District Energy Network

Low carbon heat

Nearly half of the energy used in the UK is to provide heating in one form or the other. The majority of heat is obtained by burning of fossil fuels (gas, coal etc.). Heat for buildings in the UK is generally produced onsite, by burning fuel, predominantly gas, in boilers(DECC, 2013). In some other parts of the world, heat is provided through a network known as a district heating network. It is more of a distribution system rather than a generating system.

District energy networks allow transfer of heat and power to a number of buildings, connected through insulated pipes, so that the source of heat in not in a building, but is present on a large scale (DECC, 2013). These networks allow a range of technologies to be incorporated to allow production of low carbon heat and power. Along with being low carbon, they can prove to be a cheaper method of generation as compared to individual building generation. In terms of cost, the scheme requires a high initial capital cost, whilst it is likely to be more cost effective in an urban environment where energy can be distributed to a number of buildings located in a sufficiently close proximity (DECC, 2013). Also centralising generation allows for greater efficiency and less transience by aggregating demand profiles.

Another benefit of energy networks is that the heat they supply comes from a variety of sources. These include:
• Gas CHP
• Waste heat from nearby industries
• Large scale heat pump

According to the summary evidence provided by DECC, 65% of the large heat networks are sourced by CHP, in which the fuel used is predominantly gas. Majority of the heat network schemes are backed up by gas boilers to meet the peak loads (DECC, 2013). From a broad review of existing DEN schemes, it is clear that CHP supported by peak load boilers or heat pumps are the most promising technologies currently available. These are compared below.


Case for Combined heat and power

Combined heat and power (CHP) allows integration of the process of electricity generation along with the capture of usable heat. In the UK, centralised power generation has an average delivered efficiency of only around 40% which far less than half is supplied as electricity to the point of use (CIBSE, 2014). The remainder of the energy in the fuel is dissipated as heat through cooling towers in power stations and from the electricity transmission and distribution systems. By contrast, CHP plant generates useful energy, at the point of use, in the form of both electricity and heat, with an overall thermal efficiency of up to 80%.

There is a considerable advantage in linking buildings in a DEN so that aggregate loads are met by centralised CHP plant. Combined heat is where a group of buildings, whether domestic, non-domestic or a combination, are supplied with heat from a single source. It is also a proven technology considering the number of CHP schemes already implemented in the UK. Vital Energi, a company successful in providing sustainable and viable energy solutions has implemented a number of CHP schemes for their clients, namely:
• University of Liverpool
• University of Edinburgh
• York Teaching Hospital
• University of York
• 2014 Commonwealth Games Athletes’ Village, Glasgow


Case for heat pumps

Heat pumps are a technology which may in the future play a key role in the provision of cleaner heating provision, provided that the electricity used to operate them can be obtained from low carbon sources.

For the purposes of this project, large scale water source heat pumps (WSHP) were considered. Air source heat pumps(ASHP) have been considered as there haven’t been any large scale installations until very recent updates provided by Star Renewable Energy. Air source heat pumps have until now been typically up to 60kW and used in single properties. However, at the recent All Energy Exhibition and Conference 2016, Star Renewable Energy showcased their industrial scale 700kW ASHP low carbon district heating solution (Star Renewable Energy, 2016). But for our consideration, as the implementation of this technology had not been proved at the start of our project, it has not been considered for analysis. For ground source heat pumps (GSHP), a geological survey is important to determine the depth of soil cover, the type of soil or rock and the ground temperature. Also factors such as loop depth, spacing and layout will need to be considered to provide a capacity of 3MW. There is also a risk of groundwater contamination which will need to be surveyed before implementation(Ground Source Heat Pump Association, 2008). As survey information for the University was not available and also the fact that different universities would have different geological specifications, GSHP have not been considered.

Modern WSHP use electricity to turn cool water from rivers and lakes into hot water. Water's ability to retain heat is far greater than the air, which heats up and cools down very quickly. Any open body of water, whether a river, the sea, canal, loch or lake, can be seen as both a plentiful and a replenishable sink of low grade heat which is ultimately derived from solar energy. Water source heat pump schemes have also gained support from the government, as £1.75m has been awarded for projects in Shetland, Clydebank and Glasgow (BBC, 2016).

A heat pump as a form of renewable technology is eligible for the Renewable Heat Incentive (RHI)(Ofgem, 2014). The RHI is viewed as a key factor in meeting the Scottish Government target of 11% of heat demand from renewables by 2020, and will play a significant role in decarbonising the heat sector by 2050 (The Scottish Government, 2015).

The non-domestic RHI scheme continues for 20 years of the lifetime of the heat pump, with payments made on a quarterly basis. There are two tiers of payments that make up the payments. The first tier applies to the ‘initial heat’ which is the amount of heat generated by the heat pump if it was running at capacity for 15% of the year. Any heat generated on top of this comes under the second tier of payment.

