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Shared Loop Systems - an answer to the energy crisis?

The ever-increasing prices of energy costs, volatile supply chains and worsening climate crisis have highlighted a need to reduce our reliance on fossil fuels - the use of ground source heat pumps is expected to play a key role in doing so.

Ground source heat pumps, sometimes referred to as a ground-to-water heat pumps, transfer heat from the ground outside to heat a property (including its hot water system) through underfloor heating.

There are two distinct options for the installation of ground source heat pumps - installers can either drill a vertical borehole or dig shallow trenches horizontally. In both scenarios, coils of pipe are laid which circulate a solution of water and antifreeze. It is within these pipes that the grounds heat is 'collected' and passed back (via the heat pump) to be used to provide heating and hot water all year round.

While in recent years the norm has been to fit individual heat pumps to properties, in this article we will explore the pro and cons of what is known as a share loop system (SLS).

A SLS is similar to a district heating system, in that multiple households can utilise one device to heat their homes rather than each property having its own pumps. SLS's offer the opportunity to create greener solutions for whole areas, rather than just single households by using higher efficiency ground source heat pumps.

While cost is often a factor which has influenced their adoption, one of the main issues facing household who wish to adopt a ground source heat pump is space. It is estimated that 2500 square foot of land is required for the trenched scenario, whereas multiple boreholes as deep as 100m are required for and SLS however, SLS's are not dictated by the space next to a particular property. This means that SLS's can bring renewable energy to whole streets or area - with infrastructure managed centrally. As such, developer, housing associations and in some instances communities, have begun to explore shared loop systems as a space saving mechanism.

The efficiencies of installing just one system rather than multiple pumps may also result in overall efficiencies for the developer. While the cost of setting aside communal land must be factored, the fitting of one system will almost certainly be a cheaper option than fitting multiple systems.

Once the system has been installed, its maintenance needs to be considered. District heating systems, for example, tend to be housed within blocks of flats - with the freehold of the property held by a landlord. In these circumstances, it would be the landlord who is responsible for the maintenance of the system. However, with an SLS this may be a more complex situation. With a commercial development, ownership of the system might be retained by the developer or passed to a resident owned company - with the funding of maintenance dependant on the circumstances. Charging users a sum for maintenance, or with a resident owned system, placing an obligation on the residents to maintain a sinking fund, would both be viable options.

The SLS would require an external energy source to power the pump, pushing the water through the pipes and 'transfering' the heat. With a domestic system, the pump would be integrated into the household's electricity system. However, with shared loops, an external or standalone source is required. On some larger schemes, developers have looked to extend the renewable credentials of the SLS by utilising solar and wind power. In other circumstances, power may be extracted from the grid. Where energy is extracted from the grid, it must be considered how this cost would be divided amongst the users.

Whether a resident pays for the heat extracted, would also be dependent on the ownership structure. Where the SLS is owned by a resident owned company, it may be that the heat is provided on a free of charge basis with the residents contributing towards maintenance or running costs instead. However, with a privately owned system the proprietor will likely be seeking a return on investment. Herein presents a potential issue for the residents in respect of the sums they pay to heat their homes.

With district heating systems, flats served by district heating systems are supplied by an operator who procures the energy for that network. This means that the supply of energy is considered 'commercial' rather than 'domestic'. In the case of a SLS, the operator would potentially buy electricity to power the pump on the open market and thus not be protected by the price cap. Resultantly, the price at which the residents pay to heat their homes would not be regulated in the way that the price of electricity or gas might be. The government does however, regulate how users of district heating systems are treated by the operators. As such, customers supplied by district heating systems must only be charged on their actual usage and have access to clear, transparent billing, with heat meters installed into properties.

There are many benefits to implementing an SLS, but there needs to be more done to raise awareness of the benefits and incentives. Currently, not enough information is being shared about the technology which limits their demand, consequently consumers miss out on cost benefits. The implementation of SLS's provides an opportunity to create greener solutions for whole areas rather than single households. Ultimately for SLS's to be utilised more widely, space needs to be identified to accommodate the infrastructure required to make the renewable technology accessible. Developers needs to factor this into their overall costs - only then will we be able to create greener streets and towns rather than pockets of activity from individual projects.

If you would like further information or guidance on the installation of an SLS please do not hesitate in contacting us.

For more information contact Gemma Duxbury in our Construction & Infrastructure department via email or phone on 0333 207 4239. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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