Final report - Feasibility Studies for Heat Networks in Oxford€¦ · BRE Client Report Final...

BRE Client Report

Final report: Heat Networks for Oxford - City centre feasibility study

Prepared for: Paul Robinson

Date: 20 June 2016

Report Number: PR0991-1007

BRE

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Prepared for:

Paul Robinson

Team Manager, Climate & Energy

Oxford City Council

109 St Aldates

Oxford

OX1 1DS

Heat Network Feasibility Study for Oxford - City centre Report Number: PR0991-1007

Commercial in Confidence

Document Version 1.5

Template Version V2-0820

© Building Research Establishment Ltd

Report No. PR0991-1001

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This report is made on behalf of Building Research Establishment Ltd. (BRE) and may only be distributed in its entirety, without amendment, and with attribution to BRE to the extent permitted by the terms and conditions of the contract. BRE’s liability in respect of this report and reliance thereupon shall be as per the terms and conditions of contract with the client and BRE shall have no liability to third parties to the extent permitted in law.

Prepared by

Name Christian Koch (BRE), Robbie Thompson (BRE), Robert Clark (Greenfield), Oskari Fagerström (Greenfield), Jussi-Pekka Kuivala (Greenfield), Herkko Lehdonvirta (Greenfield), Michael King

Date 20 June 2016

Authorised by

Name Robbie Thompson (BRE)

Position Technical Lead, BRE Building Futures Group

Date 22 June 2016

Signature







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Version history

Version Date Description Prepared by

0.4 26/11/2015 Early stage draft report Christian Koch, Robbie Thompson

0.5 18/02/2016 Interim report Christian Koch, Robbie Thompson, Robert Clark

1.2 25/04/2016 Final report draft Christian Koch, Robbie Thompson, Robert Clark, Oskari Fagerström, Jussi-Pekka Kuivala, Herkko Lehdonvirta, Michael King

1.4

1.5

20/06/2016

12/10/2016

Final report

Final Report - Edit for Oxford City Council public website

Christian Koch, Robbie Thompson, Robert Clark, Oskari Fagerström, Jussi-Pekka Kuivala, Herkko Lehdonvirta, Michael King

Edit by Paul Robinson of Oxford City Council

The version you have accessed is 1.5.







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This heat network feasibility study has jointly been commissioned by Oxford City Council and the University of Oxford with additional funding provided by the Heat Network Delivery Unit at the Department of Energy and Climate Change.

The study investigates a number of heat network options for Oxford city centre, connecting a wide range of potential heat and power consumers and a range of baseload supply technologies. The work follows an Outline Masterplanning study completed in 2014, which identified that the Oxford city centre offers a significant opportunity for the development of a heat network system due to its relatively high heat demand densities and committed local stakeholders.

Extensive analysis of energy loads in the city centre identified a number of key heat loads that could be connected to a heat network, which are shown as load clusters in the map.

From review of heat and power loads, existing heat networks and availability of supply plant locations, three heat network options were identified to provide heat and power to the zones shown in the maps below, namely a) Option 1 - Science Area / Keble Triangle, b) Option 2 - West End and c) Options 3 - city wide. The table below summarises the load and network length characteristics of each.

Executive Summary







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Option 1 Option 2 Option 3

Rated Peak Heat Demand (MW) 25.0 10.3 59.0

Annual Heat Consumption (MWh) 37,485 14,179 80,115

Network length (m) 2,870 2,522 9,904

Annual Linear Capacity (MWh/m) 13.1 5.6 8.1

Peak Linear Capacity (kW/m) 8.7 4.1 6.0

Within each of these zones heat network routes were identified (in consultation with key stakeholders), pipework was dimensioned and then cost estimates were prepared.

The network plan shown below illustrates the proposed arrangement for the Option 3 (city-wide) network, which also incorporates Option 1 (Science Area / Keble Triangle) and Option 2 (West End) networks.







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The study has considered a wide range of baseload supply technologies with the following

being identified as the most promising, which were subsequently modelled: Biomass Boilers,

Biomass CHP, Gas CHP and Water Sourced Heat Pumps. A review of potential energy centre

locations has also been conducted. Inclusion of existing gas boilers and new gas boilers has

been considered to meet peak load requirements.

Analysis for the networks considered for the Science Area / Keble Triangle and for a city-wide scheme suggests strong viability. The Science Area / Keble Triangle network is estimated to deliver a rate of return (40-year IRR) of close to 17% and the city-wide (best variant) provides a return greater than 14%.

The investigation has been largely focused on the University of Oxford estate, with the city-wide network also incorporating major new development loads (primarily the Westgate and Oxpens developments) along with a number of other key consumers such as local council and other public properties. Other key load opportunities have been excluded at this stage, for example, the university colleges and numerous independently owned / operated properties due to

physical and technical constraints.

Collectively, these additional loads, if connected, are likely to improve financial performance, suggesting the city-wide scheme would have significant scope for viable expansion. For reference, the university colleges are estimated to account for 54% of 54% 35%

6% 3% 2% College

Oxford University

Various owners

Local and nationalgovernment

Westgate Alliance







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the heat loads in the city-wide area as depicted in the figure on the left side.

The University of Oxford has major part of control over the centre heat load as shown in the chart and could take on the role as district heating champion. Other engaged stakeholders are Oxford City Council, Oxfordshire County Council,

governmental bodies as well as building developer Land Securities (part of Westgate Alliance).

The Science Area / Keble Triangle network essentially involves the interconnection of University of Oxford properties, which would therefore avoid the need to capture loads operated by other stakeholders. It also focuses on existing properties with both high heat and power demands in a relatively small area. As such it is considered the best network opportunity and is recommended as the initial focus for development. It is proposed that this network’s base load would be met by Gas CHP (rated at approximately 13MW) which could be located with associated plant in an existing suitable Science Area basement. Peak loads are proposed to be met by gas boilers, maximising the use of existing boiler plant.

Where there is support for the city-wide network, it is proposed that this is delivered as an expansion from the Science Area / Keble Triangle network. This means that it would be important to ensure the Science Area / Keble Triangle network is future-proofed to enable expansion and also that an appropriate governance structure is established which would facilitate this expansion rather than constrain it. The city-wide network would require an energy centre facility to house further gas CHP (rated at approximately 10MW), new gas boilers and associated plant. The preferred location for this would be at the Osney Meads industrial estate, which would also enable the incorporation of biomass CHP and/or Water Sourced Heat Pumps (WSHPs) that would capture heat from the River Thames.

The third network option considered, connecting Oxpens, Westgate and neighbouring loads shows poor IRRs (- 0.2% over 40 years) and is not recommended for development as an independent scheme. However, the area is one of the district heating opportunity with key future anchor loads that are critical in a city-wide network.

Both viable networks would be complex and involve a number of technical and commercial risks which would need to be overcome through more detailed investigation, design and development work. These risks are identified within the report. The following key tasks are recommended prior to any formal commitment being sought from key stakeholders, particularly, the University of Oxford and Oxford City Council:

Confirm suitability of an existing suitable Science Area basement to house the CHP and associated plant required for the Science Area / Keble Triangle network, through investigation of technical constraints (including power and gas connections and flue arrangements), preliminary energy centre design, exploration of private (power) network upgrades that may be required and cost analysis to include consideration of civils works. In parallel review of secondary energy centre options should be considered, where these are required.

Confirm suitability of the Osney Mead Industrial site as a location for the CHP and associated plant required for the city-wide network through investigation of technical constraints (including power and gas connections), preliminary energy centre design and cost analysis. This review should consider two sites: land owned by the University of

Breakdown of annual heat demand by stakeholder for the whole centre of Oxford.







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Oxford and the Environment Agency depot, as parts of it may be vacated in the near future.

Determine, in principle, the preferred governance and funding arrangements that could be established that would enable construction and operation of the Science Area / Keble Triangle network, whilst enabling expansion into a city-wide network.

Explore the likelihood of connection of additional heat consumers (to those proposed to be connected within the network options that have been modelled). This would focus on those Oxford colleges in close proximity to the network routes proposed together other major consumers.

Identify key terms for critical energy sale contracts and the review these with anchor consumers and determine likelihood of connection and any necessary adjustment to connection charges and heat tariff assumptions.

Revise financial modelling, appraisal of risks and development programme to account for findings from the further investigations proposed above.

Further investigation into the technical opportunity and constraints and estimated costs of importing heat from Didcot power station and from the Sandford Sewage Works.

Review the opportunity and constraints of a possible interconnection between a heat network that has been investigated in the Headington area and the city-wide network.







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Glossary

AHU Air handling unit

CHP Combined Heat and Power

CO2 Carbon dioxide (emissions arising from energy use)

DECC Department of Energy and Climate Change

DH District Heating

DHW Domestic Hot Water

EIA Environmental Impact Assessment

EWI External Wall Insulation

GIS Geographic Information System

HH Half Hourly (consumption data)

HIU Heat Interface Unit

HNCP CIBSE Heat Network Code of Practice

HNDU Heat Networks Delivery Unit (part of Department of Energy & Climate Change)

HOB Boiler (providing heating only)

IED Industrial Emissions Directive

IRR Internal Rate of Return

LCO Low Carbon Oxford

MoU Memorandum of Understanding

NPV Net Present Value

NRIA SPD Natural Resource Impact Analysis Supplementary Planning Document

OCC Oxford City Council

OSCC Oxfordshire County Council

OU University of Oxford

RHI Renewable Heat Incentive

SPD Supplementary Planning Document

WEAAP West End Area Action Plan







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Table of Contents

Executive Summary 3

Glossary 8

1 Introduction 13

National Aspirations 13 1.1

Council background 13 1.2

Local stakeholder 13 1.3

Unique opportunity 14 1.4

Scope 14 1.5

Parallel Heat Network studies 15 1.6

Headington 15 Cowley 16

2 Project overview 17

3 Load assessment 19

Introduction 19 3.1

Energy data collection 19 3.2

Identification of buildings 19 Energy data for buildings 19 Benchmark modelling 20

Additional data collection 21 3.3

Building category 21 Information on buildings services 21 Operational information 22

Data pre-processing and modelling 22 3.4

Heat load analysis 23 3.5

Electric demand clusters 26 3.6

Private wire electricity networks 26

Cooling Load assessment 27 3.7

4 Supply plant assessment 28

Introduction 28 4.1

Energy Source Overview 28 4.2

Gas Boilers 29 Gas CHP 29 Biomass CHP 30 Biomass boiler 30 Geothermal 31







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Ground Source Heat Pumps 31 Solar Thermal Panels 31 Water Source Heat Pumps 32 Industrial and alternative sources of heat 33

Energy centre concepts 33 4.3

Distributed Energy Centres 33 Major Energy Centre 35

Existing heat production plants and networks 35 4.4

Boiler House 1 (Central) 35 Boiler House 2 (Pathology Support Building) 36 Boiler House 5 (New Pharmacology) 36 Boiler House 3 (Keble Triangle) 37 Old Bodleian Library plant room 37 Boiler House 4 (St Cross Building) 37

Review of potential energy centre locations 38 4.5

Introduction 38 Locations in the Science Area 38 Arthur Street Power Station 39 Oxpens regeneration area 40 Headington Hill 40 Osney Mead Industrial Estate 40 Applying evaluation criteria 41

5 Energy Networks 43

Introduction 43 5.1

Heating Pipes 43 5.2

Heat network design and operating parameters 44 5.3

Electrical network 47 5.4

Routing principles and key constraints 48 5.5

6 Network options considered (network and supply) 50

Summary of network options 50 6.1

Option 1 – Science Area and Keble Triangle 51 6.2

Option 1 - Heat network 51 Option 1 - Heat supply strategy 53

Option 2 – Oxpens, Westgate & Speedwell Street area 54 6.3


Option 3 – Cross-city integrated network 57 6.4








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Summary of heat production for all network options 63 6.5

7 Financial Appraisal of Network and Supply Options 66

Summary 66 7.1

Financial Modelling principles and assumptions 66 7.2

Investments 70 7.3

Operation and Maintenance (O&M) 71 7.4

Revenues 73 7.5

7.5.1 Incomes - Heat sales 73

7.5.2 Incomes - Electricity sales 74

Results of financial modelling and indicative cash flow 75 7.6

Financial sensitivities 80 7.7

8 CO2 Emissions 84

9 Risk Management 88

Introduction 88 9.1

Risk register and mitigation strategies 88 9.2

10 Business model evaluation 88

Introduction 88 10.1

Private Commercial Approach 90 10.2

Full ownership 90 Concession approach 91

Public Sector approach 91 10.3

Internal Department 92 Wholly owned Special Purpose Vehicle (SPV) 92 Joint venture 93 Community ownership 94

Potential models for Oxford 95 10.4

Private sector approach 95 Public Approach – Internal Department 95 Public Approach – Special Purpose Vehicle 96 Joint venture 96 Community Ownership 97

Conclusion 97 10.5

11 Scheme development programme 99

12 Considerations around planning and DH benefits for wider community 102

Planning permission-related 102 12.1

Environmental Impact Assessment 102







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Siting and design of the energy centre building 102 Flood plains 103 River-close areas 103 Air quality 103 Considerations from network implementation 104 Archaeological considerations 104 Regulation underpinning the supply of electricity 104 Vehicle movement and parking on site 105 ISO14001 Environmental Management System 105

Synergies with parallel development plans 105 12.2

Unlocking DH benefits for larger community 105 12.3

13 Conclusions 108

Recommendations 109

References 110

Appendix A List of areas for load assessment 111

Appendix B Benchmarked energy demand (extract) 112

Appendix C University of Oxford Colleges site survey summary (extract) 114

Appendix D Site survey summary (extract) 115

Appendix E Buildings/Areas excluded from scenario-building 117

Appendix F Heat load figures per area 118

Appendix G Replaceable heat load per building (extract) 119

Appendix H Technology Comparison 126

Appendix I Energy centre location evaluation criteria 127

Appendix J Heat network technical specification 129

Appendix K Heat network phasing 136

Appendix L Risk register 139







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1 Introduction

National Aspirations 1.1

In 2008 the UK Climate Change Act was introduced as a legally-binding framework to reduce greenhouse gases (GHG) to at least 80% reduction on 1990 levels by 2050. In order to achieve this target, five interim Carbon Budgets have been drafted by the Committee on Climate Change, an independent advisor to the UK Government.

Although previous interim Carbon Budgets have been met as per last Climate Change Committee report, it was noted that the economic recession had a disproportionate impact and led to significantly lower emission from carbon-intense sectors. It was also ascertained that limited progress in deploying low-carbon heat in buildings and district heating (DH) infrastructure has been made (Committee on Climate Change, 2015). In order to tackle issues around DH, the Department for Energy and Climate Change (DECC) provides funding and strategical guidance through their Heat Networks Delivery Unit (HNDU).

Council background 1.2

Oxford City Council (OCC) has “a longstanding commitment to making Oxford more sustainable” and has received a series of awards (Oxford City Council, 2011). OCC has set a target for the authority’s estates and operations of 5% per year carbon reduction by installed measures. Recognizing that its own carbon emissions were only about 1% of the city wide emissions, a target to influence these city wide emission was also adopted by the council. The target is to reduce carbon emissions by 40% by 2020 from a 2005/2006 c.1,000,000 tCO2 baseline. To bring about this improvement OCC has taken a pro-active working approach including partnering, informing and encouraging local stakeholders with regards to renewable and low-carbon energy generation and related infrastructures.

The Council has adopted a Carbon Management Plan to reduce the council’s carbon footprint and also founded the Low Carbon Oxford (LCO) Charter (developed through Oxford Strategic Partnership) to work with and influence others across the city. Organisations such as University of Oxford who sign the charter, agree to the reductions in CO2 emissions against specific thresholds.

The charter stipulates a 3% year on year CO2 reduction target including emissions from the built environment and transport sector. OCC has supplementary planning documents in place – the Natural Resource Impact Analysis Supplementary Planning Document (NRIA SPD) – which sets standards and requirements around energy efficiency, renewable and low carbon energy as well as water resources and building materials.

Due to their ongoing engagement, OCC has commissioned studies into District Heating (DH) networks in the past as part of the West End Area Action Plan, which sees the redevelopment of a whole area in the centre. The output from the initial study created interest from many key stakeholders such as the University of Oxford.

Local stakeholder 1.3

The University of Oxford (OU) has more than 22,000 students and a functional estate that covers about 600,000 m2 distributed across more than 230 buildings. The University is one of







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the key employers of the town and together with Oxford Brookes University accounts for approximately 21,800 jobs or 19.6% of total employment in Oxford (Office for National Statistics, 2011).

Similarly to the council, OU recognises its environmental impact and strives for best practice in energy and carbon management, it has ambitious carbon emission reduction targets and focuses on providing sustainable buildings for the future as per the Environmental Sustainability Policy from 2014 (University of Oxford, 2014).

OU had commissioned an earlier initial feasibility study into a centre-wide DH network and continues his involvement in the following study.

Unique opportunity 1.4

This study is a part of wider project considering heat network opportunities for the city centre (covering an area of 414 ha), Headington (51 ha) and Cowley (138 ha) as depicted in Figure 1.

Although DH systems have been deployed across Europe for a number of years and UK independent bodies have identified DH as a key enabling technology for decarbonising heat in high density areas (Committee on Climate Change, 2015), the overall development of DH infrastructures in the UK is slow (Hawkey & Webb, 2014). By way of comparison, it is estimated that 60% of heat supply in Finland is provided by heat networks, in the UK the figures is around 2%.

Since Oxford is a dense city with a significant proportion of historic and protected properties the implementation of DH is one of the few opportunities that could deliver significant reduction in energy costs and carbon emissions. It

does not involve major transformation of the buildings it would serve yet provides an opportunity to implement cost-effective centralised plant that could, in the long term, be fuelled by low carbon technologies.

In addition, the implementation of DH projects are often affected by economical, ecological and political concerns that can be found in dense urban areas where DH schemes are being considered. As a consequence, it is important to take a broad, multi-stakeholder approach to first understand and then address the key constraints and challenges to identify solutions that could deliver the objectives of the stakeholders.

Scope 1.5

The joint team of BRE and Greenfield was commissioned to carry out a detailed heat network feasibility study for Oxford City Centre. The work has built on previous work by BRE / Greenfield (BRE/Greenfield, 2014) and an earlier initial feasibility study into a centre-wide network (Ove Arup & Partners Ltd, 2010). The scope of the work was as follows:

Figure 1: Overview of project areas, from left to the right: City Centre, Headington, Cowley







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Provide building level monthly and daily demand profiles for existing and future heat

demands.

Identification of connection issues, including preferred connection points, existing plant

rooms, existing heat networks and other operation parameters

Provide a flexible demand assessment tool that allows testing the impact of

inclusion/exclusion of individual areas and buildings on the overall heat demand

Identification of available energy sources and technologies with consideration for low

carbon pathways

Determine potential energy centre locations considering any environmental constraints

Determine the preferred network route considering constraints in consultation with key

stakeholders

Conduct network analysis including pipe sizing

Determine revenue from developer contributions and energy sales

Carry out scheme optimisation and options appraisal

Review local policies and provide a scheme development programme

Carry out detailed financial modelling

Assess risks and provide risk register

Evaluate different business models

Provide a GIS representation of the proposed system

Assist the client and key stakeholders in dissemination of information related to the

project

The work is carried out in accordance to CIBSE Heat Network Code of Practice (hereafter referred to as HNCP) and HNDU project criteria in order to provide a sound technical basis for complex decision-making around economic viability and implementation of DH schemes.

Parallel Heat Network studies 1.6

The work conducted for Headington and Cowley is presented in two separate reports, with variation on this above scope to align with the funding granted.

Headington

The Headington project area is characterised by clusters of high heat and electricity demand density including hospitals, university campuses, student villages and (boarding) schools that could be the anchor loads for a heat network development. A number of stakeholders have demonstrated strong interest in leading the development of district heating and/or being key consumers.

University of Oxford Hospitals NHS Foundation Trust is currently implementing a private district heating connection between two hospitals (John Radcliffe and Churchill). Others, such as Oxford Brookes University have ambitions to extend the use of district heating and/or already have experience using combined heat and power (CHP) technology.

The closest distance for a link between the potential DH scheme in Headington and the city centre would be between the anchor loads St. Catherine’s College and Clive Booth Student Village. Although there are constraints in the area such as the river Cherwell and a conservation area, the distance is just over half a kilometre.







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Cowley

The Cowley area, about 5 km away from the city centre, is a potential location for a heat network scheme, primarily based on the concept of utilising “spare” heat generation capacity at the MINI plant, operated by BMW UK Manufacturing, to distribute heat to commercial heat consumers in the local area.

For this reason, a partial feasibility study has been commissioned to investigate the heat demand and heat network options and assess the scope and nature of the heat supply opportunity from the plant.

Although, a direct connection between schemes seems unlikely this could happen in the long term if initial networks were built and then expanded over time.







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2 Project overview

An Outline Masterplanning study from 2014 identified that the Oxford City Centre offers a significant opportunity for the development of a DH system due to its relatively high heat demand densities and committed local stakeholders (BRE/Greenfield, 2014). The energy demands of buildings/areas initially identified have been subject to further detailed assessment using information from a number of new sources.

The areas depicted in Figure 2 were considered for detailed load assessment. The full list including area names can be taken from Appendix A.

The boundaries to the project area were drawn from physical features of the city, which will naturally constrain DH infrastructure. These were

determined from reviewing mapping data, conducting walking tours and holding discussion with key stakeholders.

The eastern boundary is the River Cherwell and the western branches of the River Thames. The southern boundary is formed by the River Thames and the Northern boundary was chosen to be St. Hugh’s College (Area ID 13) where building density becomes lower. Area ID 26 sits beyond the River Thames but this has been selected because it is the proposed location of an energy centre.

The area that is regarded as having best potential for the core of a DH scheme is the Science Area towards the Northeast of the centre (Area ID: 32). The area is fully owned by the University of Oxford; three small heat networks are in operation already and these are served by larger boiler houses and gas CHP units (730kWe total capacity). It also has the highest heat and electricity demand densities.

Figure 2: Identified areas for observation with varying relevance to the DH study. Opportunity areas for DH core networks identified in the outline masterplanning are hatched.







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A second opportunity for a core scheme is in the West End area, incorporating the new Westgate Shopping Centre (Area ID: 43), which is currently under development, the planned Oxpens development (Area ID: 29) as well as the current redevelopment of the “City of Oxford College”. The area is characterised by mixed use developments making it advantageous for a DH scheme which could reduce the relative size of the peak load through providing energy demand diversification.

Since the early planning stages, OCC has been guiding new developments in the West End area and Policy WE13 of the Oxford West End Area Action Plan (Oxford City Council, 2008) specifically requires the development of a “community energy scheme”. There have been initial investigations into accommodating a community network energy centre (large plant room for a DH scheme) at the Oxpens development. However, due to the number of landowners and financial considerations, no plan currently exists for the envisaged energy centre and hence an external solution would support the objectives of this development.

The City Centre is home to a large number of the 38 university colleges, many of which have significant energy demand arising from student accommodation, often within historic and protected building stock. Common energy saving measures such as external wall insulation (EWI) and improved glazing are difficult to introduce. Connection of these buildings to a low carbon DH scheme could be both beneficial (energy costs / carbon reduction / reliability of supply) and practicable. It is important to note that the colleges act as autonomous self-governing organisations and therefore would need to agree individually whether to connect on to a DH scheme.

There are several buildings belonging to OCC and Oxfordshire County Council (OSCC) and a few larger hotels in the city that would be suitable for connection to a DH network. The rest of the City Centre consists of hundreds of commercial, retail and residential buildings which are less significant loads. It is not possible in this study to engage with all of these potential consumers, however notable loads have been identified through the address-level-based DECC Heat Map data set.

If there is a viable business case for a DH network between the key anchor loads identified in this study then significant expansion would only serve to improve viability and enable a greater proportion of the cities energy loads to be supplied by the DH network.







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3 Load assessment

Introduction 3.1

In order to build DH network scenarios that form the basis of technical and economic viability assessment, a detailed load assessment was carried out. Information on energy consumption, building physics, building services and operation was gathered from key stakeholders and other sources.

The data was then pre-processed and input into the Heat Network Demand Model, which is a bespoke tool for this project. The model provides a number of outputs such as annual, monthly or daily heat consumption figures, potential capacity build-out based on current heating system conditions and creates output data that can be imported into geographical information system (GIS) software.

The outputs allow detailed analysis of energy demand clusters which in conjunction with a detailed supply plant assessment (Section 4) provide the basis to build up DH network scenarios.

Energy data collection 3.2

Identification of buildings

240 buildings in the centre of Oxford are included in the study. After pre-filtering, 183 were analysed comprising existing as well as planned buildings.

The majority of buildings are owned by the University of Oxford (67%), followed by Oxford colleges (23%) and the rest are council buildings (OCC and OSCC) and other large buildings as shopping centres, hotels and courts (10%) as Figure 3 shows.

The initial building list is based on the University of Oxford’s building data together with data provided by the Councils, Colleges as well as developers (Oxpens, Westgate and Oxford City

College).

Address-level data used in the DECC heat map for Oxfordshire was acquired from the Centre for Sustainable Energy to expand the breadth of data collected and as another means of validating data from different sources.

Energy data for buildings

Acquisition of accurate demand data is vital for the feasibility study as the demand data directly influences supply plant solutions and optimisation, heat network dimensioning, capital and operating cost estimates as well as revenue from a scheme.

Figure 3: Building dataset broken down by percentage of building owners

67%

23%

3% 7% Oxford University

Oxford Colleges

Councils

Rest







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Table 1: Energy data assets and associated data confidence level hierarchy for the data obtained from key stakeholders

Energy data asset Provided by Data confidence level

Half hourly/hourly billing data (HNCP best practice)

Oxfordshire County Council, Oxford University, Oxford City Council

5

Monthly billing data Oxford University Oxford City Council Oxfordshire County Council Oxford Colleges

4

Annual billing data, Display Energy Performance Certificates

Some colleges and Landmark database

3

DECC Heat Map Address-level data (Estimates)

Centre for Sustainable Energy

2

Published benchmarks (simple and composite)

CIBSE Guide F, TM46 1

Table 1: Energy data assets and associated data confidence level hierarchy for the data obtained from key stakeholders

In order to account for accuracy differences in the origins of

energy data, a data confidence level hierarchy was introduced. Data for existing buildings was grouped as per Table 1. The higher the level, the more accurate and reliable the data was deemed to be. The use of highest accuracy data was prioritised.

