annex 9 - heat plan chp report v6 - viridor

VIRIDOR FICHTNER

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VIRIDOR

SOUTH LONDON ERF

CHP REPORT

VIRIDOR FICHTNER

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VIRIDOR

SOUTH LONDON ERF

CHP REPORT

Document Production & Approval Record

ISSUE NO. 3 NAME SIGNATURE POSITION DATE

Prepared by: Stefania Trivellato

Consultant 05/07/2012

Checked by: Nigel Garrod

Senior

Consultant

06/07/2012

Document Revision Record

ISSUE NO. DATE DETAILS OF REVISIONS

1 16/05/2012 Issue for Client comments

2 17/05/2012 Revised following Client comments

3 29/06/2012 Revised following Client comments

4 06/07/2012 Revised following stakeholder feedback

5 10/07/2012 Revised for Planning

6 11/07/2012 Minor revision

7

© 2012 Fichtner Consulting Engineers. All rights reserved.

This report and its accompanying documents contain information which is confidential and is

intended only for the use of Viridor. If you are not one of the intended recipients any disclosure,

copying, distribution or action taken in reliance on the contents of the information is strictly

prohibited.

Unless expressly agreed, any reproduction of material from this report must be requested and

authorised in writing from Fichtner Consulting Engineers. Authorised reproduction of material

must include all copyright and proprietary notices in the same form and manner as the original,

and must not be modified in any way. Acknowledgement of the source of the material must also

be included in all references.

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MANAGEMENT SUMMARY

Viridor intend to install infrastructure at the Beddington landfill gas engine compound to enable

the delivery of heat to the Felnex Trading Estate as the first stage of a district heating scheme,

prior to the construction of the South London ERF at Beddington. Viridor will also configure the

South London ERF as CHP enabled from the outset which will enable the export of up to

20,000 kW of heat. The company will also make a planning application to enable the installation of district heating pipework within the Viridor site boundary up to the public highway. This will

allow future connections, to the east and west of the ERF, to be made quickly and easily without

disrupting the operation of the ERF. With the availability of heat from the existing Viridor landfill

gas engines there is an opportunity to progress a small scale district heating system that can

grow as more heat becomes available from the ERF.

An Energy Services Company (ESCO) will be engaged to help develop the district heating scheme.

Figure 1 - Key players of the proposed CHP scheme

The ESCO will be responsible for the costs associated to infrastructure outside Viridor’s

boundaries. For the proposed scheme to deliver heat at the Felnex development, the estimated capital investment for the ESCO would be approximately £1.5 million. Potential ESCO’s have

already been identified and draft heads of terms are available.

There will be sufficient revenue for an ESCO to achieve an Internal Rate of Return (IRR) of 15%.

The initial heat supply can be generated from the landfill gas engines; and the ERF has the

potential to start supplying heat to the network within 7 years.

A district heating scheme based around the South London ERF and utilising other heat sources,

such as those proposed by Croydon Council, provides a positive opportunity to reduce carbon emissions by 49,367 tonnes per year and to provide local economic benefits. The scheme has the

potential to be the largest district heating system in the UK with the wider opportunities available

in Croydon.

It is clear from this CHP study that:

• there is a strong business case for developing a district heating system centred on the South London ERF;

• by offering competitive energy tariffs an ESCO can provide real savings to the public and

private sectors; and

• Viridor are committed to providing a wholesale energy price that will facilitate competitive

retail tariffs to be maintained.

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It is envisaged that the development of a district heating system will take place over a number of phases dictated by market conditions. This phased approach will minimise the initial investment,

while the first phase will provide a base heat load that will demonstrate to other potential heat

users the benefits of utilising the system. It is anticipated that the network will be developed over

a number of years with sections connecting a number of buildings being brought on line for each

phase. As the network is developed it is sensible to target premises closest to existing pipe

infrastructure, expanding outwards from the ERF.

Although ultimately the scheme could have a heat export of 20,000 kW it is considered that a

realistic output within the foreseeable future will be 15,000 kW.

Experience in Sheffield suggests that once local businesses are made aware of the economic and

environmental benefits offered by a district heating scheme they are keen to be involved. For

example BAA Heathrow are now in discussion with Viridor over heat supply from the nearby

Lakeside EfW. The feedback from the South London area received so far confirms this positive

view. In March 2012 it was announced that a second district heating network is to be developed

in Sheffield, based on a waste wood burning facility. This confirms that once the concept becomes

established it becomes easier to expand a system. Even as each new phase of a district heating

system is developed it is likely new loads will be connected to previous phases. As the scheme

matures heat users that were initially not considered as viable connections can be connected.

This assessment has concluded that seven phases are appropriate for the supply of heat to the

identified base heat users.

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TABLE OF CONTENTS

MANAGEMENT SUMMARY ...................................................................................................... III

TABLE OF CONTENTS ............................................................................................................. V

1 Introduction .............................................................................................................. 7

1.1 Background ...................................................................................................... 7

1.2 Study Objectives ............................................................................................... 7

2 Conclusions ............................................................................................................... 8

3 Recommendations .................................................................................................... 10

4 Viridor CHP Experience .............................................................................................. 11

5 Heat use .................................................................................................................. 13

5.1 Heat use options .............................................................................................. 13

5.1.1 Agriculture / Horticulture ................................................................................. 13

5.1.2 Commercial properties..................................................................................... 13

5.1.3 Local community heating schemes .................................................................... 14

5.1.4 Public services buildings ................................................................................... 14

5.1.5 Industrial and process users ............................................................................. 15

5.2 Details of how the heat could be supplied and used by the customers ..................... 15

5.2.1 Interface between landfill gas heat supply and ERF heat supply .............................. 17

5.2.2 Back-up system ............................................................................................. 17

5.2.3 Connections between ERF and heat users ........................................................... 18

6 Technical overview.................................................................................................... 19

6.1 Heat Users ....................................................................................................... 19

6.1.1 Modelling Assumptions .................................................................................... 19

6.1.2 Confirmed heat users ...................................................................................... 19

6.1.3 Potential additional connections ........................................................................ 20

6.1.3.1 West side of the ERF development (Hackbridge) .................................... 22

6.1.3.2 East side of the ERF development (Croydon) ......................................... 24

6.2 District heating network sizing and routing .......................................................... 27

6.2.1 Preliminary pipe size calculations ....................................................................... 27

6.2.2 Assumptions .................................................................................................. 28

6.2.3 Results ......................................................................................................... 30

6.2.4 Heat availability supplied from gas engines ......................................................... 30

6.2.5 Heat from the South London ERF ...................................................................... 31

6.3 District heating equipment ................................................................................. 33

6.4 Capital Costs .................................................................................................... 34

6.5 Operating and Maintenance Costs ....................................................................... 34

7 Commercial feasibility ............................................................................................... 36

7.1 Heat tariffs ...................................................................................................... 36

7.2 Viability ........................................................................................................... 37

8 Environmental benefit ............................................................................................... 39

8.1 Viridor approach ............................................................................................... 39

8.2 CO2 savings to potential heat users .................................................................... 39

8.3 Comparison with the SLWP baseline scenario ....................................................... 39

9 Energy Service Company (ESCO) ............................................................................... 41

10 Action plan .............................................................................................................. 43

APPENDIX A - CHP STUDY, MOUCHEL, MARCH 2010 .................................................... 45

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APPENDIX B - POTENTIAL HEAT USERS, WEST SIDE (HACKBRIDGE AREA) ................. 46

APPENDIX C – POTENTIAL HEAT USERS, EAST SIDE (CROYDON AREA) ....................... 47

APPENDIX D – CHP PIPE ROUTE ................................................................................... 48

APPENDIX E – DRAFT HEADS OF TERMS ....................................................................... 49

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1 INTRODUCTION

1.1 Background

Viridor are proposing to develop a South London ERF (Energy Recovery Facility) in

Beddington, South London, and have instructed Fichtner Consulting Engineers Ltd

(Fichtner) to undertake a number of District Heating (DH) studies linked to this facility.

These ongoing studies will develop the technical, economic, environmental and

commercial issues and provide sufficient information on a preferred district heating

scheme to allow Viridor to make strategic decisions on the feasibility and deliverability of

heat export.

This report is based on these studies and aims to present a business case for a district

heating scheme for the South London ERF.

Potential heat users have been identified, on both sides of the ERF: West side towards

Hackbridge and East side towards Croydon. For each of the two areas we have estimated

the average and peak heat demand for identified heat consumers and a cumulative heat

demands have been determined.

A carbon savings analysis has been carried out and included in this report. The analysis

shows the impact of the ERF on climate change.

1.2 Study Objectives

The main objectives of this report are to:

(1) identify potential heat user developments that could present future connections to

the district heating scheme;

(2) investigate and estimate the average and peak heat demand for key

developments;

(3) provide estimated heat tariffs for commercial and domestic residential heat

consumers;

(4) review provisional DH network routing and sizing;

(5) survey pipeline route options;

(6) carry out CO2 savings calculations for the scheme; and

(7) to demonstrate the business case for district heating.

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2 CONCLUSIONS

Viridor intend to install infrastructure at the Beddington landfill gas engine compound to enable

the delivery of heat to the Felnex Trading Estate as the first stage of a district heating scheme

prior to the construction of the South London ERF at Beddington. Viridor will also configure the

South London ERF as CHP enabled from the outset and will make a planning application to enable

the installation of district heating pipework within the site boundary up to the public highway. This

will allow future connections, to the east and west of the ERF, to be made quickly and easily

without disrupting the operation of the ERF. With the availability of heat from the existing Viridor

landfill gas engines there is an opportunity to progress a small scale district heating system that

could then grow as more heat becomes available from the ERF.

The marketing and sale of heat is a specialist skill therefore an Energy Services Company (ESCO)

will be engaged by Viridor to fulfil this role. There are a number of companies, often linked to

major utilities and facility management companies that offer this service. The typical structure is

shown in Figure 1.

It is estimated that the capital costs for Viridor to install the initial pipeline infrastructure running

east and west of the site, delimited by the Viridor lease at the landfill site, will be approximately £3.5 million. The ESCO will be responsible for the costs associated to infrastructure outside

Viridor’s boundaries. For the proposed scheme to deliver heat at the Felnex development, the

estimated capital investment for the ESCO would be approximately £1.5 million. Potential ESCO’s

have already been identified.

There should be sufficient revenue for an ESCO to achieve an Internal Rate of Return (IRR) of

15% within 7 years. The initial connection would be to the landfill gas engines; the gas yield will reduce over a 7 year period and the ERF should be available to start supplying heat to the

existing customer and potential additional heat users within this timeframe.

