Electricity System Benefits of Heat Networks

This study demonstrates the electricity system benefits of heat networks for the UK’s energy system by 2050, using the Whole Electricity System Investment Model (WeSIM).

This work was conducted by ADE Research (head author: Freddie Wilkinson), in collaboration with Dr Shahab Dehghan (Newcastle  University) and Dr Marko Aunedi (Brunel University). Drs Dehghan and Aunedi operated the Whole electricity System (WeSIM) model on behalf of ADE Research on a subcontractor basis. 

This work was part-funded by the following companies: 1Energy; Vattenfall; SSE; EON; Switch2; Metropolitan; Veolia; Hemiko; Bring Energy; and Vital Energi. 

Key conclusions: 

o It is considerably cheaper to invest in heat networks than it is in individual ASHPs across the urban and semi-urban geographies that we model. The net savings from investing in heat networks in urban and semi-urban areas, rather than individual ASHPs, come to £1.1Bn a year.

o Efforts to improve national flexibility market access should support heat networks’ participation and realise at least some of its benefits in reducing the need for more expensive lithium battery storage.

o Our modelling finds that heat networks could create savings of up to £1.2Bn in avoided generation installed capacity. This agrees with previous studies, which also show significant savings from a 
reduced need for offshore wind and solar capacity. Current market or strategic planning arrangements do not currently enable these savings to be realised. This needs to be a clear priority. 

o The reduced grid costs associated with large heat networks with high levels of Thermal Energy Storage (TES) reflect the reduced operational burden on the grid. However, beyond local flexibility markets to manage local constraints, there are no current markets that would enable these savings for consumers and UK Plc to be realised.

Collectively, these equate to an annualised net benefit of £3.5 bn a year that is directly attributable to the ambitious deployment of heat networks with large-scale, flexible thermal storage. By 2050, these cumulative net benefits reach £86.5 bn.

Please read the full report below: