a manifesto forsustainable heat

introduction ................................................................................................. 1

how important is heat ................................................................................ 2

benefits of sustainable heat........................................................................ 3

what’s missing? the current barriers to use............................................... 7

what is sustainable heat? ......................................................................... 10

what can be achieved: examples from Europe ......................................... 19

what is working in Europe?....................................................................... 21

characteristics of a sustainable heat strategy .......................................... 22

references................................................................................................... 24

Written by Rebekah Phillips, Rachel Drayson and Faye ScottWith thanks to Graham Meeks and Dan CroweEdited by Rebekah PhillipsArtwork by Upstream www.upstream.coopPrinted by Seacourt www.seacourt.net on revive matt- 75per cent post consumer wasteISBN 978 1 905869 01 5© 2007 Green Alliance

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The following organisations have kindly funded this work:

For further information please contact:Green Alliance, 36 Buckingham Palace Road, London, SW1W 0RE. tel: 020 7233 7433 fax: 020 72333 9033email: ga@green-alliance.org.uk website: www.green-alliance.org.uk

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contents

1

Two recent reports have laid bare the imperative oftackling climate change.The IPCC’s comprehensivescientific review of February 2007 demonstrated thatit is 90 per cent certain that humans are behindchanges in the climate and the consequences of notreducing our greenhouse gas emissions areterrifying. Earlier, in November 2006, the Stern ReviewReport on the Economics of Climate Change showed clearlythat it is far more effective and financially sensible totackle emissions now than wait until a later date.

There is no doubt that the energy sector, and ourdependence on fossil fuels, is key to risingemissions. Since January 2006 the government hasbeen conducting a comprehensive review of itsenergy policy in response to both this mountingthreat and concerns over the security of our energysupplies in an age of diminishing UK natural gas.The next stage, the publication of an EnergyWhitePaper, should frame the UK energy market for thecoming crucial years.

Yet while the government has recognised the needto look at energy policy it has concentrated itsefforts almost exclusively on the electricity sector,which produces only a third of the UK’s emissions.A flick through The Energy Challenge was enough toimpress upon even the most casual reader the lack ofattention being accorded to either of the heat ortransport markets. These two sectors equal or surpasselectricity in terms of emissions produced, andeclipse it in the amount of energy they consume, yetare dwarfed by electricity in policy research.

This manifesto concentrates on the hidden sector ofour energy supply: heat. Transport is easily separable,yet people use the words ‘energy’ and ‘electricity’

interchangeably. In pie-charts, heat is often hiddenbehind the words ‘homes’ and ‘industry’ and officialreporting figures frequently neglect to separate outenergy used by heating processes.

Heat is fundamental to our whole economy: inindustry for melting, evaporating and dryingprocesses; in our homes and businesses for warmth,hot water supply and cooking, and conversely forkeeping cool in the summer.Yet because of itsdisparate nature heat gets overlooked.

This is a mistake. Heat produces more emissionsthan electricity and providing this heat in a moresustainable way is one of the cheapest options formitigating climate change. It will also address theother three pillars of energy policy: security ofsupply, competitiveness and fuel poverty.

There is evidence thatWhitehall and parliament areslowly waking up to the importance of addressingheat. The recent Commons Trade and IndustryCommittee report Local energy – turning consumers intoproducers concluded that ‘low-carbon heat productionis the Cinderella of energy policy’. The Office ofClimate Change is carrying out a review of thesector and Alistair Darling, the Secretary of State forTrade and Industry, has been appointed lead Ministerin this area.Yet the talk is that EnergyWhite Paperwill still have very little to say beyond warm wordson this subject.

There is a groundswell of organisations calling foraction in this area, from businesses and tradeassociations to NGOs and parliamentary bodies. It istime to capitalise on this momentum and push for asustainable heat strategy.

introduction

1

• almost a third of the UK’s carbon dioxide emissions come from heat• over half of all energy in the UK is used for heat• typically two thirds of the energy put into big electric power plants islost as waste heat

• why do we have no strategy for producing heat more sustainably?

how important is heat?

The most intensive use of heat is in the domesticsector, where fuel supplied for cooking, heating andhot water together accounts for about three quarters ofthe energy we consume in our homes. As a result,heating the 25 million or so homes in the UK isresponsible for about a quarter of the UK’s total energyconsumption.4 Gas is the fuel of choice in thedomestic sector, but about 4.4 million houses are stillnot connected to the main gas supply.These propertiestend to be rural and often depend on oil for heating,which tends to be more costly and inefficient.In the industrial sector heat is responsible for almostthree quarters of total energy use, and in thecommercial and public sector heat occupies a similarposition.But whilst heat is a precious commodity, it is wastedevery time we generate electricity from aconventional power station. Of any 100 units offossil fuel energy put into a conventional centralisedpower station, only 22 units will actually be used.Over two-thirds of this energy is lost as heat,8

costing the UK economy over £5 billion a year.9

Space heating60.7%

Water heating23.4%

Cooking2.7%

Non heat13.2%

Domestic energy use, 20045

Heat is lost as electricity is generated and transmitted

Spaceheating50.6%

Catering (excl.refrig, lighting, cooling) 10.4%

Hot water9.5%

Non heatapplications29.5%

Service sector energy use6

High temp process 18.7%

Low temp process33.4%

Drying10.6%

Space heating10.7%

Non heat26.6%

Industrial energy use7

To understand what benefits sustainable heat cangive us, we need to understand what role heatplays in our economy. Two key facts highlight this:

� Heat dominates UK energy use – outside of thetransport sector it accounts for 76 per cent ofall the energy we use. Three times as much aselectricity. Even allowing for transport, more thanhalf of the total energy that we use is for heatingpurposes.1

� Heat has a huge contribution to emissions - justunder a third of all UK carbon dioxide emissionscame from heat in 2004.2

2

Space heating

WaterCooking/Catering

Lighting/Appliances

Process use

Motors/Drivers

Othernon-transportDrying/

Separation

UK energy consumption by end use, excluding transport (2003)3

the benefits of sustainable heat

emissions savingsThe government has concentrated its efforts onreducing carbon dioxide emissions almostexclusively on the electricity sector, even thoughheat accounts for more emissions than electricity. At32 per cent of all the emissions in the UK in 2004,addressing heat has huge potential for emissionsreductions.15

There are three main ways in which action on heatcan help reduce carbon dioxide emissions:

Sustainable heat offsets the burning of fossilfuels. Using renewable sources means that less fossilfuels are burnt, reducing emissions. Even wherefossil fuels are used, technologies such as CHP usethem more efficiently, so less is needed. Renewableheat presently accounts for only about one per centof heat energy consumption16 but even the mostconservative analysis indicates that it couldcontribute up to 4.7 per cent of total UK heatdemand by 2020, leading to carbon savings ofaround 1.2 per cent of current total UK carbonemissions.17 The Biomass Taskforce goes beyond this,

saying that renewables could contribute up to 7 percent of UK heat demand by the earlier date of2015.18

Efficiency and demand reduction measuresreduce the amount of heat used or wasted inour homes and industry. Energy efficient measuresin the domestic sector could save 7 million tonnesof carbon a year, equivalent to building a new1,000MWe nuclear power plant.

19

Sustainable heat can drive behaviour change.Sustainable and local heat generation can help raiseawareness of energy use among those installingprivate systems or using local ones, as shown by theSustainable Development Commission research onlocal energy technologies. This can then act as acatalyst to further energy saving actions.

Tackling heat addresses the four main pillars of energy policy:

1. To set the UK on a path to reduce emissions by 60 per cent by 2050:32 per cent of the UK’s carbon dioxide emissions in 2004 were from heat,10 equal to those from electricity.Converting only four per cent of domestic users to renewable heat would save one million tonnes of carbon.11

2. To maintain the reliability of energy supplies:In 2006 the UK moved from being a net exporter to a net importer of gas; by 2020 we could be importing up to 80 percent of our gas needs. 60 per cent of the gas we use in the UK is to provide heat.12 Using a wide variety oftechnologies from indigenous sources would reduce our gas dependency and mean industry and householders are notvulnerable to supply interruptions and uncertain prices.

3. To promote competitive markets in the UK and beyond:Ofgem, the electricity and gas regulator, has no remit to address competition in the heating market beyond gas. Unlikeelectricity and transport fuels, heat markets are naturally distributed, presenting the opportunity for the development of adiverse and competitive market.

