Heat Pump Energy and Financial Modelling Tool – A How-To Guide
This Energy and Financial Modelling Tool has been created to estimate the potential feasibility and the energy and cost savings of a ground-source heat pump (GSHP) project, and the effect of substituting electrical, gas or oil heating systems. It has been designed for a user working on behalf of a Local Authority or Council, and who has a basic technological understanding of heat pumps, their relevant input variables, and the basic environmental and financial measures of project benefits.
The Tool’s primary output is an estimate of the heating resource density of the area in consideration. The Tool can also provide financial estimations, namely the capital cost investment (CAPEX) of the project and various economic indicators including Revenue, Simple Payback time, the Nominal Internal Rate of Return (IRR) and the 20-year Net Present Value.
In order to use the Tool and produce a basic estimate, open the attached Excel file – Powering Parks Energy and Financial Modelling, – and follow the steps outlined below:
1. Heat collector: Choose the pump type from the two available options: Vertical (a heat exchanger fitted into a borehole) or Horizontal (a coiled loop running along a shallow trench).
2. Ground Conductivity and Temperature: some pre-defined, recommended values for each input will automatically appear. However, you can input custom values by simply clicking the box and changing the figure, ensuring the figure remains within the defined range.
3. Heat load definition input: choose from the two available ways to define the relative use of the pump – these terms are explained in the toolkit:
Capacity Factor: represents the difference between a pump’s actual output and its maximum output, over a period of time.
Full Load Equivalent running hours (FLEQ): represents the pump’s actual annual usage at its maximum output.
4. A recommended pre-defined value for Capacity factor or FLEQ hours will automatically appear. However, you can input custom values by simply clicking the box and changing the figure.
5. Type of query: you can define the purpose of your inquiry by choosing from two available options:
1. General resource estimation – This is the default option. It will provide a basic output for the estimated Resource density.
See the result in the blue Outputs box on the right-hand side of the Tool Interface.
2. Assessing a specific opportunity – This will lead to further input requirements below and produce more detailed results.
Continue to step 6 below.
6. Which of these quantities do you wish to base the estimate on? You can choose from among four options:
1. Area of land available for the heat collector – The heat pump system will be designed to maximize heat output from the land available.
Continue to step 7 below.
2. Total peak heat load of the building(s) – The size of the heat pump system will be limited to providing the maximum heat demand of the building that it is designed to supply.
Continue to step 7 below.
3. Total annual heat load of the building(s) – The area required for the heat pump system will be estimated based on the building’s annual heat load, defined according to the selected Heat load definition input in Step 3.
Continue to step 7 below.
4. None of the above – similarly to the ‘General resource estimation’ option in Step 5, this option provides a basic resource density estimation.
See the result in the blue Outputs box on the right-hand side of the Tool Interface.
7. Current type of heating system: You can choose from among four options.
Electric heating – Will compare the carbon emissions performance of the GSHP with a conventional electrical heating system.
Oil Heating – Will compare the carbon emissions performance of the GSHP with a conventional oil heating system.
Gas Heating – Will compare the carbon emissions performance of the GSHP with a conventional gas heating system.
Air source heat pump - Will compare the carbon emissions performance of the GSHP with a conventional air source heat pump.
Values for Annual Carbon Footprint reductions, Annual N2O emissions reductions, and Annual NOx reductions for oil and gas heating, will be presented in the blue Outputs box.
8. Is economic estimation needed?
Selecting Yes will lead to further financial input options in step 9 below.
9. Financial Inputs
Wholesale electricity price - you may adjust this figure by simply clicking the box and entering a new figure (in £/kWh)
Wholesale heating oil/gas price – if oil and gas heating systems were selected for comparison in step 7, an additional option will allow you to enter their wholesale prices. Electric heating and air source heat pumps will not have this additional option.
10. OUTPUTS
1. Heat energy
Resource density (in Watts of heat available per m2 of land)
For vertical heat collectors, the approximate number of boreholes will be calculated.
For horizontal heat collectors, the length of the trench required will be calculated.
2. Environmental outputs:
Annual reduction of Carbon Footprint (in tonnes of CO2-equivalent)
Annual reduction of N20 emissions (in kg of CO2-equivalent)
Reduction of NOx (for oil and gas heating systems) (in kg of NOx)
N.B. This might show a negative figure (i.e. an increase) which is caused by the comparison with the current GB energy mix. As the grid decarbonises, this will improve. Also, as the emissions are at the power station rather than at the boiler, an increase to the NOx emissions figure may still improve local air quality.
3. Financial results:
Annual net revenues relative to BAU
Capital cost relative to BAU
Simple payback
Nominal Internal Rate of Return (IRR)
Net Present Value (NPV) of 20-year project