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NO. 3 / 2024
INTERNATIONAL MAGAZINE ON DISTRICT HEATING AND COOLING
HEAT PLANNING
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Contents
THIS EDITION'S FOCUS THEMES
By John Tang Jensen and Jørgen Røhr Jensen 6 3
HEAT PLANNING
UTILIZATION OF SURPLUS HEAT FROM POWER-TO-X AND CARBON CAPTURE IN DISTRICT HEATING IS A WIN-WIN By Jannick Hauschildt Buhl
COMMUNITY-OWNED DISTRICT HEATING NETWORKS IN DENMARK
NEW HEAT SOURCES
10
PODCAST HEAT PLANNING IS THE KEY TO GREEN
AND FAIR HEAT By Morten Jordt Duedahl
DIGITALISATION
12
PERSPECTIVES ON KEY DIGITALIZATION CHALLENGES WITHIN THE DISTRICT HEATING AND COOLING SECTOR By Oddgeir Gudmundsson
MEMBER COMPANY PROFILE: HADERSLEV FJERNVARME 17
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Editor-in-Chief: Lars Gullev, VEKS
Total circulation: 5.000 copies in 74 countries 10 times per year
Grafisk layout Kåre Roager, kaare@68design.dk
Coordinating Editor: Linda Bertelsen, DBDH lb@dbdh.dk
info@dbdh.dk www.dbdh.dk
ISSN 0904 9681
UTILIZATION OF SURPLUS HEAT FROM POWER-TO-X AND CARBON CAPTURE IN DISTRICT HEATING IS A WIN-WIN
Jannick Hauschildt Buhl, Head of CCUS and PtX at the Danish District Heating Association
In the journey towards a sustainable future, district heating networks are discovering a powerful new ally: surplus heat from Power-to-X and Carbon Capture processes. This dynamic duo has the potential to play a pivotal role in the way we think about energy efficiency and decarbonization in heating our homes and industries.
Photo showing detail from the hydrogen production project HySynergy, owned and operated by Everfuel. Copyright: Everfuel
optimization. Of course, the percentage of surplus heat will decrease over time with technological advancements. However, as the needed scale of Power-to-X and Carbon Capture facilities is very large, the long-term potential for sector integration remains even if the potential per MW installed capacity is reduced. Almost 70% of all homes in Denmark are heated with district heating. At the same time, Denmark has enormous potential for developing Power-to-X through the expansive renewable power resources, especially from offshore wind. Hence, it is natural to consider integrating the surplus heat from the Power-to-X processes into the district heating grid to improve overall energy efficiency. According to a study by researchers at Aalborg University, surplus heat from Power-to-X can potentially provide about 10% of the Danish district heating consumption by 2045 1 .
Power-to-X technologies have emerged as a game-changer in the renewable energy landscape. These processes, e.g., electrolysis and methanation, convert renewable electricity into valuable resources such as hydrogen, synthetic methane, e-methanol, and Sustainable Aviation Fuel (SAF). These products will be necessary to decarbonize heavy transportation and some hard-to-abate industry sectors where it is impossible to use electricity directly. Similarly, while the world must first and foremost aim for rapid and deep emission reductions, it is by now clear that industrial Carbon Capture and so-called carbon removals, where CO2 is essentially removed from the atmosphere through, e.g., capture and geological storage of CO2 from biogenic point sources, will be necessary if the world shall have a reasonable chance of staying within the limits of the Paris Agreement, according to e.g. the Sixth Assessment Report from the Intergovernmental Panel on Climate Change (IPCC).
The hydrogen production project HySynergy is owned and operated by Everfuel. Located in Fredericia, HySynergy produces green hydrogen through electrolysis with excess heat from the process utilized in the district heating system.
Harnessing the green potential In the coming decades, Power-to-X and Carbon Capture technologies represent some of the primary climate-change mitigation technologies in the energy-, transport- and industrial sectors. However, as with many other industrial processes, they also produce significant amounts of surplus heat as the production processes are not 100% efficient. In fact, up to 25% of the energy used for Power-to-X and Carbon Capture can be utilized in district heating, providing a significant opportunity for energy efficiency and resource
Creating value for all while reducing carbon emissions The utilization of surplus heat from Power-to-X in district heating systems is beneficial not only for district heating companies. In fact, it creates value for all parties, including the Power-to-X companies and the district heating customers. By utilizing surplus heat, Power-to-X companies gain a secondary revenue stream, which not only makes these sustainable fuels more competitive in the market but also accelerates the transition towards a greener energy landscape.