4. To ensure that every home is adequately and affordably heated:The price of consumer gas has risen by 35 per cent since 2003, doubling the number of people in fuel poverty to 2million.13 Reducing heat demand and waste heat decreases gas bills by an average of 26 per cent.14 Those offthe gas grid are prime targets for replacement with lower cost renewable heating.

heating bill pushes up NHS deficitThe average hospital uses three times as much heat aselectricity.The increase in energy bills from winter 2004-05 to winter 2005-06 accounted for half of the NHSdeficit by summer 2006.20

3

4

Heat consumption60%

Powergeneration30%

Other energyindustry use8%

Non energy use1%

Losses1%

Solid heat2%

Domestic34%

Public sector5%

Commercial3%

Industrialprocess heat14%

Agriculture & misc. 2%

Gas use in the UK by end user, 200523

security of supplyIf we are worried about gas supplies, then whatwe are really concerned about is how to heatour homes in winter and keep our economyworking.

“Ukraine gas row hits EUsupplies.” BBC News Online,1 January 2006

Late December 2005 and the Russian state-ownedgas company, Gazprom, cuts Ukranian gas supplies.Talks had failed to solve a row over a four-foldincrease in prices, and the Russians responded withdrastic action.

The result? A stark realisation that much of our gassupply comes from potentially unstable regions ofthe world, and the UK could be vulnerable to supplycuts at any time. By 2020 it is estimated that wecould be dependent on imports for as much as 90per cent of our natural gas supply.21 And with gasproviding a huge 90 per cent of our domesticheating demand and 55 per cent of our industrialheating demand,22 the heating of our homes and thecompetitiveness of our industry are particularlyvulnerable to supply interruptions.

This concern was one of the key triggers for thegovernment’s energy review which concluded thatone of the best ways to maintain energy reliability isthrough diversity in sources, supply chains andtechnologies and through ‘home grown’ energysupplies.

However, the review went on to focus on how thiscan be achieved through the electricity market,virtually ignoring the fact that 60 per cent of the gaswe use is for generating heat.

Low carbon and renewable heat helps increase thediversity of heating supplies. Harnessing energyfrom alternative sources such as solar, biomass orlatent ground heat energy displaces the need for gasas the fuel source.

Gas may still be used, such as in some CombinedHeat and Power (CHP) plants, but it is used moreefficiently so less fuel is needed (good quality CHPcan increase the efficiency of the fuel used to 90 percent).24

Energy efficiency improvements and building designcan also reduce the need for gas-fuelled heating inthe first place.

5

economic competitivenessRising costs of fossil fuels mean that heat accountsfor an ever-increasing proportion of our nationalenergy bill, as illustrated in the graph above.Industrial gas prices have risen a staggering 73 percent since 2004, placing considerable economicstress on energy-intensive manufacturing processes.Sustainable heat can address this in various ways:

Increasing competitiveness, encouraging smalland medium size enterprises. Ofgem, theelectricity and gas regulator, has no remit to addresscompetition in the heating market beyond gas.Although the electricity and transport markets aredominated by large companies, heat markets presentthe opportunity for a diverse range of businesses atvarious scales to become involved.

Replacing imported fuels with local jobs.Wherever the hardware is produced, a substantialpart of producing sustainable heating is inherentlylocal or regional: design, installation, training,marketing and distribution.This offers enormousopportunities for local craft industries, foragriculture, forestry and small- and medium-sizedenterprises.

Deferring other investment needs. Investment insustainable heat and heat demand reduction can alsodefer or avoid the need for investment in buildinglarge new centralised power stations.This isbecoming increasingly risky as a result of a fastchanging regulatory environment, increasingcompetition and the long investment time horizonsneeded for large infrastructure projects. It can alsoreduce the need for investment in strengthening anageing network to carry rising power loads.

Increasing efficiency. Inefficiencies in our currentcentralised power system mean that almost half ofthe primary energy used for electricity generation iswasted as heat, costing UK plc over £5 billion peryear. Closing this loop and joining up heat wastagewith use would dramatically increase the efficiencyof the fossil fuel we do use.The Carbon Trustestimates that using this wasted heat could save upto £1bn a year in the UK and an annual carbonsaving potential of 7.5 million CO2 tonnes.

26 Usingbiomass for heating can be over 90 per cent efficient(i.e. 90 per cent of the energy put in can be used).This compares to around 50 per cent efficiency intransport and 30 per cent in electricity. £1 in every£3 spent on heating is currently being wasted in the10.3 million homes in the UK with inefficientinsulation.27

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inc

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1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

GasElectricity

Industrial energy prices25

fuel povertyIt is often the poorest sectors of the population thatare burdened with draughty homes and expensiveelectric heating.With the rise of gas and electricityprices since 2003 (gas prices soared by 91 per centand electricity by 60 per cent), keeping a homewarm is now becoming an unattainable luxury formore and more people. Energywatch estimates thatthere are now at least three million vulnerablehouseholds living in fuel poverty.

The government aims to eradicate fuel poverty inthe UK by 2016, and to eradicate fuel poverty forvulnerable households in England by 2010, meaningthat no household should have to pay more than 10per cent of its income on fuel.28 The aim oferadicating fuel poverty has also made sustainable

heating options attractive to social housingassociations (see example on page 16).

However, the extent to which the fuel poor can takeadvantage of these technologies is hampered by theirlarge capital costs- an issue covered in the followingchapter.

Sustainable heat generation is particularly well suitedto retrofitting hard-to-heat homes. Of an estimated23 million homes in the UK, 6 million have solidwalls, which puts cost-effective cavity wall insulationoff limits. 4.5 million households are off the gasnetwork, mainly in rural areas, and have to rely onexpensive electric or oil based heating.These homesare prime targets for the fuel bill savings offered byrenewable heating.

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450Ave domestic Gas BillAve domestic Elec.Bill

425

400

375

350

325

300

275

2501998

£(In

real

term

s)

1999 2000 2001 2002 2003 2004 2005 2006

Average domestic energy bill, 1998-200629

7

what’s missing? the current barriers to use

1. Where is heat?Heat is often invisible in official energyinformation. Energy statistics tend to highlight therole of electricity while heat is hidden under thetitles ‘industrial’, ‘domestic’ or ‘service sector’. Takethe two graphs below, both show energy use.Thefirst, as presented in the Stern report, separates outpower generation and transport, but heat is hiddenunder the terms ‘other industry’ and ‘buildings’. Thesecond shows clearly the proportion of emissionsfrom the heating sector.

In fact, during this period 55 per cent of energy wasused as heat, and over 76 per cent of non-transportenergy.

There is a reporting gap on heat use. There is aninsufficient database of statistics on heating, asevidenced by a quick flick through the annualenergy statistics. Reliable statistics are needed toestablish a baseline to measure against and monitorprogress.Without regular statistics the savings to begained will not be picked up on as easily.

Heat generation itself is often invisible. Beingsuch an integrated part of our lives, secure heatsupplies are normally taken for granted. Boilers arehidden away in basements or underneath stairs inour homes.There are no large heat power stationson the horizon to remind us of the energy sourcewe use most. As heat is barely thought about,producing it from a different source is rarelyconsidered.

Milford Haven: insufficient incentives meanproposals ignore CHP possibilitiesThe case of the new gas power stations being built nearMilford Haven highlights the lack of incentives availablefor CHP.The waste energy in heat from these two plantswould be greater thanWales’ annual electricity demand,yet plans submitted propose to capture very little of thisheat. This is despite the fact that there are two largeLiquid Natural Gas (LNG) terminals being constructedclose by that require heat and there are already two oilrefineries requiring heat at the location.

Other energy8%

Industry22%

Transp0rt22%

Power generation36%

Buildings12%

Emissions (2000) as presented in the Stern Report30

Other (Energy Ind Use,Iron & Steel etc)14%Electricity

Generation30%

All Heat33%

Transport23%

Total UK net CO2 emissions by end-use (2004)31

Despite the readiness of many sustainable heating technologies for the market, and the financial and emissionssavings they offer, there is not the uptake that might be expected.

This is mainly due to the invisibility of heat in official energy information, an institutional set-up that doesnot support the supply of heat from alternative sources and a small and relatively unknown market. So even ifpeople know about the potential gains it is seen as a risky investment for business and homeowners alike.

