Is it time to answer those awkward questions on CHP and district heating?

23 October 2015

Bill Watts of Max Fordham says that CHP and district heating are a short-term fix that isn't even working. And while London 'mandates' them, other solutions are overlooked.

Bill Watts

There is a growing disquiet surrounding the installation of Combined Heat and Power (CHP) and district heating systems in new-build developments. Current policy from the GLA under Chapter Five of the 2015 London Plan, alongside encouragement from DECC, almost mandates their inclusion to get planning approval, but data supporting their effectiveness is so scant it’s almost scandalous. 

Like many other engineering consultants, Max Fordham has been working on district heating and CHP schemes throughout the UK for some time. This includes working with existing systems, designing them ourselves, and reviewing reports and designs by other consultants. 

In our experience, it’s a fact that existing CHP and district heating systems are generally more expensive to run, consume more energy and issue more CO2 than an equivalent “conventional” system.

For older systems, this normally leads to the recommendation to rip them out and replace with local boilers. For new systems installed in the last four years or so, it leads to a problem for registered social landlords who thought they were getting a system that wasn’t that much more costly than the conventional heating systems that they have been used to.

The hapless residents have to pay what is asked of them, with no opportunity to enter the marketplace for competition on prices. I find it staggering that such a basic utility as heat can be provided by a completely unregulated, monopoly supplier who can charge what they like. 

Even when we have been obligated to include these technologies in our own designs, we can only make the projects make sense from the point of view of CO2 consumption if we suspend our professional disbelief and simply input the manufacturer’s data and discount any system losses.

Like death and taxes, system losses are inevitable, as is overly optimistic manufacturer’s data. If we add calculated losses, it sends CO2 consumption north of those from conventional systems. And that’s before allowing for additional factors that can be difficult to mitigate – such as workmanship and sub-optimal operation.

The dearth of data relating to the effectiveness and efficiency of CHP and district heating means that unless you are in an energy service company (ESCO), you don’t know exactly what the heat losses are from these systems, except that we know they are much higher than we have been led to believe. If the CHP and district heating industry fails to indicate what those losses are, it makes predicting the viability of these systems very difficult.

"The dearth of data relating to the effectiveness and efficiency of CHP and district heating means that unless you are in an energy service company, you don't know exactly what the heat losses are from these systems, except that we know they are much higher than we have been led to believe."

The decision to install CHP and district heating, as promoted by the government and as good as mandated by the GLA to gain planning approval, is based on reports by consultants that purport their effectiveness. But a cursory examination in these reports of the calculations made for losses, efficiency and run times indicate an at best naïve understanding of engineering. 

The carbon-saving argument for gas CHP is based on the current carbon intensity of grid electricity. The case rapidly falls away, however, as the grid decarbonises, which is the avowed aim of the government, by switching from coal to gas, nuclear and renewable electricity.

Even the rabid proponents of CHP and district heating schemes admit that their idealised zero loss systems will not save carbon in a few years. This is not a viable long-term strategy.

When we discuss these reports with the authors there is a general agreement that the figures don’t really stack up but hey, the client wants an easy passage through planning, so just put it in. 

We’ve even experienced examples where the more far-sighted proponents suggest that developers should install PV arrays to offset the additional CO2 that the district heating and CHP will produce. You couldn’t make it up!

The government has been sold on the idea of these systems as the panacea to future energy woes and the growing impact of global warming. The more curious are beginning to question these figures and do the calculations based on more empirical evidence, expressing an alternative view and suggesting, quite rightly, that all is not well in the garden. But to question this too ardently, in London at least, will jeopardise planning approval for a client, so compliance is the safest option. 

Another intangible that affects the performance of these systems, leading to results that are far worse than we calculate, is the quality of the installation. There are no statutory requirements for any installation standards or performance standards, so one should not be surprised at the outcome.

Somewhat belatedly the industry has produced some design guidelines that could improve the quality of the installations, but there is no legislation to back this up and no performance targets stipulated. Without defined targets, a requirement to publish data, or a need to be competitive with other sources of heat, one can’t see the industry hurrying to change.

So why are we doing this?

Policy makers will, in private, tell you that they don’t really care about the costs or the losses. They are aware of the problems but are happy with the price paid for the infrastructure and the additional running costs and the increase in CO2 emissions. They’ll tell you the bigger picture is that, in the future, all these systems will be fed with low carbon heat.

Will you please tell us, what are the sources of this low-carbon heat you are forecasting over the next 25 years? This policy is making things worse – we are using more energy, we are wasting more energy, we are producing more CO2, developers are paying more to install systems they don’t need, owners are paying more for their flats as a result, tenants are paying for heat they don’t need at a price they can’t shop around against.

