UK DH economics – to be able to borrow at less than 6% for new assets thenDH needs to be run by a regulated monopolies
Edited Extract from a recent Claveton Exchange:
Some people’s insistence on and belief in, the term and world view summed up by “real UK political/business conditions” is IMHOP blinding them to the actual realities of economics and politics.
The UK govt, or any govt, can at a stroke, change the market rules to suit what it sees as the best long term view for UK PLC – witness the way it has dramatically reversed UK policy and even EU policy by giving an open ended guarantee to EDF for nuclear which has changed the market realities so that nuclear can be built in the UK.
Discussions on Claverton have made it incontrovertibly clear with written documents, that UK govt could easily, at a stroke change the real actual
market rules for CHPDH by for example enacting legislation, largely as per existing water companies but for hot water supply and creating the same monopolies and legal privileges for hot water as already exist with cold water supply and distribution companies ( and power cables and transmission and gas). (ie pre granted planning permission, land and ground entry rights etc)
It could rule out gas heating in legacy cities under planning and environment laws also making a de facto heat supply monopoly just as it did with banning coal for home heating ( for a reason substitute global warming for smog, drowning for asthma) and a one of the Kings Edwards attempted back in the 14th ? Century.
The govt then sells these licenses to the highest bidder, preferably to local authorities, who will then be able to borrow money at the same rate as water companies actually do now, ie 3.75% real, or 6% nominal. This is an actual fact as I have demonstrated.
This is the best and cheapest way to decarbonise Britain, because DH can take in all forms of heat, solar, wind, geo, waste, industrial reject, and has the overwhelming advantage of being able to store heat / surplus wind for weeks at very low cost.
Calculations show that it is cheaper than insulating legacy houses and leaving them on gas or heat pumps, and the latter do not go far enough in lower carbon anyway at a reasonable cost.
The huge and cheap thermal stores easily mop up surplus wind energy making a mockery of mis guided and mischievous (in many cases) attempts to develop mass electricity stora
ge for the same purposes and which ignores the elephant in the room of if you store the power, how do you then get it through undersized power conne ctions to the user. As you and I have discussed, pv in large part is a nonsense for this country because all it will do, like nuclear will be to displace wind energy which is the only likely indigenous form of energy that we have unlimited amounts of at an affordable price.
Therefore, when CHPDH is promoted is is clearly understood that this is not merely a technical claim but based on the understanding that govt policy needs to change in order to bring this about, as it will not happen in the particular set of market conditions prevailing currently.
Claverton Energy Group
Link to comprehensive report on Combined Heat and Power and District Heating, written by the Joint Research Centre, Petten, under contract to European Commission, DG Ener: