Energy costs put the heat on businesses, says report

High costs and uncertainty are the two main barriers to changing the way the UK heats its buildings and infrastructure.

CBx, an organisation involved in the design, engineering and development stage through to property management, has looked into the pros and cons faced by companies that implement the government's Renewable Heat Incentive (RHI), which pays participants to generate and use renewable energy to heat their buildings.

Its study finds that only 2 per cent of the UK's heating is supplied by heat networks. It says the sector is undeveloped owing to a historic focus on developing national scale electricity and gas infrastructure and the limited powers devolved to local authorities to develop local energy systems.

London is alone in having about 1,000 heat networks of varying capacities and systems.

National energy efficiency and carbon reduction targets state that the UK should produce 12 per cent of its heat from renewable sources by 2020.

New public management reforms in the 1980s allowed local authorities to shift the service economy, says the report, which led to a loss of the technical and financial capacity to develop council infrastructure. It also says low carbon infrastructure for cities requires big spaces and this must be integrated in urban planning to facilitate more networks.

Unless a developer is involved with a project post-completion as asset manager, the report argues, the aim is to meet any policy at the lowest capital cost which - more often than not - means gas-fired boilers or gas-fired CHP being installed, with no priority for renewables.

The report points out that the National Grid is replacing 91,000 km of gas pipelines, set to be completed by 2034. Gas also remains the cheapest solution for heating homes, which would raise a number of fuel poverty issues. As a result, concludes the report, high costs and uncertainty will get in the way of changing the way the UK keeps its population warm.

It also points out that most non-domestic RHI projects have been implemented as biomass systems, which can be problematic in urban areas because of the space needed for fuel delivery and maintenance in a dense city with high property values.


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