September 7th 2023

The Future of Energy: Unlocking the Potential of Heat Networks

The Future of Energy: Unlocking the Potential of Heat Networks

District heat networks have a vital role to play in a net-zero future. The Times Future of Energy report, released earlier this summer, featured some interesting insights on the subject, which are worth a read (you can access here). However, there are undoubtedly hurdles to overcome before their potential can be fully realised. 

Sometimes referred to in simplistic terms as “central heating for cities,” district heat networks can use renewable energy and waste heat to heat or cool water at a central point, and distribute it to buildings through a network of insulated pipes. Around 480,000 consumers in the UK currently have connections to a heat network, with an estimated 14,000 existing communal or district heating networks estimated to be in operation throughout England and Wales. 

At present, this means around 3% of the UK’s buildings use heat networks, but this only scratches the surface of what is possible. According to the Heat Networks Industry Council, this could rise to around 20%, with 80TWh of heat demand being met through heat networks. In high density urban areas, these networks often provide the lowest cost, low carbon heating option as they can provide heat to a range of homes and businesses by capturing or generating heat locally. 

However, to achieve economies of scale, there is still a long way to go. The industry first needs to install pipes and other infrastructure to ease the way for consumers to switch when the time is right. Toby Heysham, CEO of heat network developer Pinnacle Power, has referred to this task as “getting over that hump in the road before you can see the positive effects” and until those positive effects become more widely understood, this will continue to present a real barrier to uptake.

However, accurate simulation tools, that allow you to clearly communicate the benefits to various stakeholders prior to implementation of a new heat network, can go a long way in helping to support the business case. This is somewhere that IES is uniquely positioned to help, through the application of our digital twin technology and consultancy services.

Waste heat

With the UK generating an estimated 391Twh of industrial waste heat a year, great potential exists for district heat networks to tap into this energy on the way to net zero. However, a crucial first step is understanding the availability of waste heat across specific sites, and being able to calculate the extent to which this can meet the demands of surrounding buildings.

IES are able to assist in calculating waste heat recovery potential, using our ICL digital twin technology. One such example of this is our work with a distillery in Northern Italy, where we used our iSCAN data analytics platform to help create a baseline digital twin highlighting that the distillery was producing high levels of waste heat, mostly from electrical loads. Utilising the digital twin, and our iVN network modelling tool, the IES team were able to propose a waste heat exchanger which would allow the distillery to meet 5% of its overall heating needs by reusing the waste heat on site. You can read more about this project here

Of course, this waste heat could equally be used to supply neighbouring buildings if a district heat network were deployed. If you are in the manufacturing or industrial sector, you can also try out our waste heat calculator tool to help provide an early indication of the waste heat/cooling and net-zero investment potential of your site. 

Heat network zoning

To improve the supply chain within England, the UK Government has proposed the Energy Security Bill, which introduces regulations and powers to enable heat network zoning. Through the creation of heat network zones where heat networks are the lowest cost solution for heat decarbonisation, certain suitable buildings will be required to connect to the heat network.  

With our digital twin tools, we can help to investigate where heat networks can be effectively deployed, to help de-risk this process, while also helping to support analysis of different retrofitting strategies that may be needed to upgrade the nation’s energy-inefficient period buildings in tandem with the introduction of a heat network, to ensure they can successfully integrate.

Investing in heat networks

Of course, large scale investment is needed to keep the heat network market developing whilst addressing the issues decarbonising this sector. The Heat Networks Industry Council estimates the potential investment in this sector equates to an opportunity nearing £80 billion over 25 years. 

When it comes to the public sector, most organisations work on a budget deficit and thus heavily rely on investment schemes to fund decarbonisation. Some such schemes funding decarbonisation measures are the Public Sector Decarbonisation Scheme (PSDS), or the Heat Network Efficiency Scheme (HNES). However, with funding potentially being awarded on a first-come, first-served basis, organisations need to have high standard applications with masses of supporting evidence, and be ready to hit send on these as soon as the application portal opens. 

IES are uniquely positioned to support you with these applications. Our IES experts can create a Heat Decarbonisation Plan (HDP) through the use of digital techniques such as energy modelling and digital twinning, along with highlighting example outputs, dashboards, and costs, covering most information needed to complete these funding applications. Our consulting service can also use our leading simulation technology to help support your application by creating an optimisation study, which highlights optimisation recommendations, expected benefits and costs, and identifies instances of poor performance. Alternately, if you are delivering optimisation studies for clients, IES’ iVN Virtual Network tool offers leading district heating feasibility modelling capabilities that can assist in delivering these studies to your clients. 

With applications for HNES Round 7 due by 22 March 2024 (and additional rounds to follow), now is a great time to get in touch with our team to see how they can support. You can find further details on optimisation study support here.

Heat networks are widely considered to be the cheapest and cleanest method of heating our cities, but the carbon reduction benefits are ultimately hypothetical without the necessary tools and funding in place to help organisations implement these measures at greatest impact and lowest cost. James Beal, who advises the Department for Business, Energy and Industrial Strategy, affirms: “The sector has an opportunity to promote and deliver heat networks at pace and scale and so drive down the costs. It’s a challenge, but heat networks will ultimately deliver a better solution.” 

For further insights on the technologies and innovations that are driving the transition towards net zero, download your copy of The Future of Energy, a free report delivered in association with The Times, C40 Cities and Raconteur, at: https://go.iesve.com/the-times-future-of-energy-report/discoveries