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

P22

But that is not the entire picture and definitely not the correct way to look at the model. The reduced heat loss, due to the possibility to deliver at a lower temperature, more than compensates for the loss in the simple economy. The reduction in heat loss saves Viborg DH Company around 670,000 Euro per year. The overall effect of the introduction of the motivation tariff is savings of around 400,000 Euro per year. Savings that will lead to reduced prices for all customers in the Viborg DH company. The reduction is as much as 10 % of the cost of heat losses in the network.

EFFECT OF MOTIVATION TARIFF – EXAMPLES Below are a few examples of the effect of the motivation tariff for 3 different customers. The examples are all based on a 130 m² standard house, using 18.1 MWh/year of heat. Viborg can deliver heat at a price at 50 € /MWh and the fixed cost is 2.6 €/m².

Only 10°C cooling Supply 60 °C and return 50 °C. Calculated return 39 °C, but with the 6 °C neutral band Heat price (18.1*50) 905 € Fixed cost (130*2,6) 338 € Motivation (50-(39+6)= 5 °C = 5 % -> 18.1*50 €*5% = 45 € Total bill 1288 €

25°C cooling Supply 60 °C - Return 35 °C. Calculated return 39 °C Heat price (18.1*50)

905 € 338 € -36 €

Fixed cost (130*2.6)

Motivation (35-(39)= -4 °C = -4 % -> 18.1*50 €*-4% =

Total bill

1207 €

23°C cooling, but with a higher expected return as supply is below the 60°C Supply 55 °C - Return 32 °C – Calculated return 41 °C Heat price (18.1*50) 905 € Fixed cost (130*2.6) 338 € Motivation (32-41)= -9 °C *2 = -18 % -> 18.1*50 €*-18% = -163 € Total bill 1080 €