HOT|COOL NO.1/2016 "COP21"

Back in 2009, many of us were hoping that COP 15 in Copenhagen would set the framework for an ambitious climate agreement for all countries of the world. However, that did not turn out to be the case. It took six more years - with the implementation of COP 21 in Paris in December 2015 – for a global climate agreement to be made – the “Paris Agreement". First of all, this agreement was a global legally binding agreement on climate change. Secondly, the agreement provides a significant step towards converting the world to emit significantly less CO2. In this edition of HOT COOL we have chosen to hear how three main actors - IDEA, AGFW and Euroheat & Power - look at the world after COP 21 in Paris. Now the toast speeches are over; the framework is set, but in order to achieve the goals it is necessary that we all roll up our sleeves - not next month or next week or tomorrow, but today - it takes time to make the fundamental energy conversion of our society that is required.

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By Lars Gullev, Managing Director VEKS, and Chairman of DBDH THE COLUMN

AMONG THE MAIN RESULTS OF THE AGREEMENT ARE: • A long-term goal of keeping global temperature rise below 2°C. • A call to action that can limit the temperature rise to 1.5°C. • The industrialized countries have reaffirmed the promise of contributing $ 100 billion annually from 2020 to the developing countries' climate efforts. With the new agreement on the long-term climate goals we, at the same time, globally reinforce the focus on e.g. energy efficiency, including district heating and cooling. In this edition of HOT COOL we have chosen to hear how three main actors - IDEA, AGFW and Euroheat & Power - look at the world after COP 21 in Paris. Now the toast speeches are over; the framework is set, but in order to achieve the goals it is necessary that we all roll up our sleeves - not next month or next week or tomorrow, but today - it takes time to make the fundamental energy conversion of our society that is required.

Back in 2009, many of us were hoping that COP 15 in Copenhagen would set the framework for an ambitious climate agreement for all countries of the world. However, that did not turn out to be the case. It took six more years - with the implementation of COP 21 in Paris in December 2015 – for a global climate agreement to be made – the “Paris Agreement". First of all, this agreement was a global legally binding agreement on climate change. Secondly, the agreement provides a significant step towards converting the world to emit significantly less CO2. Things take time. The reason why it took six years after COP 15 in Copenhagen is that time must work when the goal is to create a consensus among such different countries. In addition, the preliminary work was also thorough. Overall, this resulted in the Paris Agreement being signed by no less than 196 countries. The enrolled reduction contributions from the 196 countries cover more than 96 % of global emissions. It is, in this context, interesting that the Kyoto Protocol of December 1997 covered less than 15 % of global emissions. With the agreement in Paris, we therefore go from activating the few countries to now involving almost all countries worldwide.

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By Lars Chr. Lilleholt, Danish Minister for Energy, Utilities and Climate

Denmark’s total emission of greenhouse gasses will be reduced by app. 40% in 2020 compared to 1990 levels. One way we can inspire other countries to speed up the green transition is by sharing our experiences on energy efficiency and renewable energy sources. Danish experts are currently assisting energy and climate authorities in countries like China, Indonesia, Mexico and South-Africa. Effective use of waste heat, cogeneration, and district heating planning are often integrated parts of many of these cooperative solutions. The Paris Agreement and the strong focus on cost-effective reduction of CO2 emissions show that the export potential of energy technology is huge. Danish energy technology exports last year increased by 10.7 percent and now comprise 12 percent of total Danish exports. In total we exported for more than 74 billion DKK in 2014. Danish energy associations have estimated that our energy technology export could double to key markets – like the EU and the US – by 2030. I am confident that this ambitious goal can be met by a targeted cooperation between companies, organizations, authorities and our embassies. Furthermore I am glad to see companies and investors across the world increasingly realize that the transition to a green economy must go hand-in-hand with good business practices. Although we still are in the beginning of 2016, I have already visited China and discussed enhanced cooperation with the Chinese National Energy Conservation Center on pilot projects on energy savings and district heating. The more we showcase the Danish energy solutions, the bigger the potential for export to the Chinese. I look forward to the coming year where the Danish energy sector will increase exports and create more jobs in Denmark.

