Congratulations to DBDH on 40 years of strengthening good Danish energy solutions. For 40 years, DBDH has helped show the world a Danish supply model where companies and utilities together create good robust and environmentally friendly supply solutions to the citizens. In Denmark, the development of the joint supply solutions is the basis for having come part of the way to an even more environmentally and climate-friendly energy supply during these 40 years. But there still is some way to go – so why not have a look at how I hope and believe Denmark’s energy supply will look in years to come. In the next 40 years, we are looking into a future with a need for investments in the order of billions in the energy supply, and now is the time for choosing the most sustainable and strategically best solutions. We must make an effort to meet the promise of temperature increases of no more than 2 degrees Celsius, and we want to make sure that Denmark is in a strong competitive position in future climate technologies. DBDH publishes Hot Cool, but the main business is helping cities or regions in their green transition. We will help you find specific answers for a sustainable district heating solution or integrate green technology into an existing district heating system in your region – for free! Any city, or utility in the world, can call DBDH and find help for a green district heating solution suitable for their city. A similar system is often operating in Denmark, being the most advanced district heating country globally. DBDH then organizes visits to Danish reference utilities or expert delegations from Denmark to your city. For real or virtually in webinars or web meetings. DBDH is a non-profit organization - so guidance by DBDH is free of charge. Just call us. We'd love to help you district energize your city!
40 YEARS ANNIVERSARY ISSUE 2018
DBDH - direct access to district heating and cooling technology
www.dbdh.dk
CONTENTS
3 4 7
FOCUS
CONGRATULATIONS!
FOCUS
40 YEARS WITH DBDH AND DISTRICT HEATING
FOCUS
THE HISTORY OF DANISH DISTRICT HEATING
10 14 18 20 24 27 28 30
FOCUS
40 YEARS OF DISTRICT HEATING NEWS AND INFORMATION
SETTING DISTRICT ENERGY PROJECTS IN MOTION, MAINTAIN MOMENTUM & DELIVERING SERVICE
GDPR COMPLIANCE. THE DEADLINE HAS PASSED – WHAT IS NEXT?
ASSET MANAGEMENT BEGINS WITH CORRECT WATER TREATMENT
WHAT HAPPENED TO BIOMASS IN DISTRICT HEATING?
NEW MEMBERS
MEMBER COMPANY PROFILE: EUROPEAN ENERGY
LIST OF MEMBERS
HOT|COOL is published four times a year by:
Amagerværket (photo altered).
DBDH Stæhr Johansens Vej 38 DK-2000 Frederiksberg Phone +45 8893 9150
Total circulation: 8,000 copies in 60 countries ISSN 0904 9681 Layout: DBDH/GallaForm
info@dbdh.dk www.dbdh.dk
Editor-in-Chief: Lars Gullev, VEKS
Pre-press and printing: Kailow Graphic A/S
Coordinating Editor: Kathrine Windahl, DBDH
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FOCUS 40 YEARS
By Ida Auken, Member of the Danish Parliament, Danish Social Liberal Party. Spokeswoman on energy
I assume, of course, that the biomass used consists of residual resources that are used only in a sustainable way, i.e. with a neutral CO2 balance. Individual heating will have restrictions on the type of heating as well as heat source, so that particle contamination is also avoided. Electricity and heat savings as well as storage technologies will have a significant impact on the efficiency and balancing of the overall system. Within the next 40 years, by 2058, district heating systems will have been improved and expanded, so that all heat and power from the industry and surroundings are utilized by the means of large heat pumps. Also, surplus wind power will be used in Denmark for district heating through heat pumps and storage. Trains are electrified and cars run on electricity or on bioelectric fuels / CO2-electric fuels. Commercial production will be largely electrified, but will also utilize surplus heat. The bioenergy share of waste is converted into biofuels and waste is also recycled. The vision will be made possible by working determined to establish a smart energy system. A huge effort to produce energy savings has made the systems suitable for low energy, and the energy system is designed with the highest possible synergies in order to secure the balance between energy production and consumption within Denmark's borders. In this way, we are making ourselves less dependent on unintentional incidents in the European electricity grid, and it will strengthen our current strong expertise to ensure smart solutions between the different types of supply. In 40 years, our world will be cleaner than today, and we can harvest the financial fruits of a foresighted energy policy, implemented in broad agreement across different political wings and Danish public and private companies.
