What is a District Heating System?
A district heating system or heat network is where heat in the form of hot water is supplied from a central source to provide heat for both space heating and domestic hot water to a number of domestic and/or commercial properties. It is very common in northern Europe and there are examples locally in Aberdeen, Methlick and Banchory.
What area will it cover?
Initially, it is proposed to cover the adjacent communities of Port Elphinstone and Inverurie where the greatest heat use is. It is also proposed to extend the system to Kintore.
Who will be eligible to receive it?
All properties within the catchment area will be eligible, including domestic, commercial, industrial, and public sector premises, subject to the roll out of the heat network infrastructure.
Will the heat be cheaper than gas or electric?
The actual costs of the project are not yet known. However, the source of heat energy is to be ‘gifted’ to the community by the developers of the proposed Energy from Waste Plant at the site of the former Inverurie paper mill.
There will be significant costs to install the heat distribution network. However, it is expected that the heat will be sold to users at a cost less than the counterfactual alternatives at that time.
Hot water and space heating account for 81% of the energy bill for the average home. Even the best and most modern combi boilers are only around 80% efficient when new and working optimally. That means you pay for 100% of the gas that you use and lose 20% of the potential heat in its conversion to heat. In district heating you only pay for the heat you use.
Will there be up-front costs of installing the district heating in homes?
Yes. In the same way that there are costs involved in installing, maintaining, and replacing all systems, there is an initial investment required. The actual amounts are not yet known for the distribution network or for individual connections to it.
What if I am interested in taking part but cannot afford the initial up-front costs?
It is accepted that this could be an issue for many. Consideration will be given to what arrangements can be made to address this issue. Governments are committed to challenging, carbon reduction targets and have, from time to time, made grants available to householders and businesses to help with such installation costs.
Will I need to change the current central heating system in my home?
It has not yet been decided what system will be adopted as that will require further technical investigation. The system chosen should be generally compatible with existing gas-fired, hot water central heating systems.
When will the system be up and running?
As it depends on using residual heat from the Energy plant at Kirkwood Industrial Park, it cannot start until that plant is operational. It is currently estimated that it will be circa 2029. It is intended that the first phase of the heat network would be installed to coincide with the start of the Energy plant, once commissioned. The wider District Heat Network will be installed in phases over a further period.
Will installation of pipework cause disruption?
Inevitably, there will be some temporary disruption while the underground pipes are installed. This will be kept to a minimum. Roads and streets are regularly being dug up for a number of reasons such as water, sewerage, electricity, telephones and more recently, modern fibre optic communications. Efforts will be made to try to co-install other new systems at the same time.
How will the hot water be piped to my home?
An individual supply connection will be required in the same way that gas, water, electricity, and sewerage is supplied now.
I have a Combi boiler installed at the moment. Will it require to be removed?
In most cases the existing boiler would be removed primarily for space-saving reasons, but it could be retained. Government policy is designed to do away with individual fossil fuel appliances like combi boilers.
What is used instead of my existing boiler?
Boilers are replaced by a heat exchanger, more specifically termed as a Heat Interface Unit (HIU) Depending upon the technical option chosen for the heat network there may also be the need for a small heat pump.
How big is the heat interface unit?
A standard heat exchanger is slightly larger than a modern combi boiler. Like a combi boiler, it provides ‘instant’ hot water and space heating and does not require a hot water storage tank.
How long will a heat interface unit last?
It is estimated that the heat exchanger will last for over 20 years in comparison to a modern combi boiler which has a life expectancy of around 15 years. Heat exchangers are less complex than combi boilers and have fewer parts. Accordingly, they require less maintenance and consequently, have lower operational maintenance costs.
What if the heat source plant breaks down?
There are several layers of resilience built into the system which will last for hours or days, depending upon demand. There is a heat storage capacity built in at the energy plant and within the district heating network itself which can accommodate a shutdown at source. Additionally, the heat suppliers have designed into their proposals, the ability to ensure continuity of heat supply by means of supplementary gas-fired technology. In the very unlikely failure of these various systems, users would be in no worse a situation than they would be, if their own primary system failed. i.e. If your gas boiler fails, you usually have access to electrical ways of providing hot water and space heating temporarily.
What are the environmental benefits?
A district heating system avoids the need for individual gas boilers, each with a flue emitting gases to the atmosphere. This will lead to a significant improvement in air quality within the community and equally importantly, it significantly reduces the carbon footprint of every user.
What are the economic benefits?
There are several significant, economic benefits. The construction costs for installation, both within the network and in individual properties, are spent in the area. There will also be new jobs created in managing the new district heating network and in routine maintenance.
The money paid for the heat used, will stay within the control of the community-owned district heating company and not be sent to some far-distant power company or its multinational investors.
The money saved by domestic and business users, will remain under the direct control of local people and are not also consigned to some large power company.
The creation of new jobs locally plus collective savings for both businesses and householders, have the potential to provide an economic boost in the area.
What about fuel poverty?
The reduction in the basic cost of heat and hot water is expected to reduce the amount of fuel poverty in the area. In addition, it will be part of the community consultation process to determine if more should be done regarding that issue.
What price will the heat be set at?
ICESL trading as Garioch District Heat, is a non-profit distributing organisation registered with the Financial Conduct Authority. We will also be regulated by Ofgem.
The price of heat will be set to cover the Capital and Operational costs, repay any loans taken out and to provide a fixed rate of return to investors. Any further ‘profit’ may be used to address priorities set by the community such as tackling Fuel Poverty, insulating homes and establishing an Environmental Grant Fund. We will work with other local agencies in this regard
What changes are happening or likely in terms of space heating?
