District heating is set to expand and provide significant help in achieving emission targets. Mark Pickard describes the benefits of district heating and where projects are in progress.

With the Marrakesh COP22 climate change summit fast approaching, the spotlight will be firmly thrown on all countries who have pledged to help mitigate the negative effects of climate change. What more can and must be done to reduce CO2 levels and ensure that climate reduction targets are met?

In the UK, domestic heating is the largest contributor to CO2 levels emitted. There has never been a more crucial time for businesses, government and local councils to collaborate to address this issue and to recognise combined heat and power (CHP) as a clean and efficient source of energy.

What is smart heating?

CHP processes effectively capture the heat produced in electricity generation and distribute this heat to local businesses and homes for both commercial and domestic use. New statistics from Transparency Market Research reveal that the global CHP installation market is predicted to reach a lofty $813 billion by 2024. Europe is currently setting the agenda and leading the way here due to the positive policy environment surrounding this technology.

CHP schemes can bring many benefits and positively impact a local area. CHP plants can achieve overall efficiencies in excess of 80% at the point of use. Compare this to the 40% of electricity provided via the grid from conventional power stations, and the CHP alternative becomes increasingly compelling.

Understanding the benefits

By creating higher fuel efficiency, both fossil fuel consumption and CO2 emissions are both reduced, as are the energy costs for building owners and facilities managers. There are significant financial benefits to be had too. CHP in the right location presents an attractive return on investment through reduced energy costs, whilst at the same time providing affordable community energy that can help combat fuel poverty. Moreover, owners of CHP installations will have greater control over the security of energy supply.

The beacons of best practice

Leeds, Aberdeen, Sheffield and Bristol are current examples of UK cities taking the lead to invest in CHP. In order for other cities and councils to follow in this example, there are a range of options to consider when it comes to the type of CHP plant that can be installed, allowing projects to be adapted and tailored to a community’s specific need.

Councils should first and foremost evaluate the needs of their district, making use of the guidance and requirements provided by the Carbon Trust to ensure that they are making the right decisions and realising the full potential of this clean technology.

The UK government can learn a considerable amount from other European nations who have already made sizable investments into local district heating programmes. Take Denmark as an example. In Copenhagen, 98% of residents are connected to a district heating network. Furthermore, Denmark has 670 decentralised CHP plants across the country, making a significant contribution to the country’s overall sustainability goals. The country now gets 40% of its energy from renewable sources.
Even though many systems are in a poor state and in need of improvement, Russia leads the charge in terms of the size and scale of its national CHP operation. Indeed, according to the IEA, CHP generation accounts for about a third of installed electricity generating capacity. 700 electricity plants can generate 215 GW.

The road ahead

There has never been a more promising time for the UK CHP market. CHP plants, designed smartly and intelligently can deliver lower energy costs for consumers, help to secure local and national energy supplies and ultimately help the UK to meet carbon reduction targets.

We hope to see a greater awareness and understanding of the benefits of CHP, and other forms of renewable energy, raised post the COP22 conference to help further the global agenda of mitigating the negative effects of climate change.

Martin Pickard is investment director at Low Carbon