A district heating scheme based around the South London ERF and utilising other heat sources,

such as those proposed by Croydon Council, provides a positive opportunity to reduce carbon

emissions and provide local economic benefits. The scheme has the potential to be the largest

district heating system in the UK with the wider opportunities available in Croydon.

The main barriers to developing a successful district heating network are usually the lack of a low

cost heat source and the high cost of the infrastructure required to deliver heat. This report

demonstrates that there are more than sufficient heat consumers available to generate enough

income to justify the infrastructure investment required. The South London ERF provides a central

and competitive energy source that could kick start a major district heating scheme.

Experience in Sheffield suggests that once local businesses are made aware of the economic and

environmental benefits offered by a district heating scheme they are keen to be involved. For

example BAA Heathrow are now in discussion with Viridor over heat supply from the nearby

Lakeside EfW. The positive feedback from the South London area received so far confirms this

view.

It is clear from this study that there is a strong business case for developing a district

heating system centred on the South London ERF.

There are two key benefits arising from the development of a Combined Heat and Power (CHP)

scheme in South London; these are outlined below.

(1) Environmental benefit. A district heating scheme reduces the reliance on fossil fuels and

is a low carbon technology. The South London CHP scheme will provide a net carbon

dioxide (CO2) emissions saving, when compared to a conventional power plant. The

district heating scheme could be argued as providing zero carbon energy compared to the

carbon emissions from a gas heating system, which is estimated at 194 gCO2/kWh, leading

to a significant CO2 saving.

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(2) Economic benefit. On the assumption that Viridor will be supplying the 20,000 kW of heat available from the South London ERF, with a resulting reduction of 5,000 kW of electrical

export, to a single ESCO, and the ESCO is able to sell the heat to the end users at

approximately 3.5p per kWh for commercial heat consumers and 4.2p per kWh for

domestic residential heat consumers, the ESCO could generate a gross income of

approximately £6.6 million per year. Typically the heat price from the ESCO to the end

users should offer a saving against using gas. The suggested tariffs meet this requirement.

Other tariff may be derived for social housing to provide more affordable energy.

It is envisaged that the development of a district heating system will take place over a number of

phases. This will minimise the initial investment, while the first phase will provide a base heat

load that will demonstrate to other potential heat users the benefits of utilising the system. It is

anticipated that the network will be developed over a number of years with sections connecting a

number of buildings being brought on line for each phase. As the network is developed it is

sensible to target premises closest to existing pipe infrastructure, expanding outwards from the

ERF.

This study has identified potential heat consumers in the vicinity of the South London ERF based

on a review of potential heat users and heat demands identified at the bid stage of the South

London residual waste treatment contract (Combined Heat and Power Study, Mouchel, March

2010 and Combined Heat and Power Update, Mouchel, December 2010 provided in Appendix A),

publicly available information and data provided by Inventa Partners. This is not an exhaustive list

of potential heat users. Further investigations as the scheme progress may well identify other

viable customers. Even as each new phase is developed it is likely new loads will be connected to

previous phases. As the scheme matures heat users that were initially not considered as viable

connections can be connected.

This assessment has concluded that seven phases are appropriate for the supply of heat to the

identified base heat users.

(1) Phase 1 – Felnex Trading Estate;

(2) Phase 2 – Carshalton College and Westcroft Leisure Centre;

(3) Phase 3 – St. Helier Hospital, Corbett Close and Durand Close;

(4) Phase 4 – Kelvin House;

(5) Phase 5 – Whitgift Shopping Centre;

(6) Phase 6 – Bernard Weatherill House, College Green, Taberner House, Davis House and

Waddon; and

(7) Phase 7 - Menta site.

It has been assumed that the district heating system will be constructed in phases over a period

dictated by market conditions. It is not possible to say at this stage what the timescales for each

phase will be.

Although ultimately the scheme could have a heat export of 20,000 kW it is considered that a

realistic output within the foreseeable future will be 15,000 kW.

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3 RECOMMENDATIONS

The following actions are recommended:

(1) maintain dialogue with the identified heat users;

Regular meetings should be held with each organization already contacted to ensure

every heat sales opportunity is maintained.

(2) make contact with other potential heat users in Hackbridge;

Building up a data base of potential customer has been identified as a key action. A

programme of canvassing and surveys should be carried out annually to build up a picture of the potential for more heat consumers.

(3) instigate the action plan outlined in section 10 of this report;

It is essential that a proper plan and organized approach is adopted if a viable district

heating scheme is to be progressed. A clear strategy is required with objectives and

targets. This can then be developed into a commercial business plan.

(4) open negotiations with potential ESCO’s;

Choosing the right ESCO will be an important step for this project. Not all potential

ESCO’s have the same experience or capability. Contact needs to be made with

suitable organizations and discussions held over how they could make this project a

success.

(5) set up a working group involving local stakeholders;

Involving local stakeholders will improve the chances of a positive outcome.

Demonstrating to local businesses that there is widespread support for the project will

encourage them to become involved. Giving out a positive impression will generate

confidence that committing to the scheme will be a benefit.

(6) carry out an annual review of potential heat load and scheme costs;

By carrying out annual reviews it will be possible to measure progress and identify any

barriers preventing the project from gaining real momentum. This will help inform the

decision makers on what the next steps should be.

(7) produce an annual progress report.

An annual report will help focus the stakeholder on those things that have been a

success and those things that have not produced the desired results. This provides a

learning opportunity which can then lead to a more informed decision making process.

The annual report can be used to demonstrate the success of the project and in turn it

then becomes a powerful marketing tool.

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4 VIRIDOR CHP EXPERIENCE

Viridor wish to build upon their current track record of developing heat export schemes

based on their energy from waste facilities. Viridor recognise the importance of

maximizing energy availability and the carbon benefits this produces. In addition to the

work being done with Felnex to develop district heating in South London Viridor are

actively promoting CHP and heat usage through the following projects:

• Derriford clinical waste plant – heat exported to a Plymouth Hospital NHS Trust;

• Runcorn I – due to start exporting heat and power to Ineos Chlor in 2013;

• Runcorn II – in negotiations to export heat and power to Ineos Chlor from 2014;

• Lakeside EfW – discussing exporting heat to BAA Heathrow. Feasibility study report

under consideration by BAA;

• Ardley EfW – discussions underway with developers and utilities in the Bicester

area. Feasibility study due to commence;

• Trident Park EfW – Feasibility study carried out and active discussions ongoing with

developer. Heads of terms being negotiated with an ESCO;

• Avonmouth EfW – has Planning consent and will carry out an annual review of heat

export opportunities. Viridor have offered a contribution towards the costs of the

Avonmouth heat grid study being promoted by Low Carbon South West.

• Dunbar EfW - has Planning consent and will carry out an annual review of heat

export opportunities.

A summary of the heat export schemes and off-taker estimates is provided in Table 1

below.

Table 1 – Viridor’s future CHP schemes

Facility

Type of

facility Status

Heat

Export

Heat off-taker /

ESCO

Start year

(or

planned)

Derriford

Clinical

waste plant Operating 1.8 MW

Plymouth Hospital

NHS trust 1998

Runcorn

Phase I

Energy

from Waste

plant

In

construction 51 MW

Ineos Chlor via an

ESCO 2013

Runcorn

Phase II

Energy

from Waste

plant

In

construction

up to

55 MW

Ineos Chlor via an

ESCo 2014

Lakeside

Energy

from Waste

plant Operating

up to

20 MW

BAA Heathrow

airport 2013/14

Ardley

Energy

from Waste plant

In construction

up to 10 MW

Utilities and

developers in Bicester area. 2015

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Table 1 – Viridor’s future CHP schemes

Facility

Type of

facility Status

Heat

Export

Heat off-taker /

ESCO

Start year

(or

planned)

Trident Park

Energy

from Waste

plant

In

construction

up to

20 MW

Local base heat

load; Cardiff Bay;

Cardiff Commercial

Centre; civic and

main university

campus; Cardiff

prison and Cardiff

Royal Infirmary via

an ESCO

2015

Avonmouth

Energy

from Waste

plant

Planning

consent

up to

20 MW

Avonmouth Heat

Grid (ESCO) 2016/17

Dunbar

Energy

from Waste

plant

Planning

consent

up to

17 MW Horticulture 2016/17

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5 HEAT USE

5.1 Heat use options

Currently the project does not have Planning consent. Without Planning consent it is

difficult for heat supply agreements to be entered into as potential consumers perceive

there to be a degree of uncertainty about the scheme, particularly on timing. With

Planning consent Viridor will be able to approach stakeholders with higher levels of

certainty and will more likely be successful in advancing with developments and

agreements. The negotiation of heat supply agreements has been considered within the

overall programme for the project. Additional investigations will be required to determine

the final initial heat users and it is likely that they will be a mix of types. Industry, commerce, residential and public services are all prospective users of heat from a CHP

plant. Heat use options are set out below.

5.1.1 Agriculture / Horticulture

Agricultural/horticulture developments use hot water heating systems to maintain

suitable ambient growing conditions. These types of developments typically require

approximately 700 kW of heat per acre. This would allow the plant to support a total

development of upwards of 25 acres.

The large heating demands placed by these types of development are likely to be

economically feasible as the heat will displace significant volumes of expensive natural

gas or oil. As all the heat load is located at one site this creates a greater heat

density, which effectively reduces the expanse of the network required to deliver the

heat load. This will offset the capital investment for the heat recovery systems and

distribution network.

This size of heat load is likely to also allow heat to be supplied to other smaller loads along the route of the pipe which otherwise would have been commercially

unattractive due to the comparatively higher capital costs for a low heat use.

The initial CHP studies indicate that no agricultural or horticultural loads are likely to

be available.

5.1.2 Commercial properties

These can provide a wide range of options. Typically good targets are office blocks,

hospitals, hotels, leisure facilities and higher education establishments. These tend to have reasonably high energy demands over prolonged periods producing good levels

of annual heat sales. Retail outlets are not ideal targets as their energy demands can

be low making economic returns difficult to achieve. An additional potential energy

demand could come from air conditioning provided by locally sited absorption chillers

powered by the district heating system. Although the capital cost of this type of air

conditioning can be high the running costs are usually low. This could be an option for

a large office block or where there is a restriction in electricity available for

conventional air conditioning providing there is room as an absorption chiller requires

more space than a conventional electrically powered air conditioning system.

There are some commercial buildings near to the ERF site which represent

comparatively modest heat loads and it is likely that these could be incorporated

within a larger scheme. Retail units can be considered as part of a wider scheme to

offset their lower heat use.

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5.1.3 Local community heating schemes

Historically community heating in the UK has been difficult to implement. This is mostly due to the existence of an extensive natural gas network and a regulated

supply market which allows customers the freedom to changes suppliers on a regular

basis to obtain improved commercial terms. The high cost of the infrastructure is also

a barrier to community heating. Developers of private residential properties are

reluctant to utilise community heating as it often increases development costs.