“Trillions of dollars will be invested in infrastructure in the coming years. Governments and the private sector must align their investment and infrastructure decisions with the goal to limit the temperature rise well below 2 degrees, even 1.5 degrees Celsius”. This was UN Secretary-General Ban Ki-moon’s statement when he addressed global business leaders at the World Economic Forum in Davos, Switzerland on 21 January 2016. Ban Ki-moon referred to the “Paris Agreement on Climate Change” which was adopted by 196 parties at the COP21 Climate Conference in December 2015. A keystone for the successful outcome was laid in the lead-up to the Conference where more than 180 countries published national climate plans; so-called Intended Nationally Determined Contributions (INDCs). Whilst not enough to limit the global warming to 2 degrees, these contributions created a strong momentum encompassing both developed and developing countries. The Paris Agreement also included an ambition mechanism that will be central for raising the global ambition level in the years to come. From a business point of view the INDCs provide a substantial market opportunity. The International Energy Agency has estimated the full implementation of the INDCs will require the energy sector to invest 13.5 trillion USD in energy efficiency and low-carbon technologies towards 2030. To support implementation, developed countries have pledged to mobilize 100 billion USD from both public and private sources per year from 2020 in support for low-carbon growth and climate resilience in developing countries. In short, The Paris Agreement gives the private sector an unprecedented opportunity to invest and create clean energy as well as climate resilient economies. Seen from a Danish perspective the result of the COP21 is a game changer. Denmark is in the middle of the green transition and the baseline projection from December 2015 shows that



By Jakob Rasmussen, Fjernvarme Fyn, Jørgen Morsing, Fjernvarmecentralen Avedøre Holme and Anders Dyrelund, Rambøll

The district heating network is an important part of the energy infrastructure in many cities. It is expensive and inconvenient to replace. Therefore, a long life-time of the pipes is vital for the success and competitiveness of district heating. We have learned the lesson in Denmark, as we had huge problems 40-50 years ago - both poorly constructed concrete ducts and the first generation of preinsulated pipes caused problems. District heating know-how in 1975 meant knowing how to ensure long lifetime of the pipes. Some pipes in concrete ducts corroded after a few years, others, e.g. a 3 km long DN500 from Vestforbrænding, is still in good condition after 40 years of operation. The first generation of preinsulated pipes (invented and developed by LOGSTOR around 1970) had to be replaced after a few years, but many Danish district heating companies gave the new technology a new chance. As a result, almost all preinsulated pipes and muffs, which were constructed after 1980, are still in good shape. In fact, nobody knows the remaining life-time of these pipes. The total lifetime of new pipes with welded muffs could be 60 years or even 100 years in case of low operation temperatures.

In order to lower costs and to reduce temperatures at our efficient CHP plants we have decided to avoid heat exchangers except for production of hot tap water at each consumer. We have no heat exchangers -neither between transmission and distribution nor between distribution and radiators. Therefore, we have a relatively large water loss as our losses include losses in the buildings. One the other hand, the good water quality reduces corrosion in building installations. There is only one disadvantage: the building can be flooded in case of a severe leak. In case this is considered to be too risky, the building owner can install a leak protection system in which two valves will close automatically if there is a difference in the in- and outgoing flow. Besides, we have an old network which leaks from time to time and there can be leaks in the tanks and heat exchangers for production of hot tap water. In total, our water losses have been much larger than normal in Denmark for many years, but fortunately never larger than the capacity of our water treatment system. High level water quality and a pH 9.5 to prevent any internal corrosion are of course vital. Therefore, we have never had the problem of progressive internal corrosion. Instead, we have taken the time to implement a rehabilitation strategy with the aim to minimize the total costs. In our strategy, we have aimed at minimizing the NPV of all costs including investment in new preinsulated pipes, repair costs, costs of heat losses and costs of disruptions. A key parameter is e.g. an “acceptable” number of leaks per 100 km per year for each type of pipe and dimension. Reducing water losses and heat losses to almost zero is not cost effective, but we can talk about an optimal level. Moreover, we have considered the advantage of lowering the reduction of supply temperatures per km pipe during summer, which is particularly important for small pipes. The general outcome of the optimization is: small dimensions first - large dimensions later. Last year we replaced the last old concrete duct with preinsulated pipes. It is a 40 year old DN600 concrete duct. The concrete duct was only replaced because of renovation of the road. If not, it would probably have been in active service for 4-5 more years. The other pipes that have been replaced in these years are normally also around 45 years old. The main reason now is not that they are in a critical shape and that it is the most cost effective.

But how do we define the time for replacement ?

CASE 1: Maintenance strategy in Odense

In Fjernvarme Fyn, located in the third-largest Danish city Odense, we have been through a successful maintenance strategy with the aim to keep it simple to minimize the distribution costs for all our consumers.

Fig. 1 Supply area of Fjernvarme Fyn

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We take also into account that consumers expect very reliable supplies, both single-family homes, large multi-owner housing blocks and industrial consumers. All these locations require a reliable supply of heat twenty-four hours a day. All our consumers expect that reliable delivery will be combined with optimum utilization of basic fuels, in an environment friendly way and at low prices. Leak detection In Odense we have found several good methods to detect leaks and thereby reducing the water losses. We have three very successful methods: • Leak detection systems in modern preinsulated pipes (check when installed and after 1 year and then every fifth year). • Thermographic inspection from air plane combined with GIS registration of our pipes and camera mounted on a car is very efficient to detect leaks in the streets. We normally use it every second year. • Uranine additive to the water to detect leaking water in drain systems and in particular in the tanks and heat exchangers for production of hot tap water. We plan to use it every third year. Last year we, or our consumers, found leaks in approximately 1,000 of the 61,000 consumer installations.

