From the archive: how can we decarbonise heat?

If the UK has made good progress in decarbonising the electricity system, the same cannot be said for heat. It is a bigger challenge and has been harder to tackle, but it is in the sights of the new Energy Systems Catapult. In 2017 Janet Wood spoke to Jeff Douglas about grappling with societal issues and kick‑starting a new industry

How do you start an industry? True to its name, the Energy Systems Catapult is working to give impetus to a new domestic heat market. It has been working on a cluster of projects that together should help industry across the difficult gap between development and commercialisation, attracting new companies in the space to innovate and expand.

Heat is a huge part of the UK’s energy needs. Decarbonising the heat sector is fundamental to meeting our carbon targets, but little progress has been made so far. In the past, there was an underlying assumption that electricity would largely replace gas to provide heat. The situation now looks far more complex.

When I talk to Jeff Douglas about how to tackle this huge task, we discuss the scale of the challenge and how the catapult aims to kick-start the industry. We also talk about how decisions should be made in an industry that reaches right into peoples’ homes. Douglas is strategy manager at the organisation, which aims to widen the energy focus beyond electricity, which has been the focus of decarbonisation efforts until now. It is taking a systems view, considering heat and transport, and also the human and economic aspects.

The catapult has taken on the ‘smart systems and heat’ programme from the Energy Technologies Institute and will also deliver a second phase of work.

Douglas explains that the UK’s gas network does more than just deliver the fuel to the house; as part of our energy system it has other functions. He says: “The gas network has a great ability to cope with storage and pump large amounts of heat into our homes just at the time we need it when we’re waking up. We need solutions that replace that functionality.”

For consumers, decarbonising heat is likely to be more disruptive than decarbonising power. The transition between electricity from fossil fuel to low-carbon sources is invisible to consumers, except as policy background or a marketing exercise. But as Douglas points out: “Decarbonisation means removing natural gas from up to 26 million UK homes, at least in the way it is used today.” This is a material domestic change. I agree, telling him about the looks of horror I get from keen cooks who do not want to lose their gas cookers.

Douglas says that is why one of the Energy System Catapult’s core specialisms – following on from work done by the Energy Technologies Institute – is social science.

“In 2050 is it going to be acceptable to be throwing so much heat away to the atmosphere or to rivers?”

That group is “trying to answer this question about what you’re doing when you are using heat or when you are using kilowatt-hours”. It has conducted surveys of well over 2,000 representative households, alongside selected detailed monitoring “in order to understand actual behaviour and compare it with what people say they do”. That understanding is necessary to develop a new heat industry that will not simply rely on pumping gas through the network.

Douglas says the social science research is a key start-up tool for the new industry. It will be used as a foundation for technology development and for thinking about the kind of commercial products that might be attractive to consumers.

 

What are the options?

Decarbonising heat has always been a tough issue for policymakers to grapple with. Early assumptions that fossil heat would largely be replaced by low-carbon electricity have changed. Now there is a growing feeling that the solution will be mixed, with district heat and other gas sources or types of gas playing a role alongside electricity.

Douglas is a big supporter of heat networks, saying: “If you did a blind tasting with a small heat interface  heating system from a consumer perspective, for a heat network you only have a small heat interface unit so no boiler to break or maintain – you would probably tick a lot of the boxes you really want.” One downside, as always, is installing new networks. Another question is where the heat comes from – CHP may be efficient, but it is also is generally fuelled by gas. Douglas sees that as an opportunity for a later switch. He says small networks can be joined to make larger ones and they can be changed to a low-carbon heat source. “At least then you have an upgrade of a smaller number of large facilities, not a large number of small facilities.”

“CHP may be high-efficiency, but it also is generally fuelled with gas”

I ask if that could be led by new-build projects, with CHP increasingly being used. He says we will have to think much bigger. “New build is important and we need very high standards in force at the time of construction, but really we are trying to tackle the big 26 million. I think heat networks could really have a big place there.

“I can imagine that we are still going to be generating large amounts of electricity in the UK and that includes significant amounts of thermal generation, whether that is CCGTs or nuclear. As soon as you are generating thermally you are throwing away a huge amounts of heat. The heat network gives you a great opportunity to capture the benefits. In 2050 is it going to be acceptable to be throwing so much heat away to the atmosphere or to rivers in the way that we see as acceptable today? I don’t think it will be.” If heat networks were eventually combined  and fed from large-scale heat sources, that may also allow those central heat sources to be fitted with carbon capture and storage.

