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Blog Post 6 December 2018

What is district heating?

District heating offers the promise of a neat solution for the supply of low-carbon heat to homes, businesses and public buildings.

It’s all about taking energy released as heat from a varied range of energy sources, and connecting to energy consumers through a system of highly insulated pipes.

There is certainly a growing case being made for expansion of such heating networks. A recent report from the Energy Technologies Institute (ETI) suggested that by using low carbon fuels they could potentially meet nearly half of UK heat demand, while reducing national decarbonisation costs by £3 billion.

The UK is now a net importer of natural gas, and this is likely to prove a factor that generates further interest in district heating as a means of providing greater energy security. If done properly, this approach to heat should also bring carbon reduction, benefits to the local economy, and reduced fuel bills for end users (including householders).

district heating insulated pipes

What’s out there in terms of district heating?

There are already over 17,000 district heating networks in place in the UK, and nearly half a million connections to them, most of which are domestic customers. They are a particularly attractive option in dense urban areas, and have been cited as a way of tackling fuel poverty while also reducing housing management costs.

The establishment of heat networks, which can vary enormously in size, means that cheaper, lower-carbon sources of heat generation can be added over time without additional, later upheaval such as digging up roads, or making changes in people’s homes

You might have also heard of community heating – and it’s important to make a distinction between the two. Community heating is about supplying heat to a relatively small development of one or perhaps two buildings with multiple dwellings, such as a multi storey block or sheltered housing complex. District heating has wider objectives: distributing large-scale sources of heat over a large area, and connecting multiple buildings in a heat network.

thermal image of valve on heating installation

Making district heating work for all

It’s important that the potential benefits of localised heat generation are realised in practice. At the moment, district heating in the UK is unregulated, and the market is fragmented.

Schemes to encourage uptake of district heating which assess and work alongside projects is one way of ensuring standards are met. In Scotland, the District Heating Loan, funded by Scottish Government, is working to support good quality schemes that reduce bills, reduce emissions and create jobs.

In seven years of operation, there has been a change in the type of projects applying to the loan fund. Smaller schemes were initially the norm, but now there’s more much larger schemes coming through, with typical loans of over £1million being offered. There have also been changes in the type of technology featuring in applications. Schemes based on heat pumps (ground, water, and air source) are on the rise, after applications initially were dominated by wood fuel-based systems.

Support for a sector heating up

The UK Government’s Renewable Heat Incentive (RHI) has provided important fiscal impetus for the sector. Plans for new heat networks require life cycle business planning, so long term financial leverage for heat generated helps make the business case stack up for trailblazing schemes.

In England and Wales, a £320 million investment programme has been launched by the UK Government, as part of ambitious plans to extend district heating capacity, driven by local authorities. There is a target in place for 15-18% of heat to be generated from networks of this kind by 2050, and Scottish Government has its own ambition to achieve big increases.

This is undoubtedly a growth sector, and it’s possible that a more common sight in coming years will be district heating included as part of new housing developments, such as the new affordable housing development in Craigmillar from Edinburgh City Council.

There is, though, a long way to go before the UK is anywhere near levels of uptake elsewhere in Europe. For example, the city of Copenhagen is almost entirely served by district heating, and around 65% of housing in Denmark as a whole, with not-for-profit organisations and cooperatives heavily involved in supply. By way of comparison, there is just two percent uptake of district heating in the UK at present with very few not-for-profit agencies delivering heat.

woman wearing socks with radiator in background

Awareness and advice is key

It’s important that as the heating supply becomes closer to home, there are adequate safeguards in place to protect consumers. Scottish Government is currently exploring a licensing system, while the Heat Trust was set up in 2015 as a voluntary UK wide scheme to set common standards across the sector and give consumers a voice.

For community groups thinking that district heating might be for them, it’s important to consider that a certain degree of expertise is required to build out and manage schemes. It’s a big ongoing commitment, requiring responsibility for heating, metering and billing – to all intents and purposes becoming a small utility company.

It’s clear, too, that there needs to be more advice for households looking to either connect to or disconnect from schemes. For those considering getting involved, there’s a lot to think about. Research is required, and it’s worth seeking independent legal advice before signing any heat sales contract with a supplier. In Scotland, householders can contact Home Energy Scotland for advice if they are thinking of connecting to a district heating scheme.

There’s some way to go before district heating becomes a major part of the UK heat mix – but there is a lot of promise if it can be done right. A mix of the right support for both those looking to establish networks, and the householders who’ll be using the heat in their homes, could see potential become reality.

More on this…

Last updated: November 5th, 2020