Congratulations to DBDH on 40 years of strengthening good Danish energy solutions. For 40 years, DBDH has helped show the world a Danish supply model where companies and utilities together create good robust and environmentally friendly supply solutions to the citizens. In Denmark, the development of the joint supply solutions is the basis for having come part of the way to an even more environmentally and climate-friendly energy supply during these 40 years. But there still is some way to go – so why not have a look at how I hope and believe Denmark’s energy supply will look in years to come. In the next 40 years, we are looking into a future with a need for investments in the order of billions in the energy supply, and now is the time for choosing the most sustainable and strategically best solutions. We must make an effort to meet the promise of temperature increases of no more than 2 degrees Celsius, and we want to make sure that Denmark is in a strong competitive position in future climate technologies. Already by 2030, twelve years from now, it is our vision that Denmark's energy supply of power and heat will be 100 % based on green sources. Denmark will have an even stronger business sector on technologies that can ensure the spread of green solutions in other countries as well. As a result, there are more jobs than today in these sectors for the unskilled, the skilled and the highly educated. IDA (the Danish Society of Engineers) has estimated that the energy consumption can be significantly reduced – and significant energy savings are required. From then on, more than half of the primary energy to be used in Denmark will come from wind turbines - predominantly located on the sea, but also from more onshore wind turbines than today. Energy production from solar cells, solar heating, terrestrial heat, geothermal heating and wave energy must produce far more energy than today.
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FOCUS 40 YEARS
By Lars Gullev, Managing Director, VEKS, and former Chairman of DBDH
North American market, where the possibilities for increased focus on the use of district heating and energy efficiency were high. In the energy sector in Denmark, it was well-known that if you produced electricity alone, you only got an energy efficiency of around 40%, but if you connected heat generation to the production, the utility would rise to 80-85%. However, according to a Gallup survey in the US, more than 50% of the population had never heard of the energy crises in 1973 and 1979. "Within the next 10 years, there will be a fantastic market for district heating in the world, and the Danes must therefore make an effort to inform others that we have one of the most highly developed district heating systems and thus the industry and
We are back in the 1970s - in the period between the two energy crises in 1973 and 1979 which affected Europe as a result of wars in the Middle East – more precisely in June 1978. We are in H.C. Andersen's home town Odense, Denmark. A true adventure, as if written by Hans Christian Andersen, begins. THE BEGINNING In the summer of 1978, 16 Danish companies - among these several of the major actors in district heating, such as Bruun & Sørensen (subsequently purchased by COWI), Rambøll, JIP Valves (subsequently purchased by Danfoss) and Danfoss - decide to set up Dansk Fjernvarmes Eksportråd. Being an export association, it is only natural that the association also gets an English name - Danish Board of District Heating or, in short, DBDH.
know-how which other countries may benefit from”, was the conviction of DBDH's Chairman at the time Mogens Larsen. Already the following year, however, in 1979, came a request from the Germans. The association of German district heating plants convened in Flensburg. This afforded theconference participants the opportunity of a site visit in Denmark, where especially the district heating systems in Sønderborg and Odense were of great interest, as district heating systems in both cities were based on efficient co-generation of electricity and heating - CHP. DBDH had a tremendous beginning, which was due in part to significant political support from among others Foreign Minister Henning Christophersen (later vice president of
The person behind the formation of DBDH was Lennart Larsson, at the time alderman in Odense, who was chairman of Dansk Fjernvarme (the Danish District Heating Association) in the period 1974-1992. DBDH was established based on Denmark's high level and many years of experience in district heating. Indeed, the Danish experience in district heating - including waste incineration and combined production of electricity and heat (CHP) - can be traced back 75 years. All the way back to 1903, when the first "waste-to energy" CHP plant was built. Now this experience was being brought to the rest of those parts of the world where there was a need for the heating of buildings, but also a need to focus on efficient use of resources.
Advertisement in News from DBDH
the European Commission from1985-1995). A beginning which meant participation in conferences in many different countries as well as handling inquiries from countries like Holland, Canada, USA, Japan, Belgium, Norway, England and Ireland.
DBDH wished to systematise the Danish export of district heating components and consultancy - and a number of Danish district heating companies were to contribute as a showroom for the results. One of the first markets being focused on was the
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THE EIGHTIES AND FORWARD In 1985, the activity in DBDH has increased to such an extent that a separate secretariat in Odense is established for better coordination of activities. The location in Odense also ensures that the many foreign visitors can see first-hand how Danish district heating actually works in a large city. DBDH has now grown into consisting of 32 member companies.
DBDH's work is now focused on three "legs": • Publication of the magazine News from DBDH - today known as Hot Cool. • Export promotion and reception of foreign delegations. • Network for members of the association. News from DBDH (Hot Cool) is characterized by articles at a professional level that reach decision makers and technicians in district heating worldwide. Yes – Hot Cool is becoming the largest district heating magazine in the world outside of China
The big step for DBDH at the international district heating scene takes place in June 1985, where the association participates in
with readers in more than 60 countries - and the magazine is free! It is available in print or a digital version and can also be read on www.dbdh.dk. THE FUTURE Now 40 years have passed, and from the original 18 members, DBDH currently has more than four times as many, 77. This could then be the end of the great adventure that began in Hans Christian Andersen's hometown Odense back in 1978.
Unichal's international district heating congress in Copenhagen. (Unichal is now known as EuroHeat & Power). By this time, DBDH is an established and respected player on the international district heating scene. The beachhead, which DBDH has now established internationally, is being expanded through the conclusion of cooperation agreements with a number of national district heating associations in North America as well as in Europe and Asia. The cooperation agreements ensure the coordination of activities such as conferences and seminars, delegation visits, exchange of technical information as well as market information of mutual interest and structure.
