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Thursday 17 August 2017
17 August 2017 - NEWS UPDATE
Community Energy

London low-carbon heating project ditched over subsidy concerns

A pioneering project to deliver low-carbon heat to the London borough of Islington has been ditched after the renewable energy company heading the scheme pulled out blaming a lack of Government support.




In the wake of plans to abolish subsidies to the wind and solar electricity production sector, Star Renewable Energy is now urging Energy Ministers to leave heat pump funding for heating technology unscathed while the technology becomes understood.

David Pearson, Director at Star Renewable Energy, has told how he fears the technology - which is used to draw warmth from the ground, air, rivers, lakes and the sea - "may die before it had a chance" if much needed subsidies are withdrawn on the cusp of the renewable heat revolution.

More than 50% of the energy we use in the UK, does not come from wind turbines and solar panels as electricity, but in the form of heat.

With only 1% of the expected renewable heat uptake being achieved with heat pumps, funding is essential to promote the acceptance and introduction of large scale heat pumps in the UK market.

Star Renewable Energy has delivered over 30MW of renewable heating around Europe and has been named among the companies putting Scotland at the forefront of low-carbon innovation in foreign markets - but the technology is still far from becoming understood in the UK.

As Prof Paul Younger at Glasgow University said, "As it is so often the case, other countries saw the light earlier than us, and heat-pump technology built on the Clyde is now heating other European cities by extracting thermal energy from rivers. Meanwhile our rivers flow by, delivering their renewable thermal content to the open ocean unused while so many people in the UK cannot afford to heat their homes."

While the Government has not yet confirmed that it will be targeting the Renewable Heat Incentive, through which this exciting technology is supported, it has not mentioned any plans to extend the subsidy beyond March 2016.

This lack of subsidy clarity around the future of the RHI has been a factor in Star Renewable Energy withdrawing from a key project - losing out on £1 million of support from the Department of Energy and Climate Change.

Developed to demonstrate the viability of harvesting heat from surface water while simultaneously selling cooling, the project, in Islington, north London, would have marked a new era of sustainability for homes and businesses around the Regents Canal area. The water heat pump was expected to supply cheaper, more eco-friendly heating locally. Drawing on heat from the local Regent's canal, the Islington water source heat pump project would have simultaneously warm local homes and businesses, as well as cool a local data centre server room.

Star Renewable Energy was on-track to lead Phase 2 of the project, but with potential heat pump funding cuts on the horizon we have been forced to withdraw from the tender as commissioning beyond March 2016 would have resulted in no RHI application.

David Pearson, Director at Star Renewable Energy says, "The teams at DECC and the Heat Network Delivery Unit should be commended, and the vision of the Borough of Islington recognised as well. We walked away from £1million in support and that was a bitter disappointment especially given the hard work done by the team including specialist consultants Phil Jones and Chris Dunham whose work had shown lower cost, lower carbon and zero local emissions. Ultimately we were unsure of the continuance of the RHI and this was a factor in our withdrawn."

While the tender withdrawal is a major disappointment for Star Renewable Energy, the incident has inspired the company to continue advocating for change. It highlights the need for the government to layout another four years of Renewable Heat Incentives as well as remove project risks such as the inability to pre-qualify for funding.
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