them". While acknowledging the "amazing schemes" that many local authorities are already undertaking, she says many are doing so with a small team of just a few people. She sees the current situation as a "patchwork" with a "mismatch across the country". Ritchie says zoning would bring a "joint approach" that would empower local author- ities to "build up the skills and supply chains and create green jobs as well". She also notes that, while the ADE sup- ports a national framework for heat zoning, it should be "… exible enough to take into account local opportunities and advan- tages", in particular regarding potential sources of currently wasted low-carbon heat. Removing the fa factor One country where heat networks are not only commonplace but in fact dominant is Sweden, where they meet almost 60 per cent of heat demand, including more than half of domestic demand. Mike Reynolds, managing director of the UK heating arm of Swedish state-owned energy company Vattenfall, claims heat networks could potentially meet up to 30 per cent of heat demand in the UK by 2050. "That's achievable if we have the right ambi- tion and put the right policies in place," he£says. He believes heat zoning will be key to realising that ambition: "The principle of zoning is relatively straightforward. It says rather than letting everyone in every single building have to go down the same journey on their own and work out what to buy, why don't we give them some short cuts and say: 'In your building, in your location, this is de nitely the right thing for you to do and the reason we know that is we've already done the studies, we've already done the research and it's the most cost-e˜ ective whole-life solution for this building.'" "I shudder to think about the amount of money that property developers and local authorities have spent on consultancies advising them on how to buy these things," he remarks. "One of the reasons is that everyone pretends they should look at lots of other options and the reality is they don't need to. They all kind of know going in that district heating is the right answer but instead what they do is go and spend a hundred grand on an engineering consultancy to go and tour around all these di˜ erent things, present a load of concepts, and come back to district heating as the right answer." He says this "fa˜ factor" is very expen- sive: "Before I've even spent any money put-

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