District heating task force launched by industry
A new task force has today (13 March) been launched by the Association for Decentralised Energy (ADE) to deliver a subsidy-free heat network market with strong protections for consumers.
The multi-stakeholder task force will provide guidance on how industry and Government can work together to deliver a market framework where heat networks can attract low-cost investor capital and relinquish the need for further subsidy by 2021.
“The proposals that the task force are to develop will be an essential blueprint for enabling cost- effective investment and assuring robust consumer protection for UK heat networks,” ADE director Dr Tim Rotheray said.
“Working with experts across Government, regulation, and industry, we can develop the right framework that can secure billions of pounds of infrastructure investment and create skilled jobs without subsidy. These can supply thousands more homes and businesses with low-carbon, affordable heat, all accompanied by a high level of quality and customer protection.”
Heat networks could deliver up to 18% of UK heating demand by 2030, up from current levels of 2% today, according to the Committee on Climate Change (CCC).
The new task force will address a number of challenges to help facilitate that ambition. It will aim to ensure heat networks have similar risk profiles as new gas, water and power network investments, and consider how to tackle important consumer issues such as heat pricing, contract length and structure. Key strategic opportunities that help drive the expansion of district heating at a local Government level, such as business rate treatment, will also be explored.
Sustainable and fair market
Ministers have committed to £320m investment for heat networks by 2021, which the Government hopes will unlock up to £2bn in new heat network infrastructure investments across the country.
Welcoming the creation of the task force, Minister for Industry and Energy Jesse Norman said: “Heat networks are already helping to decarbonise our heat supply and provide affordable low-carbon energy to thousands of homes and businesses across Britain’s towns and cities. The task force will play an important role in considering how to establish a sustainable and fair market as the sector expands. We look forward to receiving the recommendations.”
The recent confirmation of Government financial support for heating networks arrived at the same time as a report highlighted that Ministers acknowledge the need for a “transitional period” to be put in place for changes to Renewable Heat Incentive (RHI) for biomass combined heat and power (CHP) plants. It is hoped these announcements will begin to restore investor confidence in the neglected sector.
The 2009 EU Renewable Energy Directive sets a mandatory target for the UK to achieve 15% of its energy consumption from renewable sources by 2020. However, research from the CCC has discovered that the UK is not even halfway towards achieving the target of 12% of energy needs for heat generation coming from renewable sources.