For 83% of the buildings actual monthly billing data (level 4) was obtained, which together with annual billing data (level 3) represents about 92% (168 out of 183) of all buildings considered in the study (see Figure 4).

The billing data (gas consumption) was used to calculate the heat demand under the assumption of thermal efficiency of 75% for traditional Heat-Only-Boiler (HOB) systems across the whole data set. For

newer boilers, a thermal efficiency of 80% was assumed.

For about 8% of buildings without actual meter data, the address-level consumption data from the DECC Heat Map was retrieved or benchmark modelling applied.

It should be noted that although the DECC Heat Map contains actual annual meter data for a fraction of the buildings (public buildings mainly), it was considered less valuable to the study than level 3 data as the period in which the consumption occurs is not recorded (and so no degree-day analysis was possible).

Benchmark modelling

Information on planned buildings and developments has been collated in several consultations with key stakeholders. Future heat demands have then been modelled based on published benchmarks from the CIBSE Guide F and CIBSE TM46 according to building type/use and gross internal floor.

For the three larger developments Westgate Shopping Centre, City of Oxford College and the Oxpens development, benchmark figures provided through the client were reviewed and utilised.

Energy data asset Provided by Data confidence level

Half hourly/hourly billing data (HNCP best practice)

Oxfordshire County Council, University of Oxford, Oxford City Council

5

Monthly billing data University of Oxford Oxford City Council Oxfordshire County Council Oxford Colleges

4

Annual billing data, Display Energy Performance Certificates

Some colleges and Landmark database

3

DECC Heat Map Address-level data (Estimates and actual)

Centre for Sustainable Energy

2

Published benchmarks (simple and composite)

CIBSE Guide F, TM46 1

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Benchmarked figures

Actual meter data

Figure 4: Relation of actual meter data to modelled data







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The future capacity build-out of the large Oxpens developments was based on sub-phases and modelled according to masterplan planning documents from 2013 (Oxford City Council, 2013). In this way, the sensitivity of sub-phasing could be assessed and captured within the Heat Network Demand Model.

A full list of buildings and development phasing together with the applied benchmark is attached in Appendix B.

Additional data collection 3.3

Building category

All buildings have been allocated one of the following categories according to their primary use:

Education: Higher & Further education building with mixed use

Public: Libraries, museums, courts

Office: University offices, Council offices

Retail: Shopping centres

Residential: Colleges, halls of residences, hotels

Through building categories, referenced values from BSRIA BG 9/2011 (for peak heat demands) or CIBSE TM46 (gives approximation of weather-dependent thermal loads) can be compare with analysis results obtained through the Heat Network Demand Model to validate and improve the model.

Information on buildings services

In order to establish the technical feasibility of serving thermal building loads through a DH network, the nature of the heating/hot water installations and associated building services, such as chillers and air-handling units (AHU), has been reviewed. An extensive asset list (about 800 data records) provided by the University of Oxford was used as the basis of the analysis and consultations held or site surveys carried out where uncertainties remained. For each building, the replaceable heat load was analysed. Non-replaceable loads such as laboratory gas use or steam generation were identified and discounted for.

Sites around the DH opportunity areas comprising the Science Area (Area ID 32), Keble Triangle (Area ID 17) and Library Area (Area ID 18) were surveyed to provide detailed information. Although space heating for these buildings is provided by gas boilers, it was found that a significant number of buildings generate hot water through point-of-use electric heaters or electric calorifiers. This is valuable information as electric hot water generation could provide a steady electric base load which when fed from a CHP could provide a secure year round basic revenue (compared to grid electricity). Alternatively, savings could also be generated if current hot water systems are converted and fed by a DH network. Latter option could reduce carbon emissions.

For other large thermal loads, email/telephone contact was established and where necessary additional site surveys carried out. It was found that Clarendon Shopping Centre (located in between areas 6 and 7) has no direct technical potential for a DH connection as there is no central wet heating system and the majority of loads are supplied through electricity. One hotel reported that it was currently replacing a wet heating system with split cooling and heating units (electric) therefore reduces the replaceable heat load (as only hot water could be replaced).







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University colleges could play an important role in developing DH networks. Two consultations were held with the convenor of the college bursars and operations managers. Although monthly consumption data was provided, it has proved difficult to collate additional building information from bursars of the individual colleges to examine the viability and likelihood of future connections.

Two colleges were surveyed. An extract of the information is provided in Appendix C. From these surveys and other information gathered the following working assumptions have been established for the colleges:

- The majority of Colleges have multiple, locally distributed boiler rooms due to their age and development over centuries (numbers in Error! Reference source not found. denote boiler rooms)

- The average number of boiler rooms per MWh annual heat demand is 0.003 (the number of boiler rooms dictate the number of Heat Interface Units (HIU) required when connecting to a DH scheme)

- 71% of the boiler rooms surveyed provide space for a HIU to be installed

From the University of Oxford’s asset data, the condition of building services installed was available and this data has been used to develop connection phasing for individual properties.

Operational information

Heating patterns, heating days per week and actual operation of boilers was established in order to model peak heating demands and to generate hourly time series (for daily profiles and load duration curve) from actual meter data. Data from the team’s own analysis was cross-checked with figures based on published benchmarks (floor area-based from BSRIA BG 9/2011) and actually installed capacity.

An extract of building, building services and operational information can be found in Appendix D.

Data pre-processing and modelling 3.4

Data gathered was pre-processed and fed into the bespoke Heat Network Demand Model. The model carries out the following actions for each building data record:

Retrieves coordinates for Ordnance Survey National Grid reference system based on post code (where exact boiler locations could be established coordinates reflect boiler room location)

Models expected year of connection (based on boiler condition and assumed lifetime)

Determines base load and weather-adjust data to CIBSE reference year (Swindon) to address that fact that input energy data comes from numerous different years. The chosen reference year reflects lower annual heating degree days than on average in the Oxford area during the last five years. This conservative modelling provides a certain contingency within the projected demand and can be equated with area-wide future energy demand reduction through upgrades.

Specifies amount of replaceable base load







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Generates daily heat demand profiles for every building according to archetypes or similar buildings (Half hourly data from OCC, OSCC was analysed) (HNCP best practice)

Generates annual time series for replaceable heat demand (hourly steps)

Generates daily, monthly, annual demand for selected buildings

Summarises information per areas and whole project area

Heat load analysis 3.5

For each individual building the feasibility of connection to a DH network was assessed based on location, building services and heat demand. Those buildings that did not meet the criteria, mainly due to low heat demand, were excluded from DH network scenarios developed. A list of excluded buildings/areas can be found in Appendix E.

Afterwards, buildings were grouped and heat demand clusters analysed.

The adjacent map (Figure 6) shows heat clusters color-coded according to their maximum undiversified heat demand. A summary of annual heat load and maximum undiversified heat demand at full capacity build-out for each cluster is shown in Appendix F. The DH network scenarios (see Section 6) will identify the heat loads in each clusters that are

proposed to be connected.

Besides the two opportunity areas, Science Area and Oxpens/Westgate-area, further

areas of high demand density are sorted below according to maximum heat demand. Figure 7 below shows how the annual heat load is broken down among notable stakeholders.

Library Area (Area ID: 18)

University College Area (Area ID: 35)

Manor Road Area (Area ID: 20)

Keble Triangle (Area ID: 17)

Figure 5: Maximum undiversified heat demand (kW) per area. Areas are color-coded according to demand.







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Ashmolean Museum Area (Area ID: 4)

Christ Church College Area (Area ID: 10)

Balliol/Trinity College Area (Area ID: 5)

Wadham/Harris Manchester College Area (Area ID: 37)

University of Oxford Press (Area ID: 28)

St. John’s College Area (Area ID: 34)

Keble College Area (Area ID: 16)

An extract from the building database containing replaceable annual heat demand and peak heat demand can be found in Appendix G.

When aggregating the replaceable heat load for the whole centre of Oxford, the following demand profile over day and year (CIBSE reference year) can be derived (Figure 7). From this time series, a diversified peak heat demand of about 70 MW is estimated. The demand profile is dominated by the two large peaks in the morning and evening hours during heating season and a smaller peak around lunch time (about 1pm). To a great extent, this is due to the significant influence of University colleges that have a mixture of uses including student accommodation, community spaces, lecture rooms and some type of catering provision.

Figure 6: Share of centre-wide annual heat load by notable stakeholder

54% 35%

6% 3% 2% College

Oxford University

Various owners

Local and nationalgovernment

Westgate Alliance







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Figure 7: Aggregated heat demand profile for the centre of Oxford

The influence of the Colleges is paramount as they account for 54% or 78 GWh of the identified annual heat load across the centre. However, because of the various stakeholder and technical constraints discussed earlier these loads have been excluded in the network scenarios discussed in Section 6.

OU, OCC, OSCC, governmental bodies (Crown and Combined Court, Police Station) and Land Securities (forms Westgate Alliance together with Crown Estates) have been identified as key stakeholders from whom an opportunity for the development of heat networks could arise (full list of characteristics considered below). Due to the knowledge and skills around the current operation of small DH schemes, the University of Oxford was identified as DH champion. Key stakeholders/DH champions control about 40% of the expected annual heat demand in the centre of Oxford (as per Figure 7).

Strong commitment towards carbon reduction (e.g. OCC)

Control significant heat load in heat network opportunity area (e.g. OU)

District heating enablers in local or national government

Technical knowledge and skills from operating DH schemes (e.g. OU)

Building developers with expertise in distributed energy schemes (e.g. Land Securities)







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Electric demand clusters 3.6

Annual electricity demand has been taken from a study provided by the client. The data has been analysed across the same heat demand cluster as before.

The map adjacent (Figure 9) shows the annual electric consumption in each cluster.

The top 6 electricity consuming areas are:

Science Area

Library Area

Merton/Corpus Christi College Area

Keble Triangle

University College Area

Manor Road Area

Private wire electricity networks

There is a 28 MVA high voltage power network in the Science Area/Keble Triangle with local

transformers, typically one per building or a cluster of buildings. From consultations it is understood that this is a private wire network owned and operated by the University of Oxford.

The Science Area has the highest electricity consumption in the centre with about 57,099 MWh per year. Half hourly (HH) electricity meter data for the Science Area was obtained and is fed into supply plant design. This load has been considered in the energy supply strategy with major CHP supply proposed, maximising revenues from local power sales.

There could be a potential of expanding the private wire installations to other OU-owned major electric loads that are connected to large electrical substations such as the Radcliffe Observatory Quarter (ROQ), Wellington Square, Ashmolean Museum, Manor Road and Weston

Figure 8: Annual electricity consumption across the centre, summarised across established heat clusters







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Library. A detailed investigation into expansion of distributed electricity generation in conjunction with the local distribution network operator could be conducted subsequently to this study.

Cooling Load assessment 3.7

Large concentrated cooling loads can be beneficial where heat is supplied through tri-generation (combined cooling, heat and power) or ground source heat pumps are planned. In this study no such loads were identified.

Consultation with the University of Oxford, showed that there are relatively small loads dotted across the whole project area. There are unconfirmed plans to extend the current IT room to a larger server room in the basement of the Oxford Molecular Pathology Institute in the Science Area, which may offer a major cooling load opportunity.

Also, cooling loads as they could originate from a large clusters of tall office blocks such as in the City of London do not exist in the centre of Oxford. Thus, a cooling network is not considered at this stage of the study. However, a detailed investigation into optimisation of cooling demand densities could be conducted subsequently to this study.







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4 Supply plant assessment

Introduction 4.1

There are a number of different forms of technology which could be used to supply heat to the district heating system. This section of the report provides a high level overview of the technologies.

Oxford City Centre has a number of different opportunities and considerations unique to the city itself. A key consideration is the availability of space. Oxford City Centre is highly developed with minimal spare capacity for a large energy centre. A further major consideration is around environmental factors. Oxford has strict regulations around air quality and visual impact; therefore any plant would need to be considerate of these.

Various lower carbon technologies, in addition to gas CHP, are possible and have been considered. Oxford is also listed as one of the locations with the highest water source heat capacities (DECC 2015) and has a good surrounding road network which is beneficial for technologies such as Biomass Boilers, although there are both technical and commercial constraints for both as outlined in this section.

Energy Source Overview 4.2

Available energy source alternatives have been assessed in terms of indicative cost, technical feasibility, environmental impact and reliability of heat supply.

The technologies reviewed were:

Biomass Boilers

Biomass CHP

Gas CHP

Gas Boilers

Geothermal

Ground Source Heat Pumps (GSHPs)

Solar Thermal

Water Source Heat Pumps (WSHPs)

Industrial and Municipal Heat Sources







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All technologies above are discussed below and the most feasible options are summarised in Figure 9. This table was developed to compare key benefits/disadvantages and identify those that should be further analysed. Factors for scoring each technology are provided in Appendix H.

It should be noted that the technologies would not necessarily be installed in isolation but could be combined with thermal gas boilers (for peaking and reserve capacity) and, potentially with thermal stores, to optimise supply and decouple demand.

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Indicative Capex (plant only) 4 5 2 4 Not Known 5 4

Indicative Heat production cost 5 4 4 1 Not Known 3 3

Indicative CO2 savings 3 4 5 1 2 2 2

Physical size constraint 3.5 2 1 2 5 5 1

Control of heat output 3 4 2 1 1 1 1

Other environmental impact 3 1 1 3 5 5 3

Technological constraints 5 5 3 3 1 1 3

Cost Reliability 2 4 3 3 5 4 5

Long term CO2 security 1 3 3 5 3 3 1

Figure 9: Energy supply technologies evaluation metrics

Gas Boilers

Gas boilers are the simplest, lowest cost and most established technology reviewed. Gas boilers are suitable for providing peak and reserve capacity in DH system.

Gas CHP

Gas-fired Combined Heat Power (CHP) is a form of plant that generates both heat and electricity simultaneous using gas and by doing so the overall efficiency of the plant is higher than producing either individually.

A gas CHP unit is most cost effective where it is sized to cover part of the DH load, so it can work at a high capacity factor, with the remainder of the load being met by other plant such as gas boilers. This allows the CHP to run efficiently at full-load for a greater proportion of the time, providing strong revenues from power sales and ensures there is back up for when the system is down for maintenance.







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Gas-fired CHP is a feasible option for base load capacity. It provides a high overall fuel efficiency and low cost, low carbon heat depending on the allocation of costs and carbon between electricity and heat generation. In the UK, the value of CHP electricity depends on the ability to export the surplus electricity to local / regional power networks or directly to “on-site” consumers or a number of neighbouring consumers through a private wire network.

The University of Oxford Science Area has a 28 MVA private wire network and about 5 MW electricity base load and, in general terms, it would be optimal to size the CHP to minimise electricity export which provides less revenue than direct consumption. An electricity contract would be required to be negotiated directly with a utility company and the local distribution network operator to enable surplus power export and receive revenues.

CHP will deliver carbon savings in comparison to gas boilers because of the greater fuel efficiency compared to boilers or electrical heating systems. However, if the planned decarbonisation of grid electricity supply materialises (refer to Section 8), the carbon reduction benefit of CHP will be decreased and it is therefore important to consider this as a project risk.

Two key constraints exist for CHP in Oxford:

1. Gas infrastructure. The addition of a gas-powered CHP plant may require additional gas

infrastructure to be installed. This could add significant costs to the project.

2. Location for plant and thermal store. A CHP plant requires appropriate plant room space

or land for new energy centres, in close proximity to heat and power loads.

Opportunities in Oxford are limited because of the density of existing property and the

high value/demand for land for other forms of development.

Biomass CHP

Biomass fired Combined Heat Power (CHP) is a form of plant that generates both heat and electricity simultaneously using biomass and by doing so the overall efficiency of the plant is higher than producing either individually.

Biomass CHP will normally use wood chips, liquid biofuels or gasification technology and could provide the ‘double benefit’ from renewable fuel generating electricity. However, the issues related to sale of electricity mentioned in the Gas CHP section would still apply.

Biomass CHP is eligible for Renewable Heat Incentive (RHI) payments for heat produced and also for Contract for Difference payments for power generation. It also provides the best carbon savings of any technology. These benefits are counterbalanced by high capital costs, larger land area requirement, lower system efficiencies and environmental impacts, e.g. gaseous emissions and fuel transport requirements.

Biomass boiler

A biomass boiler is one type of boiler that produces heat through burning biomass. As biomass takes in CO2 from the air as it grows the net CO2 emissions from burning it is lower than burning fossil fuels such as gas.

Biomass boilers can achieve good savings in CO2 emissions and also gain financial support in the form of the Renewable Heat Incentive (RHI). Capital costs would be higher than a gas-fired boiler of comparable output due to ancillary fuel storage and handling facilities. Fuel supply







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would need to be secured by a long-term contract to preserve security of supply and a thermal store and secondary gas backup would also be required.

One potential issue with using a biomass boiler is impact on air quality. Biomass boilers typically release more particular matter and nitrogen oxides than a similar sized gas boiler and they also require fuel to be delivered by road freight. Further, issues such as noise and diesel particulates from HGV delivery will need to be taken into consideration during planning.

The majority of Oxford is within a “Smoke Control Area and an Air Quality Management Area”. Any biomass installation would therefore require the boiler to have an exemption from the “Smoke Control Area” and would be subject to additional consideration in the planning process.

A large energy centre comprising fuel storage and fuel reception area, a thermal store and the boiler and ancillary heat network plant would be required.

Geothermal

The opportunity for geothermal heating for Oxford has been reviewed based on heat flow maps of the UK and locations of sedimentary basins. No accessible geothermal resource exists in the local area of Oxford.

Ground Source Heat Pumps

A Ground Source Heat Pump (GSHP) system uses the refrigeration cycle to extract heat from the ground. In doing so typically 2 - 5 times as much heat can be extracted from the ground as would be generated from an electric heater alone.

Using GSHPs would achieve savings in CO2 emissions and also gain financial support in the form of Renewable Heat Incentive (RHI). In this study, GSHPs are assumed to be industrial scale solutions (2–10 MW) based on centrifugal compressor units and separate ground source wells. Capital costs would be higher than for a similar sized gas CHP engine.

The key requirement for a successful GSHP is in ensuring the ground temperature does not drop considerably over the course of the year. This can be achieved through using the GSHP to provide cooling over the summer. There is a cooling load on the University Park Science Area but this wouldn’t be large enough to fully recharge the ground. Consequently, unless a suitable summer cooling load can be found a GSHP would not be suitable.

Where aquifers are existent, groundwater which will be largely constant throughout the year could be used as a heat source for GSHP. However, from a groundwater map in the public domain published by the Environment Agency, no aquifers have been identified for the city of Oxford.

Solar Thermal Panels

Solar thermal panels can be used to provide heat to DH systems but the heat they generate is uncontrollable, typically of low temperature and supplied during the summer months when least heat is required. In some systems, e.g. Helsinki, solar thermal is used to support summer cooling. In addition, a district heating scale solar thermal scheme would require large areas of land or roof space.







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Solar thermal is therefore unlikely to be a complete solution for Oxford but might be added to the DH system if more heat is required during the summer months or where it could help meet large cooling loads.

Water Source Heat Pumps

Water source heat pumps extract heat from water sources such as rivers. The value of heat available is dictated by water temperatures and flow rates and as such, from a river, it is variable. Static or larger bodies of water, such as sea water or deep lakes and reservoirs can be a more consist source of heat. There are potential environmental issues related with abstraction/discharge and construction, which will require Environment Agency.

To minimise environmental disturbance, DECC recommends that water temperatures do not drop below 3oC. This can limit the amount of heat that can be provided during cold winter periods when river water temperatures approach this value. WSHPs would be able to provide useful heat to the district heating system for the majority of the year but should be combined with a secondary plant such as a gas boiler to completely cover heat demand during the coldest part of the year.

Potential for water source heat pumps were considered for both the River Cherwell and the River Thames.

The River Cherwell runs north to south through the city before joining the River Thames in the city centre. “DECC The National Heat Map: Water source heat map layer”1 suggests that the river could provide between 5 MW and 25 MW during winter based on its average temperatures. The DECC heat map also suggests that during the minimum water temperature period the potential from the river is less than 5 MW. It is likely that during a cold winter period the energy that can be extracted from the river water will be negligible and therefore a secondary heating system is required that could cover the entire heating load.

The Lower Cherwell has local resource status of ‘water available for licensing’ at low flows but overridden by flow requirements of the Thames. As no water would be permanently extracted abstraction license may be attainable but further discussions with regulators would be required.

The Lower Cherwell is conveniently located less than 250m from the University of Oxford Science Area, the location of the largest potential heat load, across the adjacent park land and would offer a low cost route for heat pipes. Due to the distance to the river, water could be pumped to a heat pump in the Science Area, avoiding the requirement for a heat pump to be located near to the river.

The River Thames runs west to east on the southern side of the city centre. In Oxford it has been identified by “DECC The National Heat Map: Water source heat map layer” as one of the top 50 locations in terms of potential for a water source heat pump. The water source heat







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pump potential is rated as 108 MW and between 25 MW and 100 MW at average winter temperatures, but below 5MW during the coldest part of the winter.

The Thames is located over 1km from the University of Oxford Science Area (Phase 1 of the proposed heat network).

As with the River Cherwell, a second heating system is required that could cover the entire heating load during the winter, if a heat pump in the River Thames were used and abstraction will need to be discussed with the appropriate authorities.

An important issue for the use of WSHP relative to other options is the low heat availability in winter (high heating season) leading to low peak utilisation of WSHP, which increases the costs of energy supplied.

A potential option would be a WSHP in parallel with CHP plant. This would reduce the low value export of power to the local / regional power network and enable the selection of a higher capacity CHP unit which will deliver lower heat costs.

Industrial and alternative sources of heat

Industry within Oxford and the surroundings have been reviewed in order to identify potential sources of heat that could contribute to an Oxford heat network.

The Oxford Waste Water Treatment Plant, approximately 5 km south of the city centre, was identified as a potential source of heat as a 2.3 MWe CHP exists at the facility. It was calculated that it would not be financially viable to extend a city centre district heating system to the facility as the spare capacity is likely to be limited. Nonetheless, if a future district heating system was developed which covered the nearby Oxford Science Park it would be wise to reconsider the Waste Water Treatment Plant as a potential heat source.

Municipal waste was considered as a potential source of heat for the district heating system. Oxfordshire, however, the nearest energy from waste facility is located in Ardley, 20km from the city centre, which too far to be a financially viable source of heat.

The 1.3GWe Didcot B power station (combined cycle gas turbines) is located some 15km from the city centre, this capacity would be able to supply excess heat meeting the heating requirement of the centre scheme as well as potentially the Headington and Cowley scheme. Similar schemes have been undertaken in Germany (Lippendorf) and elsewhere. Didcot B is not a base-load station and therefore its energy production is volatile and follows National Grid in balancing the electricity system. It may be possible to overcome this volatility using thermal storage and secondary boilers. The power station is expected to reach the end of its lifetime around 2027 and the strategic importance of the location in a future energy system should be investigated further. No technical information was provided by the plant operators and therefore at this stage this option, which will require an extensive distribution network has not been further considered at this stage.

Energy centre concepts 4.3

Distributed Energy Centres

As identified earlier space is at a premium in Oxford. As a response, smaller plant capacities could be installed within new small energy centres or within existing plant rooms distributed across a network. This approach could also be favourable if full capacity build-out of a network







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is slow or there is limited confidence in expansion of a heat network, which would otherwise justify a major energy centre.







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Also, network costs and losses would be reduced through the use of a distributed strategy with plant in close proximity to anchor loads. However, this approach would not benefit from the economies of scale (both capital and operational costs) available to a centralised energy centre solution.

Major Energy Centre

Where larger areas of land can be identified, a major centralised energy centre could be implemented. The necessary footprint for a system supplying a thermal network peak load in the magnitude of 50 MW and more would be greater than 1200 m2. Discussions have been held with planning and highways officers from the City and County Councils and with staff from the University of Oxford to explore location options.

Existing, as well as potential energy centre locations are reviewed/presented in the following Sections 4.4 and 4.5.

Existing heat production plants and networks 4.4

The following Section outlines the existing boiler houses and smaller heat networks that are already in place on the University of Oxford premises.

Boiler House 1 (Central)

Boiler House 1 is in a basement between the Earth Sciences (ID 58) and Le Gros Clark Building (Ex-Anatomy, ID 92) comprising 3 No. Hoval boilers, each with a rated heat output of 2,250 kW. A site visit showed that the boilers are over-sized as it was reported that peak heat demand is covered by only two boilers in turned down operation.

Based on the installation date between 1997/98 and current condition it was ascertained that replacement would be due 2018 to 2023.

A 150 mm gas supply serving the boiler house has recently been replaced. The Earth Sciences building has a 150 mm gas supply as well.

The plant room already provides space heating to the buildings listed in Table 2 through an existing network of pipes. Also, the majority of hot water in the served buildings is provided by localised electric point-of-use heaters.

There is no room for expansion but a large opening towards street level as Figure 11 shows. Also, the footprint occupied by all three boilers is about 7m x 2.5m and the height of the room below distribution pipework is about 2.5m. Thus, a replacement of the HOB with CHP in the magnitude of about 2 MWe at this location could be considered.

* New Pitt-Rivers Museum was designed to contain separate gas boilers

BldgId Space Heating through Boiler House 1

6 Atmospheric Physics (Old Zoology)

56 Dyson Perrins

74 Inorganic Chemistry

92 Le Gros Clark Building (Ex-Anatomy)

186 Natural History Museum

139 Pitt-Rivers Museum*

143 Radcliffe Science Lib

149 Robert Hooke Building

Table 2: Buildings with space heating served from Boiler House 1







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Boiler House 2 (Pathology Support Building)

Another major plant room is in the basement of the Pathology Support Building (ID 133). The plant room is equipped with three Hoval SR plus boilers each with a rated heat output of 2,000 kW which provide space heating to the buildings listed in Table 3 below.

The boilers were installed in 2001 and therefore would be due for replacement between 2021 and 2026. A sample reading during a plant room inspection showed a typical return temperature of 66°C which could correspond to about 80°C flow temperature.

The building is connected to a 300mm gas supply with intermediate gas governor. There is no room for expansion inside the boiler house.

The building has another roof level plantroom with several HOB boilers, a 500kWe CHP unit and an absorption chiller (not connected with each other).

