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A new development in County Westmeath answers a nagging question about district heating: how to make it financially viable when it services energy efficient buildings. Lenny Antonelli visited a housing estate that combines low energy design with an innovative district heating system and ecological timber frame construction

A new housing development in Moate is pushing back the boundaries of district heating. Bacoro Developments’ Oak Hill estate doesn’t just prove that district heating can be economically viable when servicing energy efficient housing, it does so with a remarkably small system: the forty house development is heated by two boilers with a combined output of just 135kW.

Boasting wood pellet district heating, solar thermal panels and timber frame construction, Oak Hill is a low-density development of 40 terraced, semi-detached and detached houses ranging from 1,130 to 1,815 square feet.

Long popular in parts of western Europe, district heating’s advantages have slowly become obvious to Irish developers. As well as saving space in houses, district heating simplifies maintenance by replacing individual boilers with a centralised unit. It offers energy security too: unlike national energy networks that deliver a single fuel (such as gas or electricity) and leave residents exposed to supply threats, district heating pipes hot water from a central boiler, giving users the flexibility to change their fuel (by replacing the boiler or using a multi-fuel boiler) with relative ease, based on fuel price and availability.

A popular way of financing such systems is through an energy service company (ESCo) that bears the capital cost of the system and then charges users for heating and maintenance. However, with the introduction of 40 per cent energy reductions under the new Part L of building regulations in July, developers may have doubted the economic viability of district heating that services houses with reduced fuel demand.

Oak Hill could put those doubts to bed. Running the ESCo himself, Bacoro’s managing director Ronan Meeley has set a flat annual fee of e600 per house for space and water heating, to a maximum of 4,500 kWh. After this, residents are charged 7c per kWh (for comparison, the price of home heating oil is currently around 13c per kWh). By fixing the cost, Meeley has turned the ESCo model on its head: while ESCos typically earn more when householders use extra heat, Meeley will earn more when they use less, providing an incentive for developers and other ESCo operators to reduce energy demand in their buildings.

How did Meeley set his price? “The site is split into three phases. After the first phase of 19 houses was done, we hooked up an oil boiler to the district heating system and provided heat for free from September to Christmas (2007). That’s how we knew how much heat the houses needed,” he says. By initially providing free heating and encouraging householders to use it liberally, he ensured demand wouldn’t be underestimated.