Low-carbon gas in the existing network is the second option. Douglas says: “There is no doubt we can repurpose parts of the gas network.” We are already injecting biogas and investigating the use of hydrogen. Existing projects are small scale, but are stepping up – for example, there are plans for a hydrogen network in Leeds.

Douglas talks first about the most ambitious option – replacing methane with hydrogen. It is technically feasible to completely replace methane and some have suggested that. Douglas says: “There are issues over embrittlement because of the effect of hydrogen on steel pipes. It might ultimately mean replacing the gas transmission network, so there is considerable investment there.” The fundamental question is how to produce the hydrogen.

“Consumers are unlikely to be able to have unrestricted choice between different heat types”

There are two options. “The most economic solution for producing hydrogen at the moment is methane reforming.” To meet UK network needs we would have to build more than the world’s current global reformation capacity in the UK – with all the extra energy use that entails. It means using methane as feedstock to produce the hydrogen and, Douglas says, CCS to mitigate the associated carbon emissions.

At the moment the alternative is electrolysis. “That would need a massive renewable energy resource  – we would need something like five London Arrays for [a city the size of] Birmingham. At the moment it is an expensive way of doing it and we would need [a bigger] electricity network.”

I suggest that – whether a hydrogen network would be an option or not – in a world of sharing technologies, incremental change and more efficient use of what we have, it is harder to have that kind of major change of direction. Douglas agrees, but he warns that incremental change is not necessarily a ‘no regrets’ option. “We start off by saying we want to repurpose the gas network, but is that the right solution for 2050 or for 2100? It feels like we are starting by trying to make the best use of the assets we have, but that may not be the best solution for the longer term.

“There is a danger in thinking, in decarbonisation, that you tackle the first 20% and then see where you go. That may mean the end result is more expensive because you find you are facing a cul-de-sac.”

What about the electric heat option? Heat pumps were seen as a useful swap-in for domestic heating, but Douglas says they are not the ideal source for domestic properties, except new-build. If wholesale conversion remained on the agenda, “you also have electricity network upgrades although I don’t see that as a problem”. “If we do see that as the best solution, then I am sure we can upgrade to the electricity network and let’s get on with it.”

“Incremental change is not necessarily a ‘no regrets’ option”

He describes a potential scenario: “Using a mixture of gas [CHP] and electricity, and a small amount of gas to manage the peak, with electricity providing background heat and perhaps the chance to migrate the gas network to hydrogen at a later date.”

He comes back to a potential switch from methane to hydrogen. “If you are only using a small amount of methane,” he asks, “at what point does it become attractive to move into hydrogen?” But if hydrogen is only part of the solution, he wants to know why it’s not the whole solution. “Is it driven by hydrogen availability, location or type of demand – for example city centres?”

 

Preserving customer choice

One thing is clear from our conversation. Consumers are unlikely to be able to have unrestricted choice between different heat types. Douglas says that a certain loss of choice is unavoidable. “If we are going to go for a heat network solution then personal choice is not necessarily best. You need most people on board to make it work. It’s the same for the gas solutions… society must agree. On one hand you need to make top-down decisions. On the other, we are conditioned to have the freedom of choice in the marketplace.”

Heating options will vary depending on where you live. Understanding those options will be as important for new industry players as it is for consumers and that brings us to another of the market startup tools being developed at the catapult: energy path networks, which model spatial least-cost optimisation (see box). “You import local geography and lay out the types of houses and the energy resources available. That enables you to come out with which areas are most suitable for a heat network or for electricity,” says Douglas. (There is a shortage of good gas data to include in current modelling.) He stresses: “It’s not a prescriptive answer. It’s a platform for discussion and for building consensus and engaging stakeholders – local authorities, gas distribution networks, consumers, and so on. The other important thing there is that it helps you evolve a transition pathway.” He says it has already provided insight into the likely places where heat networks would work well in Newcastle. “It allows you to balance how much you would spend on reducing demand by insulating houses versus how much you will spend on a low-carbon heat source.”