However, it is not.
With the EU's desire to place district heating high on the energy and climate agenda; with increased global focus on renewable energy and the efficient use
First issue of Hot Cool
In connection with the fall of the Berlin Wall in 1989, DBDH's focus changes from primarily North America, Western Europe and Asia to Russia and a large
of natural resources; with ideas for smart cities and livable cities, district heating and cooling have caught new attention - not just in Europe and North America, but also in Asia and the Middle East.
number of countries in the Baltic and Eastern Europe. Yes - the new markets thus, for a number of years, remove the focus from North America and Western Europe, as the new markets historically have a large prevalence of district heating. At the same time, many of these district heating systems were very worn down and the systems also heavily lag behind technologically. For that reason it is only natural that the attention is directed at these markets over the next 20 years. With the growing interest in Danish district heating technology in China, it seemed natural that DBDH established an independent unit in the form of a subsidiary organization in Beijing, DBDH China, to meet the interests of those members who focused on the Chinese
Although district heating is an old concept (moving hot water from point A to point B), the technological development has not been stagnant over the past 100 years. Over the past 100 years, district heating systems have evolved from generation to generation with still less demand for the flow temperature and thus increasing efficiency.
Today many district heating systems are established as 4th generation district heating systems (4G DH) with flow temperatures as low as 50-60 °C - indeed, some systems are established as Ultra Low Temperature District Heating (ULTDH) systems with flow temperature as low as 40- 50 °C.
Lennart Larsson, who invented DBDH
market. China has the world's largest population, of which a large part is living in areas where district heating is the natural form of heating.
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establishment of storage capacity in a district heating system is significantly cheaper than in the electricity system - 1/60.
With these very low demands on the supply temperature, district heating will partly be able to directly exploit renewable energy in the form of solar power from large solar panels (several million m2), and the huge amounts of waste heat that we already have in our communities can be utilised. And here the very large amounts of surplus heat are not even included that will come from large data centers (server hotels), which are already now under construction in many countries around the world. The challenge – that often there is no convergence between production and consumption time – is a big one in the electricity sector, but smaller in the district heating sector, as the
Therefore, we are already now seeing district heating systems, even in Denmark where the sun does not shine so much, where more than 50% of the annual heating requirement in a district heating system can be covered by solar heating. The explanation? That heat production in the summer is stored in a large underground seasonal storage, after which the energy can be used from the storage through the autumn and the first part of the winter.
And so the adventure of DBDH does not end with the 40th anniversary of the association. No - with an increasingly clear message regarding: • that we must reduce the use of fossil fuels such as natural gas, coal and oil, • an increasing need for integration between electricity and district heating systems, • an increasing desire to exploit renewable energy - including geothermal, • an increasing demand for utilization of surplus heat from the current industry, as well as the future industry (e.g. biofuel plants) An expansion of district heating systems - as part of the necessary infrastructure in modern society - will be a matter of course. There will be an increasing need for the experiences and competencies found in one place to be made available and act as inspiration for players elsewhere. DBDH will act as this link in the coming years, so that the ”Hans Christian Andersen fairy tale” from 1978 can continue for many years to come. But what fairy tale was it then – maybe the Ugly Duckling? We did start from a humble platform; whether we developed into a beautiful swan, we will leave for others to decide. VEKS Att.: Lars Gullev Roskildevej 175 DK-2620 Albertslund For further information please contact: Phone: +45 4366 0366 lg@veks.dk
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By Anders Dyrelund, District Heating and Energy Planning Specialist, and Jens Ole Hansen, Global Market Director, Ramboll
FOCUS 40 YEARS
Local democratic ownership has been the driver for an innovative and efficient Danish district heating (DH) sector in more than 100 years. The open mindset in the sector searching for the best solution for the end-users and society has stimulated co-operation between public utilities, consumer- owned companies, consultants, contractors and suppliers as well as authorities. This open environment has facilitated innovative solutions, which have given the sector a strong position in the implementation of the ambitious Danish energy policy, namely to be independent of fossil fuels. The innovative technologies, among thempreinsulated pipes and large thermal storage technologies, are now being exported world-wide. THE HISTORY OF POLICY, REGULATION AND OWNERSHIP The first DH plant in Denmark was established in 1903 by Frederiksberg Municipality to deliver steam to a new hospital. The plant was fueled by waste and contributed to reducing the waste problems in the growing city. Since then, the public utilities have been a driver for developing DH in major cities. Being responsible for both heating, electricity and waste, the public utilities could see the advantage of utilising the waste heat from power generation and waste to supply city districts with heat. It started as steam in the city area, but fortunately, the utilities found that further expansion should be based on hot water, which is more cost effective, resilient and efficient. In smaller communities, the building owners adopted the idea of co-operatives from the farmers and established co-operatives for electricity, water and not least DH. Due to growing welfare after the Second World War, individual heaters were replaced by central heating, and many buildings were supplied by the more convenient and cleaner DH. In cities, the efficient combined heat and power (CHP) and waste heat were the drivers. In small communities, it was the price gap between cheap heavy oil and light oil. The oil crisis in 1973 was a wake-up call for Denmark being almost totally dependent on imported oil. In the first national energy strategy in 1976, DH was identified as one of the corner stones in a new Danish energy policy with the aim to be independent of oil. It was due to its ability to shift fuels and use efficient heat sources. In the Electricity Supply Act in 1976, the Minister got the power to approve all power plants, which have ever since been CHP plants located strategically for the heat market. At the same time, the power utilities controlled by municipalities and consumer co-operatives shifted very fast from expensive oil to cheap coal with efficient flue gas cleaning.