1 https://vbn.aau.dk/ws/portalfiles/portal/449742535/Varmeplan_Danmark_2021_Hovedrapport.pdf 2 https://orsted.com/en/media/news/2024/02/surplus-heat-from-carbon-capture-to-be-used-for-di-13778216#:~:tex- t=%C3%98rsted%20has%20entered%20into%20an,in%20the%20Greater%20Copenhagen%20area
Copenhagen Infrastructure Partners (CIP) is working on its 1 GW HØST PtX project in Esbjerg, on the west coast of Denmark. The project aims to produce both hydrogen and ammonia. The excess heat can heat up to 15,000 homes in the district heating network of Esbjerg, owned and operated by DIN Forsyning. The above examples are all good showcases for using excess heat from Power-to-X and Carbon Capture in district heating. In general, it is essential to consider the location of Power-to-X facilities to ensure that the surplus heat can be utilized as much as possible in district heating systems. Strategic placement of these facilities can maximize the efficiency and benefits of this integration, creating a win-win situation for all stakeholders involved. Therefore, Power-to-X companies should look at the complete set of infrastructure needs when finding the best location, including the possibility of selling surplus heat to district heating.
At the same time, by tapping into surplus heat, district heating systems can provide CO2-neutral heating, offering a viable alternative to fossil fuel-based heating. Hence, it not only enhances the overall energy efficiency of Power-to-X processes but can also reduce costs for consumers and the overall carbon footprint of district heating. This partnership between Power- to-X producers and district heating providers is a win-win, ensuring a more sustainable and cost-effective energy solution for both parties. Real-world examples from Denmark Let’s take a closer look at how Danish district heating systems and Power-to-X companies are working together and leading the charge towards this green revolution. In Copenhagen, the district heating companies VEKS and CTR are working in collaboration with Ørsted 2 , a leading renewable energy company, to utilize the surplus heat from Ørsted’s coming Carbon Capture plant, which will be installed at the straw-fired
Figure 1: Up to 25% of the energy for Power-to-X and Carbon Capture can be utilized in district heating. Sources: The report ”Power-to-X and District Heating” by the Danish District Heating Association, Grøn Energi, COWI and TVIS estimates a potential for utilizing surplus heat from electrolysis of up to 25%, while the report ”CO2 capture at Danish waste-to-energy plants” by Rambøll for Dansk Affaldsforening estimates, that carbon capture can increase the heat production from the CHP or Waste-to-Energy facility by up to 20% compared to a plant without carbon capture.
The integration of surplus heat from Power-to-X in district heating systems not only benefits Danish cities but also has a broader global impact. By showcasing successful examples of this integration, Denmark can serve as a model for other countries looking to transition towards sustainable energy systems. This accelerates the global fight against climate change and opens up new avenues for technological innovation and international collaboration.
boiler at Avedøre CHP plant in Copenhagen. This innovative partnership, which will be able to heat 16,000 homes, is beneficial to all parties involved and a good showcase for sector integration. Similarly, the district heating company TVIS has embraced the potential of surplus heat, working closely with the hydrogen production project HySynergy, owned and operated by Everfuel. Located in Fredericia, HySynergy produces green hydrogen through electrolysis, with excess heat from the process utilized in the district heating system. In the first phase of the project, which includes 20 MW electrolysis, the excess heat can heat up to 1,800 homes every year. The second and third phases of the project aim to install 300 MW and 1 GW electrolysis, respectively, thereby increasing the potential for district heat integration significantly.
For further information please contact: Jannick Hauschildt Buhl, jhb@danskfjernvarme.dk
COMMUNITY-OWNED DISTRICT HEATING NETWORKS IN DENMARK
By John Tang Jensen, District Heating Expert and Jørgen Røhr Jensen, Consultant, Niras
Why community-owned companies? Privately owned district heating companies will set their heat prices just below the apparent and potential prices of individual heat supply technologies, which, from a company perspective, is the best way to maximize profit. The economic advantages of having a district heating network compared to individual solutions will only be shared with the consumers to some extent.
In Denmark, consumers own around 280 out of 360 district heating companies, with one share of the company per dwelling connected to the district heating network. This community ownership is unique for Denmark and has proven suitable for district heating network companies in urban areas. The story of how these companies were established is often forgotten, and this article aims to recount it. The story may guide urban areas and governments in setting up similar community-owned district heating companies. First, exploring why consumer-owned companies can be a suitable organisational solution compared to private ownership might be helpful. Consumer ownership has some of the same advantages as public ownership but requires less involvement from local authorities. It also avoids some disadvantages, such as getting involved in delivering on local political targets that are not related to heating and are covered by the legal regulations of local authorities.
Community ownership has four main advantages: 1. Non-profit monopoly. 2. Local involvement. 3. Long-term planning and investments. 4. Focus on efficiency, energy security, and comfort.
