Project Summary

Project

To meet the aims of Innovation Challenge 4, the project will develop a model and control system (hardware/software) to facilitate an accelerated rollout of affordable, low carbon heat. Heat delivery to tens-of-thousands of residential and commercial buildings will come from community energy hubs within which multiple flexible assets operate together behind-the-meter.

Hubs include:

• Hybrid heat networks (heat from hydrogen boilers, heat pumps and thermal stores)
• Green hydrogen production and distribution
• Electrical/thermal storage
• Utilisation of existing gas infrastructure for 100% hydrogen
• Data analytics for targeted rollout of building fabric measures

Aims

We aim to develop a novel technoeconomic approach to operating hybrid heat networks alongside other flexible assets. This facilitates use of existing gas infrastructure for the transition to hydrogen and, accelerates and reduces the overall cost of decarbonised heat rollout.

There are various options for smart, flexible systems including li-ion batteries, demand side flexibility e.g. hydrogen electrolysers, and heat networks with storage. Whilst these options are important individually, it is critical they work together in a coordinated, sequenced and consumer focused manner to cost effectively achieve the decarbonisation targets set by the government.

Innovation

Co-location of hybrid heat networks with grid scale flexible assets can provide year-round, cross vector, energy flexibility. In this way the utilisation of the energy distribution infrastructure increases significantly compared to a standalone heat network. The innovation will also enable the conversion of whole sections of the existing gas infrastructure (including storage) to 100% hydrogen, facilitating the transition to hydrogen in a targeted phased manner.

The system will include a metering and verification protocol providing data to support a targeted rollout of building fabric measures and verify the benefits once installed.

Users

The users of the innovation are heat network and/or flexible energy asset operators. Users want to increase the rollout of their systems with optimised commercial performance whilst decarbonising and increasing efficiency of their energy usage. The innovation will reduce upfront capital cost and increase the availability of network infrastructure to accelerate rollout.

Project Partners

SGN are the lead partner, bringing expertise in gas and hydrogen as well as numerous sites in urban areas.

Vital Energi are the heat network provider. They are UK market leader in district heating schemes with 83,000 homes connected.

Imperial College London will be the academic partner, having developed an integrated whole energy systems (IWES) model.

Glasgow City Council and West Dunbartonshire Council will be Local Government partners.

Innovation Justification

Problem

Several problems are addressed by this project:

• Decarbonised heat is not affordable for end users
• Switching to "green" heating (e.g. heat pumps) relies on consumers making complicated specification decisions; It is easier to stick with "what they know".
• Financial business case not viable for heat network developers
• Grid capacity constraints
• Existing gas infrastructure capacity insufficient for 100% green hydrogen
• Transition to 100% green hydrogen is challenging and expensive

Connecting and controlling multiple assets together, behind the meter, will reduce the cost and timescales for installing and operating heat networks.

Innovation

This type of co-location, integration and control across multiple behind the meter assets is novel. The innovation will include the creation of new models and control systems.

The project will review how the relative capacities of the heating and storage equipment interact and how variation in this impacts consumer costs, as well as wider energy infrastructure investment. New types of control methodology will be developed to optimise the commercial viability of a whole system.

Knowledge Gap

We must create a detailed model, which will determine equipment specification, and control system, which can operate multiple flexible assets in parallel. This requires a system which combines integrated commercial analysis with dispatch control. The system must account for changes in capacity as the heat network grows. Once the system is built and operating the rollout of hybrid heat networks can be accelerated.

Counterfactual

Proposed counterfactual:

A low carbon, low temperature hot water network with a central plant room, on its own grid connection, sized for growth, and implemented with no co-ordination with other local energy activities.

Economic Benefits:

• Lower upfront costs allow for a larger number of smaller networks with ability to grow
• Lower anchor customer requirements for heat networks to "stack up" financially
• Reduction in power and gas connection costs as shared with other assets
• High degree of storage allows assets to access multiple energy markets, lowering costs

Sustainability Benefits:

• Pathway to repurpose existing gas infrastructure for transition to 100% hydrogen
• Allows increased penetration of renewables by improving flexibility and efficiency
• Reduction in new energy distribution and generation infrastructure

Price Control

SIF funding is the only option within price control. It wouldn't attract any other type of funding as it is research led and is risky as it requires new models and control systems to be developed and proven.

Project Benefits

How will your project deliver net benefits to consumers? At Discovery Phase these can be high level; if the project progresses we would expect more granularity and evidence.
Financial - future reductions in the cost of operating the network

The key metric will be the volumes (MWh) of hydrogen and electricity required to provide the consumers heating. We will review the profile of these against the counterfactual and using Imperial's model, look at the local and national infrastructure and investment requirements to meet these demands. These savings would be achieved gradually during the transition to Net Zero.

Financial - cost savings per annum on energy bills for consumers

• We will make an estimate of how the savings on network reinforcement would translate into reduction in standing and variable charges on all gas consumer bills across various scenarios for deployment of the project.
• We will calculate the MWh of heating produced by hydrogen and electricity and will show how the heat network consumer costs will vary over several scenarios during the transition to hydrogen.
• We will demonstrate how access to flexible markets will further reduce the bills of those connected to the heat network.

Environmental - carbon reduction -- direct CO2 savings per annum against a business-as-usual counterfactual

The CO2 emissions applicable to our project will be zero from 2035. In 2017 the average household generated 2,745 kg of CO2 emissions from heating. We will identify several comparisons in the CO2 savings at various points between now and 2050 against the calculated gas and power mix.

We will identify the total volume of hydrogen required for gas only heating. We will calculate the volume of hydrogen produced during periods of excess generation in the 2050 energy mix. We will apply the assumption that any additional hydrogen would be blue hydrogen with 1kg of CO2 emissions for every 1kg of blue hydrogen used to calculate the kg of CO2 per MWh of heating. The CO2 savings per annum will be produced from these figures.

New to market -- products, processes, and services

Success will be once the product is available to other heat network operators and can be used to approach existing assets owners for behind the meter connections. We expect this to be in a 3-4 year time period.