2. The institutional set-up does notsupport the supply of heat fromalternative sources.The DTI and the energy regulator, Ofgem, are theaxes which shapes and implements our energypolicy.The structure and remit of these institutionshave built upon the policy agenda of the 1990s,which focussed on the privatisation andliberalisation of the former state-owned gas andpower monopolies. Ofgem’s attention (notably theGas- not heat- and Electricity Markets Authority) hasfocussed on driving down consumer prices throughregulating the natural monopolies in gas andelectricity networks and promoting competition ingas and electricity supply.

With government attention focused on gas supplythe supply of heat from alternative sources exists ina policy blindspot.

3. The market is small,underdeveloped and relativelyunknown.Sustainable heat solutions are often, by their nature,small-scale and distributed. As a result customers areunaware of them as options that could reduce theirenergy bills and their carbon footprint. Even if theyare aware, the complexity of the market, the choiceof technologies and the regulations they must

adhere to are overwhelming and many of themeasures are viewed as capital intensive and outsideof the mainstream.

We are too used to gas. A legacy of cheap andabundant North Sea gas and sustained publicinvestment in gas production and distribution haveafforded natural gas so many advantages that even inthe face of rising prices and the obvious benefits ofsustainable heat, alternative suppliers face manycompetitive disadvantages in entering the market.

Lack of knowledge of sustainable heat solutionshampers demand. Information and awarenesslevels about different sustainable heatingtechnologies are still quite low and they are oftenpresented as unreliable or financially risky. As aresult, most consumers still consider sustainable

public estate fails to capitalise on cost savings fromrenewable heatThe public estate has the potential to provide earlymomentum in a transition away from traditional, fossilheating to new sustainable sources. High rates of buildingoccupancy mean effective utilisation of heating plant,driving shorter payback periods.These can be used asexemplars to show that sustainable heat offers significantsavings over the lifetime of an investment.

However current practices could hinder these savings.Often energy supply is separated out from central PFIcontracts. This means that there is no scope to finance therenewable plant from fossil fuel cost savings. Elsewhere,the drive for reduction in capital budgets means that theupfront costs can be deemed too great despite the year-on-year cost savings over the operating life of the plant.

8

inconsistent capital grant schemes can hamperinvestmentCapital grants are often seen as a simple andstraightforward means of pump-priming a market, andare presently employed to help support renewableheating and electrical installations in the domestic sector.But many in the industry consider the current schemecounter-productive.

The experience of Howard Johns, Managing Director ofSouthern Solar, is a disturbing indictment of grantprogrammes:

‘Capital grants are notorious for their stop-start effect onmarket demand. If customers believe that a grant may beavailable, they are often unwilling to commit until theyhave exhausted this opportunity, even if they have theability to pay.’

‘The current experience of the Low-Carbon BuildingsProgramme is a disaster for our company, with grants tocustomers rationed on a monthly basis. In March we lost£40,000 of sales that were ready to proceed but did notget their grants. Only five out of about twenty clientswho were attempting to secure a grant were successful,some postpone till next month whilst others simplycancel. At a time when we should be investing to expandour business, the reality is that we are facing a loss forthe month ahead and if this continues for much longerit will be difficult for us to keep our staff employed’.

heating technologies ‘alternative’ and they would notbe considered when an investment decision, e.g. fora new heating system, is being taken.

High upfront investment costs put off consumers.Although many sustainable heating solutions havelow running costs, the upfront capital needed putsoff many consumers.

Support from capital grant programmes hasoften proved ineffective. Support to tackle capitalbarriers has often been via isolated capital grantprogrammes. Historically, such programmes havefailed to deliver industry expansion as they arenotoriously unreliable, operate over short timescalesand offer uncertain levels of funding.Unpredictability undermines business planning andshort time horizons deter investors. In the mid- andlong-term, economies of scale should significantlydecrease investment costs.

These issues create a ‘chicken and egg’ situation.Market development is hampered by low demandfrom consumers, making installers and buildersreluctant to enter the sustainable heating business,perpetuating the limited offer on the market. As aresult, many businesses across the supply chain lackthe consistent sales volumes or market certainty torealise economies of scale.

Lack of qualified installers, advice givers andqualified engineers to maintain thetechnologies.With the diffuse pattern of supply,many businesses in the sustainable heat sectorremain small and under-capitalised with a lack ofskilled individuals to sell and maintain sustainableheating technologies.When the market does growthere is a risk that quality could suffer and smallcompanies will be unable to meet demand.

the National Trust Cliveden Estate CHP schemeends up using gasWhen planning a new housing development on theCliveden Estate, the National Trust proposed designsfeaturing reduced energy consumption, which werebenchmarked against the EcoHomes Standards and theGreen Building Guide. Insulation, heat storage andbeneficial solar gain were all included, along with theinstallation of a CHP plant to provide a high proportionof the estate’s electricity and hot water needs.

However, the National Trust faced several barriers toinstalling a CHP plant on the site. Ideally, it would havebeen fuelled by biomass woodchips but a lack ofstandard design meant that the plant had to becommissioned from scratch. Once this barrier had beenovercome problems with fuel supply and high runningand maintenance costs were reported.The decision wasmade to install a gas powered CHP plant instead ofbiomass, as EcoHomes points would be lost if electricityhad been used.The plan aims to convert to a moresustainable source of fuel once the political andeconomic obstacles are removed.

9

what is sustainable heat?

reducing demand for heatBefore we look at sustainable heating technologieswe need to look at managing and reducing heatdemand, as the first priority in the energy hierarchy.Numerous energy standards have been publishedabout how to achieve energy efficiency.

But while energy efficiency standards have beenimproving, the increased uptake of central heatinghas meant that people can now heat their homes andoffices at the flick of a switch, often heating morerooms than needed and to a higher temperaturethan required.

We keep our homes warmer today. In 1990 theaverage temperature inside homes was 16ºC but thisincreased to 18ºC in 2004.32 This has a dramaticimpact on energy consumption, as it takes around50 per cent more energy to heat a house to 18ºCthan to heat a house to 13ºC (the average in 1970).33

designing for heatConsideration for heat needs to be central to anynew building design. Simple measures such asmaximising direct solar gain (the amount of time abuilding gets direct sunlight) are effective atreducing the need for heating or cooling. Forexample, buildings can be set out in a sun-facingcurve, creating a ‘sunscoop’, which traps solar heatand creates a warmer microclimate. Combined withthick insulation and triple glazing, this can meanthat buildings may not need a conventional heatingsystem at all and any supplementary requirementscan be met by a controlled ventilation system. Heatfrom the sun can also be captured in sunspaces andthe warm air piped around the building. Secondarymeasures can also be retrofitted to buildings such assolar control glazing, sun shading and reflectivepainting. Overhangs can be included that let in directsunlight in winter, when the sun is lower, but block

Sustainable heat is heating and cooling from low carbonmeasures and renewable sources.

The following technologies/schemes have an importantrole in sustainable heat and cooling: energy efficiencymeasures and insulation, energy management devices,biomass heating/boilers, district heating, combined heatand power (CHP), micro-CHP, solar thermal, ground andair source heat pumps, anaerobic digestion, geothermal,absorption cooling technologies and both passive andactive design measures to reduce heat demand.

1970

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Houses without central heating

Houses with central heating Internaltemperatures

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Changes in internal and external temperature since 197034

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it in summer. Airflows and orientating buildingsbased on wind direction can be used to providenatural ventilation.

Another technique is using thermal mass.Thisinvolves building with materials such as concrete orbrick, locating them in direct sunlight and paintingthem black.These bricks absorb and retain heatduring the day and release it slowly during the nightor on cloudy days. Conversely, in the summer themass cools down during the night and retains thecoolness the next day.

insulationHigh levels of insulation are fundamental toimproving energy efficiency in buildings. It preventswinter heat loss and helps keep buildings cool in thesummer. Almost all parts of a building can beinsulated, from walls and lofts to windows anddoorways. Cavity wall insulation is quick, clean andrelatively inexpensive and is normally injected fromthe outside of a building through small holes. Solidwalls are harder to insulate but insulating ‘jackets’can be fitted externally and internally. Additionally,environmentally friendly insulation materials havebecome available in recent years, such as cork,recycled cellulose, flax and sheep’s wool.

Up to 33 per cent of the heat produced in ourhomes is lost through the walls and a further third

National Trust – preserving heat in Stamford BrookIn partnership with Redrow Homes, the National Trustworked to build homes in Stamford Brook in a four-phasedevelopment, with phase four planned for completion in2008. In total this will involve the construction of 710homes with a mix of 2, 3 and 4 bedrooms.Thedevelopment will also include 10 per cent affordablehousing in the first three phases, rising to 25 per cent inphase four.