That’s just one of the tools being developed to prime the market. Another is a route to offer services that mean more to the customer than energy. Douglas says: “This isn’t about technology, it’s about what services I buy as a consumer. At the moment I buy kilowatt-hours, but I want to buy comfort.

“We envisage there being a range of packages or products that may not mean that you are directly charged for kilowatt-hours. Once we have established that and understand how you behave in your home… what we are trying to do is build a pathway for others to build new products and develop new business models.” In practice, that is a ‘gateway’ for home energy services and energy management systems that companies can use to understand the risks and the characteristics of service offerings.

“It’s a set of tools and processes. It’s a physical gateway we are developing.” It is similar to home energy control devices but it is “an open gateway, a link between the consumer and the supplier and any intermediaries to provide services that they might want to use”.

I ask whether it links with smart meters and could act as the meter’s in-home display. Douglas says: “It would work alongside it to provide a platform for sophisticated new products. As a customer you may not want to watch details [of your electricity and gas use], and instead want functionality and alarms. You will have the option to do either.”

Is the intention for energy services companies to use the gateway? Douglas says that ultimately they should develop their own gateways and products, based on the protocols the catapult and ETI have developed. “We don’t want to set ourselves up as a producer of gateways or service packages – it is about facilitation. But to demonstrate the potential we had to build a box.”

At the same time, the catapult is using its social science work to consider what type of products might replace the kilowatt-hour. It’s not about individual products, Douglas says, but about making all this work in the marketplace. “What kind of market functionality would you need?” he asks. “Energy Path Operations is helping to design the systems that you would need in the back office and the functionality there. The plan is to model power and heat, and simulate the impacts and requirements of future service packages, and how you would interlink with national energy systems. What is it that needs to be in place?”

Finally the catapult is asking what sorts of new business models might be attractive.

 

What’s the trajectory?

At the moment we have several options for heat – district heating, electricity and new gases. Is now the time to make a decision about what the end-point should be, or should we see what the current patchwork approach reveals?

Douglas is concerned that with no end-point in sight “the patchwork may not be developing a helpful way”. “You may be incentivising people to do things that don’t stack up in the long term,” he says. Either way, it is difficult to change course. “It’s not necessarily a linear process, but I think you have to have an end point in your mind.”

“You may be incentivising people to do things that don’t stack up in the long term”

He thinks that decision should be considered urgently. To do that, “we need big demonstrators of modern heat networks”. “We need to properly understand what we need to do to the gas network. Are we going to be using hydrogen and is that an interim solution?”

I suggest it is political leadership that is needed at this point, and he says: “It’s easy to say it is all down to government, but governments can only do what their people want. Each one of the energy vectors we are considering requires substantial change. It’s not necessarily just a government decision – it’s a decision of the nation.” But he adds: “The move away from coal has been extremely effective. The fact that it is an obligation that has created some very direct pressures and outcomes. We shouldn’t be afraid of those direction signals.”

How much of the change in heat can be led from the top and how much can be left to the marketplace that the catapult is helping to develop? Douglas says: “The reality is that you need both. The market will not come up with long-term solutions that will be the most efficient in making sure we’ll take the right long-term infrastructure decisions. Top down is not going to properly understand and capture the energy you can get within the marketplace to deliver new and innovative projects.”

Five blocks to build a heat market platform

The Energy Systems Catapult’s five projects are intended to give other companies the tools they need to join the heat market.

  •     Consumer information The catapult’s social science team is looking at how people really use energy in their homes (rather than how they think they use it), and at how decisions are made.
  •     Local information Energy Path Networks is a modelling tool that can bring together data on energy resources, local geography and domestic property types to help make strategic decisions on the most effective local heat solutions.
  •     A home gateway A domestic energy and services platform. Using its protocols, innovative suppliers can offer home services that include the warmth or cooling that previously came as power or gas supplies, alongside other non-energy services.
  •     Market functionality Back office systems are needed to let providers develop and charge for home services instead of power electricity and gas units. What types of functionality does a service supplier need?
  •     Market intelligence Investigating the business models that could be effective in a heat market.

1 comment for “From the archive: how can we decarbonise heat?

  1. Ian Chapple
    June 13, 2019 at 4:23 PM

    Why are heat pumps not the answer? Air to air heat pumps are cheap, easy to retrofit and very efficient. All the rest of the world uses them, only the British are hooked on water based CH for no good reason.

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