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This year’s Heat and Decentralised Energy Conference is sponsored by E.ON and we are delighted to hear from them in this blog. The market is changing rapidly for energy retailers: how do they see their role and what does this mean for how they organise their business activities?

 

We as E.ON have a clear role and responsibility in making the future energy system work.

 

In the UK, E.ON supplies electricity and gas to five million homes and businesses, as well as providing heat to over 40,000 customers through our ever-growing district heating business. We’re one of the market leaders in providing decentralised, low carbon, community-based energy and heating networks, operating over 50 district heating schemes across the UK.  E.ON is committed to contributing to a better future by driving innovative projects together with developers, municipalities and politicians. This is what we promise to our customers: “let’s create a better tomorrow’. Technology is ready and we have the right capabilities and experiences of being a strong partner today to become an even stronger and more strategic partner in the future.

 

City Energy Solutions are a core part of E.ON’s future strategy and vision - ‘improving people’s lives’ -  which is the intelligent combination of our core businesses and products, including the fundamental integration of District Heating Networks.

 

Energy is the central lever in the planning of modern and sustainable cities and neighborhoods. More and more cities are committing themselves to ambitious climate targets: Berlin plans a CO2 reduction of 85 % by 2050, London is aspiring to 100 % by 2050 and Malmö aims to be CO2-free by 2020. At the same time, people's demands are growing: a high quality of life today means living sustainably and ecologically without sacrificing comfort.

 

We are already helping cities and municipalities to use their resources more efficiently, reduce energy consumption, find sustainable solutions and thus achieve ambitious climate targets.

 

Stefan Håkansson, Senior Vice President, City Energy Solutions and keynote speaker at this year’s Heat and Decentralised Energy Conference, explains: "Through the intelligent use of decentralised systems, be it combined heat and power generation, geothermal energy, heat pumps or LowEx networks, we ensure an efficient, sustainable and economical energy supply."

 

We are proud to be sponsoring the Heat and Decentralised Energy Conference this year and look forward to collaborating towards building more sustainable and efficient energy networks, creating tomorrow’s cities today.

 

Heat and Decentralised Energy will be held on Thursday 29 November in London. Delegate packages are still available: you can find details and book your place at http://heatconference.co.uk/booknow.

 

Heat and Decentralised Energy is hosted by the Association for Decentralised Energy and the Energy Institute, and sponsored by E.ON.

 

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This year’s Heat and Decentralised Energy conference explores the pace of change that’s happening in our energy system. Whilst it feels like everything is changing faster than ever, perhaps it’s more the case that there’s not one consistent pace of change. Rather, some changes are coming like Lewis Hamilton in 7th gear whilst others are more like following a tractor down the A303 (if you never have, think yourself lucky…).

The pace of change isn’t about change in itself; it’s about what you’re trying to achieve.

Building networks takes time, for example – whether you’re expanding the gas network to off-grid properties, digging a heat network in a city centre or reinforcing the power grid in an area of growing renewable generation.

Product development is considerably quicker, especially for technology-driven products where you can problem-solve through software updates once a device is already in someone’s home.

Social movements and campaigns can take a long time to be born but then explode in public consciousness: think back a year or two and consider how many people were talking about single-use plastics.

Change, left to happen organically, takes as long as it takes.

But what if there’s a deadline?

If we’re serious about global and national ambitions to reduce carbon emissions, then the organic approach may not be enough.

The dramatic take-up in global renewable capacity, particularly solar PV, was interventionist: subsidise the product until it can sustain itself. The heat network market in the UK is about to go through a similar phase with the injection of more than £300m through the Heat Network Investment Project.

But sometimes money is not enough. Innovation and change can happen at speed, but our institutions may be holding us back. Regulatory frameworks could be more agile, fostering innovation whilst still protecting consumers. Planning decisions could be made more quickly whilst still protecting the interests of local communities.

What we need is a clear narrative around the need for change in our energy system, just as we’ve heard a clear narrative about plastics in the past year. We need to share how our system will change and take people on a journey with us. And we need to encourage our institutions to take decisions more quickly, without regret, in a culture which recognises that we are trying to achieve something different with our energy system, something cleaner and fairer for all.