Boiler House 5 (New Pharmacology)

BldgId

Space Heating through Boiler House 2

138 Physical Chemistry

140 Plant Sciences South (Ex-Forestry) & Plant Sciences North (Ex Botany)

146 Rex Richards Building

150 Rodney Porter Building

163 Sherrington Building (Ex-Physiology)

BldgId Building name

137 Pharmacology

Figure 10: Boiler House 1 showing three existing boilers, with limited expansion room but existing heat network infrastructure and large roof opening

Table 3: Buildings with space heating served from Boiler House 2







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Boiler House 5 is located in the New Pharmacology building (ID 137) and comprises three Viessmann Vitocrossal boilers with a rated heat output of each 895 kW plus an ENER-G CHP with a rated electrical output of 228 kWe. The boilers were installed in March 2013 and have an anticipated year of replacement between 2033 and 2038.

There is small room for expansion which is planned to be used for another CHP unit (about 230kW) which is meant to be installed once the Tinbergen New Chemistry Teaching Laboratory/Experimental Psychology/Developmental Biology extension (ID 213) is completed (anticipated in July 2017).

Boiler House 5 serves the buildings/planned developments listed in Table 4.

Boiler House 3 (Keble Triangle)

The boiler house 3 in the basement of the Thom building (ID 177) comprises of three

Strebel boilers with a rated heat output of each 2,275 kW. There is no room for expansion in the plant room. The boilers were installed in about 2007 resulting in a year of replacement between 2027 and 2032. A sample reading of flow and return temperature during the site visit showed a flow and return temperature of 60°C and 50°C respectively. The boiler house supplies the buildings in Table 5.

Old Bodleian Library plant room

The boiler plant room is located below the courtyard adjacent to the Old Bodleian Library (ID 30) and comprises of six

Hamworthy Wessex modular boilers each with rated heat output of 200 kW each as well as pressurisation unit, circulation pumps and control valves. There are five heating circuits serving the buildings listed in Table 6. Domestic Hot Water (DHW) is provided by localised electric point-of-use heaters. There is insufficient space for expansion or major plant at this location. Record drawings indicate that the boilers were installed in September 1999 and therefore they are due for replacement between 2016 and 2019. A recently installed 100mm gas supply serves the plant and its route is suitable for heat distribution (there is space to connect to primary flow and return headers on the boiler primary circuit).

Boiler House 4 (St Cross Building)

The boiler house serves St. Cross building only. The plant room (about 40 m2) hosts two gas boilers with 600 kW rated heat output each but leaves no room for an expansion.

178 Tinbergen Building

213 In future: NEW Tinbergen New Chemistry Teaching Laboratory/Experimental Psychology/Developmental Biology


55 Denys Wilkinson Building (Nuclear Physics)

65 Holder (Engineering/Materials)

67 Hume-Rothery Building


64 History Science Museum

142 Radcliffe Camera

162 Sheldonian Theatre

Table 5: Buildings with space heating served from boiler house 3

Table 4: Buildings with space heating served from boiler house 5

Table 6: Buildings with space heating served from Old Bodleian Library plant room







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Review of potential energy centre locations 4.5

Introduction

Existing and potential energy centre locations have been reviewed in consultations with the City and County councils and the University of Oxford.

Locations for major energy centres (MEC) that could serve a city-wide DH scheme have been identified on University of Oxford Land at the Osney Mead industrial estate and at

the bottom of Headington Hill as outlined later in this Section.

Additional information from the Environment Agency at the end of the study also suggest the current EA depot at the northern edge of the Osney Meads industrial estate could be a suitable location which is worthy of further investigation.

The rest of energy centre locations would either be able to only supply smaller schemes or could serve as distributed energy centres (DE) in a larger network. Figure 12 shows the location of all energy centres that have been closely examined.

Locations in the Science Area

The following locations have been identified for potential distributed energy centres within the Science Area:

a) A large Science Area existing basement extending half way towards the Robert Hook Building. The space currently houses an archive but does not have an agreed long-term use (several short-term uses are already agreed). It is a two-storey basement arrangement, with each story covering more than 1600 m2 and having a height of the about 2.5m.

Figure 12: The area above the Science Area basement

Figure 11: Existing (red star) and potential energy centre locations (orange star).







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Figure 13: West End Area highlighted with the black line, the potential energy centre location is marked with an orange star, the larger plant room at Westgate marked with a red star.

The basement is situated below a public grassed area as shown in Figure 13. If the basement was to be used as an energy centre, substantial building conversion would need to be carried out. The ceiling between the floors would need to be removed as well as a large opening created to lift large DH plant equipment into the basement. Utilities as well as flue gas routing would need careful consideration.

b) Another option could be to retrofit Boiler House 1 and making use of existing heat network, gas supply and flue pipe infrastructure. The room should be large enough to host a CHP in the magnitude of 2 MWel. However, there would be little space for additional DH plant equipment.

c) Alternatively, playing fields surrounding the Science Area such as Balliol College, Merton or New College Recreation Ground, which are owned by the OU Colleges, could be considered for an energy centre. However, this option is constrained: New College is located within a zone of highest flood risk (Zone 3) and each would need the respective college to release the land, presumably with a long term rental benefit payable.

d) Also, a smaller energy centre could be incorporated into long-term plans for a new science building referred to as “Hand Kreb 2” next to the Department of Biochemistry. However, a strong business case would need to be made as it would directly compete with new teaching and research facilities.

Arthur Street Power Station

The Old Power Station in Arthur Street was identified as a potential larger energy centre due to the size of the building. Although the building is generously sized, the location within a densely populated housing area would not meet the requirements of future-proofing that a larger centralised energy centre should provide. Additionally, plans have been announced to convert the building for subsequent use by Said Business School as space across the centre is in high demand.

Westgate shopping centre

Early technical notes (AMEC Environment & Infrastructure UK Limited, 2013) envisaged an energy centre at the Westgate Shopping centre which would supply a potential DH network connecting new-build areas in the West End of Oxford (area rimmed by black line in Figure 14). Information provided by developer Land Securities confirmed that the shopping centre (which is currently under construction) will integrate an interface to a potentially emerging West End DH network.

Floorplans revealed a large main plant room with a considerable floor area of about 1300m2 and one storey height (see red star Figure 14). Although current design plans cannot be amended, the large plant room size could be offer room for







Page 40 of 147

Figure 14: Potential Energy Centre location at the bottom of Headington Hill. The dashed pink line represents one of the Oxford view cones.

Figure 15: Potential energy centre location at Osney Mead Industrial Estate between existing buildings

some plant but it could not host a major energy centre.

Oxpens regeneration area

The Oxpens regeneration area could be another starting point for a DH network in the West End. A Supplementary Planning Document (SPD) based on the Oxford West End Area Action Plan (WEAAP) requires new buildings in the whole West End to connect to a DH scheme, if there is one existing.

Early considerations envisaged an energy centre at Oxpens in the vicinity of a planned office building complex towards the North of the development area as shown in Figure 14 by the orange star (AMEC Environment & Infrastructure UK Limited, 2013). The energy centre inclusive heat store was anticipated to be about 30m x 20m (600 m2) in surface area, two-storeys high and with good access for maintenance vehicles.

Apart from the North location, the area towards the South-West of the OCC Ice rink has been examined but was ruled out due to area masterplan ideas of converting the space into a sports/recreation ground (“Fields-in-Trust”) and lying within the highest risk flood zone 3.

OCC steers future development at the site through the Oxpens Master Plan SPD (Oxford City Council, 2013) from 11/2013, but development has been slow to date. The ownership of the land is now shared between Nuffield College and OCC.

Oxpens would not provide sufficient space for a major energy centre.

Headington Hill

A location for a major energy centre has been identified at the bottom of Headington Hill as highlighted with the star in Figure 15.

The area does not coincide with the Oxford View Cones, thus would not impair the view on the historic centre. Also, its location outside the centre can facilitate access to the site for fuel deliveries, e.g. biomass.

An important point is the strategic position of the site between a potential centre-wide scheme and the DH scheme being considered in Headington. Thus, plant size could be increased and would benefit from the economy of scale while feeding two systems.

The area has been used as a car park and was sold from OCC to University of Oxford in 2014. However, it belongs now to the independent University of Oxford Centre for Islamic Studies and

so is not under the control of the University of Oxford.

Osney Mead Industrial Estate

About 30% of the land in the Osney Mead Industrial Estate belongs to OU and could provide space for a major energy centre







Page 41 of 147

(refer to Figure 16). The site is outside of the centre of Oxford within an area that is not directly in high demand for housing, commercial or public use.

Also, the location and geography of the area is interesting in a way that it allows access to the conflux of the Thames, offering the opportunity to the largest potential for Water Source Heat Pumps, relatively easy road access for fuels such as biomass and proximity to a major grid connection point.

There are a number of constraints / challenges include the proximity to thermal and power loads, the need for heat network infrastructure to cross both a river and rail line. The site is favoured by representatives of the University of Oxford who have good insight in the universities land holding and development strategy, as well county and city council staff on planning ground. The image shows a location suggested by the University between Southwell and Osney One buildings which are both owned by the University.

The site also achieved a high weighted score marks in the detailed energy centre location evaluation discussed below.

Additionally, a larger centralised energy centre could be considered during early stages of work of master planning which is proposed to affect new development and use changes for the Osney Mead industrial estate. In addition, OCC are positive about the uses of this area since it would support the Osney Mead as a “Protected Key Employment Site”.

As an alternative to this location, the Environment Agency has reported that there could be additional space on their premises on Osney Mead which are about 300 m North-West to the above proposed location. Limited information was made available during the course of the study

Applying evaluation criteria

Five locations for the decentralised approach (DE) and two for the major energy centre approach (MEC) have been analysed in detail, with this analysis being summarised in Figure 17. A value between 1 and 5 has been applied to a consistent range of criteria described in Appendix I and has been weighted as per Figure 17.

5 denotes that a criterion is fully met, whereas 1 representing the worst case of a requirement not met at all. 3 refers to a neutral ranking.







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Figure 16: Energy centre location assessment metrics

The matrix gives a ranking of the decentralised energy centre options with the Radcliffe Science Library at the top of the list. In practice, depending on the network solutions development a number of this spaces may be required, with others such as college playing fields opportunities (ranked 2nd) being worth further consideration.

Regarding the major energy centre, Osney Meads comes out as the preferred solution, with Headington Hill constrained by land availability, since it has not been possible to determine its availability from the land owner.

Energy centre concept DE DE DE DE DE MEC MEC DE MEC

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T Technical 0

T1 Proximity to existing anchor loads 5 5 3 3 3 1 4 15% 10%

T2 Proximity to medium pressure gas network n/a n/a n/a n/a n/a 4 5 n/a 5%

T3 Proximity to low pressure gas network 3 3 4 4 4 n/a n/a 15% n/a

T4 Access for HGV biomass delivery 1 1 2 1 1 3 3 4% 10%

T5 Integration of Water Source Heat Pumps 1 3 1 1 4 5 1 4% 4%

T6 Integration of Ground Source Heat Pumps 1 2 3 1 1 3 1 7% 2%

T7 Phasing out fossil through other renewable sources 2 2 1 1 1 4 2 4% 6%

D Development

D1 Existing plant room 3 2 1 4 3 1 1 10% 2%

D2 Enough space for expansion and plant capacity increase 3 1 2 1 1 4 4 3% 6%

D2 Location outside of domestic dwellings 4 4 1 2 1 5 4 2% 8%

D3 Location outside of AQMA hot spot 3 3 1 1 1 5 5 2% 7%

D4 Location outside of Oxford View Cones 2 2 2 2 4 3 5 2% 8%

D5 Location outside of flooding area 5 5 4 5 1 1 5 2% 2%

D6 Favourable land ownership/intended use clear 4 2 3 2 1 5 1 30% 30%

Total, unweighted 37 35 28 28 26 44 41

Total, weighted 0.7 0.5 0.5 0.5 0.4 0.8 0.6

Criteria







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5 Energy Networks

Introduction 5.1

This section deals with the principles of a heat network and goes on to cover about the specific opportunities and constraints in Oxford City Centre. It develops a number of heat (and power) network options based on the range of prospective loads identified.

Heating Pipes 5.2

Modern large scale heat networks are built with pre-insulated district heating pipes (typically carbon steel) buried directly within trenches at a depth of 0.5-1.0 m, see Figure 17. Insulation is rigid polyurethane foam and the pipe will have an outer polyethylene coating for protection of the insulation. This technology limits heat losses typically to a level of 5-10 % of the energy transmitted. Further savings in heat losses can be achieved by lowering the flow temperature, but this would require flow rates to be increased, which in turn may require larger diameter pipelines and/or increased pumping power (with consequent increases in the operational energy consumption). Lower flow temperature can more easily be accommodated in new development or refurbishments of existing properties, where internal heat transmission systems are designed to operate at lower temperatures.

Figure 17: Pre-insulated polyurethane bonded district heating pipes installed in trench.

Network lifetime is up to 50 years with the use of steel pipe solutions, assuming high quality professional installation and efficient treatment of circulation water.

Use of plastic (MDPE) heating pipes is also possible and this can give installation and cost advantages (for smaller pipe diameters), however, lifetimes are lower (e.g. 30 years) and maximum operating temperatures and pressures are more constrained because the pipework is more prone to damage. Plastic pipes are discounted for this project because of the lower lifetime they offer and the need to achieve a high degree of system resilience.







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Heat network circulation water needs to be treated to remove contaminants including oxygen, which can particularly affect plastic pipes. Oxygen is removed by using a fixation chemical Hydrazine.

Pipes will range from the nominal diameter DN 15 to DN 400 in medium size systems and can be up to DN 1200 in large city wide systems with hundreds of MWs peak demand.

Thermal conductivity is defined not to exceed 0.033 W/mK, but modern applications often reach a level of 0.026-0.029 W/mK.

Pre-insulated steel pipes are designed to withstand an operating pressure of 1.6 MPa and operating temperature of ≤120 °C.

Further engineering detail is presented in Appendix J.

Heat network design and operating parameters 5.3

A constant temperature network, whether high or low temperature, is not the optimal solution for a modern heat network. Efficient and flexible heat networks use variable flow/variable temperature operation mode. This allows optimisation of both investments and operation in the most flexible way. With this approach, the flow temperature can vary from 70oC (or lower, depending mainly on DHW) in summer to as high as 110ºC during the peak demand periods, which will be relatively short-lived. The lower temperature level allows reduce heat losses (although it increases pumping costs). The higher temperature level applied at peak periods allows optimal network dimensions and pumping capacity; increasing the delta-T from 25ºC to 60ºC at peaks will more than double the transmission capacity with same pipe dimensions.

In this project, the district heating network layout and pipework will be optimised and dimensioned using TERMIS hydraulic modelling software to test and dimension the system. The design parameters, i.e. operating extremes that will be used for the dimensioning are presented in Table 7.







Page 45 of 147

Table 7: Design parameter assumptions used for hydraulic modelling of the heat network.

Parameter Value Source

Maximum operating temperature 110 ºC Manufacturer guidance

Upper dimensioning supply

temperature – Flow (plant outlet)

95 ºC DECC report: Assessment of the

costs and performance of HNs

(Bulk schemes, max value)

Lower dimensioning temperature –

Return (consumer HIU)

55 ºC Heat network code of practice

DH supply temperature (plant outlet) 95 ºC DECC report: Assessment of the

costs and performance of HNs

(Bulk schemes, max value)

DH return temperature (consumer

HIU)

55 ºC Heat network code of practice

Static return pressure 3.0 bar

Transmission pipeline pressure loss 2.5 bar/km Heat network code of practice

Minimum pressure difference at

consumer HIU

0.6 bar

The Heat Network is dimensioned with a maximum operating temperature of 95°C flow and 55°C return at peak demand. It is proposed that the network would operate on a variable flow and variable temperature basis, with changes in both responding to the instantaneous consumption needs. Higher loads will require greater water flow (controlled at the ‘consumer substations’ or ‘Heat Interface Unit’) and higher source (often called ‘flow’) temperatures.

The flow temperature would typically reside around 80-85°C until an outdoor temperature of below 0-5°C occurs. With colder weather, the flow temperature is gradually increased towards the maximum temperature. An example of a typical flow temperature and flow rate curve is shown in Figure 18:. Return temperature is dependent on correct/optimum design and operation of consumer substations and building heating systems, varying normally between 45-55°C.

Lower operating temperature and systems that deliver bigger more significant temperature differences between ‘flow’ and ‘return’ can improve overall system efficiencies, which should be targeted to be in the region of 90-95%.

Lower operating temperature would slightly reduce network heat losses but may require higher flow rates, which would increase pumping costs. Increasing the temperature difference between ‘flow’ and ‘return’ (“delta-T”) would reduce pumping costs. The best way for achieving high delta-T figures is to try to reduce the return temperature from customer substations to the lowest level. This can be enhanced by correct design and appropriate maintenance of substations and building internal systems. The following should be considered when optimising in-building systems within existing buildings:







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• Reducing the building internal operating temperatures, e.g. below 60°C (usually possible because of original oversizing of the secondary heating system)

• Enable variable flow and use two-port control valves only

• Common headers shall not be used as these will raise return temperatures

This would have only marginal impact on overall viability because the same amount of energy has to be injected to the network independent of whether the off-take is from flow or return and a gas CHP (without steam turbine) is not sensitive on supply temperature. At this stage of development, savings in pipeline dimensioning would be theoretical, especially since there is a need for future proofing.

Figure 18: Example of typical duration of a flow temperature and flow rate in DH network.

Regarding pressure level and control of circulation pumps, standard design principles have been applied. This consists of two separate functions: (1) Network pressurisation by pressurization pumps, expansion vessels and make-up water system; and; (2) Network water circulation by variable flow DH pumps which are controlled by pressure difference monitoring at the "critical consumer", usually a consumer furthest away from the energy centre. The network pressurisation makes sure that a minimum static pressure (3 bar) is maintained at all points of the network (topography, suction side of pumps etc.) ensuring that no boiling and cavitation takes place. Circulation pumps make sure that every customer has adequate pressure difference available across their substation, thus facilitating additional flow to their heat exchangers when the customer needs more heat, which is activated by opening (opens the local control valves).

0%

20%

40%

60%

80%

100%

120%

0

10

20

30

40

50

60

70

80

90

100

0

325

650

975

1300

1625

1950

2275

2600

2925

3250

3575

3900

4225

4550

4875

5200

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6175

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8125

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Flow temperature (°C) Total flow (%)







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Heat network circulation pumping would be designed to provide all consumer substations at all times with a sufficient pressure difference, normally about 0.6 bar, as a minimum. Speed regulated circulation pumps with frequency converter and pressure difference control would be used to optimise pump operation in different consumption and flow situations. The pumps would be regulated by pressure difference, which is measured in the most distant points of the network (critical consumers). The data would be transmitted through a SCADA system (Supervision, Control and Data Acquisition) by using fibre links, internet or communication wires possibly with radio link or GSM back-up depending on local circumstances. In case of communication malfunction, circulation pumps can be controlled manually thus ensuring uninterrupted supply to customers. Multiple pumps would be included to ensure reliability and to match the varying load requirements, e.g. to account for low summer loads.

Temperature controlled bypasses (rather than fixed ones) would be used where these are required to maintain flow temperature above a minimum even at times of low demand.

Electrical network 5.4

An important revenue opportunity for heat networks is the possibility to introduce Combined Heat and Power production (CHP). The total efficiency of a CHP heat network system is much higher (about 85%) compared with separate heat and power production (ranging between 55-65%), with commensurate fuel savings and environmental benefits.

From the financial viability point of view, it is important that the revenue from power generation can be maximised as this will contribute to the payback of the network investment.

The value of CHP electricity depends very much on the trading arrangements and the degree to which power generated on site can be consumed on site, where it will command the greatest value. Direct sales for surplus electricity exported off site yields a low value (near to wholesale price) for the electricity produced whereas utilising all electricity generated on the site that it is generated or selling it through a private wire network at a local level can fetch a price much closer to the end consumer price.

There is a 28 MVA high voltage distribution network power supply to the University of Oxford Science Area/Keble Triangle with local transformers, typically one per building or cluster of buildings. Also, it has been reported that Keble College receives their electricity through a transformer in the Science Area and is already subject to joint billing together with OU.

It is therefore assumed that electricity generated in a CHP in the Science Area can be “sold” directly to end-users through this private wire network. Additionally, major OU-owned buildings in the Ashmolean Museum, Wellington Square, Radcliffe Observatory Quarter, Manor Road and Weston Library area are exclusively connected to transformers for which a city-wide interconnection of transformers could be considered.

However, a detailed investigation into a significant extension of the University of Oxford’s private wire network or a conceptual design of a private wire network for a city-wide connection and in the Oxpens regeneration area (location of energy centre in option 2) goes beyond this study. Discussions with the local distributed network operator, Scottish and Southern Energy Power Distribution should be held to discuss how distributed electricity generation could be integrated in larger city-wide private wire networks.







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Where generation is greater than on-site consumption, surplus is assumed to be sold (“exported” or “spilled”) via the regional power network to a 3rd party. Power exports should be kept to a minimum because purchasers will pay a minimal tariff (typically less than the wholesale market price). This is achieved by correct sizing of the CHP (against certainty over the power and heating demand profiles – which would benefit from greater metering), and effective scheduling. It could also benefit from on-site power storage or diversion to other uses such as vehicle charging. Power will also still be required to be purchased via the regional power network to fill the gap between demand and the CHP supply.

The parasitic load for the main energy centre, which would be located with the CHP plant, would be covered from the CHP generation or, during non-operating periods, from the grid.

The CHP plant arrangement would also include a step-up transformer and switching equipment for the generator; these costs has been included in the investment cost of the CHP units.

Approvals for a grid connection and increased gas supply for CHP options are key risk items and it will be important to conduct connection assessments and to hold early discussions with the regional power network operator and the regional gas supplier/transporter. Applications concerning the capacity increase/distributed energy generation have been made with distribution network operators and replies are awaited.

Routing principles and key constraints 5.5

Heat network routing has been developed to connect key heat loads efficiently (shortest distances) and has been influenced by known constraints identified together with the Council and stakeholders. ‘Soft dig’ opportunities have been used where possible to minimise costs, although within the city centre there are not many such opportunities.

Where possible, it is recommended that construction of the heat network is integrated into other construction works such as Oxpens to deliver savings in construction costs and ensure in-building costs, such as boilers, are fully displaced and correctly accounted for.

Key constraints to the network route include:

Major streets (minimise number of crossings)

Thames river (river crossing required to reach energy centre site in Osney Mead)

Railways (railway crossing required to reach energy centre site in Osney Mead)

Archaeology

Archaeology will have to be considered in a medieval city like Oxford. The network route comes close or into the Oxford Castle Scheduled Ancient Monuments area. A map of the SAM is provided below (Figure 19). Scheduled Monument Consent for Historic England would be needed if ground works are required within the SAM.







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Figure 19: Oxford Castle Scheduled Ancient Monument.

The scheme passes through numerous areas of high archaeological potential within the historic core of the late Saxon burn and medieval town. Many of the town’s main streets are already heavily serviced and the proposed trench is relatively shallow and narrow. Given the sheer size of the proposed network a watching brief would be warranted in this zone.

The land to the north of the medieval suburban area has less made ground over the gravel and here there is an extensive prehistoric landscape (pits, ditches and graves cut into the natural gravel). Features along Keble road have been recorded at 0.8 m and 1.4m in depth from modern ground surface.

The occurrence of significant archaeology at 0.5 m-1.0 m required by DH trenches is likely to be very occasional and localised.







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6 Network options considered (network and supply)

Summary of network options 6.1

Heat demand clusters were presented in sections 2 and 3.5 and from this three heat network options have been identified based on detailed review of heat demands, existing heat networks and availability of supply plant locations. The assumed load connection areas for the three heat network options are presented in Figure 20 below.

Figure 20: Network options considered in Oxford City Centre.

Table 8 (load figures are at full network build-out).

Table 8: Heat Network options in Oxford City Centre.

Area connected

Supply Rated Peak Heat Demand (MW)

Heat Consumption (MWh)

Network Length (m)

Option 1 Science Area & Keble Triangle

Gas CHP 25.0 37,485 2,970

Option 2 Oxpens, Westgate & Speedwell Street Area

Gas CHP / WSHP hybrid

10.3 14,179 2,522

Option 3-1 Integrated network

Gas CHP 59.0 80,115 9,904







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Gas CHP / WHSP hybrid

59.0 80,115 9,904


Biomass CHP / WSHP hybrid

59.0 80,115 9,904

Option 1 covers the University of Oxford’s Science Area as well as the Keble Triangle. This area has a high heat demand density and includes several centralised plant rooms. Option 2 is characterised by the Oxpens development and the new Westgate Shopping Centre development, and extends all the way to the Speedwell Street area. Option 3 is a combination of Option 1 and 2, which picks up a majority of the heat demand between the two areas, including the Library Area, which has high heat demand density.

Option 1 – Science Area and Keble Triangle 6.2

Option 1 - Heat network

Option 1 connects the University of Oxford Science Area and the Keble Triangle, both areas with high heat demand density as well as existing centralised boiler houses, connected to multiple buildings with existing local heat networks. The existing boiler houses provide an opportunity for decentralised energy supply for a wider heat network in the beginning of the DH operation. The preferred location for a new energy centre for the wider heat network is within an existing basement in the Science Area (see section 4.5). It is recognised that the location has a range of constraints including accessibility for plant installation and potential alternative uses for the location. These will need further consideration with the University of Oxford.

Figure 21 shows the proposed network routing and location of the load points and energy centre in Option 1.







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Figure 21: Option 1 heat network routes.

Table 9 shows the headline parameters of the Option 1 heat network (load data is shown for full network build-out).

Table 9: Option 1 heat network parameters.

Option 1

Rated Peak Heat Demand (MW) 25.0

Heat Consumption (MWh) 37,485

Network length (m) 2,870

Linear Capacity (MWh/m) 13.1

Linear Capacity (kW/m) 8.7

Hydraulic modelling analysis based on the design parameters presented in section 5.1 has been conducted and this has identified the lengths, dimensions, schedule and phasing of heating pipes required, together with the associated costs, as shown in Table 10. The largest pipe size is DN250 (250 mm) from the energy centre outlet.







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Age and performance of existing plant in the properties anticipated to be connected has been examined and connection phasing was developed. Existing heat loads selected for Option 1 are envisioned to be connected to the heat network starting from 2020 and thereafter as existing building level gas boilers are decommissioned. The existing centralised boiler houses operated by the University of Oxford are envisioned to be connected in 2020, with existing boilers acting as backup boilers until being decommissioned at the end of their technical lifetime. Full phasing of network installation is presented in Appendix K.

