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Why heat zones can unlock opportunities for Sheffield to decarbonise

Sheffield is expanding its district heating network, providing low-carbon, cost-effective heat to businesses and communities across the city.

By Lauren Hurrell

South Yorkshire is making bold steps towards a cleaner energy future. Indeed, the South Yorkshire Mayoral Combined Authority is committed to achieving net-zero carbon emissions in the region by 2040, ten years ahead of the UK government’s target. 

Heat decarbonisation has a critical role to play in hitting that target. This means it will be imperative for local businesses and communities to engage and collaborate with local councils and energy enterprises to navigate connecting to heat zones and, where applicable, take a whole-building approach to reduce heat emissions. From 2025, the Sheffield heat zones will be implemented under the Energy Act 2023, which will see businesses and public sector buildings mandated to connect to district heating networks within the city. This will also include a requirement for businesses with waste heat to supply district heating networks, and operators of these networks are to be regulated by Ofgem.

E.ON, one of the incumbent network operators in the city will already be expanding their existing district heating network through circa 10km of new pipework, providing low-carbon heat from a centralised source to reach thousands more homes and businesses. Connecting to a low-carbon heat source allows local businesses and households to save fuel costs while simultaneously reducing carbon emissions on their path towards net zero. However, some businesses face greater challenges due to perceived costs and operational transformation required in pursuing an ambitious net-zero strategy.

With opportunities for funding and grants opening access to heat zones – including the UK Research and Innovation Fund, Knowledge Transfer Partnerships such as Liberty to Innovate UK, and the Green Heat Network Fund – enterprises and local governing bodies are helping businesses to access the wide-ranging benefits that district heating has to offer. To make this possible, E.ON Energy is partnering with renewable energy and decarbonisation experts Nordic Energy, Sheffield City Council, Sheffield Teaching Hospitals NHS Foundation Trust and the University of Sheffield to maximise benefits for the city with a huge community impact, from creating jobs to shaping a greener city. Much of this work surrounds education, engagement, local manufacturing, jobs and skills development, and the development of the local supply chain.

“E.ON is looking to significantly expand its heat network over the next 20 years to serve customers across a larger area of the city, and Nordic Energy is helping E.ON through the creation of 3D interactive models,” explains Mark Woodward, director at Nordic Energy. “These present highly complex and detailed information in an accessible way, useful for communicating with diverse stakeholders from heat network technical experts to interested members of the public.”

“Whether or not a business has a clear roadmap and strategy to decarbonise, an understanding of the costs of transitioning, the technology or the capex required to install it to the operational costs themselves, are often some of the roadblocks hindering businesses from decarbonising,” says Dr Jean-Michel Bellas, strategic relationship manager at E.ON Energy.

Most businesses are likely to be on an electricity and gas tariff with an energy supplier, with a fixed contract in place or a contract for a set period that will expire and then require renegotiation. However, prices have increased, impacting their operational viability as a business. In some cases, the increase may be significant, further impacting their supply chain, which could obstruct their ability to have what they need to decarbonise. This is a concern not only for businesses but for South Yorkshire and beyond.

“Businesses need to understand how to measure the impact of transformative change towards net zero and what it means for them as a business,” says Bellas. “They need to know how this can create value for them externally to their clients and wider stakeholders, and how it can help them continue to be successful in the years and decades to come.”

It is therefore essential that sustainability strategies are prioritised to ensure a successful transition. Decision-makers should have a clear roadmap and a thorough understanding of the costs associated with decarbonisation to guide their businesses towards a sustainable future.

E.ON is working with cities and councils across Yorkshire to deliver sustainable, low-carbon solutions. The Blackburn Meadows Biomass plant in Sheffield generates enough electricity for 69,000 homes while simultaneously recycling 200,000 tonnes (t) of UK waste wood each year, that would have gone to landfill sites due to contaminations with paints and resins. The wood is processed on-site and combusted in a fluidised bed process, generating steam, and driving a turbine to generate energy taken to the grid. From that, otherwise wasted heat is supplied along the distributed network of pipes in Sheffield’s heat zones to provide heating and hot water to homes and businesses in the network.

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“There are contaminants in the wood that cannot be entirely removed during processing, so there is a slight carbon factor associated with the heat produced, but the district heating system is still low carbon compared to alternatives,” says Bellas.

Heat zones in Sheffield also reduce carbon emissions by up to 65 per cent when compared with natural gas, providing low-carbon heat and hot water to local businesses, including IKEA UK, Sheffield Forgemasters, Ice Sheffield and Sheffield Arena.

“The UK government has reported a potential significant 30 per cent decrease in fuel bills with district heating compared to the current situation,” says Bellas.

“With district heating, communities can benefit from greater energy security, better control over pricing, with less risk from worldwide energy price volatility, creation and maintenance of jobs and improved environmental impacts,” adds Woodward.

There is also the opportunity for any waste or recoverable heat to be resold back to the network, minimising the need for individual boiler services, as service is supplied in Sheffield’s heat zone. Inside buildings, a thermostat-type system allows for straightforward control. While alternative low-carbon sources such as heat pumps may seem reasonable, the electrical upgrade costs and timing required for implementation are higher than those of district heating.

“Businesses are increasingly expected to demonstrate that they are transitioning away from fossil fuels – measured against an evaluated carbon baseline. Procurement opportunities are also restricted for businesses that are not transitioning,” says Woodward. “Heat networks offer the opportunity to provide stable pricing as the heating and cooling sources are local.”

“Heat network zoning will revolutionise the provision of heating and cooling in the UK as building owners will be mandated to connect to any available networks on the basis that this will be the lowest cost low-carbon solution for decarbonising heat,” says Woodward. “The government anticipates that the proportion of buildings served by heat networks will rise from 2 per cent to 18 per cent by 2050, resulting in an investment of around £60–80bn.”

“That investment in the UK’s heat networks will create up to 40,000 green jobs,” adds Bellas. “Around 500,000 households or businesses have been connected to heat networks since 2008. That will increase to around 5 million. From data centres to sewage treatment, the mandated connections will be any public sector buildings and any buildings where the heat demand is over 100MW hours.”

The expansion of district heating networks will require consistent communication with local communities and businesses, while decarbonisation strategies and funding are to be laid out to prepare the activity needed to build a greener future. While district heating will not only help to decarbonise heat, enterprises are helping to make low-carbon heat cost-effective, while also creating jobs and making supply chains more sustainable through local manufacturing and public realm improvements. This will only increase as E.ON looks to expand its district heating networks through Yorkshire and beyond.

“If we’re going to dig up roads to expand district heating, what else can we do? If a city needs to upgrade drainage or sewers, that can be done while also implementing cycleways, pavements and greenery to make it safer and healthier,” says Bellas. “It’s a collective approach from multiple different organisations and creating that partnership, not just to tick a box, but to make a fundamental change.”

Learn more about how E.ON is helping accelerate Yorkshire’s journey to net zero.

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