HOT|COOL NO. 1/2019 - "District Heating Finance and Economy"



By Tom Diget, Chief Operating Officer, Viborg District Heating Company

Viborg District Heating Company constantly works to improve the efficiency of the network. Lowering the temperature is an important part, but to lower the temperature the company needs the customers to also lower their return temperature. To this end, the district heating (DH) company has developed a motivation tariff, which gives some customers a discount, whereas others will have to pay more. The direct economy of the tariff is a loss of app. 270,000 EUR per year, but the efficiency gain in the whole network adds up to more than 670,000 EUR per year. This means a net benefit at around 400,000 EUR per year - a surplus, which is converted into lower general heat costs.

So, to be able to lower the temperature substantially, the DH company must find a way to motivate the consumers to lower the return temperature even more THE BENEFITS TO THE END COSTUMERS In order to be able to motivate the consumers, it is important that the consumers understand what the benefits to them as a consumer of lowering the temperature is. The list of benefits to the DH company is long and includes lower heat loss, longer life time of pipes, higher flue gas condensation and many more. But to most consumers the real motivation will always be saving money through lower heat cost. Some will have an interest in other aspects (general benefits to society, climate change) and they should not be forgotten, but for most the real motivation will be to save money.


ADHcompany hasmany good reasons to lower the temperature in its network. Lower temperature gives a lot of different possibilities compared to a network with high temperatures. Not least, lower temperature will help stay competitive against other heating technologies. The DH company is in control of the supply temperature and can reduce it in times of lower heat consumptions. But when the supply temperature has reached a certain level, the return temperature sets the limit to how much further it is possible to lower the supply temperature. In the city of Viborg, as in many other cities, the domestic hot water demand sets the minimum supply temperature in the DH network most of the year. In existing systems with older more inefficient housing stock, there are limits to how low a supply temperature can be reached. The return temperature is in the control of the consumer. The DH company therefore has a clear interest in helping the consumers to lower the return temperature. However, to a consumer “low return temperature” is, at best, of very low interest. The consumers simply want comfort, i.e. warm homes in the most simple, secure and cost-efficient way. Of course, the cost of heating must be low enough to be competitive against other options. Thus, the consumer will act disloyally if another opportunity calls.


Supply temperature The short-term goal for the supply temperature must be a temperature high enough to supply a well operated network. The long-term strategic goal should be to aim at the lowest temperature level possible with the use of the best available technology; and then even a bit lower, as technology evolves and will allow for even lower supply temperature in the future. In Denmark, the DH companies supply heat to cover primarily two heat demands: The domestic hot water and the comfort heating of the building. During a year, the required supply temperature is set by one of the two heat demands. The comfort heating sets the required temperature during the winter when the outside temperature is coldest. When the temperature outside rises above a certain level (round zero degrees Celsius), the domestic hot water demand starts to influence the required temperature level in order to deliver safe domestic hot water.

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