What next for Ground Sourced Energy 'renewable' technology?

Ground sourced energy - How does it work?

Ground sourced energy systems exploit the natural temperature difference between the ground or water, and a home or building, in order to meet heating and cooling demands. Through coupling to a heat pump, compression or expansion is used to provide either heating or cooling. When connecting to ground or groundwater, this is referred to as closed and open loop, respectively. In the UK, these systems are mainly used for domestic heating, although in urban areas the use is more for commercial operations where cooling systems are more common.

Across Europe there has been a steady uptake of ground sourced energy systems. Sweden has led the way, retro-fitting existing housing stock and building new developments.

The UK market

The UK has seen a bumpy road for the ground sourced energy market over the last decade. Predictions during the 2000s indicated this energy source could form an integral part – around 20% – of UK renewable energy generation. In 2008 there was a 100% growth in the ground sourced energy market¹ although it still formed less than 1% of the entire renewables market. The introduction of the Renewable Heat incentive in 2011 was predicted to drive growth in uptake, but fast forward to 2016 and it still only accounts for 1% of the entire renewables market and not the revised downward figure of 6%². So why hasn’t it gained a greater market share and helped the UK to meet its renewables target?

Let's take a look...

1. The Financial Crash

   The financial crisis slowed commercial and housing developments down, the main market for ground sourced energy. A recovery in use would have been expected with the economic upturn and government statistics appeared to support this, with a renaissance observed in 2015 when installation of large open loop commercial schemes increased by 200% and 44 MW of capacity were added.

   However, the first half of 2016 has shown a significant slowdown with only an additional 4 MW of capacity added. This indicates other barriers to the deployment of this renewable technology such as space, licencing and technology incompatibilities.

2. The Upward Build

   With urban environments constrained in terms of space and land prices, new developments are predominantly skywards on small plots. Small development plots pose a challenge for open loop systems (which deliver greater energy) due to the risk of thermal breakthrough from unbalanced systems, a risk which is further increased in fractured rocks.  With turnover of real estate investment portfolios approximately three to five years, the high capital cost and low return on investment means ground sourced energy schemes are less attractive to developers.

3. The Permit

   The first-come-first served nature of licensing, length of process of obtaining consent and the potential for interference between schemes also poses a challenge to deploying new schemes. Regulations such as these are likely to be a major factor in the lower than anticipated uptake of the ground sourced energy schemes for new developments.

4. The House Style

Compared to other European countries, the UK has low deployment of retro-fitting the ground sourced energy technology. This is primarily due to the cost and compatibility between the ground sourced energy technology, which favours low temperature distribution (e.g. under floor heating), and existing high temperature distribution (e.g. radiators). Underfloor heating is better suited to concrete floor types, which represents about 60% of the UK housing stock, 25% of which is either privately rented or social housing. Arguably, for these individual housing owners, there is little incentive to spend money on retro-fitting ground sourced energy schemes.

Where does that leave the UK market?

Leaving aside effectiveness of the renewable heat incentive, the future of ground sourced energy schemes may exist in:

• the retro-fitting of social housing (17% of UK housing stock)
• industrial settings where longer investment cycles are considered
• a more district scale either through site-wide development or collaboration between developers.

Opportunities offered by more district types of scheme appear to be where the focus needs to move if the UK is to meet its carbon reduction targets. A recent DECC study³ shows that integrating ground sourced energy schemes into a district system could offer a large reduction in CO₂ emissions of approximately 50% of other district heating systems, such as gas-combined heat and power (CHP). 

With all factors considered, an optimal approach for the UK to meet its renewable targets is a mixed energy source incorporating both ground sourced energy with CHP.

References