It is a scandal – and we are blithely tolerating it at a time when fuel poverty, energy security and housing affordability are looming issues threatening our way of life. All this, on the unresolved promise that the additional CO2 we are releasing today will one day be “paid back” in an as-yet unarticulated future.

While this district heating circus plays out, it sucks money from the job of better insulating buildings to not need heat in the first place. The irony is that reducing the amount of heat a building needs will actually increase the proportion of heat lost in a district heating system, making it less economically viable and more environmentally damaging.

District heating, therefore, is not a friend of insulation. Until we get some answers to how we are going to heat and power Britain I suggest we make use of our cash to insulate well and reduce the demand for heat, and therefore use very little of it.

Bill Watts is a senior partner at Max Fordham LLP


Bravo - Someone with the sense to stand up to the sheep-like (and incorrect) belief that district heating (Community energy before that) is energy efficient and low carbon. There are appropriate circumstances but inflexibility and underreported losses often make large scale district solutions expensive and far from low carbon. But the flock is well herded I'm afraid.

Alastair J Nicol BSc CEng MEI , 23 October 2015

Good to hear the opinions of a practitioner. It certainly challenges the positive spin we keep hearing.

Kevin Ryan, 23 October 2015

CHP is of marginal benefit as the grid decarbonises - no arguments there.

Small scale CHP (with low electrical efficiency) is worse than individual gas boilers - no arguments there.

All heat sources (CHP, boilers, heat pumps, fuel cell) are worse than individual gas boilers if the engineers screw up the distribution network design and commissioning - no arguments there.

DCLG's reliance on BREDEM (SAP) for evaluating the performance of buildings exposes them to the weaknesses of this tool - no arguments there.

BREDEM (SAP) imposes no requirements on distribution network efficiency and indeed protects engineers who screw up distribution network design, commissioning, and subsequent operation by providing absurdly generous assumed values for distribution network efficiency - no arguments there.

Unscrupulous engineers exploit these weaknesses to specify terrible systems and win the business of developers on the basis of lowest upfront cost - hardly any surprise here either.

Summarised in your own words: "There are no statutory requirements for any installation standards or performance standards, so one should not be surprised at the outcome."

The industry provides what developers ask for - which is cheap - rather than what UK plc needs - which is good. We could tell the same story about insulation, thermal bridging, ventilation, and air tightness.

District heating can be done very well indeed, as can insulation, thermal bridging, ventilation, and air tightness. The steps needed to ensure that those developments of yours are to passive house standard are the very steps needed to ensure that their communal hot water systems (insulation doesn't help with hot showers) are low carbon and future proof.

Step 1 is probably to stop throwing rocks at your allies in the world of energy efficiency. (there's a very good reason that the CHPA is no longer about CHP but also incorporates demand response and energy efficiency...),

Step 2 is working out how to educate lead customers, those with an interest in the lifecycle cost of their buildings, in how to specify a building in order to achieve our aims. Do you have any helpful suggestions on this one Bill?

Marko Cosic, 26 October 2015

Three starters for ten:

1) Delete the get out of jail free clauses in BREDEM (SAP) on the assumed efficiency of heating systems. Require 'type approval' of systems or detailed calculations for one-off designs.

2) Take the NHBC's technical bod to one side and offer him the opportunity to update NHBC's absurd hot water requirements before DCLG makes him look stupid by explicitly outlawing such requirements in the building regulations. (DHW at >60C at kitchen sinks, unless you're installing an individual gas combi boiler in which case no rules apply) Designing efficient district heating solutions for new build would be a lot simpler if the insurer's performance standard was the same as for individual gas boilers.

3) Change the BREDEM (SAP) scoring from 'marginal fuel cost/emissions' to 'lifecycle fuel cost/emissions' to encourage forward-thinking on behalf of planners. Then may the most appropriate solution win. ;-)

We'd be happy to design you an efficient, cost effective, communal heating system in new build tomorrow. Heat pump based with flow temperatures in accordance with Swedish Building Regulations: max 55C at design condition. You couldn't insure the finished build using the NHBC though, because we refuse to meet their specifications, and you wouldn't receive a great SAP rating, because we design for lifecycle cost/emissions not marginal fuel cost/emissions, and that isn't captured under SAP.

Marko Cosic, 26 October 2015

Good to get these issues aired. The caveat in Bill's opening sentence is crucial - he's specifically talking about New-build! For existing networks of older buildings - like Universty estates, hospitals etc and housing schemes with group heating then upgrading the energy supply infrastructure to deliver power and heat (sometimes cooling too) does have multiple benefits - displacing high cost electricity can pay for the sunk costs of distribution networks. And once sufficient variety of building types connected our experience at the Univerdity of Edinburgh is that the diversity means we run our four engines 24/7 serving quite diverse campus networks.