Fig 2. Leak detected by airborne camera is analyzed in detail by local inspection combined with GIS

Besides this, we of course inspect all our underground drain wells and pump sumps in our underground constructions.


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CASE 2: The network that survived - Avedøre Holme District Heating Company

Avedøre Holme District Heating Company is located in an old seabed area next to Avedøre CHP plant in Copenhagen. The company supplies mainly industrial consumers. Some of them use low-pressure steam to processes and therefore the system operation temperature has been 165 O C ever since the network was constructed back in 1967. The network was constructed as a concrete duct system cast on site and insulated with cellular concrete and drained. However, the draining systemwas poorly constructed and the pipes started to corrode as ground water was penetrating into the ducts. It was decided to renovate the whole network by efficient outside deep draining and by protecting the top and the sides of the duct with waterproof asphalt filt. As a result, the network survived. In 1990, we presented this success story in News from DBDH (former name of Hot Cool). Now we can confirm that the almost 50-year-old network is still in good shape. There is only a small leak to be repaired from time to time. The water losses are so low that we can detect any new leak. Besides, we use the same maintenance strategy and leak detection methods as Fjernvarme Fyn. The lesson learned is that poorly constructed concrete duct systems may have a lifetime of less than 10 years, however efficient draining and ventilation can prolong the lifetime to more than 50 years.

Fig 3. This is definitely not drain water

As a result of the rehabilitation and systematic leak detection, we have reduced our water losses from 700 m3/year/km in 1990 to 80 m3 in 2012 as shown on the graph. Now the losses are so low that we can detect a major leak at once by observing the need for make-up water.

water consumption m3/k












Fig 4. Make water consumption during 20 years.

FJERNVARME FYN - 97 % owned by the municipality of Odense and 3 % owned by the municipality of Nordfyn

AVEDØRE HOLME DHC - 100% owned by the consumers - 134 building level heat meters and heat exchangers

- 60,100 building level heat meters - Heat production 7,808 TJ in 2013

- Heat production 297 TJ in 2013 - Share of heat from CHP ~ 97 % - Heat losses 20 %

- Heated floor area 15 mill. m2 - Share of heat from CHP ~ 95 % - Share of waste and biomass ~48 % - Supply temperature 70-90 O C - Heat losses ~ 18 % - Water volume 70,000 m3 in the network - Water losses 9,643 m3 in 2013 (80 m3/km/year x 1,996 km = 160,000 m3/year) - 1,996 km network including branch lines, from DN15 to DN1000 - 0 heat exchangers - Heat storage tank 75,000 m3 - Maximal production demand 790 MW and 13,834 m3/h in 2013 - Coal fuelled CHP 407 MWelec and 570 MWheat = ~ 650,000 ton coal - Straw fuelled CHP 35 MWelec and 110 MWheat = ~ 180,000 ton straw/year - Waste fuelled CHP 24 MWelec and 64 MWheat = ~ 200,000 ton waste/year - 23 peak and spare boiler plants, 743 MW (42 oil boilers and 14 gas boilers)

- Supply temperature 160 dgr .C constant - Water volume 690 m3 in the network - Water losses in 2013 3,507 m3 /year

- Water losses in 2014 3 m3 /day(after detecting one leak) - 21 km network including branch lines, fromDN25 to DN300 - 19 km old renovated concrete ducts, - 2 km preinsulated pipes in new branchlines (LOGSTOR HT3) - Maximal production demand, 34 MW in 2013 - 1 peak and spare boiler plant, 55 MW

For further information please contact:

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By Paul Voss, Managing Director, Euroheat and Power

