Heat pump bid in trouble as funding put in danger by slipping project deadlines.
Growing opposition to the River Tay Heat Pump District Heating Scheme risks derailing the most promising initiative of its kind and dashing the hopes of local residents and businesses who would benefit from its success. The scheme would provide cheap, green heating to homes in one of the most deprived areas of Perth, but recent calls to put the health of the council’s balance sheet ahead of the health of our planet and our children’s future are casting doubt over its viability.
The scheme has been unanimously backed by Councillors in Perth & Kinross. Councillor John Kellas summed up the mood when he said: “We in Perth and Kinross have an opportunity with this scheme to lead the field.” A sentiment shared by all of his fellow councillors.
The Perth City River Tay Heat Pump is an ambitious project that aims to show that water source heat pumps are a viable proposition, even in a river such as the Tay that is ecologically sensitive and is designated as a Special Area of Conservation. If successful, it will generate renewable energy that will supply heat to premises alongside the river, including Council Offices and residential properties, via a District Heating Network.
The proposal includes the possibility for natural gas to be used by auxiliary boilers so that the heat obtained from the river can be topped up when demand is very high, such as might be the case in the depths of winter. The scheme also includes thermal stores that will keep excess heat from the heat pumps when demand is low and allow this to be made available when needed later.
The scheme will provide affordable heat to many homes in Perth and allow technological expertise to be developed locally, which will boost the economy and allow us to export skills from the Perth area.
Speaking earlier this year after he and his colleagues at Perth and Kinross Council’s strategic policy & resources committee had given their backing to the £8.2 million pound project, Council leader Ian Miller said: “This is a hugely important paper. Investing in key infrastructure is one way that our council can support our residents, local economy and business sector.” Councillor Miller went on to say: “This report provides a really good example of how this council can be ambitious and innovative in addressing economic, social and environmental challenges. This scheme will boost local enterprise, reduce fuel poverty and reduce carbon emissions.”
According to Vice-convener Alan Grant, similar projects are already operating well in other countries in Europe, including Italy and Norway. A more detailed business case will be discussed by councillors at a future date.
Scottish Government has already awarded funding of £2 million from the Local Energy Challenge Fund and PKC will be looking into other funding sources to ensure all the money is available by the end of 2016. The expectation is that the loans will be repaid using money from the distribution of heat through what will be the largest project of this type in the UK and links with the 300 panel solar park in the north of Perth.
Background – Tay Eco Valley
The scheme was developed for a number of compelling reasons, including to meet the strategic aims of the Tay Eco-Valley, which are as follows.
- To promote the Tay Eco Valley, which it is hoped will become a major focus of expertise and a hub for environmental innovation.
- To generate discussion about novel solutions to the sustainability problem, and to serve as a fillip for environmental innovation and business growth.
- To provide clear opportunities for supporting businesses to grow, for example finance, construction and so on.
- To serve as a powerful demonstration of the opportunities that such projects offer for the growth of local businesses.
- To increase collaboration between the public, private and community sectors on eco-innovation in the Eco-Valley area.
- To help improve local skills and training to help deliver eco-innovation.
The Tay WSHP will help to meet the strategic aims of the eco valley in a number of ways. In particular, it will reduce carbon impacts from energy consumption and production, promote the development of clean technologies and serve to demonstrate environmental technologies.
The objectives of the WSHP scheme are as follows.
- To use the water heat pumps as a source of renewable energy from the River Tay without damaging the sensitive ecology.
- Create a district heating network to supply affordable heat to 4 business plots, 211 social housing and 2 Council buildings (a Daycare Home and a Primary School).
- Installation of a solar farm that will generate electricity to be distributed via a private network.
- Boost local enterprise, mitigate fuel poverty and reduce carbon dioxide emissions from heating.
- Put Perth City on the map, as part of the Tay Eco-Valley as a UK and European leader in eco-innovation.
- Provide a blueprint for other similar projects that can be used elsewhere.
The overall cost of the project is estimated at £8.2M and includes the cost of an energy centre and innovation hub, which will be housed on the Perth Food & Drink Park. The building will allow for the sharing of facilities such as back-office staff, conference rooms etc and will promote resource efficiency in the food and drink sector. The costs for the building will be around £4.5M.