The first district heating plant in Denmark in 1903 in Frederiksberg. Today the building is used for sports and cultural events, just next to the office of DBDH.
In 1979, the Heat Planning Committee made recommendations for how to reduce the dependency on oil. They included much more DH from CHP plants and waste heat in the densely urban areas, including large heat transmission systems. But also a completely new natural gas infrastructure, supplied from new Danish gas fields, to supply heat in the less densely urban areas and to replace heavy oil in the district heating plants. The Heat Supply Act from 1979 gave the local authorities the responsibility for heat supply planning and provided tools for implementing the plans for DH and gas in a cost-effective way for society and not least to the benefit of the heat consumers. The act stated that all profit in the DH sector must be to the benefit of the consumers, which was already the objective in the municipal and consumer-owned companies. DH was recognized as being an important urban infrastructure like public roads and waste water e.g. with respect to way-of-right for important trenches and an obligation to use the heat supply form that was most cost effective. The administration of the law included an interactive top-down and bottom-up planning process including the Ministry of Energy, the regions and the local administrations in order to integrate the new gas system and agree on the zoning between DH and gas networks. Having established the two natural monopoly infrastructures for DH and gas in 1990, the local authorities got the sole responsibility for planning the most cost-effective further development for society, guided by assumptions submitted by the Energy Authority. In the following 10 years, all DH companies that had gas as the primary fuel established gas-fuelled CHP plants in accordance with the national energy policy. Small DH plants without gas shifted mainly to straw and wood chips, whenever possible.
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THE TECHNICAL INNOVATION The Danish DH is not only known for its efficient ownership and large market share of CHP and waste. It is also recognized for a wide range of innovative solutions, which have already had and will also in the future have a positive impact on the energy sector world-wide.
The stable national energy policy, the transparent planning and the municipal responsibility for both DH and gas seemed important for successful implementation. It ensured strong competition between consultants, suppliers and contractors, and it created bankable projects. Moreover, municipal guarantees for loans stimulated competition among banks to offer the lowest interest on loans to DH and gas infrastructure.
THE PREINSULATED PIPES The first and most important innovative DH technology was the preinsulated pipe developed by a small company in the town of Løgstør and tested in full scale by the local DH companies searching for cheaper solutions. The first prototype developed around 1965 was only successful in permeable soil, but lessons were learned and finally, around 1980, the bonded and welded pipe technology was ready to be used at large scale for the heavy expansion of the DH system. The technology has since then been further developed with curved pipes, twin-pipes, no- dig methods etc. and has been used world-wide for DH and even DC. These direct buried pipe systems are much cheaper than pipes in concrete ducts, and we can therefore give this technology credit for a significantly larger market share of DH.
The Greater Copenhagen DH system tells the history of Danish district heating.
ELECTRONIC HEAT METERS Another important technology is the electronic ultrasonic heat meter, which can bemonitored automatically by the DH company. This meter opens for time-dependent tariffs and incentives for lower return temperature. Moreover, it is an opportunity for the DH company to offer active energy management support to the end-users, which will stimulate energy efficient consumer response on price signals and thereby improve the efficiency of both buildings and DH systems.
After year 2000 , the gas project was on safe ground, and the environmental awareness became stronger. Shortly after, a significant majority of the Danish Parliament agreed on a long-term vision - that Denmark must be independent of fossil fuels in 2050. Thereby DH became even more important as the DH system is able to integrate and store all efficient non-fossil heat sources in a cost-effective way. The first stage from 2009 of this transition was to extend the DH to replace mainly large gas boilers whenever it was cost effective. It started in districts in which the gas supply had got preference in the first planning phase with the aim to replace oil. Another later step was to shift from coal and gas to biomass at several large CHP plants. In 2017, the Climate Commission gave its recommendations for how Denmark can be independent of fossil fuels in the most cost-effective way: Wind energy should be our main renewable energy source, but the challenge will be not to produce it but to use it. That opened up for an even more important role of DH in combination with district cooling (DC) as the DH and DC infrastructure can use large amounts of electricity once it is cheap (due to strong wind), store it for later use and not use electricity or produce it once it is very expensive (due to lack of wind, even in longer periods). The DH&DC systems combining hot- and cold-water storage, heat pumps, electric boilers and CHP plants act like it was an electric battery, but much more efficient and cost effective than electric batteries. Besides, it improves the environment, both the carbon emission reduction and the local air quality. Currently, the Danish Parliament is forming the coming years’ energy policy in which DH&DC owned and controlled by local democratic society hopefully will continue to have an important role to play.