Community heating typically lends itself to situations where:

(1) There is no alternative heating offered. Scandinavian countries typically use

community heating to great success. This source of heat is accepted by the

community, and when new houses are built they are added to the existing

network. This practise has not been used in the UK. The retrospective

installation of hot water mains and domestic heat exchangers is expensive when

compared to the continued use of gas, which is reflected in the take-up rate.

Clearly lower take-up rates increase the costs for those included in the scheme;

(2) There is a high heat density. Areas of high population e.g. high rise flats are

ideally suitable to communal heating. This allows relatively low number of

connections for a high load which improved the overall cost of the scheme;

(3) There is a high level of local authority / housing association properties. Single

landlord arrangements can improve the take-up rate significantly, which

improves the economics of the scheme.

Community heating schemes are unlikely to be major heat users, typically less than

10,000 kW with a very seasonal demand and are therefore not normally considered

material for large scale CHP schemes. Only new build developments of at least 2,000

dwellings would normally be considered for a standalone system.

Community heating will be considered in conjunction with other buildings as part of

this mixed use district heating system. This will ensure that the potential benefits of

affordable heating for social housing are maximised.

5.1.4 Public services buildings

All local authorities are looking at ways of reducing their carbon footprint and

connection to a district heating scheme offers the opportunity for large carbon

savings. They own or control a large number of buildings which are suitable for

connecting to a district heating system.

The buildings suitable for inclusion in a scheme could include:

• primary schools;

• secondary schools;

• administrative Buildings;

• leisure centres and swimming pools;

• hospitals;

A number of potential heat consumers have been identified in the initial heat survey

and contact will be maintained with these as part of the detailed follow up process.

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5.1.5 Industrial and process users

Typically most industrial and process operations do not require large amounts of space heating or domestic hot water. They are more likely to require energy for

process purposes and may require the energy in the form of steam at certain

conditions. Unless there is one major user close to the ERF who requires a large steam

supply this option is very limited. Transporting steam over long distances can be

inefficient and expensive. Industrial users also tend to be located away from other

potential consumers thereby limiting the prospects for additional connections. If a

suitable industrial or process heat consumer can be identified then they may offer the

prospect of requiring a based load with year round constant demand.

Potential loads can be identified using the Industrial Heat Map website. This identifies

potential heat loads derived from a database of major energy using industrial sites

although the data is not recent.

In the current economic climate it is difficult to get industrial heat users to commit to

considering alternative energy sources that will not be available until 4 years in the

future. Although no steam users have been identified at present the ongoing review

will continue to monitor for potential steam consumers.

5.2 Details of how the heat could be supplied and used by the customers

Given the types of heating requirements identified off-site to date as being potentially

available, heat could be supplied in the form of hot water to some users subject to viable

economics. The temperature of the water could be supplied at up to 120°C depending

on the end user’s requirements but normally 110°C will be used. Summer supply

temperatures would be lower to reduce energy losses.

Heat would be distributed in buried pipework. Preinsulated steel pipes are used to supply

pressurised hot water to the customer, and to return cooler water. Where pipes are

small, two pipes may be integrated within a single insulation sleeve. However, single

pipes are likely to be used to meet large heat demands. This technology is well proven

and provides an energy distribution system with a 30 year design life. Additional

pipework can be added in the future and it is a straightforward process to add branches

to serve new developments (Figure 2).

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Figure 2 – District heating pipework (supply and return)

Heat would be supplied to a secondary heat exchanger on a consumer’s premises. Typically,

the heat exchanger at the end user is arranged to supply heat to the tertiary heating circuit

upstream of any boiler plant. The water in the tertiary circuit is heated to the temperature

required to satisfy the heating needs of the building. Domestic hot water can also be

provided by a separate heat exchanger. These heat exchangers can be supplied as

prefabricated substations making installation quick and easy.

Water is pumped continuously around the system. Pumps are operated with 100% standby

capacity to maintain heat in the event of a pump fault. The pumps would have variable

speed drives to minimise energy usage. Booster pumps can be installed within the

distribution pipe network to increase the distance over which the energy can be delivered.

Providing the system design pressure is not exceeded then there is no limit as to the

distance the water can be pumped. Heat exchangers can be used to provide pressure

breaks to enable to network to be extended. Space has been allocated on the ERF site

sufficient to accommodate a fully equipped heat station to provide 20,000 kW of heat

export.

A typical schematic arrangement of a CHP system is given in Figure 3 below.

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Figure 3 – Typical CHP system schematic arrangement

5.2.1 Interface between landfill gas heat supply and ERF heat supply

District heating pipework will be installed as follows:

• between the ERF and the landfill gas compound;

• between the ERF and the west boundary of Viridor’ site; and

• between the landfill gas compound and the east boundary of Viridor’ site.

The ERF’s design includes a CHP room where the primary plant area equipment will be

installed during construction of the ERF.

The pipework between the ERF and the primary plant area at the landfill gas

compound will be installed, but not operational during the ERF construction period.

During the first phase of the proposed CHP scheme, heat will be supplied to the Felnex

development through the primary plant area at the landfill gas compound via the

pipework from the gas compound to the west side. Once the gas yield decreases and

the ERF comes on stream the connection ERF-landfill gas compound will be enabled.

When heat will be no longer available from the gas engines, then the circulation loop

of hot water between Felnex, and any additional heat user, and the ERF will become

the only source of heat by-passing the primary plant area at the landfill gas

compound, which will no longer be in use.

All required infrastructure will be in place before the ERF starts supplying heat to

minimise any disruption when gradually introducing heat from the ERF to the district

heating network.

5.2.2 Back-up system

Currently there are no systems included in the project to provide back-up heat to the

heat users. Where the heat supply is critical this would require the installation,

operation and maintenance of local back up gas- or oil-fired boiler plant. The need for

this equipment will be determined as the scheme progresses and the location and

configuration agreed with the ESCO. This will allow for greater flexibility and provides

the opportunity to integrate with other initiatives.

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It may be more efficient in some cases to install gas or oil-fired auxiliary boilers at the point of use to minimise heat losses and minimise fossil fuels use. This would also give

the customer the option to control the heat supply so they can reasonably avoid the

high cost of heat produced from fossil fuels. This would provide heat use customers

with additional confidence by being able to operate their own heating plant when the

ERF is shut down for maintenance or there is unplanned downtime. Alternatively if the

network is complex and there are a large number of critical heat users then a central

stand-by boiler plant could be considered at a remote location.

5.2.3 Connections between ERF and heat users

At the present time, no definitive fixed route has been established for the connections

from the ERF to the various potential users since no specific agreements have been

made. Investigations have identified possible routes which can be firmed up at a later

date.

Easements and Highways Licenses would need to be obtained for access, construction,

and maintenance of the pipes. There is a significant financial implication for obtaining

easements, and these would only be progressed once Planning consent has been

received and heat supply agreements put in place. There is also a considerable

amount of work required to negotiate the traffic management requirements resulting

from having to install pipes in large trenches within major access roads within the

local area. The traffic management requirements would need to be agreed prior to

being able to obtain the necessary Highways Licenses granting permission to install

the pipework. It is envisaged that heat supply could commence within 12 months of

completion of the ERF subject to sufficient heat demand being identified and

contracted.

Discussion with the various potential heat users will be maintained, and negotiations

over heat supply agreement and designs for the consumer substations progressed as

early as possible.

Figure 4 – Supply Schematic

EfW Boiler

To condenser

Superheated Steam

Consumer Heat Exchanger

Flow Water at 110 °C

Return Water at 70

°C

To feed water tank

Feed Water

Turbine

Standby Boilers

Shell & Tube Heat

Exchanger

Electricity Export

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6 TECHNICAL OVERVIEW

6.1 Heat Users

It is expected that the development of a district heating system will take place over a

number of phases. This will minimise the initial investment while providing a base heat

load that will demonstrate to other potential heat users the benefits of utilising the

system. It is anticipated that the network will be further developed over a number of

years with sections connecting a number of buildings being brought on line for each

phase.

No pre-existing single development exists in the area which is of sufficient size to accept

a significant amount of heat from the plant, but there is the potential to supply a proportion of the heat exported to existing and proposed local developments. There are a

number of other developments which also present good opportunities for heat use

although they are some distance away. Potential additional heat users have been

identified and these provide an economic incentive for extending the network.

The ERF at Beddington Farmlands will provide a district heating output of up to

20,000 kW. The thermal energy is derived from the steam supply to the turbine, and is

therefore not ‘waste’ heat. The export of heat at Beddington ERF will result in a reduction in electrical export of up to 20%.

The potential connections to the system are described in section 6.1.3 below with a

general description of the types of heat consumers. Separate sections have been

provided on the heat users within Hackbridge (section 6.1.3.1) and Croydon (section

6.1.3.2).

6.1.1 Modelling Assumptions

District heating network design is based on peak heat demand. Peak heat demand can usually be determined from the winter daily heat use profiles, however; no daily heat

consumption data is available for the potential heat users. Instead typical daily

profiles which represent the heat users have been used. The estimated annual heat

demand was applied to this typical daily profile to estimate the peak heat demand.

A combined heat demand profile for each period was then developed to model the

seasonal and daily change in heat demand. The peak demand figure for each period was set by the maximum total capacity of the heat users.

6.1.2 Confirmed heat users

As part of the ongoing Viridor communications with Shroeder, the developers of the

mixed use redevelopment of the Felnex Trading Estate, Fichtner engaged with their

advisors, Inventa Partners.

Fichtner have held several meetings with Inventa Partners to discussion the options

for heat supply and the technical requirements to be satisfied. Sufficient information

was gathered to allow a preliminary DH pipe size calculations based on the heat

demand from the Felnex Trading Estate (section 6.2).

The main outcomes of the discussions were:

• an understanding of the assumptions made by Inventa Partners when modelling

the Beddington CHP scenario;

• confirmation that the model so far used by Inventa Partners is based on heat

initially supplied by the landfill gas engines with the mixed use redevelopment of

the Felnex Trading Estate as a single end user;

• an update on the heat demand of the mixed use redevelopment of the Felnex

Trading Estate and future connection by other developments; and

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• a timescale for providing information from both sides.

It was a very productive meeting which helped bring both Inventa Partners and

Fichtner up to speed on each other’s plans and has facilitated an ongoing collaborative

approach to progressing a DH scheme.

The total estimated heat load is approximately 1,200 kW (average).

A breakdown of the type of heat users is provided in Table 1 and Table 2, for

commercial and residential respectively. The surface area is indicated and has been

used to calculate the heat load for each property type based on the CIBSE Guide for

energy efficiency in buildings.