From a consumer perspective, it is an advantage if the operation of the district heating network company does not
If authorities want to help communities establish and develop new district heating networks, it is essential that the community can get the first investigations financed. This can be obtained by loans from future suppliers and private funds that must only be paid back if the district heating network is established. Alternatively, the money must be given to the community from public funds or energy suppliers without conditions. If investigations show that a district heating network is the best solution, the government can help community-owned companies establish the district heating network system by guaranteeing the needed loans.
technologies will reduce demand for capacity investments. At the same time, the security of supply and comfort can be increased without additional costs. If management focuses on efficiency, a part of this is also to attract new consumers. If the existing supply becomes more efficient, capacity is released and available for new consumers who can share some costs with existing consumers, lowering the heating price. In the same way, insulation and energy conservation inside buildings indirectly benefit all if they allow the district heating network company to expand to new areas and to connect new consumers not yet connected. Low carbon objectives can then align with heat pricing objectives. The same incentives could be present in private district heating network companies. Still, investments in energy conservation and saved investment costs are often converted to increased profit, which does not incentivise connecting new consumers and lowering prices by sharing costs. Expanding district heating networks requires a burning platform. This chapter explores how district heating networks were established in Denmark. The very first district heating networks in Denmark were established due to common sense! The waste heat from city power plants was collected and used to heat nearby buildings. It was built because heat was available, and the companies were owned mainly by local authorities. At that time, it was about eliminating individual coal, coke, and oil polluting the cities with dust and smog. The ‘burning platform’ was the pollution from individual heating solutions. Many of these companies were established in the 60s, and the ‘driver’ was
have to generate a profit for an owner. The profit can be used to lower heat prices. The precondition is that the driver for both the board and the management of the company is to achieve the lowest heat price possible. If low heat prices are not the ‘driver,’ there is a monopoly risk with community ownership if managers work for their benefit, accumulate capital for no reason, use it for purposes unrelated to heating, and do not develop efficient, low-cost solutions. If the company board is elected among consumers, the board will probably require management to prioritise affordable heat prices, avoid accumulating capital, and stick to the main business – heat supply. Local Involvement When consumers are involved in their own heat supply company and benefit from good company management, they will require management and the board to work for consumer benefits. Local engagement also makes it easier to get solutions approved and accepted locally, which benefits everyone. Long-term planning and investments The combination of monopoly, non-profit, and community ownership requiring low prices makes management prefer implementing long-term planning and investment strategies. These will include long-term loans and low-risk loans with low interest and long depreciation time according to technical lifetime. All this will support low heat prices compared to a profit-based and short-term approach. Focus on efficiency, energy security, and comfort. Consumer-owned companies will focus on energy-efficient solutions because saved fuels and purchased heat will decrease heat prices for all. High efficiency and combining heat source
ensure the use of natural gas? The answer was industry, zoning for individual natural gas boilers, and new zoning for natural gas CHP plants delivering heat to district heating networks in high-heat density areas. This story focuses on the third burning platform where most new district heating networks became community owned. This deployment of district heating has continued until today – partly because of the recent energy crisis and the technology-agnostic nature of district heating. How did the community-owned companies get established? Many small cities and urban areas in Denmark have quite strong communities used to make associations for all kinds of purposes 1 , and if local stakeholders and local authorities are responsible for getting a solution benefitting the community established, it is not unusual that local frontrunners call for a meeting with the purpose to develop an “Association” for joint lobbying against local authorities. Frontrunners can be local politicians, business owners, or private persons willing to work for the cause. Many new “Heat Associations” were established during the 1980s up to the middle of the 1990s. The steps for establishing these community-owned companies were as follows: The first action is to establish a local group of frontrunners. Often, local engineering advisors contacted the local civic association and offered assistance in evaluating the possible establishment of a community-owned company. A working group was established, including people elected for local government and local frontrunners. Often, local people with technical or economic skills were included. It was published in the community that it was intended to establish this group. Usually, everybody was invited to a public meeting to find out who would be interested in participating. The local frontrunners and politicians were not legally elected, and the group had no legal rights. The next step was to investigate a district heating project, which included all technical, economic, and legal circumstances for district heating, and make a plan for financing and establishing a district heating network. This was a tremendous job, and the group usually could not do this independently. The group and the advisor had to cooperate to get funding to make it possible for the advisor to conduct the investigations. The funding was typically donations and loans from companies delivering equipment for heat networks.Whenestablished,itcouldbecompaniesdelivering heat-producing equipment, companies delivering heat network pipes, local natural gas companies, and advisory
low-priced coal and heavy fuel oil. Most of these companies were established by local frontrunners and owned by the consumers. In the second phase, district heating companies were established in connection with the oil crisis, creating a ‘burning platform’ at the beginning of the 1970s. Consumers were forced to replace the individual oil boilers with something much cheaper. The solution was more district heating networks based on centralised large coal CHP plants in large cities and, in other cases, district heating networks based on heavy fuel oil or coal boilers in decentralised cities. This crisis mainly resulted in local authority-owned district heating networks and, in some cases, in community-owned district heating network companies associated with existing community-owned water companies and community-owned power grid companies. This development was mainly seen in the 1970s. The main driver of the widespread deployment of district heating in Denmark has been lowering the costs of heating – not the environmental aspects, as many might assume. Denmark’s third ‘burning platform’ was the second oil crisis and natural gas discovery in the 1970th. Consumers were forced to convert to either individual natural gas boilers or district heating CHP plants. Again, the target was to develop independence for imported oil and, in this case, replace it with natural gas from the fields in the North Sea. The government used zoning to find areas suitable for district heating and others for natural gas boilers within the gas network supply chain. After the zones were designated, local authorities were responsible for establishing networks and designing the heat sources. In zones for district heating, companies were required to establish CHP based on natural gas, but biomass CHP and waste incineration CHP were also allowed. Existing coal CHP plants could continue using coal. Local authorities were allowed to find their own heating solutions, and many small villages chose to establish a district heating network system based on natural gas CHP incentivised by subsidised electricity production. In some cases, if natural gas was unavailable, district heating networks were established and based on straw or wood pellet boilers. The remaining part of mainly rural areas kept oil boilers. All centralised cities were already converted to coal and waste incineration CHP at the third’ burning platform.’ The plants were relatively new and difficult to convert to natural gas, as they were more expensive, so where could the government
1 Common dairies, slaughterhouses, sport unions, assembly halls, kindergartens, apartment/dwelling associations, grocery stores, telephone companies, power stations, power grid companies, water companies, machine stations (for farmers), feed material companies (for farmers), etc.