Gram District Heating demonstrates the newest innovations and forms a virtual battery.
LARGE-SCALE SOLAR WATER HEATING AND HEAT STORAGE PITS
The latest Danish DH innovation, which is important for meeting the new low-carbon objective, is large-scale solar water heating combined with an underground heat storage pit, which can store solar heat from summer to winter. These two technologies, which really take advantage of the economy-of-scale, were developed by Marstal consumer-owned DH company followed by many others in co-operation with suppliers and consultants. More than a hundred companies have now established solar water
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HEAT SUPPLY IN URBAN AREAS
heating to cover around 20% of production. Moreover, Marstal DH company and four other companies have developed and tested the heat storage pit and increased the share of solar heat up to 60%. The heat storage pit combines the heat storage tank and landfill technology with a floating insulated cover. Thus, the solar heat has paved the way for an efficient heat storage pit technology, which can store any other cheap surplus heat and renewable energy, e.g. from the fluctuating wind, industrial surplus heat, CHP plants and surplus heat from district cooling. It can even be used as a cold storage.
Hot water district heating and the preinsulated pipe technology has been the key to lower cost and larger market shares.
District heating supplies 63% of all homes. The heat production based on renewable energy and surplus heat is 60% today, but can be increased to 100 % to meet the energy policy objectives.
CONCLUSION The historic development of Danish district energy has led to a very modern and innovative infrastructure system. Use of district energy infrastructure is unavoidable for designing low-carbon or carbon neutral cities. Luckily, the Danes have paved the way by inventing the technology needed around the world. But there is still a potential for improvements, in particular digital solutions for active energy management and interaction with the end users and more integration of district heating and cooling. If all end-users connect in the smartest way and establish low temperature heating systems, it will pave the way for even more efficient distribution, production and storage.
For further information please contact:
Rambøll Att.: Anders Dyrelund Hannemanns Allé 53 DK-2300 København S
Phone: +45 5161 8766 AD@ramboll.com
“In 2058, the most dramatic change in our
”In 2058, the most dramatic change in our energy system will be that green energy free
energy system will be the proliferation of district
energy systems to enable efficient thermal sharing and more resilient local microgrids in clusters, cities, communities and campuses.” Rob Thornton, President and Chief Executive Officer, International District Energy Association (IDEA)
from CO2 is available as an (almost) unlimited resource for all locally and globally.” Carsten Bach, Energy Political Spokesman, Liberal Alliance
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News from DBDH 1988
News from DBDH 1988
News from DBDH 1988
News from DBDH 1988
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News from DBDH 1999
News from DBDH 2001
News from DBDH 1999
Hot cool 2009
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DISTRICT HEATING FINANCING AND OWNERSHIP
By Laxmi J Rao, Director, International District Energy Association
GETTING TECHNOLOGY, FINANCE, BUSINESS MODELS AND GOVERNANCE RIGHT
District energy (DE) systems have provided dependable service and valuable benefits to owners, operators and customers over many decades. Hundreds of systems in cities, communities and campuses worldwide continue to expand to keep up with growth in customer demand and are modernizing to
leverage efficiency and newer sources of energy. Older systems are being revitalized to maintain reliable services, enhance efficiency and reduce carbon intensity. DE technology is well understood, yet many well- intentioned projects do not complete the journey from conceptual design to operation. From time to time, existing systems face the challenge of retaining customers in the face of competition from other building-based thermal sources. Securing a vibrant future for the district energy industry requires that systems
deliver value, meet business and community objectives, attract positive attention and stand out as examples of industry best practice. While rare, systems that may fail during their journey through the system lifecycle impose not only a cost on stakeholders but can have a negative impact on the brand of DE. While feasibility studies establish the technical and economic viability of a project, they do not always provide the full path forward to project delivery and sustained operation. Technology design and selection are important aspects of any district energy project, but even more critical is building a business model that incorporates and balances stakeholder objectives with appropriate ownership, financing and governance strategies to take the project from concept to providing services, future expansion, modernization and even a sale or acquisition. DISTRICT ENERGY LIFE CYCLE DE systems can have a lengthy trajectory from concept to realization and then continue to be in service for fifty years or more, often experiencing phases of expansion, renewal, modernization and evolution in ownership
Typical stages of a district energy system lifecycle.
