(Written for Switch2 with Tomorrow’s People)
For years, the design of community heating schemes has focused almost exclusively on purely technical considerations. But as the sector matures, developers will need to put residents and the customer experience at the centre of their planning decisions.
Increasingly, M&E teams are expected to think more holistically so that decisions made in the early design stages will meet the needs of scheme operators. The overall priority, of course, is to ensure decisions made today will feed through to tangible future benefits for end users: residents who will live with (and rely on) the heat network long after the planners have moved on.
Plan for the future
When embarking on a community heating scheme, developers above all need to understand that unless they get the operational and design plans right at the start, there are a host of potential issues once the system is up and running.
In addressing this, schemes need to be planned and designed to ensure minimal operating cost and maintenance, high levels of resident satisfaction, smooth payment procedures and longer term flexibility. All these factors need to be considered from the outset, with detailed plans developed around the desired outcomes.
Although it’s still early days for the sector generally, enough schemes have been completed over the years for a number of lessons to have been learned, all of which need to be applied to future schemes so the same mistakes are not repeated. Helped by this experience and rising expectations, codes of best practice and guidance are now available – notably from the CIBSE, and the Heat Trust which is backed by DECC and likely to become the main regulation in the future. So all developers need to consult these documents, and voluntary adherence to the CIBSE Code of Best Practice is strongly recommended.
Created a side panel to unpack the reference in above para . line 2 about “lessons…learned”
- Design with maintenance costs in mind.
- Decide what customer satisfaction looks like and how your community heating scheme can deliver this.
- Review future operational efficiency, including factors such as low heat loss, flow rates and return temperatures.
- Consider installing pre-payment meters to ensure debt does not build up.
- Ensure flexibility is designed into the system to leave the potential for expansion and installation of more efficient or low carbon elements, such as fuel cells.
Invest today for lower whole-life costs
Whether the owner / developer is a local authority, an ESCo, a property developer or a community organisation, it will ultimately be responsible for the performance of the project and should therefore take the lead in working to the CIBSE Code.
This may mean investing more up front in the design and quality of materials used, for example, in order to achieve lower whole-life costs and resident satisfaction. As the sector matures further, regulation in this area is eventually expected to become compulsory and more exacting.
Once such guidance has been consulted, the developer should seek advice and discuss issues with all the major stakeholders involved. It’s also worth considering a one stop shop with an Esco service provider who has everything under their tight control. This will reduce the number of interfaces between contractors, putting responsibility of customer satisfaction In one place.
Developers should also consult with other developers, prospective customers and the local community. Any plan must be carefully vetted to ensure it will be the right system and design to satisfy residents, whilst working financially and technically. Whether the priority is long term cost reduction or lower carbon emissions – or both – all goals need to be clearly defined in terms of measurable objectives. The Code recommends that monitoring against its standards should be done on a regular basis. It suggests that at the end of each project stage, compliance with minimum requirements should be assessed. As best practice evolves, this may increasingly need to be carried out formally by independent specialists (certified by a body as yet to be confirmed).
Developers should also consider checking that the designer and subcontractors are familiar with debates within the industry and best practice. At a minimum, the owner needs to ensure that the CIBSE Code of Practice and Heat Trust guidelines are included as a key requirement in briefs and specifications relating to feasibility studies, design services, construction contracts, commissioning contracts, operation and maintenance contracts and energy services contracts. The CIBSE document – although primarily targeted at M&E engineers – is generally very readable and emphasizes the importance of careful planning in section 1.1, as well as considering the whole life cycle.
Create a side panel to unpack the reference in above para . line 2 about “debates”
- To what extent should emissions reductions be prioritised relative to cost or customer service improvement?
- How can providers get the standing charges down and introduce fairer tariffs?
- The implications of relying more on stored or instant hot water.
- What recourse should scheme operators have if customers do not pay their bills?
- There is a trade off between material quality and cost/efficiency – at what point do you draw the line?
- How should responsibility for operating, maintenance and billing be best shared?
- How compulsory should regulation be? Currently, only voluntary guidelines exist in the CIBSE Code of Best Practice and the Heat Trust guidelines.
The owner needs to provide designers with clear responsibilities using the guidance in the BSRIA Design Framework . It should also make sure that all those working on the project conduct an effective handover process between each stage, and should provide feedback to CIBSE as to the operation of the Code and any points where compliance has been found to be too onerous or impractical, so that the Code can be progressively improved.
It goes without saying that schemes need to comply with existing legislation, including local planning rules, and recent rules promoting energy efficiency, which mandates metering and billing. They must also take account of regional spatial planning guidance, such as the London Mayor’s Spatial Development and Energy Strategies, or local master plans or development frameworks.
Focus on the end-user
As expectations rise, the industry matures and more people are served by community heating systems, greater emphasis is also being placed on resident satisfaction, with new guidelines included in the CIBSE Code and Heat Trust document, along with recommendations to government from Which?