in Paris, but this agreement is nothing more than the end of the beginning. It is only an agreement that the necessary work should begin. If we are indeed to secure the future of our planet for our children, our children’s children and their family pets, we will have to do far more and far better than we have managed so far, and we will have to do it far more quickly. Agreeing that we shouldn’t destroy our planet should be easy, but it proved difficult. It seems fair to assume that actually keeping this promise to future generations will be even harder. The science is stark and uncompromising. Global greenhouse gas emissions, the majority of which are linked to energy use, must be dramatically reduced over the coming decades. Solutions are available. A wide range of renewable energy sources are available and the technologies required to harness them are steadily becoming more cost-effective. These solutions will have to move from being the exception to the rule if the ambitions set out in Paris are to be realised. And while the transition to a renewable-based energy system typically evokes images of windmills, photovoltaic panels and electric cars, the simple and little-known truth is that the single largest source of energy demand is generally for neither electricity nor transport but for heating and cooling. Once this is understood, it becomes clear that district heating and cooling networks are much more than a ‘nice to have’ but rather an essential tool in the struggle to develop a truly sustainable energy model for the world. Why district heating? If you’re reading this publication, there’s a good chance you’re already familiar with DHC’s (District Heating and Cooling’s) advantages. You know that these networks allow thermal energy that would otherwise be wasted to be transformed into a valuable resource with no additional environmental impact. You know they provide a vital route to market for renewable resources available in or nearby our cities. In short, you know they can help, but the case can be put more strongly than that. The argument is simple and compelling. 1. There can be no energy transition without sustainable cities since this is where both energy consumption and the associated emissions are concentrated. 2. There can be no sustainable cities without sustainable heating and cooling since these are and will remain the dominant energy demands. 3. District energy (Heating and Cooling) networks are without questions the most effective means of delivering large amounts of low carbon heating and/ or cooling into a dense urban environment.

For a few days in December last year, climate change and, more specifically, COP21 dominated the headlines of newspapers around the world. Billed as the last chance to get a global deal on tackling climate change, the negotiations felt like a life or death test for humanity whose outcome was entirely uncertain. In the end, after some last minute squabbles and a predictable delay, a deal was announced. Speaking in the aftermath, UK Prime Minister David Cameron proclaimed that “our children and grandchildren will see that we did our duty in securing the future of our planet”. Two months later, now that the champagne has been drunk and the victory parties have wound up, it seems right to reflect on what happened and what it means, not only for our planet, for our grandchildren but for our industry.

What was achieved? It is fair to see that the Paris accord was a genuinely historic occasion for humanity. After the disastrous breakdown of negotiations at COP15 in 2009, it was vitally important to rebuild a global consensus about the need to take meaningful and concerted action. In this sense, the agreement is an extremely important achievement. Commitments in principle to keeping temperature increases below 2°C and to regular (upward!) revisions of emissions reduction targets are essential prerequisites for meaningful action in practice. Had the summit failed to reach agreement on these points, it would have been extremely difficult to sustain the argument that effective political action to combat climate change was an achievable ambition. What (definitely) wasn’t achieved? Amidst all the post-conference euphoria, it seems to have escaped the notice of some people that agreements on paper are not a substitute for action on the ground. It’s fine for politicians to hold self-congratulatory press conferences, and, as stated above, there are reasons to be proud of what happened



to come. In parallel, the UN Environment Programme (UNEP) has produced a wonderful report setting out the advantages of the technology and highlighting its potential to make a major contribution to the fight against climate change. What now? Anyone who believes that COP21 really secured the future of our planet has been reading too many of his own press statements! Equally, it does almost nothing to secure the future of the district energy business. We wake up to the same challenges that were there before the meetings in Paris. The economy is shaky, the popular consensus about the reality of climate change is inexplicably fragile, and the politics and economics of reimagining our energy system remain horribly complex. But it’s worth remembering that it could have been much much worse. We have an agreement in principle to try to solve this problem, and we know that our technology can make a major contribution. Now it is the turn of our industry to step up, day by day, city by city, street by street and deliver practical solutions that really work. I am quietly confident we can get it done. In fact, I’m already looking forward to the champagne when it’s over!

In a world where business as usual will no longer be an option, district energy can suddenly become an extremely hot topic. At Euroheat & Power, we have observed first hand the power of these simple ideas. Heating and cooling, for decades an afterthought (if it was considered at all!) in the European energy policy debate has exploded on to the political agenda in the past 12 months. On February 16th, the European Commission published the first ever EU Strategy on Heating and Cooling. It makes it abundantly clear that the decarbonisation of the European energy system (the EU has set a target of 80-95%GHG reduction by 2050) cannot be carried out without fundamental change in the way we heat and cool our buildings. District energy, networks, with their ability to deliver low carbon heat into cities, emerge as a headline solution. This political message from Brussels should have knock-on effects in decision-making processes at national and local level across Europe in the years

