What was the aim of the work?
Dumfries and Galloway Council wanted to understand if it were technically and financially viable to build a heat network in Cargenbridge to deliver carbon savings and provide heat at affordable prices. Through detailed analysis of heat loads and financial calculations, Natural Power advised the council on how a potential scheme could deliver on their objectives.
What was the outcome?
The study at Cargenbridge helped inform the council’s strategy for heat networks at a regional level. It increased their understanding of how to approach heat network development.
Detailed discussions with potential heat consumers of the network determined that although the heat network met technical and commercial hurdles, it was not a viable option. This was due to key heat consumers already having taken strategic decisions on their future low carbon heat supply.
This highlighted the value of our approach to involving the heat consumers early in the feasibility assessment of heat networks. The council decided not to progress with the project at this point in time.
What did Natural Power do to get this result?
Natural Power produced techno-economic study investigating the viability of a heat network in Cargenbridge. The network was to supply a mixture of private and public buildings.
We calculated heat demand profiles using heat demand data from the council; actual data from existing building owners and occupiers; and forecast data, which we estimated using industry benchmarks. This allowed us to determine how big the plant needed to be to meet these heat demands.
We produced a heat network layout drawing, and it showed pipework routes and a phased building connection programme. The pipework layout design took into account local physical constraints, including roads, buildings and existing services. The layout also aimed to minimise network length and maximise linear heat density. We conducted an initial appraisal of the connectability of the proposed buildings and presented assumptions for physical connection requirements and operating temperatures.
We conducted a financial assessment using an industry leading energy modelling tool (energyPRO). The 20-year model estimated capital costs and annual operating costs and revenue streams. We analysed the scheme using a discounted (NPV) cash flow model incorporating the council’s cost of capital, and we determined the internal rate of return (IRR). The sensitivity analysis carried out on key project variables determined the impact on IRR and net present value (NPV).
We estimated the annual carbon savings versus business as usual using UK Government emission factors. We advised on how the planning system both supported and regulated the project. This particularly took into account gaseous emissions into the atmosphere.
By producing detailed risk register, we categorised and scored risks according to how likely they were to occur and the severity of their impact. This provided recommendations on how to mitigate risks. These risks were then re-scored assuming the proposed mitigation measures were put in place.