Network investment costs have been calculated based on the modelled trench lengths, pipe dimensions and installation type (soft dig / hard dig). ‘Hard dig’ construction accounts for approximately 96% of the network, which is typical in a dense city. Costs are based on UK market estimates and prior quotations.

Table 10: Option 1 heat network trench lengths and investments.

Trench length Cost

m £k

DN25 111 71.5

DN32 254 163.6

DN40 110 73.2

DN50 205 146.4

DN65 285 218.1

DN80 101 84.0

DN100 294 254.0

DN125 562 584.7

DN150 523 643.0

DN200 404 533.2

DN250 22 30.3

Subtotal 2,870 2,801.9

Contingency (30%) 840.6

Total 2,870 3,642.4

Option 1 - Heat supply strategy

The heat supply strategy including the selection of primary (base load) energy source, supply capacity and energy centre location is based on the qualitative analysis presented in section 4 as well as on quantitative cost comparison (LCOE) between potential fuel and technology options.

Gas CHP capacity is proposed for base load supply with gas boilers for peak and reserve. There is enough space in the existing Science Area basement to house gas CHP units (engine gensets) and all gas boilers required. Also the existing centralised boilers can be connected to support the network in the first instance. Centralising the supply capacity in future in one location would have the following benefits compared to several separate boiler houses: economy of scale (lower investment costs, lower maintenance costs), easier control of generation and network operation.







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Other supply technologies considered in Section 4.2 are not suitable in the envisaged energy centre location due to its space restrictions at site and in the building space itself. Transport and storage of biomass fuel is not considered feasible, primarily because of delivery constraints.

Other possible energy centre locations in less congested areas can be considered in future depending on how the heat demand and network evolves. Larger heat demand may justify longer transmission distances or connecting other areas in the city and would promote the other energy centre options discussed under Options 2 and 3.

Figure 22 illustrates the capacity build-out for the Option 1 network with the source of heat supply shown as bars and the peak demand (in MW) shown as a line. It illustrates the points at which new supply capacity would be commissioned to meet the rising heat demand as new properties are connected to the network.

Figure 22: Capacity build for Option 1 (gas CHP) by year.

Option 2 – Oxpens, Westgate & Speedwell Street area 6.3


Option 2 connects the Oxpens, Westgate and Speedwell Street areas. It is characterised by the new developments within the area, Oxpens and the new Westgate Shopping Centre. A site at the Oxpens development area was selected as the energy centre location for this option, since plans for an energy centre are already included within the development.

Figure 23 shows the proposed network routing and location of the load points and energy centre for Option 2.

0

5

10

15

20

25

30

35

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Peak D

em

and (

MW

)

Option 1

Existing CHP CHP Gas boilers

Existing gas boilers Heat store Peak demand







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Figure 23: Option 2 heat network route.

Table 11 shows the headline parameters of the Option 2 heat network (loads are shown at full network build-out).


Option 2






Hydraulic modelling analysis has been conducted to define the lengths, dimensions, schedule and phasing of heating pipes required, together with the associated costs, as shown in Table 12. The largest pipe size is DN200 (200 mm) from the energy centre outlet.







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Age and performance of existing boilers in the properties anticipated to be connected has been examined and connection phasing was developed. Existing heat loads selected for Option 2 are envisioned to be connected to the heat network starting from 2020 and thereafter as existing building l gas boilers are decommissioned. Full phasing of network installation is presented in Appendix K.

Network investment costs have been calculated based on the modelled trench lengths, pipe dimensions and installation type (soft dig / hard dig). ‘Hard dig’ construction accounts for approximately 85% of the network, which is typical in a dense city. Soft dig installation is assumed for the new development in Oxpens, as pipes can be installed when the site is developed. Costs are based on UK market estimates and prior quotations.


Trench length Cost

m £k

DN32 32 20.7

DN40 97 64.9

DN50 87 61.8

DN65 740 558.3

DN80 225 161.8

DN100 491 442.9

DN125 233 243.0

DN150 395 457.5

DN200 318 411.8

Subtotal 2,617 2,422.6

Contingency (30%)

726.8

Total 2,617 3,149.4


The area includes two potential energy centre locations, within the Oxpens and Westgate developments (see section 4.5). The Oxpens site was selected as the energy centre location for this option, since plans for an energy centre are already included within the development and on the other hand, since Westgate centre is already well advanced.

The heat supply strategy including the selection of primary (base load) energy source, supply capacity and energy centre location is based on qualitative analysis presented in section 4 as well as on quantitative cost comparison (LCOE) between potential fuel and technology options.

In Option 2, the peak heat demand is relatively small, estimated at 8.0 MW (with a 0.95 diversity factor included). The total generation capacity would be 10.4 MW including peak and reserve capacity. The capacity mix includes 0.8 MW gas CHP, 2.0 MW WSHP and 7.7 MW gas boilers.







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A Gas CHP / WSHP hybrid option as baseload capacity provides the lowest production costs and also relatively low carbon content. Gas CHP alone is not competitive because the CHP electricity is assumed to be costly to be supplied to retail consumers via private wire, hence the WSHP as an on-site electricity consumer makes use additional power to recover heat from the river Cherwell.

Gas boilers would operate as peak and reserve capacity.

Figure 24 illustrates the capacity build-out for the Option 2 network with the sources of heat supply shown as bars and the peak demand (in MW) shown as a line. In Option 2, all consumers are envisaged to join from the beginning and no additional demand or capacity is assumed during later years.

Figure 24: Capacity build for Option 2 (gas CHP / WSHP hybrid) by year.

Option 3 – Cross-city integrated network 6.4


Option 3, the largest of the network scenarios, incorporates the areas of Option 1 and 2, as well as most of the heat demand between those areas. The heat network would extend from Osney Mead and Oxpens to the Science Area and Keble Triangle, picking up the areas of dense heat demand in the City Centre, including among others the Library Area, University College Area, Ashmolean Museum Area, Balliol College, and Manor Road Area.

Option 3 enables the creation of a cross-city heat network connecting together the largest heat demand clusters but also enabling the inclusion of a major energy centre allowing the use of a wider range of energy supply technologies. The main energy centre is envisaged to be located in the Osney Mead industrial estate on an empty space owned by the University of Oxford (see Figure 16). It is proposed that a secondary energy centre is located within an existing Science Area basement in the Science Area.

0

2

4

6

8

10

12

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Peak D

em

and (

MW

)

Option 2

Existing CHP WSHP CHP

Gas boilers Existing gas boilers Heat store

Peak demand







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The heat network will have to cross the River Thames and the rail line to reach the city centre from the Osney Mead industrial estate. Initial investigation suggests the river crossing could be best implemented by installing the heat pipes on the bottom of the waterway in a shallow, backfilled trench. This would require approval from the Environment Agency. For underwater installations, the district heating pipe would be installed within a special steel casing pipe which itself would have a polyethylene coating. The river and railway crossings could be implemented at the same location, as there is a railway bridge over the river near the energy centre site. An alternative options is the use of footbridge that is under consideration by the University of Oxford, designed to connect the Osney Mead to Oxpens areas.

Figure 25 shows the proposed network routing and location of the load points and energy centre in Option 3.

Figure 25: Option 3 heat network route.

Table 13 shows the headline parameters of the Option 3 heat network (load figures are shown at full network build-out).







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Option 3






Three alternative heat supply capacity options have been considered within network Option 3

Option 3-1: Gas CHP

Option 3-2: Gas CHP / WSHP hybrid

Option 3-3: Biomass CHP / WSHP hybrid

Hydraulic modelling analysis has been used to estimate the lengths, dimensions, schedule and phasing of heating pipes required, together with the associated costs, as shown in Table 14. The largest pipe size is DN300 (300 mm) from the energy centre outlet for Options 3-1 and 3-2, and DN400 (400 mm) for Option 3-3. The largest pipe size increases in Option 3-3 due to heat production being moved from the Science Area to Osney Mead, as CHP production envisaged in an existing Science Area basement are replaced by Biomass CHP / WSHP hybrid production at Osney Mead. The network routes are the same in each option (3-1, 3.2 and 3-3).

Age and performance of existing plants in the properties anticipated to be connected has been examined and connection phasing was developed. Heat loads in Options 3-1, 3-2 and 3-3 are envisioned to be connected to the heat network starting from 2020 and thereafter as existing building level gas boilers are decommissioned on a systematic basis. The existing local networks operated by University of Oxford are envisaged to be connected in 2020, with existing boilers acting as backup boilers until decommissioned at the end of their technical life. Full phasing of network installation is presented in Appendix K.

Network investment costs have been calculated based on the modelled trench lengths, pipe dimensions and installation type (soft dig / hard dig). ‘Hard dig’ construction accounts for approximately 90% of the network for all options, which is typical in a dense city. Soft dig installation is assumed for the new development in Oxpens as pipes can be installed when the site is developed. Costs are based on UK market estimates and prior quotations.







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Option 3-1 Option 3-2 Option 3-3

Trench length

Cost Trench length

Cost Trench length

Cost

m £k m £k m £k

DN20 84 44.5 84 44.5 84 44.5

DN25 121 77.8 121 77.8 121 77.8

DN32 310 200.2 310 200.2 310 200.2

DN40 307 205.2 307 205.2 307 205.2

DN50 600 427.7 600 427.7 600 427.7

DN65 1,072 810.9 1,072 810.9 1,072 810.9

DN80 311 247.1 311 247.1 311 247.1

DN100 2,128 1,919.9 2,128 1,919.9 2,128 1,919.9

DN125 1,599 1,664.6 1,599 1,664.6 1,599 1,664.6

DN150 709 871.2 589 724.2 385 472.7

DN200 537 709.8 657 867.8 810 1,069.9

DN250 510 709.4 510 709.4 561 781.2

DN300 1,450 2,233.8 1,450 2,233.8 1,053 1,573.5

DN400 - - - - 398 795.2

Total 9,739 10,122.1 9,739 10,133.1 9,739 10,290.5

Contingency (30%)

3,036.6 3,039.9 3,087.1

Total 9,739 13,158.8 9,739 13,173.1 9,739 13,377.6

This city-wide option could also provide a DH connection to many of the energy-intense historic University of Oxford Colleges, which are not considered at this point (due commercial and ownership constraints - outlined in Section 3). Thus, the strongest business case for a city-wide scheme was chosen, which should facilitate network development whilst providing substantial future expansion potential as historic Colleges account for about 78 GWh of heat year (CIBSE ref year) or about £1.4 million in energy expenditure alone. In addition, the demand could significantly increase due to very low average outside temperatures during heating season. As a comparison, the Heating degree days (HDD) based on base building temperature of 15.5oC for Oxford in 2013 have been 17% higher than in the CIBSE reference modelling year. This could lead to an additional 10 GWh of annual heat consumption (about £200k).


The heat supply strategy including the selection of primary energy source, supply capacity and energy centre location is based on qualitative analysis presented in section 4 as well as on quantitative cost comparison (LCOE) between potential fuel and technology options.

Option 3 would create a cross-city heat network with a peak demand of 38.3 MW (with a 0.95 diversity factor included) allowing the use of a wider range of energy supply technologies. As such it offers greater heat supply efficiency, reduced carbon emissions, greater energy security and implicit future-proofing.







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The main energy centre is envisaged to be located in the Osney Mead industrial estate on land owned by the University of Oxford between two buildings (see section 4.5). Another possible option in close proximity (about 300 meters North West) is at the Environment Agency depot within the industrial estate. This site was identified at the end of the study and so it has not been possible to verify its suitability. It is proposed that a secondary energy centre is located within an existing Science Area basement. Dividing the supply to opposite ends of the heat network increases resilience and reduces the pipeline dimensions required, as the peak demand can be supplied locally in the Science Area.

Table 8 in section 6.1):

1. Option 3-1: Gas CHP o 19.4 MW gas CHP o 33.1 MW gas boilers

2. Option 3-2: Gas CHP / WSHP hybrid o 24.2 MW gas CHP o 3.5 MW WSHP (Osney Mead) o 24.8 MW gas boilers

3. Option 3-3: Biomass CHP / WSHP hybrid o 4.9 MW biomass CHP (Osney Mead) o 6.5 MW WSHP (Osney Mead) o 41.1 MW gas boilers

The capacity mix in each option has been dimensioned based on fixed and variable costs of each energy supply option.

The base and peak load capacity would be divided between energy centres taking into account the following:

biomass CHP and WSHP are possible only in Osney Mead

gas CHP benefits from the private wire electricity sales at Science Area

Gas boilers will be used for peak and reserve capacity. In addition to new gas boiler capacity installed in the two energy centres (Osney Mead and an existing basement in the Science Area, it is envisioned that the existing local boiler houses in the Science Area currently connecting multiple buildings via existing local heat networks are initially retained as peak and reserve boilers as in Option 1. The boiler house at the Old Bodleian Library is not taken into account in heat supply because the boilers are old (installed in 1999) and the total capacity is only 1,200 kW. It is not reasonable to install new small local boilers, but instead the capacity can be built in the centralised main energy centre. This will also makes space available which would presumably enable further property rationalisation for the University.

Figure 26, 27 and 28 illustrate the capacity build-out for the Option 3 heat generation alternatives, with the heat sources shown as bars and the peak demand (in MW) shown as a line. It illustrates the points at which new supply capacity would be commissioned to meet the rising heat demand as new properties are connected to the network.







Page 62 of 147

Figure 26: Capacity build for Option 3-1 (gas CHP) by year.

Figure 27: Capacity build for Option 3-2 (gas CHP / WSHP hybrid) by year.

0

10

20

30

40

50

60

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Peak D

em

and (

MW

)

Option 3-1

Existing CHP CHP in SA CHP in OM


Peak demand

0

10

20

30

40

50

60

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Peak D

em

and (

MW

)

Option 3-2

Existing CHP CHP in SA WSHP

CHP in OM Gas boilers Existing gas boilers

Heat store Peak demand







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Figure 28: Capacity build for Option 3-3 (biomass CHP / WSHP hybrid) by year.

Summary of heat production for all network options 6.5

Annual heat production (MWh) from the various heat sources is illustrated in Figure 29 for each network option and supply variant. This graph shows the position once the full heat network is built-out. It clearly demonstrates the high proportion of CHP heat supplied in the Gas CHP options (1, 3-1 greater than 90% and the 3-2 around 80%) as compared to the Biomass CHP / WSHP hybrid option 3-3 (c. 34%) and gas CHP / WSHP hybrid option 2 (c. 19%). This is due to the base/peak capacity mix as determined by the optimisation modelling conducted.

Figure 29: Annual heat production shares by production technologies.

Energy calculations for each supply option are summarised in Table 15 for the first year of a fully built-out system.

0

10

20

30

40

50

60

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Peak D

em

and (

MW

)

Option 3-3

Existing CHP WSHP CHP in OM


Peak demand

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Option 1 Option 2 Option 3-1 Option 3-2 Option 3-3

Annual heat

pro

duciton

Gas CHP Biomass CHP WSHP Gas HOB







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The high cost of energy from the Biomass CHP option, which limits the proportion of heat supplied, is largely due to high capital cost and the fact that it will have a lower heat-to-power ratio (circa 2:1) than gas-CHP (circa 1:1). This means that significantly less power (used in a water sourced heat pump) is generated in Biomass CHP option which in turn reduces energy sales revenue when compared against the Gas CHP options.

The technical reason for the big difference in power to heat ratio between Gas CHP and Biomass CHP is the use of different energy conversion processes. The Gas CHP option applies reciprocal engines whereas Biomass CHP is assume to be based on a conventional Rankine cycle steam turbine process. The type of conversion process and thermodynamic characteristics such as process temperatures which results in the higher power to heat ratio for the CHP engines.







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Table 15: Summary of energy supply options.


Peak Heat Demand2 MW 21.2 8.0 41.2 41.2 41.2

Total Heat Production

Capacity

MW 26.9 10.4 52.5 52.5 52.5

Gas CHP MW 12.6 0.8 19.4 24.2 0.0

Biomass CHP MW 0.0 0.0 0.0 0.0 4.9

WSHP MW 0.0 2.0 0.0 3.5 6.5

Gas Boilers MW 14.3 7.7 33.1 24.8 41.1

Total Annual Heat Production MWh 40,484 15,313 86,559 86,532 86,627

Gas / Biomass CHP MWh 39,971 2,967 81,172 68,247 29,164

% >90 % 19.4 % >90 % 78.9 % 33.7 %

WSHP MWh 0 9,709 0 17,538 37,092

% 0.0 % 80.6 % 6.2 % 21.1 % 66.3 %

Gas Boilers MWh 513 2,638 5,387 747 20,371

% 1.3 % 17.2 % 6.2 % 0.9 % 23.5 %

Gas Consumption MWh 101,495 10,422 210,551 173,056 21,491

Biomass Consumption MWh 0 0 0 0 57,878

CHP Electricity Production MWh 42,888 3,183 87,098 73,229 12,161

CHP Electricity to Private Grid Network

% 81.0 % 0.0 % 56.0 % 62.1 % 0.0 %

CHP Electricity to Grid % 19.0 % 0.0 % 44.0 % 30.0 % 0.0 %

CHP Electricity to WSHP % 0.0 % 100.0 % 0.0 % 7.9 % 100.0 %

Parasitic Electricity Consumption

MWh 405 153 865 865 865

Peak Utilisation Factor (supply side)

h/yr 1,767 1,767 2,135 2,135 2,135

Heat Network Trench Length km 2.9 2.6 9.7 9.7 9.7

Heat Network Heat Density MWh/m 13.1 5.4 8.4 8.4 8.4

2 Peak diversity factor included







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7 Financial Appraisal of Network and Supply Options

Summary 7.1

This section reviews the detailed costing and cash flow modelling of the preferred supply options (Gas CHP, Gas CHP / WSHP hybrid, and Biomass CHP / WSHP hybrid) within the three network scenarios. It presents the key assumptions which are drawn from the demand analysis, network design and supply solutions discussed previously and highlights the financial performance of the different options.

The analysis highlights network and energy centre investment costs range from £10m to £47m (depending on option). A 30% contingency assumption is included in each option at this early stage and this should be accounted for when considering the outturn results. The investments in Gas CHP options vary between £18m and £36m.

Option 1, which is limited to Science Area and Keble Triangle, has the best return at 18.9% (Internal Rate of Return “IRR”, over 40 years) and a corresponding simple payback of 6.4 years. Transitioning to a city-wide network (Option 3), which would incorporate both Option 1 and 2 networks, would still deliver a strong rate of return at 14.5% (IRR, over 40 years).

A biomass-fuelled network spanning the City Centre (Option 3-3), by contrast, illustrates much higher operating costs, lower revenues from electricity sales and higher initial investments. Whilst both Contract for Difference and RHI sales tariffs are included they do not sufficiently compensate the high costs involved. For this option the return is only -0.2% (IRR, over 40 years).

Financial sensitivities are explored for the options modelled and highlight, in rough order of impact, the following issues to be critical to the business case: capex increases, power export price, heat demand decreases, heat tariffs, fuel prices and business rates.

Financial Modelling principles and assumptions 7.2

In general terms, heat network schemes require significant investment at the construction phase compared to other solutions, e.g. building level gas boilers. As a consequence, they require long operational periods with operating costs that are sufficiently lower than available alternatives so that capital repayments can be made. An impact of this is that heat network schemes can be sensitive to underlying financial parameters, such as the cost of capital and future energy price predictions, over the 40-year plus lifetime.

The financial modelling includes all investment (original and replacement), operation, maintenance and other business costs on annual basis throughout the calculation period. Discounted Cash Flow (DCF) analysis is used to derive the Internal Rate of Return (IRR) and Net Present Value (NPV) for each option.







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The financial modelling is conducted in real terms (2016 values) and as such monetary inflation is not considered on costs or incomes. A range of real terms discount factors are used to calculate lifetime NPV figures. 3% is used to represent the social cost of investment into capital projects that are public funded and be regarded as long term (greater than 30 years), as recommended by the HM Treasury Green Book. Discount rates of 6% and 12% are used to represent the cases of joint public and private investment and private investment only. This variation in discount rate accounts for the weighted average cost of capital (WACC) of the different developer/investor groups whose access to finance, terms of finance and the view of risk will vary.

Two calculation periods are used for each option: 25 and 40 years. In the final year of the calculation period (year 25 and 40) the residual value of all plant is included as a revenue to provide an equal basis on which each option can be compared.

Key assumptions used in the study are presented in Table 16 to 18. In annual modelling, the energy prices and CO2 emission factors have been adjusted in line with DECC/Treasury projections.

Table 16: Energy prices.

Energy prices (Year 1) £/MWh Source

Natural Gas 20.2 DECC Quarterly Energy Prices - December 2015

Biomass 31.0 30 % moisture content; British Biomass Centre

Retail Electricity 96.0 DECC Quarterly Energy Prices - December 2015

CHP Electricity Sales Price to grid 48.4 DECC Updated Energy & Emissions Projections – November 2015

Avoided Electricity purchase (in case of CHP with private wire network)

95.0 University of Oxford Electricity Purchase Price minus 5%







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Table 17: Financial parameters.

Financial parameters

WACC % 3 / 6 / 12 %

Business rate £/MWh 6.0

Lead time yr 2

Calculation period yr 25 / 40

RHI (available for 20 years)

Biomass CHP £/MWhtherm 42.2

Water Source heat pump £/MWhtherm 89.5 (Tier 13)

26.7 (Tier 24)

CfD (available for 15 years)

Biomass CHP Strike Price £/MWhe 125.0

3 Applied for 1,314 hours * installed capacity for each 12 months

4 Applied over remainder heat generated for each 12 months







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Table 18: Heat production performance parameters and emission factors.

Heat Production Performance Parameters

Efficiencies

Gas CHP Overall Efficiency % 82.1 %

Gas CHP Power to Heat Ratio 107.3 / 100

Biomass CHP Overall Efficiency % 71.4 %

Biomass CHP Power to Heat Ratio 41.7 / 100

Gas Boiler Efficiency % 90 %

WSHP COP 3.05

Emission Factors

Gas tCO2 / MWh 0.205

Biomass tCO2 / MWh 0.039

Grid Electricity (2016) tCO2 / MWh 0.363

Grid Electricity (2056) tCO2 / MWh 0.032

Business rates are assumed to be £6 per MWh of heat sold, based on recent reporting of existing systems. In practice business rates, if the project were liable, would be agreed with the Valuation Office and would depend of the specific nature of the project. It is possible to base the business rate valuation on the capital value, which may make sense in this case particularly as the cost of the CHP/energy centre could be excluded from the calculation if it achieved the CHP Quality Assurance (CHPQA) standard.

Sales of heat and power are attributed according to hourly energy modelling in the optimised capacity mix identified, with price differentiation between ‘grid’ and ‘private wire’ electricity sales according to modelled power load matching. ‘Private wire’ rates are assumed to be equivalent to the consumer’s retail purchase price with a 5% discount.

The model also accounts for Renewable Heat Incentive (RHI) and Contract for Difference (CfD). Through CfD, an additional price is paid for biomass CHP-generated electricity which covers the difference between the CfD strike price (£125/MWh) and the actual momentary UK market price for electricity supplied to the grid. Thus, exposure of renewable electricity producer to volatile wholesale prices is reduced and electricity prices can be locked for up to 15 years. In order for a biomass CHP to qualify for CfD, a CHQA GN44 (Issue 5) certificate is required. Additionally, a CHQA certification is also required in order to claim RHI for biomass CHP.

The financial value of CO2 emission savings between the network options and counterfactual "business as usual” solutions are assumed to be zero in base case and a sensitivity analysis is conducted using DECC’s carbon valuation scenario.







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Investments 7.3

The heat network options considered in the analysis are as follows:

Option 1: Science Area and Keble Triangle supplied by Gas CHP

Option 2: Oxpens, Westgate and Speedwell St. supplied by Gas CHP / WSHP hybrid

Option 3-1: City Centre supplied by Gas CHP

Option 3-2: City Centre supplied by Gas CHP / WHSP hybrid

Option 3-3: City Centre supplied by Biomass CHP / WHSP hybrid

Total investment cost for the options considered are presented in Table 19. The investment requirement varies from £9.8 million (Option 2) to £47.2 million (Option 3-3). The investment costs include all equipment and construction costs but also the so called owner’s costs such as project planning, technical design, project management, procurement and supervision of implementation.

In each scenario a permanent energy centre is assumed, and each option is costed based on the plant and civil works required. Further work will be required to detail the preferred solution prior to any investment decision.

The investment cost estimates are based on data from Greenfield’s prior implementation experience and cost data obtained from equipment manufacturers. A 30% contingency has been applied to account for potential additional costs associated to the nature of the site and the early stage of analysis, to present a conservative scenario.

Table 19: Investment cost breakdown for the considered options (£k).

Investment Costs (£k) Opt. 1 Opt. 2 Opt. 3-1 Opt. 3-2 Opt. 3-3

District Heating Network

2,802 2,423 10,122 10,133 10,290

Heat Interface Units 681 280 1,328 1,328 1,328

Energy Centre 10,818 4,851 18,510 23,709 24,722

Private Wire Network 0 0 0 0 0

Contingency 30% 4,290 2,266 8,988 10,551 10,902

Total 18,591 9,819 38,948 45,721 47,242

The majority of investments are scheduled in the first year with subsequent investment up to 2034 as existing boilers are replaced. The network investments are spread over two years for Option 3, as the network is quite extensive.

Construction is assumed to start in 2018 and commercial operation in 2020. From the start of the initial commercial operation, the investment profile follows the replacement schedule of the existing boilers and construction schedule of the development areas. Generation capacity increase follows the estimated load build-up for each network option (discussed in section 0).







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Replacement investments are assumed for the heat production units, ancillary plant and network components at the end of expected service life. For all production units (gas CHP, biomass CHP and WSHP) total replacement is assumed in 25 years and for networks in 50 years. The same 25 years replacement period is assumed for energy centre ancillary systems such as automation & instrumentation, electrical and HVAC systems, water treatment and 20 years for consumer heat interface units (HIU) as shown in Table 20. In addition, scheduled maintenance throughout operational years would also include major re-builds.

Table 20: Technical life cycle and major overhaul periods for different type of assets.

Asset Technical life cycle (yr.) Major overhaul timespan

Gas CHP 25 50,000 h / 10 yr.

