Taking a longer-term view on costs

Published:  03 September, 2014

Hamworthy Heating, life cycle costs, boilers, space heating, hot water, DHW
The economic and environmental benefits of more efficient boiler plant — Keith Thompson.

The much higher efficiency of condensing boilers compared with the installed base of atmospheric boilers in the commercial sector has the potential to achieve major reductions in whole-life costs. Keith Thompson of Hamworthy Heating looks at the issues.

Every day in the news we are faced with a different story about energy targets, Government policies, funding and new legislation. The 2020 EU Climate Change Target, Energy Act 2013, Carbon Reduction Commitment, Building Regulations and Energy Related Products Directive (ErP), to name but a few.

Ultimately these initiatives are all working towards common goals — lowering energy consumption, reducing carbon emissions and encouraging the use of high-efficiency or renewable technologies.

The UK Government has made a commitment to cut Britain’s greenhouse gas emissions by 80% (from 1990 baseline) by 2050. During 2008 to 2012 they produced fewer emissions than allowed under the first carbon budget. The Climate Change Act permits these ‘surplus’ emissions to be used on future carbon budgets. However, in June this year the DECC decided not to do this as it could effectively water down the target and threaten its ability to meet longer-term carbon goals.

To help the UK continue to achieve these targets and reduce carbon emissions we as an industry need to educate people to make informed decisions. With commercial-sector buildings being responsible for 10% of the UK’s greenhouse-gas emissions, we need to take stock of what heating and hot-water equipment is currently being used in the market and how this can be improved.

There is a large installed base of atmospheric boilers in the field that needs replacing. The use of atmospheric boilers is declining, and the efficiency criteria set out in the Building Regulations Part L 2013 that came into force in April 2014 and ErP that will be fully enforced by the end of 2015 will effectively wipe out the use of atmospheric boilers — first in new build and then in existing buildings.

Upgrading from atmospheric to condensing boilers — with a thorough site survey and objective review of the existing heating and hot water system, the number of boilers in this hotel plant room was reduced from 16 atmospheric to seven condensing boilers, creating more space and reducing servicing and maintenance costs.

There is no getting away from the fact that more efficient products such as condensing boilers are going to cost more than atmospheric boilers — in both the capital and installation costs. This often sways the product choice towards atmospheric boilers. But that view is very short term.

No longer can we solely focus on the acquisition cost of a product; we need to review the economics over its life. This means taking into account both the capital and operational costs of the system.

The Government backs this principle with the Soft Landings Framework and PAS 1192-3, a new BIM specification that focuses on the information management requirements during the operational phase of assets. It recognises that operating and maintaining buildings can represent a large percentage of the whole-life costs and that operational savings can pay back any upfront premium in construction expenses in just a few years.

An EU Directive on public procurement is also due to come into force in the UK by 2016 that will see public sector organisations choosing the ‘most economically advantageous tender’. From the point of view of the contracting authority this shall be identified on the basis of the price or cost, using a cost-effectiveness approach, such as life-cycle, and may include the best price-quality ratio.

Reviewing whole-life costs

The long-term energy savings and financial rewards that can be reaped from upgrading to condensing boilers speak for themselves. The following example compares an atmospheric boiler system with a condensing boiler system in a building with heating available on demand continuously, seven days a week, for a 39-week heating season. The costs have been based on a 25-year life and the operational, and energy costs have included an inflationary rate of 2%.

Energy costs (in particular gas) account for the highest proportion over the life of both products — typically 90 to 95%.

• Over the life of the boiler plant you could see a 35% saving in gas consumption — £220 000.

• Taking into account the initial outlay for condensing boilers, a saving of more than £200 000 can still be gained over the life of the boiler — an annual saving of approximately £8000.

• As a result of reducing the gas consumption there will be an associated reduction in carbon emissions — 35%.

• Newer condensing boilers can provide up to 80% reduction in NOx emissions over atmospheric boilers. They are also more likely to comply with the NOx level stipulated in ErP Sept 2015 (levels to be at less than 56 mg/kWh).

That example is a direct system comparison and hasn’t factored in any improvements to the system. There may be the opportunity to integrate renewable-energy products such as biomass boilers or combined heat and power plant.

Looking beyond the gas boiler to the whole system and building could result in even more efficiency gains and reductions in energy use.

The annual savings in fuel costs for more efficient boilers more than outweighs the difference in initial capital costs.

Although incentives for renewables and energy-efficient products are plentiful at the moment, we at Hamworthy have always advocated that projects need to be financially viable in their own right. Government grants and incentives should be seen as a bonus — not relied on to justify the business case. The example proves that real, substantial savings can be made without extra incentives.

The task we face as an industry is communicating these benefits.

Often in large organisations or leased buildings the capital expenditure comes out of a different budget to the gas bills. Getting the message to the right people can be challenging, but it is a challenge we should be taking on to keep the UK on track to meeting its carbon reduction targets.

Keith Thompson is sales and marketing director with Hamworthy Heating.

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