using heat pumps for heat networksPerth City River Tay Heat Pump and District

Heating Network &Solar Farm

Graham EssonHNPS, Grangemouth29 April 2017

OverviewProject origins

The Place

Partnership

The approach

Some thoughts

Tay eco-valleyStrategic aims:aPromote the Tay Eco-Valley as a significant cluster and centre of excellence

for Eco-innovation.aCreate opportunities for business growth through demonstrator projectsaPromote and signpost businesses to support services, finance and mentoring

opportunitiesaProvide a leading edge networking forum for debate and discussion for the

generation of novel solutions in Eco-innovation as a stimulus to entrepreneurial growth

aPromote and facilitate access to skills and training to support Eco-innovationaPromote collaboration between businesses, academia, the public and

community sectors on Eco-innovation in the Tay Eco-Valley

Drivers - Environment§ Climate change – reduce carbon impactsfrom agriculture /waste / energy –sustainable consumption and production.§ Deeper resource recovery – Zero Waste/Circular economy.§ Improved energy from waste andrenewable energy solutions (waste heatuse).§ Improved soil improvers – organicsmanagement.§ Clean technology ‘space’ and support.

§ Environmental Education, Demonstrationand Training.

Eco Innovation Parks

§ § …planned spaces, often with an anchor tenant, to stimulate innovative interactions between businesses in material and energy use and as catalysts to the use and

§ development of clean technologies’…

5/18/16

Binn Farm: 2,000 acre agricultural estate with landfill site,Composting plant and general waste business:1. Integrated waste treatment and resource use and usingwaste to make products.2. Renewable energy: EfW (ACT), Wind, Micro-hydro, Woodpellet fuels, later - Bio-algal diesel (3rd/4th generation fueltechnologies).3. Sustainable food production (and other products) – polly-tunnels and

greenhouses.4. Incubator for emerging environmental technologies and an Education

and Training Centre.5. Driving sustainable and more self sufficient regional economies –

research

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12

EnergyMappingMethodology

Heating– CoolingNetworkstargetedusingspatialdata

• Anchorloads• Demandloads• Connectible buildings (denseheatdemands)• Existingandproposednetworks• Proximity toenergysupply• Offgasgridareas• Fuelpoverty• Council andSocialHousingdensity• Futuredemandloads(strategicsites, industrial parksetc.)• Wasteheat?

River Tay Heat Pump and District Heating NetworkSolar Farm

SolarFarm

Perth food and drink park

Perth food and drink park

The Group includes:ü aBinn-Eco Parkü aEnergy Skills Partnershipü aInterface Food & Drinkü aJames Hutton Instituteü aPerth College UHIü aPerth & Kinross Councilü aPerthshire Chamber of Commerceü aStagecoachü aScottish Enterpriseü aResource Efficient Scotland/Zero Waste Scotlandü aUniversity of Abertay Dundee

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18 May 2016

Perth and Kinross - Heat map

§ The project costs are estimated at £8.2m broken down as follows:§ - Energy Centre/Innovation Hub building and pumps (2MW) to be located§ within plot 9 at the Perth Food & Drink Park. It is also proposed that the§ building hosts an innovation Hub for the food and drink sector facilitating§ sharing of services/facilities (e.g. reception, offices, meeting rooms) and§ the promotion of resource efficiency in the food and drink sector. The§ costs are estimated at £4.5m.§ Heat network (2.3kms of pipe and related infrastructure) and individual§ heat interface units. The following buildings will be linked to the network:§ 4 plots including 5 small business units at the Food and Drink Park, 211§ residences and North Muirton Primary School. The costs are estimated§ at £2.3m.§ Development costs including contingency, planning and professional§ fees including project management. The costs are estimated at £1.4m.§ It is proposed to finance the scheme as follows:§ £2m from Local Energy Challenge Fund (secured in principle subject to§ due diligence and final negotiations) towards the cost of the heat pipe§ network.

18 May 2016

RiverTay RenewableHeatExchangeandNetwork

• Use water heat pumps to capture renewable energy from the ecologically sensitive River Tay without harming wildlife, and create a District Heating Network to supply affordable heat to 4 business plots, 211 social housing and 2 Council’s buildings (Day care home, Primary School).

• Solar Farm to produce electricity and be distributed through a private network

• This will help to boost local enterprise, reduce fuel poverty and reduce carbon dioxide emissions from heating.

• An innovative, replicable and transformational project which will help to establish Perth City and the Tay Eco-Valley as a leading Eco-innovation living lab in the UK and Europe.