Table 2 – Felnex commercial type of heat users

Property Type Surface area

Supermarket 4,000 m2

Other retail 1,902 m2

Offices 5,795 m2

Care Home 3,050 m2

Community Centre 821 m2

Table 3 – Felnex residential type of heat users

Property Type Surface area

Residential above the supermarket 10,964 m2

Town houses 23,354 m2

Residential above retail 13,599 m2

Other apartments 13,846 m2

Residential in business forest 6,180 m2

6.1.3 Potential additional connections

The experience Sheffield suggests that once installation of a major district heating system commences interest levels rise and more potential customers can be

identified. Even as each new phase is developed it is likely new loads will be

connected to previous phases. As the scheme matures heat users that were initially

not considered as viable connections can be connected. Sheffield had four main

phases of installation but continued to connect new customer to all parts of the

network as the system expanded. This process of ‘infilling’ continues as new

consumers are connected each year in Sheffield.

This study has identified potential heat consumers in the vicinity of the South London

ERF based on publicly available information and data provided by Inventa Partners.

Further investigations are likely to identify more potential heat consumers. Currently

some heat users may not be financially viable to connect individually but with

economies of scale groups of smaller heat users may become viable connections.

This assessment has concluded that seven phases are appropriate for the supply of heat to the identified key heat users.

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Table 4- Heat users

Phase Potential key heat user

1 Felnex Trading Estate (confirmed heat user)

2 Carshalton College

Westcroft Leisure Centre

3 St. Helier Hospital

Corbett Close

Durand Close

4 Kelvin House

5 Whitgift Shopping Centre

6 Bernard Weatherill House

College Green

Taberner House

Davis House

Waddon

7 Menta site

Maps showing the location of these potential heat users are provided in Appendix B

and Appendix C, representing the west and the east side opportunities respectively.

We have assumed that the South London ERF will ultimately be capable of supplying

on average up to 20 MW (20,000 kW) of heat for a minimum of 30 years, which is the nominal life of the energy recovery facility. The realistic foreseeable heat export is

probably 15,000 kW.

Table 5 – Cumulative demand for the Beddington District Heating network

Phases Annual demand

[kWh]1

Average demand

[kW]2

Peak demand

[kW]

1 10,512,000 1,200 3,700

1+2 14,450,000 1,600 6,800

1+2+3 36,619,000 4,200 13,700

1+2+3+4 36,809,000 4,200 13,800

1+2+3+4+5 38,329,000 4,400 14,200

1+2+3+4+5+6 50,135,000 5,700 18,100

1+2+3+4+5+6+7 68,031,000 7,800 23,400

Note 1: annual heat demand being the billing unit for energy delivered to consumers by energy utilities (kW·h).

Note 2: average demand is the ratio between the annual demand and the total hours in a year (8760 hrs/yr).

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We have included Phase 1 to represent the connection to Felnex Trading Estate which is a confirmed heat user for the South London CHP scheme. A detailed optioneering

study is outlined in section 6.2. The commercial heat users within the Felnex Trading

Estate include a supermarket, retail outlets, offices, a care home and a community

centre. The residential heat users include apartments above the supermarket, town

houses, apartments above the retail units, other apartments and residential units. A

Memorandum of Understanding (MoU) is being developed between Viridor and the

developer Shroeder, responsible for the development at the Felnex Trading Estate, for

the use of heat from both the ERF and the landfill gas engines. Shroeder are currently

negotiating with two major utility companies who are bidding to be the Energy Supply

Company (ESCO) for Hackbridge (more information on ESCO’s is provided in section

9). These two utilities companies are seeking options to supply heat to the customers:

buying heat from the proposed South London ERF is one of the possibilities that these

utilities companies are actively considering. The developer has also been actively

engaged in discussions in response to a draft condition included in the London

Borough of Sutton’s report to Committee which requires the proposal to indentify and

include renewable technologies to achieve a 20% reduction in carbon dioxide

emissions.

The total estimated average Felnex heat load is approximately 1,200 kW with an

estimated a peak load of 3,700 kW.

6.1.3.1 West side of the ERF development (Hackbridge)

Discussions with Hackbridge Sustainable Suburb resulted in a number of

developments being identified as having potential for connection to the South

London CHP scheme. These are set out below. In particular a meeting was held at

BedZed, the Beddington Zero Energy Development in Hackbridge. Amongst the

attendees there were representatives from Bioregional, LB Sutton, Hackbridge &

Beddington Corner Neighbourhood Development Group (HNDG).

The main outcomes of the meeting were:

• potential early connection of the BedZed eco-village to the landfill gas

engines to supply heat in form of hot water. Estimated heat demand is

<100 kW. This will be investigated.

• Bioregional, in cooperation with the neighbourhood planning group, is seeking

funds and contributions to progress with the potential to connect the existing

buildings within Hackbridge to the proposed DH network.

• Bioregional and the LB Sutton have shown their commitment to support the

discussions with Network Rail. Crossing the railway is a key factor for the

heat to be delivered to any user on the east side of the Beddington site and

presents a major technical challenge.

The total estimated heat load is approximately 5,500 kW (average). Some of the

developments that have been identified are Westcroft Leisure Centre, Carshalton

High School for Girls, Boys College, Durand Close housing, St Helier Hospital, BedZed, Corbet Close, Mullards Estate and many others. The most relevant

developments, in terms of heat demand, are described below.

The CHP strategy that has been adopted and potential heat demand has been

discussed with Jeff Wilson and the London Borough of Sutton who advocated the

approach to developers and potential developers as undertaken by Viridor.

(1) Carshalton College

Carshalton College has expressed interest in connecting to the proposed

district heating system in preference to a forthcoming boiler replacement

programme.

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The annual gas usage data from 2010/11 suggests the College has an annual average demand of approximately 334 kW. The capacity of the existing gas

boilers, which will need replacement in the near future, is 330 kW per unit.

Based on a typical heat profile, we estimate the College has a peak heat

demand of 1,140 kW.

(2) Westcroft Leisure Centre

The Westcroft Leisure Centre is due to replace its existing gas boilers in the

near future. The Centre is also in the middle of a significant refurbishment

and construction is scheduled to be complete in November 2012. The heat

demand from the leisure centre prior to the refurbishment was as follows:

• average annual load = 1,008,000 kWh;

• peak load = 1,860 kW;

(3) St. Helier Hospital

St. Helier Hospital will be embarking on a major re-development programme

across a large portion of their existing site during 2012/13.

This will include redevelopment of their existing boiler house. The

management at the St. Helier Hospital has expressed strong interest in being

part of a local heat network.

The annual gas usage for the existing buildings, is approximately 19,427,877

kWh (2,200 kW annual average) and the existing boiler capacity is 8,000 kW

to cope with peak demand. Based on a typical heat profile for a hospital, we

estimate the hospital’s peak heat demand to be 5,800 kW.

(4) Corbett Close

Corbett Close is being developed by Affinity Sutton, a registered social

housing provider. Affinity Sutton has confirmed it would be interested in

connecting to a local heat network.

The development consists of the following:

• 10 x 2 bedroom houses;


• 14 x 4 bedroom houses.

The development will require space heating as well as domestic hot water

heating with a total annual heat demand of 50 kW. The annual requirements

are estimated as follows:

• space heating = 241,287 kWh;

• domestic hot water heating = 203,058 kWh.

Based on typical heat profiles, we estimate the peak heat demand to be

170 kW.

Corbett Close is scheduled to be developed from 2013.

(5) Durand Close

Durand Close is also being developed by Affinity Sutton who have expressed

an interest in connecting this development to a local heat network.

The development consists of the following:

• 132 x 1 bedroom flats;




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• 30 x 4 bedroom houses.

The development will require space heating as well as domestic hot water

heating for a total heat demand of 265 kW. The annual requirements are

estimated as follows:

• space heating = 1,071,837 kWh;

• domestic hot water = 1,225,007 kWh.

Based on typical heat profiles, we estimate the peak heat demand to be

895 kW.

Durand Close is scheduled to be developed slightly later than Corbett Close,

starting in 2013/14.

(6) Kelvin House

Kelvin House sits on the opposite side of Hackbridge Road to the Felnex

development. This development comprises of 87 apartments.

Kelvin House is nearing completion however as part of its planning consent is

has been developed to allow it to connect to any future heat network.

Construction has started on site and it is due for completion before the end of

2012.

The estimated heat demand is approximately 190,000 kWh. Based on a

typical heat profile, we estimate the peak heat demand to be 74 kW.

6.1.3.2 East side of the ERF development (Croydon)

Croydon Council is currently developing a strategy to establish a district heating

network for the central Croydon area through the Croydon Council Urban

Regeneration Vehicle (CCURV). The scheme would be based on the regeneration

plans for the town centre with key development plots being supplied by a central

energy centre. The team at the Council has developed a detailed financial model to

test the viability of the scheme and this assumes that there is a single gas fired

CHP energy centre. It is envisaged that there will be an average heat load demand

of approximately 27,000 kW (average) potentially increasing up to 64,000 kW

(average) from the sites identified, subject to planning permission being granted

for the development proposals.

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Figure 5 – Croydon development areas

The list of potential heat users within Croydon Council’s financial model includes,

but is not limited to:

(1) Ruskin Square;

(2) Bernard Weatherill House;

(3) College Green;

(4) Taberner House;

(5) Davis House;

(6) Waddon;

(7) Menta site;

(8) Whitgift Shopping Centre;

(9) NHS Croydon hospital;

(10) Fairfield Halls school; and

(11) a development on the existing Taberner House.

Some of the developments that will potentially join this scheme are shown in

Figure and outlined in the section below.

(1) Whitgift Shopping centre

Whitgift Shopping centre has been carrying out construction works for the

erection of a 5 storey extension building which comprises a total floor space

of 7,830 m2. The estimated annual additional heat demand is approximately

1,520,000 kWh (170 kW average). Based on typical heat profiles, we estimate the peak heat demand to be 455 kW.

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(2) Bernard Weatherill House

The Bernard Weatherill House (BWH), formally the Public Service Delivery

Hub (PSDH) is CCURV’s corner stone project. The development is a

22,300 m2 office building designed to house Croydon Council and a range of

local service providers. Works started in March 2010 and construction work is

programmed for completion in summer 2013. The estimated annual heat

demand is approximately 1,760,000 kWh (200 kW average). Based on typical

heat profiles, we estimate the peak heat demand to be 527 kW.

(3) College Green

College Green is located in the centre of Croydon. The site is made up of

several components. The College Green masterplan is to create a learning

and cultural area with a mixture of cultural, educational, leisure, residential

and retail uses and covers approximately 5,740 m2 floor area. The estimated

annual heat demand is approximately 792,000 kWh (90 kW average). Based

on typical heat profiles, we estimate the peak heat demand to be 309 kW.