Biomass CHP 25 50,000 h / 10 yr.

Gas Boilers 25 50,000 h / 8 yr.

WSHP 25 50,000 h / 10 yr.

DH network 50 -

HIUs 20 -

Operation and Maintenance (O&M) 7.4

Annual operation and maintenance (O&M) costs include all fuel, electricity, water and material costs needed for the heat production and system operation as well as estimates for fixed and variable maintenance costs. In addition, estimated O&M personnel and outside service costs are included.

A breakdown of total O&M costs for all network options is presented below in

Table 21 and across the full calculation period (40 years) in Figure 30.

Table 21: O&M costs summary table.

O&M Costs (Average annual) Option 1 Option 2 Option 3-1 Option 3-2 Option 3-3

Variable £k 2,786.5 420.3 5,785.1 4,802.3 2,622.3

Gas purchase £k 2,640.5 362.2 5,502.5 4,524.5 737.3

Biomass purchase £k 0.0 0.0 0.0 0.0 1,615.3

Pumping electricity £k 60.7 24.1 117.0 117.0 117.0

EC variable O&M £k 63.9 15.6 132.5 125.7 111.7

EC major overhauls £k 21.5 18.5 33.1 35.1 41.0

Fixed £k 486.3 296.5 941.3 990.6 1,001.5

Personnel £k 128.3 128.3 213.8 213.8 213.8

Energy Centres £k 102.8 46.1 175.8 225.2 234.9







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DH Network and substations

£k 13.2 11.8 48.8 48.8 49.6

DH Network and substations inspection / service

£k 3.4 3.2 11.6 11.6 11.6

Business Rates £k 218.7 87.1 471.3 471.1 471.6

General Admin £k 20.0 20.0 20.0 20.0 20.0

Total £k 3,272.9 716.8 6,726.4 5,792.9 3,623.8

Figure 30: O&M costs for all network options.

The estimated total annual O&M costs range from £717k in Option 2 to £6,726k in Option 3-1 (after the networks are fully built out). In all options, fuel costs account for the majority of the total O&M costs, ranging from 65% in Option 3-3, to 82% in Option 3-1.

Personnel costs and business rates are significant components in all options.

The assumptions used for estimating the maintenance costs for heat production are presented in Table 22, with a comparison to a gas boiler solution (business-as-usual scenario). The fixed annual costs for the energy centre include annual maintenance, repair and inspection costs (materials and labour) of heat production units and other process equipment and systems.

Table 22: Annual Maintenance cost assumptions for heat production

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

£k /

a

O&M Costs








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Maintenance Costs

Type of heat generation

Variable (£/MWhfuel) Fixed (% of investment)

Gas HOB 0.50 1.0 %/a

Gas CHP 0.70 1.0 %/a

Biomass CHP 1.30 1.0 %/a

WSHP 1.00 1.0 %/a

Consumer’s Business as Usual (medium size)

10.00 (incl. all O&M) -

Major overhauls of the heat production plant are based on running hours rather than operating years. Once the specific number of running hours required for maintenance is reached, the overhaul cost is allocated for that year within the financial model. In

Table 21, however, such periodic costs are averaged over the calculation period, for ease of comparison.

Revenues 7.5

7.5.1 Incomes - Heat sales

Consumer heat tariffs have been calculated based on estimates of future business-as-usual costs, accounting for fuel, operation, maintenance and plant costs. A 5% discount has been applied compared to customer’s BAU energy costs, making a heat connection a competitive solution. The tariff is also projected forward based on the DECC energy price projections.

In addition, customers will also gain benefit from the reduction in the local plant space required, better reliability and resilience, carbon reductions, and avoiding local exhaust gases and noise, but monetary values have not been attached to these.

Typically, a heat tariff would consist of three components:

Connection Fee (one-off payment defrayed when a building is connected)

Capacity/Availability Charge (£/MW, month)

Energy Charge (£/MWh, metered consumption)

In this analysis, we have assumed an all-inclusive heat unit price in the cash flow analysis, which is set between 35 to 45 £/MWh, depending on customer type. In addition, a connection fee has been assumed corresponding to the avoided investment costs of individual boilers. For the University of Oxford, the buildings currently connected to existing centralised boiler houses are given an exemption on the connection fee, where they are connected to the network at the start of operation as production capacity.

Heat sales tariffs used for the analysis are presented below in Table 23.







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Table 23: Heat sales tariffs.

Heat Sales Tariffs University of Oxford Other

Connection fee (£/kW) 150 150

Fixed annual fee (£/kW, yr.) - -

Heat tariff (£/MWh) – Year 1 35.2 45.2

As presented in previous sections, heat demand (MWh/yr) is projected to increase gradually as new connections are made within each network option. In the smallest scheme, Option 2, the level of heat sales is estimated at 14.2 GWh/yr. Option 3, the largest scheme has an estimated heat demand of 80.1 GWh/yr by 2033.

Heat sales revenues for each option for the full calculation period (40 years) are presented in Figure 31.

Figure 31: Revenue from heat energy tariffs.

7.5.2 Incomes - Electricity sales

For the CHP electricity consumed at site or supplied via the private wire network, the electricity sales price has been set to provide a 5% discount compared with the customer’s current electricity purchase price from the grid. In case of the University of Oxford, the 5% discounted price would be 95.0 £/MWh (year 1). The price of electricity export to the grid is set at UK wholesale electricity price prediction of 48.4 £/MWh (year 1 / 2016).

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

£k /

a

Heat Sales Revenue

Option 1 Option 2 Option 3







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To determine the proportion of power consumed on site and exported to the grid, respectively, hourly modelling has been conducted which 1) calculates hourly CHP electricity production, assuming the CHP plant operates as the first heat supply option and is then joined by gas boilers to meet the loads greater the rated capacity of the CHP plant, then; 2) compares the hourly CHP power profile against an hourly power demand profile for the site, and then; 3) determines, by hour, whether power is consumed on site or exported. In hybrid options 2 and 3-3, the CHP electricity generated is used to power the Water Source Heat Pump (WSHP). The percentages of site usage and grid export are presented in Table 24.

Table 24: CHP electricity production


CHP Electricity Production MWh 42,888 3,183 87,098 73,229 12,161

CHP Electricity to Private Wire Network

% 81.0 % 0.0 % 56.0 % 62.1 % 0.0 %

CHP Electricity to Grid % 19.0 % 0.0 % 44.0 % 30.0 % 0.0 %

CHP Electricity to WSHP % 0.0 % 100.0 % 0.0 % 7.9 % 100.0 %

Figure 32 illustrates the power sales revenues for each option for the full calculation period (40 years). It is worth noting that Options 2 and 3-3 have no power sales revenues as all power produced is consumed by heat pumps (in practice a small proportion may exported to the local grid at time when heat is not available from a heat pump).

Figure 32: CHP electricity sales revenue.

Results of financial modelling and indicative cash flow 7.6

Financial viability of various schemes has been assessed by Discounted Cash Flow modelling, calculating the Internal Rate of Return (IRR) and the cumulative Net Present Value (NPV) for each option. The NPV has been calculated based on various discount rates to determine the scale of any funding gap that may exist depending on type of investors and terms of available investment capital.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

£k /

a

CHP Electricity Sales Revenue

Option 1 Option 3-1 Option 3-2







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The analysis suggests at this stage of investigation, that the project IRRs over a 40-year period are between -0.2% and 16.8% depending on Option, and between 2.6% and 16.7% over a 25-year period, as presented in Table 25.

Option 1 Gas CHP (Science area & Keble Triangle) results in the greatest IRR at 16.8% over the 40-year calculation period. The most important factors making this option deliver the best returns are the relatively large quantity of electricity that could be supplied via the private wire network and the high share of annual heat energy supplied by CHP (estimated at above 95%).

The financial performance of CHP / WSHP hybrid options is less positive, since there electricity is not sold to a private wire network (or to grid).

Table 25: Financial results summary.

Areas Technology Simple Payback Period (yr)

NPV £k (@ 3% DR) IRR

25 yr 40 yr 25 yr 40 yr

Option 1 Science Area, Keble Triangle

Gas CHP 7.8 £30,776 £42,822 16.7 % 16.8 %

Option 2 Oxpens, Westgate, Speedwell St.

Gas CHP / WSHP

40.0 -£ 426 -£ 2,713 2.6 % -0.2 %

Option 3-1 City Centre Gas CHP 8.4 £ 52,135 £ 72,336 14.4 % 14.5 %

Option 3-2 City Centre Gas CHP / WSHP

9.4 £ 49,625 £ 64,877 12.4 % 12.5 %

Option 3-3 City Centre Biomass CHP / WSHP

19.2 £ 1,330 -£ 11,448 3.3 % -0.2 %

These rates of return suggest that Options 1, 3-1 and 3-2 could be seen as commercial investment prospects, which typically require project IRR’s at the level of 12-15% or better. The private sector may be attracted to the project because of some favourable key aspects of the scheme, such as the small number and stability of stakeholders (particularly University of Oxford) which gives certainty of heat (and electricity) off-take and a simple route to scheme expansion. That said, there are numerous risks particularly when looking at the cross-city scheme, Option 3. Conducting ‘soft market testing’ would be useful to verify the views of private suppliers to support the decision making around project structuring.

Table 26 and 27 show the NPV for each option over a 25-year and 40-year period. Where NPV figures are negative, they highlight the additional external funding (such as grants) required to achieve rates of return of 3% (social cost of capital, for long term publicly funded projects), 6% (representing a public/private joint venture) and 12% (commercial funding only).

Table 26: 25-year NPV figures over various discount rates.

Areas

Technology

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Gas CHP £30,776 £17,272 £4,367







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Gas CHP / WSHP -£426 -£2,541 -£4,288

Option 3-1 City Centre Gas CHP £52,135 £27,776 £4,620

Option 3-2 City Centre Gas CHP / WSHP £49,625 £24,661 £979

Option 3-3 City Centre Biomass CHP / WSHP £1,330 -£9,366 -£18,436

Table 27: 40-year NPV figures over various discount rates

Areas

Technology

40 year NPV £k @ various discount rates

3 % 6 % 12 %


Gas CHP £42,822 £21,349 £4,846


Gas CHP / WSHP -£2,713 -£3,787 -£4,629

Option 3-1 City Centre Gas CHP £72,336 £34,347 £5,279

Option 3-2 City Centre Gas CHP / WSHP £64,877 £29,087 £1,194

Option 3-3 City Centre Biomass CHP / WSHP -£11,448 -£16,169 -£20,244

A summary of the outputs from the financial modelling in terms of incomes and costs is presented below in Table 28.







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Table 28: Income and cost summary


Total income £k 6,714 1,209 12,799 12,088 6,750

Heat Sales £k 1,671 790 4,025 4,025 4,025

CHP Electricity Sales £k 5,043 0 8,773 7,315 0

Electricity Sales Price £/MWh 117.58 0.00 100.73 108.40 0.00

RHI income (20 yr.) £k 0 419 0 748 2,725

CfD income (15 yr.) £k 0 0 0 0 753

Annual OP Cost £k 3,630 741 7,444 6,392 3,924

Net Income £k 3,084 468 5,354 5,696 2,826

Initial Investment Costs £k 18,591 9,819 38,948 45,721 47,242

Residual value (25 yr) £k 6,087 3,569 14,830 14,818 14,595

Residual value (40 yr) £k 8,970 3,329 18,860 18,848 19,006

The discounted cash flow analysis and cumulative NPV of the six options with a 3% WACC, over a 40-year period, is graphically illustrated in Figure 33.

The graph clearly shows the good performance of the gas CHP options (Option 1 (Science Area), 3-1 (city-wide) and 3-2 (city-wide)) illustrating strong cumulative NPV progress which is able to cover investment repayments and meet the future costs of plant replacement. The biomass / WSHP hybrid Option 3-3 by contrast, illustrates higher initial investments and lower annual net cash flow and consequently, the NPV remains negative (even at 3% discount rate) indicating that the scheme would not be financially viable without financial support.

Another observation is that the Options which include the Science Area and Keble Triangle (and apply gas CHP) perform well compared to Option 2 which is limited to Oxpens, Westgate and Speedwell St. area. This is mainly due to the favourable CHP electricity sales opportunity mentioned earlier.

It is worth noting that the retained value of plant at year 40 is added as revenue to the final calculation year (as it also is in the 25-year analysis) so that this value is incorporated in the financial analysis, which is why an uplift is illustrated on the graph in the final year.

At this early stage of development, the uncertainties associated with the scheme costs and revenues are high and therefore there is scope for improvement with respect to estimated rates of return, particularly as a number of key assumptions are conservative. It is important to note that changes in assumptions could also worsen the rates of return.






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Figure 33: Cumulative NPV and Discounted cash flow for each option (40 years).

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Cash Flow (discounted) - Option 3-3 Biomass Hybrid Cumulative NPV - Option 1 Gas CHP

Cumulative NPV - Option 2 Hybrid Cumulative NPV - Option 3-1 Gas CHP

Cumulative NPV - Option 3-2 Hybrid Cumulative NPV - Option 3-3 Biomass Hybrid






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Financial sensitivities 7.7

In general terms heat network schemes require significant investment at the construction phase compared to other solutions, e.g. building level gas boilers. As a consequence, they require long operational periods with operating costs that are sufficiently lower than these alternatives so that capital repayments can be made. An impact of this is that heat network schemes can be sensitive to underlying financial parameters and their future development, such as the cost of capital and future energy price predictions, over the 40-year plus lifetime.

Financial sensitivities have been examined for all network options to determine where the key financial risks lie. Six main sensitivities are described below, showing their impact on the base case IRRs, presented previously in Table 25. A specific variation range has been applied for each risk item, and the impacts on base case IRR are shown in Figure 34 to 38. The financial case for the gas CHP solutions is significantly supported by the estimated revenues from electricity sales and so a number of sensitivities examine this. Energy prices are highly dynamic and it will be important to monitor and manage pricing risks over time, e.g. by heat sales tariff indexation and by multi-source fuel flexibility.

Business rates show a limited impact on project viability. Effects vary from ±0.8% to ±2.0% from baseline IRR, depending on Option. The effect is most significant in the options that have marginal baseline IRRs to begin with (Options 2 and 3-3).

Fuel prices typically fluctuate and there can also be a long term trend having an impact on costs and financial viability. Depending on Option, a 10% change in fuel price would impact the IRR by ±1% to ±2%. Heat and power sales prices will be influenced by fuel prices and as such as fuel prices increase revenues from both heat and on-site power sales will also tend to increase mitigating the risks. In this analysis, heat sales price is indexed to fuel price but the linkage between fuel and electricity prices has not been considered.

The investment IRR would be impacted by the amount of fuel price change but also by the timing of it; the earlier the changes occur, the bigger is the impact on IRR. This risk may be mitigated by paying attention to terms and conditions in fuel contracts.

University of Oxford Private wire (and grid power) sales are likely to be primarily affected by association to electricity supply prices in the wholesale market, which may experience long term price trends (e.g. due to low carbon strategy) or temporary shocks (e.g. due to fuel price fluctuations). At retail consumer level, the transmission and distribution costs constitute another major component in electricity price which component is more stable than the production cost.

The electricity sales price has a major impact on financial viability. A 10% change in private wire electricity price would impact the IRR by ±2% to ±3%, except in Options 2 and 3-3 (hybrid) where the CHP electricity is used in heat pumps. Option 1 is most affected by this variation with change in IRR in the region of ±3.0% with a 10% change in sales revenue.

Gas prices are an influencer in power market and as such where electricity prices start to decline reducing the scheme revenues, fuel costs will also typically reduce as gas prices also reduce. This mitigating impact is difficult to quantify and has not been considered, in order to be on conservative.

Grid export tariff could increase or decrease depending on the electricity wholesale market development. This would have a relatively modest impact on financial viability because the revenue share of electricity sales to grid is small or zero depending on Option.






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A relatively drastic change of 50% reduction in export tariff would reduce the IRR of Option 1 from 18.9% to 18.0%. Options 3-1 and 3-2 would be somewhat more affected, about 1-2%. This risk could be mitigated by adjusting the supply mix, for example by reducing the CHP power rating and by other means to limit power export.

Heat tariffs will be set and agreed with the customers before the final investment decisions, and thereafter the tariffs would typically be contractually linked to fuel prices, as defined in long term heat supply agreements. Depending on the heat market competition, customers’ priorities and commercial negotiations, the initial tariff level may settle lower or higher than estimated in this study. The impact of 10% lower or higher heat tariffs is ±1% to ±3% on IRR. Options 2 and 3-3 are the most sensitive because their revenue consists entirely of heat sales.

EU ETS costs / benefits were explored against a Business as Usual case for each option. Option 2 was excluded from EU ETS because it remains below the lower threshold for EU ETS payments which is 20.0 MW of combustion input. The BAU emission payments were compared against emission payments calculated for each network option. For some options this approach increases costs (as in options 1, 3-1 and 3-2) and some options enjoy benefits from lower emission payments (option 3-3). In all options, the effect on IRR is minor, between ±0.0% to ±0.3%.

Capex increase/decrease will directly affect viability of a scheme and the sensitivity is significant. A 20% increase in the Capex would reduce IRR by between 3% and 4% across the options. A 20% Capex decrease, in contrast, would have a slightly greater percentage improvement in the IRR.

Typical mitigation measures include prudent practices in technical design, procurement and contracting as well as use of proven technologies and reliable suppliers. The investment cost estimates applied in financial analysis have been developed conservatively, with a 30% contingency built-in.

Figure 34: Sensitivities for Option 1.

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Figure 35: Sensitivities for Option 2.

Figure 36: Sensitivities for Option 3-1.

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8 CO2 Emissions

CO2 emissions have been calculated for the preferred energy supply solutions taking account of the efficacy of the various supply plant, system losses and parasitic consumption e.g. pumping and the impact of displacing grid supplied power in the CHP options. Carbon factors have been applied to each supply option and this has been compared against a ‘business as usual’ scenario for each property assumed to be connected to the network. The ‘business as usual’ scenario assumes gas boilers supply for all existing and new buildings. The small CHP capacity currently in operation is assumed to have a relatively small impact on carbon emissions. Typical assumptions for boiler efficiencies have been applied. All buildings are assumed to be supplied with grid power.

The emission factors for gas and grid supplied electricity shown in Table 18 have been used.

CO2 emissions for each heat network option and supply variant and for the ‘business as usual’ solution are shown in Table 29 below. At this point, these figures do not account for future projections of grid power carbon factors; a static 2016 factor has been used. It is worth noting that the figures for Option 2 do not include electricity consumption, as the option does not displace any electricity consumption.

Table 29: Summary of annual CO2 emissions for the network options.

CO2 emissions (tonnes/yr., 2016 carbon factor)

Base-load energy source Option 1 (Science Area)

Option 2 (Oxpens etc.)

Option 3 (city-wide)

Business as Usual 37,499 3,699 47,865

Gas CHP 30,328 (18%) - 29,630 (38%)

Gas CHP / WSHP hybrid - 2,208 (40%) 36,145 (24%)

Biomass CHP / WSHP hybrid

- - 33,588 (30%)

Annual CO2 emissions range from 2,208 tonnes in Option 2 to 36,145 tonnes in Option 3-2 (Gas CHP / WSHP hybrid).

UK carbon factor projections5 for grid electricity, as well as DECC carbon factor projections for electricity displaced by Gas CHP6 have been used to explore the impact of heat networks over time, which is shown by comparing Figure 39, 40 and 41. The first graph shows relative carbon performance using a static electricity carbon factor and shows the heat network (CHP) remaining a better option in carbon terms throughout the system lifetime.

5 "Grid Average, consumption-based" emission factor for electricity has been used from Valuation of energy use and greenhouse

gas (GHG) emissions - supplementary guidance to the HM Treasury Green Book on Appraisal and Evaluation in Central

Government, HM Treasury, December 2015.

6 “CHP exporting” and “CHP onsite” emission factors have been used from Emission factors for electricity displaced by gas CHP,

Bespoke natural gas CHP analysis, Department of Energy & Climate Change, July 2015.






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Figure 39: CO2 emissions with static grid factor at first full year (2033).

The second graph (Figure 40) shows that the diminishing grid electricity carbon factor, accounting for the DECC gas CHP projections, leads to a slightly worse carbon reduction performance in comparison to the ‘business as usual’ case, in long run. This scenario would suggest that the Gas CHP in Option 1 results in slightly greater carbon emissions from year 19 onwards (2039).

Figure 40: CO2 emissions, accounting for grid and marginal CHP factor projections for Option 1.

However, in Option 3, all production technologies achieve CO2 savings throughout the calculation period, as shown in Figure 41.

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Figure 41: CO2 emissions, accounting for grid and marginal CHP factor projections for Option 3.

Table 30 shows the results of an analysis of carbon reduction of each scenario against the ‘business as usual’ case using static 2016 carbon factor, and projected grid factors as discussed above.

Table 30: 20-year CO2 emission savings vs. Business as Usual.

20-year CO2 emissions savings (tonnes)

20-year CO2 emissions savings (%)

Option and base-load energy source

2016 static carbon factor

Projected carbon factor

2016 static carbon factor

Projected carbon factor

Option 1 Gas CHP 133,432 68,329 18.3 % 20.4 %

Option 2 Gas CHP Hybrid 29,771 29,854 40.4 % 41.0 %

Option 3-1 Gas CHP 331,563 103,808 36.0 % 20.8 %

Option 3-2 Gas CHP Hybrid

220,044 131,561 23.9 % 26.4 %

Option 3-3 Biomass CHP Hybrid

257,882 258,194 28.0 % 51.8 %

CO2 performance of the various production technologies is influenced by the grid emission factor projections used. When assuming static year 2016 grid electricity emission factors throughout the operation period, all production technologies achieve significant CO2 savings against the ‘business as usual’ case.

Using the projected emission factors, over a 20-year period gas CHP is estimated to deliver a carbon saving in the region of 18-21%. Gas CHP / WSHP hybrid options deliver carbon savings ranging from 16-26%. The biomass CHP would deliver a saving in the region of 52%.

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The changes in electricity carbon factor predicted require significant transformation of the UK power supply system which relies on major investment into new nuclear power, renewables and other low carbon technologies. Whilst it cannot be said with certainty that the rate of change predicted will be achieved it is an important risk in long run for a heat network scheme using gas CHP as baseload supply.

This suggests that where carbon reduction is a key objective and stakeholders wish to apply the carbon projections then gas CHP presents a risk, however, this should be balanced against its far better financial performance. Where gas CHP is used, carbon performance should be carefully monitored on an annual basis and options to fuel switch should be considered on an on-going basis.

Where carbon performance is a key objective then the biomass CHP / Water Sourced Heat Pump hybrid option (Option 3-3) would offer the best performance, but only where carbon factors decline over time. With static factors gas CHP performs better for Option 3. In addition, it is worth noting that where carbon is a key driver it would be important to utilise the Osney Meads location for the energy centre because this enables the utilisation of biomass and WSHPs to contribute to baseload supply. Even if gas was used as the primary fuel option in this location in first instance it would be technically possible to switch to biomass or some other low carbon fuel in the future.






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9 Risk Management

Introduction 9.1

At the beginning of heat network projects there is a magnitude of risks related to design and construction. The overall project is regarded as high risk. If external funding needs to used, then theses risk will be priced in for which a higher project return is required.

It is important that risks are identified, managed and mitigated in order to de-risk large projects and reduce the cost of capital and negative investment decisions. A fundamental aspect in risk management is the fact that risk should be managed by the party best placed. Parties owning these risks may be within the host organisation or outside (through contracting of works or services), and should be capable to exercise control in order to effectively manage them. This will have implications for how the project should be structured to best enable the objectives being achieved. The business model in section 10 gives an overview of possible structures.

Risk register and mitigation strategies 9.2

The five risk themes have been analysed:

Demand: Risk from heat loads not getting connected or demand reduces over time

Supply: Risk from unavailability of supply during operation or as there are implementation issues around energy centres

Regulatory: Risk from legislative change or rejection of planning permissions

Financial: Risks of increased investment or operation costs

Implementation/Management: Risk occurring during design, construction and operation

A full risk register sorted by risk evaluation (i.e. impact x likelihood) starting with the highest perceived risk is attached in Appendix L.

10 Business model evaluation

Introduction 10.1

There are a wide range of ownership and management models for a heat network type of project. They essentially range from a pure public sector venture to a purely private sector project. In between, a range of hybrid options involving both private and public sector financing, design, operation, fuel supply, day to day management and decision-making are possible. The key differentiating factors are:

The degree of control required via governance to direct the project towards it

objectives.

The degree of risk the project sponsor is willing to carry in order to exercise that

control.

The return on investment the project is able to deliver relative to the sources of capital

available.






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Figure 42: Type of governance models with key differentiating factors

As this Figure indicates, the level of control, risk, the investment required, and expected rates of return define the choice of governance model. There are examples of all three main models – public, private and hybrids – in the UK with a number of variations according to local circumstances.

Essentially, the critical decision is identifying the objectives for the project. These may be carbon reduction, affordable energy or economic development with local jobs. Increasingly local authorities are concerned with energy security to improve the resilience of their areas in the face of a variety of challenges ranging from severe weather events to economic volatility. For others it may be a purely commercial enterprise to secure revenues for the host local authority. Whilst localised energy can contribute to achieving all of these objectives it is important to prioritise them as this will define the degree of control that needs to be exercised over the project in order for it to deliver the desired outcomes. For host organisations such as local authorities and housing associations the degree of control is maximised the closer ownership sits to them and minimised the further away it resides. Control often relates to the scale of the project objectives. Local authorities will typically seek to implement city-wide projects to maximise the benefits across a larger number of consumers, whereas commercial organisations will tend to focus on specific consumers that can maximise project returns.

Thereafter the model chosen is fundamentally about access to and use of capital for the initial and subsequent investments. Private-owned ESCO’s will use commercial or corporate debt and will therefore require a return on capital above 12 – 15%. If the project cannot deliver an IRR to match this expectation, then this route is closed off unless the host organisation is prepared to make a capital injection to improve the rate of return. In contrast local authorities and universities can access low cost capital through the PWLB or HEFCE (3.5%) and therefore projects with a 6% IRR will be financially viable. Hybrids sit between these two positions and will depend on the structuring of debt and equity particularly if it is split between two or more parties (such as a joint venture).






