Project Summary
Heat Risers investigates an underexplored but significant barrier to heat decarbonisation which is currently driving an unjust energy transition. Multiple occupancy buildings make up a quarter of dwellings in UK Power Networks’ areas. That’s more than one million households in need of a sustainable, cost-effective pathway to a low carbon home.
This project offers a whole systems opportunity to overcome specific connection barriers that obscure the path to full heat decarbonisation in these buildings and lead to a situation where some tenants are left with no choice but to remain on fossil-fuel heating systems due to building infrastructure limitations.
Innovation Justification
Heat Risers will further explore a significant barrier to heat decarbonisation which is currently driving an unjust transition. MOBs make up ~25% of dwellings in UK Power Networks’ (UKPN) areas, which according to their Distributed Future Energy Scenarios (DFES), could equate to one million homes. This project offers an opportunity to overcome specific connection barriers that obscure the path to full heat dercarbonisation in these buildings and lead to a situation where some tenants are forced to remain on fossil-fuel heating systems due to building infrastructure limitations. Therfore, Heat Risers primarily addresses Challenge 4: Accelerating decarbonisation of major energy demands.
High connection costs under the counterfactual approach, where individual heat pumps have previously been rolled out to each dwelling in an uncoordinated manner, are currently leading to abandoned heat decarbonisation projects, often before they’ve started. The Project Partners have pooled their knowledge during the Discovery Phase to understand MOB stakeholder perspectives across different tenure types.
For occupiers, the connection costs for different buildings will depend on the condition of the building that customers happen to live in, and buildings are becoming constrained after early adopters have installed heat pumps, inhibiting further uptake. Our work has emphasised the importance of addressing the variable electrical connection cost burden for distributed and centralised heating solutions.
For building owners and managers, there is a high level of complexity that makes the returns of heat decarbonisation projects risky for private investors. These complexities are driven by the variability of building factors, lack of clarity on responsibilities, the burden of IBEN upgrade costs, and the fragmentation of market offerings and funding.
For DNOs, the current fragmented approach has a high administrative burden and has underlined the need for appropriate solutions to be deployed in the right circumstances to drive significantly lower network costs. Consideration of how to monetise the savings to incentivise and reward deployment of the right solutions is also needed.
Discovery demonstrated that a one-size-fits-all approach is not appropriate for MOBs given the diversity of characteristics and local network constraints. For example, two purpose-built high-rise buildings may have very different requirements depending on current fuel type, state of riser and lateral systems, ownership structure and network headroom. Hence, subsequent phases aim to develop and test a decision-making framework, recommend new funding and incentive mechanisms, and boundaries of responsibility. During Alpha, we will also explore the value of providing a self-serve planning tool for building owners and managers to give a clearer view of how to decarbonise their portfolio of buildings.
Whilst industry has previously developed guidance to support the design and installation of heat pumps in MOBs, no framework exists to lead stakeholders towards full decarbonisation. For example, CIBSE AM16 (2021) ‘Heat pump installations for multi-unit residential buildings.’ has not considered IBEN constraints at point of installation; it only highlights that load reduction and storage utilisation could offset some connection costs.
It will be difficult to tackle this challenge without SIF funding due to the complexity of the issues face. To build an evidence base to guide decision-making and test the framework and solutions designed in Alpha, the Beta Phase aims to fully decarbonise the heating systems of selected MOBs within Greenwich, which would exceed the size of an NIA demonstration project.
Heat Risers focuses on the use of technologies that already exist (TRL9 and IRL7) and aims to increase the commercial readiness of the heat technologies in MOBs through unlocking solutions to electrical connection cost barriers. The current CRL3 will be worked up to CRL4 in Alpha where market analysis will produce a clear value proposition and Beta will aim to achieve CRL5-6.
Impacts and Benefits
The key benefit of Heat Risers is avoiding a blocker in the roll-out of decarbonised heat solutions into MOBs. The most significant and highest confidence direct benefit is therefore in enabling carbon reduction through avoiding delay. The means to avoid this delay is uncertain but options have been identified in the Discovery Phase, for further investigation.
One option may be to remove the burden of up-front costs from customers for internal building network upgrades, and the risk of sunk costs for heat pumps which then get replaced with whole building solutions. This could result in cost savings for consumers, but costs would still need to be bourne by another party. Another option could be increased uptake of whole-building solutions, which in some cases are lower cost per household.
These considerations are set out in the Alpha Bid CBA. Carbon benefits below are therefore a confident size of prize based on solving a delay, and not a reduced cost benefit. Cost reduction benefits are stated as a “what-if” examples of whole-building solutions to be refined in Alpha.
