District Energy Scheme benefits

Gateshead Council opened the Gateshead Energy Centre in March 2017 to provide heat and power to the district energy network across Gateshead town centre and the Gateshead Quays area. The new, low carbon energy centre generates both heat and power for sale directly to customers via a new 5km underground network of heat pipes and high voltage 'private-wire' electricity cables.  

Initially, the scheme supplied public buildings - Gateshead Civic Centre, the Glasshouse International Centre for Music, BALTIC and Gateshead College - and homes managed by the Gateshead Council. However, the scheme has grown, connecting further Council buildings and depots, as well as a leisure centre, Shipley Art Gallery and Talmudical College. In 2020, the first new build office, the 5000m2 RIGA building, was connected to the heat and power network. 

Between 2021 - 2023, the scheme will see its biggest expansion yet, connecting the following customers: 

• 5 more buildings along a 2km eastward extension, towards Gateshead Stadium 

• the first new build housing development, 300 units on the Freight Depot site, to be supplied by both heat and power 

• connection of Gateshead Quays - arena, conference centre and hotels, as well as a 1000 space multi storey car park, with solar PV and electric vehicle charging 

• a west extension, towards 5 high rise social housing blocks, with connection points to housing development on Askew Rd 

The network plan (PDF, 894 KB)(opens new window) 

A low carbon energy network

The scheme aims to continually reduce the carbon emission of energy supplied to customers, with the ambition of becoming zero carbon by 2030. The gas combined heat and power engines installed initially were the first step to a zero carbon future. Gateshead Energy Company has a 5 year business plan to reduce emission further, as follows: 

• building and operating a 6MW minewater heat pump energy centre, that will supplement the network with heat recovered from abandoned mineworking 

• currently, ca. 0.5MW of solar PV is connected to the network, but plans are progressing to increase capacity by 2025

• the ability to use minewater for a cooling network to nearby developments will be developed further, to also provide zero carbon cooling 

• increasingly the network will connect electric vehicle charging points, to make low carbon power available to EVs of customers and visitors 

What are the potential benefits to developers? 

While connection to the district energy network will be a planning requirement for most large developments, connection also offers many commercial advantages to developers, which will be missed if development progresses using conventional heat and power supplies. 

The benefits of connecting to the district energy scheme are as follows: 

• cheaper construction costs - where the connection cost to the network will be much lower than the cost of  conventional heating plant and utilities connections 

• reduced plant space allows greater lettable floor area in developments 

• cheaper and easier for developers to meet prevailing building regulations, Code for Sustainable Homes, BREEAM and the emerging zero carbon homes 

• reduced heating and power costs for building occupants, of at least 5% and potentially more, compared to prevailing market rates of heat and power costs 

• flexible energy supply contracts, offering dual fuel, heat only or power only connections 

• developers have the option to secure further discounts on heat and power costs, by choosing to pay a higher upfront contribution 

• reduced exposure to green/carbon taxes and levies (for example Carbon Reduction Commitment, CRC, and Climate Change Levy, CCL) 

• as well as energy savings, buildings could avoid ongoing heating plant maintenance, servicing and replacement costs 

• the resilience built in to the Energy Centre and network is as good, if not better, than conventional heat and power supplies 

• opportunity to participate in a scheme which will deliver significant carbon savings to wider Gateshead

How does district energy work?

District energy schemes are a means to generate heat and power locally for customers, that is more efficient than conventional power stations. 

They require a centralised energy centre, to generate heat and power for customers. The heat is distributed via an underground network of super insulated heating pipes. 

The Gateshead scheme is 'heat-lead', which means our energy centre runs to provide customers with their heat requirements, first and foremost. When heat is being provided from the gas CHP engines, electricity is also generated. 

In most schemes, this electricity is exported into the national grid. However, in Gateshead, the electricity is supplied direct to customers through a network of "private wires". This allows us to provide electricity at a lower cost to customers, reducing the costs and losses of exporting into the national grid. 

The Gateshead scheme has a full set of back up facilities. The CHP engines do not run continuously. When customers do not need heat, or when the CHP engines are being serviced, heat is provided from conventional gas boilers, which operate as back up. Also, when the CHP units are not running, or when our customers use more electricity than we can generate, we import 100% renewable electricity from our own grid connection. 

In this way, the scheme is as resilient, if not more so, than a conventional building with a gas boiler and grid connection. 

As we green the network further, by adding other source of renewable heat and power - for example minewater heat pumps, solar PV systems - these will further supplement the heat network, and reduce our reliance on gas CHP engines.

This project is being supported by a grant from the England European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020.