If the expectations from project proposals were met, the final decision was made. In this phase, all normal actions for establishing a company were carried out, including con- tracts with suppliers, authority approvals, land purchases, etc. Financing the development and construction of the dis- trict heating solution is essential for establishing the district heating network. In Denmark, it is possible to apply for a guarantee for a loan from the local government to get the district heating network company established. This guaran- tee makes it possible to get a low-interest rate loan from national or private banks. The loan pays all investment costs, including development costs, until consumer payments take over and operational costs are paid. When loans are secured, the first employee can be hired, who will often be the future plant manager. Afterward, the chairman and the plant manager will be responsible for hiring staff and mak- ing contracts with suppliers, though advisors typically help with contracts and agreements. Community ownership gives the consumer the possibility to make their own decisions, get involved, and elect their board among neighbours in a democratic process which offers an additional benefit to the local community and local confidence that can affect other local activities. When the district heating network company was established, and delivery began, new consumers/shareholders were required to pay for a share if they wanted to connect to the network. The share is only paid once and is transferred free to a new building owner if the first shareholder moves away. This way of establishing district heating networks was generally a success. Still, some companies struggled in the first 10 to 15 years because they were forced to use expensive natural gas due to decreasing subsidies and a high energy tax. An additional issue was the falling electricity price, which made natural gas- based CHP networks unable to keep heat prices low. After the government removed the requirements regarding using natural gas, most companies managed to decrease the heating price and get more consumers connected. However, it still can be an issue if the population decreases and buildings are left empty or torn down. If heat loss increases due to decreasing supply to consumers, it can be challenging to maintain a good economy in the company. Then it becomes essential to find very low-cost heat sources, such as solar collectors or own integrated wind turbine combined with a heat-pump-based source like air, water, or waste heat.
companies. If decided, the loans were included in the total investment for establishing the district heating network company afterward. If it had not been agreed upon to establish the district heating company, the loans would not have been paid back and lost. The companies giving the loans this way took the risk. The companies were promised to be included in the tendering process in competition with other suppliers. The companies offering the loans then could not be sure to win the project, but if the project was realised, they got their loan paid back by including the loan in the investment for establishing the district heating network. It is essential to highlight that these agreements are “Gentlemen’s agreements” since the working group had no legality. Local natural gas companies often gave the most significant loans, which were not required to be paid back because the gas company had a monopoly on selling gas when the network was established. Often, loans from natural gas companies could finance investigations, and other loans were not necessary. The advisor and the working group made the project proposal. Their cooperation ensured that the members of the working group received education and skills regarding the details of the project. It was common in projects to investigate different solutions, including different fuels and technologies for heat supply, etc. The project report and information were then shared with all community citizens. Public meetings were arranged to discuss project details, economic consequences, and connection requirements. The projects typically showed that between 60% and 70% of all consumers needed to connect from the start to be viable, which depends on local conditions.
Consumer agreements were made, but these were, at this point, not legally binding.
A founding meeting for the legal district heating company was arranged if the number of agreements was near or above the required 60% to 70%. The consumers participating in the meeting elected a board for the company, which took over the project. The community-owned company was established, where shareholders were liable for their share of capital, which typically was very low and between 10 and 1000 € paid per share (dwelling) After establishing the company, binding consumer agree- ments were made, tenders were published, and the final decision to establish the district heating network was pre- pared based on the bids received from the tendering.
For further information please contact: John Tang Jensen, jtjensen10@gmail.com
PODCAST HEAT PLANNING IS THE KEY TO GREEN AND FAIR HEAT
In this episode of the DBDH district heating podcast, we discuss heat planning and why it is so important. In short, good planning will ensure that the local authorities can provide the right, fair, sustainable, and affordable heat solutions to its citizens – that is, district heating in any kind of urban area (villages, towns, and cities) and heat pumps outside these areas. This will be an important part of making your municipality a liveable place. As the experts agree on – “Get started! Don’t wait!”