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CRITICAL FACTORS FOR SUCCESS To maintain momentum, projects need to enable all participants to work towards project objectives. Success comes from attention to critical success factors outlined below:
Identifying risks and allocating them Unmanaged risks can be potentially disruptive. Once identified and understood, they should be allocated to the party best able to manage them. Assigning risks to an external party may increase overall costs, as it will be priced into their charges. Thus, managing risk internally might be a more cost effective solution.
Feasibility In addition to equipment selection for performance, underground piping routes, and topology for distribution system must be explored. It is critical to plan for real estate development that proceeds faster or slower than expected, and develop customer connection timelines. Estimated revenue from anchor customers will be needed to cover initial investment costs, including sufficient capital for customer conversion, metering, and interconnections. Delays in system build-out may impact revenue stream, budget and timing of service to customers. It is good practice to have contingency funds of 20-30% to cover unforeseen construction circumstances including challenging piping routes or delays. A preliminary cost of service study and hurdle rate analysis is useful to determine rates and return on investment options and build potential service rate/tariff structure for customers. Design build The practice of nodal development with enough physical space for maintenance, replacement and modular production facility growth helps manage future growth while avoiding over-sizing systems, leading to poor system performance at partial loads and tying up capital in assets.
Obtaining, using and disseminating good quality data
Data quality impacts project design and performance. Locally available data (such as building performance and benchmarking data from existing property) can often be obtained faster and more inexpensively than estimating new building energy use profiles.
Seeking and obtaining appropriate levels of funding
Aligning the type and level of funding with the project stage helps target options such as grants, public funds, utility incentives, project finance, revenue bonds and equity. De-risking projects helps attract private capital.
Making sure to have the right people with the needed expertise
A successful development project often requires a focused and dedicated internal champion supported by experienced industry resources with relevant skills.
LIFE CYCLE STRATEGIES FOR SUCCESS Each project stage has different success milestones, risk profiles and financial needs and require specific best practice activities aimed at risk mitigation to advance the project to the next stage. Concept In this stage, it is critical to clarify stakeholder objectives, identify and understand risks and pursue grants/public funds to develop early stage conceptual designs.
Development Distribution pipeline Heat source Anchor heat loads
Heat loads Transmission pipeline Power station
Information for conducting a first order DE/CHP screening should include district composition, phasing and buildout timelines, zoning, land-use requirements local, state or regional permits for air emissions and water use and potential thermal demand.
Systems designed with measuring, monitoring, and metering help optimize system performance while commissioning before final system sign-off avoids customer complaints, sub-optimal operations and financial losses.
Heat maps provide a useful picture of local heat demand and supply options.
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At this stage it is important to develop suite of contract documents including letters of intent, connection agreements, and customer service agreements, conditions of service, maintenance contracts, and appropriate language to allow for potential future sale or transfer of assets. Operations and maintenance Often not enough funds are set aside for operations and maintenance and system renewal leading to degradation of system performance, such as poor delta T and system losses. Long-term service agreements with major equipment suppliers and/or insurance products will help mitigate equipment performance risk. It is critical to provide training for operators and engineering staff. Expansion As the system grows to keep pace with demand growth, expansion plans will benefit from system size and expansion based on current and projected demand, and expected increased efficiency of building loads. Opportunities to review system optimization as well as financing, re-financing at lower costs of capital and asset monetization options may be explored. Successful expansion projects need to factor in system interruptions, both planned and unplanned and re-commission system after integration of the new assets.
Renewal & modernization For aging systems with reduced reliability related to poor or deferred maintenance, assess opportunities for modernization in conjunction with equipment replacement. It is also a time to analyze next generation technology options, such as lower temperature heat resources, thermal energy storage, resource recovery of waste heat; renewable resources, innovative controls and optimization tools, and integration of renewable generation. Sale & acquisition Before a sale, undertake stakeholder outreach and engagement to address changed objectives and customer service continuity covered by provisions in legal contracts. Business model spectrum The ownership and management models range from a pure public sector venture to a purely private sector approach. In between, a range of hybrid options involving varying blends of both private and public sector financing, design, operation, fuel supply, day-to-day management and decision-making are possible. Successful business models are characterized by the appropriate balance between risk and control, appropriate financing as well as ongoing governance of the objectives and overseeing the use of best practices.
