The objective of the Distributed Energy (DE) Programme is to increase the uptake of DE through the development of integrated systems in order to reduce through-life costs, improve ease of installation and increase efficiency in the combined generation of heat and electricity. Within this programme framework the objective of the Macro DE FRP will develop and validate a software methodology to enable the design of optimised DE solutions where clusters of demand sites are linked with appropriate DE supply equipment. The project will quantify the opportunity for Macro level DE (up to 50MW) in the UK and the potential to accelerate the development of appropriate technology by 2020 for the purposes of significant implementation by 2030.
This is the final report on the benefits case for DE in Great Britain.
The assessment of the potential for DE across GB follows a staged process. It makes use of the 20 Characteristic Zones (CZs) which have been identified in work package 2 of this macro DE study as representative of areas potentially suitable for macro DE. A macro DE scheme is optimised for each CZ made up of a District Heating Network (DHN) and energy centre. The optimisation produces the lowest ‘levelised heat cost’ solution for the CZ. These results are then aggregated to a GB level by multiplying up to all zones within each class represented by a CZ. By comparing the macro DE heat costs with counterfactual costs from air source heat pumps (ASHPs) and gas boilers, an assessment can be made on where macro DE offers a more economic solution. Different GB uptakes can then be assessed based on zones where macro DE is economic, a net economic case (with some economic zones cross subsidising some un-economic zones), and a maximum CO2 reduction case (where the macro DE costs are not considered).
The report concludes
There is a very large potential for macro DE using gas fired CHP in the 2010s and 2020s.
Despite the technical and economic potential, many barriers exist which future policy aimed at supporting macro DE can help overcome.
Macro DE may be a significant contributor to GB electricity supply with wide spread deployment.
DHN costs dominate the capital expenditure and access to low cost finance can help reduce this impact.
The CO2 savings from gas CHP will reduce in the 2030s, but alternative forms of generation can make use of the flexibility offered by DHNs.