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New Energy World™
New Energy World™ embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low-carbon technologies.
The heat generated from cooling data servers, among other low-carbon technologies, is being used to warm the homes of social housing tenants in a government-funded trial project in south-east England. The project is providing access to cutting-edge technology that would normally cost thousands to eligible tenants at no cost, writes Jon Cape, Managing Director of Power Circle Projects.
Currently, only the top 20% of UK households can afford to retrofit their homes. However, SHIELD (Smart Heat and Intelligent Energy in Low-Income Districts) is empowering customers to generate their own electricity, store it and reduce their heating costs.
The scheme aims to combat fuel poverty among low-income and vulnerable households. Through SHIELD, low-income households could cut their energy bills by 40% or more, based on current modelling using Ofgem TDCV (typical domestic consumption value) assumptions.
SHIELD involves utilising a social enterprise energy services company (ESCo) that can develop, install and operate low-carbon energy systems on behalf of social landlords and homeowners, as well as aggregate these systems to secure low-cost finance from institutional funders.
The project was created by the social enterprise Power Circle Projects and is led by UK Power Networks. Other project partners include Essex County Council (where the trial is taking place), Essex Community Energy (the owner of the solar PV and battery units in the trial), Citizens Advice (who provides tenant advice and carried out market research), Eastlight Community Homes (which houses the tenants), Thermify (technology provider), UrbanChain (which enables the local energy market), Electricity North West (ensuring that SHIELD was designed for wider rollout), and UK Community Works (which engages landlords and tenants).
SHIELD (Smart Heat and Intelligent Energy in Low-Income Districts) aims to support the transition to net zero by reducing the costs of reinforcing the electricity network and creating greater opportunities for flexibility.
One of the systems used is Thermify’s HeatHub, a standalone cloud data centre server bathed in coolant. The unit, which is located at the home and is fitted with its own separate power supply, passes about 5 kW through a heat exchanger and into a Sunamp heat storage unit, and from there to the radiator system in the home. In some cases it can also supply hot water, although that is less likely in homes where hot water is currently provided via electric showers and over-sink water heaters.
The heat is supplied at a low fixed monthly rate. Low-income tenants pay a monthly standing charge (currently £5.60 including VAT, although tied to inflation) with no additional charge per kWh. They can set their temperature in the home as they wish and use as much heat as they like. This is made possible as the heat is a by-product of data processing, which generates its own revenue.
The first commercial HeatHub was installed in December 2024, alongside ten 440 W solar panels, a 5 kW inverter and 9.5 kWh battery to store that energy collected on the roof, which had been installed in April 2024. A second installation of similar specification is slated for February 2025. An installation in a block of flats will come later in the programme.
The tenants report that it has been ‘life-changing’ for them, by providing the temperature they wanted to see but can only now afford throughout the house. Until the new system started, they only allowed themselves to heat one room properly. In addition, they saved around 30% on electricity bills in the first few months after the solar generation system was installed.
For electricity, residents pay only for power (first at a rate of 14 p/kWh for pilot homes; then 16.8 p/kWh for new participants in 2025; both rates include 5% VAT and are tied to inflation). Residents will still need a separate contract to meet the remaining amount of demand. The PV and battery assets are owned by the project company. For the SHIELD Beta phase, this is Essex Community Energy CIC. Thermify retains ownership of the HeatHub units.
For customers situated where solar PV may not be suitable, the local energy market, also part of SHIELD, enables such households to benefit from lower electricity tariffs, using excess electricity generated within and beyond SHIELD. That works via the Essex local energy market which is being established and operated in collaboration with SHIELD’s peer-to-peer trading project partner Urban Chain.
There is no capital cost contribution by landlords in SHIELD Beta.
Over the next four years, 300 social tenants will join the SHIELD project. Solar and battery systems will be installed in all 300 homes, and the HeatHub system will be installed in 100 of them (25 by 2026, 75 by 2027). The process to decide who gets the latter involves a combination of landlord consent, confirmation of tenant interest (although interest to date has proven to be very high) and a desktop survey followed by onsite survey by the installation contractor.
Installation in flats will require a different configuration depending on space availability and may require a small heat network in some cases.