Predicting the future is precarious, but we do know that the Scottish government has introduced a ban on single fossil fuel burning appliances in new homes. It has stated that they will ban the replacement of individual gas boilers in existing homes in the near future.
Additionally, concerns over global climate change and government commitments to carbon reduction targets, mean that not only will price stability of fossil fuels be at risk but their actual continuation has to be under serious doubt.
In recent years we have experienced, significant increases in the price of natural gas with more predicted. Concern is also being expressed nationally, about the security of gas supply in the UK.
How will the project be funded?
At the moment, the local volunteers who have started the project, are looking for grant funding to kick-start the community awareness and consultation aspects. This then needs to be followed by funding to build the complete business case for the project.
The main Capital Funding – known as Capex, is expected to come from a share issue and potentially, Government grant funding. It is expected that local residents will receive initial preference in taking up shares in the company.
Thereafter, the shares will be available publicly. Given the number of large pension funds etc., known to be looking to move away from fossil fuel and other investments, we envisage that the share offer will be over-subscribed.
Operating costs – known as Opex, will be covered by the sale of heat.
That has not yet been decided and is one of the issues that we want to gauge local opinion on
Will there be any other benefits?
Subject to community consultation, we want to give consideration to, for example, establishing an Environmental Grant Fund within the community.
It seems incongruous to provide cheaper heat to houses which are poorly insulated. Accordingly, it may be appropriate to consider improvements in the insulation of properties supplied by the DHN. This could be done as part of the DH programme or in partnership with other organisations specialising in that work.
How common or innovative is District Heating?
District Heating has been around for many decades and there are examples locally, in Aberdeen, Methlick and Banchory. The various Aberdeen systems supply heat to over 5000 homes and over 25 public buildings.
A district heating scheme has been running in Lerwick, Shetland using heat from the local Energy from Waste plant has been operational for 25 years. There is a waiting list to be connected. Reports from Lerwick show significant financial benefits within the community as a result of the scheme.
On the continent and particularly in Scandinavia, heat networks have been in operation for many years, supplying a substantial percentage of end users. The technology in heat networks is well established and continues to develop.
Why here?
It is an opportunity presented by the proposed development of an Energy Recovery plant on the site of the former paper mill. The developers have offered to ‘gift’ the heat normally vented to atmosphere, to the local community for the purpose of creating a community- owned District Heating Network.
Why now?
TThe proposed Energy recovery plant is a commercial, merchant development, designed to treat the ‘residual’ waste from businesses in the north east which currently goes to landfill. In Scotland, landfilling of mixed waste was due to be banned from 31 Dec 2020 but the date has had to be extended due to lack of alternative treatment facilities. The ban has now been reinstated.
Will the source of heat be regarded as ‘Green’?
The heat from an Energy Recovery plant is regarded as ‘renewable’ on the basis that it is treating / recovering the energy, from waste which is classed as ‘residual’ – and cannot be recycled due to Technical, Environmental, Economic or Practical reasons – TEEP. The primary output from the plant will be in the form of electricity sent to the national grid. However, to increase the efficiency of the plant, the lower grade heat is utilised in a system called Combined Heat and Power. In the past such heat was vented off into the atmosphere.
How will using District Heating reduce my carbon footprint?
Using the surplus heat from the plant avoids the need to use other fossil fuel sources of heating, especially gas. This enables users to significantly reduce their carbon footprint without having to make drastic changes in their lifestyle such as getting rid of their car or no more flying on holiday.
Will the District Heating Network be extended to cover rural properties?
TThe logistics and economies of scale make this unlikely. However, the concept of Heat Batteries is developing, and it may be possible to deliver heat to rural properties in a similar way that oil and LPG are delivered today. Those fuel sources will be banned, and alternatives will have to be developed.
My Boiler will need to be replaced soon, so when will this all take place?
The plant will take some 3-4 years in construction and commissioning with completion currently expected towards the end of the decade. We hope that installation of the District Heating Network (DHN) infrastructure, will be started in parallel with the later stages of the plant construction to be ready to start around the same time. The DHN will be developed in several stages over a number of years.
Initial efforts will concentrate on delivering the core loop network around Inverurie, to supply the commercial, industrial, and institutional customers. This is known the ‘Anchor load’ and is necessary to provide the financial viability to attract the investment required to develop the future stages. There will be ‘opportunity’ domestic installations during this phase. However, the majority of individual domestic installations will be in future phases.
What would happen if the Energy plant goes out of business or reaches the end of its planned life?
The plant is designed for 25 years of operation with potential to continue for a further 25 years. Part of our long-term planning is to look at additional sources of heat available within the community.
Geothermal heat is understood to be available in the area. In other areas of Scotland rivers and sewage treatment works are being harnessed as sources of available heat.
We will also investigate the potential for bulk heat storage in summer when demand is low, for use in winter. (termed as inter-seasonal storage)
What is a Community Benefit Society (CBS)?
A Community Benefit Society is a legal structure designed for organisations that exist to serve the wider community. Key features include:
- Democratic ownership – anyone can become a member by buying shares, and each member has one vote.
- Community-first approach – profits are reinvested into local projects, not paid out to shareholders.
- Transparency and accountability – members help shape the direction of the society and elect its directors.
Inverurie Community Energy Society Limited trading as Garioch District Heat is a CBS, which means we’re committed to putting community benefit above private profit. Our registered number is 7832