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Investors, lenders and contractors participating in a project will take account of risk when calculating their fee or return on capital. Lowering specific or overall risk will therefore reduce costs. Managing the risks of a project is therefore an important activity that needs to be addressed through various means. Risk is a good thing conceptually because it focuses attention on the important aspects of the project, whether that be the initial design, the

technology choice and performance of the technology, the access and guarantees over fuel prices and supplies, the level of maintenance, heat pricing formula, or dealing with bad debts and uncertain heat loads. This helps to prioritise actions to mitigate these risks. It is important to note that risks can be managed for all of these and other risks.

In conclusion, the decision on the choice of governance model is mediated through these three elements of control, cost of capital and risk and can be summarised in the following diagram (Figure 44).

Private Commercial Approach 10.2

There are two approaches to heat network projects favoured by private commercial energy companies. Such companies will be seeking returns on capital between 12 – 15% on both approaches. As Option 1 (Science Area / Keble Triangle) can provide a return on capital of up to 16.8% and Option 3.1 up to 14.5% this route is open to project sponsors.

Full ownership

This option is generally only open to fully built-out projects with a number of years’ operational track record. By this point, cost and revenue variations characteristic of the development phase have stabilised and the project has been de-risked. Investors will easily be able to determine whether the project will provide a stable return on capital for their investment. However, as heat networks are unregulated they will require a higher rate of return than is typical for other energy investments. The project will be owned in perpetuity by the investors. If that is a large energy company, the management and operation & maintenance of the project will be taken in-house. Non-energy company investors will typically contract out activities to specialist companies.

In a recent example Ignis Energy, the owner and operator of the Wick District Heating Scheme which was bought out (100%) by the Green Investment Bank and Equitex for £10 million. Management and operation & maintenance have been contracted out7.

This approach is a fully private model as the public sector has minimal involvement.

7 http://www.theade.co.uk/gib-and-equitix-commit-10m-to-expansion-of-wick-district-heating-scheme_3870.html

Figure 43: General behaviour of the key differentiating factors between governance models






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Concession approach

Under this approach project sponsors, typically public sector organisations such as local authorities, procure a commercial energy services company to provide heating for specified consumers over a fixed term of 20 – 40 years. The contract may also seek to facilitate expansion but this cannot be guaranteed and would be subject to certain conditions being met, which have been set when there is little certainty over the performance of the initial phases. Guaranteeing the heat demand over a long period allows the commercial energy services companies to design build finance and operate & maintain (DBFO) the project over the course of the term. At the end of the term the assets revert to the project sponsor who then has the option on whether to: re-tender for a fresh concession, take direct control of the project, or sell it to a private sector investor. Examples of this approach are the Birmingham District Energy Scheme (BDES)8 and the Leicester District Energy Scheme (LDES)9.

This approach can be considered a public/private model as the public sector initiates the project, undertakes initial development before procuring a private operator. Furthermore, it will typically guarantee the long term heat loads. Lastly, the assets are returned at the end of term.

Advantages

External financing

Technical and commercial risk transferred to external operator

Third party provides necessary skills

Private sector procurement, which will typically be shorter than other alternatives

Disadvantages

Loss of control – operator typically does not want to extend beyond original

specification

High heat charges for users – more expensive overall because of need provide high

returns

Reputational risk – users see project sponsor as guarantor of last resort in conflict

situations

Reputational risk – sponsor promotes building connections that the operator may then

fail to deliver

Loss of flexibility – operator not willing to accept heat from sources not under its control

or connect customers where cost of connection exceeds higher hurdle rate

Public Sector approach 10.3

There are two potential models: fully integrated within the sponsoring organisation as an internal department or; as a wholly owned special purpose vehicle (SPV).

8 http://www.cofely-gdfsuez.co.uk/solutions/district-energy/district-energy-schemes/birmingham-district-energy/ 9 http://www.cofely-gdfsuez.co.uk/solutions/district-energy/district-energy-schemes/leicester-district-energy/






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Internal Department

The former can accept a low return on capital due to its ability to access low cost public finance such as the Public Works Loan Board (3.5%). Consequently, projects can be viable with an IRR as low as 6% - although the threshold varies between different public bodies. Whilst this approach provides perfect alignment with the project sponsor’s strategic objectives it must also carry the risk of project development and operation, although risk can be contractually offset to commercial sub-contractors procured to deliver specific tasks. As risk is retained within the host organisation cost is reduced, particularly if design and construction are separated in a design bid build contract (DBB) where construction is carried out by one contractor according to a design specification provided by a separate contractor. Alternatively, they can be packaged into a design build (DB) or design build operate & maintain (DBOM) contracts but the greater risk carried in these contracts will result in a higher cost.

An example is Bunhill Heat & Power which is a recent heat network project developed internally by Islington Council10. Operation and maintenance of the plant and network is contracted out to specialist companies.

If the heat customers are other public sector entities, the project could be exempted from the need to competitive tendering by invoking a Teckal exemption under OJEU requirements. This will reduce commercial risk.

Advantages

Can access lower cost public sector financing

Can access grant support

Delivers affordable tariffs

High degree of control allows flexible development, e.g. expansion over time and

incorporation of alternative energy sources

Technical risk contractually outsourced to external operator

Disadvantages

Must provide financing

Relies on budget and covenant strength of host organisation

Must carry commercial, reputational risk

Political risk (for local authorities - policy shifts due the changes in political

administration)

Need to develop internal skills

Public sector procurement can take a longer time

Wholly owned Special Purpose Vehicle (SPV)

This is typically established as a company limited by guarantee based on shares owned by the sponsoring organisation. It can also secure low cost public finance via its public sector owner, particularly if its heat customers are other public entities. In order to capture this advantage, the sponsoring public body must put in place an explicit guarantee to underwrite the SPV.

10 http://www.islington.gov.uk/services/parks-environment/sustainability/energy-services/Pages/bunhill-heat-power.aspx






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However, if heat customers are private entities then any on-lending will be subject to State Aid Rules11. As the SPV would have no collateral at the outset it is likely that the cost of on-lending would be in the region of 13.5%. But as Option 1 has an IRR of 16.8% there is sufficient head room (3.3%) for it still to be viable.

An example is Upper Lee Valley Heat Network Ltd12.

Advantages

Can access lower cost public sector financing


Delivers affordable tariffs

High degree of control allows flexible development, e.g. expansion over time and


Technical risk contractually outsourced to external operator

Arms-length nature insulates against political risk

Separate business plan and budget from host organisation and focussed management

Disadvantages

Must provide financing

Must carry commercial, reputational risk

Must comply with public sector procurement methodologies

Liable for corporation tax

Joint venture

This is typically established as a company limited by guarantee based on shares with ownership of those shares allocated to one or more partners dependent on equity invested by each partner. This equity may take the form of cash, other forms of equity such as land, or expertise and skills.

The advantages and disadvantages of this approach will depend on the nature of the partners. For example, a public sector partner may contribute equity in the form of land and may provide access to lower cost debt capital. A private sector partner, typically an energy company, may provide skills and expertise, shorter private sector procurement and access to external capital. Although such capital will be at a higher cost it can be mixed with public sector capital to achieve a blended rate.

An example of this approach was Thameswey Energy Ltd13. This was established as a joint venture between Woking Council and a Danish investment foundation originally owned on a 20/80% equity split. However, Woking Council progressively bought out its private sector partner and Thameswey is now a wholly owned municipal SPV.

Advantages

11 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52008XC0119(01)

12 http://www.enfield.gov.uk/lvhn/

13 http://www.thamesweyenergy.co.uk/






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Can draw on public and private sector financing to achieve a blended rate


Medium degree of control allows flexible development, e.g. expansion over time and


Risk shared between partners



Can choose private sector procurement route (dependent of equity division)

Disadvantages

Possible early exit by partner may compromise strategic objectives and constrain

flexibility

Tariffs reflect return on capital required

Must comply with public sector procurement methodologies (dependent of equity

division)


Community ownership

This approach could be considered as a public/social model. It is more common in other European countries, notably Denmark. Heat customers become members of a cooperative that owns the physical system. They can vote for representatives who select the board members that control the company. This can also be formed as a mutual company similar to a building society which does not need to comply with all the conditions necessary to be a cooperative. An example in the UK is Aberdeen Heat & Power Ltd14.

Advantages

Not-for-profit approach allows low tariffs

Allows flexible development

Risk shared between partners



Disadvantages

Cannot rely on covenant strength of sponsoring organisation

Cannot exit to other owners – owned in perpetuity by members

Potential for members to starve company of investment funds be voting for very low

tariffs


14 http://www.aberdeenheatandpower.co.uk/






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Potential models for Oxford 10.4

Private sector approach

Commercial energy services companies will seek a return on capital between 12 – 15%. The financial evaluations contained in technical study below show:

Table 31: Financial results summary

Areas Technology Simple Payback Period

NPV £k (@ 3% DR) IRR

(yr) 25 yr 40 yr 25 yr 40 yr


Gas CHP 7.8 £30,776 £42,822 16.7 % 16.8 %


Gas CHP / WSHP

40.0 -£ 426 -£ 2,713 2.6 % -0.2 %

Option 3-1 City Centre Gas CHP 8.4 £ 52,135 £ 72,336 14.4 % 14.5 %

Option 3-2 City Centre Gas CHP / WSHP

9.4 £ 49,625 £ 64,877 12.4 % 12.5 %

Option 3-3 City Centre Biomass CHP / WSHP

19.2 £ 1,330 -£ 11,448 3.3 % -0.2 %

This indicates that network options 1, 3-1 and 3-2 can deliver an internal rate of return in this range and therefore these could be tendered to the market. This would likely be as a concession for a 25-year or 40-year term as they would likely attract market interest.

However, the university and local authority may need to jointly procure the commercial energy services company, particularly where the local authority seeks to expand the network over time (which will be constrained by the intent of the commercial operator and the nature of the concession entered into). Tariffs will be higher than with alternative approaches and may not be competitive with existing operations. This approach may constrain flexibility and the opportunity for future expansion of the heat network to served areas with lower rates of return, for example, connection of the 38 colleges identified.

Public Approach – Internal Department

Engagement with Lynne Barker of Oxford City Council Finance Dept. indicates that the Council is able to access Public Works Loan Board and would seek a 5 – 6% return on capital. At this level, again, option 1, 3-1 and 3-2 would be viable and provide a healthy surplus. However, Figure 7 of the technical study reveals that less than 3% of the heat loads are controlled by the City Council. Furthermore, the Council does not appear to have much track record in the development, management and operation of CHP and heat network projects. Consequently, it is unlikely to have the requisite expertise to develop these projects.

In contrast, the University of Oxford controls 35% of the heat loads, would also be well placed to facilitate expansion to other consumers, notably the colleges, and, has an ownership interest in the Osney Mead industrial site. This location is recommended for an energy centre required in the option 3 (city-wide) network. Furthermore, the University has some track record of CHP and heat network projects. As there has been no information available on the return capital required by the university, it is assumed that it would be at a similar level to the City Council of 5 - 6%, since they would have access to HEFCE funds. Therefore, it is possible for these options to be delivered by an internal department of the university.






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The University may have greater interest in only developing option 1, than options 3-1 and 3-2 as these extend to serve buildings beyond their control constraining the development of a broader city network whilst option 1, which serves buildings they control provides a better rate of return, although all are capable of delivering attractive surpluses. However, a broader city-wide scheme would enable a far greater proportion of the university estate and the university colleges (as well as non-university, non-college properties). This would deliver commercial and the environment benefits across a greater degree of university’s property interests. Further engagement will be needed to ascertain the appetite for city-wide expansion.

Public Approach – Special Purpose Vehicle

Whilst the establishment of an arms-length Special Purpose Vehicle wholly owned by either the University or the City Council could potentially provide greater focus to project development and management and more flexibility, it will, nevertheless, suffer the same constraints as an internal department approach. Additionally, it would also be liable for corporation tax.

Joint venture

A joint venture could be established as a company limited by guarantee based on shares. Allocation of shares could reflect the different proportion of heat loads controlled by the different stakeholders or the equity invested in the company in the form of cash or land (for the plant room), or a combination of both. This will allow the different stakeholders to exercise influence and control over the company in proportion to the benefit they may derive from it through representation on the board (see case study below on Høje Taarstrup Fjernvarme for potential governance structure).

As an arms-length company it would have the greater flexibility to develop the wider Options 3-1 and 3-2 which extend beyond the buildings controlled by the different stakeholders. Risk can be shared between different stakeholders and allow their different strengths and expertise to be captured for the benefit of the company.

The company will be able to access lower cost public sector capital through the Council or University that would be reflected in lower tariffs to customers. Although care will be needed to comply with State Aid Rules regarding on-lending. However, if equity is invested in the form of land the company will have assets to offer as collateral to underpin loans. Capital can also be raised by equity releases to private investors, if necessary. Surpluses can be distributed to shareholders as dividends or re-invested in the business at the discretion of the directors.

Should the stakeholders wish to exit from the enterprise, a share-based approach will allow them to do so. Alternatively, they may decide to re-structure the enterprise along functional lines (generation, distribution, retail and customers) as depicted below

Figure 44: Organisational structure of district heating companies

For example, they may retain ownership of the distribution infrastructure and customer interface whilst separating generation/production into a different company. This would allow the distribution company to potentially source heat from different providers and develop a competitive heat generation market in the city.

Under this approach the company will be liable for corporation tax.






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Community Ownership

This approach would be very similar to the shares- based joint venture company except instead of shares, ownership will be based on membership. Whilst this approach would benefit from many of the same advantages in terms of flexibility, control and sharing of risk there are certain differences.

The company would be owned by its members in perpetuity. Consequently, raising capital through equity releases of exiting the enterprise through the sale of shares would not be possible.

Governance structures could be similar to those used for district energy cooperatives in Denmark. An example is shown for Høje Taarstrup Fjernvarme below

Figure 45: Exemplary governance structure of district energy cooperative from Denmark.

Høje Taarstrup Fjernvarme is one of the largest heat companies in the Copenhagen area. It was formed in 1992 by a merger of an existing cooperative district heating company and a municipal district heating company. It purchases heat from the municipally owned transmission company that buys heat from privately-owned power stations in the surrounding areas and brings it into the city. Høje Taarstrup Fjernvarme then distributes heat via a 169 km network to its 5,260 customers, including residential, commercial and industrial buildings. Customers connect via participation agreements, under which they become a member-owner of the co-operative. Voting rights are allocated to residential, commercial and industrial customers who elect a board of representatives. In turn, they elect seven members to the board and the local authority nominates a further two directors. The board is responsible for the management of the company and appoint staff to carry out the functions.

Conclusion 10.5

A private concession approach would be possible for Options 1 (Science Area/Keble Triangle) and the two city-wide options 3-1 and 3-2. However, the procurement of the commercial energy services company would be complex, it will reduce control over the project and with it the flexibility to extend the network over time and to incorporate new energy sources. Risk can be transferred to the energy services company and external investment obtained. The






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high return on capital required would result in higher tariffs. Surpluses would accrue to the commercial energy services company.

An internal department of the University could deliver Options 1 (Science Area/Keble Triangle) and the two city-wide options 3-1 and 3-2. This could benefit from lower cost public sector capital but risk would be retained and would need to be managed, largely through outsourcing. Although control will be exercised directly, there may be difficulty in extending the project beyond the buildings owned by the lead stakeholder.

A joint venture established as a share based company would allow access to lower cost public capital resulting in competitive tariffs. It would allow control to be exercised in proportion to the heat load controlled by the different stakeholders or equity invested. This would allow flexibility to develop the wider network options outlined in Option 3-1 and 3-2 as well as re-structuring the company along functional lines in the future. Risk would be shared. Additionally, equity releases could provide a route to future fundraising and shareholding allow existing stakeholders to exit the enterprise.

Lastly, the community-owned approach based on membership offers the advantages of the joint venture share based company. But it reduces the opportunity for equity releases. Stakeholder could exit by resigning their membership but they would not be able to take any value with them.

As such, the joint venture established as a share based company offers the most advantages. It is suggested that this option is subject to further study and development in collaboration with the key stakeholders.






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11 Scheme development programme

Heat network projects involve many constituent parts (supply, distribution and the consumption) often with numerous parties involved. They involve construction, including underground / street works and utility connections and require planning and environmental approvals, e.g. for energy centre construction, pollution control and network construction. They can also be implemented through various procurement approaches. The specific nature of a heat network project, its constituent parts and the approaches taken to its development will significantly influence the programme of tasks required to design, fund, approve, build and commission it.

The outline programme below provides an initial indication of the development programme.

As with any major project it will be necessary to institute an organisational delivery structure that will take responsibility of the development process. It is recommended that the delivery structure involves the implementation of a formal project management process which would fully establish the nature of the project, the development task, stakeholders and the decision making procedures. It is recommended that two key groups are formed:

a) A project group, which would be responsible for the close review of the work of the project manager and other project staff and external advisers / suppliers

b) A senior project committee, which would establish the remit of the project group, review/approve the work of the project group, make key stop/start and investment decision relating to the project, ideally based around project staging

From the outset of the project, in parallel with the formal decision-making around proceeding with a heat network scheme, and reviewing project management approaches it will be important to conduct a skills and resources audit to ensure the project groups is effectively resourced, bringing in external resources (in this highly specialised area) where required.

Based on the outcomes of the analysis reported and the development structure options discussed Section 10 the following outline implementation programme has been developed. It will be important for stakeholders to review and refine this as part of future project planning exercises. The programme assumes procurement through a design and build contract, i.e. contracts are let on the basis of an output specification rather than a detailed scheme design.

# Task Milestones / outcomes

0 Issue final feasibility report and associated data to stakeholders

Feasibility report issued

Q3 2016

1 Establish project group and senior level decision groups (membership should be reviewed on an on-going basis to ensure it reflects key stakeholders)

MoU for project boards

Sept 2016

2 Plan, procure and facilitate completion of the short-term feasibility / development tasks (see below)

July – Aug 2016

3 Short-term feasibility / development tasks, including

1) Supply option design development to address risks and uncertainty with the principle energy supply / energy centre options.

Outline business case and approval to proceed from stakeholders

Aug – Dec 2016






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2) Review carbon impact (environmental, financial) 3) Facilitate preliminary approvals (University, other land

owners) 4) Review opportunity and constraints of possible

interconnection with Headington heat network 5) Consumers

a. Explore additional city centre loads, e.g. colleges, and conduct soft-market testing

b. Refine aggregate long-term demand profiles, phasing, sensitivities

c. Develop heads of terms for key consumers 6) Technical optimisation of supply and network design 7) Update risk register 8) Review stakeholder objectives, governance, business

model and financing options and develop business case

(nb. HNDU funding may be available to support further work in Q4 2016)

4 Implement cornerstones of the project:

- Establish HoTs with key consumers

- Formalise project structure: o stakeholder roles o governance/ownership o funding o procurement route

- Establish delivery vehicle, where relevant

- Resolve key risks (technical, commercial, legal)

Dec – Mar 2017

5 EU compliant procurement (Design and Build approach assumed)

Mar 2017 – Mar 2018

Output specification (est.) Mar 2017 - June 2017

Conditions of contract (est.) Mar 2017 - June 2017

Selection criteria July 2017

Establish evaluation committee, with appropriate technical support

July 2017

Explore procurement options and contractor preferences through discovery presentations and Q&A

July 2017

Revised output specification and/or contract model Aug 2017

PIN process (if required) Sept 2017

PQQ process Oct 2017

ITT process Oct 2017-Dec 2017

Contracts entered into (by) Mar 2018

6 Design / planning Mar 2018 – Sept 2018






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7 Construction Sept 2018 – Dec 2019

8 Commissioning by March 2019

Heat Network Feasibility Study for Oxford - City centre






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12 Considerations around planning and DH benefits for wider community

Planning permission-related 12.1

Consultations with OCC and OSCC have been held in order to determine likely considerations during implementation of area-wide networks as proposed for Science Area/Keble Triangle or Oxpens area as well as a potential city-wide scheme. Planning permission for a new heat network will be required for major schemes and separately for the Energy Centre.

Environmental Impact Assessment

An Environmental Impact Assessment (EIA) is required to enable the planning authority to make an informed decision when granting or rejecting planning permission. The aim of the EIA is to identify the significant effects the proposal has on the environment covering aspects such as emissions into air and water, hazards regarding soil, required transport, noise and vibration, biological impacts and fully involve the public during the early stages of decision-making.

An application for a formal project screening must be made to the planning authority, who will then determine whether the proposed development requires an EIA. In the screening process the planning authority considers both the size of the proposed development and proximity to sensitive areas.

If an EIA is required, any planning applications will not be valid until it has been completed.

Siting and design of the energy centre building

The design, layout and setting of the permanent building and structures together with the impact on nearby properties will all need to be considered. It is important that any adverse visual impact is minimised and that, where practicable, the development makes a positive contribution to the locality in landscape and visual terms. The building and structures will need to be sensitively designed with appropriate finishes and colours. The building and structure need not be unattractive and the local planning department will expect to see high design standards applied to any proposed installation.

The design of the energy centre building will need to incorporate a flue of the required height. The height will need to be estimated using the guidelines from the Clean Air Act 1993. The HMIP 1993 ‘Guidelines on Discharge Stack Heights for Polluting Emission, technical Guidance Note D1 will need to be followed.

It should be noted that buildings, within 1200m of the Carfax Tower cannot exceed a height of 18.2m above street level; a rule designed to preserve the views of Oxford’s skyline. In addition, any large building should be located outside of Oxford View Cones see Section 4.6. This presents a risk to energy centre locations in this area unless the stack falls under “minor elements of no great bulk” which are exempted from the rule.

Structural surveys should be conducted to determine the impact of a large plant room in the basement of an existing Science Area facility. Additionally, flue gas and utilities routing needs to have careful considerations.







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For the location of an energy centre at Oxpens, noise and vibration need to be carefully considered as the plant room is proposed to be part of an office block. However, energy centres supplying heat networks are routinely located within communities e.g. the energy centre supplying the Seaton Estate heat network in Aberdeen.

Despite the location at Osney Mead being favoured by several employees of OCC and the University of Oxford, there is limited land available for a large energy centre between buildings, particularly if a large thermal/biomass store for a city-wide network is also required. Other considerations were raised by OU, including the presence of protected trees and together with an industrial estate turning head that lies in the proposed area. These issues need to be fully investigated before pursuing development on this site. Also, noise investigations should be carried out as the Osney Mead energy centre is in the vicinity of an office complex (Osney One Buildings).

Flood plains

The major energy centre proposed for Osney Mead would be located within Flood Zone 2 (“areas at risk of flooding”) as designated by the Environmental Agency for which reason the following issues need to be considered.

In the technical guidance of The National Planning Policy Framework, energy production and distribution facilities fall under “Essential Infrastructure”. This means, they need to remain operational during times of flooding. However, the classification of use which will guide the flood risk assessment should be confirmed with the local planning department.

In conversations with the flooding officer at OCC, a flood risk assessment for an essential infrastructure would need to demonstrate the following:

1. If any flood plain area, designed to accommodate the water of a 1 in 100 year flood, is displaced, suitable provision must be accounted for by lowering a section equal to the volume that was displaced by the construction.

2. There will be no blockage of flood water over-flow channels 3. As it will be an ‘essential service’, the plant must be able to withstand inundation of water

from a 1 in 100 year flood. 4. Suitable flood risk mitigation 5. Adequate drainage to account for increased surface run-off as a result of increased

impermeable surfaces.

River-close areas

Prior written consent from the Environmental Agency is required for temporary or permanent works proposed within 8 m of the top of bank, on or over the Bulstake Stream, Thames or Cherwell as per Water Resources Act 1991. In addition to this, any work, within the boundaries of an existing watercourse, will require written consent from the OCC under Section 23 of the Land Drainage Act 1991.

Air quality

In fulfilment of Part IV of the Environment Act 1995, the OCC has duty to periodically review and assess the air quality in the city. The whole of Oxford has been declared an Air Quality Management Area (AQMA) whose aim is to achieve and maintain air quality standards across the city and to reduce carbon emissions from transport activity.







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The OCC also operate a Low Emission Strategy which aims to reduce the emissions and air quality impact of transport and new developments across the city. The comprehensive approach includes a commitment to a 40% reduction in CO2 emissions and a 50% reduction in NOx & PM emissions between 2005 and 2020. As CHP units will increase the NOx level locally, OCC would need to decide whether it guarantees a special position to DH systems due to their wider carbon saving benefits.

The proposed development must be sensitive to Oxford’s commitment to clean air quality. Especially for the large 13 MW gas CHP in the Science Area it is recommended to carry out air pollution modelling.

Considerations from network implementation

In consultation with planners from OSCC, no apparent issues with the inner-city pipe routing have been identified. It was reported that after planning application for the pipework network a Section 278 Agreement will need to be drawn up between developer of a network and Highway Authority.

The Section 278 Agreement is a legally binding document between the developer and the Local Highway Authority to ensure that that the proposed development is compliant with the relevant standards. The agreement covers the responsibilities of both the developer and the authority to ensure that the work is completed in accordance with the approved documents.

It is highly recommended that a consultation from Highway Authority be sought at the earliest possible stage in the planning process to ensure that their requirements can be incorporated into the design.

Additional contact may also be necessary with Network Rail, British Waterways or the Environment Agency due to the major crossings envisaged in the proposed city-wide system.

Archaeological considerations

Initial constraints and considerations to the network routing have already been considered in Section 5.5. A desk-based assessment will need to be carried out first to compile archaeological levels data from a large number of previously recorded sites and assesses the impact of the shallow DH trench. The document also needs to outline a condition for archaeological mitigation. The assessment will be carried out in order to receive a planning permission.

In order to get indicative costings of archaeological excavations, the Chartered Institute for Archaeologists could be consulted which can provide a list of local archaeological contractors.

It should be noted that excavations can delay DH development if significant archaeology occurs during works. As per high level assessment from OCC, previous utility work at 500mm-1m depth has shown significant archaeology only very occasionally and localised.

Also time delays should be considered which are largely depending on the methodology of the strip, for example if larger areas can be opened up in one go discrete features can be addressed whilst the pipe is being laid from one end of the trench.

Regulation underpinning the supply of electricity

Due to the high displaceable amount of electricity in the Science Area private wire installation, no additional analysis on the long term development statement from the local DNO has been conducted for city centre schemes as such.







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Analysis of the long term development statement will be provided with the Headington report which concludes the initial heat network feasibility work commissioned for the city of Oxford.

The Electricity (Class Exemptions from the Requirement for a Licence) Order 2001 should be consulted to determine whether a generator qualifies for an exemption from supply licence requirements.

