A new approach to decarbonising heat · 2019. 4. 15. · Using trials and research to learn about heat as a service 23 Installations Technical support tickets resolved Most participants

A new approach to decarbonising heat

Learnings from Smart Systems and Heat Phase 2 Programme

Thursday 21 March 2019

© 2019 Energy Systems Catapult

Agenda

1. Welcome: Phil New, Energy Systems Catapult

2. Introduction: The Rt Hon Claire Perry, MP, Minister of

State for Energy and Clean Growth

3. Smart Systems and Heat Learnings: Part 1 ▪ Challenge, Context and Programme – Richard Halsey,

Energy Systems Catapult

▪ Creating a Lab to Test Heat as a Service – Matt Lipson,

Energy Systems Catapult

4. Panel Session: ‘Is there a better way to sell heat?’

5. Innovator Showcase Arena

6. Smart Systems and Heat Learnings: Part 2 - Market

Transformation: John Fox, Energy Systems Catapult

7. Panel Session: ‘Where are we seeing the greatest

innovations in heat?’

8. Smart Systems and Heat Learnings: Part 3

2

9. New Local Context: Richard Halsey, Energy Systems

Catapult

10. Social Dimensions of a smarter energy system:

Jan Webb, University of Edinburgh

11. Experiences of Bridgend County Borough Council, Next

Steps: Councillor Richard Young, Bridgend County

Borough Council

12. Panel Session: ‘What low carbon policy is needed to

drive heat decarbonisation?’

13. Feedback and Conclusion

© 2019 Energy Systems Catapult 3




The challenge

6

At the current rate of conversion, it would take…


The cost of decarbonising heat

7

Source: National Infrastructure Commission

Cumulative additional cost of decarbonising the UK’s heating system by 2050

utilityweek.co.uk/decarbonising-uks-heating-system-cost-450-billion


Decarbonising heat is going to require

significant changes to our economy

8

Homes and

Buildings

Transmission and

Distribution

Generation

Heating systemsConsumers Control systems


There is no silver bullet for decarbonising our homes…

Each home is different, and households have very different

heating requirements

Many people

struggle to meet

winter heating

needs in poor

quality building

stock

Cost to improve

and budget to

spend vary widely

between

households

Decarbonising will

require significant

investment

9


… but there is a big opportunity for the industry

10

District heating

Heat pumps

Low carbon gas

Smart controls

Electricity networks

Generation and storage

Retrofit

Bioenergy


Consumers aren’t choosing low carbon heat today

11

of homes have low

carbon heating today

prefer gas central

heating given the choice


And are facing significant barriers

to choosing low carbon heat

12

Subsidies?

Smart controls?

Which supplier?

Intrusive?

Will I like it?

Is it reliable?

Disruption?

Will I be locked in?

Which technology?

Which installer?

Maintenance?

Financing?

Capital costs?

Retrofit?

Will it work?

Running costs?



The energy revolution has started

14

Connected

homes

ProsumersRenewables Electric

vehicles


Digitalisation is just starting to transform energy

15

More households have smart thermostats

with 500K being installed last year

Of people asked found the use case

of controlling heating very attractive

Source: Delta EE Smart speaker customer research

utilityweek.co.uk/smart-thermostats-now-in-1-5-million-homes

statista.com/outlook/279/156/smart-home

Expected sales growth of energy related

connected home devices in 2020

Increase in revenue expected for Energy

Management devices in the Smart Home

Market from to 2023



Smart Systems and Heat Phase 2 (SSH2)

17

Funded by: May ‘17 – Mar’19:

Our challenge: to look at innovative ways to decarbonise domestic heat



How to decarbonise heat: our hypothesis

19

Start with the consumer, not the technology

Digitalisation offers significant potential (and some risk)

Heat as a service could be a powerful proposition

Understanding different local energy systems is essential

Heat decarbonisation will require significant market changes/policy drivers


Learning from SSH Phase 1

20

People care about being warm and

comfortable at home - not which fuel is used

Advanced control and retrofit is critical to

making low carbon heating work

Shift to low carbon will be complex and

systems engineering approaches can help

Work with local areas found a balanced mix

of solutions would be cheapest

Energy services + policy could help create a

market that enables the mix of solutions

needed to decarbonise heat

Energy services appeared a promising

business model to support decarbonisation


Key questions

21

To what extent can service

business models help reduce

the barrier to

decarbonisation of heat?

