Managing Director of The Kensa Group and former Chair of the GSHPA, Simon has overseen Kensa’s rise to UK market-leader status and has been heavily involved in policy discussions at Westminster and Whitehall as a Top Tier Stakeholder to BEIS.
evertheless, it would appear that BEIS Ministers are still committed to the reforms and intend to introduce legislation later in 2017.
Most importantly, the response made clear Government’s continuing support for GSHP technology: “The Government recognises that GSHPs are likely to be a strategically important technology for decarbonising heat, and anticipates the potential for significant growth in deployment of this technology through the period to 2050”.
This statement is vital as Government policy over the past few years has prompted a significant reduction in GSHP sales. According to BSRIA, sales peaked way back in 2008 with 2016 volumes at barely half that figure. Government’s own research has revealed that over 90% of all recipients of a Government grant were pleased with their ground source installation so this drop in sales is not the consequence of any misgivings about the technology’s performance; instead, the subsidy support has not been packaged in a way that is attractive to the market.
So, what changes are in store? According to the consultation response: “The Government is keen to support the deployment of GSHPs making use of shared ground loops”. And: “This route (shared ground loops) will improve investment confidence and...will also offer the greatest flexibility, encouraging a broad range of shared loop projects to come forward including new-build and mixed-use projects”.
As a market leader, Kensa has pioneered the use of shared ground loops in the UK via micro-district installations. Very simply, individual heat pumps installed at each dwelling are linked to a communal ground array, or shared ground loop in Government parlance. This system architecture qualifies as district heating and, so, both retrofit and new-build installations are eligible for support via the non-domestic RHI. Crucially, the Government’s planned reforms will introduce a significant change to this support.
Previously, RHI payments were based on the metered heat consumption at each dwelling served by the shared ground loop. This requirement forced system owners to install expensive (and notoriously unreliable) heat meters and engage in an onerous quarterly claims process. Worse, they had no certainty on the level of RHI income as they could only estimate the amount of heat consumed at each property, an estimate that was significantly impacted by occupant behaviour, a factor beyond their control.
This uncertainty discouraged many potential system owners so Government embraced industry’s proposal to base payments on the deemed heat consumption (taken from the property’s Energy Performance Certificate); a step which mirrors arrangements in the domestic RHI. Vitally, the non-domestic RHI pays an index-linked tariff over 20 years so returns are far more attractive. And it is also possible to co-fund retrofit installations with upfront grants via the Energy Company Obligation. Of course, the pursuit of subsidy support should never be allowed to trump the technical elegance of any solution so it is helpful that there are multiple arguments for supporting the use of micro-district GSHP schemes rather than conventional district heating.
District heating systems featuring large central plant (of any flavour) require costly insulated pipes to protect the heat as it is circulated away from the source and often impose high bills on householders who have no opportunity to select an alternative heat supplier. Bills based upon heat meters are often questionable and householders typically dislike a distant entity being responsible for the upkeep of the heat source. Most are used to a smaller appliance in their own property: all are relentlessly encouraged to ‘switch’ by Government.
Thankfully, these issues disappear with a micro-district system. Heat is only generated close to the point of use so the fluid circulating around the distribution pipework (within any housing estate or apartment block) is at ambient temperature, massively reducing the cost. Construction costs are also helped by the opportunity to provide a lower number of deeper boreholes as drilling contractors can be more productive whenever rig movements are minimised.
The architecture also enhances system integrity. Under the ‘one heat pump/one borehole’ arrangement, there was some risk that any house with exceptionally high heat use might exhaust its individual borehole unless a very conservative (and expensive) design was adopted. Now, the high heat use house is simply balanced by a lower heat use house so the overall borehole depth can be reduced.
Householders can source electricity from their own preferred energy company, switching as required to secure the most competitive tariff. And the circulation pumps within each heat pump move the fluid around the shared ground loop so there is no need for any separate equipment imposing additional running costs.
Householders typically benefit from a 300 to 350% system efficiency which means running costs are consistent with mains gas and are far lower than other renewable heat technologies. Ownership costs are also appealing thanks to the remarkable reliability and durability of the technology.
Of course, this system architecture is only practical in situations where there are neighbouring properties who all agree simultaneously to embrace GSHP technology. As such, early installations have focused on the social housing retrofit and all new-build sectors but emerging financing models are encouraging adoption in private housing. Indeed, Kensa is currently developing plans for a village-wide installation using sea water as the heat source and will shortly deliver the country’s largest private housing retrofit installation in Scotland.
The Fourth Carbon Budget calls for three million heat pump installations at residential properties by 2030, so it is vital that Government introduce policy refinements which will finally allow the sector to flourish. The reducing carbon intensity of the electricity grid is an ideal backdrop to the increased deployment of heat pumps and, increasingly, many stakeholders are recognising the sense in focusing on the most efficient variant: the time for ground source heat pumps has arrived.