Vehicle movement and parking on site

When assessing the environmental impact of vehicles on the site, separate considerations should be made regarding those used for construction and those used in the day-to-day operation of the site. An access statement must be created that takes into account the following:

Provision of an adequate number of parking spaces and manoeuvring areas for site operation.

Maintenance and operational vehicles should be able to manoeuver internally without causing disruption to external vehicles in the local area.

Adequate vehicle turning and manoeuvring areas must be accounted for and illustrated on a scaled site plan.

How authorised vehicles and pedestrians will gain access to the site.

The access statement must be included within the planning application.

ISO14001 Environmental Management System

The operator of the site may also wish to consider the development of an independently audited Environmental Management System compliant with 14001. This will indicate to all stakeholders than the site and its operations are fully compliant with the relevant environmental regulations. This is particularly important for developments in close proximity to residential buildings.

Synergies with parallel development plans 12.2

It is foreseen that the project could benefit planned infrastructure projects in the future. There are currently proposals aiming to improve the issue of traffic congestion in the city. Some long-term ideas for Oxford High Street include the construction of underground tunnels. It is advisable that the developer checks with the OSCC to consider any relevant infrastructure projects that are happening at the same time as it could offer an efficient delivery solution. The incorporation of an efficient district heating system shows a commitment to reduced emissions and environmental issues. This in-turn could spur on further investment into innovative projects in the future.

Apart from this, there are early masterplanning activities around the “Main Growing Area Osney Mead” which could see the development of graduate housing.

Unlocking DH benefits for larger community 12.3







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For city-wide networks such as option 3, community involvement and engagement should also be considered as an integral part of the development process. The plans should be discussed with neighbours and nearby residents at design stage in order to allow any views to be taken

into account prior to the submission of a formal planning application.

At the same time, additional customers that are located at the planned network route should be identified, approached and targeted. First approaches to communicate the intentions behind heat networks have been attempted by the project team. A highly visual newsletter for the common reader was compiled by the project team and disseminated among stakeholders. The aim of the newsletter is to make people aware of this parallel technology as well as making them aware of the potential the pose for a heat network.

Additionally, expansion network loads have been identified such as the Brooks Taylor Court sheltered housing which is at the route of network option 2. The connection of sheltered housing or households in fuel poverty to a city-wide network could provide lower heat tariffs to the people in need. Revenue from displaced grid electricity and customers where higher profit margins could be yielded cross-subsidise lower heat tariffs. The diversion of profit from the system could also guarantee lower heat tariffs. Figure 47 shows heat loads for network expansion (Building IDs refer to Appendix G).

In order to start engagement with colleges, there is a monthly bursar meeting which could be used in future for dissemination of information and raising the profile of DH as. It was reported that all colleges together with OU have a combined energy purchase contract to yield lower wholesale prices.

At a later stage, before actual implementation of a scheme additional customers should be targeted through common marketing/sales/campaigning methods that would be used by companies currently providing energy.

Figure 46: Potential heat loads for network expansion (Building IDs refer to Appendix G)







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It is also recommended that OCC or OU hold a stakeholder workshop in order to disseminate information on DH but also to start approaching main stakeholders to see how whether there is interest in city-wide schemes.







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13 Conclusions

The study has considered a wide range of baseload supply technologies with the following

being identified as the most promising, which were subsequently modelled: Biomass Boilers,

Biomass CHP, Gas CHP and Water Sourced Heat Pumps. A review of potential energy centre

locations has also been conducted. Inclusion of existing gas boilers and new gas boilers has

been considered to meet peak load requirements.

Analysis of the networks considered for the Science Area / Keble Triangle and for a city-wide scheme suggests strong viability. The Science Area / Keble Triangle network is estimated to deliver a rate of return (40-year IRR) of close to 19% and the city-wide (best variant) provides a return greater that 14%.

The investigation has been largely focused on the University of Oxford estate, with the city-wide network also incorporating major new development loads (primarily the Westgate and Oxpens developments) along with a number of other key consumers such as local council and governmental properties. Other key load opportunities have been excluded at this stage, for example, the university colleges and numerous independently owned / operated properties due to physical and technical constraints.

Collectively, these additional loads, if connected, are likely to improve financial performance, suggesting the city-wide scheme would have significant scope for viable expansion. For reference, the university colleges are estimated to account for 54% of the heat loads in the city-wide area as depicted in the figure on the right side.

However, the share of annual heat load from potential district heating champions still accounts for about 40% across the centre. As champions the following stakeholders have been identified: University of Oxford, Oxford City Council, Oxfordshire County Council, national government bodies and building developer Land Securities.

The Science Area / Keble Triangle network essentially involves the interconnection of University of Oxford properties, which would therefore avoid the need to capture loads operated by other stakeholders. It also focuses on existing properties with both high heat and power demands in a relatively small area. As such it is considered the best network opportunity and is recommended as the initial focus for development. It is proposed that this network’s base load would be met by Gas CHP (rated at approximately 15MW) and this and associated plant is located in an existing Science Area basement. Peak loads are proposed to be met by gas boilers, maximising the use of existing boiler plant.

Where there is support for the city-wide network it is proposed that this is delivered as an expansion from the Science Area / Keble Triangle network. This means that it would be important to ensure the Science Area / Keble Triangle network is future-proofed to enable expansion and also that an appropriate governance structure is establish which would facilitate this expansion rather than constrain it. The city-wide network would require an energy centre facility to house further gas CHP (rated at approximately 10MW), new gas boilers and associated plant. The preferred location for this would be at the Osney Meads industrial estate, which would also enable the incorporation of biomass CHP and/or Water Sourced Heat Pumps (WSHPs) that would capture heat from the River Thames.







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The last option of connecting Oxpens, Westgate and neighbouring loads shows poor IRRs (- 0.2% over 40 years) and is not recommended for development as an independent scheme across the whole proposed area. However, through initial focus on a smaller network supplying the key future anchor loads Westgate Shopping Centre, Oxpens development and City of Oxford College the business case could significantly improve. Due to Oxford City Council’s supporting policies and strategic vision for the West End Area, network development could be considerably facilitated. Neighbouring loads could then be connected when a city-wide network was developed.

Recommendations

Both viable networks would be complex and involve a number of technical and commercial risks which would need to be overcome through more detailed investigation, design and development work. These risks are identified within the report. The following key tasks are recommended prior to any formal commitment being sought from key stakeholders, particularly, the University of Oxford and Oxford City Council:

Confirm suitability of an existing Science Area basement to house the CHP and associated plant required for the Science Area / Keble Triangle network, through investigation of technical constraints (including power and gas connections and flue arrangements), preliminary energy centre design, exploration of private (power) network upgrades that may be required and cost analysis to include consideration of civils works. In parallel review of secondary energy centre options should be considered, where these are required.

Confirm suitability of the Osney Mead Industrial site as a location for the CHP and associated plant required for the city-wide network, through investigation of technical constraints (including power and gas connections), preliminary energy centre design and cost analysis. This review should consider two sites: land owned by the University of Oxford and the Environment Agency depot, as parts of it may be vacated in the near future.

Determine, in principle, the preferred governance and funding arrangements that could be established that would enable construction and operation of the Science Area / Keble Triangle network, whilst enabling expansion into a city-wide network.

Explore the likelihood of connection of additional heat consumers (to those proposed to be connected within the network options that have been modelled). This would focus on those Oxford colleges in close proximity to the network routes proposed together other major consumers.

Identify key terms for critical energy sale contracts and the review these with anchor consumers and determine likelihood of connection and any necessary adjustment to connection charges and heat tariff assumptions.

Revise financial modelling, appraisal of risks and development programme to account for findings from the further investigations proposed above.

Further investigation into the technical opportunity and constraints and estimated costs of importing heat from Didcot power station and from the Sandford Sewage Works.

Review the opportunity and constraints of a possible interconnection between a heat network that has been investigated in the Headington area and the city-wide network.







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References

AMEC Environment & Infrastructure UK Limited. (2013). Oxpens Development: CHP Review - Draft Technical Note 1. AMEC.

BRE. (2014). Outline Master Plan for Heat Solutions in Oxford.

Committee on Climate Change. (2015). Meeting Carbon Budgets - Progress in reducing the UK's emissions; 2015 Report to Parliament. London: Committee on Climate Change.

DECC (2015) National Heat Map:Water source heat map layer

Hawkey, D., & Webb, J. (2014). District Energy Development in Liberalised Markets: situating UK heat network development in comparison with Dutch and Norwegian case studies. Edinburgh, UK: University of Edinburgh.

Hawkins, G. (2011). BSRIA Rules of Thumb Guidelines for building services (5th edition). BSRIA.

Intelligence, S. (2012). Oxford Economic Narrative. London.

Office for National Statistics. (2011). Business Register and Employment Survey 2011. Newport, UK: Office for National Statistics.

Ove Arup & Partners Ltd. (2010). Oxford District Energy Scheme - Initial Feasibility Study. Sheffield, UK: Arup.

Oxford City Council. (2008). West End Area Action Plan. Oxford, UK: Oxford City Council.

Oxford City Council. (2011). Oxford Core Strategy 2026 - Building a world-class city for everyone. Oxford, UK: Planning Policy Team, Oxford City Council.

Oxford City Council. (2012). Carbon Management Plan - Carbon Reduction at the Heart of everything we do. Oxford, UK: Oxford City Council - Environmental Development.

Oxford City Council. (2013). Oxpens Oxford West End - Master Plan Supplementary Planning Document (SPD) - Adopted November 2013. Oxford, UK: Oxford City Council.

Oxford City Council. (May 2013). Low Emission Strategy. Oxford, UK: Oxford City Council.

University of Oxford. (2014). Environmental Sustainability Policy. Oxford, UK: Head of Environmental Sustainability.







Page 111 of 147

Appendix A List of areas for load assessment

Area Id

Area Name Area footprint, m

2

Area Id

Area Name Area footprint, m

2

4 Ashmolean Museum Area 13,286 29 Oxpens Area 65,835

5 Balliol/Trinity College Area 29,183 30 Pembroke College Area 17,851

8 Botanic Garden Area 17,146 31 Radcliffe Observatory Quarter Site

47,288

9 Business School Area 15,043 6 Randolph Hotel Area 8,675

10 Christ Church College Area 57,348 32 Science Area 110,889

12 East Banbury Road Site 45,409 33 Somerville College Area 18,928

1 Ferry Leisure Centre Area 12,763 2 Speedwell Street Area 34,241

14 Jericho Site 1,336 41 St Anne's College Area 22,148

16 Keble College Area 21,479 13 St Hugh's College Area 84,031

17 Keble Triangle 14,596 34 St. John's College Area 10,171

18 Library Area 101,662 35 University College Area 38,640

19 Magdalen College Area 31,900 37 Wadham/Harris Manchester College Area

35,987

20 Manor Road Area 44,051 39 Wellington Square Area 28,627

7 Marks & Spencer Area 15,193 40 West Banbury Road Site 7,687

21 Merton/Corpus Christi College Area

26,209 43 Westgate Shopping Centre 35,872

23 Nuffield College Area 20,794 44 Winchester/Barnbury triangle 37,767

26 Osney Mead Site 38,089 45 Wolfson College Area 37,256

24 Oxford Castle Area 14,304 46 Worcester College Area 31,614

28 University of Oxford Press 18,091 47 Wycliffe Hall/Kellogg College Area

26,749






Page 112 of 147

Appendix B Benchmarked energy demand (extract) NB. Not fully presented here as potentially sensitive

Bldg Id

Site Building GIA,m2 Source Category Id 1 Category Id 2 Energy Efficiency

Assumed connection year

72 Business School Area

Hythe Bridge Street 23-38 (University Offices)

2017

29 Library Area Bodleian Library (New) 2032

302 Marks & Spencer Area

Marks & Spencer Plc 2017

309 Oxford Castle Area

Macclesfield House 2017

240 Oxpens Area NEW City Of Oxford College

2017

241 Oxpens Area NEW Oxpens development phase 1a+b

2018

242 Oxpens Area NEW Oxpens development phase 2a

2019

243 Oxpens Area NEW Oxpens development phase 2b+3

2020

233 Randolph Hotel Area

Macdonald Randolph 2017


Magdalen Street 1 (Shopping centre)

2017

212 Science Area Rhodes House 2017

213 Science Area NEW Tinbergen New 2033






Page 113 of 147

Chemistry Teaching Laboratory/Experimental Psychology/Developmental Biology

214 Science Area NEW Biochemistry Building Extension

2017

215 Science Area NEW Beecroft Building (Physics)

2018

312 Speedwell Street Area

The Oxford Combined Court Centre St Aldate's

2017


Saint Aldates Police Station

2017


Oxford Magistrates Court 2017

219 Wellington Square Area

Wellington Sq 25 Student Accommodation

2017

218 West Banbury Road Site

NEW The H B Allen Centre Extension

2019

216 Westgate Shopping Centre

NEW Westgate Shopping Centre

2018

222 Wycliffe Hall/Kellogg College Area

Kellog College 2022






Page 114 of 147

Appendix C University of Oxford Colleges site survey summary (extract) NB. Not presented here as potentially sensitive.

Not presented here as potentially sensitive.






Page 115 of 147

Appendix D Site survey summary (extract). NB. Data not presented here as potentially sensitive

Bldg Id

Site Building Name Notes Base Load replaceable

DHW provided by fuel boiler?

BRE Demand Profile Heat

Heating days per week

Cooling notes

30 Library Area Bodleian Library (Old)

49 Library Area Clarendon Building

142 Library Area Radcliffe Camera

162 Library Area Sheldonian Theatre

74 Science Area Inorganic Chemistry

186 Science Area Natural History Museum

165 Science Area South Parks Rd 02

164 Science Area South Parks Rd 01

114 Science Area Old Observatory

139 Science Area Pitt-Rivers Museum

92 Science Area Le Gros Clark Building (Ex-Anatomy)

6 Science Area Atmospheric Physics (Old Zoology)

143 Science Area Radcliffe Science Lib

52 Science Area Clarendon Lab-






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Townsend

149 Science Area Robert Hooke Building

56 Science Area Dyson Perrins

51 Science Area Clarendon Lab-Lindemann & Clarendon Lab-Simon

140 Science Area Plant Sciences South (Ex-Forestry) & Plant Sciences North (Ex Botany)

146 Science Area Rex Richards Building

150 Science Area Rodney Porter Building

156 Science Area Rothermere American Ins

71 Science Area Hwb Of Gene Function

NB. data not presented here as potentially sensitive.






Page 117 of 147

Appendix E Buildings/Areas excluded from scenario-building

Area Id Areas or buildings Reason for exclusion

Between 6 &7 Clarendon Shopping Centre Site survey has shown that majority of heat/DHW loads are provided by electricity

12 East Banbury Road Site low heat demand density remote from core scheme

13 St Hugh's College Area low heat demand density remote from core scheme

14 Jericho Site low heat demand density remote from core scheme

31 Radcliffe Observatory Quarter Site Whole site has just recently been redeveloped including GSHP network for heating and cooling

41 St Anne's College Area low heat demand density

44 Winchester/Banbury triangle low heat demand density remote from core scheme

47 Wycliffe Hall/Kellogg College Area low heat demand density remote from core scheme






Page 118 of 147

Appendix F Heat load figures per area

Area Id Site Annual Heat Load,

full capacity build-

up, kWh (CIBSE ref

yr)

Annual Peak Demand,

undiversified, full

capacity build-up, kW

32 Science Area

18 Library Area

29 Oxpens Area

10 Christ Church College Area

35 University College Area

5 Balliol/Trinity College Area

20 Manor Road Area

37 Wadham/Harris Manchester College Area

16 Keble College Area

34 St. John's College Area

19 Magdalen College Area

17 Keble Triangle

23 Nuffield College Area

30 Pembroke College Area

4 Ashmolean Museum Area

39 Wellington Square Area

21 Merton/Corpus Christi College Area

43 Westgate Shopping Centre

33 Somerville College Area

28 University of Oxford Press

24 Oxford Castle Area



9 Business School Area

46 Worcester College Area

7 Marks & Spencer Area

40 West Banbury Road Site

8 Botanic Garden Area






Page 119 of 147

Appendix G Replaceable heat load per building (extract)

BreBuildingID

AreaID

Owner Building Name Served from other building

Annual Heat Load,

kWh (CIBSE ref

yr)

Annual Peak Heat Demand,

kW

5 4 OU Ashmolean Museum 817,289 913

24 4 OU Beaumont St 34 - 36 75,352 65

158 4 OU Sackler Library 327,323 1,165

173 4 OU St Giles 66 (Formerly 65 - 67) 825,666 393

174 4 OU St John Street 02 - 04 0 0

176 4 OU Taylor Institution 266,931 251

287 4 College Blackfriar's College 377,294 247

236 5 College Balliol College 3,177,471 1,356

237 5 College Trinity College 2,244,045 941

36 8 OU Botanic Garden 37 575,104 1,662

37 8 OU Botanic Garden - Charlotte Building 0 0

72 9 OU Hythe Bridge Street 23-38 (University Offices) 561,633 891

159 9 OU Said Business School 997,882 560

160 9 OU Said Business School - Phase 2 0 0

220 10 College Christ Church College 5,868,934 2,460

273 10 OCC Town Hall 712,762 365

217 16 College Keble College 4,482,355 1,810

97 16 OU Mathematical Institute 164,712 113

33 17 OU Boiler House No 3 (Engineering) 2,414,173 1,548

55 17 OU Denys Wilkinson Building (Nuclear Physics) 33 83,969 626

59 17 OU Engineering & Technology Building - Etb 200,481 218

61 17 OU E-Science Laboratory 86,028 74

65 17 OU Holder (Engineering/Materials) 33 49,533 428

67 17 OU Hume-Rothery Building 33 181 1

73 17 OU Information Engineering 235,171 142






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BreBuildingID

AreaID


Annual Heat Load,

kWh (CIBSE ref

yr)


kW

76 17 OU Jenkin Building (Engineering Annex) 190,413 206

91 17 OU Keble Rd 08 - 11 And Wolfson Building 180,842 144

177 17 OU Thom Building 166,508 80

29 18 OU Bodleian Library (New) 3,649,539 6,897

30 18 OU Bodleian Library (Old) 737,545 1,285

49 18 OU Clarendon Building 174,965 140

64 18 OU History Science Museum 168,117 137

113 18 OU Old Indian Institute Building 144,555 200

142 18 OU Radcliffe Camera 239,858 676

162 18 OU Sheldonian Theatre 30 178,963 146

223 18 College Exeter College 2,991,416 1,254

224 18 College Lincoln College 1,697,232 735

225 18 College Brasenose College 2,174,103 903

226 18 College Hertford College 1,907,064 775

248 18 College Jesus College 2,179,432 965

249 18 College All Souls (College) 1,439,009 603

265 18 College New College 4,652,254 1,950

268 18 College Queens College 2,857,428 1,198

271 18 College St Edmund Hall 3,665,499 1,327

263 19 College Magdalen College 4,183,325 1,753

34 20 OU Boiler House No 4 (St Cross Building) 0 0

95 20 OU Manor Road Building 383,821 1,675

168 20 OU St Cross Building 725,587 444

245 20 College St Catherine's College 4,200,824 1,511

302 7 Unknown Marks & Spencer Plc 622,741 713

272 7 OCC St Aldates Chambers 201,427 164

255 21 College Corpus Christi (College) 1,556,524 652






Page 121 of 147

BreBuildingID

AreaID


Annual Heat Load,

kWh (CIBSE ref

yr)


kW

264 21 College Merton College 923,190 539

112 23 OU Old Boys High School 222,116 182

227 23 College Nuffield College 1,309,748 549

228 23 College St. Peter's College 1,365,545 527

94 24 OU Malthouse 111,653 98

229 24 Malmaison Malmaison Hotel 634,924 476

230 24 OSCC County Hall 1,100,470 766

126 #N/A OU OU Press 1,929,450 1,943

240 29 College NEW City Of Oxford College 1,689,076 778

241 29 Unknown NEW Oxpens development phase 1a+b 2,182,064 1,005

242 29 Unknown NEW Oxpens development phase 2a 2,560,736 1,179

243 29 Unknown NEW Oxpens development phase 2b+3 1,422,427 655

261 29 OCC Oxford Ice Rink 488,970 571

231 30 College Pembroke College 2,400,323 1,016

232 30 College Campion Hall (College) 399,999 168

295 6 Unknown Magdalen Street 1 (Shopping centre) 1,329,373 1,522

233 6 Macdonald Macdonald Randolph 276,315 127

74 32 OU Inorganic Chemistry 31 182,335 311

186 32 OU Natural History Museum 31 0 0

165 32 OU South Parks Rd 02 38,234 64

164 32 OU South Parks Rd 01 54,424 114

114 32 OU Old Observatory 112,481 58

139 32 OU Pitt-Rivers Museum 31 164,366 116

92 32 OU Le Gros Clark Building (Ex-Anatomy) 31 707,865 358

6 32 OU Atmospheric Physics (Old Zoology) 31 0 0

143 32 OU Radcliffe Science Lib 31 0 0

52 32 OU Clarendon Lab-Townsend 315,049 179






Page 122 of 147

BreBuildingID

AreaID


Annual Heat Load,

kWh (CIBSE ref

yr)


kW

149 32 OU Robert Hooke Building 31 89,465 37

56 32 OU Dyson Perrins 31 841,329 921

31 32 OU Boiler House No 1 (Central) 3,493,753 1,941

131 32 OU Pathology 262,815 113

51 32 OU Clarendon Lab-Lindemann & Clarendon Lab-Simon

647,719 530

140 32 OU Plant Sciences South (Ex-Forestry) & Plant Sciences North (Ex Botany)

32 22,864 35

163 32 OU Sherrington Building (Ex-Physiology) 32 817,599 592

178 32 OU Tinbergen Building 35 184,995 112

179 32 OU Tinsley Building 488,123 569

146 32 OU Rex Richards Building 32 0 0

35 32 OU Boiler House No 5 (New Pharmacology) 4,077,535 1,921

137 32 OU Pharmacology 35 246 0

150 32 OU Rodney Porter Building 32 243 0

133 32 OU Pathology Support Bldg 714,045 565

132 32 OU Pathology Epa Building 558,182 234

156 32 OU Rothermere American Ins 142,624 122

98 32 OU Medical Science Teaching Centre 565,070 289

43 32 OU Chemistry Research Lab 3,125,595 1,776

71 32 OU Hwb Of Gene Function 480,213 245

185 32 OU University Club - Mansfield Road 206,461 238

103 32 OU New Biochemistry Building 1,200,717 638

166 32 OU South Parks Rd 06 3,460,437 3,034

58 32 OU Earth Sciences Building 769,864 499

125 32 OU Oxford Molecular Pathology Institute (Ompi) 1,399,605 796

214 32 OU NEW Biochemistry Building Extension 517,012 268

213 32 OU NEW Tinbergen New Chemistry Teaching Laboratory/Experimental Psychology/Developmental Biology

35 468,543 243






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BreBuildingID

AreaID


Annual Heat Load,

kWh (CIBSE ref

yr)


kW

215 32 OU NEW Beecroft Building (Physics) 547,269 284

32 32 OU Boiler House No 2 (Pathology Support Bldg) 2,080,615 1,455

135 32 OU Peter Medawar Building 471,517 268

212 32 Unknown Rhodes House 212,974 110

254 32 OU Burdon Sanderson Cardiac Science Centre 175,596 123

262 32 College Linacre College 1,175,885 457

244 33 College Somerville College 2,384,196 1,119

300 2 OSCC Speedwell House 462,637 320

313 2 National Government

Saint Aldates Police Station 546,352 411


The Oxford Combined Court Centre St Aldate'S 338,358 543


Oxford Magistrates Court 300,695 226

100 2 OU Music Faculty 169,895 144

234 34 College St. John's College 4,636,743 1,943

62 35 OU Examination Schools 1,207,075 2,127

250 35 College University College 3,541,453 1,484

267 35 College Oriel College 1,541,440 622

141 37 OU Queen Elizabeth House 195,530 162

238 37 College Wadham College 2,838,528 1,376

239 37 College Mansfield College 601,780 252

258 37 College Harris Manchester College 1,233,554 505

54 39 OU Dartington House (Admission Information Centre) 119,780 143

102 39 OU New Barnett House 83,912 55

188 39 OU University Offices 449,084 367

197 39 OU Wellington Sq 01-07 (Rewley House) & Sadler House

256,026 206

198 39 OU Wellington Sq 08 25,567 13






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BreBuildingID

AreaID


Annual Heat Load,

kWh (CIBSE ref

yr)


kW

199 39 OU Wellington Sq 09 31,745 14

200 39 OU Wellington Sq 11 0 0

201 39 OU Wellington Sq 12 145,004 263

202 39 OU Wellington Sq 16 22,054 11

203 39 OU Wellington Sq 32 - 42 (Barnett House) 276,449 129

204 39 OU Wellington Sq 43 - 48 118,066 63

219 39 OU Wellington Sq 25 Student Accommodation 247,858 114

269 39 College Regents Park College 608,656 242

270 39 College St Benets Hall (College) 264,012 101

8 40 OU Banbury Rd 07 - 19 126,165 114

11 40 OU Banbury Rd 21 164,712 138

218 40 College NEW The H B Allen Centre Extension 347,001 160

93 43 OU Littlegate House 136,399 105

216 43 Westgate Alliance

NEW Westgate Shopping Centre 2,294,101 2,627

235 46 College Worcester College 1,497,543 657

309 24 Unknown Macclesfield House 384,351 199

501 Expansion Brooks Taylor Court, sheltered housing, electric heating

502 Expansion Jackson Cole House, sheltered housing

503 Expansion Anchor Court, sheltered housing

505 Expansion Wingfield Court, sheltered housing

506 Expansion McMaster House, sheltered housing

507 Expansion St Lukes Hospital, care home

508 Expansion London Court, retirement housing

509 Expansion Oxford Brooks University, Dorset House, student accommodation

504 Expansion Florey Building, student accommodation

510 Expansion Oxford Brookes University, Warneford Hall, student accommodation

512 Expansion Oxford Centre for Islamic Studies






Page 125 of 147

BreBuildingID

AreaID


Annual Heat Load,

kWh (CIBSE ref

yr)


kW

513 Expansion Oxford Hernia Clinic

514 Expansion St Michael's CE Primary School






Page 126 of 147

Appendix H Technology Comparison

The following table outlines the criteria that underpin the initial energy source assessment. Requirements for each criterion have been established that need to be met in order to achieve a scoring point between 5 and 1.

