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


By Knud Bonde, Senior Vice President, Meters – Heat & Cooling, Kamstrup, and member of the Board of DBDH


converting this into hot water. With the increasing adoption of electricity production from wind and solar, ‘wrong timing’ of excess production of electricity is happening more and more frequently. This is where DH is helpful in creating a better balance in the total energy picture by absorbing excess produced electricity. There are numerous other examples of where energy, otherwise wasted or sold at very low prices, is converted into heat comfort and hot showers. The exploration of this issue will surely continue. In other cases, DH is often produced by different types of biomass, like wood chips and non-recyclable waste type of materials, which are often not useable in other contexts. To summarise, in many cities these sources will cover the entire need for DH, with the positive consequence that the usage of primary energy sources, such as oil, coal and gas for heating purposes, are constantly reduced or eliminated. Everybody can imagine the positive significance of this when it comes to using our basic energy sources on Earth and when it comes to benefitting CO2 and other environmental balances as well as reducing pollutions. Furthermore, the use of local DH sources will for many countries, be beneficial to their international balance of payments, which any government would gladly welcome. All in all, DH proves that it has a lot of advantages for the environment, the energy balance, the economy and last, but not least, with the built-in “no-trouble-concept” it fits very well with the modern human being, who wants to spend their time on other things in life than caring about operating a technical system for bringing up heat comfort and hot water. Finally, we might add that most of the advantages of DH can be adopted by producing and distributing cooling/air-condition, in fact these similar concepts already exist on a big scale in areas such as e.g. Dubai.

The benefits of district heating (DH) are certainly many, and the beauty is that there are also benefits to many of the different “stakeholders”. Just to mention a few: the users or customers of the “product”, the society – locally and nationally, the energy preservation and the environment. Let us take a closer look at these different stakeholders… The customer of DH is of course the most important stakeholder in this, since if they do not choose DH, DH has no market justification. The basic benefits for the customer are that they will always have an adequate supply of heat and hot water, without having any worries about operational issues, etc. Once installations are set up, the supply will simply always be available and unrestricted. Compared to other sources of heat/hot water, this means no worries, no service calls, no risk of break downs and so on. The overall economy is at a competitive level while the investment is on a similar or lower level compared to other ways of achieving heat comfort and hot water. At the same time, the current payment of usage is on a competitively low level and based on the concept “you pay as you go / for what you use”. Over the years, DH has brought benefits to the local community, having removed a lot of chimneys, which were connected to individual heating sources, thus contributing substantially to cleaner air in the surrounding areas. DH is often set up locally in conjunction with e.g. water or electricity supply, thus enabling the use of the most modern(convenient) technology. An example of this would be in the collection of consumption data from the different usages of energy and water, enabling the utilities to provide efficient and seamless services to the customers. Generally, both locally and on a national basis, DH acts as an absorber or user of energy that would in other cases be wasted, for instance, cooling water from power production or from a variety of other productions where cooling is needed, such as production of cement or of oil. Over the latest years, DH is also absorbing excess production of electricity and

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