Heat networks finished 2015 on a high. In a year in which the Government hammered almost every other part of the low carbon sector, heat networks not only escaped harm, they unexpectedly received a £300m boost in November’s Comprehensive Spending Review. And there may even be further support if projects can secure a share of new innovation funding at DECC.
So you might expect this market to rapidly pick up speed. But funding is only part of the picture. Even more important is policy, because just like a species is shaped by its ecosystem, heat networks are shaped by their policy landscape.
This landscape can be defined by three key features: the CIBSE Code of Practice, the Heat Trust rules and SAP. Influential as they may be, these three features aren’t set in stone. Far from it. All three will undergo major changes in 2016, with so much potential to shake up the market that it’s tough to predict how projects will look (commercially, technically, legally) a year from now.
What might these upcoming changes mean for projects, practitioners and operators?
CIBSE/ADE Heat Networks: Code of Practice
Launched last summer, the Code sets clear minimum standards for the various stages of heat network projects. It’s a massive improvement on previous district heating guides, which, rather than setting out clear requirements, always seemed to politely suggest that engineers perhaps consider this or that option, or not, because, you know, we don’t want to impose.
While it’s a big step forward, the Code isn’t perfect. Critics say the 2-day course that accompanies the Code is too brief to meaningfully improve practice among engineers. I agree and I think the training will be extended. But that’s not the most important problem that needs solving.
The real problem is that, in its current incarnation, the Code can be seen as a conglomeration of clear but disparate requirements. It’s up to the project team to sift through them and pick out the ones that are relevant to their scheme.
As a result, there’s currently no way to say whether a given project has identified and complied with all the relevant requirements. In other words there’s no such thing as Code compliance and no authority to say whether or not it’s been achieved.
This is a problem because whether or not a project complies with the Code will likely become extremely important in 2016, as we’ll see from looking at our next landscape feature…
The Government’s Standard Assessment Procedure (SAP)
SAP is used on every residential and commercial building project in England and Wales to work out if a building’s design complies with regulations. Specifically, SAP predicts how much energy will be used for things like heating and lighting and how much carbon will be emitted as a result.
By rights, there should have been an update to SAP in 2015 in advance of the Zero Carbon Homes standard coming into force this year. The standard was scrapped by the Tories* and the SAP review didn’t happen. But it will – in 2016. And as part of any SAP overhaul, the way heat networks are treated will almost certainly change. Here’s why:
About two years ago, the BRE (who manage SAP on behalf of the government) started asking around to see if anyone had operational data from heat networks so they could update SAP based on real world information. Almost no one responded. Of the few people who did offer data, some were angry – they’d had bad experiences with inefficient networks and were keen to air their grievances.
As this data emerged in 2015, policymakers were confronted with the fact of how bad heat networks could be. But they also knew they could and should be much better. For a start, the poorly performing networks highlighted by BRE’s data gathering hadn’t had the benefit of the newly released Code of Practice.
In order to recognise that heat networks can be bad but should be better, policymakers are likely to consider a two-tier approach within SAP, whereby networks that promise to comply with the Code of Practice will score better under SAP than those that don’t. If such an approach is adopted, Code compliance will effectively become mandatory for new heat networks.
No bad thing. But the obvious prerequisite is that we work out just what comply means and who gets to decide whether a given project complies or not. The issue of compliance is made more complex by the inclusion of customer care standards, which brings us on to our third landscape feature…
Launched at the end of last year, Heat Trust sets out a voluntary standard of quality and customer protection for operators of heat networks, including (among other things) requirements for clear and transparent billing and penalties that operators must pay to customers in the event of an outage. Heat Trust is important because it imposes customer protection standards in the otherwise unregulated heat market.
The CIBSE/ADE Code of Practice ties itself tightly to Heat Trust (citing it more than a dozen times) and uses the Trust’s rules as the standard for fair treatment of customers. So any discussion of Code compliance will need to include Heat Trust. But there’s a problem.
At the launch of Heat Trust in November of last year, three organisations announced they’d be the first to sign up: EON, Brookfield and SSE. Wait a minute, you might say, those are all ESCOs. What about the housing associations and developers who build most of the heat networks in the UK? Aren’t they signing up too?
Not yet. In its current form, Heat Trust only applies to the ESCO commercial model, where the network owner and the provider of customer care are the same entity. So the rules don’t work for the other half of the market, where network owners hire a third party to provide metering and customer care. In other words, organisations that might have to adopt the Heat Trust rules (in order to achieve Code compliance, in order to score better on SAP) simply won’t be able to.
Clearly, this omission in the Heat Trust rules will have to be put right this year. Along with changes to the Code of Practice. Oh, and a major SAP revision.
So there are very big changes up ahead. By this time next year, the world of heat networks may be a very different place.
*Is ZCH coming back but just in London? That’s another interesting one for 2016.
carbon limited 
No mention about over sized heat plates and why heat customers are experiencing 1970s like heat bills
Have a look around. This blog is full of information about what can go wrong on heat networks and the potential costs to customers if they’re not got right.