A new crisis has pushed even more towards more district heat- ing in Denmark and Germany. In Denmark, we had to take a new round of planning. BW (Baden Württemberg, Germany) is ahead of others as they have already started the planning. New sources, new systems, and a double crisis—energy and cli- mate—need to be dealt with. Your experts in this podcast are from Germany, where heat planning has just begun, with the new law dictating all local authorities to make heat planning for all municipalities larg- er than 10,000 people, and from Denmark. Actually, the two experts do not disagree on much but simply urge everyone to get started and take on the responsibility required. The German expert is Volker Ki e nzlen, managing director of Kli-ma und Energie Agentur, Baden Württemberg. Together with his team, they made the first heat planning law in Germany, supporting the development of heat plans in the largest 104 local authorities. In the other chair for this talk, you will find Steen Christiansen, mayor of Albertslund – a municipality on the outskirts of Copenhagen, also chairman of the board of VEKS (DH transmission company in Copenhagen, Denmark), and a board member of the Danish DH Association. Two ex-perts who nicely combine German and Danish expertise on supporting the green heat transition.
Both experts agree that politicians, both local and national, must step up and make sure things can happen. Both in Den- mark and in Germany, the local authorities are given the man- date to do things – and yes, both Volker and Steen agree that the key is municipal leadership and taking responsibility for further solutions. “The local authorities must take leadership,” Volker says. Only they can put on the long-term perspective and deliver on these agendas.
“Transparency” is a keyword – listen in and learn how important our experts find that idea.
There are differences. In Denmark, people are eager to become less dependent on natural gas and look for DH. In Germany, people think they become dependent on one supplier when they get DH. Learning from Denmark is important – one learning could be – just get started!! There is still a long way to go, and convincing people to like DH is a big thing.
Get started – don’t wait!
Welcome to DBDHs district heating podcasts. In this series of podcasts, we invite experts from the industry to highlight important and current developments in our industry. The goal is to share knowledge, to inspire and maybe also to provoke a bit – to give insights. And I always ask the experts to share one recommendation each.
This is the DBDH district heating podcast, and your host is Morten Jordt Duedahl.
"What is the greater value of heat planning – to cities, citizens, and society? To give input on that topic, we have invited Mayor Steen Christiansen from the municipality of Albert- slund, chairman of the heat transmission company VEKS, and board member of the Danish DH Association to discuss with Volker Ki e nzlen, Managing director of KEA, BW.
Volker Ki e nzlen and his team have been leading the work in BW to implement the first German law on heat planning and have also been instrumental in an international heat project where heat is taken from K i ehl in Germany and piped to a large DH network in Strasbourg. Steen Christiansen has had DH on his agenda for a long time, and his municipality is leading the way in both sustain-able and energy-efficient transitions. Based on good heat planning, the municipally owned DH company is expanding to convert more households from natural gas to district heating. “
Meet the experts
Steen Christiansen, Mayor of Albertslund Municipality
Volker Kienzlen, Managing director of KEA, BW
Profile Albertslund Price comparison in Denmark: https://forsyningstilsynet.dk/analyser-og-tal/ forbrugerpriser/fjernvarmepriser
Profile Kea BW Hot|Cool articles by Volker Kienzlen
https://dbdh.dk/excess-heat-from-steel-mill-for- cross-border-dh-cooperation/ https://dbdh.dk/ urban-thermal-energy-planning-a-booster-for-dis- trict-heating/ Heat price calculator: https://www.kea-bw.de/waermewende/waermepre- isrechner
District heating prices for end-users (August 2023): https://forsyningstilsynet.dk/analyser-og-tal/forbru- gerpriser/fjernvarmepriser/priser-pr-1-august-2023
Podcast links:
Apple Podcasts Connect
Spotify
Google Podcasts for Android
RSS.COM
PERSPECTIVES ON KEY DIGITALIZATION CHALLENGES WITHIN THE DISTRICT HEATING AND COOLING SECTOR
By Oddgeir Gudmundsson, Director, Climate Solutions, Danfoss A/S, Nordborg
In November 2023, the final report from the IEA DHC project Digitalisation of District Heating and Cooling (DHC) was published [1]. The project aimed to promote the opportunities of integrating digital processes into different parts of DHC systems and end-user heating installations. The consortium behind the project included key research institutions, universities, and digital solution providers in the DHC. The report identified seven key challenges for developing digital solutions within the DHC sector. To overcome these challenges and ensure viable scale-up of digital solutions, it is vital to have a deep fundamental understanding of the interaction between the various system components. Without understanding the physical nature of DHC systems, there is a real risk that a digital solution will become a local solution with minimal scaling potential and an inherent risk of the solution provider abandoning the solution. There is no doubt that the modern advancement of digital solutions is the driver of a new evolutional paradigm of the DHC concept, and we will see increased application and development of digital solutions across the thermal supply chain in the years and decades to come. In this article, the author provides his perspectives on these challenges and how solution providers can address them.