David Somervell, sustainability adviser, University of Edinburgh

David Somervell, 27 October 2015

I'm a German Engineer working in scientific analysis of all types of heating systems for many years now. I have a special focus on the comparison of different energy systems, such as buildings with insulation, CHP, heat pumps or boilers or any combination of these. However, so far I have to say that I never heard or read that:

"...it’s a fact that existing CHP and district heating systems are generally more expensive to run, consume more energy and issue more CO2 than an equivalent “conventional” system."

In my view such an aggressive claim would need extremely well grounded evidence, to be taken seriously. Progressive countries like Sweden, Denmark and many cities in Germany use CHP to significantly cut Carbon emissions. This is verified by many studies and I have made enough calculation on my own that I am as certain as a scientist can be that the notion of CHP as an environmentally sensible solution is correct.

Like the author I am against simple "always do this and it will work" recommendations. For individual constructions like buildings, its simply not a good approach. However, in many cases DH systems are a very promising and good solution to decrease resource consumption and cut carbon emissions. Cost calculations are always very sensitive depending on the underlying basic economic assumptions, especially on those on interest rates, investment costs, taxes, subsidies and CO2 prices - so they are a poor indicator for the benefit our environment (and thus our future) gets from a system. Just so you know in Denmark DH from CHP is the cheapest form of heat.

I agree with the author that probably DH is not a sensible approach in low heat-demand density areas with new-build single-family houses but in inner cities or even in moderately insulated new build multi-apartment buildings, the situation can be very different.

The theory behind CHP after all is convincing. If you generate power, you have to generate waste heat (2nd law of thermodynamics). CHP allows you to upgrade that waste heat to a useful temperature level. With this you replace heat that has been generated by using valuable fuels directly for generating "low value" heat and thus reduce resource consumption and emissions.

If the author doesn’t believe me, I am open for a challenge. The author can send me his calculations for review. I am pretty sure I will find a mistake in the calculations. If I do, the author will pay me for the time the review took - if I don’t I will make the result public here or support his claim in another article for free. If the author is so sure about his claim, I expect to read from him soon.

Until then I caution everyone against believing this unusual and so far poorly justified opinion.

Andrej Jentsch PhD Eng., 28 October 2015

Most consultants design and commission DH for an overestimated peak demand and see that as job well done. The resulting performance is poor at the everyday much lower loads. It’s no surprise that incorrect design and commissioning lead to poor DH – the problems is many designers haven’t bothering to find out / think the issues before starting work. For instance Bill Watts’s 2010 document against DH and CHP discussed how electrically led CHP, sized to meet the electrical demand of the buildings being heated (so the CHP dumps 20% of heat generated and supplies 40% of total heat demand) showed little environmental benefit- which to me demonstrated that the author doesn’t know enough about CHP/DH. Heat lead CHP with a thermal store sized at the economic optimum (zero heat dumped and CHP supplying about 75% of total heat demand) will deliver far higher CO2 and economic savings and this is what a knowledgeable consultant would suggest and what the profit making ESCOs: Eon, SSE, Cofely etc build.
Typical UK design of heat networks has been poor and this was Phil Jones’ motivation to behind getting CIBSE and ADE fund the Heat Networks Code of Practice. Members of the industry keen to improve things contributed and the end result is an excellent step forward which will help designers and clients build better DH.
Bill says there is a dearth of data – well I think a consultancy worth it’s salt should monitor some of the schemes it’s designed. Then it can learn, improve the designs and not accept poorly commissioned systems on their client’s behalf. Invariably this will lower capital cost too. I’ve yet to see a handed over DH system with a temperature difference of more than a few degrees unless an ESCO was involved. ESCOs have worked this out as it costs them money. Commonly low dT is a due to flushing bypasses left open. It shows the lack of knowledge that the consultant can’t spot this or other simple problems. In my view there is a lack of interest in understanding how DH could work more efficiently, an absence of ambition to improve.
Bill has a go at CHP, which will have reducing CO2 saving in future, but that rather misses the point of DH ? It’s easy to change a few DH heat sources than thousands of combi boilers. Look at how Sweden has fuel switched over the years – this rate of change wouldn't have been possible if there wasn't lots of DH. As for a good heat sources can I suggest SELCHP surrounded by inner city London which has be throwing away around 100MW of heat since 1994 – how much of London would that heat? If it were a Danish EfW plant most of the heat would come from the flue gases and result in much less sacrificed electricity. If there is no EfW plant locally how about a heat pump from a river/lake/industrial waste heat /sewage works or deep geothermal or AD etc ….

Martin Crane, 30 October 2015

Thanks for your comment, Martin.

Could you please direct me to data from examples of these systems operating at the 'economic optimum' in the UK that demonstrate CO2 and economic savings?

As a matter of interest, do you have any data that substantiates the SAP Calc and its prescribed losses of 5% in dwellings?

Many thanks

Bill Watts, 30 October 2015

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