In its 2019 election manifesto, the Conservative Party pledged to invest £9.2 bn in improving the energy efficiency of homes, schools and hospitals. Of this, £6.3 bn was set aside specifically to install energy-saving measures in 2.2m homes, with a focus on social housing and those in fuel poverty.
The government’s focus has, naturally, shifted to addressing the current pandemic. But the calls are strengthening for more ambitious climate change policy to be woven into the solution to the COVID-19 economic crisis, to deliver a green and resilient recovery.
Addressing the UK’s energy consumption
Key to this action will be to find more efficient ways to heat our homes, something which accounts for a fifth of overall UK energy consumption. Currently, most properties use individual gas or electric boilers. But district heating – which connects multiple residences to a communal system – could cut energy use for heating by up to 30%.
Alongside carbon and fuel savings, district heating schemes can also put money back in consumers’ pockets – a key consideration for social housing tenants. The savings are significant: the 2017 Heat Networks Consumer Survey revealed that customers connected to a heat network pay an average of £100 less annually for their heat than those with gas boilers.
We are beginning to see schemes emerge – we are delivering a scheme for Leeds City Council, for example, that will connect 2,000 homes across the city and leverage technology from similar projects across the Nordic regions. But currently, such programmes fulfil just two per cent of all heat demand across both domestic and commercial buildings. In contrast, almost two thirds of Danish homes are heated this way, with virtually every home across the country’s major urban centres connected to a network.
The Leeds City-Wide scheme is setting an example for the rest of the UK and while there is much progress to make, this is matched by great potential. The Conservatives’ planned investment in housing efficiency could provide local authorities with the means of delivering affordable warmth to tenants, realising social and economic benefits across their constituencies.
Fair and transparent billing
A crucial factor in making district heating a success will be delivering value for money for both councils and tenants.
The efficiency savings generated by these networks mean their initial capital costs can typically be recouped over approximately 30 years. However, setting tariffs that deliver a fair deal for residents while generating return on investment for local authorities is a delicate balancing act.
The ongoing consultation on the Heat Network (Metering and Billing) Regulations 2014 could provide crucial guidance on this issue. Heat network operators currently have a great deal of freedom over billing arrangements, with no obligation to install meters at individual properties, or to link billing to consumption. But new rules will help councils design billing systems that accurately reflect precise household usage.
A robust approach that clearly itemises usage and unit costs will ensure that bills are affordable and fair. Councils can then assure residents that they are only paying for what they use, and not subsidising excessive behaviour by others on the network.
Often, the complexity of balancing these requirements when establishing networks sees councils seek support from external consultants. However, this can increase the financial burden by adding to set-up costs.
To solve this, Sweco has developed a tariff calculator for local authorities that allows key information – including number of properties, expected consumption, current billing levels and capital costs – to be plugged in, and a programme of tariffs automatically generated. This innovative offering enables councils to devise the most sustainable network possible in terms of both financial viability and environmental credentials.
The calculator is free of charge to councils looking to install district heating networks across new social housing developments. The added control it provides also creates the scope to drive further carbon reduction benefits, through the creation of built-in cost incentives for those who use energy responsibly.
Leading the charge on energy efficiency
The UK has previously outlined its intention to slash carbon emissions to 100 per cent below 1990 levels by 2050. But COVID-19 has helped to push the green agenda to the forefront of the public consciousness. Climate change policy and investment in renewable energy sources will be crucial to supporting our recovery from the pandemic, from an economic, social and environmental point of view.
District heating is one area where significant gains can be made in this regard, with the added benefit of supporting consumers and providing sustainable, affordable heating supplies. By championing this method, the UK can take the lead in reshaping environmental policy as we emerge from the coronavirus crisis.
Dr Tanja Groth is head of urban energy at engineering consultancy Sweco UK,