Cities Take the Lead on District Heating

We are entering a new age of Victoriana, where cities, bereft of Government spending and failed by national energy policy, are returning to their roles of municipal leadership and investing in the infrastructure they need to serve not only voters in homes but those businesses that generate the ever important business rates.

In the past 10 days, we have seen announcements about investments in local energy generation at a significant scale in Sheffield, in Nottingham and in Stoke. The drivers for this are many – it is not simply a carbon issue, nor is it solely an energy security issue. Nor is it just a revenue generating exercise or an investment in crucial business infrastructure. In fact, it’s all of these things – and more.

Whilst government debates whether nuclear is really our only solution for power and how fracking is our only solution for gas, there has been a quiet revolution underway in our towns and cities. Slowly, almost silently, cities such as Leicester and Coventry have invested in district heating networks, to join more established players like London, Nottingham and Sheffield.

The Government’s contribution, arguably, has been limited to developing some new policy frameworks (albeit without any real teeth) and seedcorn funding some (important) feasibility work in cities that have shown competence and ambition.

Why? Because the Government’s own Heat Strategy states that producing heat is the biggest user of energy in the UK and in most cases we burn gas in individual boilers to produce this heat. This is a wasteful method of producing heat and a large emitter of CO2, with heat being responsible for 1/3 of the UK’s greenhouse gas emissions. Household heat demand has risen somewhat over the past 40 years from 400 TWh/y to 450 TWh/y, despite a marked improvement in the energy efficiency of homes and a slight reduction in the severity of winters. The average internal temperature of homes has risen by 6°C since the 1970s, and this combined with growth in housing – the number of households has risen by around 40% since the 1970s – has offset energy efficiency gains in terms of total energy used to heat homes Some studies suggest these temperature increases are due to factors including the move to central heating, rather than householders actively turning up their thermostats.

In 2010 Sheffield households consumed 3,405GWh of gas. This figure includes gas used for cooking but the majority of this gas was used for heating and hot water. Using the carbon conversion figure of 0.1836kg/KWh[1] this equates to 625,158 T/CO2. District heating has the potential to create large carbon savings. For example, if 25% of this load, some 56,250 properties, were connected to district heating this could save up to 851GWh of gas which would reduce the cities carbon emissions by 156,290 T/CO2 per annum.

In most cases in the UK heat is something that is generated on-site in individual buildings, with customers buying fuel, such as gas, and converting that gas to heat through a boiler system. It is less common to buy heat itself. In other parts of the world, heat networks that transport heat to consumers through a network of insulated pipes are more common and here in Sheffield we have a long track record of creating heat at a commercial rather than domestic scale. A heat network – sometimes known as District Heating – is therefore a distribution technology rather than a heat technology, and its associated carbon emissions depend on the mix of sources for the heat in the pipes.

Heat networks are best deployed where the following conditions are satisfied:

  • long term low/zero carbon heat sources (or stores) are available; and
  • heat networks are capable of meeting average and peak heat demand without depending on fossil fuels in the future. 

Where these circumstances exist, heat networks can play a critical role in helping buildings and industry decarbonise their heat supply. Some pioneering local authorities, such as Sheffield, have already established heat networks in their city centres and are realising the benefits; better resource efficiency, new jobs and contracts, lower energy bills, and reducing fuel poverty.

Heat networks supply heat to a number of buildings or dwellings from a central heat production facility or facilities through an insulated pipe network. Most networks distribute heat using hot water at temperatures between 80-120°C. Where higher temperatures are required, such as for industrial applications heat energy is transported over shorter distances using steam at a few hundred degrees at a range of pressures depending on usage. Heat networks are best suited to areas with high heat demand density which influences how much pipework is needed to supply a given heat demand. They are most likely to be economic in areas that not only have concentrated demand but have fairly consistent demand over time (potentially for twelve months a year).Tower blocks represent a high heat density, as do dense urban communities bordering commercial or public sector buildings such as hospitals, schools or universities.

Because heat networks are able to deliver heat at scale and for a mix of uses, locating heat networks in areas with a mix of sources of demand also allows for the balancing of loads, e.g. housing with night-time peaks and swimming pools with day-time peaks.

Usually, heat networks start small and expand over time, potentially connecting to each other as they grow, creating larger networks that span city centres and a variety of building types. When networks are sufficiently developed, additional heat sources can be connected. As networks become more sophisticated, it may be that customers could have the choice of more than one supplier of heat, making competitive local markets possible.

Heat networks in the UK use a range of heat sources including biomass and gas boilers, combined heat and power (CHP) plants and heat from energy-from-waste plants and, where conditions suit, such as is the case of Southampton, a small amount of geothermal heat. Networks are currently estimated to provide less than 2% of the UK’s heat demand supplying 172,000 domestic buildings (predominantly social housing, tower blocks and public buildings) and a range of commercial and industrial applications (particularly where high temperature heat in the form of steam is required). Despite being of a significant size, Sheffield’s city centre district energy network is estimated to provide 3% of the entire City’s total heat needs.

By comparison, district heating is widespread in many other parts of Europe, in China, Korea, Japan, Russia, and the USA, although the level of sophistication and reliability is very diverse. While having an average market share of 10% in Europe, district heat is particularly widespread in Scandinavia (Denmark nearly 70%, Finland 49%, and Sweden around 50%). It also has a substantial share elsewhere in Europe. For instance, district heat provides around 18% of heat in Austria (and 40% of heat in Vienna). European networks are currently growing at around 2,800 km per year, about 3% of current installed length. With the right planning, economic and market conditions it is clear district energy can play a more prominent role.