Table a: RHI payments for Ground/ Water source Heat Pumps (Ofgem, 2016).

RHI.jpg

Another benefit for considering water source heat pumps especially in Glasgow, is the investment recently being put into it. Water source heat pump schemes have been awarded £1.75m for projects in Shetland, Clydebank and Glasgow (BBC, 2016).


Strathclyde case study

Background

Strathclyde University have receive £8m to construct a combined heat, power and district energy network from the Scottish funding Council(BBC, 2014) and £8m capital contribution by the University(Glasgow City Council, 2015). The proposed scheme would initially be operated as a localised installation for university buildings with the potential for expansion into a much larger Glasgow wide scheme in the future.

Our project aims to provide suggestions on the carbon saving potential that a CHP system would have compared to another viable proposal i.e., a water source heat pump or ground source heat pump.

Carbon reduction and cost calculation: CHP vs HP

To make a decision of which technology would be appropriate, carbon reduction potential and project costs was calculated for the two technologies. Data inputs regarding costs regarding uncertain values were obtained from literature review.

The electrical base load for the university is 3MW, which was analysed through the half hourly annual electricity data obtained from the University Estates Department. Even though larger engines would provide a greater carbon reduction, there is no point of oversizing the CHP as export back to the grid has not been taken into account. Also, oversizing will increase costs while te benefits remain the same. So, the CHP is sized to base load in order to operate it flat out over the year giving the best payback period. We have considered a 3MW gas CHP against a 3MW water source heat pump that would extract heat from the river Clyde. Even though we had initially scoped out off-site sources for our project, water source from the river Clyde was again reviewed and considered as a viable solution in terms of being available not far away from the University. Carbon emissions due to electricity drawn from the grid as well as gas is shown below. For the CHP scheme, the selection is expected to run in excess of 8000 hours per year, with high levels of availability, consistent with standard practice for commercial CHP engines (Clarke Energy, 2016). For comparison, we also assume that the heat pump can achieve 8000 hours of operation.

The greenhouse gas emission factors for electricity and gaseous fuels have been taken from DEFRA, 2015. Similarly, in terms of the amount of electricity or gas input that would be required to power the technology, fuel prices have to be set. The fuel prices have been taken from Energy Savings Trust.

Cost savings for CHP are mainly obtained from the electricity produced by using gas as the fuel source, rather than grid electricity. Savings from heat generated are not taken into account as those emissions would be approximately equal to emissions generated from a gas boiler.

Carbon savings from the CHP is due to the difference between CO2e generated to produce 3MWe, where ‘e’ stands for electrical, through electricity from the grid and CO2e generated to produce 3MWe through the CHP using gas as fuel.

Carbon savings for the heat pump are obtained as a difference between CO2e generated to produce 3MWth, where ‘th’ stands for thermal, using gas as fuel (in gas boilers) and CO2e generated to produce 3MWth using electricity as fuel in the heat pump. Assuming a Coefficient of Performance(COP) of 3 for the heat pump i.e., the ratio of heating provided to the work input required, 1MWe input would be required to generate 3MWth of heat. Comparison for the most relevant parameters is shown below. Costs are based on previous case studies reviewed.

Cost savings for heat pumps are obtained mainly from the Renewable Heat Incentive and the slightly lower cost of electricity compared to the cost of gas required to generate heat.

Table b: Carbon saving and cost comparison between a 3MW CHP system and a 3MW Heat Pump

CHPvsHP.jpg

On comparison, key columns to note are the return on investment (ROI) and the marginal abatement cost (MAC). CHP is currently the technology with not just the most carbon saving potential, but also the most financially viable technology. For these reasons, the CHP was selected as the key technology to decarbonise campus electricity.

Considering a CHP system chosen in a district heating network, the estimated project cost would be around the region of £13m-16m, with a payback period of 8-11 years. This seems very acceptable considering the expected life of a gas fired CHP engine is around 15 years.

Heat pumps are currently not considered as promising due to their poor financial performance and relatively low carbon abatement potential. The carbon abatement potential would most certainly improve by supplying electricity to the heat pump through renewable sources, but it would still remain a poor source of financial gains for the foreseeable future. However, for the case of the University of Strathclyde, electricity is supplied from the grid whose emission factor is currently greater than that of gas.

Grid decarbonisation

Carbon emissions from UK’s electricity grid today are around 0.46 kgCO2e/kWh(DEFRA, 2015). With the growth of low carbon technologies supplying electricity to the grid in the future years and reducing dependence on coal and gas power stations, the grid emissions are expected to reduce substantially.

DECC projections indicate a pathway in which emission intensity falls to around 25% of its current value (100 gCO2e/kWh by 2030) (DECC, 2016). If the grid decarbonises at this rate heat pumps are a more attractive solution than CHPs in terms of lifetime carbon abatement potential, which can be seen in the graph below.