Are you frustrated in the slow lane or struggling to keep up with the speedsters? Join us at on Thursday 29 November at Heat and Decentralised Energy 2018 to share your perspective and hear from expert speakers including:

  • Katie Black, Director of Policy, National Infrastructure Commission
  • Emma Floyd, Project Director, Heat Networks Investment Project
  • Stefan Hakansson, Global Director for City Energy Solutions , E.ON SE
  • Chris Stark, Chief Executive, Committee on Climate Change
  • Innovators from across the energy networks and technologies sector

Book your place now at http://heatconference.co.uk/booknow. Discounts are available for SMEs, public sector organisations, academics, students and charities.

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Type “putting the customer at the heart of everything we do” into Google and you’ll get more than 2.8 million search results. It’s become a business truism – of course we do that – if not a cliché. So how is the district heating sector making those words meaningful?

District heating can be a tricky customer proposition to manage, presenting a specific set of challenges relating to customer engagement and experience. Customers are generally required to sign long term contracts and are not able to switch supplier. They are likely to pay the same, or very similar rates as their neighbours – and before the advent of heat meters this was often irrespective of the amount of heat used. At the same time, district heating projects are expensive capital projects where risk needs to be shared among many partners.

So how is industry tackling these challenges? In some truly inspirational ways which leave no doubt that putting the customer at the heart of what they do is key to success.

Heat Trust launched in 2015 as a customer protection scheme for people living on heat networks. Its vision is that all heat customers should be assured dependable heat supplies and excellent customer service. The customer service standards set by Heat Trust are overseen by an independent Stakeholder Committee, which is responsible for ensuring the standards remain fit-for-purpose and proposing amendments to drive forward continued improvement.  

In just two years, it has grown to cover 51 heat networks and more than 30,200 customers. Its recent annual report found that only 6% of customers on heat networks made a complaint, compared to 11% on standard electricity or gas supplies. The most common causes for complaint related to billing issues (74%); within this, the most frequent topic was standing charges (54%). Heat Trust provides a route through which complaints can be taken to the Energy Ombudsman, ensuring that district heating customers are offered the same levels of support and protection as others within the energy system. Their growing data set is helping the industry to identify the real issues that householders face and discover new and innovative ways of putting the customer in control.

ADE members Pinnacle Power are proud of the approach to customer engagement that they have put in place at Greenwich Peninsula in London. The basis behind the structure for the Greenwich Peninsula ESCo, GPEL, which owns the heat network infrastructure, was to put the residents first so that they are confident they are getting value for the heat consumed from the network.  

Pinnacle Power has achieved this in part by getting buy-in from the Royal Borough of Greenwich and the Greater London Authority to be a part of a Governance Committee. This governance agreement ensured that there was a committee, meeting quarterly, which would force compliance with appropriate pricing and customer service obligations. At every governance meeting, the company reports on all complaints, down-time, and repairs made on the network, so that the committee has a very transparent view of service levels. The committee acts as an escalation point and a point of comfort to residents.

At the recent ADE Awards, the Customer Engagement Award of the Decade was presented to Switch2, and it’s worth dwelling for a moment on the support that they offer to customers. Switch2 provide customer service and management for over 500 district heating schemes serving 70,000 customers. Resident Liaison Officers act as the bridge between customers, installation teams and network operators. Home visits are offered to new customers with clear demonstrations of heating controls, and further support is available through multiple channels and in multiple languages. Community energy clubs help local residents think more widely about their energy use. You can watch a short film about Switch2’s work with customers here.  

Companies like Switch2 and Pinnacle Power, along with those actively involved in Heat Trust are demonstrating that the district heating sector is taking steps towards “putting the customer at the heart of everything we do”. As more and more district heating networks are developed across the country, it is this commitment to openness, quality and fairness that will help bring them into the mainstream.

