Utility Week

Utility Week 17th April 2015

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The Topic: Heat HEAT THE TOPIC 8 | 17TH - 23RD APRIL 2015 | UTILITY WEEK A fter years of political wrangling and the laying of landmark leg- islation, the UK should by now be hitting its stride on plans to decarbonise the energy sector. However, in reality only half the problem has been tackled so far. The UK has a low-carbon plan to keep the lights on, but how does it plan to cut carbon while keeping radiators warm? The Department of Energy and Climate Change (Decc) has taken tentative first steps towards tapping the potential of district heating as well as the wide-scale roll out of water source heat pumps. But without a clear overarching policy on decarbonising the heat sector, the future is unclear. It is a problem that has so far has been largely overlooked. Although heat accounts for almost half of the UK's total energy demand, to date the main thrust of govern- ment policy has focused on securing electric- ity generation capacity. Electricity Market Reform (EMR) focused on generation through a tried and tested approach: get big energy companies to invest even larger sums in enough new capacity to plug the gap. But tackling the problem of heat will require a different approach that is both locally focused and user- oriented. It is an altogether new policy-making challenge for government. However, the need to meet this challenge head on is becoming increas- ingly apparent. The central concerns in the heating sector Renewable heat: the missing piece of the low-carbon jigsaw play straight to the heart of the energy tri- lemma, encompassing carbon intensity, sup- ply and cost. Heating is carbon-intensive, with more than 80 per cent of residential users relying on gas heating for warmth. And as the UK's gas resources dwindle, imports have swelled to around 50 per cent, leaving the country increasingly exposed to volitility. Consumer champion Which? reported last year that among household customers, 41 per cent worry about how to heat their home in win- ter. Perhaps with good reason: the govern- ment's own data shows that over the past ten years gas costs have risen by 50 per cent for the average household and 60 per cent for business users. For those living in fuel poverty, the en- ergy inefficiency of old housing, combined with rising costs, means adequate access to heat supply is effectively out of reach. Government is taking action to counter this problem. Alongside its ongoing support for renewable heat through its Renew- able Heat Incentive (RHI), the government announced in March a new drive to tap as much as 6GW of water-sourced heat. The announcement came with the release of an interactive map to provide developers and homeowners with information on the poten- tial heat capacity of each waterway and the levels of heat demand across England. In addition, this year the government made available £7 million through a com- petition to boost innovation in the heat industry and made £25 million available to the Central Heating Fund. But although domestic space heating ac- counts for 80 per cent of heat demand in the UK, this is not the whole picture. An impor- tant 20 per cent of heat is required for high temperature industrial processes. Finding an effective way to decarbonise this without unacceptable damage to competitiveness presents a particular challenge to policy- makers and one that has yet to be resolved. Support for combined heat and power via tax incentives has been welcomed by industry in the past, but this system is in the throes of change – transitioning to support via a combination of Renewables Obligation and RHI mechanisms – which is never help- ful for investor confidence. Read on for more insight into the future of UK heat policy and technology. by Jillian Ambrose Before 2050, around 26 million homes will each require new low-carbon installations – the equivalent of ten Milton Keynes each year. The Energy Technologies Institute's report Decar- bonising Heat for UK Homes (March 2015) highlights the need for a whole system approach to understanding smart interactions between consumers and multiple energy sources. Gas engine District energy Biomass boiler Waste to energy Municipal scale heat pump Thermal storage Natural gas Biomass with CCS H2 turbine Nuclear power Renewables Fossil fuel with CCS Isentropic storage Smart meters Smart controls Smart appliances Thermal efficiency Ventilation and heat recovery Heat pumps Hot water Boilers/heat exchanger Heating systems Heat storage

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