The development aims for high environmental standardsand has achieved these in water use, promotion of publictransport and respect for the surrounding naturalenvironment. In terms of reducing demand for heat, thehomes have heavily insulated floors, walls and roofs, aswell as split external lintels to reduce heat loss. The layoutof the development also promotes solar gain and 84 percent of the houses will be unshaded at midday in winter.35

Red Kite House, the Environment AgencyWest Area headquarters(image courtesy of Martin Cleveland Photography for the Environment Agency).

building for saving heatRed Kite House is designed to be heating and coolingefficient. Its curved design and orientation captures thewind, maximising airflow through the building andsupporting natural cooling processes. High-level exposedconcrete ceilings on each floor act as a heat sink duringthe day.They are cooled by air entering through 100motorized windows on each floor. Roof-mountedturbines draw air in through the windows on the topfloor, which is the most vulnerable floor to overheatingin the summer.This floor is also shaded by a south-facing canopy. Neutral solar control glass minimises solarheat gain in summer whilst maximising natural daylight.

11

through the roof.36

Widespread implementationof insulation could savearound 7 million tonnes ofcarbon a year.37 The DTI hascalculated that widespreadloft insulation alone coulddeliver savings of over 1.2mper year and it is a goodinvestment: payback is only2.7 years and householdersget a 180 per cent returnover five years.

There has been a significant increase in the thermalinsulation of domestic dwellings, partly due to lowcost schemes offered by energy suppliers inconnection with the Energy Efficiency Commitment.However, there are still 10 million propertieswithout cavity wall insulation, about two-thirds ofthe existing property stock.The main disincentive istime and effort and the difficulty of comparingpayback over time with an initial upfront cost.Schemes such as British Gas’s council tax reductionpilot (see case study) show the potential for fiscalincentives to raise uptake.

Other heat saving measures include draught proofingwindows and doorways, as 20 per cent of all heatloss is through ventilation and draughts in a typicalhome.39 Insulating pipes and hot water tanks can alsocut down on heat loss; fitting a British standard‘jacket’ to a hot water cylinder can reduce heat lossby around 75 per cent. Double or secondary glazingcan minimise heat loss by up to a half. Radiatorinsulating panels can be fitted behind the radiator tolessen heat loss, as 70 per cent of radiator heat is lostinto the walls.40

smart meters and energymanagement systemsKey to energy efficiency and reduction is being ableto measure and manage energy. If consumers areunable to comprehend or easily see how muchenergy they are using it is far harder to cut their use.

The government hopes that the domestic sector canachieve 4.2 million tones of carbon savings by 2010.Installing smart meters could conservatively deliver7 per cent of this target each year.

At their most basic, smart meters measure howmuch energy is used and communicate this to adisplay device. More elaborate meters store andcommunicate consumption data by time-of-use.

Research has shown thatimproved consumptionfeedback creates a betterawareness of energy use andcarbon emissions, promptinga change in behaviour.Available evidence suggestssmart meters can reduceenergy use by between 3 and15 per cent. Systems that alsoinvolve some sort of pay-as-you-go device have beenshown to increase savings by up to 20 per cent.42

heating controlsBuildings that are centrallyheated can be made moreefficient by upgrading heatingcontrols. Timer switches andprogrammers allow heatingand hot water to only comeon at times when they areneeded and room thermostatscan automatically switch offthe central heating once acertain temperature is reached.

Installing insulation (imagecourtesy of the EST)

incentivising insulationBritish Gas had partnered with local councils around thecountry to offer subsidised cavity wall insulation, as partof their EEC.There are five schemes now in operation,British Gas is in discussion to set up 20 others and thegovernment is looking into the scheme’s replicability atthe national level. In 2005, 200 homes in Braintree hadbeen insulated and 90 in South Cambridgeshire (data isnot yet available for other schemes).The schemes arerunning slightly differently but homeowners areincentivised by the offer of what is termed either‘cashback’ or a council tax rebate, there are no additionalcosts to the resident and British Gas pays the council £50towards each installation.41

Smart meters show theconsumer how much energythey are consuming (Image:

More Associates)

Thermostats can be fittedto individual radiators tocontrol the temperatures ofindividual rooms (imagecourtesy of the EST)

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Similarly, thermostats can be fitted to individualradiators to control the temperature of roomsseparately. Intelligent heat controlling devices cancombine several of the above functions, as well aslearning how long it takes a building to heat up indifferent weather conditions.Weather compensatorsare also available individually and are able to delayswitching on the central heating on milder days.

supply side – providing heat fromsustainable sourcesFor many existing buildings there is a limit to theefficiency that can be achieved through demand sidemeasures alone. In addition to efficiency measures acrucial element of de-carbonising our heating is toprovide heat from low carbon and renewable sources.

Biomass heatingBiomass, also known as‘biofuel’ or ‘bioenergy’,is a generic term thatdescribes the use oforganic matter of recentorigin to produceenergy. Biomass is asimple and provenheating technology that is virtually carbon neutral,as any CO2 that is released is counteracted by thatabsorbed during the plant’s lifetime.45

Biomass can take solid or liquid form and can beproduced from a variety of plant types. Solid, or drybiomass, includes wood products, energy crops suchas rape and short rotation coppice products such aswillow.Wet biomass includes industrialbiodegradable products from food processing, suchas waste cooking oil. Also included is the slurryfrom livestock, which is used to produce biogas(looked at separately below).

a smarter school in DevonTiverton high school in Devon has implemented ametering system that provides half hourly readings of gas,electricity and water use.These can be read through asoftware programme on the bursar’s computer.The schoolalready has the lowest electricity use in the country butthe smart meter system enabled further savings.Thesystem identified that the heating was coming on atmidnight due to a fault, as it was set to come on muchlater. The fault was repaired and a temperature sensor wasused to measure how long it took for rooms to reach acomfortable temperature.The results showed that theheating did not need to come on until 6am, even at thecoldest time of year, and the system was set accordingly,saving £3,045 per year in gas costs and large amounts ofcarbon emissions.The biggest saving has been in relationto water use, rather than heat, but it illustrates thepotential of smart meters to identify unseen problems,which can be to do with water or heating.The systemrecorded high levels of water use in the area of threeprefab classrooms.Two of them are not in use and thethird did not need a water supply, which meant there wasa leak.This was repaired and the school immediatelysaved £20,000 per year, which more than makes up forthe £5,075 cost of the meter system.43

greater control at Manchester conference centrePrior to improving their heating controls, all of theconference centre’s hotel rooms were heated throughoutthe day, to ensure they were warm if a delegatehappened to return to their room. A better system ofcontrol now allows the conference centre to save energyand also allows guests to be more comfortable byproviding more control over their room temperature.The system turns the heating on to ensure it is warmfrom 6:00 – 7:00 a.m. and again from 4:00 – 5:00 p.m.,when many delegates return to their rooms. At all othertimes the heat is reduced to an average of 13ºC and theroom’s occupant takes control, with a one hour boost ofheat available as frequently as desired at the press of abutton.The system is very easy to use and instructionsare provided.44

The biomass cycle(image courtesy of the NEF)

wood fuel heating at Sheffield Road flatsBarnsley Metropolitan Borough Council has adopted apreference for biomass heating and intends to apply woodheating throughout their building portfolio where spaceand access permits.This policy enabled the council to winfirst prize in the 2006 Ashden Sustainable Energy Awards.

In 2005 wood heating was installed by Econergy toprovide community district heating for three towerblocks with 166 flats. This is the first of six Fröling woodboiler installations ordered by the Council and thedisplacement of gas use saves approximately 300 tonnesof CO2 emissions per year.The boilers are over 90 percent efficient and use approximately 500 tonnes of woodchip per annum, much of which is sourced locally.Thecombination of biomass heating and improvedinsulation has enabled the council to substantially reduceheating bills and address fuel poverty objectives.

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Biomass can be used for space heating, for hot waterand to power domestic, community and industrialCHP systems (looked at separately later).Theprincipal market for domestic scale heating is morerural locations where there is space to accommodatethe boilers- the potential market size is 1.1 millionhouses.46 The cost for boilers varies depending onthe fuel choice; a typical 20kW (average sizerequired for a three-bedroom semi-detached house)pellet boiler would cost around £5,000 installed,including the cost of the flue and commissioning.47

The fuel costs are cheaper than conventional heatingfuel.