Key drivers for the expansion of heat networks in Scandinavian countries were concerns about cost and security of supply following the oil price shocks of the 1970s. With no ready source of natural gas, these countries switched from oil boilers to heat networks in cities (and often to biomass and heat pumps in rural areas).The lower level of heat network deployment in the UK reflects the choices made in the past – most significantly the UK’s decision to access affordable natural gas from the North Sea, which provides a cost-effective and reliable source of heating.

The Government recognises that almost half (46%) of the final energy consumed in the UK is used to provide heat. Of this heat, around 75% is used by households and in commercial and public buildings with the remained used for manufacturing in industry. It is recognised that cooling currently accounts for only 0.5% but that it is recognised this is likely to change as a the UK grows warmer as a result of climate change.



The Government’s Heat Strategy recognises heat networks offer a way to supply heat directly to homes and businesses through a network of pipes, rather than supplying the fuel for people to generate heat on-site. Under some circumstances, heat networks can be the most effective way of supplying low carbon heat to buildings, and can offer greater convenience and reliability to consumers. Heat networks also offer flexibility over time, as a number of different heat sources can supply the same network.

It also recognises that heat networks are best suited to areas with high heat demand density (such as cities with a compact urban form) and that in urban areas they can, with individually controlled and metered heat, be  as reliable as gas boilers. Smaller scale heat networks can also serve buildings like blocks of flats where individual gas boilers may not be an option.

Heat networks are compatible with a wide range of heat supply options and provide a way to distribute low carbon heat, which makes them easily upgradeable, creating flexibility to make the transition to low carbon heat over time with less disruption for consumers and businesses. Most of the cost and disruption occurs at the point of initial construction and installation.

Heat networks need to be considered as a long term investment in the city. The economics mean that a return on investment will be over decades and it is essential to build in future-proofing  to ensure the supply of heat is easily upgradable, provided low/zero carbon sources are available. So in the near term, we can expand existing fossil fuel based heat networks and upgrade them to low carbon fuel supplies to deliver more substantial carbon savings and help to meet the UK’s emissions and renewable energy targets.

Fuel sources for heat networks will need to change over time. Gas CHP may represent a cost-effective and resource-efficient option to develop and supply district heating networks now, but is unlikely to be acceptable in the long term. Government needs to set a framework that encourages the replacement over time of generating plant with increasingly low carbon alternatives. In the right conditions, changing a central heat source for individual buildings is likely to involve less hassle and cost overall for customers than changing stand-alone technologies. Pipes also last significantly longer than individual heat-generating technologies.  Because pipe infrastructure is not fuel specific, a range of technology options can be used to generate the heat which is transported through the network, and each network can have generation plants in multiple locations. This means:

  • networks offer a solution to the problem of limited space in homes and buildings for low carbon technologies like heat pumps or biomass boilers and their accompanying hot water tanks. In urban areas in particular, where space is at a premium, this can be a big advantage; 
  • they can be upgraded over time according to local and national priorities, without impacting on consumers. For example, it may be economic in the short term to power a network with gas CHP, and to replace this with a lower carbon alternative such as biomass CHP in the medium to long term. In-building heat sources can also be replaced over time, but in many cases it may be easier to replace in-building heat sources once, to switch to district heating, and then replace the central heat source when appropriate, than to frequently replace the in-building heat source; 
  • they can take advantage of economies of scale to realise greater efficiencies and keep costs down for consumers; 
  • heat networks themselves can provide seasonal as well as daily storage using large water tanks, offering a simple and practical option which takes up less space than a water tank in every home. This could be important in city centres where land values are very high; and 
  • they can be integrated with Local Authority plans on waste management, air quality, urban regeneration, regional growth, fuel poverty and other social and environmental issues. This is why so many cities already have plans involving the construction of heat networks. 

Heat can also be recovered from industrial sites that generate a lot of excess heat that is usually lost to the atmosphere, or from locations where excess heat is a problem, such as underground tunnels. This heat may be able to be redirected to where it is useful, eliminating the need for further fuel combustion.

In the same way, heat networks can be used to provide cooling which is likely to be required more in the future as a result of climate change, consumer comfort and customer expectation.

The three schemes in Stoke, Nottingham and Sheffield are all funded in different ways – some using ‘City Deal’ funding, others using private sector investment or public money – but the rationale isn’t too different wherever the funds come from.

Don Leiper, Director of New Business at E.ON, said: “Building on the construction of our renewable energy plant at Blackburn Meadows, this is a substantial investment in Sheffield’s energy future and I’m delighted we’ve already been able to secure customers to our network, organisations looking to reduce their carbon footprints and benefit from a secure and locally-produced heat energy supply.

“Blackburn Meadows is already designed to be an efficient and sustainable power generation source, fuelled by waste wood and providing carbon savings the equivalent of taking 20,000 cars off the road each year. By capturing the heat and providing it for use by nearby businesses we are effectively almost doubling the efficiency of the plant and the environmental benefits to customers.”

In Stoke, a similar figure to Sheffield, around £20 million, will be spent creating the Stoke-on-Trent District Heat Network, with £5 million going to Keele University’s smart energy network demonstrator and another £5 million on boosting skills.

The drivers for this are many – it is not simply a carbon issue, nor is it solely an energy security issue. Nor is it just a revenue generating exercise or an investment in crucial business infrastructure. In fact, it’s all of these things – and more.

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