ProgrammeDevelopmentMethodology

•Capacity Building

•Heat Mapping

•Policy Support

•Resourcing

Some figures:

• 2MW Water Heat Pump to provide 4MWh heat load and cooling• 75Kwh solar farm – 300 panels• 2.3km pipe network

• Total Solar Farm Costs: 95K funded from Commercial Property and Investment Programme generating income of around 10K per year over 20 years.

• Total Energy Centre/Innovation Hub and network costs: £8.2m• £2m from Local Energy Challenge Fund (in principle)• £1.4m from Council’s Commercial Property Investment Programme,

£0.2m from Council’s Housing Improvement Programme and £0.1 from commercial users

• £4.5m from borrowing to be paid from heat sales and Renewable Heat Incentive over 20 years

Benefits

• It will reduce fuel poverty in one of the most deprived areas in Scotland by reducing bills and control tariff -£46,700 annually. £200 per year from electric heating and £100 per year from gas heating for tenants.

• It will reduce carbon emission by 450 tonnes CO2 / year

• It will attract businesses to Food and Drink Park allowing them to access cheaper heat and electricity from renewable energy, boost their green credentials and promote resource efficiency in Food and Drink sector through innovation hub

Timeline & Progress

• Solar Farm: on site - work to be completed by 31st

March 2016• Energy Centre/Innovation Hub and network:

• Finance in place by June 2017• Development work completed by December 2016 • Construction to start Spring 2017• Completion by 31st March 2018.

• Governance and project team in place

River Tay Heat Pump and District Heating NetworkSolar farm

Next steps

- Create a legal entity to operate network and distribute heat after construction.

- Expand network towards Gowans Terrace to serve Perth Grammar School, North Inch Campus, other Council’s buildings, Caledonian social housing providing 12MWh heat. This would place Perth scheme at the same level as other schemes in Europe. This scheme could be linked to other schemes in Perth as part of Heat Master plan.

- Promote Perth City and Tay Eco-Valley as a living lab for low carbon heating innovation and attract inward investment.

Any Questions?

River Tay Heat Pump and District Heating NetworkSolar Farm

§ In July 2015, £20K was secured from the Local Energy Challenge Fund§ (phase 1 feasibility), matched by an additional £5k from Perth and Kinross§ Council to develop a more detailed business case.

18 May 2016

§ If all consents, finance and tenders are in place by December 2016, it is estimated that the construction phase will start in Spring 2017 and be completed by March 2018. In order to reduce risk in relation to potential environmental impact, a fresh water mussel survey was carried out and

§ concluded that the locations of the water abstraction and rejection points and the associated construction works will not have a detrimental impact. A strategy to achieve all consents within the timescale has been developed.

§ It is envisaged that a design, build and operate tender would be used to§ construct and operate the project infrastructure either as one contract or as§ two contracts (Energy Centre/River Interface and Heat pipe network). A§ procurement strategy has been developed. During the construction phase,

the Council will be the contracting authority. It is envisaged that a legal entity be established which could act as an Energy Service Company (ESCo) to take over the project when the project is commissioned (April 2018). The preferred option would be to develop a public-led model such as those developed in Aberdeen or Denmark which would ensure control of tariffs and therefore ensure that the main benefits of affordable heat are realised. Such a legal entity would also have the potential to develop and manage other energy projects using other technologies such as biomass, solar or hydrogen.

18 May 2016

§ It is proposed that a specific Project Board is established to oversee the§ construction phase. Given the magnitude of the Project and its complexity,

a dedicated Project Manager with relevant experience will be recruited and be supported by a Project Team and specialist advisers. Project Management costs have been built in the overall construction budget. Taking into account the timescale, the main infrastructure will be located at the Food & Drink Park, and funding of £1.4m is to be allocated through the CPIP, the CPIP Project Manager will lead the project until a dedicated Project Manager is recruited. The Project Board and team will liaise with key stakeholder groups including main beneficiaries such as tenants. There could also be an opportunity to develop an educational awareness project with North Muirton Primary School or local secondary schools, as part of the curriculum Development

18 May 2016

§ In parallel, an opportunity to develop a solar farm (300 panels – 75 KW) at the Food & Drink Park has emerged which could provide green and affordable power to business units, including those to be built by the Council. Due to the time limited nature of the opportunity linked to the incentive regime and to meet the commissioning target date of 31 March 2016, the Depute Chief Executive Environment (Sustainability, Strategic & Entrepreneurial Development) agreed to progress the project in line with the Council’s financial regulations with funding from the CPIP.

§ 2.10 The solar farm has been built at a cost of £95K. It will produce electricity which will be distributed through a private network. The farm will jointly work with the heat pump proposal. It is estimated that it could generate income of around 10K per year over 20 years to support maintenance and operational costs at the Park.

18 May 2016

Do you have any

questions?