More than ever, community heating schemes are expected to be win-win solutions, not just a way of meeting emissions targets. It is entirely possible for residents to see substantial benefits provided plans are drawn up carefully. The benefits must be quantified and carefully planned, as residents will not have a choice once the scheme is complete.
This is recognised in the Heat Trust scheme rules, which includes an obligation to provide residents with a comparison price indicative of what they would be paying for heating using a typical conventional energy supply, so owners must be sure cost forecasting is robust and charges will be able to survive such scrutiny. Looking ahead, customers should also expect full control and clear billing. And if it is a refurbishment, tenants should expect to be asked about their preferences regarding controls, radiator type, location of operations, and other issues during the design development phase.
Of course, this all means developers and scheme operators will need to hone up on their ability to communicate and consult with residents.
Balancing the needs of residents and scheme operators
The rules aimed at ensuring resident protection are likely to grow as the number of people in the electorate that use such systems expand, especially in central city areas. If the target of serving 14% of the population using heat networks is achieved, residents could come to make up a significant special interest group able to influence policy. So attempting to cut corners with regard to customers is increasingly likely to prove a false economy.
At the same time, when a scheme is up-and-running it is essential that it pays for itself, so cashflow must be assured from customers through pre-payment or other pay-as-you-go systems. Such equipment cannot be fitted retrospectively if rent arrears become a problem – they need to be installed at the start.
Wider issues to consider
Any scheme should be able to deliver at least some significant economic, environmental or social benefits and help local authorities with their local agenda 21 and home energy conservation act (HECA) commitments, whilst also making a contribution to the goals of the Government’s energy white paper, including the delivery of affordable energy. It should also aim to assist area regeneration and help build sustainable communities, reduce fuel poverty and improve security of supply.
Within this context it is essential that design options undergo site-specific technical and financial feasibility studies, looking at elements such as projected maintenance and running costs, and how to ensure the system can be run within parameters that will enable a high level of efficiency.
Once constructed, the project launch should also be planned carefully, with a number of checklists to complete, including education of end-users and staff in how to use the heating system itself, along with the billing system.
On the financial side, the project owner must draw up a budget, arrange funding, and account for how the plans may fit with the housing association’s commercial model. The availability of government support and incentives also needs to be checked early on, as this may affect fuel choice or design – there are various incentives on offer to encourage authorities to adopt community heating and/or cut emissions. Fuel choice could also be affected by what might happen to fuel prices, and this needs to be carefully considered, especially in the case of oil or gas-fired operations, along with how price changes might be evened out or passed on.
Created a side panel to unpack the reference in above para . line 4 about “various incentives”
The UK government supports community heating projects with these funding options:
- Renewable Heat Incentive (RHI)
- Energy Company Obligation (ECO)
- Heat Network District Units (HNDU)
- Community Energy Network Fund
- Low Carbon Infrastructure fund
Loan finance can also be obtained from the Green Investment Bank.
As part of this financial planning process, whole life costing should be used to measure and compare projects, according to the government, as outlined in the Treasury’s Green Book. This takes into account capital and running costs, replacement costs and revenue streams, and the benefits to each stakeholder. These costings and feedback from all stakeholders should contribute to an agreed project strategy, which should be communicated to all concerned, along with milestones and benefits of the scheme.
It is important to assign responsibilities for the project’s development, operation and maintenance carefully in order to ensure the best outcome. For example if there are too many interfaces then it will become overcomplicated, but if you assign full control of the scheme to a single entity, it may enable significant cost savings and avoid communication issues or the tendency to pass the buck. A one-stop-shop, with the same group taking responsibility for its own advice provided at the outset, is bound to result in a longer term and more resident-focused approach than the alternative where separate companies are responsible for different areas such as billing and maintenance.
Finally, owners need to ensure that only suitably qualified and experienced people are employed at each stage. It is expected that in the future a system of certified individuals or companies who have the best capability, systems and expertise to develop and operate heat networks will be established.
Whatever the system, there are now a number of companies that have gained the experience needed to run even the most complex community heating schemes successfully, provided everything has been considered and planned well from the start.
In many ways, community heating has still to overcome a poor image based on the experience of outdated technologies and systems installed decades ago, which have not been adequately maintained.
But when community heating schemes are designed and implemented effectively, there are benefits for all: take a look at Denmark, where 55% of homes and up to 95% of buildings in urban areas are served by community heating, with far higher efficiency and satisfaction rates than seen in the UK so far.
We can get it right in the UK as well. We just need to take a carefully planned, long term, customer-focused view in the early design stages of each scheme.
- Refer and adhere to the CIBSE Code of Best Practice, and Heat Trust Guide
- Consult widely, especially with the eventual scheme operator
- Get everyone onboard with best practice and scheme strategy, and assign responsibilities carefully
- Above all, make sure the system satisfies residents, whilst ensuring payment
- Every site/scheme is different, so site-specific design and testing is required to ensure any system works efficiently and with low maintenance