To deal with higher ambient temperatures in summer, Thermify controls the HeatHub to follow the heat load, with less processing activity during the summer months. Options for using heat generated in the summer, for example, via inter-seasonal storage, which may be practicable in some situations, are being explored in the SHIELD Beta phase.
Having won government funding of £5.4mn, alongside some £4mn of funding contributed by partners, the trial is the third (Beta) phase of SHIELD. It previously successfully progressed through Ofgem’s Strategic Innovation Fund (SIF) feasibility stages (discovery in early 2023 and Alpha, to March 2024, plus the delayed installations). In the Beta stage, capital costs are met by a combination of Ofgem SIF grant and SHIELD partner contributions. In a wider rollout, landlords will be expected to contribute around £3,000, roughly the cost of replacing heating systems.
In the wider rollout, beyond the landlord contribution, the PV system, battery and Thermify heating system will be funded via SHIELD project finance and Thermify, who also retain data processing revenue. SHIELD Beta will provide the evidence base regarding grid services revenues from battery assets, which will help support wider rollout financing. SHIELD aims to deploy 100,000 systems a year by 2030.
Electricity system operators (ESOs) are placing increasing emphasis on the use of grid services in years ahead, and the need for grid balancing increases with greater renewable generation and the switch to electric heating and transport. Power Circle has experience through earlier activity with other social landlords, and its team has staff with experience in the grid services market.
In addition to the demand flexibility service, balancing mechanisms will become practicable in a domestic setting in 2026, and distribution network operator (DNO) grid services (in this case UKPN) are increasingly accessible for domestic assets. Power Circle will be engaging on both National Grid and DNO services during SHIELD Beta.
These technologies will also be of benefit to social landlords and electricity companies. SHIELD aims to support the transition to net zero by reducing the costs of reinforcing the electricity network and creating greater opportunities for flexibility. For social landlords, the initiative could reduce the upfront cost of meeting regulatory standards associated with an adequately heated home.
Through the combination of an innovative heating system, onsite generation and storage, and data processing emissions (which can be substantial due to the cooling requirements of data centres), these technologies are expected to reduce the carbon emissions of participating households by over 90%.
As SHIELD explores ways to expand these benefits to a broader range of homes, it has the potential to help create a brighter, more affordable future for those most in need.
Dealing with energy bills
In December 2024, UK energy regulator Ofgem announced plans to mandate energy suppliers to offer low or no standing charges and offer better support for households struggling with debt.
Ofgem said it will consult on introducing an option under the price cap to include zero standing charge tariffs alongside existing tariffs. Some suppliers already offer low- or no-standing charge tariffs, but it is not universal, and Ofgem believes more choice is needed for all consumers, including those in debt.
Tens of thousands of consumers responded to Ofgem’s call for input on standing charges. Many asked for standing charges to be removed altogether, saying that reducing or removing standing charges would make it easier for them to manage their bills or pay back debt. However, there was also evidence of the risk of harm to some very vulnerable consumers who are high users of energy, often for medical and health needs, if the fixed costs currently covered by standing charges were moved to unit rates, which would see their bills rise significantly.
The Regulator has also set out its debt strategy, which aims to tackle the growing impacts of rising debt in the energy system, and to create lasting change in the way debt is managed and customers in debt are supported. It has followed best practice guidance from the finance sector to propose new supplier standards that will make it easier for the customers struggling to pay their bills to get support.
Alongside this, Ofgem has also announced proposals to address debt that was built up during the energy crisis, when energy bills reached unprecedented levels. The level of debt built up during that period has become unsustainable, and requires a bespoke, one-off solution to tackle it that will drive down the costs of debt in the long term for the benefit of all consumers, the Regulator said.
- Further reading: ‘New UK Prime Minister unveils new energy bills support package’. Just days after being announced as the new UK Prime Minister, Liz Truss set out a package to support people and businesses with their energy bills, as well as action that aimed to tackle the root causes of the issues in the UK energy market through increased supply.
- More low-carbon generation will fail to deliver sustainability, security and affordability without radical changes in the way in which energy is stored and distributed in the UK, according to Dr Vincent Thornley of grid technology specialist Fundamentals.
