For SSE, our core Group purpose is clear: to provide the energy needed today whilst building a better world of energy for tomorrow. Our recent ‘Greenprint’ set out just how we want to do that in tandem with UK Government to help rebuild the economy and power us along the road to net zero.
Decarbonisation of heat has a big role to play in this ambition. The Committee on Climate Change has identified that in order to achieve the UK’s 2050 net zero carbon targets, around 18% of heat will need to come from heat networks. Its latest Progress Report was crystal clear: we are not moving far enough fast enough, and a stronger cross-Government strategy is needed.
The vast majority (85%) of homes are still heated by natural gas and of those, two-thirds suffer from inefficient heating systems. This makes conversion to low carbon solutions harder.
We’re likely to hear more from Government today on energy efficiency measures for homes and businesses but the public awareness of the need to decarbonise heat is worryingly low, with only 10% of gas boiler customers willing to switch to greener alternatives. Decarbonising heat requires us to engage with customers in a way that hasn’t been needed for electricity grid decarbonisation. If we’re going to get heating decarbonised, we need get the public onside.
In my business, SSE Enterprise, we already operate 16 heat networks and support two hospitals with their heat. We serve over 10,000 customers from bespoke on-site heating and cooling energy centres that are cleaner and cheaper than individual gas boilers.
But we need the sector to grow faster as it currently accounts for meeting just 2% of heat demand in this country – far lower than other European countries.
I believe that a paradigm shift is needed – local authorities empowered by a clear national roadmap. Heat networks are intrinsically local infrastructure and it is vital they are planned in areas where they can deliver the most benefit, for example, where there is density of heat load and sources of waste heat.
They also need to be strategically embedded within local development plans to support sustainability, fuel poverty and mobility objectives, bringing to life real ‘local integrated energy systems’, to leverage links between heat, transport and renewable generation.
For these reasons, I strongly believe Local Area Energy Planning (LAEPs) and local heat network zoning should be part of the policy ‘armoury’ to achieve these outcomes and as such, it should be trialled and rolled out as a top priority. Crucially, embedding heat network development in LAEPs enables planning and co-ordination with electricity network operators.
As we move to an increasingly electrified heat supply, we see efficient heat networks with centralised heat pumps and thermal and battery storage harnessing waste heat sources to provide low carbon, low-cost heat to customers. Enabling the co-development of electricity and heat networks in a planned way, maximising the ability of heat networks to support electricity grid flexibility, through storing heat centrally, will be a key component in successful, local decarbonisation.
‘Heat Networks Zones’ will channel investments, delivering heat at the lowest price to consumers. Targeted policy interventions within zones should also be adopted, including granting exclusive concessions to private and public sector entities, using public sector loads to anchor the network and providing incentives (or obligations) to connect to heat networks.
But zoning, planning, development and deployment of heat networks only works if there are proper resources to support it. The case for well-designed public-private partnerships has never been stronger. Sector operators can bring the capacity and know-how to local authority projects, in a joint effort to ensure these can be planned, designed, delivered and, importantly, expanded at the necessary speed and scale to meet the net zero target.
This transformational change will require unprecedented stakeholder alignment. SSE Enterprise is ready to take up the challenge. You can learn more about this from an SSE-sponsored roundtable with Carbon Connect on the required governance for heat decarbonisation by clicking here.