ADD2197 The case for heat pumps in London’s new developments

Type of decision: 
Assistant Director's decision
Code: 
ADD2197
Date signed: 
06 February 2018
Decision by: 
Patrick Feehily, Assistant Director, Environment

Executive summary

Recent research commissioned and published by the GLA as part of the London Plan evidence base has highlighted that the continued decarbonisation of the national electricity grid may increasingly favour the use of heat pumps to meet the London Plan onsite carbon reduction targets. This would significantly impact the existing trend of specifying gas engine Combined Heat Power (CHP) technologies to meet the equivalent carbon target. The research also suggests that this tipping point between technology choice may be triggered by the adoption of 2019 emission factors for carbon reporting.

The GLA wish to establish the effect of adopting 2019 emission factors on the deployment of heat pumps, the cost and carbon impact for various heat pump configurations and impact on London’s supply chain, development industry and building users.

Decision

That the Assistant Director of Environment approves expenditure of up to £20,000 for the procurement and appointment of consultants to support the GLA’s work in determining whether the supply chain and business case exists in London to allow for the transition to heat pumps. This will inform the decision as to whether we use updated carbon emission factors, or wait until government does this at a national level.

Part 1: Non-confidential facts and advice

Introduction and background

In recent years, national Building Regulations (last published in 2013) have become increasingly outdated in relation to estimating the carbon emissions associated with buildings, in particular the carbon content of grid supplied electricity. The UK electricity grid has become significantly lower carbon in the four years since Building Regulations were last published. This is as a result of increased gas and reduced coal generation due to their relative fuel prices and rapid increase in renewable energy supply.

Following a consultation in 2016, the Government announced changes to the Standard Assessment Procedure (SAP). SAP is the tool used to measure the energy use and carbon emissions of new homes against the target set in the Building Regulations. A key part of this change will be updates to the emission factors associated with energy use to reflect the continuing decarbonisation of the electricity grid. These changes are likely to have an influence on decisions in selecting energy systems and technologies to meet carbon targets.

In summer 2017 the GLA commissioned Buro Happold to produce a report, “The future role of the London Plan in the delivery of area-wide district heating” to examine the impact of using updated emission factors on the energy systems and technologies that developers would propose in the energy strategies produced as part of planning applications. The report concluded that:

• As the national electricity grid decarbonises, the carbon benefit of gas Combined Heat Power (CHP) (the most commonly proposed technology in energy strategies currently) diminishes as gas becomes more carbon intensive relative to grid electricity
• Using 2019 carbon emission factors, gas engine CHP is expected to provide less carbon savings over its lifetime and, as such, will not sufficiently help London meet its carbon targets.
• Heat pump technologies, which are not currently commonly proposed, show increasingly greater carbon savings with future grid emissions factors and will meet our carbon targets.

In November 2017, the Government responded to the consultation stating that new greenhouse gas emission factors will be included in the next Building Regulations update; however the timeline for this is currently uncertain. In light of this uncertainty, we want to explore whether London can adopt updated emission factors before government to avoid locking in carbon intensive development long-term and support delivery of the Mayor’s aim for London to be zero carbon by 2050. A key part of this is whether London is ready for the shift to new low carbon technologies, in particular heat pumps.

Objectives and expected outcomes

The objective of this work is to establish whether the shift to heat pumps in London is technically and economically viable, whether the supply chain exists to support this shift as well as the impact on consumers’ energy bills. This will involve:

Heat pump market review

1. A summary of existing heat pump studies and the effectiveness of delivery programmes (including relevant stakeholder interviews).
2. A review of the existing heat pump market and supply chain in London, its ability to scale and the impact on the existing heating system market for new developments.
3. A review of consumer feedback and design versus operational and economic performance of existing air source, ground source and hybrid heat pump systems in new build developments in an urban setting.
Impact of heat pump deployment of London Plan developments
4. A review of the carbon impacts of air source, secondary heat source and hybrid heat pumps systems for a number of typical development case studies, considering district heating integrated systems where specified within heat network priority areas.
5. A review of the various costs (capex, opex and local grid reinforcement) and who they fall on (developers, consumers, network operators etc) for air source, secondary heat source and hybrid heat pumps when compared to traditional new build heating systems such as gas engine CHP and gas boilers.
6. Assessment of the impact of rapid heat pump deployment on noise, visual impact and use of refrigerants with a global warming potential.
7. Assessment of likely air quality impacts associated with hybrid systems, when installed in areas exceeding legal limits. Consideration of regulation required to limit any adverse impacts in related areas.

The expected outcome is an evidence base that will be used to inform our decision on whether to use updated emission factors in the planning process (through a revised Energy Guidance document). This will influence the decisions developers take to meet our carbon targets, better reflecting real-world emissions and supporting our carbon targets.

Equality comments

The evaluation process will be conducted to ensure that submissions are evaluated fairly to select the offer that provides the relevant experience and offers value for money.

Other considerations
  1. Key risks and issues

 

Risk/issue

Mitigating actions

  1. Insufficient evidence to support the move to use new emission factors resulting in criticism from industry for continuing to use outdated emission factors.
  • Supplement this consultancy work with stakeholder engagement activities with developers, boroughs, NGOs to support the evidence base and the final decision on whether new emission factors are used.

 

  • Continued engagement with government on the importance of updating emission factors within Building Regulations.

 

  • If current emission factors are maintained, clear communications with industry on the reasons why to be set out.
  1. Evidence base supports the move to using updated emission factors but this creates confusion in industry as it diverges from national approach.
  • Clear communications strategy produced, with user-friendly guidance explaining the methodology to be used
  • An implementation period allowing time for industry to adjust.

 

  1. Evidence base supports the move to using updated emission factors but boroughs lack resource to implement the changes.
  • Additional training workshops for boroughs to explain the methodology.
  • Clear guidance produced.

 

 

 

b) This works links the Mayor’s Environment Strategy, new draft London Plan energy policies and the ambition for London to be zero carbon by 2050.

Financial comments

Assistant Director’s approval is sought for expenditure up to £20,000 for the procurement and appointment of consultants to support the GLA’s work in determining whether the supply chain and business case exists in London to allow for the transition to heat pumps. This will be funded from Environment’s 2017-18 Supply Chain budget and is expected to be delivered by the end of 2017-18.

Activity table

Activity

Timeline

Release invitation to tender / Award contract

February 2018

Inception meeting

February 2018

Draft report

March 2018

Review meeting

March 2018

Final deliverables

April 2018