HOT|COOL NO. 1/2020 - "How to District Energize your City"

Delivery models for District Heating in practice There is no ‘one size fits all’ delivery model for heat networks. Their makeup and scale are influenced by local circumstances, particularly the availability of heat sources, buildings density and composition, whilst the delivery model depends particularly on the objectives for the project, as well as the degree of control and risk appetite of the lead organisation. Projects whose objectives involve higher levels of social benefits (i.e. fuel poverty alleviation, carbon savings, economic development) generally have stronger public leadership and control. However, with the rapidly growing decarbonisation agenda affecting all organisations, delivery models are increasingly involving public/private partnerships. Their combined resources can greatly enhance the benefits and reach of district heating.

Room for Improvement The Committee on Climate Change’s ‘Central scenario’ suggests that heat networks can deliver up to 5.7MtCO2 emissions reduction in buildings by 2030, which represents around a six-fold increase on today’s heat networks carbon emissions savings level (2 .

Scottish Government policies to support Transition to Net Zero

The Energy Efficient Scotland Programme, launched in 2018, aims to address heat decarbonisation under one long-term programme to transform Scotland’s buildings by 2040. Included is a Heat Networks Bill as well as secondary legislation setting minimum energy efficiency standards for homes in the private rented sector, revised energy efficiency standards for non- domestic properties and steps to place Local Heat and Energy Efficiency Strategies on a statutory footing. It is hoped that a combination of licensing and zoning will help to accelerate the deployment of heat networks.

The following examples show differing approaches by public bodies to deliver low carbon heat networks.

MIDLOTHIAN Public/private joint venture

Midlothian Council intends to build a low carbon DH network to supply heat to the new Shawfair town on the outskirts of Edinburgh, with heat supplied from the recently built Millerhill Recycling and Energy Recovery Centre (ERC). The ERC is a joint project between the City of Edinburgh and Midlothian Councils (5 . The project forms part of a wide range of projects that the Council is planning to deliver through their energy partnership with Vattenfall, announced on 11 February (6 . The joint venture will establish an energy services company (ESCo) to deliver the projects, combining private sector expertise and capital investment with the Council playing a key role in enabling projects to come forward. The ESCo will operate across Midlothian to deliver not only DH but other renewable energy generation, transport and energy efficiency projects. UNIVERSITY CAMPUS PROJECTS University ownership and operation, no third party sales Heat networks exist on many of the large university campuses in Scotland including Edinburgh, Glasgow, St Andrews and Strathclyde. They have generally been developed to supply heat to their own properties and are owned and operated by in-house engineering and technical teams. The University of St Andrews aims to become the UK’s first energy carbon neutral university. The Eden Campus Biomass DH Scheme at Guardbridge includes a 6.5MW biomass boiler that delivers low carbon heat via 6km of DH pipework to 17 building complexes. Not only did the project aim to achieve carbon emissions savings, it also aimed to establish a green supply chain with local economic benefit, and act as a low carbon exemplar. University campuses are major heat anchors and have the potential to catalyse wider heat network expansion if they can overcome commercial, legal and technical barriers to sharing energy resources.

Financial support to district heating under the District Heating Loan Fund since 2011, and the Low Carbon Infrastructure Transition Programme (LCITP), since 2015.

£50 million Heat Networks Early Adopter Challenge Fund for local authorities is included in the government’s 2020/21 budget.

Heat Networks (Scotland) Bill, laid before Parliament in March, aims to encourage greater deployment of heat networks. The Bill includes requirements for operators to hold a licence which will be subject to standard conditions, including consumer protections. Licence holders will have the power of compulsory land purchase and network wayleave rights, including ‘necessary wayleaves,’ which will allow license holders to install and maintain heat network apparatus on any land. Also included are powers for local authorities and Scottish Government to designate ‘heat network zones’ in which only holders of zone permits can operate. The zones could provide protection for license holders from competition and thereby incentivise long-term investment decisions.

2 Next steps for UK heat policy. Committee on Climate Change (2016). 3 Carbon savings from gas CHP are no longer achievable versus displaced grid electricity due to the lower carbon intensity of the grid compared with when the earlier Aberdeen gas CHP networks were installed. 4 The NESS Energy Project. 5 6

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