Criteria for Sustainable Community Owned District Heating Scheme

1. Housing/building density-must be sufficient to maximise use of heat networks
2.  Ideally mixed use buildings in scheme, especially if some process industry or hospital using 24 hour heat load included
3. Public/private sector mix for sustainability �ability to match different sources of finance for economic development and environmental protection
4. Economic fuel source, preferably owned/controlled by the community - it is important to have hedge against fuel price rises
5. Renewable/sustainable energy sources are viable both technically and economically- in the case of Wick wood fuel is being used but other renewables could also be used, and/or a mixture of fuel sources
6. Target:reduce average heating costs per house by half to around �7-50 to �9.50 per week

Fuel Poverty Increase

Driving Change

• Fuel poverty is defined as energy costing more than ten percent of household income
• DTI estimates for every one percent rise in price of electricity to consumer, 50,000 more households thrown into fuel poverty - 12 percent rise in electricity prices have happened this year already
• Electricity prices directly linked to fossil fuel prices-or if nuclear source costs/prices high.New nuclear will have long lead time to build [7 years minimum estimated] and cost of future decommissioning will be in price
• Cost of grid and long distance transmission set to rise sharply under new BETTA-will impact on consumer desire for economic locally generated heat and power and micropower networks using new technologies
• Fossil fuel prices predicted to remain high and demand rising for foreseeable future-price wars possible e.g. oil has been recently $50+ /barrel; Osama bin Laden worst case scenario -$144/barrel Saudi oil?

Housing and District Heating

• Highland Council housing has *Warm and Dry* programme funding for refurbishment over ten year period
• 500 council houses adjacent to Wick Distillery need economic heat
• Wick Distillery burns 750,000 litres/year of increasingly expensive heavy fuel oil- has significant surplus process heat for recovery and use in new district heating scheme, whilst saving estimated 50 percent of distillery energy costs by substituting wood fuel and changing technology
• Community Energy Programme/EST grant of �1.54 million combined with "warm and dry" Highland Council funds provides finance for new �3.5 million DH scheme using distillery waste heat and wood chip from nearby forests

Cost of Heating to Houses

• Wick houses presently heated by expensive mix of fuels �
• electric storage [12 percent price rise in 2004]-av.cost �465/annum for 3 bed house
  - coal fired CH [price of coal rose �1/bag last month]- av. cost �483/annum for 3 bed house
  - gas-transported by road 110 miles from Inverness, currently subsidised, subsidy not expected to be maintained in long term
  - oil fired central heating-av.3 bed house cost �480/year-unsubsidised gas will cost as much if not more
  - CHP/DH estimate �277 per annum for av.3 bed house

Capital Costs of Installation
Capital costs for installing heating for average 3 bed. house -

• - oil:�7000;
• - electric storage: �3200;
• - coal fired CH: �4200;
• - CHP/DH �3300 [wood fuel]

Community Ownership Model

• Community owned not-for profit company, Caithness Heat and Power Limited, was formed in December 2004 -founder members Inverhouse Distillers from Wick Distillery, Pulteneytown Peoples Project, The Highland Council
• Model for legal framework agreements-Aberdeen District Heating Scheme [Aberdeen District Council, in partnership with local council housing tenants]
• Differences in Wick District Heating scheme [WDHS]and Aberdeen scheme:-
  -WDHS will include private sector partnership with the distillery and will utilise the distillery�s waste
   heat resource to mutual economic benefit
  -WDHS will utilise economic wood fuel from locally available sources rather than the natural gas
   which Aberdeen uses-distillery will move to wood fuel from heavy fuel oil for its main energy
   source, producing benefits for all concerned
  -WDHS may also use biogas from anaerobic digestion of distillery potale in future: investigations
   currently in progress

Wood Fuel Issues

• Availability- special forestry study was commissioned before designing Wick District Heating Scheme; this estimated 130,000 tonnes wood fuel per year available in Caithness from peak felling/harvest beginning in 2010,and continuing for 30 years. Maximum requirement for larger WDHS [if expanded to hospital, hotels/supermarkets, schools] estimated at 30,000 tonnes/year
• Drying-tree ringing before felling economic way of reducing moisture levels; further R&D on fuel density/moisture reduction options planned
• Technology-well proven for economic heat production; innovative technologies possible for micropower/electricity production
• Transport-innovative container handling systems to be trialled-inter modal uses;
• Rail freight to take heavy vehicles off the roads
• Bulk Storage availability-distillery; docks; railway yards
• Pricing stability �timber ownership potential? Hedging seen as essential-either physical or virtual. Further feasibility work in progress.

WOOD FUEL ISSUES

•  UPDATE:
• Due to escalating wood fuel costs we are having to review our strategy.
• We are now minded to use a recognised agent to supply us with wood chip on a long term contract.
•  Any contract would stipulate at least 20% of wood sourced locally.

Community Energy Centre

• Combine energy efficiency and renewable energy advice centre with District Heating management/administration centre for sustainable benefit of community
• Further development of energy efficient advice centres to provide information on energy, water, waste and transport will expand work of Community Energy Centre
• Community consultation, understanding and involvement essential-all Council householders have right to refuse to connect to district heating network if they wish
• Transfer of Council housing stock to new affordable housing association should not affect basic economics or management of system-same parameters will apply

Heat Network Links to Buildings

Leak Detection Monitoring

Pulteneytown From The Air

Showing Area For New Heating