24 June 2019

Why local authorities are flying in the face of convention (and why we’re encouraging them)

As local authorities and housing associations place more emphasis on their carbon reduction commitments, I have noticed a shift in how they view the generation, supply and consumption of heat and electricity across their social housing stock and infrastructure. Concurrently, there’s also a general acceptance that if a successful transition to the government’s requirement for a future low-carbon economy is to be achieved, then a stringent (but creative) three-pronged approach will be required, and that’s: effective district heating solutions, efficient distributed energy systems, and the decarbonisation of transport through the provision of e-charging points for electric vehicles. To achieve a customer-centric, low carbon future, our local housing authorities (LHAs) need to consider a whole new ecosystem for energy – whether that’s new-build or retrofitting existing housing stock, they must evaluate their entire infrastructure for heat, electricity and transport.

New ecosystems and municipal energy companies

So, we’re agreed we’re looking at a new ecosystem for energy generation, distribution and consumption to realise a low-carbon economy. But how do these three elements fit together? Communal plants and district heating systems are becoming increasingly not just about heat but about the electrical generation and renewable assets on site and how those systems are managed. In short, we’re taking a more holistic view. Some LHAs have a number of district heating and communal heating plants and have the ability to generate but are not well used – this is where an expert partner becomes highly attractive. Other LHA’s have set up their own municipal energy companies and are offering charging for electric vehicles (EV) as an enhanced service. Some of these LHAs have gone down the route of ‘white labelling’, which means they don’t hold a supply licence but work with a partner supplier. This model reduces their risk and resources and allows them to provide electricity and gas at competitive prices. There are LHAs who have chosen to invest in their energy ecosystem by building (or optimising) their own generation, heat and electricity networks, using assets such as solar PV or combined heat and power plants. These investments can allow them to access lower carbon and lower cost power, better integrate electric vehicle charging, access new revenues from flexibility markets, and push down energy costs for residents. With the addition of e-charging, these municipal and energy companies and LHAs are ticking all the boxes for residents and tenants and providing an excellent customer experience. They are really starting to focus their direction on the end consumer.

The decade of electric vehicles is upon us.

LHAs will be aware there’s an industry acknowledgment that 2020 to 2030 will be the decade for electric vehicles. It’s expected that EVs will become cost competitive against internal combustion engine vehicles by 2022 and will outstrip them in sales by 2025. Siemens is the ideal partner to support local housing authorities with their EV ambitions and charging facilities. We have the expertise to support and guide housing authorities with the installation and operation of supply charging services across their sites, particularly where those sites are multi-storey buildings with centralised car parks. When working with a housing association or local authority, we also explore how we can leverage their own businesses. To the residents and tenants, they are providing a valuable service, but there’s also opportunity to make extra revenue off the system. We are in the unique position of having an end-to-end solution that starts with the grid and ends with the vehicle. Siemens has always been good at building power grids for our transmission customers; we can supply the hardware, the technology and the competence. And now with the added expertise from one of our newest businesses – Electric Vehicles – we now have e-charging infrastructure to add to our competence. We’re able to successfully merge these two sectors, and that it where our strength lies in our ability to provide a one-stop shop for e-mobility and e-charging. Siemens as a charge point operator allows the LHA to be completely hands off. When we build and operate a system for an authority, we customise it to their specific needs. Not all LHA’s are going to have the same specifications and we make sure provide a flexible system through our EV charging management system. This intuitive, back-end platform that comes with an accountancy function and provides data that helps with the operation of chargers by giving visibility of performance of when and how it’s being used.

Disrupting the heat market and supporting authorities

The decarbonisation of heat is high on the government’s agenda. The provision of heat contributes to 25 per cent of the UK’s carbon emissions so a holistic approach to decarbonisation that also takes into account energy, transport and industry is needed to meet emission reduction targets. Siemens has years of proven experience in the district heating market, with a broad portfolio of products and systems. What we also have is a market-disruptive mindset! The objective for domestic heat over the next few years is to extend the network and support its predicted rapid growth by developing scalable, cost-effective solutions. Our response to that challenge? A cloud-based Smart pay-as-you-go (SPAYG) solution that shuns expensive “thick” heat meters (in-house display prepayment box on the wall) and has the potential to revolutionise a LHA’s approach to monitoring and controlling energy consumption across its social housing stock and key infrastructure. It’s not just the LHAs who will benefit from Siemens’ SPAYG system. The tenants and residents – the end-consumers – will have a vastly improved customer experience thanks to greater flexibility and control that remote top-up will deliver. Most importantly it protects an authority’s most vulnerable customers through its ability to activate friendly credit and exclude them from disconnection.

Beyond SPAYG for heat

Although we’re proud to have brought Siemens SPAYG solution to market, it is only the first step on the journey to supporting local authorities and housing associations with their energy ecosystem overhauls. We’ll continue to increase our use of data from the assets that generate, supply and measure the consumption and use of electricity, gas and heat generation to develop further solutions for optimisation. What else can a local authority of housing association expect from us as? A one-stop shop for all their energy needs. Trusted adviser. Asset operator. Technology innovator. Disruptive thinker.

Take a look at my blog on how the cloud-based heat meters work: How Siemens’ smart approach to Pay as You Go will disrupt the heat market

For more information visit the Heat Solutions page www.siemens.co.uk/heatenergyservices

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