1. Heat Network Demonstration SBRI: policy context & objectives for the competition Natalie Miles Heat Strategy and Policy (Heat Networks)

2. 1. Context: heat networks policy 2. Context: research into heat networks innovation 3. Introduction to the heat network demonstration competition 4. Objectives of the demonstration competition 5. Scope of the demonstration competition Outline

3. March 2012March 2013 DECC has been developing the evidence base and implementing options to decarbonise heat March 2012March 2013 The Future of Heating: A strategic framework for low carbon heat in the UK

4. 4 Contents Ministerial Foreword Introduction Chapter 1: Efficient low carbon heat in industry Chapter 2: Heat networks Chapter 3: Heat and cooling for buildings Chapter 4: Grids and infrastructure Evidence Annex “Meeting the Challenge” covers the whole spectrum of heat in the UK, and also covers cooling

5. 5 Meeting the Challenge described the situation now for heat network deployment 2000 networks 2% of domestic, public and commercial demand Predominantly natural gas fired

6. It also provided evidence that pointed to substantial increase in heat networks to 2050

7. However, Meeting the Challenge also highlighted a number of barriers to deployment So, we came up with 11 actions to help overcome some of these barriers, they include… Support for local authorities Consumer challenges Capital funding & financial incentives Supporting long-term development Setting up a Heat Networks Delivery Unit and development funding stream Supporting the establishment of an industry-led customer code of conduct and transposition of the Energy Efficiency Directive to improve metering and billing Examine scope for extra financial support for heat networks through the Renewable Heat Incentive Developing technical standards and supporting technical innovation in design and installation

8. Shortly before the publication of Meeting the Challenge, the Heat TINA was published Key finding that innovation could reduce the costs of heat technologies significantly The technology innovation needs assessment (TINA) project is a collaborative effort between LCICG members Aim To provide a robust evidence base on the innovation needs of those technologies likely to be important in delivering our energy and climate change targets and/or economic benefits for the UK Focus The heat TINA focussed on three technologies: heat pumps, heat networks, and heat storage

9. The main conclusion from the heat TINA: benefit of UK public sector investment in heat innovation is high Sub-area Value in meeting emissions targets at low cost £bn Value in business creation £bn Extent of barriers Opportunity to rely on someone else Benefit of UK public sector activity/investment (without considering costs) Heat pumps 21.1 (11.4 – 39.3) 2.6 (1.2 – 4.5) CriticalIn part High: design, installation, and O&M most important Heat networks 5.5 (2.2 – 15.0) 0.7 (0.3 – 2.0) CriticalIn part Medium: design, installation, and O&M most important Daily heat storage 1.4 (0.1 – 6.8) 1.4 (0.3 – 4.3) CriticalIn part Medium: advanced stores most important Interseasonal heat storage 1.5 (0.4 – 4.8) 0.4 (0.1 – 1.4) CriticalIn part Medium: heat store, extraction, design, installation, and controls The UK can rely on others to deliver innovation in some components, but not in design, installation, and operation

10. With Meeting the Challenge and the heat TINA in our minds we developed the demonstration competition What is the aim of the competition? The Heat Networks Demonstration SBRI is designed to stimulate innovation that addresses challenges to greater deployment of heat networks, namely cost and performance efficiency. The proposal Our proposal is for a competition for technology developers, with relatively broad scope, paired with demonstration opportunities (accompanied by monitoring and evaluation) on existing heat networks (or those under construction). It will be a two phase competition. With £1m in phase 1 to cover the costs of developing feasibility studies and £6m in phase 2 for the demonstration and monitoring of the technology.

11. The objectives for the competition overlap strongly with the findings from Meeting the Challenge i ii iii iv To support the deployment of low carbon heat networks out to 2050 v To demonstrate the successful integration of innovative technologies and techniques on heat networks To provide real world evidence on reducing costs and improving energy efficiencies To improve the customer experience of heat networks To increase DECC’s understanding of heat network innovators and the heat network technology supply chain

12. The competition is intended to have a relatively broad scope to encourage innovative ideas What is in scope? Innovation can include new technologies (components, materials, techniques etc), integration of new technologies into existing networks, application of existing technologies into the heat networks area, and efficiency improvements to existing technologies. What is outside scope? As a network scheme, projects will only be funded where connectivity / interface with the network can be demonstrated. Heat generation technologies in isolation will not be considered.

13. These are examples of the types of technologies DECC is seeking to encourage As a guide, technologies and techniques might include (but are not limited to): the integration of innovative low carbon heat sources to heat networks, e.g. technologies for recovering waste heat from industry and power stations or river- source heat pumps; Novel large-scale thermal storage, i.e. beyond conventional hot water storage; Novel heat transport technology that may have lower installation or operating costs; Improved controls that deliver greater system cost-effectiveness, e.g. in terms of switching efficiently between different heat sources (depending on heat load and availability); Low temperature system technology; Innovative technologies that can be applied to cooling networks, e.g. more efficient absorption chillers that use heat to produce cold air/ water, or more efficient trigeneration of heating/ electricity/ cooling.

14. Thank you for your attention Natalie Miles Heat Strategy and Policy (Heat Networks) natalie.miles@decc.gsi.gov.uk