The heat network itself will include 2.3km of pipework and associated infrastructure. The network will connect four plots incorporating 5 small business units and the Food and Drink Park, 211 houses and North Muirton Primary School. It is expected to cost £2.3M in total.
Other costs, relating to planning, project management, professional fees and contingency are likely to total £1.4M.
Part of the above costs will be met by the Local Energy Challenge Fund, which will go towards the heat pipe network.
Some figures taken from the heat and the city website:
- 2MW Water Heat Pump to provide 4MWh heat load and cooling
- 75Kwh solar farm (300 panels)
- 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 https://www.theade.co.uk/10-million-to-support-community-energy_3902.html
- £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
The costs are being met, in part, by the successful bid placed by the Council for funding from the Local Energy Challenge Fund. The Local Energy Challenge Fund was set up in August 2014 to help promote local low carbon energy initiatives. Its chief aim is to help big, low carbon projects that can show strong local energy economy approaches linking local energy generation and use.
It is expected that the scheme will promote a busy and growing economy, helping businesses to reduce their carbon footprints, improve their green qualifications whilst bringing increased employment and real eco-innovation to the area. Jobs will be created on the Food and Drink Park and in the surrounding area through supporting businesses. Making available low-cost heat to homes and businesses in North Muirton and Muirton, the water source heat pump and district heat network will provide greater impetus to the local economy, lower fuel poverty rates and help to minimise carbon dioxide emissions from heating.
The benefits of the scheme include reducing fuel poverty in a particularly deprived area of Scotland. This will be achieved through the expected reduction in bills brought about by the district heating network. The savings are expected to be of the order of £46,000 per year. It is expected that approximately £200/year will be saved by households currently using electricity to heat their homes and around £100/year for those using gas.
Carbon emissions will see a reduction of 450 tonnes per year of carbon dioxide.
Food and Drinks businesses will be brought to the Food & Drink Park where they can use the lower cost heat and electricity from the renewable energy systems. This will give them lower heating and electricity bills, improve their eco-friendly status and encourage resource efficiency in the Food and Drink Sector as a whole. All of this will be promoted using the innovation hub on the park.
Education benefits from involvement of local schools, such as North Muirton Primary School as part of the curriculum for excellence.
Speaking about the benefits of the scheme, Councillor Alan Grant, Vice-Convener of the Strategic Policy & Resources Committee, said: “The River Tay Heat Pump and District Heating Project allows us to tap into the immense power of the river in a way which will not harm wildlife, but will provide a source of renewable energy and access to cheaper heating to reduce fuel poverty in the north of Perth and help attract more food & drink related businesses to Perth on the basis of lower energy costs.”
He also went on to say: “The project will also be used as a model for the roll-out of similar schemes across the region, and potentially across Scotland. Together with the solar farm at Perth Food & Drink Park, this project demonstrates the exciting potential of Perth City as we continue to innovate for the future, and in doing so create higher-value, higher-skilled jobs.”
The solar farm was scheduled to be finished in March 2016 and was the first part of the project to be built. It comprises 300 panels and has been built on a section of the Food and Drink Park that would be unfavourable for other types of development.
The combined earnings from the heat pump and electricity from the farm are expected to be around £10,000 per year for a period of 20 years. This will help to support the running costs of the park.
The Energy Centre and Innovation Hub and accompanying network should have finances in place by June 2017 and be operational by early 2018.
Future expansion plans include taking the network out towards Gowans Terrace and linking in Perth Grammar School, North Inch Campus, Caledonian Social Housing and other Council buildings. Eventually the scheme could be linked in with other schemes in the area and would bring it to the same sort of scale as those already being run in Europe.
Once the project becomes well-known, it is expected that it will become a showpiece for the Tay Eco-Valley, which will in turn generate investment from outside the area.
Hopefully the difficulties over the project timescales slipping, and the likelihood that the important funding deadline in March 2018 will be missed, can be overcome. The council is expected to re-apply for the money in the next funding round. If that later bid is successful, we can all look forward to Perth and its surrounding area not only becoming that little bit greener, but also leading the high-tech revolution that is being driven by the need to innovate to meet our climate change targets in 2020.