HEAT NETWORKS | OPTIMAL DESIGN carbon reductions through greater heat pump generation contributions. However, this economic incentive is not apparent for 100% heat pump systems, as the total capex and levelised cost of electricity (LCOE)1 are significantly higher for these compared with hybrid systems. When reviewed in combination with the additional reductions to carbon intensity of heat, the relative costs to decarbonise increase by an order of magnitude to decarbonise the final 5% of heat once you have reached 95% fraction from the heat pump. This is of major significance to the industry and one of the most important findings of the assessment. As such, because of the large increase in required heat pump capacity to cover peak load in the 100% heat fraction scenario, some form of boiler top-up will probably remain the preferred option, even without the choice of using gas. From a life-cycle perspective, the optimal heat fraction is around 80% for gas boiler hybrid systems. However, the LCOE for all gas hybrid systems is comparable (<8% from the minimum), so there is a minimal life-cycle impact to maximising the heat fraction while retaining the hybrid strategy to maximise carbon reduction. The life-cycle cost of electric boiler systems decreases up to around a 95% heat fraction. Electric boiler hybrid systems are better suited for higher heat fractions because of the increased cost of electric boiler heat generation. Within these optimal fractions, GSHP is a higher overall cost option than ASHP, with a 60-90% greater capex and 8-13% greater 30-year LCOE. The difference between the options decreases as the scheme size increases because of the non-linear nature of GSHP costs. However, initial analysis of a 1,000-dwelling scheme shows that ASHP is still favourable. GSHP is likely to compare poorly, economically, to ASHP in many scenarios with the withdrawal of the Non-Domestic Renewable Heat Incentive tariffs available to recover their high initial capital cost. They can continue to offer attractive systems though, particularly when a significant cooling demand can be coupled to the ground loop to boost overall seasonal coefficients of performance TOM BURTON is a consulting engineer at FairHeat Footnote: 1 The LCOE for each energy strategy has been calculated using: Capex + discounted sum of fuel, O&M, sinking fund and air quality costs LCOE = discounted sum of energy produced This formula is typically used to compare different methods of electricity generation, but is also applicable to heat generation in heat networks. The aim of this calculation is to determine the average revenue per unit of energy required to recover all heat generation capital and operating costs. 1,200 References: 1,000 1 Committee on Climate Change, Next steps for UK heat policy, 2016 2 Ofgem, Access and forward-looking charges significant code review: consultation on minded to positions, 2021 800 Heat demand (kW) and, therefore, reduce the cost and carbon intensity of heat beyond the figures presented in this report. The two major unknowns in the industry that impact capex (and, therefore, the overall costs) are the cost of increased Grid-connection size and of rooftop space. Grid upgrade costs are currently covered, predominantly, by developers and are highly variable between sites based on local infrastructure. This already impacts overall costs with gas hybrid systems, and the impact of this will increase as gas boilers are replaced with electric boilers. However, the approach to Grid upgrade costs is changing. Decarbonisation of heat and transport require significant upgrades to the electricity distribution network, and there is an understanding in the industry that upfront contributions to Grid reinforcement will probably impact the rate at which this happens. It is likely, therefore, that these charges will be removed, and reinforcement costs recouped via customer electricity bills, removing a key barrier to electric heat generation2. Defining costs associated with rooftop space is challenging, as this has wide-reaching impacts on planning conditions, biodiversity commitments, and provision of communal areas. It is, therefore, currently undertaken mainly on a qualitative basis depending on the development size and planning/end-customer requirements. This research has two clear recommendations for the industry. From a policy and regulatory perspective, local authorities should adopt carbon-offset fees into planning conditions, and set ambitious prices to incentivise low carbon heat generation and accelerate decarbonisation. On a scheme-specific level, hybrid energy strategies are the correct solution for transitioning to heat pumps while protecting residents and minimising operational risks. Read the full research paper, presented at the 2022 CIBSE Technical Symposium, at: bit.ly/CJAug22TB. 600 Theoretical data profile (kW) 400 Real data profile (kW) 200 0 0 1,000 2,000 3,000 4,000 5,000 6,000 Hours spent at heat demand (h) 30 August 2022 www.cibsejournal.com 7,000 8,000 9,000 Figure 1: Hourly load profile comparison of theoretical vs real data (theoretical model scaled for comparison) for 500-dwelling scheme