Heat pump project pulls out of heat network competition

Star Renewable Energy has said it will no longer participate in phase two of the Department of Energy and Climate Change’s (Decc’s) heat network innovation competition, having been “unable to bring the project plan to a viable point”.

The firm’s director David Pearson told Utility Week that its project would not move forward as other sources of heat being planned for the network, such as harvesting heat from the London Underground, were “viewed by others” as being likely to receive the renewable heat incentive (RHI), making them lower in cost.

Therefore, the projected demand from the canal/data centre project was “between 40 per cent and 60 per cent of that originally conceived”.

“Unfortunately in the final commercial analysis and due diligence, Star Renewable Energy has been unable to bring the project plan to a viable point and has withdrawn from the tender,” he said. “Subsequently we have also advised Decc that none of the phase two monies will be drawn down.”

The aim of the project was to recover waste heat from a large data centre and extract heat from the Regents Canal, both utilising heat pump technology, to supply heat to the Bunhill heat network in Islington.

Pearson said having to turn down the government support was a “bitter disappointment”, as the “fundamental need” for London to find cleaner, cheaper heat than can be provided by gas, gas combined heat and power (CHP) or biomass has “never been more pressing”.

“Large heat pumps would have acted to balance the grid, an increasingly pertinent capability,” he said. “We have proven 90°C heat from rivers in Norway; we need to prove it now in London.”

He added: “Ultimately, this project does prove something; change isn’t going to be easy and so if nothing it demonstrates exactly why the government has to keep a firm hand on the tiller of the heat pump RHI. It must layout another four years with a view to a permanent encouragement to define better projects. How else will they hit the renewable heat targets?

“Other project risks can be removed as well. An inability to pre-qualify for the RHI for large heat pump projects, when large biomass, large biogas or even large geothermal solutions can, unsettles the investors’ nerves. It is an oversight that needs to be fixed.”

Star was one of nine developers of innovation projects awarded funding in phase two of Decc’s heat network innovation competition, which began testing their technology last month. The aim of projects is to improve the performance of heat networks and encourage greater uptake of renewable heat sources.