Should new builds be banned from connecting to the gas grid?

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Paul Steen, energy specialist at Ramboll, shares his thoughts on the recent report from the Committee on Climate Change that suggests new homes should be banned from connecting to the gas grid

There is little doubt as to the importance of reducing our carbon footprint on the planet, and recent reports from the Committee on Climate Change (CCC) called for new homes to be banned from connecting to the gas grid. Whilst these proposed changes will undoubtedly have a positive effect on carbon emissions, it is unclear as to how they will be applied to smaller developments without coming at a significant cost.

Excess energy in the form of heat is abundantly rejected to air and water and the industrial sector alone in the UK was estimated by Element Energy in a 2014 report to reject 48 TWh/yr – around one-sixth of overall industrial energy use. Additionally, heat from infrastructure (for example wastewater or the London Underground) and from surface water, groundwater and geothermal resources offer a substantial opportunity to capture low carbon heat.

Capturing and distributing heat requires district heating networks to be developed. The Department for Business, Enterprise and Industrial Strategy (BEIS) has been supporting district heat network project development. BEIS has recently launched the Heat Networks Investment Project to invest over £300m in heat networks.

The CCC’s published proposals to stop gas connections to new developments by 2025 were also set out in the Chancellor’s Spring Statement in March 2019. This is a step towards the UK meeting its targets for reducing greenhouse gas emissions by 80% by 2050 (on 1990 levels).

With over 80% of the building stock that will exist in 2050 being built already, a significant challenge will be to de-carbonise existing properties. The CCC report and Spring Statement begins to address this issue, but the detail of how to retrofit low carbon heat is not presented.

Linking waste heat resources to existing buildings and new high-density developments using district heating can provide low carbon and affordable heat alternatives. The government target of building 300,000 homes every year to meet our housing demand presents a great opportunity to establish district energy, supplied by waste heat as a core part of our energy mix, helping to deliver cheaper and de-carbonised energy to thousands.

In London alone, the GLA estimate that enough heat is wasted to provide 38% of the city’s heating needs. Ramboll’s work on the Bunhill project in Islington aims to recover heat from the London Underground and supply this heat to a district heating network. Compared to heating provided by gas boilers, the capital costs to supply low carbon heat are greater for new build and retrofitting. What’s more, the disruption from installing district energy systems or individual heat pumps to existing properties is also greater than new builds.

The up-front capital cost is a significant barrier to many consumers accepting alternative solutions when gas remains such a low-cost alternative. However, the long-term operating costs of decarbonisation can be lower if waste heat is used and energy efficient measures in buildings are installed. Taking a lifecycle perspective can demonstrate a payback.

The capital investment in heat infrastructure must be found to achieve UK targets for reducing greenhouse gas emissions. While high density developments might create economy of scale to achieve reasonable payback from lower operating costs on the development of smaller, rural new builds, these costs will be harder to find.

But who will pay the additional cost? There are a number of possible ways to socialise the costs of building new low carbon buildings and retrofitting existing property. As Denmark has done, the Central Government could impose taxation on gas supply, and direct that budget towards supporting low carbon investment. Private Companies, Communities and Local Authorities could also create energy companies that borrow and invest locally in low carbon energy solutions that recover the investment through customer charging. Homeowners could be required to decarbonise heat through their own investment in properties. However, none of these options are likely to be popular.

As an alternative, property developers may pay landowners less to reflect the additional cost of decarbonisation. Alternatively, developers could pass on these costs to the consumer in higher property prices. Sources of rejected heat are plentiful and Ramboll have been putting that to good use on developments such as in Stirling using wastewater or Queen’s Quay in Glasgow, using heat from the River Clyde.

Carbon emissions and waste energy in housing is an issue that needs to be addressed to ensure the housing sector continues to become greener, however the calls from the CCC to ban new build homes from connecting to the gas grid altogether need to consider the costly implications for smaller and more rural developments. Calling for developments to make use of waste heat resources are positive steps, however whilst these sources are plentiful enough to power 38% of London’s heating needs, the cost implications of these restrictions on smaller, more rural developments need to be considered before any further steps are taken.

 

Paul SteenGas grid, new builds, committee on climate change,

Associate Director

Ramboll

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