Introduction With the increasing focus on decarbonizing our societies, exploring synergies between the energy sectors is essential, as taking advantage of synergies will increase both the speed and the cost of decarbonization. As temperature requirements of building thermal demands are low, they have the potential to play a crucial role in decarbonizing the energy system. To realize the potential, it is vital that buildings’ thermal demands and generation can be decoupled over an extended period. The solution is district heating and cooling (DHC), which enables the decoupling and cost-effective utilization of local renewable energy sources. However, for DHC to be part of the future, there are five prerequisites, we need DH to be:
Already today, digitalization is having a profound impact on the DHC concept, where its interactions include:
the overall energy system, the thermal plants,
the distribution system, the end-user substations, the building technical installations, engagement with end-users.
Tying all these interaction points together offers a unique opportunity to achieve an end-to-end optimization solution for realizing the most sustainable and cost-effective operation, benefiting the end-users and society. To realize the full potential of digitalization, numerous challenges, with varying complexities, must be overcome. Heterogeneity of DHC systems One of the many interesting aspects of the DHC sector is its local uniqueness and operation. The uniqueness of each system originates from the varying local conditions due to climate, geographical features, network layouts, available Challenge
robust, yet flexible, reliable and secure, yet open and supportive to other sectors,
green, yet sustainable, local, yet acting global, widespread, yet affordable.
To live up to these expectations, embracing and fully integrating digital solutions into the DHC concept is essential.
these designs tends to hinder interoperability with third-party solutions, as they often employ proprietary data standards and storage methods, resulting in a state of vendor lock-in. Breaking free from vendor lock-in is crucial to fostering collaboration and enabling solutions from various vendors to work together seamlessly. Danfoss recognizes this imperative and is actively developing a modular-based offering through the Leanheat™ platform. However, the journey doesn’t stop there. Localized DHC systems often necessitate tailor-made add-ons to meet unique needs. Therefore, the goal is to create an ecosystem where diverse modules addressing specific local requirements seamlessly integrate into the broader Leanheat™ platform, promoting adaptability and scalability in DHC digitalization. By enabling integration with third-party solutions, a flexible yet tailormade solution can be offered to DHC utilities. By advancing towards modular, interoperable solutions, we pave the way for a more collaborative and future-proof DHC landscape, where innovation thrives, and local needs are met through a harmonized digital framework.
energy sources, building standards, building utilization, and substation designs. Further, existing systems can be decades old and at varying modernization stages. On top of that, most systems are locally operated under the direction of the local government or community. All these factors lead to a complex and fragmented market. Digitalization solution providers need to recognize and accept that while the fundamental purpose of all DHC systems is the same - to fulfill heating or cooling demands - they have different needs. The obvious solution is a modular approach, where the key elements of the supply system are addressed in specific modules, which can be linked to unlock optimization potential across the supply chain. Challenge Lack of standards for DHC The challenge revolves around the absence of standards in the digitalization of DHC. This comes from the fact that the sector has historically been decentralized, often initiated by enthusiastic local champions. While the local nature of DHC is a source of strength, it introduces the risk of ad- hoc, non-standardized solutions, including applied units, data communication standards, and local terminology for components. Recognizing the pivotal role of standardized vocabulary and data protocols in accelerating digitalization within DHC, the sector has established a digitalization standardization group within the DHC+ research platform, an initiative strongly supported by Danfoss. In this pursuit, the importance of data semantics and ontology cannot be overstated. The semantic understanding of data ensures that information is not only standardized in format but also in meaning. Establishing a shared ontology enables a common understanding of terms and relationships, facilitating interoperability and consistent interpretation of data across diverse systems. This semantic clarity is essential for overcoming the sector’s fragmented history challenges. To bolster this initiative, Danfoss is actively supporting the sector. Until a standardized protocol is established, the focus is on providing robust support, including features like automatic unit conversion, which is crucial for averting data errors. Challenge Vendor lock-in and interoperability The historical fragmentation and absence of standardized digitalization practices in DHC have led to the prevalence of “built-to-order” solutions. Unfortunately, the localized nature of
Challenge
Need for robust and resilient control architectures
DHC is a robust, reliable, and resilient energy infrastructure, a fact extensively discussed in [2]. As the sector embraces digitalization, it is crucial that these features are maintained by developing solutions resilient against risks posed by cyberwarfare, cyberterrorism, and cybercriminal activities. To mitigate risks, it is imperative that digital solutions are not only built on robust and resilient architectures but also incorporate fallback options to address worst-case scenarios. At Danfoss, our approach to developing solutions is rooted in decades of experience and knowledge garnered through active involvement in the DHC sector. Leveraging the extensive knowledge of components, applications, and the overall supply system, we are uniquely positioned to design control infrastructures with resilience and local fallback redundancy at their core. By prioritizing the development of digital solutions that anticipate and address potential threats, we contribute to ensuring the continued dependability and resilience of DHC systems in the face of an evolving digital landscape. Software solutions with robust and resilient control architectures, in combination with on-site controllers, offer a comprehensive range of functionalities, including monitoring, setting management, and optimization solutions. When
is beneficial for the public interest can be interpreted in the context of ensuring energy security and mitigating climate change. Challenge Safety and security of IT systems With increasing threats from cyberwarfare, cyberterrorism, and cybercriminal activities, software development teams need to be vigilant and able to react quickly to emerging threats, particularly in critical infrastructures like DHC systems. There is no doubt that security is an integral part of the development lifecycle of digital solutions. Security measures need to be considered and implemented at every stage, including architecture, coding, testing, deployment, and during the operational phase. During the operational phase, it is vital that the solution provider’s security operation team monitor, detect, investigate, and respond to security incidents and threats in real time. The security operation teams play a crucial role in ensuring the overall security posture of digital solutions, which is vital in today’s fast-evolving cybersecurity landscape. One important aspect of ensuring the high safety and security of IT systems involves making resources available for maintaining them. In that respect, standardized and cloud-based solutions developed and supported by strong companies have greater access to resources to maintain their systems’ security and integrity.
