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Community Heat Conference 2015

Council HouseBirmingham's 19th century Council House, venue for the UK's first Community Heat Conference, is supplied by a city centre district heating scheme.

The ornate surroundings of the Council House in central Birmingham made a fitting venue for the UK's first ever Community Heat Conference, writes Robert Hine. The building is itself part of a large city centre district heating scheme, which supplies heat to various council buildings, shops and offices, and will in future involve the revamped New Street Station. Making connections to supply heat to two or more buildings, at whatever scale, is the core concept of district heating. The economy of scale in supplying the hot water for space heating from a common source means, in principle, that heating can be delivered more cheaply than from individual boilers. Also, there is much more scope for using renewable heat, such as a biomass or a heat pump, so that carbon emissions are reduced.

Conference Chair, Emma Bridge, Chief Executive of Community Energy England,
one of the organizers of the conferenceEmma Bridge.

The conference was arranged to encourage the development of community led initiatives, and help in devising a 'tool kit' for guidance and advice for such projects. Around 200 delegates representing a range of practitioners, policy-makers, consultants, council officers, and community groups shared examples of good (and not so good) practice and described the support currently available. The significance of the event was marked in a keynote speech given by Baroness Verma, Parliamentary Under-Secretary of State.

UK lagging behind

At present roughly 45% of the UK's total energy consumption is used for heating in various forms, about 80% of which is derived from oil, gas, and other fossil fuels. Of this total, around 20% is used for heating homes. So switching to more sustainable sources of heating is a priority if we are to meet our carbon reduction targets.

The UK is lagging far behind other European countries in terms of community heating schemes, a point empahsized by Ian Manders of the Danish Trade Council. In Denmark, over 60% of homes belong to some form of district heating scheme, supplied chiefly by consumer-owned cooperatives and local authority companies. This is the result of a long-term strategy to reduce Denmark's reliance on imported oil and gas, by focusing on opportunities to use alternatives such as biomass, refuse, geothermal heat from deep underground, and waste heat from industry. In the UK district heating accounts for only about 2% of homes.

District heating uses a network of insulated pipes to carry hot water underground.
Image courtesy of State of Green (Denmark).

heat pipesHowever, the sector is growing, as evidenced by the rapid expansion of the UK District Heating Association since its formation in 2011. Its Chair, Simon Woodward, outlined some of the practicalities in setting up a district heating scheme, fundamental to which is the underground network of pipes to carry the hot water to customers' buildings. The cost and feasibility of this has to be carefully scrutinized from the outset. Pricing and contracts are other vital components of a viable business plan. Because of the initial cost of the network and connection, district heating demands a long-term contract between the customer and supplier, so the customer must be assured of its reliability and benefits.

Potential of woodfuel

Using wood as a fuel for community heating is an attractive proposition from many angles. Matthew Woodcock of the Forestry Commissionwoodfuel argued that local heating schemes have great potential for expanding the market in woodfuel from small and medium-sized deciduous woodland. Not only is wood a sustainable fuel, but the revenue from such a market would encourage owners to bring woodland back into a managed cycle of coppicing for timber production, with benefits for wildlife and biodiversity. Matthew informed delegates that the Forestry Commission had recently published its online Community Biomass Guide, providing help to those seeking to exploit local woodfuel opportunities.

Managing woodland will yield a renewable, sustainable, low-carbon fuel, and benefit wildlife.

Finance

Finance is often a stumbling block for community schemes. One option is to sell shares to raise capital for the project either to people who will benefit most in the local community, or to investors more widely. The various possibilities were described by Andrew Jackson of Community Shares Unit, who manages the crowdfunding platform Microgenius. But even getting to the 'investment-ready' stage will involve feasibility studies and formulating a business plan. This is where grants and loans from the Community Energy Funds can come in helpful. In England there are two, a £15 million Rural Community Energy Fund, and a £10 million Urban Community Energy Fund [closed July 2016]. Wales has the Ynni'r Fro fund. David Rogers of WRAP provided an overview of the sort of schemes that might benefit.

Renewable Heat Incentive (RHI)

The government's RHI scheme, which makes payments to generators of heat from renewable sources, is potentially a source of revenue for, and a key element in many community heat projects, according to DECC's RHI policy officer, Ruth Richmond. The non-domestic RHI scheme will generally be the one that applies when heat is supplied to multiple dwellings or other buildings. This features a 20-year tariff lifetime, compared to the 7 years for the domestic RHI, and thus is more attractive for the long-term investment required in such schemes.

There was criticism from the audience of recent cuts ('degression') in RHI tariffs, which would inevitably harm the feasibility of some schemes with a long lead time. Ruth said that DECC was aware of the problem, but that the RHI budget was limited.

Case studies

Swim NarberthSwim Narberth

A fascinating account of the many hurdles faced in realizing a community project came from Ben Ferguson Walker of Severn Wye Energy Agency. He focused on how the community in the town of Narberth, Pembrokeshire, rallied round when the local swimming pool was threatened with closure. Local people formed a community interest company, Swim Narberth, to take over running of the pool from Pembrokeshire County Council, and also set up Narberth Energy Ltd as a community benefit society to raise money via a share offer to fund installation of a biomass boiler to heat the pool. This will bring in revenue from the Renewable Heat Incentive, and reduce the building's carbon footprint. Previously, the Council was spending over £30,000 a year on heating oil.

Plas Nwydd

The National Trust have embraced renewable energy in a big way to supply energy to their properties. A good example is Plas Nwydd on the Menai Strait in North Wales. Their environmental advisor, Keith Jones, outlined how the Trust has installed a marine heat pump that derives heat from the sea near the property, and will provide all the space heating for the 18th century mansion. The 300kW pump cost £600k to install, drawing water some 30 metres vertically up the cliff. It will replace the vast amounts of heating oil previously used, and is expected to save around £40,000 in operating costs.

Farmers' Co-op in Buchkirken, Austria

More inspiration from Europe was delivered by Alastair Mumford of Regen SW. In 2006 in the small town of Buchkirken in Austria, four local farmers set up a co-op to develop a district heating system fuelled by wood from their own and neighbouring farms. It now has two biomass boilers and supplies hot water heating to local schools, public buildings and several homes. And it is continuing to add customers each year. The venture was funded in part by the Austrian government, and partly with bank loans and connection fees, as well as the farmers' own money, all to the combined tune of 1 million euros. It could take 15 years to recoup the original investment, but at least the money is retained in the local economy, and the surrounding farmers are now taking better care to manage their woodlands.

Ministerial speech by Baroness Verma

We need to supply heat in new ways to meet our climate change commitments and reduce reliance on fossil fuels - this was a major theme of the address to delegates by Baroness Verma, from DECC. She gave an overview of government initiatives to support change and innovation in this area, building on the Community Energy Strategy launched in 2014. She cited examples of the work done by DECC to promote the sector, including the RHI, the National Heat Map, and Heat Networks Delivery Unit. The latter works with local authorities to explore heat network opportunities as part of energy plans for their areas. She stressed, though, the need for local authorities to work with community groups in accessing the Community Energy Funds in England.

To help develop a community heat toolkit', she noted that the rest of the afternoon would be devoted to securing the ideas and experiences of delegates to help in formulating just such a toolkit. This would then be developed by the Energy Saving Trust and run by Community Energy England. 'Ultimately', she concluded, 'we want heat to become a community issue so that we can provide a real boost to the local economy and meet our climate change targets at the same time.' The full text of the speech is available here.