Will consumers accept

and value new energy

services?

Which policy drivers

might help

decarbonise heat?

Can local energy planning

help unlock decisions and

investment?

Subsidies?

Smart controls?

Which supplier?

Intrusive?

Will I like it?

Is it reliable?

Disruption?


Which technology?

Which installer?

Maintenance?

Financing?

Capital costs?

Retrofit?

Will it work?

Running costs?Which Service?

Which Provider?

Intrusive?

Disruption?


Running costs?



Using trials and research to learn about heat as a service

23

Installations Technical support

tickets resolved

Most participants

rated our support

as excellent

Batteries

replaced

Surveyed about low

carbon scenarios

Surveyed about

heat pump interest

Heat plans

launched

Participant

blog posts

Households

screened

Data points per

home, per day

Health and Safety

incidents recorded

Heat plan

workshops


Rapid change is possible if consumers want it: PC and mobile

24


Rapid change is possible if consumers want it: heating

25


Low carbon heat can be great but there are consumer challenges

(even if the cost was comparable)

26

Make low carbon heating easy to control

Make low carbon heat systems easy to install

Improve low carbon heating systems

© 2019 Energy Systems Catapult 27© 2019 Energy Systems Catapult



Consumers experience widespread problems that

others sectors would see as spurs to innovate

29

Other sectors can discover what consumers want

Most consumers experience damp, drafts and overheating


Could the smart home hold the key?


We upgraded homes to the 2020s level of data and control

31

Commands

from device

Cloud control

and research

database

Home Wi-Fi

and Hub

Boiler controller

and boiler

Room temp/

humidity sensor

Radiator

surface temp

WRV

A room in a

house


Consumers use heat in very different ways (e.g. temperature)

32

Often adjust

temperature to

try and cut bills

Cool Conservers

Rarely adjust their

heating as they are

fine with 18-20oC

Steady and Savvy

Turn it on and off to try and

make sure home is only

warm when someone is in

On-off Switchers

Often adjust

temperature to

get comfortable

Hot and Cold Fluctuators

Some like it hotter or

want to spend more than

others in their home

On-Demand Sizzlers

Love feeling cosy and

prefer not to put clothes

on if they’re cold

Toasty Cruisers


Everyone enjoys better control, but they use it very differently

(e.g. time)

33

Avera

ge n

um

ber

of

ho

urs

per

week

Week commencing


Everyone enjoys better control, but they use it very differently

(e.g. space)

34

Week commencing

Perc

en

tag

e o

f ro

om

s h

eate

d


Other sectors apply usage data to improve systems design

(e.g. automotive)

Digitalisation could enable the heating sector to improve low carbon solutions

35


Last year I spent

• £1,400 on

• 15,000kWh of gas and

• 4,000kWh of electricity

Next year, it’s hard to know

• How much fuel I need

• What it will cost, or

• What experience I will get

I want to

choose how much I spend

warming the rooms I want…

…to the temperatures I like…

…when I like

What if consumers bought Heat-as-a-Service?

36


Heat Plans: a starter-for-ten energy service

37

Pence per warm hourLike “mpg” for heating

Warm hours Hours any room is warm

ScheduleTemperature of

rooms at any time

ExtrasCost of warmth

outside the schedule


Consumers discover the service they want through experience

38

Extras

Costs

vary

Costs

fixed



Heat Plans: the view from people in the trial

40


Participants’ responses to being offered Heat Plans

More than half bought a Heat Plan

41

• Used most of their plans

• More likely to use Extras

• Used less of their plans

• Never used any Extras

• Six upgraded in ‘flash sale’

