Communal heating schemes have a reputation for being very inefficient. It’s a widely held perception that communal heating means high tariffs for residents, increased standing charges and reduced reliability, making it an unfavourable option for residents. But is there any truth to this?

Heat Network Efficiency Scheme (HNES) – What did the demonstrator round tell us?

The first round of the Heat Network Efficiency Scheme (HNES) unfortunately proved that heat networks are indeed, performing poorly. Under the demonstrator round of the scheme, Switch2 carried out nine optimisation studies across sites of varying sizes and locations. The results of the studies found that schemes were operating at an average efficiency of little over 40%, with heat losses between the plant room and the property commonly reaching 60%.

Of course, these results should set alarm bells ringing, as this level of inefficiency results in a range of undesirable outcomes for both residents and operators. Poorly performing heat networks are not good news for anyone. Residents suffer from higher tariffs and poor reliability, whilst operators suffer from high plant room maintenance, increased replacement costs and higher carbon emissions due to higher than necessary demand on the system. All feeding though to higher cost for residents or leaseholders.

The carrot - In the current climate, where soaring gas prices led to increases of more than 600%, it’s imperative that heat network efficiency becomes a priority. Not only will it help to reduce the cost of gas for operators, but these reductions will also help to alleviate the pressure of passing significant cost increases onto residents and leaseholders.

The stick - The Government is bringing in regulations for heat networks that will cover customer protection and technical standards. Building owners who do not manage their heat networks may be at risk of sanctions.

What can building owners do to improve efficiency?

There is no better time to improve your buildings heat networks... the unfortunate dramatic increase in gas and electricity means that paybacks on improvements are much more attractive.

When it comes to improving the performance of heat networks, building owners often find themselves making important decisions without the necessary data or experience to ensure they’re the right ones. In our experience, there are three levels of intervention which building owners can make on their journey to a more efficient heat network.

Low-cost interventions

Ensuring your scheme is properly operated and maintained can make a significant difference to how it performs and is the first step in giving your residents a fairer deal.

A specialist operations and maintenance provider, such as Switch2 can easily pinpoint and fix the specific issues your heat network is experiencing, quickly improving efficiencies by up to 30%. As a result of the rising cost of gas, employing a specialist operations and maintenance provider should pay for itself through the savings made because of the improved efficiency.

Medium – cost interventions

If your heat network is still not performing, it may be that you need to make more drastic changes. Medium-cost interventions are often more intrusive and will require more capital spend. They include actions such as:

• Replacing HIUs
• Insulating risers
• Making modifications to energy centre pipework

Before you make any investments however, it’s important to ensure that you fully understand where changes need to be made to ensure that they have an impact.

High-cost interventions

Finally, building owners can look to more make more radical changes to improve efficiencies. High-cost interventions require significant capital investment and offer more complex challenges for building owners. Some examples of high-cost interventions are:

• Reducing pipework sizes
• Replacing pipework supports
• Insulating laterals

It all sounds great, but what’s in it for me as a building owner?

As a building owner, now has never been a better time to make improvements to your heat network. The soaring cost of gas has made paybacks much more attractive than before the energy crisis. For example, a scheme of 288 residential properties using 3000 kWh per customer which is operating at 40% efficiency could now save £33,014 and reach 65% efficiency, just by making improvements.

Is there any Government help?

Improving heat network efficiency is also now firmly on the Government’s agenda, in line with their ambition to clean up heat. Following a popular demonstrator round, the next round of the Heat Network Efficiency Scheme (HNES) is set to launch in early 2023. The upcoming £30 million grant funding scheme will part-fund the installation of targeted and cost-effective improvement measures aimed at delivering performance improvements, and optimisation study projects to identify such measures.

If you’re a building owner, it’s important to note that the funding will be limited, so it’s imperative that building owners are ready for submission when the funding opens.

How can Switch2 help?

If you want to understand the savings you could be making, our simple Heat Network Efficiency Savings Calculator can do the work for you. Alternatively, if you’re looking for support with HNES funding or how to prepare for the next round, complete the form below and one of our team will be in touch shortly.