(4) Taberner House

Taberner House is located in the centre of Croydon. Croydon Council are in

the process of preparing a masterplan for mid-Croydon, which encompasses

Taberner House. Initial proposals suggest a high quality residential

development with the ground floor uses having active frontages onto Queens

Gardens. Uses could include leisure, retail, health and/or the Council’s

Register Office. Full details of this masterplan are uncertain at present. The

estimated annual heat demand is approximately 6,175,000 kWh (700 kW

average). Based on typical heat profiles, we estimate the peak heat demand to be 1,850 kW.

(5) Davis House

The property was built in the early 1970’s and it has been subject to an

extensive refurbishment programme, including a newly designed reception

area, upgraded lift lobbies, refurbished male and female services and

Disability Discrimination Act (DDA) compliant accommodation including new lifts.

The property comprises retail accommodation at ground level at the front of

the property totalling 970 m2, office accommodation on ground and seven

upper floors totalling 8,304 m2. Car parking is provided at basement floor

level. The estimated annual heat demand is approximately 845,000 kWh

(100 kW average). Based on typical heat profiles, we estimate the peak heat demand to be 253 kW.

(6) Waddon

The project comprises the following units:

• a new leisure centre incorporating a swimming pool;

• 98 private flats;

• 2 private houses;

• 87 affordable flats;

• 66 affordable and 30 private flats;

• 58 private flats;

• a children’s education centre; and

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• an office.

Construction works started on the Waddon Leisure and Housing scheme in

January 2011 with completion of the first residential phase due in summer

2012. The estimated annual heat demand is approximately 3,965,050 kWh

(450 kW average). It is estimated that approximately 1,731,178 kWh will be

required for space heating and 2,233,872 kWh for domestic hot water. Based

on typical heat profiles, we estimate the peak heat demand to be 1,190 kW.

(7) Menta site

The Menta site is a 54 storey skyscraper (75,000 m2 development) and

comprises of:

• 499 flats;

• 4 star hotel (165 bed plus 22 serviced apartments);

• retail space, 2 ground floors of tower block;

• office space (6,596 m2);

• community centre (529.5 m2);

The combined estimated annual heat demand for the Menta site is

17,896,000 kWh (approximately 2,040 kW average). Based on typical heat

profiles, we estimate the peak heat demand to be 6,160 kW.

6.2 District heating network sizing and routing

Several site surveys have been carried out at the Beddington landfill site to determine a

pipe route to serve the Felnex site. An underground service survey was undertaken to

identify any service pipe running underground within the area which will be subjected to

the works for the installation of the DH pipework. These services are: gas main, sewage

pumping main (SPM) and low voltage underground electricity cable (LVUG).

The proposed CHP pipe route was amended following up from the outcome from the tree

survey so oak trees could be retained.

A suitable CHP pipe route has now been defined and submitted to the ERF contractor for

quotation. This is shown in Appendix D. The proposed route runs to the South of the

main effluent carrier (MEC) overflow channel to the western edge of the site, where it

turns south. The pipe route ends at the boundary of Viridor’s land ownership adjacent to

London Road. This provides a direct link to the public highway. Access to the heat supply

for the Felnex site and other potential users in Hackbridge will be taken from this point, crossing the railway via the London Road bridge.

The pipe route toward Croydon will run beneath the new site access road which is to be

created to serve the ERF. The services and ground conditions along this route will be

established. It will end at Beddington Lane, from where heat can be taken to various

locations in Croydon subject to contacts being secured. The precise details of pipe routing

from this point will be established in connection with future contracts and the exact

location of potential heat users.

6.2.1 Preliminary pipe size calculations

This section summarises the assumptions and the technical issues to size the DH

pipework for supplying district heat from the Beddington landfill gas engines to the

Felnex site.

For this size estimate, it is assumed a flow temperature at 90°C, and return

temperature at 70°C, as advised.

From the data supplied by Inventa Partners, the annual average heat demand is

estimated to be 1,240 kW.

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These are preliminary pipe sizing calculations and are based on the current information on heat loads and availability. It is recommended to use these figures as

an indicative assessment and then to re-size the pipework accordingly if necessary

once the routes to heat users to the east and west beyond the site are finalised,

taking into account the requirements of the heat end users.

6.2.2 Assumptions

In calculating the preliminary size of the DH pipework, the following assumptions have

been made:

• Pipe route length = 1.6 km;

• Peak heat load = 3,600 kW; (excluding heat loss)

• Supply hot water temperature = 90°C;

• Return hot water temperature = 70°C;

• Heat loss across the pipe = 100 kW (function of pipe length).

We have not been provided with the peak heat demand from Inventa Partners

therefore calculations of the peak heat load have been based on a combination of

typical residential and commercial heating profiles. An hourly typical profile is shown

in Figure ; an annual typical heating profile is shown in Figure . This results in a peak

heat demand of 3,600 kW.

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Figure 6- Typical hourly heat demand profile

Figure 7 - Typical annual heat demand profile

District heating network design is based on peak heat demand. Peak heat demand can

normally be determined from the winter daily heat use profiles. However, no daily

heat consumption data is available for Felnex Trading Estate. Instead typical daily

profiles which represent the heat users have been used. The estimated annual heat

demand was applied to this typical daily profile to estimate the peak heat demand.

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6.2.3 Results

An internal pipe diameter of 200 mm, a DN200 pipe, (300 mm external, including the casing and insulation) has been found to be the most appropriate for the scenario

described above. This is based on a peak heat demand of 3,700 kW, which is the

calculated peak heat demand plus the heat loss across the pipe from the landfill gas

compound to the Felnex Trading Estate.

The flow velocity within the pipework is 1.31 m/s, which is within acceptable design

limits. The velocity of the water in a pipe should range between 1.0 m/s and 2.0 m/s. At lower velocities there will be control problems due to time lag issues. At higher

velocities there could be pipe erosion issues.

As this pipework will also be used to supply heat from the ERF the capacity has been

checked using a higher supply temperature. At the likely heat export conditions from

the ERF this pipe line is able to deliver over 15,000 kW of heat to Hackbridge.

6.2.4 Heat availability supplied from gas engines

Energy recovery potential from the Beddington landfill has been evaluated by Viridor.

This study is based on gas collection data, waste deposition data and information from

the landfill operators. Assumptions on the gas collection efficiency and average

methane content of the landfill gas have been made. These assumptions along with

the waste deposition data have been used in an empirical gas generation model that

predicts the future energy recovery potential of the site.

Based on the information provided from this study, the back-up required at the Felnex

site to cope with peak heat demand has been calculated.

Viridor proposes to convert two of the four landfill gas engines in order to meet the

Felnex heat demand, prior to the South London ERF becoming operational.

Two landfill gas engines will be capable of providing 6 year availability (up to 2018)

based on the predicted Felnex average heat demand. However the security of heat

supply will be guaranteed by the heat produced at the South London ERF which,

subjected to planning consent, is scheduled to be operational in 2016/2017. With the

ERF operational, Viridor will be in a position to provide sufficient heat to cope with

Felnex’s peak demand. Details of DH pipe sizing from the ERF to the landfill gas

compound and to Beddington Lane (towards Croydon) are illustrated in section 6.2.5.

During peak times, the ESCO will require a back-up system capable of supplying up to

2,500 kW of heat.

The back-up boiler should be designed to provide sufficient back-up in case a major

failure at the engines occurs or there is any issue associated with the pipeline.

Further investigation is currently being carried out to understand the level of heat

supply if a full heat recovery from the landfill gas engines was to be implemented. A

full heat recovery would recover the exhaust heat as well as heat lost from the

engines. An initial proposal from the CHP gas engine supplier indicates that by

recovering heat from the water jacket and exhaust the heat available would be

1,081 kW per engine. This would require additional capital costs but would be capable of meeting the normal heat demand by converting only two of the four gas engines

and would leave the possibility of converting just one of the four engines.

Based on our calculations, on the assumption that two gas engines were to be

converted then Viridor will be in a position to supply enough heat to meet the annual

average heat demand. However during peak times, the ESCO will still require a back-

up system capable to supply up to 1,500 kW, if the heat recovery included heat from

the exhaust.

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The difference between peak heat demand and heat available from the landfill gas engines decreases if four gas engines were converted instead. It should be noted that

even in this scenario, the landfill gas engines will not be capable of supplying enough

heat during peak demand if the heat was only recovered by a water jacket. However,

if Viridor opted for a full heat recovery (including the heat from the exhaust gasses)

then the back-up to meet the peak heat demand will not be required.

It would be prudent to size the back-up boilers to meet the Felnex peak load

regardless of how many engines are converted. This would provide back-up in case a

major failure at the engines occurs or there is any issue associated with the pipeline.

6.2.5 Heat from the South London ERF

Four different scenarios have been investigated to understand the sizing implications

when interfacing the heat from the landfill gas engines and the Beddington ERF.

Additional pipework will have to be considered when connecting the CHP building at

the Beddington ERF to the landfill gas compound. In addition, a provision for pipework

from the CHP building to Beddington Lane will have to be included, as part of the plan

to export heat on the east side of the site. These sections of pipework and

corresponding approximate pipe lengths are shown in Figure 5.

The CHP pipe route sections are described in Table below.

Table 6 – Sections of CHP pipe route (description)

From To Approximate

length [m]

Reference colour in

Figure 8 – Sections of

the CHP pipe route

(not to scale) below

Landfill gas

compound

West Viridor lease

site boundary (direct

to Public Highway)

1,600 red

Beddington ERF Landfill gas

compound

360 green

Beddington ERF

(separate set of pipes)

Beddington Lane

(east side)

500 orange

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Figure 8 – Sections of the CHP pipe route (not to scale)

Scenario 1: the supply heat temperature increases to 110°C (from 90°C).

This increase in temperature provides a more efficient system and consequently a

reduction in costs, capital and operational.

As a consequence of the increase of differential temperature between the supply

water and return water, the water flowrate decreases in order to maintain a constant

heat load.

Heat demand = flowrate surface (Tsupply –Tend user)

where the ‘surface’ is the cross sectional area of the pipe.

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We have sized the DH pipe sections from the ERF to the landfill gas compound and from the ERF to Beddington Lane. The pipework arrangements include two separate

sets of pipes: one set supplying heat to the east side (i.e. Croydon), the other set

supplying heat to the west side (i.e. Felnex and other potential users in Hackbridge).

In order to do so we have assumed that all the heat available from the turbine at the

ERF, which is up to 20,000 kW, will be distributed between Felnex and future heat

users in Hackbridge and Croydon.