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By Robert P. Thornton, President & CEO, International District Energy Association (IDEA)

through district energy and is keen to help other mayors learn from their experience. Anne Hunt of St. Paul was kind enough to offer a timely shoutout inviting the audience to IDEA2016 which St. Paul will be hosting in June 2016. Unlike the prior twenty COP sessions, many of which produced mixed if not disappointing results, this was arguably the first time that subnational entities, such as cities and the business community, had substantial voice to influence the process. 440 mayors from around the world gathered at Paris City Hall on December 4 for a “Day of Action” to demonstrate their common interest and collective voice in climate mitigation and adaptation. Former New York City Mayor Bloomberg and Paris Mayor Hidalgo were quite prominent during COP 21, making the case that mayors must be pragmatic and solutions-oriented. Much of the conference program focused on climate actions led by cities. Cities hold 53% of global population, consume 70% of the world’s energy and produce over 80% of global economic activity. It’s important to note that many of the recognized “Climate Cities” like New York City, Paris, Copenhagen, Malmo, Vancouver and Boston fully embrace district energy and their respective leaders understand and appreciate the advantages of thermal grids in their communities. District energy is very much on the radar and UNEP has been an invaluable catalyst for increasing our visibility. Moreover, mayors readily acknowledge their direct accountability and responsibility to citizens for the impacts of climate change – more frequent and severe weather events, increased flooding, economic disruption and constituent safety. In addition to adaptation, mayors are sharing technology and financing strategies in order to mobilize decisive actions to cut emissions and harden infrastructure. With the Paris Agreement now concluded, there is very strong momentum to reduce reliance on fossil fuels and shift toward lower carbon solutions. It is clear that mayors have taken up the gauntlet and will continue to catalyze change. Here in the US, even if partisan bickering in Congress distorts and delays federal action, municipalities and states will likely drive infrastructure investment. During the Summit, Mayor Bloomberg announced the aggregate impact of city commitments to the Compact of Mayors – the world’s largest coalition of cities committed to reducing greenhouse gas emissions and tracking progress. Climate Cities released a video outlining Bloomberg’s vision that Compact-committed cities can deliver half of the global urban potential greenhouse gas emissions reductions available by 2020. Reflecting on the historic COP21 agreement, Bloomberg reiterated his support of the success in Paris and that future success will be contingent upon city action:

The United Nation's 21st Conference of the Parties (COP 21) was the single largest gathering of countries in one location in recorded history. 196 different nations gathered in Paris for two weeks beginning Nov 30, 2015 culminating in a historic agreement on December 12 to limit emissions of greenhouse gases in order to avert climate change. Never before had so many heads of state come together collectively to address a single issue. Frankly, it is remarkable that a unanimous global agreement was achieved, calling for transparency, regular review periods, sharing of responsibility between developed and developing nations, and ultimately a unifying statement that will galvanize action toward cleaner energy solutions. Had one party declined approval, the whole agreement would have collapsed, much like the calamity of Copenhagen which I witnessed first-hand in 2009. Frommy view, the Paris Agreement is a very positive outcome for district energy/CHP (Combined Heat and Power), requiring that we re-double our efforts as an industry to leverage favorable policies to accelerate deployment and growth of district energy systems. IDEA was invited to participate in COP21 by the United Nations Environmental Program and ICLEI Local Governments for Sustainability with whom we have partnered on the District Energy in Cities Initiative. IDEA released a special video for COP21: District Energy for Low Carbon Cities in conjunction with a panel discussion involving Maryke van Staden of ICLEI; the Honorable Katrin Stjernfeldt Jammeh, Mayor of Mälmo, Sweden; Peter Krahl Rydberg, Environmental Strategist of the City of Gothenburg, Sweden; Anne Hunt, Environmental Policy Director, City of St. Paul, MN; and industry leaders Ahmad Bin Shafar, CEO of Empower Energy Solutions, Dubai, UAE and Paul Voss, Managing Director of Euroheat & Power, Brussels. The panel session highlighted the variety of solutions and innovation within our industry and around the globe. In Malmo, 90% of the residences use district energy and 60% is from recovered waste heat. In Gothenburg, an industrial port city, district heating service supplants idling ship boilers when docked at port and surplus heat from local industry provides baseload community energy, strengthening the circular economy. In St. Paul, regional wood waste has displaced over 240,000 tons per year coal use, dramatically cutting emissions and nearly doubling efficiency through district energy/CHP. Both Malmo and St Paul are involved in significant industrial re-development projects that will be underpinned by clean district energy infrastructure. In just ten years, Dubai has deployed over one million tons of district cooling capacity to literally halve peak electric demand and displace substantial downstream emissions. Mayor Jammeh of Malmo is rightly proud of her city’s leadership in sustainability



States had insisted on an aggressive, uniform system for countries to publicly report their emissions, and on the creation of an outside body to verify emissions reductions — a form of “carbon auditor.” Developing nations such as China and India had sought to be subject to a less stringent form of monitoring and verification than richer countries. Ultimately the agreement requires all countries to use the same emissions-reporting system, but it allows developing nations to report fewer details until they have the ability to better count their carbon emissions and defers creation of the carbon auditor agency to be determined later.