Grid Decarb CHPvsHP.jpg

Figure a: Effect of decarbonising electricity generation on carbon emission savings from a CHP and Heat Pump(DECC, 2016).

The curved decline for a CHP is due to the fact that power plants with the highest emissions intensity close before the mid-2020s leading to slower declines later(DECC, 2016).

From the graph, we observe that by the end of 2018, heat pumps will be capable of providing greater emission reductions than a CHP system of the same size. By 2022-2023, CHP will become a positive contributor to carbon emissions. This is due to the fact that carbon emissions from the grid will have reduced to such an extent that it would be more beneficial to use electricity from the grid rather than providing electricity on site with a CHP engine.

Even though carbon savings provided by a CHP decreases over the lifetime of the system, the net carbon saved over the entire period is still positive as long as the CHP unit is in operation by 2018. Added to the fact its high financial viability, this makes the CHP the ideal solution to be implemented first in the district heating network. Its high cost savings and low payback makes it feasible to install the CHP system and use its gains for further investment opportunities to expand the heating network in the future.

The trends projected by DECC suggest that heat pumps will be a viable solution in the future. It is advisable, considering the likely grid carbon intensity changes in the near future, to invest in the addition of a heat pump into the district network in the future.

To conclude, DECC scenarios indicate that the future grid will have decarbonised and diversified. Electricity, especially electric heat pumps will be used even more widely for heating. Hence, grid decarbonisation will play a significant role on selection of technologies, and even more so if the technologies are implemented later rather than sooner. For further information, see grid decarbonisation page.


References

BBC. (2014). Scottish universities given funding for low carbon projects. Available at: http://www.bbc.co.uk/news/uk-scotland-scotland-politics-27175643 (Accessed: 02 May 2016)

BBC. (2016). Water source heat pump schemes awarded £1.75m funding. Available at: http://www.bbc.co.uk/news/uk-scotland-glasgow-west-35706309 (Accessed: 30 April 2016)

Clarke Energy. (2016). Liverpool University CHP Plant. Available at: https://www.clarke-energy.com/2016/liverpool-university-chp-plant (Accessed: 30 April 2016)

CIBSE. (2014). CHP Overview. Available at: http://www.cibse.org/Networks/Groups/CHP-District-Heating/CHP-Overview (Accessed: 04 May 2016)

DECC. (2013). The Future of Heating: Meeting the Challenge [pdf]. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/190150/16_04-The_Future_of_Heating-ExSUM_Accessible.pdf (Accessed: 30 April 2016)

DECC. (2013). Summary Evidence on District Heating Networks in the UK [pdf]. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/212565/summary_evidence_district_heating_networks_uk.pdf (Accessed: 30 April 2016)

DECC. (2016).Updated energy and emissions projections 2015 [pdf]. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/501292/eepReport2015_160205.pdf (Accessed: 30 April 2016)

DECC. (2016).Web figures- Updated energy and emissions projections 2015 [excel]. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/501265/Web_Figures_2015.xls (Accessed: 30 April 2016)

DEFRA. (2015). Available at: http://www.ukconversionfactorscarbonsmart.co.uk/ (Accessed: 30 April 2016)

Glasgow City Council. (2015). Energy and Carbon Masterplan [pdf]. Available at: http://www.glasgow.gov.uk/CHttpHandler.ashx?id=28750&p=0 (Accessed: 30 April 2016)

Ground Source Heat Pump Association. (2008). Domestic Ground Source Heat Pumps: Design and installation of closed-loop systems [pdf]. Available at: http://www.gshp.org.uk/documents/CE82-DomesticGroundSourceHeatPumps.pdf (Accessed: 1 Aril 2016)

Ofgem. (2014). Eligibility for the Non-Domestic RHI. Available at: https://www.ofgem.gov.uk/environmental-programmes/non-domestic-renewable-heat-incentive-rhi/eligibility-non-domestic-rhi (Accessed: 15 April 2016)

Ofgem. (2016). Tariffs that apply for Non-Domestic RHI for Great Britain. Available at: https://www.ofgem.gov.uk/environmental-programmes/non-domestic-renewable-heat-incentive-rhi/tariffs-apply-non-domestic-rhi-great-britain (Accessed: 30 April 2016)

Star Renewable Energy. (2016). UK's Largest Air-Source Heat Pump for Residential Use to Showcase at All-Energy Event. Available at: http://www.neatpumps.com/news/uks-largest-air-source-heat-pump-for-residential-use-to-showcase-at-all-energy-event.aspx (Accessed: 30 April 2016)

The Scottish Government. (2015). Energy in Scotland 2015. Available at: http://www.gov.scot/Resource/0046/00469235.pdf (Accessed: 20 Aril 2016)

Vital Energi. (2014). Case Studies- Combined Heat and Power. Available at: https://www.vitalenergi.co.uk/casestudies/?technology=combined-heat-and-power-chp (Accessed: 30 April 2016)