News analysis with BESA


Key to heat network growth


BESA members can play a major part in the low carbon revolution that is driving expansion of UK district heating networks, according to one of the Association’s newest members


R


ichard Johnson, managing director of Northamptonshire-based Eneteq Services, believes the community heating market is


poised for rapid expansion and that suitably qualified contractors will be vital to this potentially highly lucrative sector. Richard, along with his business partner Colin


Taylor, left the construction firm Galliford Try in 2012 to set up Eneteq as an Energy Services Company (ESCO) and designer, installer and commissioning specialist for district heating networks. The company started trading in October 2013 and


has grown rapidly to £3.5m turnover with a staff of 25. Richard and Colin are the majority shareholders, but have formed a partnership with the Swedish pre-insulated pipework supplier Powerpipe, who have a minority equity stake. Eneteq staff spend up to six weeks working in


Sweden with Powerpipe’s installation teams gaining first-hand experience of the highly mature Swedish district heating market. Most major cities across Scandinavia rely on community schemes – almost 100% of residents in Gothenburg and Stockholm receive their heating from local authority owned systems, for example.


Scandinavian The company believes the UK should try to emulate the Scandinavian approach, but Richard says there are a number of problems that need to be overcome first. “There is a serious quality issue with UK networks,” he says. “Very few schemes are being designed properly – and even where the design is right the installation is usually wrong. In fact, I have still not seen one heat network in the UK where both of those things are right.” Joining BESA is a big part of his company’s strategy


to raise awareness and drive up technical standards. “We are already well connected with large energy


The Heat Networks Investment Project (HNIP) will


be rolled out over five years and is backed by the department for Business, Energy and Industrial Strategy (BEIS), which says networks could reduce heating costs – in some cases by more than 30% – by recycling waste heat from factories, power stations and even the London Underground as well as CHP and biomass schemes. Minister of State for Energy, Baroness Neville-


Rolfe said the scheme would both reduce carbon emissions and “bring [heating] bills down for people across the country”. More details of the finance packages are available at: hnip.salixfinance.co.uk However, Richard believes the sector’s technical


companies like E.ON and Veolia, who invest in the infrastructure and own and operate the networks. It is among specialist contractors that we want to raise our profile and improve collaboration because they are the key to driving expansion of district heating and improving performance,” says Richard. “Having consulted widely, it was clear that BESA was the best organisation for us to join. It gives us professional credibility [because membership has to be earned through the Competence Assessment Scheme (CAS)], as well as the opportunity to work with companies who make the m&e connections between heat networks and individual buildings/consumers.” The Government has committed £320m to a fund aimed at helping local authorities develop and build heat networks providing low carbon and recycled heat, which is already providing a massive boost to a market expected to grow beyond £2bn in value during the 2020s.


shortcomings will have to be addressed if this strat- egy is to pay off. “The mind-set is often wrong because companies just focus on how quickly and cheaply they can get the pipes into the ground,” he explains. “This undermines the whole basis of a heat network, which needs to operate for 40 to 50 years and is completely dependent on the infrastructure remaining robust and effective for all of that period. “If there are any problems with the installation, the network will underperform and long-term costs will rise.”


Healthy BESA technical director Tim Rook also points out that government funding is dependent on striking a balance between initial capital expenditure and the long-term revenues produced by the network. Within this there are compet- ing short and


 February 2017


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