Putting the customer first is a key theme of Heat and Decentralised Energy 2017, a one-day conference on Thursday 30 November at The Crystal, London. You can register your place and join the debate at http://www.heatconference.co.uk/booknow

 

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£500 million.

That’s how much Government estimates could be saved from industrial sector energy bills through its proposed Industrial Heat Recovery Support Programme. Industrial heat recovery saves money, supporting business competitiveness; it also reduces carbon emissions and helps bring benefits to local communities through the export of heat through heat networks.

Industry has known about the potential for the recovery and recycling of heat for many years.

The Arla Foods milk processing facility near Aylesbury uses an innovative system designed and delivered by Edina. Two CHP engines are fuelled by a mix of natural gas and biogas generated through anaerobic digestion of waste products from the dairy’s processes. As well as using the power generated by the CHPs on site, most of the heat produced is captured and used in pasteurisation, homogenisation and for cleaning circuits.

At the Janssen Pharmaceutical plant in Cork, Finning CHP plant was installed to provide greater resilience and to reduce energy costs. As well as using power on site, the CHP generates heat in two ways. Exhaust gases are used to evaporate condensate return water to generate steam, whilst heat exchangers harvest heat from the engine water jacket circuit to produce low temperature hot water. These are both then used in industrial processes within the plant.

Despite the success stories, there are practical, commercial and organisational barriers to the development of heat recovery projects (and these are something that the new support programme should aim to address).  Identifying sources of waste heat and integrating them with existing systems can be a technical challenge. Capital is constrained, with many competing priorities for investment, all of which need to demonstrate returns in timescales that are attractive to industry. And many organisations lack the skills to develop and deliver these opportunities.

The Royal Mint is facing up to many of these challenges as  it strives to improve the efficiency of a range of highly energy-intensive processes. Electricity is itslargest energy expenditure, so it is considering using either CHP or a hydrogen generator for electricity and capturing the waste heat for space heating or for use in production processes. The Royal Mint is thinking more broadly: waste heat from smelting furnaces and other processes could also be captured for re-use. There are concerns, however: how to ensure that back-up heat is available whilst managing maintenance and repair costs; whether natural gas provides sufficient future-proofing for decarbonisation; how to capture waste heat and not simply add to the problem; and – a crucial challenge - how to create the time to assess the options in detail.

Reducing risk, unlocking capital investment and helping build knowledge and capacity among industrial organisations will be key to the success of heat recovery schemes. The support provided by BEIS for local authority-led heat networks in recent years has set a template for how Government can work with communities to deliver significant infrastructure projects; the hope is that the new Industrial Heat Recovery Support Programme will help to unlock similar potential within our manufacturing sector.

It’s a good news story for industry and manufacturing in a time of uncertainty. We’ll be talking more about the industrial sector at Heat and Decentralised Energy 2017. We’ll explore the importance of leadership in bringing forward the transformational projects that will build industrial competitiveness by cutting costs, maximising energy productivity and reducing the sector’s environmental impacts.

Join us on Thursday 30 November at The Crystal in London for Heat and Decentralised Energy 2017. You can book your place at http://www.heatconference.co.uk/booknow

Heat and Decentralised Energy 2017 is sponsored by Siemens and Exxon Mobil, and supported by EDF Energy, Centrica Business Solutions, Clarke Energy, Pinnacle Power, Rehau and SAV Systems.

 

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Decentralisation and devolution have been two of the policy buzzwords of recent years, especially in the energy sector. Local models of generation, supply and delivery have gained a huge amount of traction, from community owned solar PV farms to a growing number of district heating networks to cooperative wind farms. But what about the human face of a decentralised energy system? Who’s in charge? What skills and competencies do they need? Who holds them accountable?

We asked Emma Bridge, Chief Executive of Community Energy England, and Julian Packer, Low Carbon Investment Director at Greater Manchester Combined Authority, for their views.

 

Q: Where does leadership come from in a decentralised energy system?

