The first in a series of blogs from the Industry Council's working group chairs, Nathan Sanders, Managing Director of Distributed Energy at SSE Enterprise and Chair of the Carbon Reduction working group, shares his thoughts on the role of heat networks in decarbonising the energy sector.
As a low carbon energy company, SSE is fully committed to powering the nation along the road to net zero. Decarbonising heat is a key part of that jigsaw, with the Committee on Climate Change stating that around 18% of heat will need to come from heat networks if the UK is to hit its 2050 net zero carbon targets.
In my area of the business, SSE Enterprise, we operate 16 heat networks sites plus two hospitals across the UK and we serve almost 10,000 customers from bespoke on-site heating and cooling energy centres, that are cleaner and cheaper than individual boilers.
Whilst expanding our network is a major objective, we also have a clear focus on decarbonising the existing infrastructure. For example our heat network site in Wandsworth is now providing low carbon heat, hot water and cooling to Londoners thanks to innovative technology which draws heat from the aquifer below the site and uses heat pumps and gas CHP. However, we all know decarbonisation of heat needs to keep moving faster.
I was struck by the latest UK Energy Research Centre analysis, showing that a combination of energy efficiency, heat pumps and district heating is the least-cost technology pathway for heat decarbonisation in the next 10 years. Yet, heat networks uptake is far below the optimum. It should be about three times faster than today, to hit a trajectory compatible with net zero.
So, if we all know what needs to be done, why it is not happening quick enough?
As active players in the heat networks industry, we’ve agreed to focus on working together within the Heat Networks Industry Council (HeatNIC) to try to find an answer to this question. Even more importantly, we want to develop concrete solutions for it.
I strongly believe in the potential for industry collaboration on this matter and that’s why I volunteered to chair the HeatNIC ‘Carbon Reduction’ group which will look to develop a roadmap to decarbonise existing and new heat networks in an ambitious yet implementable manner, utilising the best brains from the industry.
I see three ways in which we can work together to make a difference:
1. Share best practices: Innovative solutions to deliver zero carbon heat networks will be increasingly needed and the best way to nurture them is to disseminate learning and experience, advancing the research based on common findings and understanding.
2. Develop constructive policy proposals: Technological and social innovation will not be enough to drive the required scale of the change, without a substantial policy intervention. The heat network market is relatively nascent and carbon pricing signals will be needed to support still immature technologies that often have marginal investment cases and may not yet be commercially viable without financial incentives. As an industry, we should collectively examine the current regulatory landscape and identify key fundamental asks that would encourage the market to grow, keeping consumers’ affordability at the heart of our analysis.
3. Open a dialogue with the local level. Heat decarbonisation is inherently a local challenge. Therefore, designing the appropriate framework between central government and local authorities will be key to ensuring that heat networks are built every time is efficient to do so and any connections opportunities are maximised. As HeatNIC, we are fortunate to have different local authorities supporting our efforts and we should also draw from their experience to understand how the private and public sector can better cooperate to bring skills and capital to facilitate the growth of heat networks.
New national policies are underway which represents another positive step toward the comprehensive legislative framework the heat market needs and I look forward to working with industry and the Government to ensure heat networks can fully play their part on the road to net zero.