applicable, these features should be orchestrated through secure cloud platforms and effectively communicated to local controllers. This ensures a cohesive and integrated system under normal conditions as well as in case of unexpected disruptions. GDPR compliance GDPR aims to ensure the protection of natural persons from the exploitation of their personally identifiable data. Under GDPR, valid use of personally identifiable data is specified for a) fulfilling legal contracts, b) fulfilling legal obligations, or c) performing a catalog case. While a) and b) are self- explanatory, c) covers specified and regulated data usage cases. The dataset catalog offers a comprehensive description and intelligent tagging of the data allowed to be collected, as well as precise definitions for the lawful use of the information. Data collection and processing are also allowed for non-regulated data usage once revocable consent from the owner is granted. Challenge In [3], it was argued that the public advantage from data reading and processing in DHC systems, which can be used to achieve energy efficiency and climate benefits, is strong enough to fall under the umbrella of lawful data processing, as described in Paragraph 1 of Article 6 of the GDPR. The EU has developed a data regulation called the Data Act to ensure a fair relationship between users and data holders. The Data Act came into force on January 11, 2024, and becomes applicable on September 12, 2025. As the Data Act covers both personal and non-personal data, it is a complementary regulation to the GDPR. The Data Act aims to facilitate data sharing and ensure a sustainable environment for the future development of data-driven solutions by imposing an obligation on data holders to make data available to users and third parties of the user’s choice. The Data Act does not differentiate between business and consumer users regarding the right to share data. Further, the Data Act adapts rules of contract law and prevents the exploitation of contractual imbalances that hinder fair access to and use of data. The Data Act further requires manufacturers of connected products and related services to ensure that data transmitted out of the product and collected is always easily and securely accessible to a user, free of charge, and in a comprehensive, structured, commonly used, and machine-readable format. This new regulation will stimulate the future growth of digitalization solutions and has the potential to unlock new and, so far, practically unattainable benefits. The Data Act data sharing requirements on data holders when the use of data
Challenge
Lack of reference datasets and benchmarks
Given the considerable system-to-system variations outlined earlier, creating a broadly representative dataset for the sec- tor is challenging. However, due to the high costs of chang- ing IT systems, utilities should consider reference datasets and benchmarks as crucial parameters when selecting future digitalization systems. Creating a suitable reference dataset is being considered in the upcoming 3-year IEA Annex TS9 pro- ject: “Digitalization of District Heating and Cooling: Improving Efficiency and Performance Through Data Integration.” It’s a tough game, but DH can do it. As an infrastructure, DHC is, from a physical point of view, a future-proof solution. The 7 challenges have been addressed above, yet five prerequisites were also added – 1) robust, yet flexible; 2) reliable and secure, yet open and supportive to other sectors; 3) green, yet sustainable; 4) local, yet acting global and 5) widespread, yet affordable.