• Did not increase energy use

FlexiTime was the most popular plan


People with different priorities preferred different Heat Plans

42

• Know what they pay now and

compare prices to this

• Switch frequently, so more

open to something new

• Preferred the FixedTime Plan

to try and control their costs

• But many used lots of Extras

• Enjoyed improved comfort

from zonal new controls

• Most likely to buy a Plan

• Preferred FlexiTime and

enjoyed knowing they could

get the comfort they wanted

• Loved feeling in control of

how much they spent

• Enjoyed haggling to get the

best bargain


Businesses could use this data to offer households tailored

retrofits that prepare their homes for low carbon heat

43

Shows when cannot get

comfort they want

(e.g. lounge feels cold)

Used to design retrofit

that improves comfort

and energy efficiency

Data about

household and

building

Prepares home for low

carbon heating that

suits that area

Supported by

local smart

energy plans


Smart technologies can help tackle consumer challenges to

low carbon heat (once the cost is comparable)

44

Make low carbon heating easy to control

Make low carbon heat systems easy to install

Improve low carbon heating systems



Consumer’s data creates opportunities for

retailers, manufacturers and networks

46


Consumers will need protecting in this

smarter new energy world

47

Know what they’re buying

Can get the experience they want

Can get their problems fixed

Can compare offers and switch


None of this will be low carbon

without policy

48

Transition will change the cost of energy

Innovation should benefit everyone



If energy services could guarantee people got the comfort

they wanted, they might not care how it was delivered

50


Signs that energy services could unlock low carbon heat

51

Could Heat Plans help ‘sell’

low carbon heat?

Preferred the idea of a heat pump

bundled with a heat plan vs. 23% for a

heat pump alone

Does experience of a Heat Plan make

people open to low carbon heat?

of people who bought heat plans were open

to alternatives to gas when replacing their

boiler (vs. 1/3 for people who have not)

Would services be a more popular

approach to decarbonising heat?

were positive to energy services vs.

38% for a home improvement loan,

30% for a boiler ban and 22% for a carbon tax

People with experience of Heat Plans

were more likely to want a heat pump

<0.1% of people who read an on-line advert

wanted a free heat pump compared with

>15% of people who stayed on the trial


Could smart technologies help reduce fuel poverty?

52


What comes first?

53

Policies Energy Service

Providers


A Living Lab so we can all move forward together

54

C O N S U M E R S

P R O D U C T M A N U F A C T U R E R S

ENERGY

SERVICE

PROVIDERS

REGULATORS

POLICY

MAKERS


We are using the Living Lab to accelerate innovation

55

Move five owner

occupiers from gas

to heat pumps

Help industry learn

how to sell energy

as a service

Large scale

Demonstration

Programmes with

partners

Learn how to

design smarter

protection

Help innovators

test new products

and services


How to decarbonise heat: our hypothesis

56










Understanding the barriers and opportunities for business

60

Business model

families flow-

diagram produced

Business models

evaluated in detail

Business models

developedDemand Side

Management

simulation

Business model

canvassing

Municipal ESCo

models studies

Workshops Policy and

stakeholder

journey maps

Analogous

transitions

Data

analysis

50+ business

models

examined

28 business

model families


A range of new business models were explored

Each represents new opportunities

61

Energy as a

Service

Community

energyPeer-to-peer Lifestyle services

company

Off-grid

solutions

Building/

retrofit

Aggregators/

marketplace


Learning from what has worked well in other industries…

62


Enhanced consumer protection is possible with digital tools

63

• Transformed their sectors to the benefit of the customer, if not the incumbents

• Rely heavily on data and digital platforms

• Identified new risks and developed their own largely digital mitigation strategies

Can build trust

Supports active, more agile, and

richer regulation

Data can support other outcomes

(e.g. policy)

Opportunities to harness

Allowing the market to path-find

appropriate regulatory limits can

have consequences…

It is harder to regulate a market after

it is formed

Cost-reflective pricing has created

risks for consumers

Challenges to manage


Done well, open interoperability standards benefit everyone

64

• 1G analogue mobile phone standards around the world were mutually incompatible

• Wide acknowledgment that 2G needed one digital standard

• France and Germany in competition so EU intervened in the market

• Global Systems for Mobile Communications (GSM) was born

Broad industry support

Independently curated, but with

Industry shaping

Independent test and simulation

opportunities provided

Once established, became natural

nucleus for the next wave of

standards

Local investment: ETSI membership

Opportunities to harness

With GSM there was a clear political

mandate – 1G was ‘bad for everyone’

