This is JUST the costs of the pipeline from a power station and conversion of the power station. The cost of connecting it to a building should be in the domestic and commercial heating technology sections.
Sources and Method
The DECC report on district heating costs done by AECOM has £119/kWp for a 200MW 15km pipeline. That would be £24m for such a pipe.
Assume that all power stations are connected by 15km 200MW pipes. For low, assume the AECOM cost. For high, assume double. For "Default", assume 35th centile between these low and high costs. Assume operating cost is 1% of capital cost. Assume that the pipes last 30 years and model that life as implying that 1/6 of all capital must be replaced in any five year period. Assume that the peak heat to average demand ratio is 4.1 (roughly the 2007 value calculated in the balancing section in 2050).
Worries & Tests
- The AECOM report has some pumping energy and transmission loses. Do we account for these somewhere?
- Have we really incorporated the connection costs in the heating sheets?
- Is there a significant cost to attaching the pipe to the power station (beyond the conventional power station costs?)
- Is there another source for this cost analysis? e.g., Danish experience?
All the calculations for final cost estimates appear correct and consistent with other sectors.
From a quick scan of the literature, the heating network appears to be the main cost driver, although the other main costs of heat converters and heat storage to deal with varying demand appear to be material capital costs.
When comparing to Denmark, it raises the issue that most of the plants are dedicated large CHP plants rather than converted power stations. Therefore, it may be more appropriate to model the capital costs as the cost of the heat distribution plus the capital costs of CHP (see Domestic space heating and hot water costs). This could form the high cost estimate. It may then be appropriate in this iteration to up-rate CHP costs for community scale in comparison to district scale.
The low cost estimate would be the cost of converting existing plants. It would be useful to find out from someone in industry or policy advisor where this has occurred and to provide a cost estimate. This may prove immaterial but the cost of storing heat is likely to be a significant additional capital cost.
Converting existing power stations is unlikely to occur. Heat networks take many years to build and to develop the heat load. In addition the amount of heat produced from existing thermal plant is very large and incompatible with most heat loads. They may be a few examples whereby an existing power plant is located near a heat network but the only one I can think of is Barking. The most likely development for heat networks is through small heat systems connected by appropriately matched heat sources (gas engine CHP, biomass CHP, large heat pumps). With interconnection these systems may achieve a critical mass whereby the connection of large heat sources may become viable.
Heat storage is mainly required to provide top-up and security. Hence if a system is sized to meet peak demand with a margin for security then storage should reduce investment cost. Storage also offers the potential benefit of demand side participation (with electric heating) and so could be beneficial to help manage intermittency.
Summary of suggested changes:
- Make high cost equal to cost of heating network plus capital investment of dedicated district level CHP plants, either from Markal or if possible Danish estimates (Issue: Calculator doesn't account for electricity produced)
- Add heat storage costs to investment cost, although will this be covered in the stress test?
- Check with colleagues where power plants have been converted to share heat and whether the cost of conversion is a significant capital investment