Project Summary

SHIELD is a bold new initiative aimed at making the Net Zero transition accessible to low-income residents of social housing and other tenures who cannot afford Low Carbon Technologies (LCTs). SHIELD utilises innovative solutions, including distributed data centres for heating, PV and battery storage to intelligently balance supply and demand.  
This innovative approach to decarbonisation seeks to address the debilitating issues faced by those who live in fuel poverty, helping to reduce both the upfront and running costs of consumers’ heating and energy. SHIELD provides a path to decarbonisation for all, which would otherwise be out of reach.

Innovation Justification

SHIELD encompasses two main innovations:  
Developing a not-for-profit Social ESCo which will not only focus on conventional district heat network solutions, but also provide grid services and support individual domestic LCTs. The ESCo aggregates decarbonisation opportunities and secures funding to install and operate these low-carbon energy systems on behalf of landlords and homeowners.  
Integrating Thermify’s Heathub into domestic heat and power systems. The HeatHub recovers waste heat from decentralised data processing for business customers, providing affordable heat. It adjusts its processing activities based on the home’s heat demands and provides a 70% carbon reduction compared to hyperscale data centres due to reduced electricity requirements. Currently, Thermify’s products are at TRL7 and CRL7 but are expected to reach TRL9 and CRL8 by end of Beta. 
The HeatHub integrates with other LCTs in Smart Local Energy Systems (SLES), balancing home energy generation and use, and providing flexibility services to the grid. The HeatHub is at IRL5 and is expected to reach IRL7 prior to Beta installations.  
 
Successful development of these innovations will: 
Reduce energy costs for fuel-poor households 
Enable access to institutional capital to scale-up deployment 
Speed up decarbonisation for fuel-poor households 
SHIELD addresses Challenge 1 by: 
Supplying fuel-poor households with low-cost heat and power whilst reducing carbon emissions 
Developing a Social ESCo to provide SHIELD at no upfront cost, making it accessible to households of all incomes 
To ensure electricity demands beyond SHIELD’s generation are also low-carbon and low-cost, SHIELD has partnered with UrbanChain, who provide green energy via a Peer to Peer (P2P) network. UrbanChain use AI and blockchain technology to intelligently match low-carbon electricity generation with consumer demand half-hourly. 
In addition, SHIELD will apply learnings from related SIF projects, including Net Zero Terrace and RetroMeter, which highlighted opportunities to complement current technology choices and explore options to monetise carbon savings. Additionally, the UKPN Heat Risers project is addressing challenges with energy solutions in multiple occupancy buildings (MOBs). MOBs have not yet been targeted, however by taking learnings from Heat Risers, SHIELD aims to investigate rolling out in a block of flats during Beta. 
Stakeholder engagement has been essential in Beta planning. Examples of input received include: 
Tenants – concerns about potential drawbacks of SHIELD and challenges in learning to use the system 
Housing Associations – questions regarding the installation and end-of-life of the technologies and planned tenant engagement 
Citizens Advice (CAB) – best practice advice on communication approaches with fuel-poor tenants 
For Beta, PV and battery technology will be installed in 300 homes, with 100 utilising the HeatHub solution. This will qualify SHIELD for both DSO and ESO grid services requiring 1MW+ of flexible assets, while also enabling Thermify to demonstrate scale-up and prove its benefits across a range of properties. 
SHIELD cannot be funded through existing price controls or considered as part of business-as-usual activities due to its complexity, integration of technologies and new business models. SIF will support SHIELD to commercial viability and demonstrate its performance to future investors and stakeholders. 
The alternatives to decarbonising residential heating are ground or air source heat pumps (ASHP), which have high upfront costs and add to householder bills and network pressures. SHIELD is cheaper for consumers as it uses waste heat from data processing and reduces network pressure by delivering a SLES through integration of renewable generation and storage. 
The counterfactual for funding LCTs in social housing is social landlord ownership and financing with grant support. Both financial and managerial resources are too constrained to deliver a just transition in this way in a timely manner. 

Impacts and Benefits

SHIELD CBA has been undertaken at the Beta trial level and at GB wide scale. 
Beta Trial: NPV of £1.1m up to 2055.  
Forecast of 300 households taking up SHIELD solutions during Beta – with 100 receiving Thermify’s HeatHub, and 300 receiving the PV, battery storage and smart energy management system. 
Baseline: Without SHIELD, it is conservatively assumed that by 2025, half of the households switch to an ASHP and half will remain on gas boilers due to high upfront costs of ASHPs. In reality, a lower number of customers in the trial area may switch to heat pumps. No customers receive PV and storage solutions in the baseline. 
GB scale: NPV of £2.2bn up to 2055. 
SHIELD scaled across GB aligned to UKPN DFES Consumer Transformation scenario, applying to the segment of social housing which could uptake the technology versus an ASHP. This solution assumes each household receives a PV and Thermify solution. This is based on how the solution will operate outside of the trial which had specific constraints on its roll-out that won’t occur at the national level.  
Baseline: Without SHIELD, households would switch to ASHPs based on UKPN DFES Consumer Transformation scenario. No customers receive PV and storage solutions in the baseline 
Financial - future reductions in the cost of operating the network  
Baseline:  
Switching from gas boilers to electric heating will require general enquiry (e.g. fuse upgrades) and network reinforcement costs due to additional electrical load. 
Solution:  
Deferral of network reinforcement of LV substations due SHIELD solution optimising energy usage and providing flexibility services.  
Metrics: 
# MVA avoided through SHIELD and avoided reinforcement costs (£) - (£367k in trial, £497m in GB roll-out up to 2055) 
Financial - cost savings per annum on energy bills for consumers 
Baseline: 
Heating and electrical costs can be estimated using the following assumptions: 
The kWh of heating and electricity (non-heating) used per year, the current electricity and gas price, and the installation cost of a ASHP. Ofgem’s average usage rates and electricity prices were used for all assumptions.  
Solution: 
Energy cost is £360/year based on Thermify’s current proposition for heat-as-a-service they provide to consumers, with a reduced rate of £60/year for fuel-poor customers. 
No upfront costs to customers for the PV or battery storage as they are 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 (£) - £4.2m in trial, £7.2bn in GB roll-out up to 2055 
Environmental - carbon reduction – indirect CO2 savings per annum 
Baseline: 
GHG Emissions for heat pumps, gas boilers, and non-heating electricity is based on energy usage assumptions, carbon emissions factors for electricity / gas and the number / amount of heat pumps, boilers and electricity used. 
Solution: 
SHIELD assumes no GHG emissions associated with the heating (heat is a waste output from the data centre processing) or PV generation. Therefore, the benefit of the solution is equivalent to the size of the baseline emissions. 
Metrics: 
Carbon reduction (tCO2e) – 3.9k tCO2e in trial and 1.3m tCO2e in GB roll-out up to 2055. 
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.  
Metrics:  
Revenue generated from customers / exports (£) – £5.5m in trial and £4.7bn in GB roll-out up to 2055. 
New to market – products/services 
Outputs and Metrics covered by other benefit types.