Biomass is an extremely efficientway of using energy and can reachlevels of 90 per cent efficiency (i.e.90 per cent of the energy put in canbe used), this compares to around50 per cent efficiency of biomassused in transport and 30 per cent inelectricity. It can also provide localeconomic benefits through the useof a local fuel source, and offersnew economic opportunities forfarmers.

Anaerobic digestionThis involves the conversion of organic matter toenergy by microbiological organisms in the absenceof oxygen.The process produces ‘biogas’ (a mixtureof methane and carbon dioxide), which can be usedas a fuel source for heating.There are four main feedstocks suitable for anaerobic digestion: sewage,municipal solid wastes, farm wastes and food

processing wastes. At present this technologycontributes little to the UK heat market and isrelatively unknown.

Ground source heat pumpsGround source heat pumps (GSHP) are able toharness the earth’s stable ground temperature.Warmer ground temperatures mean pumps can usethe heat in the ground to provide heating during thewinter and conversely the relatively lower groundtemperatures in the summer can be used for cooling.

A ground loop pipe filled with water andrefrigerant, which absorbs heat as it moves throughthe pipe, is buried underground. A heat pump- adevice that can raise heat to a higher temperature-removes heat from the water and transfers it to atank of clean water that feeds radiators, under floorheating or water storagefor hot water supply.

Electricity input isrequired to pump theheat but, for every unitused, 3-4 units of heatare produced.The heatcan therefore be said tobe approximately 75 percent renewably sourcedand the level ofefficiency can make heatpumps a cheaper form ofheating than oil, LPG andelectric storage heaters.There are little, or no,maintenance costs, the

A biomass stove (imagecourtesy of the NEF)

IKEA keeps warm using waste biomass3G Energi have installed a pair of wood heating systemsin the recently built IKEA store in Milton Keynes, makingIKEA one of the first multinational companies in the UKto implement a renewable heating system on commercialterms.The combined boiler system, with the primary onerunning on regionally sourced wood chips and a smallerone running on wood waste from the shop, provide IKEAwith an annual cost saving of £7,500 compared to usinggas at current prices.The installation also provides IKEAwith a valuable use for up to 7.5 tonnes of wood wasteper week, such as old pallets and wood off cuts, andresults in CO2 savings of over 1,500 tonnes per year.

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biogas in Shropshire2006 was a year of development for Greenfinch Ltd., abiogas firm in Shropshire. In partnership with SouthShropshire District Council, they built the UK’s first largescale anaerobic digester after receiving funding fromDefra’s NewTechnology Demonstration Programme andAdvantageWest Midlands. Households in the areareceived collection bins for kitchen and garden wasteand the plant receives about 5,000 tonnes of their wasteper year.The biogas released in the digestion process isburnt as fuel in a CHP plant to produce heat andelectricity for the biogas plant itself and the surroundingindustrial estate.The pasteurised bio-fertiliser producedis on offer to local farmers.46

A typical ground source heat pump (imagecourtesy of the EST/BRE)

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only requirement is ground space. A typicalhousehold system costs around £6,000 - £9,000and can provide up to 100% of heat requirements.50

This could provide a payback of around £640 perannum if it replaces electric heating.51

The market for GSHP is small but growing. About700 units are currently installed52 and the marketpotential is for up to 35,000 by 2015 and 55,000by 2020.The system is most suitable for domestichousing not connected to the gas network andcommercial properties with a stable heat demand.

Another variation is the use of geothermal aquifers.These are naturally occuring geological formationscontaining water that has become heated by themovement of heat away from the Earth’s core.Thehot water can be made to flow to the surfacethrough a borehole and can be used as a source ofheat. The UK has only limited geothermal potential,as it is far from the active tectonic and volcanic areasof the Earth, so heat flows are generally low.

Solar thermalwater heatingSolar water heatingsystems use thesun to heat liquidfrom which heat istransferred forspace or waterheating.There arethree maincomponents tothese systems: solarpanels, a heat transfer system and a hot water store.Solar panels - or collectors - are fitted to the roofwhere they collect heat from the sun's radiation.Theheat transfer system uses the collected warmth toheat water. A hot water cylinder then stores the hotwater and supplies it for use.

Because solar thermal collectors can produce energyfrom diffuse sunlight they are ideally suited to theUK climate.Typically, systems are able to providealmost all hot water needs during the summermonths and about 50 to 70 per cent year round.55 Atypical system costs between £2,000 and £2,80056

and can bring savings of £120- £150 per year inelectric heated properties, giving a payback time ofapproximately 24 years.57

There is a small but established market for thetechnology; 42-50,000 UK homes currently havesolar thermal systems installed58 and these arerelatively easy to install by a trained plumber.Thereis potential, under favourable market conditions, forinstallations to increase to 300,000 per year by2015 and 800,000 by 2020.59 The systems can alsobe used on a larger scale but long pipe runs increasethe heat loss.

ground source heat reduces billsHousing associations are taking an interest in groundsource heat because the pumps can reduce heating billsfor tenants and are cost-competitive with oil-firedsystems for new rural properties off the gas network.TheMetropolitan Housing Trust installed ten Powergensystems in March 2004 in new bungalows inNottingham, in partnership withWestleighDevelopments Ltd.The system has now been successfullyinstalled in 60 of the Trust’s properties and Powergenaims to supply at least 1,000 heat pumps for installationin the social housing sector across the UK, as part of itsEnergy Efficiency Commitment (EEC).53

geothermal in SouthamptonHot seawater in a Southampton borehole rises naturallyfrom 1,800 metres below ground to just 100 metresbelow the surface.The remainder of its journey is assistedby a pump and the 74º C water is then passed through anexchanger which transfers its heat to clean water.Theclean, heated water then circulates through pipes toprovide customers with heat, or cooled water is circulatedin summer.The system provides 18 per cent of the heat inthe local district heating system to customers includingthe City Council, a shopping centre, BBC regional offices,a five star hotel and many campuses and offices.54

Evacuated tube collectors (image courtesy ofCAT)

solar heated water in BurtonIn a good example of local councils leading by example,East Staffordshire Borough Council, based in Burton onTrent, installed a Genersys Plc. solar hot water system. Itprovides nearly all of the hot water used by the townhall and its visitors and the council expects the system tohave paid for itself in 6-8 years. Annually, the installationwill save the amount of CO2 emitted by 4 average homesper year.60

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combined heat and power (CHP)CHP is a fuel-efficient energy technology thatgenerates electricity and heat, which is then captured,in the same process.Waste incineration, traditional gasor steam are all used to power CHP plants, whichcontrast with conventional power plants and mostindustrial processes where the heat produced is lost tothe atmosphere. Captured heat from CHP can be usedfor space heating, water heating or refrigerationthrough highly insulated pipes.

There is major potential for CHP to be used inconjunction with community heating schemes (seepage 19). CHP is applicable on a variety of scales, fromcity-wide development down to individual buildings.A micro-CHP unit is most commonly used to heat andpower a single building. Such systems could potentiallyprovide a cost-effective source of power and heatprovided that site energy usage is sufficient.

CHP converts around 85 per cent of the raw fuelinputted into the generator into useful energyoutput, compared to the 25-35 per cent efficiencyrates of conventional electricity generation.61 Thisreduces CO2 emissions by about 20-40 per cent and

has the potential to save substantially on energy bills.Because the generation often occurs locally there isalso less potential for energy to be lost intransmission and distribution.

The UK has the potential to install 10 GW of CHPby 2010, current capacity is around 5GW.

Heat and power production from conventional sources and CHP (imagecourtesy of the EST/BRE)

heat from waste in SheffieldVeolia Environmental Services operate a CHP plant incentral Sheffield, which is fuelled by the incineration of225,000 tonnes of local municipal waste each year.Theprocess generates electricity that is sold to the nationalgrid and distributes heat to over 130 commercial andpublic buildings throughout the city, including over1,000 homes. Due to the efficiency of generating heatand power together, all of the energy recovered fromwaste is passed on to consumers and they are able to use100 per cent of what they pay for. In comparison, a gasboiler operates at an average of 80 per cent efficiency, sofor every unit of fuel energy paid for, only 80 per centof it provides heat. The price of the CHP heat iscompetitive with gas so customers get more for theirmoney and the heating apparatus also takes up less spacein their buildings and is cheaper to maintain. Capturingand using the heat results in CO2 emissions savings of12,000 tonnes per year, compared to the use of gasboilers in individual buildings, as a significantproportion of municipal waste is carbon neutralbiological matter.