Score: 5 4 3 2 1

Indicative Capex £/kW (plant)

<=£1,000 <=£2,000 <=£3,000 <=£4,000 > £5,000

Indicative Heat production cost £/MWhth (Includes fuel, maintenance, RHI & Elec sales)15

<= £-3 /MWh

<= £-1 /MWh

<= £1 /MWh <= £3 /MWh >= £3 MWh

CO2 savings kg/kWhth16 >0.500kg/k

Wh >=0.250kg/kWh

>=0.150kg/kWh

>=0.1kg/kWh

<=0.1kg/kWh

Physical size constraint No central plant required

Plant can be installed with minimal constraints

Plant can be placed in existing plant rooms

New larger facilities required

New larger facilities required with additional space for transport and fuel storage

15 Heat production costs can be negative due to Feed in Tariffs for electricity generation.






Page 127 of 147

Appendix I Energy centre location evaluation criteria

Criteria General description

Technical

Proximity to existing anchor loads The higher the proximity of the energy centre to the anchor

loads, the lower the network-related costs.

Proximity to medium pressure gas pipe The higher the proximity of a major energy centre to a

medium-pressure gas pipe the lower the costs for

connection.

Low pressure gas network spare

capacity

How feasible is the connection of a smaller decentralised

energy centre to the low pressure gas network

Access for HGV biomass delivery The transport of biomass will be through Heavy Good

Vehicles (HGV) with a maximum gross weight of up to

44 tonnes. Such large HGV deliveries on a daily basis in

Winter could lead to pollution and traffic-related problems

within the centre of Oxford.

Integration of Water Source Heat Pumps Although integration of water source heat pumps can be

less efficient in DH systems with traditional flow and return

temperatures, it should be considered as one way to phase

out fossil fuels in long-term

Integration of Ground Source Heat

Pumps

Integration of ground source heat pumps can only be

feasible for larger plant rooms where the ground can be

regenerated during Summer (high cooling loads).

Phasing out fossil through other

renewable sources

Integration of other renewable energy sources

Development

Existing plant room Can the building be quickly converted into a DH energy

centre?

Location outside of domestic dwellings Larger plant rooms can create significant noise pollution to

residents and employees in surrounding area






Page 128 of 147

Criteria General description

Location outside of AQMA hot spot A heat network should not disproportionally contribute to

increased emission of pollutants in the centre where air

quality is already at stake

Location outside of Oxford View Cones The view on Oxford historic buildings through the

designated "View Cones" should not be impaired.

Location outside of flooding area Heat Network Energy Centres are vital part of energy

provisioning structure and should preferably be built outside

of flood plains.

Favourable land ownership/intended use

clear

Could landownership/intended future use of the site be

confirmed within this study






Page 129 of 147

Appendix J Heat network technical specification

Transmission/distribution pipework

Modern district heating networks are constructed from pre-insulated polyurethane bonded district heating

pipes. In short, the pipe assemblies consist of a steel service pipe, rigid polyurethane foam insulation and

an outer casing of polyethylene. Typically, projects of this nature would use pipe sizes in the range of

DN20 – DN500 (i.e. pipe diameters typically range from 20-500mm). The pipe assembly may also include

the following additional elements: measuring wires, spacers and diffusion barriers. Measuring wires are

used to monitor moisture inside the polyurethane insulation in order to predict pipeline corrosion and

potential damage. An upper limit for thermal conductivity is typically set at 0.033W/mK but modern

applications often reach a level of 0.026-0.029 W/mK.

The operation is based on variable flow design, where the actual momentary heating energy consumption

level (controlled by the heat interface unit (HIUs) determines the actual water flow applied, the higher the

consumption the higher the applied flow is.

The district heating network is designed to withstand a maximum operating temperature of ≤ 120 °C

(flow), however 100 °C is rarely exceeded and in practise the flow temperature varies between 70-75 °C

most of the year. The standard design pressure for the DH pipes is PN16 or PN25. Typically, the actual

pressure level varies between 5-10 bar (including static and dynamic pressure), depending on network

length, number of pumping stations, topography, load, etc.

Recommended pipe material for the underground DH pipeline is carbon steel P235GH for pressure level

of PN 16 and for the pipe dimensions less than DN 500. P265GH is suggested for PN 25 (typically used

in deep underground tunnels or areas with high topographic difference) and where pipe diameters are

greater than DN 500.

DH circulation water is demineralised water with oxygen removal; hydrazine (oxygen removal chemical) is

fed into the DH network to prevent corrosion.

Properties of pre-insulated polyurethane bonded district heating pipes are governed by the following

European standards:

EN 253 for pipe assemblies

EN 448 for fitting assemblies

EN 488 for valve assemblies

EN 489 for joint assemblies

EN 13941 for design and installation

EN 14419 for surveillance systems.

Trenches

The figure below shows a typical construction detail for a heat network mains pipe trench in the public

highway, using a pair of pipes for flow and return. The minimum distance from the top of the pipes to

ground level is 600mm. The pipes should not be located within the road structure as defined under






Page 130 of 147

NRSWA17

. The dimensions of the excavation depth (d) and width (w) and the separation distance

between pipes (a) and from the excavation edge (b) depend on the size of pipe and the highway

construction. Figure J - 1 provides the suggested relevant trench dimensions for typical pipe diameters.

Additional space at welding points, corners, valve locations and spurs will be required.

Figure J - 1 Typical installation arrangement for separate flow and return pipes (source: London Heat Network Manual, GLA, 2014)

DN (carrier/ casing) a (mm) b (mm) w (mm) h (mm)

DN80/160 150 150 770 860

DN80/160 150 150 770 860

DN100/200 150 150 850 900

DN125/225 150 150 900 925

DN150/250 150 150 950 950

DN250/400 200 200 1400 1100

DN300/450 200 200 1500 1150

DN400/560 200 200 1720 1260

DN500/630 200 250 1910 1330

DN600/800 250 300 2400 1500

DN700/900 250 300 2600 1600

Table J - 1 Trench minimum dimensions

When the trench is located within the public highway the depth, surround, backfill and reinstatement of

the trench must comply with the NRSWA (New Roads and Street Works Act 1991) Specification for the

17 New Roads and Street Works Act






Page 131 of 147

reinstatement of openings in roads. When backfilling, the initial surround of up to a minimum 100mm

above the heat network pipes should always be completed with specified, imported and screened sand.

The excavated trenches should be surveyed to determine high and low spots of the installed bonded pipe

network. This information should be used to inform where the optimum positions for air release valves

and drainage valves are to be located.

Where a heat network is installed in proximity to other existing utility and service apparatus, the

installation of the heat pipes should endeavour to comply with the principles of separation from other

apparatus. Separation will depend upon the congestion of the area and consultation with owners of the

existing apparatus is recommended

Where a heat network is installed in new developments where no other apparatus exists, the installation

should endeavour to comply with the principles within the National Joint Utilities Group Guidelines on the

Positioning of Underground Utilities Apparatus for New Development Sites.

Testing and commissioning of pipe welding

Pipe work should be tested as detailed in EN 13941. Typical requirements which should be included in the works specification are:

All steel pipe welding is to be undertaken by certified coded welders. Certification must be in

compliance with current British and European Standards. Welders may be subjected to a welding

test with at least the same acceptance criteria as the criteria for the finished work, with reference

to EN 25817;

A testing regime must be established for welded joints e.g. non-destructive testing of 10% of

welds as detailed in EN 13941. Visual inspection of welds is required;

All pipe work installations should be hydrostatically pressure tested, witnessed, and signed off by

a competent engineer. All equipment used for testing should be fully calibrated and the test

procedures and monitoring proposals must be agreed before the tests commence;

Following completion of a satisfactory pressure test the site closures must be made in strict

accordance with the pipe work manufacturer’s specification;

The leak detection system must be tested and certified; and

Systems must be flushed and treated prior to being put to service.

Testing and commissioning of insulation case joint welding

Typical requirements to be included in the works specification are:

Joint assemblies for the steel pipe systems, polyurethane thermal insulation and outer casing of

polyethylene shall comply with BS EN 489. The joint assemblies shall be installed by specially

trained personnel according to the instructions given by the manufacturer. Fusion welded

insulation joints shall be implemented to join the pre-insulated steel pipe systems;

All joint assemblies must be manufactured by same manufacturer as the steel pipe systems

and/or approved by the steel pipes systems’ manufacturer for use with their pipes;

The joint should be pressure tested to confirm it is air tight;

Polyethylene welders shall possess evidence of valid qualifications, which document their ability

to perform reproductive welding of the quality specified.

Valves and valve chambers

All valves on a heat network should be pre-insulated and of the same manufacture as the pre-insulated

pipe system. Where necessary spindle extensions must be provided to enable operation of the valves

buried at depth or located within manholes where it is otherwise unnecessary to enter.

Where valves are housed in specific chambers then these chambers should be sized to accommodate

the apparatus within them and to enable easy operation of the valves. The valve chambers and

associated items must be designed to withstand the likely traffic loads applicable to their location. Valve






Page 132 of 147

chambers should be clearly marked such that the location and contents of the pipes are easily

identifiable.

Heat Interface Units (HIUs)

Heat consumers are connected to the district heating network using prefabricated heat interface units

(HIUs), which comprise of heat metering equipment and isolation valves on the supply side, and heat

exchangers, and circulation pumps on the consumer’s side. For individual residential consumers these

usually come packaged in a single unit, some of which are a similar size to wall-hung boilers.

For larger commercial and public sector buildings the equipment is larger but is easily accommodated in

an existing boiler room. If the customer has existing gas-fired boilers, these can usually be replaced

directly with the district heating HIU, providing the operating temperatures are compatible.

While the technical details of the HIU and metering equipment will not need to be specified until a later

stage, well beyond feasibility, a typical layout is shown in figure below, which shows the metering

equipment and network interface with isolation valves.






Page 133 of 147

Figure J - 2 Diagram illustrating a DH Consumer's Heat Metering Equipment and Network Interface

Typical modern units have automatic temperature control for central heating. The heating circuit is

adjusted in relation to the outdoor temperature and the required indoor temperature via a thermostatic

control, outdoor sensor and/or indoor sensor.

The HIUs used in larger buildings are typically free-standing units (opposed to wall mounted for smaller

buildings), as is the case with the units presented below. The HIUs are typically delivered as ready-to-

install packages and as such are easy to install. A rendering of HIU suitable for large buildings is

presented in image below.

Image J - 1 Typical modern heat interface unit (HIU) suitable for larger office buildings (courtesy of Alfa Laval Ab).

Modern units can be controlled and monitored remotely using a standard PC with an internet connection

or by an operator panel.

In larger buildings (office buildings, leisure centres, community buildings, apartment buildings), a plant

space is required for the heat interface unit (HIU) equipment. The height of the plant space should be at

least 2 m. The space should be equipped with a faucet and a floor drain. The temperature of the plant room may vary between 5-35°C, and a heating element must be installed if the plant room temperature

can fall below 5°C. The HIU typically requires 80 cm of space in front and 60 cm on either side for

maintenance.

Technical and commercial data concerning typical and modern HIUs for large buildings is presented in

the table below. Cost estimates are based on consultant’s previous experience on similar projects and on

budget proposals requested for this case.






Page 134 of 147

Table J - 2 Technical and commercial data for DH HIUs for office and research buildings (courtesy of Alfa-Laval).

Installation costs can be estimated to amount to 50 % of the substation cost if the building is newly built,

and 100 % of the substation cost if the substation is installed in an existing building, requiring removal of

existing gas boilers from the plant space and renovation of the plant space.

The total space requirements (including free space required for maintenance) of the HIUs in larger

buildings are:

Length: 300.0 cm – 329.0 cm

Width: 218.0 cm – 249.0 cm

Height: 134.0 cm – 212.0 cm

An indicative layout drawing of a plant space with the largest HIU (1000/700, as presented above)

installed is shown below.

D H substat io ns fo r large buildings

300/ 300 600/ 450 1000/ 700

Power, heating kW 300 600 1,000

Power, DHW kW 300 450 700

Temperature, Heating Primary °C 100-52 100-55 100-54

Temperature, Heating Secondary °C 50-70 50-70 50-70

Temperature, DHW Primary °C 65-21 65-19 65-18

Temperature, DHW Secondary °C 10-55 10-55 10-55

Length cm 185.0 180.0 209.0

Width cm 58.0 73.0 89.0

Height cm 134.0 155.0 212.0

Price (inc. delivery to UK) £ 9,000 12,000 17,000

M easuring equipment (inc. installation) £ 800 950 1,300






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Figure J - 3 Indicative plant space layout drawing, shown with the 1000/700 unit installed.

The main advantages of these HIUs include standardised system solutions, small space requirement,

minimal installation time, a high degree of automation and easy maintenance and operation.






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Appendix K Heat network phasing

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total

DN20 - - - - - - - - - - - - -

DN25 80 - - - 31 - - - - - - - 111

DN32 140 - - - - - 43 - 48 - - 22 254

DN40 57 - - - - - - - - - - 53 110

DN50 89 - - - 6 - - - 85 - - 26 205

DN65 59 20 - - 16 - - 64 27 13 - 87 285

DN80 101 - - - - - - - - - - - 101

DN100 223 - - - 42 - - 29 - - - - 294

DN125 506 - - - - - 13 42 - - - - 562

DN150 523 - - - - - - - - - - - 523

DN200 404 - - - - - - - - - - - 404

DN250 22 - - - - - - - - - - - 22

DN300 - - - - - - - - - - - - -

DN400 - - - - - - - - - - - - -

Total 2,203 20 0 0 95 0 56 135 161 13 0 188 2,870

Table K -1. Pipeline construction phasing for Option 1 (years indicate when pipes are put in the ground).






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2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total

DN20 - - - - - - - - - - - - -

DN25 - - - - - - - - - - - - -

DN32 18 - - - - - - - 14 - - - 32

DN40 97 - - - - - - - - - - - 97

DN50 87 - - - - - - - - - - - 87

DN65 740 - - - - - - - - - - - 740

DN80 225 - - - - - - - - - - - 225

DN100 491 - - - - - - - - - - - 491

DN125 233 - - - - - - - - - - - 233

DN150 395 - - - - - - - - - - - 395

DN200 318 - - - - - - - - - - - 318

DN250 - - - - - - - - - - - - -

DN300 - - - - - - - - - - - - -

DN400 - - - - - - - - - - - - -

Total 2,603 0 0 0 0 0 0 0 14 0 0 0 2,617

Table K -2. Pipeline construction phasing for Option 2.

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total

DN20 - - - - - - - 84 - - - - - 84

DN25 - 80 - - - 31 - 10 - - - - - 121

DN32 - 183 - - - - - 43 - 62 - - 22 310

DN40 - 154 - - - 31 - - - - - - 122 307

DN50 - 240 - - - - - - - 334 - - 26 600

DN65 - 858 20 - - 16 - - 64 27 - - 87 1,072

DN80 - 269 - - - 43 - - - - - - - 311

DN100 - 1,624 - - - 179 - - 29 297 - - - 2,128

DN125 340 1,203 - - - - - 13 42 - - - - 1,599

DN150 366 343 - - - - - - - - - - - 709

DN200 537 - - - - - - - - - - - - 537

DN250 490 19 - - - - - - - - - - - 510

DN300 1,450 - - - - - - - - - - - - 1,450

DN400 - - - - - - - - - - - - - -

Total 3,184 4,973 20 0 0 300 0 150 135 720 0 0 258 9,739

Table K - 3. Pipeline construction phasing for Option 3-1.






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2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total

DN20 - - - - - - - 84 - - - - - 84

DN25 - 80 - - - 31 - 10 - - - - - 121

DN32 - 183 - - - - - 43 - 62 - - 22 310

DN40 - 154 - - - 31 - - - - - - 122 307

DN50 - 240 - - - - - - - 334 - - 26 600

DN65 - 858 20 - - 16 - - 64 27 - - 87 1,072

DN80 - 269 - - - 43 - - - - - - - 311

DN100 - 1,624 - - - 179 - - 29 297 - - - 2,128

DN125 340 1,203 - - - - - 13 42 - - - - 1,599

DN150 247 343 - - - - - - - - - - - 589

DN200 657 - - - - - - - - - - - - 657

DN250 490 19 - - - - - - - - - - - 510

DN300 1,450 - - - - - - - - - - - - 1,450

DN400 - - - - - - - - - - - - - -

Total 3,184 4,973 20 0 0 300 0 150 135 720 0 0 258 9,739

Table K - 4. Pipeline construction phasing for Option 3-2.

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total

DN20 - - - - - - - 84 - - - - - 84

DN25 - 80 - - - 31 - 10 - - - - - 121

DN32 - 183 - - - - - 43 - 62 - - 22 310

DN40 - 154 - - - 31 - - - - - - 122 307

DN50 - 240 - - - - - - - 334 - - 26 600

DN65 - 858 20 - - 16 - - 64 27 - - 87 1,072

DN80 - 269 - - - 43 - - - - - - - 311

DN100 - 1,624 - - - 179 - - 29 297 - - - 2,128

DN125 340 1,203 - - - - - 13 42 - - - - 1,599

DN150 42 343 - - - - - - - - - - - 385

DN200 810 - - - - - - - - - - - - 810

DN250 542 19 - - - - - - - - - - - 561

DN300 1,053 - - - - - - - - - - - - 1,053

DN400 398 - - - - - - - - - - - - 398

Total 3,184 4,973 20 0 0 300 0 150 135 720 0 0 258 9,739

Table K -5. Pipeline construction phasing for Option 3-3.






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Appendix L Risk register

Primary risk type

Risk description Impact description Probability description Impact Probability Risk evaluation

Mitigation

6 Supply Radcliffe Science Library not available / suitable for energy centre

Non-availability of proposed energy centre space then requires a different, probably decentralised CHP / boiler supply strategy

Alternative uses for the facility are under discussion costs of civils works and constraints for flue arrangement will be difficult to overcome

4 4 16 1. Early engineering review 2. Early planning review re: flue arrangements 3. Early commercial review 4. Develop alternative, decentralised energy supply strategy

12 Implementation Management

Inadequate skills / organisation / resources to deliver

Insufficient capacity and capability to act as an informed client to suppliers and external experts and to manage contractual, procurement and financial process. Results in poor project, high costs and/or delays. This will depends on governance arrangement for the project, who leads and who supports.

Dependent on nature of development. University has good skills and experience of property level systems but not heat networks

5 3 15 1. Formalise / Initiate project 2. Conduct skills audit 3. Recruit key resources (including outsourced skills) 4. Up-skill decision makers 5. Establish project and senior decision making groups with effective stakeholder representation






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Primary risk type


Mitigation


Private power network upgrades costly

Costs are greater than contingency allowances included in the modelling for Radcliffe Science Library location. In general grid connection costs can be significant and are highly variable.

Costs are likely be high but unlikely to be beyond contingency sum

4 3 12 1. Early exploration with DNO 2. Explore dynamic capacity connection arrangement 3. Consider CHP re-sizing 4. Consider alternative location for the CHP, e.g. Option 3 energy centre (with either Licence Lite or Private Wire network arrangement)

9 Regulatory Additional emissions in Science Area from distributed electricity generation (13.8MW gas CHP) or concentrated heat generation (15.7MW HOB) too high

Could be an issue because of inner city location and the proximity to major transport routes. Significantly influenced by plant and flue specification.

Uncertain as no modelling has been conducted and flue constraints are not fully known

4 3 12 1. Conduct air pollution modelling for possible supply scenarios 2. Review with environmental pollution team within city council






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Primary risk type


Mitigation

13 Supply Poor reliability and performance

Poor design and construction standards leads to failures and loss of revenue, consumer trust

Only a problem where scheme is not designed / built / commissioned / operated by inexperienced contractor and best practice is not used

4 3 12 1. Apply best practice design, construction and operational standards, e.g. UK Code of Practice 2. Ensure specification meets longevity standards required 3. Ensure scheme revenues are sufficient to support O&M and meeting re-investment requirements 4. Transfer risks to operator

18 Financial Medium term fuel prices increase beyond modelled assumptions (DECC projections)

Gas prices increase in the line with global energy market, resulting in higher energy costs for heat network

Forecasts used and best estimate available

4 3 12 1. Ensure business case accounts for variance 2. Monitor impact over medium terms (short term changes are likely to even out) 3. Negotiate with suppliers to limit impact (use MOD leverage) 4. Calibrate against power cost changes over medium term. 5. Retain fuel switch option






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Primary risk type


Mitigation

19 Financial Medium term electricity prices diminish significantly below modelled assumptions (DECC projections)

Electricity prices reduce, leading to lower revenues than expected and diminishing of business case for investment away from BAU option

Forecasts used and best estimate available

4 3 12 1. Ensure business case accounts for variance 2. Monitor impact over medium terms (short term changes are likely to even out) 3. Negotiate with suppliers to limit impact + sales revenue is largely an internal accounting exercise and so revenue deficits can be managed through budget adaptation 4. Calibrate against power cost changes over medium term

5 Supply Gas connection Science Area at full capacity

Expensive additional connection, beyond the contingency allowance modelled.

There are reports that low pressure network feeding the Science Area is at full capacity

3 3 9 1. Early exploration with gas transporter 2. Consider CHP re-sizing 3. Consider alternative location for energy centre

8 Regulatory Flue from energy centres in Science Area and Osney Mead do not fall under "minor elements of no great bulk".

Planning documents do not permit buildings higher than 18.2m within 1200m around the Carfax Tower

This is likely to be an issue but engineering solutions could resolve

3 3 9 1. Early review with planners 2. Explore alternative






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Primary risk type


Mitigation

10 Regulatory Additional emissions in Osney Mead from distributed electricity generation or concentrated heat generation too high

Less of an issue than Science area because of location is on outskirts of city and only small capacity CHP is proposed. Significantly influenced by plant and flue specification.

Uncertain as no modelling has been conducted and flue constraints are not fully known

3 3 9 1. Conduct air pollution modelling for possible supply scenarios 2. Review with environmental pollution team within city council


Limited future expansion (beyond initial connections)

Initial scope of connections is not expanded because perceived risks or financial performance of the scheme. Linked to whether expansion fits the objectives of the university

Reasonably likely based on headlines of the feasibility analysis

3 3 9 Establish governance arrangements that would enable future expansion

7 Supply Osney Mead location not suitable for energy centre due to flood risk

Flood can be problem for any development

Likely to be an issue but engineering solutions can resolve

4 2 8 1. Flood risk review 2. Develop engineering solution






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Primary risk type


Mitigation


River and rail crossing costly

River / rail crossing from Osney Meads for heat network infrastructure to reach city centre consumers proves to be more expensive than estimated

Low likelihood since costs are based similar projects

4 2 8 1. Develop engineering solutions 2. Prepare cost estimate 3. Reconsider Oxpens as alternative Energy Centre location

14 Financial Costs increase prior to financial close

Cost increase during the course of design / construction, e.g. ID of major ground constraints and supplier costs are higher than predicted

Not considered likely as 30% contingency is included

4 2 8 1. Review costs during subsequent feasibility stages 2. Conduct value engineering

16 Financial Energy sales contracts do not meet expected incomes

Revenues from energy purchase (power and heat) are lower than modelled

Unlikely since conservative assumptions have been made

4 2 8 1. Energy revenues have been considered on conservative basis within modelling but this could be reviewed further to aggregate and annual sensitivities 2. Soft market testing should be used to further verify assumptions

20 Financial Operating costs and revenues outside business case tolerances

O&M costs exceed and revenues fall short of the modelling tolerances

O&M cost assumption are set conservatively

4 2 8 1. Conduct independent due diligence 2. Monitoring costs and revenues during operation and develop operational responses 3. Pass risks on to operators, where possible






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Primary risk type


Mitigation

21 Supply Inadequate maintenance

Poor maintenance leads to system failures which will cause dissatisfaction and increased costs as backup measures are required

Only a problem where scheme is operated by inexperienced contractor and best practice is not used

4 2 8 1. Ensure initial construction and commission are of a high standard 2. Provide for effective asset management 3. Structure O&M contracts to performance

22 Supply Poor service management

Poor service provision leads to user dissatisfaction and eventually to disconnection

Only a problem where scheme is operated by inexperienced contractor and best practice is not used

4 2 8 1. Provide effective delivery management 2. Structure incomes/profits to good management record

1 Demand Oxpens development not completed

Energy demand is marginally lower than estimated and revenues are lower

Completion is likely but delays and variation are reasonably likely

3 2 6 1. monitoring development progress 2. resize heat network to fit with emerging scheme

3 Demand Low DH connection take-up

Phasing slower than expected or fewer loads

Low likelihood for bulk of consumers since they are University properties

3 2 6 1. Systematically engage with consumers, e.g. MoU, contract terms, contract, etc 2. Re-plan heat network on iterative basis as certainty of demand improves 3. Include suitable supply / infrastructure capacity to deal with potential variations






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Primary risk type


Mitigation

23 Supply Poor long term carbon performance

Gas CHP (the preferred solution), will become less carbon competitive against BAU and alternative renewable supply options as grid electricity is decarbonised

Scale of effect is significantly limited where UK ambitions to reduced carbon emissions in power generation are not achieved. The commissioning of Hinckley Point C is a significant factor

2 3 6 1. Monitor operational carbon performance and compare against other solutions (biomass and incinerator options), and maintain a long term implementation plan 2. Introduce low carbon energy supply, where this is required

12 Regulatory No final planning consent for network and/or energy centre

No development possible

Low likelihood since heat networks will provide value and would presumably be promoted by the council and university, although some objections should be anticipated

4 1 4 1. Develop solution that is sensitive to likely objections 2. Effective stakeholder engagement and build support for project with clear case for development


Archaeological excavations prolong construction of network

Delays leading to reduced revenues and increased costs for construction and archaeological appraisal

Some anticipated 2 2 4 1. Works closely with council archaeology experts 2. identify existing underground tunnels with university 3. link in with other construction projects





Report Ends


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Primary risk type


Mitigation

2 Demand Mild weather/climate

Energy demand is lower than predicted in specific years

Increasing annual average temperature expected due to climate change

1 3 3 1. Conservative heat modelling on CIBSE ref yr which reflects average to low HDD in Oxford (observing the temperature of last 5 yrs) has been carried out 2. Annual variance with see positive and negative impacts year on year so cash balance impacts should mitigated

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