We have calculated what the internal pipe diameter would have to be if the South

London ERF had to supply 20,000 kW of heat which is the maximum heat that can be

extracted from the turbine. The most likely arrangements in terms of internal

diameters of those sections of pipes would be as follows:

• Pipe from the ERF to Beddington Lane: DN300 (length of 500 m);

• Pipe from the ERF to the landfill gas compound: DN200 (length of 360 m);

The pipe sizes described above would have to be subjected to detailed design.

DN300 would be the pipe diameter used for the pipeline for supplying heat to

Croydon.

It should be noted that supply diversification has not been applied to the known heat

loads at this stage. Further investigations should provide a greater level of information

which normally confirms that individual peak demands rarely coincide. This will allow

more buildings to be connected without exceeding pipeline capacity. This will also

greatly increase the ability to provide heat to both Hackbridge and Croydon.

6.3 District heating equipment

(1) Piping

The heat transfer loop from the landfill gas engines will require a flow and return

pipe with an internal diameter of 200 mm for the pipe. Pressure drop across the

pipe was a determining factor on pipe sizing. The heat supply from the landfill gas

engines will be at lower temperatures than that supplied by the ERF. This means

that the pipes will have a higher capacity when fed from the ERF. The DH pipes from the ERF will be sized to allow the full 20,000 kW of heat available to be

delivered towards either Hackbridge or Croydon to maximise supply flexibility.

DH pipes are pre-insulated and the materials are steel for the service pipe,

polyurethane (PUR) for the insulation and high density polyethylene (HDPE) for the

outer casing. The pipes will be installed in accordance with BS EN 13941: Design

and installation of pre-insulated pipe systems for district heating. It is very straightforward to add additional pipework to this type of system.

(2) Primary plant area

Two separate primary plant areas will have to be accounted for: one at the landfill

gas compound and one at the ERF within the CHP building.

The primary heat exchanger at the ERF recovers energy from the steam turbine

and transfers this to hot water which will be pumped to the landfill gas engine

primary plant.

The primary heat exchanger at the landfill gas engines recovers energy from the

landfill gas engine and transfers this to hot water which will be pumped to the

Felnex Trading Estate.

The heat exchangers would either be a shell and tube type or plate type,

constructed from stainless steel to ensure longevity. The heat exchangers have

been sized for the maximum duty for this option applying a conservative approach

to heat transfer for a supply and return temperature of 90°C and 70°C

respectively. Heat exchangers sized for a supply and return temperature of 110°C

and 70°C respectively would be cheaper due to higher efficiency.

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There will be two DH circulation pump sets: one at the ERF and one at the landfill gas compound. The set of pumps at the landfill gas compound will provide service

for the main pumping system; the set of pumps at the ERF will serve as booster

pumps for circulation.

A DH circulation pump set will include two pumps arranged in a duty/standby

configuration to provide 100% redundancy. It is necessary to overcome pressure

losses through the system and to maintain an adequate water flow. Booster pumps

could be provided at the ERF primary plant to provide sufficient pressure to reach

the landfill gas compound.

The main primary plant area would probably have to be at the landfill gas

compound as that is likely to start operating sooner than the ERF.

The design of the pumping station will depend on the location (ERF, landfill gas

compound) and the timing for the installation(s) to be operational. The final

configuration will be subjected to detailed design due to its complexity.

(3) Secondary plant area

A secondary heat exchanger at the heat user’s plant room will be required to

transfer heat between the two hot water systems. A plate heat exchanger is

considered to be the most appropriate for this application. One heat exchanger,

complete with local controls and a heat meter will be supplied to each heat user.

(4) Back-up Boilers

Guaranteeing heat to the various consumers at all times will require a back-up

boiler system for continuous supply when the gas engines are not operational.

6.4 Capital Costs

The estimated capital costs for providing the district heating infrastructure (section 6.3)

required to supply Felnex Trading Estate, at approximately 2 km away from the site, include the following:

• infrastructure at the ERF, to be located in the CHP room’

• pipework from the ERF to the east boundary of the site, towards Beddington Lane;

• pipework from the ERF to the landfill gas compound, as a separate set of DH pipes;

and

• infrastructure at the landfill gas compound (as described in the primary plant area)

and pipework from the landfill gas compound to the west boundary of the site,

towards Felnex Trading Estate.

The total estimated capital investment required by Viridor is approximately £3.5 million.

The estimated capital costs that the ESCO will have to incur to provide the required

infrastructure to supply heat to the heat users is approximately £1.5 million.

6.5 Operating and Maintenance Costs

Operational and maintenance (O&M) costs for the district heating network have been estimated based on Fichtner’s experience of similar CHP projects. The market has not

been approached for actual quotations and as the scheme progresses more accurate

figures will need to be obtained.

The annual O&M costs for Viridor are estimated to be approximately £31,000. The O&M

costs for the ESCO are estimated to be approximately £50,000 per year; these costs

include the inspection and maintenance of the back-up boilers, usually associated to the

ESCO.

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The operating costs at the ERF should be looked at in conjunction with a reduction in revenue from electricity export. By exporting heat, the ERF will have a reduced electrical

output therefore this should be taken into account in the financial modelling. The heat

available from the ERF is not surplus heat or waste heat but heat that could be used to

generate electricity. At this stage we can only estimate the heat to power ratio but this is

expected to be 4:1, i.e. for each 1,000 kW of heat generated there is a decrease of

250 kW of electricity production. Providing the heat sale tariff is set correctly the gross

income to Viridor should be unchanged.

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7 COMMERCIAL FEASIBILITY

7.1 Heat tariffs

In order for a district heating scheme to be successful it must be able to compete with

the alternative fuels available to each of the identified developments. Energy demands

for each development have been assumed to be met by gas.

It is difficult to estimate the costs that each development will pay for their heating and

hot water due to the sensitivities in being able to access commercial information. A heat

tariff that offers the consumer a saving against gas should be attractive providing the

heat source can also demonstrate that it is low carbon.

The heat tariffs for domestic and commercial consumers should be different to reflect the

volume of usage and the potential for debt risk. It is now uncommon for domestic energy

tariffs to include a monthly standing charge so all fixed and variable costs will need to be

recovered through a single unit charge. Standing charges are still a feature of some

commercial energy tariffs and provide the benefit of increasing cash flow during the

summer months when energy sales will be at their minimum. Commercial energy users

tend to pay less per unit of energy than domestic energy users due to buying power

resulting from higher volumes of usage.

Heat supply tariffs can be set based upon current commercial gas prices converted to

output energy unit prices, which can provide competitive prices for the energy supplied.

Different tariffs will be required for commercial and residential heat users.

The diagram in Figure illustrates the key players of the proposed CHP scheme and

associated heat prices.

Figure 9 – Key players of the proposed CHP scheme

A DH unit energy price is not directly comparable to gas prices. Gas prices represent a

gross energy price with the amount of net energy available being a function of boiler

efficiency. In normal circumstances Building Regulations require very energy efficiencies

for both commercial and residential buildings. This is often achieved through a mixture of

energy conservation measures and high efficiency boilers. It is now not uncommon to

expect boiler efficiencies to exceed 85% with over 90% being achievable on domestic

boilers. District heating is supplied via a plate heat exchanger which is a very efficient

method of transferring energy with efficiencies of at least 99%.

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The unit gas price for commercial district heating users has been estimated based on DECC data for small commercial gas users at 2.891p/kWh excluding Climate Change

Levy. This represents an input energy price. If a reasonable boiler efficiency of 85% is

applied, the output energy unit price will be 3.401p/kWh. The heat user will avoid paying

Climate Change Levy by using district heating. The heat user will also make savings on

boiler maintenance costs. Therefore it has been assumed that a unit heat price of

3.5p/kWh is reasonable for an ESCO to charge commercial heat customers. This should

present a cost saving against using gas.

The unit gas price for residential district heating users has been estimated based on

DECC data for domestic residential gas users at 3.997p/kWh. This represents an input

energy price. If a reasonable domestic boiler efficiency of 90% is applied, the output

energy unit price will be 4.441p/kWh. The heat user will also make savings on boiler

maintenance costs. Therefore it has been assumed that a unit heat price of 4.2p/kWh is

reasonable for an ESCO to charge domestic residential heat customers. Subject to

investment costs, it may be possible to offer a lower tariff to social housing

developments.

Although these suggested heat prices are very similar to gas prices the heat consumer

will actually require less energy due to the differential between boiler efficiencies and

heat exchanger efficiencies. Therefore the heat consumer should be able to make energy

cost savings of at least 10%. Heat prices can be indexed to gas prices so as to preserve

the competiveness of the heat tariff.

Based on the heat price suggested above, from the ESCO to the end heat users, the

ESCO for the Felnex Trading Estate could generate revenues of £405,000 per year, just

on Phase 1. The annual revenue could potentially reach approximately £6.6 million over

time taking into consideration that the ERF could export up to 20,000 kW of heat

consistently.

7.2 Viability

In order to assess the commercial viability of the CHP scheme a basic financial model

was developed. This model was used to quantify the financial impact of the proposed

heat export so that an attractive heat price for the ESCO could be determined.

The financial model shows that the ESCO will be able to achieve an Internal Rate of

Return (IRR) of 15% within 7 years which takes into account the declining gas yield

from the landfill gas engines and the subsequent project continuation from the ERF.

The wholesale heat price from Viridor to the ESCO has been investigated on the basis of Viridor recovering the initial capital costs, after allowing for inflation. Inflation was

assumed to be a flat rate of 2.5% over the 7 years project life taking into account the

declining gas yield from the gas engines, therefore an IRR of 13% was targeted. This is

equivalent to an IRR of 10.5% if inflation is not considered.

Two scenarios have been modelled:

• scenario 1: no government support; and

• scenario 2: Renewable Heat Incentives (RHI) provided.

It is assumed that the heat sales will be the only source of revenue for this scheme. To

be conservative, the revenues under the Renewable Heat Incentive (RHI) tariffs and

Renewables Obligation Order (ROC) are not considered in this assessment, as it is not

clear whether the Government will have sufficient funds for all schemes in the future.

The wholesale price of heat provided by the existing landfill gas engines will depend on

the level of investment required to deliver the heat to the Beddington landfill site

boundary. The wholesale heat price charged by Viridor to the ESCO for heat from the

ERF must fulfil two objectives. Firstly it must compensate Viridor for the reduction in

power output caused by exporting heat and cover the investment costs for providing the

infrastructure required to enable heat export. Secondly it must offer the ESCO a

sufficient margin on the retail heat price so that the ESCO can cover their costs and

make a reasonable level of return.

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It is currently envisaged that the wholesale price will be of the order of 1.5 per kWh. However, if RHI were provided, assuming a rate of 1.0p/kWh, the heat price from Viridor

to the ESCO could be reduced to 0.05 per kWh and would make the scheme even more

attractive to the ESCO.