“This groundbreaking agreement on climate action – together with the commitments made by cities and businesses around the world – sets the world on a new and hopeful pathway,” Bloomberg said. “The agreement not only unites all nations in the battle against climate change, it also sends a clear signal to markets about the direction of government policy, which will help spur greater private sector investment in low-carbon technology. Like any agreement, it's not perfect, but it also includes a built- in remedy that many city leaders strongly supported: regular re-evaluations of national goals and transparent reporting of progress, to ensure that we are on track to hand a safer, healthier, and more prosperous world to our children.”

At the core of the agreement is a breakthrough on an issue that had previously foiled decades of international negotiations on climate change. Traditionally, such pacts have required developed economies, such as the United States, to take action to mitigate greenhouse gas emissions, but exempted developing countries, such as China and India, from such action. The Paris Agreement removes that obstacle by requiring action in some form from every country, rich or poor. The primary aim of the agreement is to begin to level off the rise in fossil fuel emissions enough to forestall an increase in atmospheric temperatures of 2 degrees Celsius (3.6 degrees Fahrenheit). That is the tipping point at which, scientists say, which will lock the planet into a dangerous future of rising sea levels, severe flooding and droughts, food and water shortages and more extreme storms. The new agreement requires countries to return to the negotiating table every five years with plans that would ratchet up the stringency of their existing polices. The first such meeting would take place in 2020, when countries would be required to propose tougher plans. The accord also establishes “stock-taking” meetings every five years, at which countries will present an accounting of how they are reducing their emissions compared with earlier targets. In addition, all countries agree to monitor, verify and publicly report their levels of emissions. The issue of monitoring and verification had been one of the most contentious, with negotiators wrangling over final details toward the end. The United

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for district energy and microgrids. We signed an MOU with parties from Korea, China, Mongolia and the EU to collaborate on district energy/CHP deployment. Our members across the Middle East are driving expansion of district cooling. Looking ahead to 2016, IDEA anticipates signing memorandums of understanding with the Edison Electric Institute (EEI) to collaborate on district energy/CHP deployment, with ASHRAE on multiple provisions and with US Green Buildings Council on treatment of district energy in LEED and accelerating adoption of PEER for more resilient, sustainable energy grids. We plan to continue and expand our activities with UNEP and ICLEI to work together on appropriate capacity-building and policies. District energy is certainly on the radar of city leaders, planners and policy makers, as well as those organizations actively supporting clean energy evolution. It will be important for industry leaders like DBDH, Euroheat & Power, AGFW and IDEA to be available and involved in these many conversations, bringing to bear experience and operational insight if we are to be effective partners in accelerating district energy deployment. The pivotal Paris Agreement sets the stage for dramatic acceleration of activities in the months and years ahead. Now that the ink is dry, our work really begins.

Some elements of the accord are voluntary, while others are legally binding. That hybrid structure was specifically designed to ensure support from the United States: An accord that would have required legally binding targets for emissions reductions would be legally interpreted as a new treaty that would require Senate ratification, essentially dead on arrival with the current majority. As a result, all language in the accord relating to the reduction of carbon emissions is essentially voluntary, assigning no concrete targets to any country for emissions reductions. Instead, each government has crafted a plan detailing how they would lower emissions at home, based on what each head of state believes is feasible given the country’s domestic political and economic situation. The accord uses the language of an existing treaty, the 1992 United Nations Framework Convention on Climate Change, to put forth legally binding language requiring countries to verify their emissions, and to periodically put forth new, tougher domestic plans over time. Heading into Paris, many multi-national corporations, including large oil and mining concerns, also signed onto compacts calling for a decisive, transparent global agreement that would provide clarity and consistency to enable longer-term investments to lower carbon emissions and drive the transition from a fossil-based economy. Similarly, here in the US, utilities and industry alike foresee the impact of policies like the EPA Clean Power Plan accelerating a transition to cleaner, more distributed generation. During 2015, IDEA worked closely with groups like the Urban Sustainability Directors Network, EcoDistricts, Microgrid Resources Coalition and C40 Cities to expand awareness and develop more capacity The Development of District Heating District heating is expanding wherever it is potentially possible at Vestegnen, the suburban area west of Copenhagen. Converting into district heating is a cheap, secure and environmental friendly alternative to natural gas and oil – with half the emission of CO 2 . But it can be even better: VEKS aims for a CO 2 -neutral heat supply by 2025.

