Heat networks are good value and crucial to decarbonising domestic heating in the UK, according to a new report by influential think tank Policy Exchange, entitled: ‘Too hot to handle? How to decarbonise the way we heat our homes’
The report reveals that greenhouse gas emissions from domestic heating have fallen by 20% since 1990, compared to a reduction of 50% in the power sector, and suggests a radical overhaul of the government’s heat strategy to do better on domestic heat decarbonisation.
Among the policy recommendations is a proposal to increase the roll-out of heat networks, which Policy Exchange says currently only supply around 1% of households, but could serve 10 to 20%+ of households by 2050.
The report calls for Ofgem to develop a bespoke regulatory framework for heat networks and for the government to do more to increase the financial attractiveness of heat networks and de-risk investment, which echoes the call by the Association for Decentralised Energy (ADE) for a new regulatory investment framework.
Commenting on the proposals, Ian Allan, Head of Research and Development for community heating specialist Switch2 Energy said: “This is a very interesting report that helps to bring heat out of the energy policy shadows and highlight the huge contribution that heat networks can make to reducing the UK’s carbon footprint in the most affordable way possible.
“Although the Heat Trust is making an excellent contribution to raising industry standards, it is a voluntary scheme, and Policy Exchange is right to call for greater regulation. However, as the report states, this must be proportionate to the scale of heat networks and differentiate between large heat networks, such as district heating, and smaller building-level heat networks, such as community heating.
“Heavy ‘Ofgem’ legislation may be too rigid for small community heating systems and could deter the growth of such schemes, at least in the short term. Policy must also recognise the fact that many heat network operators do not have end-to-end responsibility for schemes, preferring to deliver heat to the bulk meters and then hand over to landlords or local community.”
Ian Allan added: “In working towards ensuring competitive charging structures by heat networks, it is much easier and more relevant to compare the price of heat where it enters the building, not at the apartment meter where price is influenced by the specifics of the building layout, fabric and local heating system performance. ”
He continued: “The report recommends moving focus away from specific technologies, such as electric heat pumps, which the current government heat strategy favours. In the case of heat networks, it’s important to remove barriers to development and permit developers to choose their own heat source, whether this be gas boilers for small community heating schemes, CHP, biomass, or other technologies.
“The government already recognises the need to roll out heat networks to millions more UK homes and is helping to commit funds to the sector, but more can be done to encourage the sector and the availability of lower cost, lower carbon heat for residents. However, policy must be carefully thought out and nuanced to recognise the difference between large district heating and small community heating schemes.”