D E S I G N I N G H E AT N E T W O R K S J U S T I N E T H E R I N G TO N

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1 C O N S U LTA N T S P E R S P E C T I V E O N D E S I G N I N G H E AT N E T W O R K S J U S T I N E T H E R I N G TO N 4th November 2015

2 E N E R G B U R O H A P P O L D

3 D R I V E R S - E N E R G Y T R I L E M M A N AT I O N A L C O N T E X T SECURITY OF SUPPLY AFFORDABILITY SUSTAINABILITY

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5 H E AT N E T W O R K S - A P I E C E O F T H E S O L U T I O N A heat network is not a short term investment, the VALUE lies in the future performance. Enable large scale low carbon techology deployment and simplified future transition Gas fired CHP is a TRANSITION technology to future zero carbon sources

6 D H C U R R E N T UK L I F E C Y C L E Operation DH Policy 1. Heat Mapping Construction Procurement IMPLEMENTATION Heat Network Delivery Unit 2. Energy master planning 3. Feasibility study Business case approval 4. Detailed project development

7 BH D H P R O J E C T S

8 K E Y S U CC E S S FA C TO R S Technical solution with adequate heat With CHP private wire makes a world of difference Alignment of stakeholders Agreement of objectives and performance Long term projects with modest returns Understanding of operational vehicle and long term strategy Commitment to implementation

9 C L A R I T Y O F D R I V E R S / O B J E C T I V E S Public or Private clients have different drivers: Tackle fuel poverty RETURN ON INVESTMENT HIGH Cost savings Policy Carbon reduction LOW HIGH Return on investment Raise profile of the Council/development Facilitate inward investment and jobs Important to prioritise and agree as there can be tension LOW HEAT PRICE LOW HIGH CO 2 SAVINGS

10 R E Q U I R E D C O M P O N E N T S O F A S U CC E S S F U L P R O J E C T Technical Viable Solution Commercial

11 W E S T M I N S T E R C I T Y C O U N C I L C H U R C H S T R E E T H E AT N E T W O R K Date Title Funding 2013 Paddington Church Street Public Realm Masterplan Church Street DH Feasibility DEPDU HNDU Compl etion Church Street DH design through to delivery HNDU

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13 I N I T I A L N E T W O R K F E A S I B I L I T Y

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15 Element Value Cost ~ 9m Heat Phase 1 ~ 10GWh/a Phase 2 ~ 15GWh/a Peak boiler plant 3.0MW retained plant 4.0MW new boilers CHP W E S T M I N S T E R C I T Y C O U N C I L C H U R C H S T R E E T H E AT N E T W O R K Thermal Storage 75m 3 Network Temperatures 2 x ~1200kWe Pre-insulated Steel Phase 1 ~1600m Phase 2 ~ 600m Winter 90⁰-60⁰C Summer 70⁰-45⁰C

16 K E Y D R I V E R S Regeneration gave opportunity to invest into infrastructure WCC Commitments to: CO 2 reduction Fuel poverty alleviation Power to obligate connection of private development Availability of finance through council sources Experience of operation with Pimlico District Heating Undertaking Proximity of WCC owned properties in control of stakeholders and pricing

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19 C O M M E R C I A L S T R U C T U R E Cost Plant cost - 5.5m Network cost ~ 3.5m Heat pricing developed from existing costs and future plant replacement Investment structuring Sensitivity testing Acceptable rate of return

20 R E C O M M E N D E D S O L U T I O N F O R B U S I N E S S C A S E A P P R O VA L

21 C O N F I D E N C E B U I L D I N G T H R O U G H DE- R I S K I N G Technical accuracy Sizing Confidence to design lean highly utilised networks Simulation realistic representation of losses and heat consumption Implementation and industry feedback Performance representing the modelled system Economic accuracy Costs representative of reality Installation Operational Future understanding of operation or exit strategy

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23 C R I T I C A L S U CC E S S FA C TO R S Client COLLABORATION + CONFIDENCE + COMMITMENT Industry

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