For further information please contact:

Robert P. Thornton IDEA

+1-508-366-9339 office +1-508-254-7369 mobile

24 Lyman Street, Suite 230 Westborough, MA 01581

VEKS is an environmentally certified heat-transmission company supplying 20 local district heating companies with heat generated at Vest- egnen. The heat supplied equals the consumption of 150,000 families. The majority of heat is supplied to VEKS from the Avedøre Power Plant and the other CHP plants in Copenhagen as well as from the waste incineration plants KARA/NOVEREN and Vestforbrænding. VEKS is a non-profit company. Further information:



By Dipl.-Mgr. Ing. Maria Grajcar, MA, Europe and International, AGFW

$ 100 billion annually should be scaled up by developed countries to finance climate change mitigation in developing countries by 2020. € 40 billion ($ 44.5 billion) in total would be enough to realize an ambitious goal in Germany: 70 % of district heating share in 70 the most highly populated German cities. The author of the article examines how a new 70/70-Strategy fits into the framework of the Paris Agreement from the twenty-first session of the Conference of the Parties (“Framework Convention on Climate Change”).

Assumptions The authors of the study reckon with a considerable decrease in heat demand in big cities; however, this will be lower in relation to Germany on the whole. The future attractiveness of large cities like Dresden and Munich will contribute to an increase in their population. Regarding economic boundary conditions, assumptions mostly correspond to the one ones used in the CHP potential study made for the Federal Ministry of Economy and Energy, reckoning with a wholesale electricity price (base load) at EUR 42/MWh in 2020 and at EUR 67/MWh in 2030. It was also assumed that the CHP Act would continue to be in force with an unlimited subsidy budget.

The COP 21 Agreement invites all parties to communicate their contribution in order to fall within the least-cost 2 Celsius scenarios. A prerequisite for a successful Paris Agreement is the ability of the developed countries (the OECD) to support developing countries with $ 100 billion a year. Germany, as the first state, announced a doubling of its financial resources available to approx. € 4 billion annually already in May 2015, followed by France and the UK. All things considered, pledges still seem to fall short of reaching the $ 100 billion target by 2020. Leaving aside the totally different expectations from both camps (developed countries vs. developing countries, the latter most affected by the climate change), Parties share a vision on the importance of technology development and transfer under Article 10. Moreover, Parties are invited to communicate their greenhouse gas emission reduction strategies. Technology and greenhouse gas reduction strategies are two main concepts of the agreement with a link to the district heating sector. Last year the Managing Board of the AGFW approached the issue with its 70/70 Strategy. Simple question capturing our imagination What if the 70 most highly populated German cities 1 were to provide 70 % of their buildings (heating and hot water) with high efficient district heating?“ What national, economical and regional effects are to be expected? And how would this share contribute to “Energiewende” goals? Authors of the study considered two scenarios: Business as Usual (BAU) and Renewable Energy Scenario (RES). In both schemes, about 90 % of the expansion is expected to be observed in the old states of Germany and about half would be carried out in the cities with a population of more than 350,000 2 . In order to achieve the interim target of a 55% district heating share by 2030 it will be necessary to invest as much as possible into the expansion of the distribution network before 2030; since connecting new customers will take at least 10 years.

1 The total heat demand of the considered cities amounts to 731 PJ or approx. 30 % of the total heat demand of residential and non-residential buildings in Germany. The current average share of district heating in these cities is 18% compared to the total German average of 10.4 %. 2 District heating is already being significantly expanded in some large cities like Munich, Mannheim, Frankfurt or Dresden.

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Results As previously stated, most of the expansion would be completed and almost 90% of investment would have to be spent by 2030 with the following effects:

The sensitivity calculations document the importance of the CHP Act for the economic viability of the CHP plants and the 70/70 Strategy. As the CHP Act continues (new provisions of the Act were not known at the time of study release), about three-quarters of the defined district heating expansion can still be realized in a cost-effective way. However, if the CHP Act was abolished completely, the 70/70 Strategy would only be effective in exceptional cases, as not only the subsidies for generation, but also the network subsidies would cease to be applicable. In accordance with the State Aid Guidelines, the Federal Government notified the CHP Act; no official response has been received by the European Commission yet. The CHP support may not be put into effect until the Commission has reached a decision. With the 70/70 Strategy and a newCHP Act inmind, the German district heating sector hopes the European Heat Strategy (to be published in spring 2016) to contain similar incentives for district heating at EU level. • The 70/70 Strategy has been released by the Institute for Energy Economics and the Rational Use of Energy (IER) of the University of Stuttgart and by the Fraunhofer Institute for Manufacturing Technology and Advanced Materials (IFAM) • The study can be downloaded from the AGFWwebsite: (in German). For the English version of the study, please contact the author of the article.

