Developers desperate to find ways to offset the combined evils of the credit crunch, property slump and rising oil prices are increasingly examining the potential of low carbon solutions to heat and cool buildings.
At the head of their current focus are Ground Source Heat Pump (GSHP) systems such as those produced by Geothermal International Ltd (GI). The Coventry-based company, which is already the GSHP market leader for commercial building systems in the UK, says it has witnessed a rash of new enquiries from developers in the past six months and is busier responding to these now than at any other time in its seven years history.
Company CEO Brian Davidson says Geothermal is seeing unprecedented levels of interest in its GSHP systems from both commercial and residential developers who, in the current climate, are battling a number of factors that threaten the very survival of their projects. Indeed, there is already evidence that some have been mothballed until suitable finance and alternative building solutions can be found.
“There is a new willingness to dig deep into the ground rather than into their pockets when it comes to specifying building heating and cooling systems,” he says.
“It’s not difficult to see why GSHP systems are beginning to catch the imagination. The historic high installation cost is coming down all the time as the technology improves, and this together with ever rising fuel prices and the emergence of grants for some projects, is reducing payback time by several years.
“All of a sudden, and perhaps for the first time, the ability to save up to 70% on a building’s ongoing heating and cooling running costs has become a major differentiator when it comes to choosing between a carbon and low carbon solution. Now the short-term extra investment in GSHP systems is more commercially viable, not least when potential purchasers can be sold on long term heating and cooling savings or up to two thirds over conventional systems,” he adds.
Estimates about the actual size of savings vary, but with independent research indicating that companies spend around 40% of their annual budget heating and cooling their building, its not hard to see that a lot of money is involved.
From its own point of view, GI highlights the case of the new Mansfield Hospital, which when completed will be heated and cooled with a lake loop GSHP system the company designed. Compared to a traditional oil-fired system, the hospital expects to save around 9,600MW of energy a year. This equates to a reduction in the NHS energy bill of about £120,000 a year, just from the one site!
The environment also benefits, with typical GSHP systems producing around 50% less C02 emissions; attractive to companies and public sector organisations wanting to reduce their carbon footprint and play their part in helping government meet its C02 reduction targets.
All these factors should make it easier for developers to finance and build their new projects. They should also make them that much easier to sell to a more environmentally aware public. If the momentum continues, GI believes the UK may soon witness the growing take-up levels of GSHP technology already being experienced elsewhere, notably in Sweden, Switzerland and Canada, where geothermal systems are very popular and where, for instance, payback times are now typically less than five years.
“The experience of other countries that have embraced geothermal solutions should give UK developers pause for thought. It highlights the potential benefits of this technology far better than any brochure, and shows them the way forward,” says Brian Davidson.
“With no sign that the current economic climate is likely to change any time soon, I strongly suggest that developers wanting to maintain their momentum open their minds to the low carbon, renewable energy technologies now available, and to the benefits of installing GSHP systems in particular that can help give them the competitive edge they clearly need,” he adds.
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