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8 ENVIRONMENTAL BENEFIT

8.1 Viridor approach

The National target, which has been set by the UK Government, is for a 34% reduction in

CO2e emissions from 1990 levels by 2020 and a reduction of 80% by 2050. Additionally

the draft Planning Policy Statement: Planning for a Low Carbon Future in a Changing

Climate highlights the importance that decentralised energy supply will play in reducing

carbon at a local level through national policy. This builds on the European Directive

(2009/28/EC) which promotes the use of renewable energy and led to the UK's

commitment to sourcing 15% of its energy from renewable sources by 2020.

Viridor is actively tackling the issue of carbon emissions resulting from its operations. Recently Viridor fully engaged with the trade body for the sector, the Environmental

Services Association (ESA), to produce its carbon reporting protocol for the waste sector.

Under this protocol, carbon reporting follows internationally recognised categories of

emissions; direct emissions, indirect emissions and avoided emissions.

Over the previous year, Viridor conducted a review of its current data capture related to

carbon management which has enabled improvements to be identified and changes to be

made. By making improvements to the methods of data capture and base lining for the reporting of carbon emissions, Viridor will be able to meet its obligations under the

Carbon Reduction Commitment (CRC). The CRC, which was recently renamed the CRC

Energy Efficiency Scheme, is a mandatory carbon emissions trading scheme covering all

organisations using more than 6,000,000 kWh of electricity per year. It has been

implemented by the UK Government as a new climate change and energy saving scheme

to promote energy efficiency and help reduce carbon emissions. The CRC requires Viridor

to monitor and report emissions and to purchase allowances to emit CO2e. The more CO2e

Viridor emits, the more allowances Viridor will need to purchase, therefore there is a

direct incentive to reduce emissions.

As part of the South London Waste Partnership (SLWP) residual waste treatment service

contract Viridor will implement a carbon management plan. The plan commits Viridor to

setting and managing carbon reductions. Implementing this district heating scheme will

greatly assist Viridor in meeting their obligations.

8.2 CO2 savings to potential heat users

As the heat from the ERF plant in CHP mode displaces heat and power produced by fossil

fuels it could be considered as not contributing any carbon emissions, Therefore the heat

exported from the plant can be considered zero carbon energy and be used by the

outlined developments to achieve their carbon target.

When in full CHP mode the South London ERF will be producing less CO2 than

conventional fossil fuel heat and power generation. This means that the district heating

scheme will be saving carbon emissions compared to the carbon emissions from a gas

heating system, which is normally estimated at 194 gCO2/kWh.

8.3 Comparison with the SLWP baseline scenario

A WRATE model was developed to compare the carbon emissions of Viridor’s solution

with the ERF exporting electricity only against the SLWP’s baseline scenario. The climate

change potential of the proposed solution in electricity only mode equates to a carbon

benefit of 56,400 tonnes of CO2e. Considering that the SLWP’s baseline scenario has a

carbon burden of approximately 38,400 tonnes of CO2e, the overall carbon saving for this

project would be approximately 94,800 tonnes of CO2e.

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The carbon saving per tonne of waste treated is approximately 209 kg of CO2e for the proposed solution in electricity only mode. A net saving of over 293 kg of CO2e per tonne

of waste could be achieved when moving from the SLWP’s baseline scenario to the

Viridor solution.

When the ERF exports heat, a proportional reduction in electricity production occurs but

the carbon benefit increases. The carbon savings relating to the heat export would

increase compared to the WRATE model outputs, overall CO2e and CO2e per tonne of

waste treated would improve because additional carbon saving is provided by the heat

export.

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9 ENERGY SERVICE COMPANY (ESCO)

It is common to utilise an ESCO to manage the interface between the energy producer and

the energy consumers for a major district heating system. This allows for separate

accountability and risk management. The ESCO would buy energy from the producer at a

rate that provided a return to the produce and the ability for the ESCO to make sufficient

margin to cover their costs and risks.

The ESCO would normally be responsible for:

• ensuring that there is sufficient heat available at all times to meet the demand of the

DH system;

• maintaining the DH system;

• DH system operational costs such as peak lopping fuel, pumping and water

treatment;

• billing, revenue collection and debt risk;

• sales and marketing activities; and

• customer care.

Financing of the initial infrastructure and any subsequent additions can be a major undertaking. In this instance the scale of the investment required could be a disincentive for

a third party sponsored ESCO. If the ESCO were required to fund the initial investment they

would need to provide considerable equity and to source project finance from a bank. In the

current financial climate this may be hard to achieve. Also in this case the heat purchase

price from the ERF would need to be low and there would need to be guarantees in place

over long term heat supply and back up supplies. The issue of debt risk could be a

significant factor to any funder.

The ESCO would need to put in place key agreements with Viridor to cover the following

critical items:

• System operation. It would be logical in this scenario for the ERF operator to be

contracted to operate the DH system to operating instructions provided by the ESCO.

An operating fee would need to be included in this agreement.

• Heat supply. The ERF operator would need to guarantee to meet the actual heat

demand either from the ERF or from standby boilers. Alternatively the ERF operator

could agree only to supply heat when the ERF is operational and at a level determined

by the plant performance. The option chosen would affect the heat purchase price as

the cost of the standby heat will need to be factored into the tariff calculation.

The maintenance of the DH system can be contracted out to various contractors. The key

issue with DH system maintenance is to maintain supply by responding rapidly to

breakdowns. Loss of supply affects DH system reputation and consumer confidence. If the

DH system is not delivering heat it is not earning revenue so the ESCO will benefit from

maintaining high availability and from meeting full demand. The level of maintenance costs

will depend on the ownership of the standby facilities and the agreed supply termination

point. Also the ownership and therefore maintenance responsibility of the steam to water

shell and tube heat exchanger will need to be clarified.

A key area for the ESCO is the ability to bill the heat consumers and collect the revenue

due. Proving individual heat meters is a straightforward task using proven technology. Heat

meters for domestic applications can include tamper indicators. Meter reading can range

from the basic manual reading to remote wireless meter interrogation at whatever

frequency is deemed appropriate. The debt risk with commercial consumers is relatively low

although some care must be taken when the consumer is only a tenant in the building being

served. On the other hand the debt risk with domestic users can be higher due to a number

of factors. Whilst the level of debt can be low, the number of debtors can be high and redress can be slow and difficult, particularly where social housing is concerned. It is

possible to contract with companies who will read the meters and collect the revenue and

who will also take the debt risk but the fees involved can be high.

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In the context of this particular project and considering the level of investment required it is considered that the ESCO could be one or even more than one company, given the potential

heat demand identified. The ESCO will have to invest in the infrastructure outside the

Viridor lease boundaries and the planning application boundaries.

As Phase 1 of Felnex Trading Estate could be ready before the ERF is ready to supply heat it

will be necessary to install local infrastructure and supply heat from the landfill gas

compound. The two landfill gas engines will be capable of supplying heat until 2017/18.

A number of potential companies who could act as an ESCO for this project have already

been identified. Initial discussions have been held with one major utility company so far.

Companies that offer these services include:

• E.ON Sustainable Energy

• SSE

• Vital Energi

• Dalkia

• MITIE

In order to be able to progress discussions with potential ESCO’s draft heads of terms have

been developed, see Appendix E. These have been developed for a Viridor project in Cardiff.

A more detailed draft Heat Supply Agreement has also been developed for use once the

project progresses.

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10 ACTION PLAN

The South London ERF will as a minimum be CHP enabled to be able to deliver 20,000 kW

of heat. To become a CHP plant thermal energy needs to be exported from the site in the

form of hot water. A hot water based system will be provided as this provides the widest

opportunities for heat users. In order to achieve this, the scheme scope needs to be defined

and technically assessed to prove that it is deliverable. Potential consumers need to be

identified and approached so that there is a high degree of certainty over heat sales. The

economic viability then needs to be confirmed. Once these steps are completed final

negotiations with potential ESCO’s can take place with a high degree of certainty. This

process needs to be repeated if the initial assessment is not positive as circumstances can

and will change.

To ensure this process happens an action plan should be drawn up and implemented. It

should involve all the local stakeholders and be supported at the highest levels within

Viridor. The action plan needs to identify the strategic phases required for the district

heating scheme development.

The following project development phases are required to define the scheme:

Initial phase:

• initial heat load survey and research;

• follow up detailed heat load survey;

• engage with London Development Agency and Sutton and Croydon Councils;

• engage with Network Rail;

• build data base of potential heat users;

• target buildings identified as potential heat users;

• carry out heat use surveys at targeted heat users;

• determination of seasonal heat demand over time;

• preliminary pipe routing;

• infrastructure sizing and configuration;

• technical viability confirmation;

• capital cost estimates;

• operation and maintenance cost estimates;

• economic viability assessment;

• draw up project master plan;

• set up joint working group with stakeholders; and

• set out a marketing strategy.

Intermediate phase:

• detailed negotiations with heat consumers;

• finalisation of initial heat demand;

• finalisation of infrastructure sizing;

• detailed discussions with Highway Authority over pipe routing;

• finalisation of pipe routing;

• tenders for initial infrastructure;

• tender for Energy Services Company (ESCO);

• sign heads of terms for heat supply agreements;

• installation of initial infrastructure;

• sign agreement with ESCO; and

• commissioning of scheme;

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Final phase:

• marketing of the scheme;

• expansion of the scheme by adding major phases; and

• expansion of the scheme by infilling on existing infrastructure.

The initial phase can be repeated annually until a viable scheme is developed. A joint

working group will be established involving the Greater London Authority (GLA), Sutton

Council, Croydon Council and other local stakeholders. Once an ESCO is in place they would

join the group. The objective of this group would be to maximise the potential of the district

heating scheme.

Constructing a data base of potential heat users is a key activity. This data base needs to be

revisited annual and updated. New and planned developments need to be added. Change in

building ownership and use can affect the potential to be a heat customer. Boiler age must

be tracked so that the consumer can be target when they are already considering investing

in a new heating system. The data base will become a powerful tool over the life of the

project.

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Appendix A - CHP Study, Mouchel, March 2010

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Appendix B - Potential heat users, West side (Hackbridge area)

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Appendix C – Potential heat users, East side (Croydon area)

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Appendix D – CHP pipe route

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Appendix E – Draft Heads of Terms

DRAFT HEADS OF TERMS

PARTIES

(1) [ ESCO details here]

(2) VIRIDOR LIMITED (incorporated and registered in England and Wales under

company registration number •), the registered office of which is at • ("Viridor").