Environmental – carbon reduction – indirect CO2 savings per annum against (£233m by 2050)
The Discovery Phase identified one million gas boilers across MOB dwellings in UKPN’s areas may fail to decarbonise or remain on fossil fuel heating for longer, resulting in a carbon cost of £233m by 2050 using the Government’s green book carbon accounting method. Unlocking this delay could therefore avoid this carbon cost. This is the baseline solution presented in the CBA Alpha Bid template.
Financial – cost savings per annum on energy bills for consumers (Up to £176m by 2050)
Central solutions are preferable for certain ownership characteristics; social housing for instance is more suited to heat networks. Social housing is more likely to be surrounded by other buildings, which can all be owned by one party, enabling a large heat demand which is how heat networks become most cost effective. Option 1 and 2 in the CBA illustrate scenarios of social housing properties moved to heat network solutions instead of individual heat pumps, and offsetting IBEN upgrades costs and related substation interventions. Option 2 (the high connection costs scenario) suggests an NPV benefit potential of £176 million by 2050 across UKPN’s area.
Financial – future reductions in the cost of operating the network (£6m by 2050)
Heat Risers is focusing on avoiding a blocker to rolling out decarbonised heat solutions, and so would lead to the same network load as the counterfactual. In some cases, whole building solutions can lead to a lower aggregate load than individual heat pumps, but the impact is expected to be limited. For example, if all social housing moved to heat networks, we estimate a benefit of just £6m by 2050 to the network through reduced peak load.
There is a potential incremental benefit in situations where substation reinforcement can be avoided by moving to whole building solutions, but this is currently not quantified with confidence due to data scarcity. In addition, there will be administrative savings to DNOs and building owners through a more coordinated planning approach and route-to-market for MOB solutions, but again due to the lack of data existing in this area we will need to investigate further in the Alpha phase.
New to market – products, processes, and services
The project will deliver a decision-making framework that determines the optimal low-carbon heat solution on a building-by-building basis, considering all costs. This approach will be of benefit to building occupiers, owners, managers, and DNOs, and may result in new market offerings, funding mechanisms, and support services to reduce the up-front and ongoing cost burden on consumers.
Impacts and benefits
The benefits have evolved since the Alpha application due to new data acquired and further stakeholder engagement. A detailed cost benefits analysis (CBA) was provided with the Beta application. The key benefit of Heat Risers is overcoming barriers to decarbonising heat in MOBs. Focusing on UKPN’s licence area, the project addresses challenges posed by complex, costly connections. Heat Risers developed the DMF to identify optimal heat solutions for different MOB types, potentially accelerating decarbonisation for an estimated 62,000 buildings in our area.
Of these, 60,000 buildings will likely require IBN upgrades to support individual heat pumps or direct electric heating. These buildings, mostly gas-heated with insufficient electrical capacity, need upgrades to accommodate the increased electrical load. Meanwhile, 2,000 buildings are better suited to communal heating systems, which could avoid costly local network upgrades while offering 25% lower power requirements due to demand diversity.
The CBA assumes that without intervention, these buildings will delay decarbonising until 2035, when the gas boiler ban takes place. The project aims to enable decarbonisation of ~35% of these buildings earlier, particularly those with fewer ownership complexities.
Financial Impact: Network Cost Reductions (£2m by 2070)
In the 2,000 buildings where communal heating offsets local reinforcement needs, Heat Risers could save £2m in reduced DNO-related substation upgrades.
Financial Impact: Consumer Savings (£2.7bn by 2070)
Switching from gas boilers to heat pumps—three times more efficient—can save consumers £2.7bn in energy bills between 2028 and 2070, particularly as electricity prices are expected to fall relative to gas. For social housing and other building archetypes suited to communal solutions, centralised heating will offer additional cost savings. Upgraded risers and laterals also reduce maintenance costs, potentially saving local authorities £7m by 2070.
Environmental Impact: CO2 Savings (£2.6bn by 2070)
By accelerating decarbonisation in these aging buildings, Heat Risers could deliver £2.6bn in carbon emissions reductions by 2070. Upgrading risers and laterals is essential to meet Net Zero goals and avoid leaving these buildings behind in the energy transition.
Non-Quantifiable Benefits
The project will streamline the decarbonisation process, enabling smoother customer journeys and reducing the need for multiple design iterations in connections applications. Additionally, Heat Risers addresses equity challenges by exploring funding options for electrical upgrades, unlocking more accessible pathways to decarbonisation for building owners.
We will consider pursuing the project outside the SIF, however finding an alternative funding source that supports the current scope might be challenging.
