The recovery of heat from power generation in Scotland: study

1 Introduction

This research project commissioned by the Scottish Government and delivered by AEA, develops understanding of the financial and technical potential for recovering heat from large scale power stations in Scotland to provide heating through local district heat networks.

1.1 Background to Study

The Scottish Government recognises the increasing threat of climate change and the issues associated with energy supply (for example rising costs and security of supply). A range of policy initiatives and programmes are in place to address these threats, including:

• A target to generate 100% of gross electricity consumption from renewable sources by 2020.
• A target to reduce greenhouse gas emissions by 80% by 2050.
• An interim target to reduce greenhouse gas emissions by 42% in 2020.
• A target for 11% of Scotland's heat demand to be met by renewable sources by 2020.

These targets are part of the Greener Scotland objective of the Scottish Government's Economic strategy, which has as its central purpose the creation of sustainable economic growth. Hence, the energy and climate change targets are closely linked to wider objectives of job creation and fuel poverty reduction.

The Scottish Government acknowledges that to achieve these ambitious targets Scotland will need to embrace a variety of existing and emerging fuels and technologies. It is anticipated that the bulk of the energy that will contribute to the target for electricity will come from intermittent renewable sources. This will require the presence of back-up base load generating capacity to be installed. For the foreseeable future this will be provided by fossil fuel sources and to a lesser extent biomass. This offers a significant opportunity for the recovery of heat in particular from large scale power stations.

In this context, the purpose of this study is to examine the technical and financial prospects for the recovery of heat from 4 sites used for large scale fossil fuel power generation. This study then examines the policies that could help make recovery of heat a more practical option.

1.2 Energy and Carbon Context

Scotland has adopted a world leading target of reducing greenhouse gas emissions by 42% in 2020 and 80% in 2050. To deliver this, four transformational outcomes have been identified for 2050:

• A largely decarbonised electricity generation sector by 2030, using renewables complemented by fossil fuels with Carbon Capture and Storage.
• Largely decarbonised heating for buildings by 2050, through reduced demand, energy efficiency, and renewable and low carbon heating.
• Almost complete decarbonisation of road transport by 2050, with significant progress by 2030, through wholesale adoption of electric cars and vans; and
• A comprehensive approach to carbon in rural land use.

To deliver these outcomes it is essential to examine all options that could make a material contribution to these objectives.

Previous and on-going activity in Scotland is already examining other contributions to de-carbonise heat supply, examples include:

• The Biomass Action Plan.
• The Scottish Biomass Support Scheme.
• Heat plans for energy from waste plants.
• The Renewable Heat Incentive for biomass, ground source heat pumps etc.
• Use of Section 36 consents to encourage heat recovery from biomass power stations.
• The pilot district heating loan scheme.
• A number of actions set out in the 2020 Routemap for Renewable Energy in Scotland.

This study examines a further opportunity, recovery of heat from large fossil power stations.

Analysis of the energy balance in Scotland for 2002 ^[1] estimated that energy losses in coal and gas fired electricity generation in Scotland at 40 TWh. In the same year natural gas consumption in Scotland was estimated to be 63.5 TWh, most of which will be used for space heating and hot water.

Thus, if only a fraction of these energy losses can be captured and used to displace other heating fuels, significant savings in carbon emissions could be achieved.

Hence this study considers the technical and financial issues associated with recovery of heat from four large power stations sites in Scotland, including the costs and investment returns in the district heating network. This would represent a step change in the scale of district heating in Scotland, adding four large scale schemes to the growing list of smaller community based examples.

The transformation of heat supply from fossil fuel to district heating is not without precedent. The following chart shows the percentage of the population served by district heating in a selected number of countries in the European Economic Area ^[2] .

Figure 1 District heating Statistics in Selected European Countries

This shows that several countries in the north of Europe have 40% to 64% of the population connected to district heating. The exception is Norway, where electrical heating dominates, a benefit from Norway's extensive hydro power capacity.

District heating has grown in countries like Denmark as the result of a range of policy measures, particularly planning policies, but also financial support mechanisms. This has supported a range of district heating schemes, from large scale power station based projects to small community scale projects.

Thus it may be possible for Scotland to follow a similar process of transformation, if this is deemed a valuable and viable option for heat supply.

This study will provide insight to support decisions regarding the potential for heat recovery and the case for policies to support the development of this potential.

1.2.1 Report Structure

This report is structured to provide information under the following sections:

Table 1 Report Structure