Project Summary
SHIELD is a bold new initiative that will revolutionise the way we heat our homes. By using innovative low-cost low-carbon heating solutions, such as distributed data centres, SHIELD will help to decarbonise heat and energy for vulnerable consumers and social housing tenants.
In addition, SHIELD will use smart energy generation and storage technologies to intelligently balance demand and supply, helping reduce the upfront cost and running costs of consumers' heating and energy.
This innovative approach to decarbonisation has the potential to transform the energy landscape and make a real difference to the lives of vulnerable people.
Innovation Justification
SHIELD will deploy Thermify's HeatHub, a new innovative technology that provides safe and secure distributed data centres in homes. They generate heat as a by-product of data processing, which can be recovered to warm the home. The HeatHub intelligently adjusts its data processing activities based on the home's heat requirements, reducing workload in summer to avoid overheating. Additionally, we will incorporate advanced energy generation and storage technologies to help balance demand and supply, making heat and energy more affordable at scale.
SHIELD applies whole system thinking to converge Thermify's HeatHub with other LCTs in smart local energy systems (SLES) that help:
· Balance generation and load within the home
· Balance the wider electricity network
· Provide flexibility and other services to the grid
SHIELD ensures that low carbon heat is made affordable, inclusive and scalable. It incorporates innovative business models and mechanisms, with robust cross-industry collaboration. These solutions will then be made accessible at scale to social landlords and housing associations with stretched human and financial resources. By targeting social housing tenants and vulnerable customers, SHIELD meets Challenge 1, ensuring they receive the benefits of the energy transition.
SHIELD will aim to apply learnings from related projects. SHIELD has had discussions during Discovery Phase with two ENWL SIF Discovery Phase projects, Net Zero Terrace and RetroMeter. For Net Zero Terrace, ENWL are looking to find ways to decarbonise terraced streets using a ground source heat pump system. SHIELD has learnt that there could be an opportunity for Thermify to complement the ground source heat pump system in the future. For RetroMeter, this project could help SHIELD monetise its carbon savings in the future. Through this engagement, ENWL will be joining SHIELD to explore these opportunities in more detail.
This approach is currently un-tested for social landlords, funders, and consumers at scale. Data services are the primary source of revenue for Thermify however additionally, their business model sells heat as a service to households. SHIELD will demonstrate the efficiency of deploying Thermify's solution in individual homes and the integration of Thermify with heat pump systems in blocks of flats. Thermify products are at TRL 7 and CRL 7 at present, but we expect it to reach TRL 8 by Alpha Phase and TRL 9 and CRL 8 by Beta Phase.
The proposed scale for Beta Phase (c.300 homes) is appropriate as it will qualify the SHIELD solution for both DSO and ESO grid services requiring 1MW+ of flexible assets.
SHIELD cannot be funded elsewhere within the price control or considered as part of business-as-usual activities due to the complexity and risk in approach, integration of technologies and new business models. The phased approach to SIF provides the right funding and ecosystem for the project to develop in an agile way.
The counterfactual and alternatives to decarbonise residential heating are ground or air source heat pumps or heat networks. In isolation, these technologies have high upfront costs, add to householder bills and for networks they add to network pressures and are costly due to the upgrades required. The SHIELD solution is cheaper for consumers as it uses waste heat from data processing and puts less pressure on the network as SHIELD delivers a SLES through integration of renewable generation and storage.
The demand for data processing is growing. In 2020, the global cloud computing market was valued at $371.4 billion, and it is estimated that by 2025 it will rise to a staggering $832.1 billion. If scaled, distributed data centres can support this growth and reduce the challenges networks face connecting large single points of demand for centralised data centres.
Impacts and Benefits
SHIELD has a NPV of £3.41m up to 2030 at the project trial scale.
This figure is based on a forecast of c.300 of Eastlight households taking up SHIELD solutions - Thermify HeatHub, solar PV, heat storage, battery storage and smart energy management). This calculation is conservative and will be developed in more detail during Alpha Phase.
Baseline: If SHIELD is not deployed, assumption that by 2027, half of the households switch to air source heat pumps (ASHP) and half will remain with gas boilers due to high upfront costs of ASHPs.
Key Metrics: Number of households that have taken up the solution, energy and heating usage/output and energy prices to estimate benefits.
Financial - future reductions in the cost of operating the network
Baseline:
Increased capacity on the electricity network over RIIO-ED2, resulting in four LV substations requiring upgrades at the project-level scale in shortlisted areas
Switching from gas boilers to electric heating, general enquiry work is required, e.g. fuse upgrades.
Solution:
Deferral of network reinforcement of four LV substations due SHIELD solution optimising energy usage and providing flexibility services
Metrics:
Number of LV substations that require upgrades avoided (number, MW and £)
Financial - cost savings per annum on energy bills for consumers
Baseline:
Heating costs can be estimated using the following assumptions:
Cost of heat pump households is based on average number of kWh for heating of 12,000kWh per year. Therefore, the electricity requirement is 4,000 kWh with a COP of 3. Electricity price of 30.11p per kWh and cost of heat pump and install is £10,000.
Cost of gas boiler households is based on 12,000kWh for heating annually, therefore gas usage of 13,042kWh with a COP of 0.92. Gas price of 7.51p per kWh.
Solution:
Energy cost is £300/year based on Thermify's current proposition and the annual fee for heat-as-a-service they provide to consumers. This is considerably cheaper than the baseline.
No upfront costs to customers for the solar PV, heat storage or battery storage as this will be owned by the social ESCo and incentives/revenues from the assets are returned to the asset owners. Similarly, P2P scheme will lower the unit rate of electricity.
Metrics:
Energy bill savings (£)
Environmental - carbon reduction -- indirect CO2 savings per annum
Baseline:
GHG Emissions for heat pumps is based on energy usage assumption above, electricity carbon emissions factor and number of heat pumps.
GHG Emissions of gas boiler is based on energy usage assumption above, gas carbon emissions factor and number of gas boilers.
Solution:
GHG emissions benefits from consumers using SHIELD solution. SHIELD assumes there are no GHG emissions associated with heating for the SHIELD solution as heat is a waste output from the data centre processing. Therefore, the benefit of the solution is equivalent to the size of the baseline emissions.
Consuming local renewable generation that wasn't installed in baseline (to be quantified in Alpha Phase)
Metrics:
Carbon reduction (kgCO2)
Revenues - improved access to revenues for users of network services
Baseline:
No previous revenues for users
Solution:
Access to ESO balancing mechanism, demand flexibility services, firm frequency response and DSO flexibility services revenues for the owners of the flexibility assets. The amount of electricity exported will be reported and revenues received will be tracked through the social ESCo
New to market -- products/services
A new innovative distributed data centre heating solution and heat as a service proposition for consumers along with the SLES and assets installed by social ESCo. Metrics are covered by the other benefit types.
