In an article written for Energy in Buildings and Industry magazine, Richard Harrison, CEO of Switch2 Energy, calls on heat network owners and operators to think “efficiency first”.
Raising efficiency of the UK’s 17,500 heat networks is critical to tackling the triple challenge of high energy costs, carbon reduction and regulatory compliance.
Many existing communal heating systems operate at only 35 to 45% efficiency. As such, there’s huge potential to raise performance to levels achieved by the best performing legacy heat schemes, which can reach 65%.
Communal heating scheme managers are faced with sky high gas bills and there’s increasing risk of residents falling into fuel poverty. Raising efficiency is the most cost-effective way to tackle the problem. Indeed, soaring energy prices means the payback on investing in maintenance and efficiency improvements is much faster than before.
How much money can you save?
Currently, a typical communal heat scheme could save as much as £160,000 on their annual energy bill when they use specialist support to maximise efficiency of the entire network.
Investment in efficiency improvements, such as specialist, data-driven operation and maintenance (O&M), which is performance managed, can quickly pay for itself. This will continue to drive long term financial, environmental and operational returns.
Our clients pay the same for this specialist, data-informed O&M service as they would for a standard service – provided by a traditional gas engineer. The savings, both monetary and carbon, soon add up.
Carbon and compliance
Reducing energy usage decreases carbon emissions as well as costs – helping to deliver on the UK government’s heat decarbonisation strategy and its net zero 2050 commitment. This strategy involves a huge expansion of heat network capacity from 3% to 18% of homes connected to communal heat schemes.
Decarbonising the UK’s existing 17,500 communal heat schemes, which are largely fuelled by natural gas boilers, is crucial to meeting sustainability goals.
These legacy heat networks must be fully optimised and operating at maximum efficiency and lower temperatures before retrofitting new low carbon technologies, such as heat pumps, or connecting to energy-from-waste schemes.
Communal heat suppliers must also be ready to adhere to new regulatory and technical standards affecting all areas of operation.
This demands a step change in efficiency and environmental performance, as well as better customer service and reliability standards.
Principles of efficiency
Unlike standard heating systems, which use individual boilers and only operate on demand, communal heating schemes support multiple homes. This means that one poorly performing property can affect performance of an entire network. That’s why it’s even more critical to optimise network performance 24/7.
Many communal heat schemes underperform because data intelligence is lacking and there’s a failure to consider the entire end-to end operation and performance of the scheme. Maintenance tends to be reactive and piecemeal with no consideration for the overall efficiency of the heating system.
By contrast, high performing communal heating systems take a holistic approach to operations and maintenance, including:
- Robust proactive maintenance
- Continuous monitoring, analysis and evaluation of performance to inform a series of targeted improvements.
- A specialist heat network operation and maintenance contractor has an expert overview of entire network performance and takes an overall view of efficiency improvements.
- Driving action via extensive use of advanced data insights – from meters, BEMS, HIUs etc. to inform interventions and maximise return on investment. Accessible data is centralised, rather than sitting in silos, as with poor performing schemes.
- Incremental approach to efficient use of fuel (gas) – following a stepped improvement journey, where progress is monitored and measured
- Relentless focus on customer needs and commitment to driving affordability and reliability.
The second phase of the Heat Network Efficiency Scheme (HNES) was launched in February 2023 – providing £30 million in grant aid.
In the first phase, Switch2 carried out multiple HNES optimisation studies across varied sites for housing associations, local authorities and private developers. We found that heat losses between the plant room and the property were commonly reaching 60%, with efficiency averaging just above 40%.
The impact of poor efficiency performance included:
- Higher tariffs and less affordability for residents – leading to fuel poverty
- Poor reliability and customer service issues
- High plant room and wider network maintenance costs
- Increased wear and tear on assets, shorter plant lifecycles and increased replacement costs
- Higher carbon emissions due to energy waste
- Compliance risk of inadequate customer service and technical standards, plus poor environmental performance
Cost & carbon saving in action
Switch2’s operation and management contract for the communal heating scheme at Greenford Quay is using a data-driven approach to transform efficiency.
We’re using our next generation digital technologies to optimise network performance at all stages of the project, which is being developed and occupied in phases.
With the energy centre fully installed to run the entire 2,000 property development, we’re overcoming the challenges of energy losses and supply/demand misalignment on phased developments
12 month results
- Efficiency of heat has increased by more than 40%
- CO2 savings of 300 tonnes achieved
- Overall thermal (heat) efficiency has improved by 30%
- Property heat losses in the first apartment block were reduced by 37%
- Excellent efficiency has ensured lower resident tariff charges
Take action now
Taking a holistic, data-driven approach to long term heat network performance improvement can yield positive results with lasting impact. Crucially, this specialist O&M service can be delivered at the same cost as standard, fragmented services.
There’s never been a better time to pursue heat network efficiency improvement – to capitalise on cost and carbon savings and ease the pain of rising bills for customers.