Emma Bridge: The whole premise of a decentralised energy system is that leadership comes from the local area. To be truly effective, this needs to be a mixture of local authorities, local enterprise partnerships, local businesses and communities. Community energy has a vital role to play here. It doesn’t just enable energy to be generated at a local level, it encourages us as individuals to take greater control over how our energy is generated. It also reconnects communities with their relationship with energy, enabling them to get involved and engaged with energy efficiency and process of demand management. You need all these facets to be brought together for decentralised energy to work effectively.

Julian Packer: [At a national level], there is a clear political commitment to district heating from the Department for Business, Energy and Industrial Strategy (BEIS) as evidenced by the Heat Network Delivery Unit (HNDU) and the Heat Networks Investment Project (HNIP). This is a real positive. Local authorities are, potentially, the key driver for the wider adoption of decentralised energy. In many local authorities, there is a strong political will to move to a low carbon future in which decentralised energy features strongly.

Q: So, do we have the leaders that we need, in the right places?

Emma Bridge: I think we still have some work to do to make sure that we have the right leaders in the right places. Energy has been so removed from day to day life that it will take a while for that connection and the wider benefits of decentralised energy to be grasped across the board. There are some fantastic examples of this starting to take place though, and I don’t think it will be long until these start to be replicated across the country.

Julian Packer: Political will [at a local level] is often not matched by executive action in terms of implementing supportive robust planning (a notable exception being London with its London Plan). Often, this is in large part due to the fear of setting planning requirements which are unattractive to developers, an understandable concern given the increasingly severe budgetary pressures being experienced by Local Authorities and their not wishing to lose a development to a nearby authority with less stringent requirements.

Q: What skills and competencies need to be developed (and among which types of people) to ensure the success of the decentralised energy revolution?

Julian Packer: Consultants need to improve the quality of the work they undertake; they lack “coal face experience”. There needs to be a standardised approach to financial modelling of schemes – too many bespoke models are produced. Likewise, streamlined procurement and contractual frameworks are required – too many projects “reinvent the wheel”. Local authorities need more embedded expertise in order to be effective, informed clients.

Q: How do we ensure that the customer is protected in a highly localised energy system?

Emma Bridge: By ensuring that they are engaged in the process. Community energy is a great example of communities “doing energy” rather than energy being done to them. Their knowledge of local people and ability to engage traditionally harder to reach consumers and, where appropriate, turn them into prosumers in unparalleled. Regulation also needs to start to put the consumers first.

Julian Packer: Obviously the Heat Trust provides protection for the private domestic customers of heat networks. Commercial customers are normally protected through contractual provisions, but again some standardisation and sharing of experience would be invaluable. The question we keep encountering is more about providing choice rather than protection. For example, housing developers will insist on providing a gas supply in order to be able to offer gas hobs! Another example: commercial developers still require the installation of gas boilers as this is insisted on by institutional investors.

 Q: What models for local energy are interesting to you at the moment? Who’s doing interesting things?

Julian Packer: Local authority owned, licensed energy supply companies as a catalyst for decentralised energy. Robin Hood Energy and Bristol Energy Company are interesting examples to follow. [Models for] local authority investment into district heating projects are an active interest too, as they provide local authorities with an opportunity to convert capital into long term revenue.

Emma Bridge: Cornwall Council is starting to really explore the role of local energy through its devolution deal. The Energy Local pilot in Wales is developing new systems so that communities can benefit from pooling and using their own generation directly through new relationships with suppliers, smart meters and technology. Plymouth Energy Community is doing excellent work linking generation with addressing fuel poverty. And in the heat world, Kingston Heights in London is using the River Thames to provide renewable heating and hot water to 137 apartments and a hotel. I think we’ll see a lot of innovative and exciting models coming through over the next couple of years with strong ties to the local community.

 

We will be exploring the place of decentralised energy on the local, national and global stages at this year’s Heat Conference.  The conference is hosted by the ADE and the Energy Institute and sponsored by Engie.

Join us on Wednesday 23 November at the Grand Connaught Rooms in London and make your voice heard. We have discounted tickets available for local authorities, others in the public sector, charities and SMEs. Find out more and book your place here.

 

 

 

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