28 Mio. t CO2 reduction, with reference to Germany total CO2 reduction: 90 Mio. t. CO2

For the analysis and the assessment of CO2 emission savings resulting from two above-mentioned scenarios, a reference system assumed a mix of 50% oil boilers and 50 % natural gas boilers with an efficiency of 90 % each. Remaining CO2 emissions are lower in the RES scenario due to two factors: a) the positive effect of CHP power generation will decrease due to the exclusive use of fossil fuels in CHP installations and the lower CO2-factor of electricity; b) the increasing use of renewable energy sources in heat- only boilers and the increasing share of district heating generated by heat-only plants in the RES scenario

38,000 km of new pipes, with reference to Germany: more than 120,000 km of pipes

13,000 potential jobs in the energy sector, with reference to Germany: more than 50,000 jobs

The resulting job creation from the development of district heating means 12,000 new jobs by 2030. An additional 1,250 jobs will come from the operation, maintenance and management of the infrastructure. Up to 70 cent out of every Euro paid for district heat remains in the region (compared with 19 cent for natural gas and 6 cent for heating oil). Strategy 70/70 and the new CHP Act Implementing the 70/70 strategy would ensure the achievement of the previous federal government’s goal of a 25 %CHP share in electric power by the year 2030. However, the Federal Govern- ment changed the reference system to which the goal of 25 % of CHP electricity is related: from net electricity production (150 TWh) to the electricity production from thermal power plants only (115 TWh) . The new CHP Act came into force on 1 January 2016 subject to Commission’s decision on state aid provisions (KWKG 2016). Surcharges increased by an additional EUR 0.6 ct/kWh for plants that replace installations running on hard-coal or lignite (certain conditions apply). The maximum volume of financing support (the total sum of CHP surcharges) has been doubled to EUR 1.5 billion per year. Electricity from high-efficient installations with a capacity above 2 MW, running on gas and supplied to the public grid will receive a surcharge of 1,5 ct/kWh. This provision is valid for the maximum of 16,000 full-load hours for the next 4 years.

For further information please contact:

Europe and International AGFW | The Energy Efficiency Association for Heating, Cooling and CHP Stresemannallee 30 60596 Frankfurt/Main, Germany

Phone: +49 69 6304 281 Fax: +49 69 6304 458 Mail:



By Anders Dyrelund, Senior Market Manager, Ramboll Energy and Flemming Ulbjerg, Chief Consultant, Ramboll Energy

• Step 2: Large thermal storage pits (PTES). The first task has been to store solar heat from large-scale solar heating plants from summer to winter and thereby increasing the solar heat from less than 20% to roughly 50%. The second task will be to utilize interruptible efficient heat sources from CHPs and large heat pumps in order to integrate a larger share of wind energy.

An increasing number of countries are going to implement low carbon climate action plans, with the aim to reduce the fossil fuel consumption in a cost effective way. The challenge will be to integrate the efficient energy sources and the fluctuating renewable energy in the energy system in a cost effective way. Due to economy of scale, district heating can integrate many heat sources, which have sufficient temperature and capacity when needed. The cost of extracting low temperature heat from a large coal fuelled power plant is e.g. less than 0.4 MWh coal per MWh heat in case a similar condensing plant is in operation – not to speak about deep geothermal heat, energy from waste and large-scale solar heat, which can be used cost effectively without fossil fuels. The challenge in the energy system of the future will be to integrate all available renewable sources, which unfortunately are fluctuating and often not available when needed. It is a problem that solar heating and surplus heat from cooling are only available when the heat demand is low. It is an even bigger problem for the power system that fluctuating wind, solar PV and hydro power are difficult to integrate. Pump storages can help in some countries, but cost effective pump storages are also a limited resource. The power sector even considers establishing electricity storages, which are extremely expensive. Therefore, large thermal storages in the district heating will play an important role in the energy system in the future, not only to use all heat sources better, but also to support the power system integrating the fluctuating electricity sources.

The diagram below shows the investment cost in relation to storage capacity in MWh.

Investment costs storage tanks (TTES) and storage pits (PTES) incl. design, construction and materials

Capacity in MWh storage

Figure 1. Cost of thermal storages

This diagram gives us two important pieces of information: • It is important to reduce the temperature at consumer and in the grid to reduce investment costs in storages (plus many other good reasons) • Storage pits is an interesting opportunity to reduce cost and increase volume Pressure less storage tank The largest pressure less hot water storage tank has a volume of 75,000 m3, the maximal temperature is 95 o C and it maintains the pressure in the grid. It can store 4,000 MWh heat and is owned by Fjernvarme Fyn in Odense, Denmark. The second largest in Esbjerg has a volume of 50,000 m3.

Denmark has gained useful experience in this process for several reasons:

• Strong energy policy and tax on fossil fuels • Large share of low temperature district heating <100 o C • Large share of combined heat and power (CHP) • Large share of wind power

The introduction of heat storages has taken place in two main steps:

• Step 1: Heat storage tanks (TTES) to all CHP plants and thereby to almost all 400 district heating systems. The main task was to de-couple heat and power and thereby improving the flexibility and opimizing production of heat and power. Three large tanks are slightly pressurized, all other are pressure less.

Figure 2. Simple connection of a pressure less storage tank

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