Heat networks: a route to net zero

Neil Smillie

Principal Consultant

As the UK looks to transform and decarbonise its energy generation and supply sector to meet global net zero carbon targets, heat networks have a vital role to play.

Recent spikes in wholesale energy prices have sent shockwaves around the world and ignited the debate about the need to accelerate the transition away from gas boilers as the primary means to heat our homes and businesses.

Not least given the post-COP26 global consensus that the world must radically decarbonise its energy generation to achieve net-zero carbon emissions by 2050. The result is a growing realisation that we must now embrace heat and heat networks as a major part of the solution to this critical challenge.

Heat in buildings is one of the biggest sources of greenhouse gas emissions in the UK, accounting for 23 percent of total UK emissions.

The Climate Change Committee has estimated that heat networks could provide around 18 percent of UK heat demand in 2050, up from two percent today.

The recent UK government Net Zero Strategy, published in October 2021, identified heat as being central to meeting the challenge. Sadly, the headlines which followed largely focused on a new £5,000 grant designed to encourage homeowners to scrap their gas boilers in favour of domestic air source heat pumps and the additional strain that this dramatic market stimulation could place on National Grid infrastructure.

In reality, the required transition must go beyond such simplistic narrow views. We must embrace a wider, coordinated approach to the use of heat; we must align this thinking with existing domestic and commercial energy infrastructure and target greater, more deliverable economic and social outcomes.

Fundamentally we need to adopt game changing thinking around our approach to heat. Climate change is happening before our eyes and the decarbonisation of heat is a major contributor to turning the tide. As such, heat networks are crucial to rethinking the way we use, manage and store future carbon-free energy.

A ‘whole system approach’ to energy management

Heat networks work by transferring heat - or cooling - from a central source to domestic dwellings, public buildings, businesses, factories, sport facilities, hospitals and universities. They are uniquely able to unlock otherwise inaccessible large-scale renewable and recovered heat sources such as waste heat from industry and heat from rivers and mines.

This concept of linking a central source of generation to multiple customers via a water pipe network to deliver space heating and air conditioning has been around and in use for many decades. Modern heat networks provide an efficient way to provide heat to end users instead of traditional individual boiler systems and help customers make use of lower cost sources of heat.

The future must build on this start to adopt a ‘whole system approach’ to managing energy use. As technology has moved heat can be generated from several technologies and from either a central or diffuse sources.

Capturing waste heat in all its forms is critical to driving down carbon. Whether the source is waste heat from a power station or data centre, from ground source heat pumps driven by renewable electricity, or from an energy from waste plant or industrial facility that is electrifying heat. Heat networks can play a role in the best use from energy transfer.

Transforming energy storage and transportation

The opportunities provided by heat networks go beyond simply decarbonising and reducing the cost of domestic and commercial heating. As the world shifts away from fossil fuels toward electrification and renewable generation, heat networks can create huge opportunities and benefits for both the storage and transport of energy.

While battery technology is improving, it remains an expensive and resource hungry way to store large scale energy. By contrast, heating water is a simple, cost effective and reliable solution to capturing excess intermittent energy generated by solar farms, wind turbines or other forms of renewable generation.

Similarly heat network technology can provide a reliable means to transport energy, not least as grid capacity is set to be the limiting factor to the UK’s migration towards mass electrification and the adoption of electric cars, bikes and trains. Add in transition away from gas boilers towards electric heating or electric-powered heat pumps, and it is clear that without massive investment to upgrade capacity, the electricity grid will quickly be stretched beyond capacity.

Delivering the heat network reality

The challenge of creating widespread heat networks will come down to our ability to join up the dots and identify synergies during the development stages of infrastructure projects.

Consumers will most probably expect no increase in energy price as they transition to heat as a service, but demand performance benefits from specialist providers of this new technology. Engagement across disparate stakeholder groups is crucial to securing the required whole system approach.

Campus and neighbourhood scale networks, with large thermal and electrical loads, are clear first opportunities to develop, and the building in of flexibility to schemes enables future changes in heat sources to be accommodated. Once investment is secured for the heat network and supporting infrastructure installed, the generation source can be easily replaced with even lower carbon solutions when they become available.

Swaffham Prior Community Land Trust

Radical pilot schemes are already happening. Cambridgeshire County Council has been working with the Swaffham Prior Community Land Trust to retrofit a whole village of 300 homes with a heat network. The village is not connected to mains gas and is reliant on oil for heating and hot water.

This project is a first of its kind in the UK, retrofitting rural homes and connecting them to a heat network and is expected to save 41,000tCO2e over the next 40 years.

By making this low-carbon, low-cost energy available to all residents across the village, it will help tackle fuel poverty and lessen the effect of fluctuations in fossil fuel prices.

Reaping the global benefits

The heat opportunity is global, and many nations are ahead of the UK in terms of understanding and embracing heat networks to reduce the carbon emissions associated with the fossil fuel generation - and ultimately provide long-term cost benefits to the consumer.

Sweden and Denmark are considered exemplars of countries providing heat through networks, but many other central European countries such as France and Germany have extensive experience with heat networks.

In the UK, central government is providing funding toward capital delivery programmes with initiatives such as the Heat Networks Investment Project (HNIP) and the Green Heat Network Fund (GHNF), with more funding available to specific sectors. But feedback from some market participants is that operational cost is also challenging. To make the transition towards heat more viable in the short to medium term, assistance with operational costs is often beneficial and helps to enhance the viability during the capital recovery phase of a project.

Building the heat future

The integration of heat networks across our communities will provide great opportunities in terms of balancing and decarbonising the nation’s energy supply. That means utilising more waste heat and being able to flex demand to balance the existing gas and electricity networks and interconnect wider energy networks.

Heat networks can become the energy hubs for local areas and communities with pipe networks installed alongside new infrastructure for electric vehicle charging and high-speed fibre communication.

When we add in the adoption of smart systems to manage energy use, we will see an acceleration in mass decarbonisation of heat as technology and zero carbon infrastructure takes centre stage. Taking the right steps now means we will reap the benefits of this game changer in terms of reliable, efficient decarbonised energy sooner.

Key takeaways

  • The use of heat and heat networks are key to decarbonising the UK’s energy mix.
  • A whole system approach to managing our infrastructure is fundamental to capturing and reusing waste heat.
  • A flexible, technology agnostic approach is central to driving our heat energy transition.
  • The UK energy market can learn from both local and global heat network successes.
  • Funding solutions must meet both the capital and operational cost challenges of heat networks.

For further information contact:

Neil Smillie
Principal Consultant