Heat networks are an excellent way of providing low cost, reliable, low carbon heat to the residents. However, things have not always be done as well as they could be. 

Reasons for this range from a lack of experienced contractors, poor operation by non-specialists, and a lack of focus or understanding of what equates to optimal heat network performance.

Whilst The Competition and Markets Authority (CMA) Heat Networks Market Study 2018 was very positive about heat networks in general, the report identified that customers, particularly those on privately-operated schemes received poorer outcomes in terms of price and service. In addition, when service and reliability issues arise, heat network customers are not currently afforded the same protections as those on conventional gas and electricity supplies.

Of course, this study was undertaken before the soaring rise in the cost of gas, meaning that residents who are serviced by heat networks find themselves more vulnerable than ever before. On the other hand, the paybacks on performance targeted, high-quality operation and maintenance, and improvement interventions, are now much more attractive than before the energy crisis.

How can improving the efficiency of a heat network help residents?

For a long time, many heat networks have been underperforming, leaving residents with poor service and low value for money. Since the rise in the cost of gas, residents on poor performing heat networks are facing a gigantic increase to their energy bills.

Improving the efficiency of a heat network has significant benefits for the residents. Increased efficiency means an enhanced, more reliable heat network. Improving the efficiency of a heat network also reduces the demand on the system, meaning that gas and electricity consumption is reduced which leads to lower tariffs for residents.

What can building owners do to improve efficiency for residents?

Many building owners are often concerned by the cost of making improvements, and in our experience, have often shied away from making large capital investments as the paybacks were not very attractive.

Heat network specialist operations and maintenance, targeted on improved performance will make informed improvements to the your heat network, meaning your residents will pay less for their heat, going some way to mitigate the huge increase in energy costs.

Why should building owners be looking at this now?

Since the gas crisis, paybacks have become increasingly desirable and with the spiralling gas prices being passed on to residents through energy bills, there has never been a better time to improve the efficiency of your h

eat network.

To demonstrate this, if pre-energy crisis, a building owner was paying 1.5p/kWh for gas and the heat network was 35% efficient, the annual gas bill would be £30,000.

Compare that to post energy crisis, building owners who are now paying 10p/kWh, will see their annual bill rise to £200,000 if the efficiency remained at 35%.

However, if building owners made targeted performance based interventions, such as specialist operation and maintenance, which increased efficiency to 55% the annual bill costing £200,000 would drop to £127,273. This translates into a £72,727 saving which building owners could pass on to their residents in the form of a lower tariff.

Is there any funding available?

Improving heat network efficiency is now firmly on the Government’s agenda, in line with their ambition to clean up heat. In 2021, the Government launched the Heat Network Efficiency Scheme (HNES), which provided funding to building owners with the aim of supporting efficiency changes to heat networks. Following the popular demonstrator round, the next round of the HNES funding is set to launch in early 2023. The upcoming £30 million grant funding scheme will part-fund the installation of targeted improvement measures aimed at delivering performance improvements, and optimisation study projects to identify such measures.

How do I get started?

Before you start to make investments, it’s important to assess your heat network, understand it’s current performance, what can reasonably be done to improve the efficiency and expected savings you can make.

Use our Heat Network Efficiency Savings Calculator to work out your potential savings by improving the efficiency of your network.

If you’d like to discuss how Switch2 can support you with your operations and maintenance, please complete the form below and one of our team will be in touch to discuss.