RECITALS

(A) Viridor is constructing a 276,000 tonne per annum waste to energy facility, at

Beddington Lane, South London, generating electricity and heat (the “Facility”)

(B) [ ] wishes to enter an agreement (the "Heat Purchase Agreement") with Viridor for

the offtake of heat [and electricity] from the proposed Facility

(C) This Agreement sets out the confidential and exclusive basis upon which the parties

agree to work together to negotiate and, subject to contract, enter into the Heat

Purchase Agreement whereby [ ] will have an exclusive agreement to purchase

heat output from the Facility

IT IS AGREED AS FOLLOWS:

definitions

In this Agreement, the following expressions shall, where the context so requires, be

deemed to have the following meanings:

“Business Day”

means any day other than Saturday or Sunday, Christmas Day or Good

Friday and other than a bank holiday in England within the meaning

given by section 2 of the Banking and Financial Dealing Act 1971;

“Viridor Project Information"

means all documents, surveys, drawings, studies, reports, specifica-

tions, calculations, operating manuals, plans and all tangible or intangi-

ble property created or prepared by or on behalf of Viridor in relation to

the Project, as set out in the attached document;

“[ ] Project Information"

means all documents, surveys, drawings, studies, reports, specifica-

tions, calculations, operating manuals, plans and all tangible or intangi-

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ble property created or prepared by or on behalf of [ ] in relation to the

Project;

“Group”

means, in relation to any company, that company and every other com-

pany that is, from time to time, a subsidiary or holding company of that

company or a subsidiary of any such holding company (and the terms

“subsidiary” and “holding company” shall have the meanings given to

them by Section 1159 of the Companies Act 2006);

"Heat Purchase Agreement"

means the contract intended to be entered into by Viridor and [ ] the

purchase of Heat from the Facility

"Insolvency Event"

means either party entering into a voluntary arrangement within Part 1

of the Insolvency Act 1986, or any other composition, scheme or ar-

rangement with (or assignment for the benefit of) its creditors; or being

unable to pay its debts within the meaning of Section 123(1)(e) or Sec-

tion 123(2) of the Insolvency Act 1986; or if a trustee, receiver, admin-

istrative receiver, administrator or liquidator or similar officer is

appointed in respect of all or any part of its business or assets; or if a

resolution of it is passed or a petition is presented and not discharged

within 28 days for its winding up or for the making of an administration

order (otherwise, in each case, than for the purpose of a bona fide

amalgamation or reconstruction);

"Party"

means Viridor and [ ], or any one of them as the context requires;

"Project"

means the design, development, construction, commissioning, and op-

eration of the Facility together with associated plant and equipment re-

quired to offtake heat from the Facility;

“Project Documentation”

means, as appropriate, [ ] Project Information or Viridor Project Infor-

mation;

"Project Plan"

means a detailed programme for the construction phase of the Project

which identifies timings and key dates for its implementation, which will

developed in accordance with Clause 5;

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“Facility”

means the energy from waste plant as described in Recital A

Exclusivity

During the term of this Agreement, Viridor shall not (and shall procure that no member of

its Group or person acting on behalf of it or its Group shall), make, accept, solicit or

consider any offer from, or negotiate with, any person other than [ ] (or a member of such

[ ]’s Group) regarding the potential offtake of steam and/or hot water from the Facility.

AGREEMENT TO negotiate THE HEAT PURCHASE AGREEMENT

In relation to the Heat Purchase Agreement the Parties have agreed in principle to the

following terms:

they will negotiate in good faith and aim to conclude negotiations on a legally binding Heat

Purchase Agreement within 6 months from the date of this Agreement;

they may agree conditions to the Heat Purchase Agreement which will require fulfilment

before the Heat Purchase Agreement becomes fully unconditional; and

the maximum initial heat price chargeable under the Heat Purchase Agreement will be 1.5

p/kWh (based at 1st April 2012) at volumes, temperatures and pressures to be defined in

the Heat Purchase Agreement and shall be indexed annually using an indexation

methodology detailed in the Heat Purchase Agreement. The Parties acknowledge that this

price will be used by [ ] as a basis to market the sale of heat to its customers.

Without prejudice to the enforceability of the remainder of this Agreement, the Parties

agree that the provisions of Clause 3.1 are not intended to (and shall not) create any legally

binding obligations on either Party.

Each Party will bear its own legal costs incurred in connection with the negotiation of this

Agreement and the Heat Purchase Agreement.

VIRIDOR’s RESPONSIBILITIES

It shall be Viridor’s responsibility, at its own cost, to:

as soon as reasonably practicable after the date of this Agreement, provide [ ] with a

named representative who will attend all Project meetings to deliver the detailed proposal with respect to developing the Heat Purchase Agreement.

keep [ ] updated as to progress by them in securing discharge of any outstanding planning

conditions for the Facility ;

work with EON to develop the Project Plan; and

EON's Responsibilities

It shall be [ ]'s responsibility, at its own cost, to:

as soon as reasonably practicable after the date of this Agreement, provide Viridor with a

named representative who will attend all Project meetings to deliver the detailed proposal

with respect to developing the Heat Purchase Agreement.

prepare and submit, as soon as reasonably practicable, the Project Plan; and

upon agreement of the Project Plan, to develop details of the Heat Purchase Agreement for

further discussion by the Parties.

Joint responsibilities

Each Party shall:

appoint a representative of sufficient seniority to whom notification of any meetings and/or

performance progress should be given;

co-operate with the other to enable it to discharge it obligations under this Agreement with

regard to achieving the delivery of the Project and, subject to contract, entering the Heat

Purchase Agreement as soon as practicable preferably within 6 months of the date of this

Agreement; and

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give the other Party reasonable opportunity to attend any discussions with Government

bodies and/or local resident liaison committees convened by that Party in relation to the

Project.

Project documentation

[ ], in respect of [ ] Project Documentation, and Viridor, in respect of Viridor Project

Documentation:

holds sufficient title in the same to enable the other to use the same in connection with this

Agreement;

shall retain all copyright and other intellectual property rights as they hold in the same.

Insofar as it is able, each Party hereby grants or shall procure the grant to the other Party

an irrevocable, non-exclusive and royalty free licence to copy, reproduce and use Project

Information (subject to such use being solely in relation to the Project) provided that each

Party shall have no liability the other Party for the use by any person of such documents

and information other than for the purposes for which they were prepared or provided.

CONFIDENTIALITY AND PUBLICITY

Each Party shall, from the date of this Agreement and for a period of three years after its

termination or expiry, keep strictly confidential and shall not disclose to any third party

without the prior written consent of the other Party:

information (including Project Documentation) supplied to it by the other Party (or any of its

agents, servants, representatives or employees) in relation to the subject matter of this

Agreement;

information which may otherwise come into its possession or of which it may become aware

with respect to the business or financial affairs of the other Party; and

the terms of this Agreement and all other agreements, arrangements and understandings

entered into between the Parties in relation to the subject matter of this Agreement.

Notwithstanding clause [ ], either Party shall be entitled to disclose any of the information

or matters referred to therein:

pursuant to any law;

to its professional advisers and consultants who require disclosure of such information or

matters to carry out their duties as professional advisers or consultants;

to the extent that the same has become generally available to the public otherwise than as

a result of a breach of this Clause 0 by the Party seeking to disclose the information or

matter in question;

to the extent that the same was purchased or otherwise legally acquired at any time from

third parties free of any restriction regarding disclosure;

to its officers, employers, agents and contractors subject to appropriate confidentiality

obligations being given; or

to any employee of its Group companies if so required in order to develop the Project and

the Heat Purchase Agreement.

TERM AND TERMINATION

This Agreement shall commence from the date of execution and shall continue for a period

of 24 months (or as extended by agreement between the Parties in writing).

This Agreement may be terminated earlier by written agreement of the Parties and shall

terminate:

automatically and forthwith:

pursuant to clause 0; or

upon the execution of the Heat Purchase Agreement;

forthwith:

on written notice being given by one Party to the other upon the occurrence of an

Insolvency Event affecting the other Party; or

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where a Party commits a material breach of its obligations under this Agreement (the

“Defaulting Party”) in respect of which the other Party has issued a notice to the Defaulting

Party specifying the failure and requiring a remedy and such a requirement has not been

complied with within 10 Business Days of receipt of the notice; or

Limitation LIABILITY

Neither Party shall be liable for any indirect or consequential losses or expenses, howsoever

caused (including, but not limited to, loss of anticipated profits, goodwill, reputation,

business receipts or contracts or losses or expenses resulting from third party claims) which

are suffered or incurred by the other Party in connection with the failure to fulfil or breach

any obligation under this Agreement.

No action or proceedings for any breach of this Agreement (save for any breach of clause

8) may be commenced after the expiry of one year from the date of termination of this

Agreement.

Nothing in this Agreement shall exclude or limit the liability of either Party for death or

personal injury resulting from the acts of that Party or its directors, officers, employees or

agents.

Subject to Clause 10.3, the each Party’s total aggregate liability in respect of all other

claims, losses or damages, whether arising from tort (including negligence), breach of

contract, under an indemnity or otherwise (but excluding insured losses) under this

Agreement shall in no event exceed £100,000 (one hundred thousand pounds sterling) in

aggregate.

General

Either Party may assign the benefit of this Agreement to a third party subject to the consent

of the other Party (such consent not to be unreasonably withheld or delayed).

Nothing in this Agreement shall confer any enforceable rights on any third party by virtue of

the Contracts (Rights of Third Parties) Act 1999 save for any permitted assign of either

party.

No variation of any of the terms and conditions of this Agreement shall be valid unless

agreed in writing by the Parties.

The failure of either Party at any time to enforce any provision of this Agreement shall in no

way affect its right thereafter to require complete performance by the other Party of all its

obligations under this Agreement nor shall the waiver of any breach of any provision be

taken or held to be a waiver of any past or subsequent breach of any such provision. No waiver shall be effective unless it is communicated to the other Party in writing.

Subject to the Appointment this Agreement contains the entire agreement between the

Parties in relation to the subject matter of this Agreement.

This Agreement shall be governed and construed in accordance with English law and each

party irrevocably agrees that the Courts of England are to have exclusive jurisdiction to

settle any dispute which may arise out of or in connection with this Agreement.

NOTICES

Any notice or other document to be given under this Agreement shall be in writing

(including facsimile transmission) and shall be deemed duly given if delivered by hand or

sent by registered post:

[the ESCO}

if to Viridor to:

•

•

•

or such other individual or address as may be notified by Viridor to [ ] or vice versa at any

time in writing

IN WITNESS of which the Parties have executed and delivered this Agreement on the date

first mentioned above.

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Signed by )

duly authorised for and )

on behalf of )

) ……………………………………………..

Signed by )

duly authorised for and )

on behalf of )

VIRIDOR LIMITED ) ……………………………………………..

VIRIDOR FICHTNER


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annex 9 - heat plan chp report v6 - viridor

Documents