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sustainable coolingCooling, more commonly known as airconditioning, is accounting for an ever growingproportion of energy demand and is threatening toundermine savings from other areas. By 2020carbon dioxide emissions from air conditioningcould negate 15 to 90 per cent of the energy savingsachieved by domestic Building Regulations.63

Sustainable cooling measures come under two broadcategories: passive, which do not require energyinput and active, which do. Passive measures areoutlined in the section on building design above andactive measures are described below.

Absorption coolingThis technology uses heat instead of electricity toproduce a cooling effect. It is particularly suitable forbuildings that use CHP, as the waste heat produced inpower generation can be used in the chilling process.

Radiant coolingThis process relies on removing the heat load fromspaces through convection. Cooled water flowingthrough water pipes convects heat away from aroom. For this purpose, the ceiling of a space ismost suitable but the walls or the floor can be usedas well, although their cooling capacity is morelimited. ‘Chilled slab cooling’ is an alternativemethod where concrete slabs are reinforced with anetwork of pipes connected to circulating cool watersystems.

Ground water coolingThis technique is similar to ground source heatpump systems, but instead of ground temperaturethis system exploits the nearly constant temperatureof underground water. Low temperature water ispumped up to the surface to a heat exchanger,which cools ventilation air as it passes through.

Nobel House and sustainable coolingAs well as providing sustainable electricity and hotwater from a small-scale CHP plant, a number ofmeasures have been taken to ensure that cooling isalso sustainable. A natural ventilation system hasbeen installed, based on the ‘wind-towers’ used tokeep buildings cool in cities such as Dubai. Alightweight roof has been constructed over thequadrangle at the centre of the building with smallwindows around the edge.These windows areopened and closed by a computer system thatgauges outside weather.Warm air rises to the top ofthe building and escapes from the windows, whichthen acts to draw in cooler air through the largeroffice windows.

For rooms with no windows, CHP is used to drivean absorption chiller. To meet peak cooling demandammonia chillers are used, as ammonia is not ozonedepleting and the compressors turn less frequently,therefore using less energy.

A radiant cooling panel(image courtesy of Zehnder ltd)

‘Stay Cool’ on the TubeInstallation of a groundwater cooling system is currentlytaking place at Victoria Station, London. The watersupply which has a temperature of around 12ºC will bepumped through a network of pipes to feed three heatexchange units on the concourse area between theVictoria line platforms. The heat exchange units havefans which will draw in the warm station air andthrough heat exchange with the pumped water willsupply cooled air to the concourse and platforms.

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community heatingCommunity heating is not a type of sustainable heatgeneration, like those described previously. Rather, itis one of the main ways that sustainable heattechnologies can be used. Also known as districtheating, the term refers to the production of heat ata central source and then its distribution to anetwork of close-by buildings via a heat mains.Thiscontrasts with the conventional heating of buildingsby individual gas boilers using mains gas, or withthose generating sustainable heat for on-site useonly. Community heating schemes can vary in sizefrom individual tower blocks to a whole city similarto the schemes that serve Southampton, Sheffield,and Nottingham.

Heat can be supplied to the scheme fromconventional boilers, renewable-fired boilers, or canutilise the waste heat from power generation (CHP).Once the network is set-up the energy source is fuelflexible.The heat distribution network transfers heatto buildings connected to the system, usually as hotwater, and customers receive it through radiators, asin a conventional system. Air conditioning or chilledwater can also be supplied via an absorption chiller.The only significant difference for users is theabsence of a boiler in each house, as there is equalcontrol over individual building temperatures.

By relying on alocal heatsource, districtheating is ableto assistcommunities tobecome moreself sufficientand energysecure. It isespeciallybeneficial for

those who are not connected to the gas network anddepend on expensive heating alternatives such aselectric. It has considerable carbon savings overconventional generation.

Networks are frequently developed to take advantageof heat that is already being produced but beingwasted, or to utilise a local waste product as fuel.Our German case study (page 19) mentions twosuch networks. One town captures the heatproduced by a nearby aluminium rolling mill andpipes it to local houses. Prior to the network beingset up, all of the heat produced by the mill wasgoing to waste. Another town installed a centralboiler that burns waste wood chippings and sawdustfrom the local timber industry and the heatproduced is supplied to local housing estates. Again,the wood chippings were previously going to waste.

As these demonstrate, the manner of heat generationat the centre of the network can vary but it isfrequently a CHP plant.The network in Sheffieldmentioned on page 17 is a good example of heatcapture and use from an industrial process, in thiscase waste incineration. In most UK examplescustomers pay for the heat they use, either with aflat rate or in a metered system, as they would ifusing conventional gas. Many networks in Europeare state funded and, because they make use of heatthat was being wasted anyway, customers enjoy thebenefits of free heat.

Community heating in Aberdeen using CHPAberdeen City Council has taken to CHP in a big wayand uses it to provide community heating in clusters oftower blocks. CHP networks powered by gas already heattwo clusters of homes and a third is being planned,resulting in a total of 988 homes, an academy and aswimming pool enjoying the benefits of renewable heat.This is of particular benefit to the estimated 70 per centof tenants in the area suffering from fuel poverty due tohigh energy costs, as those costs have now beensignificantly reduced. Residents now pay approximately£7.44 per week for fuel compared to weekly costs of upto £18.48 a week for residents before the CHP systemwas installed, creating a saving of up to £574 per year.The carbon savings, compared to the existing heatingsystems, equate to 411 tonnes per year.64

A community heating system (imagecourtesy of the EST)

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what can be achieved – examples from Europe

Examples below show how government policy candrive uptake in sustainable heating.

state-level renewable heatingpromotion in GermanyNorth Rhine-Westphalia (NRW) is Germany’s self-titled ‘energy state’ and has created a set of state levelgrants and policies that heavily promote renewableheat.

CHP: NRW’s district heating fund allocates grants tosystems using heat from CHP plants, regenerativeenergy sources or captured heat from industrialprocesses. By 1998, CHP supplied 78 per cent ofNRW’s district heat networks and had achievedprimary energy savings of 67 per cent, compared tostand-alone furnaces, and a 60 per cent reduction inCO2 emissions.

Nationally, this increase in sustainable heat has seenthe amount of heat Germany produces separately fallto 1955 levels, but the deregulation of electricitymarkets threatened this progress and made CHPstations less competitive. In response, Germany’scentral government introduced a law to protect CHPplants and paid bonuses for the heat supplied.

Biomass: NRW’sWood Sales Support Guidelines aimto increase wood sales for use in energy generation.

By 2004, subsidies had assisted 2,200 plants andwood pellet boilers have become an attractive optionwhen upgrading old heating systems.

Solar: NRW provides grants for passive solar designprojects and their support for solar collectorinstallations has strengthened the market so muchthat it no longer requires subsidisation.

Geothermal: Geothermal installations have beenheavily promoted with a widespread advertisingcampaign and a grant programme that makes themas cost effective as conventional heating systems.

capturing the sun in BarcelonaBarcelona is blessed with an average of 2,350 hoursof sunshine a year but, until recently, the city didnothing to take advantage of it. The idea of usingsolar energy to heat water was mooted in 1995, butit was not until 1999 that Barcelona City Councilpassed their Solar Thermal Ordinance. It came intoforce in 2000, leaving builders a year to get to gripswith it.

The ordinance requires any new buildings orsignificant refurbishments to use solar energy for atleast 60 per cent of their water heating, and all newswimming pools must be 100 per cent heated bysolar. There is a threshold below which theordinance does not apply but, in general, mostcommercial and public buildings and residentialdevelopments of 16 households or more are subjectto it.

With support from NRW’s State Initiative on FutureEnergies an estate housing 4,000 people and a shoppingcentre in Neuss-Allerheiligen is being heated by a nearbyaluminium rolling mill. The captured heat meets 80 percent of the mill’s industrial heating needs and 90 percent of the estate’s heating needs.With an overallinvestment of 13.3 million Euros the area is guaranteedfree heat for 15 years.

A wood furnace in Lieberhausen heats a network of 74buildings and a soon to be built housing estate.Thefurnace accepts wood chips directly from the forest orsawmill and the system is a national model for convertingwaste biomass into energy. It benefited from aninvestment of 500,000 Euros by NRW, as part of anoverall cost of 1.45 million Euros.

