Agenda item

Tom Vosper, Strategic Project Manager, will provide a verbal presentation followed by a question and answer session on:

·  SELCHP expansion project

·  Water source heat pump project

·  Heat Networks Strategy

·  Heat metering

District Heating was considered by the 14 September cabinet, under item

13: Heat Networks Strategy.  Appendix 5, Heat Network strategy development, is particularly relevant, especially pages 8-11. More information on the cabinet item can be found here:

https://moderngov.southwark.gov.uk/ieListDocuments.aspx?CId=302&MId=7015&Ver=4

The 19/ 20 Housing Scrutiny Commission wrote a report on District Heating and Heat Networks, details can be found below.

Scrutiny Report:

 https://moderngov.s:uthwark.gov.uk/ieDecisionDetails.aspx?ID=7178

Cabinet Response:

https://moderngov.southwark.gov.uk/ieIssueDetails.aspx?IId=50024623&PlanId=0&Opt=3#AI59107

Tom Vosper, Strategic Project Manager, gave a presentation covering the below:

·  SELCHP expansion project

·  Water source heat pump project

·  Heat Networks Strategy

·  Heat metering

The chair then invited questions and the following points were made:

·  Billing will be done via a fixed weekly charge so that the cost is spread equally throughout the winter and summer, and this will be amended if energy use is lower or higher throughout the year. This was a result of the feedback from the consultation.

·  The charges will be cost recovery rather than profiting making .The council have not decided yet of the costs will be estate based or pooled.

·  Members raised concerns about estates with outrages and asked how this will be dealt with. The officer explained that when installing new heat systems the council have to balance not raising bills, reliable heat provision, and reducing carbon and grant availability. A recent heat pump scheme was only viable because of grants. A new grant is expected that is likely to provide capital costs to install heat pumps, however efficiency work will also need to be undertaken to ensure demand and thus costs, and bills, can be contained, resulting in the same outcome for bills but lower carbon.

·  The top priority is reliability, and that can mean that when heating systems are not working then the council are replacing gas boilers where needed, even though these are not lower carbon.  Those council estates relying on SELCHP have been 100 % reliable, but there have been problems with estate plant rooms, which ought to not be repeated this winter.  

·  A member referred to the cabinet report and the possibility of setting up a sink fund to raise capital for installation costs. The officer explained that there are legal difficulties, including use of the HRA and lease charging stipulations. Other options are therefore being considered including setting up a shell fund, which would mean the HRA could contribute on an annualised basis and leaseholders could also contribute and spread the cost. However there are challenges which the council is considering and taking legal advice.

·  The extent of biomass and possibility of extending this was asked about. The officer explained that this had been considered but there are problems in terms of carbon and the environment , particularly in the city, including the transport costs of moving biomass sometimes halfway round the world and through the city in HGVs, the storage space required, and pollution that would prevent significant rollout. There is however some biomass, including in Tooley Street.

·  The officer was asked about the heat maps diagram in the cabinet report and the difference between open and closed loop heat pumps.  The officer explained that an open system extracts warmer water from the London chalk aquifer, absorbs the energy, and pumps cooler water back, approximately 5 degrees colder. There are good opportunities here and the Environment Agency is keen on this as generally the water aquifer temperature has been rising as heat has been deposited, rather than extracted. The closed loop extracts heat from rocks, clay and other sources, but does not circulate water. There is a Thames Water exclusion zone where water is extracted from the aquafers and cannot be utilised, and areas where the underground network prevents extraction.