The infrastructure is robust and reliable; the only requirement for thermal sources is their temperature level. The challenge is
Acknowledgments The Danish Energy Authority (EUDP) supported the participation of the Danish consortium in the IEA DHC project Digitalisation of District Heating and Cooling. References Schmidt, Dietrich (ed.), et al. (2023). Guidebook for the Digitalisation of District Heating: Transforming Heat Networks for a Sustainable Future, Final Report of DHC Annex TS4. ISBN 3-89999-096-X, AGFW Project Company, Frankfurt am Main, Germany. https://www.iea-dhc.org/fileadmin/documents/Annex_TS4/ IEA_DHC_Annex_TS4_Guidebook_2023.pdf Oddgeir Gudmundsson, Jan Eric Thorsen and Anders Dyrelund. District Energy – the resilient energy infrastructure, Energy Master Planning for Resilient Public Communities, October 2020. https://prod.euroheat.org/dhc/knowledge-hub/district-ener- gy-the-resilient-energy-infrastructure Digitalisation in District Heating and Cooling systems, Euroheat & Power, May 2023. https://prod.euroheat.org/dhc/knowledge-hub/dhc-re- port-on-digitalisation-in-dhc-systems
on the operational side, which traditionally relies on inflexible rule-based control logic. However, as the DHC sector embraces renewable and waste heat sources, which are often fluctuating and small-scale, the complexity of the operation can quickly become unmanageable for the traditional rule-based approach. By adopting digital solutions, the complexities can be controlled, enabling greater system flexibility and opening the infrastructure for alternative energy sources, such as waste heat from other sectors. Further, multi-source DHC systems with effective digital tools supporting the operation can take advantage of synergies between connected sources and by that minimize the capacity requirement of each individual energy source, leading to much lower installed capacity compared to decarbonization via electrification on a building level and by that minimize the environmental and economic footprint, which is the hallmark of any sustainable energy transformation. Considering the outsized impact the energy sector has on global warming, contributing to 75% of greenhouse gas emissions, it is fundamental that capable local energy infrastructures fulfilling local demands, like DHC, act globally and adopt end-to- end digital solutions for enabling continuously optimized thermal generation and distribution. This is the key enabler for expanding the reach of existing schemes and building new DHC systems capable of supplying affordable green energy to fulfill building thermal demands in urban areas. Conclusions Due to the general complexity of DHC systems, various digital solutions target different aspects of the system. Depending on the aspects being addressed, different challenges may arise. Some challenges are generic, such as challenges 4 and 6, while others are more human or historically related, like challenges 1 and 2. Additionally, there are challenges associated with the evolving legal environment, as described in challenge 5. Challenges 3 and 7 relate to the inherent risk of lock-in when choosing complex solutions for critical infrastructure systems. Once integrated and necessary for system operation, switching between digital solutions can become a practical nightmare scenario, perhaps requiring an operational shutdown for days, if not weeks, while changing the software system. This embedded nature poses the risk of vendor lock-in, which will hamper the development of digital solutions and must, therefore, be avoided. At Danfoss, we acknowledge the existence of these challenges and work diligently to address them in our solutions. We further foresee that cooperation with other solutions benefits the long-term growth of the DHC digital solution business.
For further information please contact: Oddgeir Gudmundsson, og@danfoss.com
Member company profile:
HADERSLEV FJERNVARME
UNLOCKING HADERSLEV'S HEAT GRID
Haderslev District Heating is a democratically owned limited company where the customers have a direct influence as shareholders. Its mission is non-profit, and the main objective is to secure stable and affordable heating for as many as possible.
Towards a Sustainable Future We see our future as positive, exciting, and challenging as district heating has become " hot again." The district heating industry is an important player in the fight against climate change and is also seen as a commitment to society. The Six Pillars of Haderslev’s Strategy Our strategy is based on the vision to invest our energy in future-proofing the end-user’s heat and achieving the green transition. Our slogan is "Haderslev District Heating - Together for your heat and our climate.”
The district heating in Haderslev was set free in 2021 after being cut off from an expansion of the supply area for 33 years. Thirty-three years of delineation between district heating and natural gas areas were politically replaced by free access to the deployment of district heating in those parts of the natural gas areas where a positive societal economy can be demonstrated. The Growth of Haderslev District Heating In Haderslev, there were 13 sub-areas with approximately 3,500 homes that could potentially switch to district heating, and in all 13 areas, there was a positive societal economy with a 60% connection rate. The expansion of Haderslev District Heating's supply area was therefore initiated in the summer of 2021. As of March 1, 2024, 3,060 homeowners have signed agreements for district heating supply, of which 87.4% have accepted district heating, meaning a connection rate of 87,4%! The success in attracting new customers is due partly to a good offer of inexpensive connection to the network, with 90% of homeowners opting for the offered subscription scheme for the connection and equipment needed, while 10% have chosen to invest in the heat interface unit themselves. A Successful Strategy for New Connections New customers mean increased demand for heat production, and here, Haderslev District Heating looks into a future where biomass, in the form of wood chips, is supplemented by both a 10.5 MW air-to-water heat pump system and two electric boilers of 8 and 15 MW, respectively. As reserve and peak load, natural gas will continue to play a role, but it will also be a transitional solution as efforts are being made to secure agreements on surplus heat from nearby companies.
The foundation for the vision is our six vision beacons:
1. Establishing a closer dialogue with our shareholders.
2. Maintaining a stable and competitive heat supply. 3. Strengthening and developing the organization. 4. Focusing on sustainability, climate, and the environment. 5. Seeking to establish partnerships, networks, and collaborations. 6. We will optimize the use of data.
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