HOT|COOL NO.4/16 - "From one generation..."


b) Rural district heating networks: Many small DH networks struggle with profitability, especially during summer when the operation is inefficient due to high heat losses due to high network temperatures. Possible new elements include: • Network optimisation (Figure 2: Value Proposition 4 ): Onemain reason for high return temperatures are faults at the substations on the customer side due to inappropriate installations and operation. Very often, planners and installers (Figure 2: Key Partnerships 1 ) of district heating networks in rural areas are not aware of the requirements of DH networks in connection with the installation of the secondary side respectively the consequences if they are not fulfilled. Therefore, workshops (Figure 2: Value Proposition 4 ) are planned to integrate the relevant stakeholders at an early stage to show them the importance of the customer side . In addition, the cooperation between different DH networks should be strengthened for knowledge transfer (Figure 2: Key Activities 2 ). Final remarks For the implementation of innovative elements in the current business models, additional efforts are required. This is including an integrated cost-benefit analysis in order to evaluate the feasibility of the new elements and strategies for the transformation of the current business model. Here, major barriers are the organizational structures and philosophies of many companies as well as regulatory conditions and the market design in which the business model is implemented. However, following approach for developing innovative elements of business models supporting future proof district heating networks can be described: • Motivate the stakeholder to think “out of the box” and allow also new and creative ideas (e.g. show international best practice examples) • Involve key partners, local stakeholders and possible new actors (such as energy contractors) to develop new business models for creating a win-win situation • Identify the needs of the customers and allow them to take part in the development process • Deliver a sound concept featuring economic and ecologic advantages and at the same time addressing technical and non-technical barriers Acknowledgement This work is a result of the STRATEGO project, supported by the Intelligent Energy – Europe (IEE) programm (Contract N°: IEE/13/650/SI2.675851).

Waste heat from data centres and industrial processes (Figure 1: Key Partnerships 1 ): For the integration of alternative heat sources into district heating networks, data centres offer a high potential especially in larger cities. In Vienna, about 1 – 2 new data centres per year were built in the last ten years and the waste heat could be used to feed into the DH network or supply to new development areas . Reducing system temperatures (Figure 1: Value Proposition 4 ): The long term structure of the current heat delivery contracts is a main barrier for modifications on the building side. As a consequence, customer contracts should be continuously adapted to lower temperatures if possible e.g. in new or renovated buildings. Also the compliance of the customers to the prescribed return temperatures will be more strictly pursued. Special services (Figure 1: Key Activities 2 ): The largest customer should get a service which includes analysing heat consumption (load profile), energy savings, measures for reducing the return temperature, shaping / flattening peak loads to harmonize the profile, etc. New tariff models (Figure 1: Revenue Streams 9 ) • Flexible tariff: Flexible tariffs could be offered for better addressing the customer needs and to give them possibilities to influence their heating costs. New tariff models could be time dependent (e.g. daily and seasonal variations) or include a bonus/malus systems, i.e. customers could get a financial bonus for lower return temperatures. However, flexible tariff are at the current status not so easy to implement because of the Austrian weights and measures act and very often, high quality heat measurement systems with remote access are not yet extensively implemented. • Alternative energy tariffs: New tariffs for alternative heat supply (e.g. solar thermal, heat pump, etc.) should be offered to the customers. The customers have the chance to select their own “green” heat supply through deciding between different energy sources with different prices. Similar models already exist for several years for electricity tariffs, e.g. “Ökostrom”. Experience shows that some customers are willing to pay higher energy bills for a more sustainable supply. • Experience from Sweden in implementing new tariff models shows: The level of acceptance depends upon 1) the precision of the communication and 2) the outcome for the specific customer. Here, following customer requirements need to be considered:

• pay for what they consumed (variable costs) • transparency and easily understandable pricing • feel monetary effects from energy efficiency and energy saving

For further information please contact:

AIT Austrian Institute of Technology GmbH Giefinggasse 2 1210 Vienna, Austria Att.: Roman Geyer Phone: +43 50550-6350

New financing and contracting solutions (Figure 1: Key Resources 3 ): For developing and implementing new business models, specialists from law, financing, contracting and other frameworks are needed.

Att.: Ralf-Roman Schmidt Phone: +43 50550-6390

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