Introduction

Tackling climate change through decentralized energy partnership.  This scheme demonstrates that community heating can be an environmentally friendly, cost-effective, flexible and reliable way of providing heating, hot water and cooling to a wide variety of urban costumers.

Objectives and target audience

A key element of SCC’s vision for the future of Southampton is to provide a community heating infrastructure that serves all areas of the City utilising the most environmentally friendly energy sources. In particular, the District Energy scheme has the objective of providing:-

• Affordable heat;
• Security of supply;
• Sustainability of supply;
• A way of meeting the Council’s HECA (Home Energy Conservation Act) target, Agenda 21 and Nottingham Declaration objectives.

Financial Resources and Partners involved

There has been an £8 million investment to date in infrastructure.  Mostly financed by the Council’s private partner, Utilicom, but including E.U. funding and EST Community Energy grants.  Connections to individual developments are covered by development costs and customers can expect 5% to 10% energy cost reductions against market norm (depending on contractual agreement).  Running costs are borne totally by operator, although heat station land is provided by Council on ‘peppercorn’ basis.
The main partners involved in this scheme are: Southampton City Council, Utilcom (through the company Southampton Geothermal Heating Ltd.) and the consumers (public and private sector as well as domestic).

Process

The Southampton District Energy Scheme was established in 1986. The catalyst for the SDES was the commitment of the City Council to work towards Sustainable Development and the potential of a geothermal energy source beneath Southampton.
The City Council developed the scheme in partnership with Utilcom, a private energy provider who set up a special purpose company for delivering the scheme, Southampton Geothermal Heating Company (SGHC) Ltd. SGHC finances, develops and operates the Southampton Energy District Scheme.
Utilcom and Southampton City Council worked together to ensure that SDES was marketed successfully to potential customers: Utilcom by ensuring the delivery of  competitively priced energy services to businesses, householders and public buildings, and the City Council by stressing the need for Sustainable Development using CHP or renewable energy through the Structure Plan and the City Development Plan and by using several municipal mechanisms to encourage developers to explore the use of these technologies.

Results

In 1986 the SDES served only one building, the Civic Centre and today the scheme provides electrical power, hot water for central heating, and chilled water for air conditioning to over 40 commercial customers and hundreds of households in the city centre.
The decentralised, low-carbon energy source for the city centre mitigates against the causes of climate change, producing over 70GWh of energy and saving 11,000 tonnes of carbon every year.  The scheme also addresses air quality, energy conservation, and fuel poverty.
The scheme provides a number of benefits to consumers and also benefits the City Council as it contributes significantly to achieving carbon reduction targets as part of an overall climate change strategy.
Future plans include the expansion of the scheme and the integration of renewable energy sources as for example bio-gas in order to make it a fully renewable energy source.

Critical Success Factors / Challenges

• Strong political commitment, in particular from SCC Executive Director, Mike D. Smith;
• The creation of an interdepartmental working party specially set up to implement and develop the scheme.  This brought important experience and knowledge to the project and this approach also prevented potential delays that could have been caused by individual departments.
• Successful public-private partnership between Utilicom, who delivers the scheme, and Southampton City Council, who actively encourages new and existing buildings to connect to the scheme.
• Finance provided by Utilicom. Utilicom provided all the funding of the scheme (they own SGHC Ltd, the company set up to finance and run the scheme.  The City Council provided the land to Utilicom to build a heat station and the geothermal well-head in return for a long-term profit share.