Central Heating Districts in Scotland

A new report by Scottish Enterprise has found that central heating districts throughout Scotland offer major commercial benefits to the local business communities.

At present Scotland has 9,886 properties connected to district heating projects which provide heat from a single source via an insulated pipe network. By 2020 the Scottish Government has set a target of 40,000 properties receiving its heat via this method highlighting major opportunities for local businesses including civil works on roads and buildings, internal infrastructure work, and developing the required technology.

The commercial benefits add to the environmental and financial gains district heating can bring as entire systems can be based on renewable energy technology including biomass boilers.

Scottish Renewables policy manager Stephanie Clark said: “Scotland’s ambitious climate targets mean we must drastically reduce the amount of carbon emitted by our society. District heating schemes offer an opportunity to do that, and also to reduce energy bills – particularly relevant when more than one in three Scottish households are living in fuel poverty.”

The Glasgow Commonwealth Games Athlete’s village, since remodelled into a combination of social and affordable housing is one of several new build residential projects to implement the idea. Other projects currently in productions or soon to commence include some of Scotland’s most prominent universities Glasgow, Strathclyde, Glasgow Caledonian, and St. Andrews and well as many of the country’s housing associations.

Ms Clark added: “Glasgow already leads the way in district heating, with schemes at the Commonwealth Games Athletes’ Village and several housing developments, as well as projects underway at the city’s universities.

“That experience means the city, and the wider Scottish heat sector, could benefit from the work that must be done in the next five years if we are to hit our district heating target.”

As many of the current heat networks are based on gas heat and power Ms Clark reiterated the importance the basing all future districts on renewable energy.

“As heating accounts for 55 per cent of our energy demand, we really need to move to renewable and to low-carbon sources of heat to achieve our heat target, which is 11 per cent. The more district heating projects that come further that are renewably sourced the better.”

For example a new housing project in Banchory, Aberdeenshire is hoping to power a district heating network via a biomass boiler or if possible, a geo-thermal source.

The Scottish Enterprise report confirms that 103 new projects are currently in the planning stage and will require 190km of heat network piping at a potential cost of between £85m and £190m.

The report acknowledges that the district heating schemes do involve a “high initial capital expenditure” however also states that this will be offset by “secure and stable long-term profitable operations for multiple decades.”

In related news a new study published by the UK Green Building Council (UK-GBC) and the UCL Energy Institute at University College London has stated that energy efficient homes could increase in value if banks, building societies and other mortgage providers used more accurate estimates of household energy bills in the affordability checks which underpin their mortgage calculations.

The study called “The role of energy bill modelling in mortgage affordability calculations” found that mortgage lenders could significantly improve upon the current estimated energy costs used in their affordability calculations if they switched and used readily available data including the Energy Performance Certificate (EPC) rating of the property.

The report claims that lenders current approach for estimating energy costs could be out be out by as much as £45,000 over the duration of a twenty five year mortgage for a modern efficient household. The difference for a typical Victorian property was found to be approximately £11,500.

However the report showed that if lenders made a more detailed assessment that accounted for key property characteristics the estimates would be much more accurate. In turn this would reduce lender’s risk as they would be better at tailoring their lending to reflect the true cost of living in the property. Also as more efficient properties would be able to attract more mortgage finance the value of these would increase relatively compared to those less efficient.

Richard Griffiths, Senior Policy Advisor at UK-GBC, who co-authored the study, said: “Government wants lenders to be more responsible, yet this work shows that they are currently failing to account for the likely energy costs faced by would-be borrowers. As a result lenders are potentially lending more money than buyers of inefficient properties can truly afford, and vice-versa for efficient properties.

“If banks took some quite straightforward steps to address this – by including data on properties’ energy efficiency and making more accurate estimates of their likely energy bills – they would reduce the risks associated with their lending, while helping to create the conditions that would see energy efficient properties rise in value compared to their inefficient counterparts.

“One important consequence of that is that would-be purchasers would be incentivised to buy efficient properties, and existing homeowners would see the value of their homes increase if they took steps to retrofit them. In the context of Government having recently cut support for the Green Deal in the face of low demand, this could be an important development for the industry and policy-makers.”

Ian Hamilton, Lecturer and Senior Researcher at UCL Energy Institute, who also co-authored the report, added: “Having high-quality data on housing energy performance is incredibly valuable. This research illustrates how energy performance information can be used to inform very important purchasing and lending decisions for businesses and households.

“Providing evidence that can be used by Government, industry and households to make decisions on their energy use is essential to bring about a more sustainable demand for energy.”

The implementation of the central heating districts is a positive step in reaching our carbon output reduction targets. With heat accounting for 55% of our total energy use modern efficient technologies will aid us in reducing our carbon emissions. However with the inevitable stagnation of the wind and solar industries we must continue to do more to ensure the energy used to supply these projects comes from renewable sources. The technology of the central heating districts is useful but without a clean renewable energy source the difference they will make to our carbon output is negligible.

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