Option Description
Risk Allocation
Example
1
Entirely public sector led, funded, developed, operated and owned
Public sector retains all risk
Public sector procures contracts for equipment purchase only. Procurement could be direct, or via a publicly owned arm’s length entity Public sector procures turnkey asset delivery contract(s), possibly with maintenance and/or operation options As 2, with increased private sector operational risk, and payment or investment at risk
2
Private sector assumes design & construction risk, and possibly operational risk
Public sector led: entirely publicly funded, greater use of private sector contractors Public sector led, private sector invests/takes risk in some elements of the project Joint venture- public sector & private sector partners take equity stakes in a special purpose vehicle Public funding to incentivize private sector activity Private sector ownership with public sector providing a guarantee for parts of project Private sector ownership with public sector facilitating by granting land interests
3
Private sector takes risks for discrete elements (e.g. generation assets)
4
Risks shared through joint participation in JV vehicle / regulated by shareholders agreement Public sector support only to economically unviable elements
Joint venture – both parties investing and taking risk
5
Public sector makes capital contribution and/or offers heat/power off-take contracts
6
Public sector underpins key project risks
Public sector guarantees demand or takes credit risk
7
Private sector takes all risk beyond early development stages
Public sectors makes site available and grants lease/ license/wayleaves No or minimal public sector role (e.g. planning policy / stakeholder management
8
Private sector carries all risks
Total private sector owned project
Generic delivery structures and roles with risk allocation
”In 2058, the most dramatic change in our energy system will be that we are independent from fossil fuels”. Thomas Danielsen, Energy Political Spokesman, Venstre
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Technology, finance, and business models and governance DE systems are recognizedworld-wide for advancing social, environmental, urban sustainability and economic development objectives, while providing ecomomic value to the communities, cities, campuses and districts they serve. Balancing the built landscape with the energy, social and financial landscapes is critical as is engaging in community level energy planning and stakeholder engagement and education. Good governance ensures that the shared objectives of all stakeholders including service providers, customers are being met Getting the technology, finance, business models and governance right is the key to setting district energy projects in motion, maintaining momentum & delivering service.
Building space served by district energy, Source: IDEA
For more details see https://www.districtenergy.org/HigherLogic/System/ DownloadDocumentFile.ashx?DocumentFileKey=e24e4c4e- 3cd8-825e-d1eb-518dc945632c&forceDialog=0)
For further information please contact:
International District Energy Association Att.: Laxmi J Rao 24 Lyman Street Suite 230 Westborough, MA 01581, USA
Phone: +1 508-366-9339 Laxmi.idea@districtenergy.org
How do you locate heat loss in your district? Imagine if you could use smart meter data to unlock the distribution network black box, locate heat loss and see what happens in the pipes below your feet?
Your district, your value
kamstrup.com/heatintelligence
www.dbdh.dk
A N N I V E R S A R Y I S S U E 2 0 1 8
P18
By Christian Almskou, GDPR Consultant, Pernexus Systems, Per Samuelsen, GDPR Consultant, Pernexus Systems, Serena Isolan, Business Development Manager, Pernexus Systems
While Facebook and Cambridge Analytica have brought a world of attention to the concern over personal data, companies across Europe have spent the past two years in a race to comply with new and stricter EU legislation on the protection and handling of such data. There is no doubt that General Data Protection Regulation (GDPR) remains a tremendous challenge for utility companies across Europe. A European-wide benchmark survey, done prior to the deadline by the company Deloitte, found that only 15% of companies expected to be in compliance with the rules by deadline. The greatest challenges they stated were a lack of time, a lack of clarity in what was demanded, and the degree of difficulty in complying with the demands. However, as we move past the deadline towards continual integration, it is important not to overlook this process as a unique opportunity for valuable long- term business development.
THE CHALLENGE FOR UTILITY COMPANIES To utility companies, the handling of personal data has always been an integral part of the daily operation and administration. In fact, data is one of the most valuable assets to the company, as well as to their client, and in the current environment of heightened privacy concerns – increasingly so. Protecting and respecting data is key to any company’s continued and future success. The challenge is in the increased complexity of the new GDPR rules, which mean that compliance often requires a comprehensive update or shift in existing processes, documentation, controls and the handling of data. This is not a one-time fix. It requires continual and dynamic attention to ongoing competencies and processes. Under this new legislation, the handling of personal data must be an integrated and agile process that is continually maintained and adjusted. To most utility companies, this presents a massive challenge. While most have handled data lawfully and responsibly in the past, this demands an entirely different approach to documentation and processing of personal data - which in turn demands an entirely new level of competencies, management and resources that has not been necessary in the past. According to the previouslymentionedDeloitte study, companies reported that the most difficult elements of compliance were rules surrounding the right to erase, developing and maintaining a personal data register, the accountability principle, data portability, maintaining a record of processing, and rules of consent.
How to approach this process to the greatest benefit for utility companies will be the focus of this article.
ABOUT GDPR That companies struggle with compliance is not surprising, the General Data Protection Regulation has been described as one of the most disruptive changes for EU businesses in recent history. It was approved by the EU Parliament in April 2016, with an enforcement date of May 25, 2018, giving companies a two-year transitional period in which to become compliant. The law aims to bring all EU member states under one umbrella by enforcing a single data protection law, with the purpose of strengthening the privacy rights of European citizens, and to reshape the way organizations across the region approach data privacy. It applies to all companies that handle personal data, dictating how they use, collect and store data, and requiring them to demonstrate compliance at any time.