Using solar technology, a Gelsenkirchen housing estateof 72 homes has cut its emissions by 55 per cent,compared to an average home.The homes are built tocapture as much sun as possible, with solar collectorsheating the water and photovoltaic panels generatingpart of the electricity required.The estate was subsidisedby NRW’s Energy, Urban Construction and Science andResearch ministries, which aim to support 50 such solarestates.

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The ordinance has had a significant impact; in 2000Barcelona only had 1,650 m2 of solar thermalcollectors installed, or 1.1 m2 per 1,000 residents.By October 2004 the amount of installation hadrisen to 21,500 m2, or 16.5 m2 of installation per1,000 residents. Even so, countries like Greece andAustria can boast of 200-300 m2 of solar collectorsper 1,000 residents, so there is still great potentialfor Barcelona to make more progress.

Much of Barcelona’s success is owed to its broadcommunications strategy.They published a guide tothe ordinance, held stakeholder meetings,implemented demonstration projects and held a‘solar day’ to increase understanding of theordinance. Adherence to the new regulation hasbeen good but it has been slightly hampered by alack of qualified installers. In addition, qualityverification of different systems at the national levelwould be beneficial.

Overall, the city has saved an average of 15.68 MWhof energy per year and cut down 2.756 tonnes ofCO2 emissions. A key success has also been the factthat Barcelona acted as a demonstration and acatalyst for the rest of the country. By 2003, another11 Spanish cities had introduced a similar ordinanceand from 2006 Spain’s national building regulationsrequire that 30 – 70 per cent of domestic hot waterdemand has to be covered by solar thermal.66

Denmark – a district heatingexemplarIn Denmark district heating supplies a massive 60per cent of heating, providing a compelling exampleof district heating’s potential.Well over half of thenetworks are supplied by high-efficiency CHPplants, with others supplied by biomass, solar poweror gas. Many of the plants can run on a variety offuels, such as the country’s largest one, whichgenerates enough electricity for 1.2 million homesand provides district heating for 190,000 homes inGreater Copenhagen.

The success and widespread presence of heatingnetworks has been driven by a commitment fromcentral and municipal level government, regulation,and control of market forces. Local governments canban electric heating in new buildings, tax on fossil

fuels for heating is high and legal measures exist toforce building owners to connect to local districtheating networks.There are also investment subsidiesavailable for utilities that rehabilitate or completenetworks and for consumers who connect to them.District heating is also seen as a key part of urbanplanning and areas all have least cost energy plans.Most district heating companies are owned byconsumers, so there is transparency and motivationto provide good customer service and low runningcosts. The stability of these policies and provennature of the technology creates a very secureenvironment for investing in district heating.

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policy focus: lessons from Europe

Renewable heat initiatives around Europe highlightthe key features of successful approaches. Acomprehensive programme is vital, as fiscalincentives alone will not guarantee success.

Well funded and well timed promotion is key, asdemonstrated by Sweden. Even very high fossil fuelprices were not prompting a real shift to renewablesuntil an awareness raising campaign began. From2002, local one-stop shops for all queries were inplace and domestic wood pellet boiler use doubledin 2 years. The local nature of Sweden’s awarenessraising was also a success factor, as also seen inFrench, Austrian, Finnish and Spanish examples.

Sufficient duration builds public awareness andfamiliarity with technologies, as well as ensuring asupply of trained installers and certified products tomeet increased demand. Successful French andGerman solar thermal programmes were both 6-7years long.

Involving the full range of stakeholders wasbeneficial to most programmes. Communicationwith industry, town planners, installers andarchitects ensured that demand could be met, thatplanners understood the technology, and that therewere enough installers. Lack of installers is the mostcommon bottleneck in the take-up of renewableheat technology; in Greece, solar technologymanufacturers provided their own installers but thisis quite rare and most other countries have fundedtraining as part of their programme.

Quality assurance needs to be addressed, asillustrated by Portugal. Their solar campaign in the80’s had little success due to quality problems andtheir renewed campaign in 2001 failed to includequality standards, so people’s misgivings persisted.As a result, only 10,000 m2 of a planned 150,000m2 of solar collectors was installed in 2003.There isa clear need to develop European level quality

standards for renewable heat technologies to ensureconsumers have confidence in their systems and areaware of varying performance efficiency.

The financial or regulatory instrument has to beright, but there is no one answer. Regulation isattractive to governments and has worked well inSpain.Their city ordinances requiring the inclusionof solar water heating in new buildings orrefurbishments have been very successful. Butregulation only works if markets are developedenough and there are sufficient installers to meet theinstant demand increase that regulation creates.

Experience shows that successful instrumentsbalance the need to give companies andindividuals a tangible incentive with fiscal orbudgetary limitations. For instance, both Franceand Germany have successfully employed grant-based programmes for solar thermal installations.This approach saw the French market grow by 40per cent and costs fall by 30 per cent in 6 years,whilst in Germany, costs fell by 50 per cent in 10years. However, the downside is that the budget fordirect incentives can be cut and, if a programme istoo successful, it may not meet the demand forgrants. As a result, France is now consideringswitching to a tax rebate. An alternative is todecrease the incentive over time so that more peopletake advantage of it straight away, the market growsmore quickly and costs fall naturally. In Greece andPortugal tax rebates are offered on solar thermalinstallations, which are easy to administer andremove the uncertainty of grant applications.

Salzburg, in Austria, has added renewable heatobjectives to an existing housing constructionsubsidy scheme. Support will now only be granted ifschemes include solar hot water and biomassheating.This avoids an increased administrativeburden but, as with regulation, the markets must bestrong enough to cope.67

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key characteristics needed for a UK heat strategy

With European examples as a guide we have set outbelow the more detailed characterstics required foran effective heat strategy.

First, they should adopt the principles of the Sternreport on the economics of climate change, which identifiedthree main characteristics for policy mechanisms.They should:

1. Be based on a long-term meaningful price forcarbon: currently there is no carbon price forheating, as existing mechanisms do not apply tothis market.

2. Support innovation: a heating strategy shouldencourage innovation in technologies, buildingdesign and urban planning, controls andmetering and in financing and commercialstructures.

3. Encourage behaviour change: a sustainable heatstrategy will encourage visible sustainabletechnologies which often act as a catalyst tofurther energy-saving action.

Second, they should:

� Put energy conservation and efficiency first:as energy efficiency and demand managementare often the most efficient forms of carbonsaving, any support for low carbon andrenewable heat should be coordinated withefforts to ensure that high levels of efficiencyhave already been achieved.

� Be comprehensive: only a co-ordinated packageof measures can address the current barriers togrowth. A comprehensive heating and coolingstrategy should include a number of reinforcinginstruments that provide both the mechanism ofchange and the optimum long-term marketconditions. It must be considered as acomprehensive whole, and not a shopping list ofdiscrete measures.

� Provide stability over the long-term: aframework that delivers support over a reasonableinvestment horizon will avoid the vagaries of

government funding rounds and present the stableinvestment conditions for long-term growth.

� Be target-based using reliable statistics:ambitious and verifiable targets need to be setthat will be the guiding line for the measures tobe taken. A pre-requisite for these targets will bemore reliable and comparable statistics.

� Reward carbon reduction: linking incentives tovolume – of fossil energy saved or low carbonand renewable energy supplied – ensures that themost effective and efficient measures receive themaximum encouragement.

� Be simple and effective, for applicants andthe public sector alike: Administrativeprocedures should be as simple as possible tominimise transaction costs. The burden oftransaction costs will be most acute for thedomestic sector and small-scale technologies.

� Be capable of addressing capital barriers:capital can be a barrier to uptake in all segmentsof the market, but is most acute in the domesticand public sector. Incentives must have theflexibility to recognise the benefits delivered overthe operating life of a measure and equate thesebenefits to up-front capital support.

� Be sustainable: any strategy must be basedupon the principles of maintaining enforceablestandards of environmental sustainability for allheating fuels, and ensuring that the measuresintroduced will contribute to significant netsavings in entire lifecycle greenhouse gasemissions.

� Be consistent with European standards: anytechnical parameter linked to eligibility forfinancial incentives should be based on Europeanstandards and certification procedures, wherethey exist, and, for small scale systems, BRE/DTI'semerging Microgeneration Accreditation Scheme,to avoid creating small and isolated markets.

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� Be open to innovation: qualification forsupport must be flexible to provide competitiveaccess for all products, with appropriateincentives to tackle the barriers to new marketentry.

� Be flexible and responsive: any incentivescheme needs to be able to adjust to marketdevelopment and introduced with minimumimpact on the market.