Standards were effective over a large

enough region to support model

ranges

Challenges to manage


Key finding: Future energy system needs to be interoperable

in different ways

65

Commercial Physical

Data

Consumer

Vector

ensuring that provisions exist for

consumers to switch between both

different commercial offers and

technology choices.

to ensure that incentives are aligned

across the energy system to ensure

that value can flow where it needs to,

driven by market forces.

to ease the sharing and portability

of data between different systems.

Devicesto ensure that devices are swappable, replaceable and

exchangeable as needs change and technologies

develop and to allow consumers to make informed

choices between open and closed eco-systems.

to ensure that end-to-end systems function as

changes happen to parts of the system.

to ensure that energy provision across gas,

electricity, heat, transport fuels etc. are compatible

with one-another and that coordination occurs in a

timely fashion.


Key finding: new business models are unlikely to achieve

decarbonisation by themselves

66

All of the business models were considered viable,

but unlikely to achieve the necessary level of

decarbonisation without a policy driver to create

a stronger commercial incentive

We tested series of high-level policy options

through stakeholder mapping:

Identified potential risks in several policy interventions

Risk that vulnerable consumers are not

able to respond to the policy, or

business models may favour one type

of consumer to the detriment of another

Risk that the policy pathway does

not drive the required carbon

reduction levels


Portfolio obligation is a promising approach

67

Puts the responsibility for complex and changing

requirements with an informed consumer-facing actor,

not the consumer

• Homes most in need would benefit

• Longer-term relationship with homeowners

• Supports many different business models and

competing technologies (energy efficiency vs

low carbon heat)

• Supply-chain alignment

• Complements local area planning

Challenges

• How do you make sure it is fair from

supplier to supplier

• Measuring outcomes reliably requires

new and novel approaches




As part of the programme we have been working with

three very different local areas

70

Bridgend NewcastleGreater

Manchester


Local forms an important our heat hypothesis

71







Improving local area energy planning is an important

enabler to low carbon heat

72

Open planning dialogue on

what solutions, where and

when should be implemented

to decarbonise domestic heat

in different places

Whole system local energy plans

can inform local and strategic

decisions on electrification,

hybridisation, hydrogen, heat

networks and fabric retrofit

This can inform decisions and

investments in cost-effective

network solutions that meet

consumers needs in a low

carbon and digital future

Can underpin engagement

with consumers and

communities on local energy

systems of the future


As part of SSH2 we have been working with each local area in

developing their own smart energy plans

73

Continued to collaborate

with the three local areas

Supported developing their

local smart energy plans

Connected to wider local

priorities such as fuel

poverty and transport

Used to stimulate a pipeline

of near term deployment

and innovation projects


There were some common innovation priorities that emerged

across the local areas to meeting the heat challenge

74

Better integrated

electric heating

solutions for gas

heated homes

Solutions for

expanding

district heating

to supply existing

homes

Hybrid heating

and advanced

control as an

enabler for low

carbon heat and

new energy services

Data driven

approaches to

better target

retrofit in local

areas and homes

Creating place

based innovation

zones as a

springboard for

scaling solutions


Social Dimensions of a Smarter Energy System

Jan Webb

Richard Cowell, University of Cardiff and Jan Webb, University of Edinburgh Scoping

Study: SSH and Local Area Energy Planning

Local Area Energy Planning Pilots - lab to locality

Proposition ‘To enable a cost effective low carbon transition, more advanced local area energy planning is needed to ensure the right solutions are implemented in the right place, at the right time’

EPN decision support model

SSH - technology and market innovation

LAs – welfare, shrinking budgets, tangible projects, local benefits - building stock, regeneration, jobs

Funded by:

Knowledge for LAEP

• Perceived validity and usefulness depends on assumptions, form, and sources – authority/power relations/trust

Formal models of complex

systems

• Building stock, development planning, geography, inequality

• Politics and £££

Local and specific

knowledge

• Informing and influencing

• Symbolic and political and Improvisatory

• All need champions to translate energy system modelling to into accessible knowledge for local value

LAEP Uses

In contention – the case for local decision making

Citizen of nowhere

Who needs ‘local’?