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MINING THE GOLD The path to implementing and integrating permanent compliance of GDPR the right way is simple, but not easy. One of the best ways to maintain an overview it is to treat it as a continual annual analysis tailored to the company and its future goals. Continual The integration must be continual, which means there must always be an eye on the prize, in this case compliance. This requires tailored processes, built in education and integration, awareness and system checks. A dynamic approach will ensure that compliance continues and processes adapt, even if the rules change, the company changes, new hires come in, new products launch, or new software is implemented. Annual analysis GDPR demands an ability to document your compliance at any moment. A good way to ensure this is to set up compliance in a way that lives up to annual analysis. An annual analysis has key questions that must be answered, which means they must be identified, measured and documented throughout the year. When they are not, the gaps in compliance are clear. Tailored to the company The path to integration must be tailored to the company’s existing processes and goals. This will help make the transition as smooth and cost-efficient as possible, ensure that it works with existing resources, and that it reaches all necessary areas of the company. And its future goals Finally, the company’s strategy and future goals must be taken into account when working out a path to compliance. There is gold to be found in this process. Not doing so is a lost opportunity. In conclusion, the most cost efficient, sustainable and beneficial solution is an evolution tailored to the existing processes and the future goals of the current business. This exercise will not just have a positive impact on general IT capabilities, but also on operational productivity and cost. For utility companies not already in the habit of analyzing and documenting to this extent, getting the right support to identify and establish the best past to compliance is often necessary. Regardless how utility companies move forward, the key to turning challenge into opportunity is to view GDPR as a window to improve not only a company’s data governance but the efficiency of the entire organization.
The fact is that for most companies within the utility sector, GDPR compliance requires a level of change that spans the entire organization, from policy to technology, procedure, process, management, and culture. It demands that the message reaches and settles within the entire organization, including in the daily awareness, habits, and routines of employees. It is easy to see why the journey to become compliant is highly complex, and how it can be a difficult priority for a company whose core competencies lie elsewhere. THE GOOD NEWS FOR UTILITY COMPANIES The good news is that the level of self-examination required to become compliant, is a highly valuable opportunity to optimize efficiency, productivity and data management across the organization. Our experience with utility companies has made it clear that any time spent mapping, identifying and integrating the best path to compliance can bring significant benefits across the wider organization. The key is to map these changes from a perspective that brings the company’s long-term strategy, daily operation and goals into the equation. This was also the finding of companies in the Deloitte survey, of which 61% said they expected to see benefits beyond compliance, and 21% expected to see significant benefits, such as competitive advantage, improved reputation and business enablement. Based on the research, the report stated: “The key here is intelligent implementation, capitalising on the need for change and transformation to make a compliance requirement a real business enabler. Organisations should focus their efforts not just on what needs to be done, but on how it can best deliver real long-term benefit.” We could not agree more. These changes have to happen, and done intelligently, with a focus on long-term business development and benefit, there is real value to be gained in the process. OUT OF TIME? The penalties associated with non-compliance are significant, reaching up to 20 million euro or 4% of a company’s worldwide annual revenue. While there has been concern expressed about this, it is still too soon to say how they will be enforced. However, with many, if not most, companies unlikely to be fully compliant at this point, and considering the extensive changes required of each individual organisation, it is difficult to imagine harsh enforcements being enacted immediately. While companies should be ambitiously pursuing compliance at this point, it is far too valuable a process to do wrong, and far too expensive a process not to do right.
For further information please contact:
Pernexus Systems Att.: Serena Isolan Herlufsholmvej 37 DK-2720 Vanløse
Phone: +45 3325 1666 sis@pernexus.dk
www.dbdh.dk
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By Jørn Urup Nielsen, Group Sales Director, Eurowater
Optimumwater treatment will help prolong life cycles of the critical components in a district heating system, including accumulation tanks, boilers, heat exchangers, the piping transmission and distribution network. Furthermore, correct water treatment can bring along both water savings and energy savings.
DEFINITION OF ASSET MANAGEMENT Wikipidia gives a good definition of the engineering environment perspective: “The practice of managing assets to achieve the greatest return (particularly useful for productive assets such as plant and equipment), and the process of monitoring and maintaining facilities systems, with the objective of providing the best possible service to users in all dimensions.
Infrastructure asset management is the combination of management, financial, economic, engineering, and other practices applied to physical assets with the objective of providing the required level of service in the most cost-effective manner. It includes the management of the entire lifecycle - including design, construction, commissioning, operating, maintaining, repairing, modifying, replacing and decommissioning/disposal—of physical and infrastructure assets”.
RELATION BETWEEN ASSET MANAGEMENT AND WATER TREATMENT? So, what is the role of water treatment in relation to asset management? Well, correct water treatment will prevent corrosion and thereby have a positive effect on all issues mentioned above. Optimum water treatment will indeed prolong life cycles of the critical components in a district heating system.
In short: Optimum water treatment can extend life cycles of all the expensive components in a district heating system. Furthermore, correct water treatment will have a positive effect on maintenance requirements as well as maintenance costs i.e. for boilers, heat exchangers etc. (including reducing the annual downtime significantly).
Water treatment plant for production of make-up water for the district heating grid in Aalborg, Denmark.
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