� Support skills: for a market to flourish,engineer and technician training in low carbonand renewable heat design, installations andmaintenance is essential. Targeted training andrecruitment is needed until the marketframework is correct and key players willtherefore ensure there is no skills shortage.

� Promote leadership, starting with the publicestate: public buildings should act as anexemplar of what can be achieved in the lowcarbon and renewable heating and coolingagenda, but should also include consideration forthe replicability of the technologies elsewhere.This would help pump-prime the market anddrive costs down. The government needs tocontinue and deliver on its commitments on this.Champions in the private sector should berecognised and encouraged.

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references

1. Derived from http://www.dtistats.net/energystats/ecuk1_7.xls2. AEA Technology/ National Atmospheric Emissions Inventory, 2006, Background data for the UK Greenhouse GasInventory 1990-20043. Derived from http://www.dtistats.net/energystats/ecuk1_2.xls4. Based on DTI’s UK Energy brief of July 20045. Derived from DTI estimates: Domestic: http://www.dtistats.net/energystats/ecuk3_6.xls (2004)6. Derived from DTI estimates: Industrial http://www.dtistats.net/energystats/ecuk4_7.xls (2004)Domestic: http://www.dtistats.net/energystats/ecuk3_6.xls (2004)Service: http://www.dtistats.net/energystats/ecuk5_5.xls (2004)7. ibid8. Greenpeace, May 2006, Decentralising UK Energy9. British Gas 10/11/04 news release10. AEA Technology/ National Atmospheric Emissions Inventory, 2006, Background data for the UK Greenhouse GasInventory 1990-2004http://www.airquality.co.uk/archive/reports/cat07/0605231047_ukghgi_90-04_v1.1.pdf11. AEA/DTI, 2004, Renewable heat and heat from combined heat and power plants-study and analysis, pg iii12. DTI, 2005, http://www.dtistats.net/energystats/dukes4_1.xls13. http://www.dti.gov.uk/files/file26355.pdf14. http://www.nea.org.uk/downloads/publications/The_Fall_and_Rise_of_Fuel_Prices_and_Fuel_Poverty_(summary).pdf15. 2004 data generated from AEA Technology/ National Atmospheric Emissions Inventory, 2006, Backgrounddata for the UK Greenhouse Gas Inventory 1990-2004http://www.airquality.co.uk/archive/reports/cat07/0605231047_ukghgi_90-04_v1.1.pdf16. http://www.dti.gov.uk/files/file22074.pdf17. AEA/DTI, 2004, Renewable heat and heat from combined heat and power plants-study and analysis, pg iii18. Biomass Taskforce, 2005, Report to governmenthttp://www.defra.gov.uk/farm/crops/industrial/energy/biomass-taskforce/pdf/btf-final-execsumm.pdf19. http://uk.ihs.com/news/uk-carbon-savings.htm20. FOI request from NHS by Energy Crops Company21. DTI, July 2006, The Energy Challenge22. Derived from: http://www.dtistats.net/energystats/ecuk3_7.xls23. http://www.dtistats.net/energystats/dukes4_1.xls24. http://www.defra.gov.uk/environment/energy/chp/pdf/fes-economics.pdf25. Derived from http://www.dtistats.net/energystats/qep331.xls26. Carbon trust, http://www.carbontrust.co.uk/NR/rdonlyres/27AEAFE1-E87E-49E4-AFD7-FCAD679997CB/0/ConnectiveEnergy.pdf27. Defra, 2006, British Gas extend council tax rebate scheme to nearly 1 million homes,www.defra.gov.uk/news/2006/060313a.htm28. Defra, 2004, Fuel poverty in England:The government’s plan for action29. Derived from: Gas http://www.dtistats.net/energystats/qep232.xls & Electricityhttp://www.dtistats.net/energystats/qep222.xls30. HMT, 2006, The Stern Review on the Economics of Climate Change31. Derived from AEA Technology/ National Atmospheric Emissions Inventory, 2006, Background data for the UKGreenhouse Gas Inventory 1990-2004, p422http://www.airquality.co.uk/archive/reports/cat07/0605231047_ukghgi_90-04_v1.1.pdf32. DTI, 2006, Energy: its impact on the environment and society, p.2033. DTI, 2005, Energy: its impact on the environment and society annex 3a, p.6http://www.dti.gov.uk/files/file20327.pdf

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34. ibid35. Provided by the National Trust36. Energy Saving Trust, www.est.org.uk/myhome/insulation/cwi/37. DCLG, 2006, New Figures Show Potential 7MTonne Home Carbon Savings,http://www.communities.gov.uk/index.asp?id=1002882&PressNoticeID=228238. Cavity Insulation Guarantee Agency and the National Insulation Agency, 2004, Memorandum to the House ofLords Science and Technology Committeehttp://www.publications.parliament.uk/pa/ld200506/ldselect/ldsctech/21/21we06.htm39. Energy Saving Trust, www.est.org.uk/myhome/insulation/draughtproofing/40. Zoological Society of London, www.zsl.org/science/climate-change/reducing-emissions-in-the-home,521,AR.html41. www.publications.parliament.uk/pa/cm200506/cmselect/cmenvaud/584/5102615.htm42. Sarah Darby, 2006, The effectiveness of feedback on energy consumption.43.The Carbon Trust, 2005, The Carbon Trust’s Advanced Metering Field Trial Update44. Chalmor, www.chalmor.co.uk/casestudies.asp45. www.est.org.uk46. AEAT, April 2005, Draft Renewable Heat and Heat from Combined Heat and Power Plants – Study and Analysis47. http://www.lowcarbonbuildings.org.uk/micro/biomass/48. www.3genergi.co.uk49. www.greenfinch.co.uk50. http://www.lowcarbonbuildings.org.uk/micro/ground/51. Calculated on basis that direct electric heating would cost (assuming 3p/kWh might-time rate) 30,000kWh x 3p = £900 per annum and GSHP would cost 8,570 kWh x 3p - £257 per annum.52. AEAT, April 2005, Draft Renewable Heat and Heat from Combined Heat and Power Plants – Study and Analysis53. Earth Energy Engineering, www.oxfordsciencepark.co.uk/downloads/geothermalheatpump.pdf54. Energie Cites, www.energie-cites/db/southampton_140.en55. BRE on DTI websitehttp://www.dti.gov.uk/energy/sources/sustainable/microgeneration/heat/page27605.html56. AEAT, April 2005, Draft Renewable Heat and Heat from Combined Heat and Power Plants – Study and Analysis57.The price assumes the cost of natural gas around 2 p/kWh.58. Green Alliance, 2004, A micro-generation manifesto59. AEAT, April 2005, Draft Renewable Heat and Heat from Combined Heat and Power Plants – Study and Analysis60. www.genersys-solar.com61. Energy Saving Trust, 2005, Community heating and combined heat and power,www.est.org.uk/uploads/documents/housingbuildings/10_community%20heating_enw.pdf62. www.greenenergy.co.uk63. Association for the Conservation of Energy, 2006, Cold comfort for Kyoto? Carbon implications from increasing residentialcooling demand, www.ukace.org/research/coldcomfort/Cold%20Comfort%20for%20Kyoto.pdf64. Energy Saving Trust, 2004, Community Heating – Aberdeen City Council Case Study,www.est.org.uk/uploads/documents/housingbuildings/ce65.pdf65. North Rhine-Westphalia Government, 2006, Energy of the Future from North Rhine-WestphaliaI,www.energieland.nrw.de66. Barcelona Energy Agency, 2004, Sustainable energy solutions in Barcelona, www.managenergy.netEric Martinot, 2004, Renewable Energy Information on Markets, Policy, Investment, and Future Pathways, www.martinot.info;Toni Pujol, 2004, The Barcelona Solar Thermal Ordinance: evaluation and results, presentation at 9th Annual Conference ofEnergie-Cites, www.energie-cites.org; David Ruyet, 2004, Solar thermal energy for buildings in Barcelona, Spain,www.managenergy.net67. Christian Rakos, Herbert Tretter, Andreas Veigl, 2004, Best Practice Policies to develop Renewable Heat Markets,Renewable Energy Action

This manifesto has been produced as part of the Green Allianceproject: Building an alliance for sustainable heat, in partnership withthe REA. This project aims to raise the profile of sustainable heat inthe political landscape and push for the introduction of a strategy forreducing emissions from heat. Please see the inserted pull outdocument for more details on our proposed strategy.