What scale is local?

If local, who has

what authority?

intermediaries, technical capacities and resources for any strategic local energy planning

Big bang solution?

A Smarter Energy System - Net Zero GHGs

Value of LAEP pilots

Fit between LAEP & legal and regulatory demands of local government planning

Whole societal solutions

• Contours of the heat problem

• Technical resources

• Cross sector collaboration

• Using complex models in local strategies – lessons from transport & land use planning?

• Organic models of knowledge

• Consensus building for future

• Boundary-spanning civic deliberation and learning


www.bridgend.gov.uk

Local Area Energy Strategy &

Smart Energy Plan

Cllr Richard Young

www.bridgend.gov.uk

BCBC’s Vision

To make Bridgend a decarbonised, digitally connected smart

County Borough.

BCBC aim to act as an enabler for innovators to introduce and deliver

decarbonisation projects, products and concepts to local consumers.

www.bridgend.gov.uk

Local Challenges

03

• Housing and Social

Factors

• Technical Factors

• Consumer Acceptance

(OS data © Crown copyright and database right 2018)

www.bridgend.gov.uk

Welsh Policy Context

03

• Well-Being Future

Generations (Wales) Act

2015

• Environment (Wales) Act

2016

• Welsh Government

Low Carbon Delivery

Plan launched today

(21st March 2019)

www.bridgend.gov.uk

20

16

To

day

20

25

20

50

• Bridgend Data

• Local Area Energy

Planning

• Local Area Energy

Strategy

• Smart Energy Plan

(2018 – 2025)

Smart Energy Plan

delivery:

• Incorporate into Local

Development Plan

• Build strategic

partnerships

• Deliver innovation

projects

• Stimulate the local

economy through:

•Investment

•Industry growth

Use learning from Testing

period to:

• Devise future Smart

Energy Plans

• Make confident

decisions

• Encourage further

economic growth

• Achieve 95% reduction

in CO2 from buildings

Local Area Energy Strategy

04

Planning TestingFurther Testing

& Roll-Out

www.bridgend.gov.uk

Local Area Energy Strategy

05

Dominant 2050

Domestic Heating

Systems Identified

(OS data © Crown copyright and database right 2018)

www.bridgend.gov.ukwww.bridgend.gov.uk07

Smart Energy Plan

Deployment/Innovative heating

projects, complementary transport,

power & digitalisation projects2025

Success:

✓ Create new decarbonisation market offerings to the consumer.

✓ Establish Bridgend as an area of Low Carbon Innovation.

✓ Attract organisations to introduce ideas & concepts to the area.

✓ Stimulate the local economy.

✓ Create the infrastructure needed for the low carbon transition.

✓ Make the wider Welsh and UK energy industry aware of learning from

projects.

www.bridgend.gov.uk08

Smart Energy Plan: Projects

Deployment Projects: 1. Bridgend Town Lower Carbon District Heat Network

Phase 1

2. Bridgend Town Lower Carbon District Heat Network

Phase 2

3. Energy Efficiency Projects

Innovation Projects :1. Fully Targeted Retrofit

2. Hybrid Heat Pumps & Full Electrification

3. Caerau Mine Water Gas-to-District Heating Transition

4. Affordable Urban Heat Networks

5. Electrification of Heat through Energy as a Service

6. Intelligent Bridgend Energy System Design

www.bridgend.gov.uk09

Summary

Innovation

Projects 2025Transition to

Business as

Usual2050

(ETI, 2018a, Bridgend Local Area Energy Strategy)

www.bridgend.gov.uk

Thank You

[email protected]



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Documents

A new approach to decarbonising heat · 2019. 4. 15. · Using trials and research to learn about heat as a service 23 Installations Technical support tickets resolved Most participants