HOT|COOL NO. 3/2017 - "North America"


CHALLENGE #2 BUSINESS MODEL AND RISK SHARING PRACTICES The business model for getting the pipes in the ground also influences the final costs. The preferred method in the US seems to be either the EPC model or the Design-Build model. In both cases, the building owner, the campuses, put the entire risk of the project on the contractor. Since thin-wall hot water is still new in the US (most places), the contractor will assign all risk to the price up-front. Additionally, with limited practical experience the contractor is likely to also overshoot the actual risk. The result is a much more expensive project than we would see in Europe. In Europe, both the owner and the contractor have years of experience and the risk can be priced precisely. The team will look at other ways to contract the project, taking the recent experience of both the owner and the contractor into account. The investigation will involve: • Performance design vs detailed design • EPC vs Design and Build • Owner pre-purchase • Design reviews • Financing models including export guaranties • Quality control during construction

Let’s take a look at just a few of the challenges.


Ramboll has compared the American ASME standard and the European standard, and it is easy to document that building according to the European standard is more cost effective than the American standard. This is mainly due to the fact that the European standard is constantly updated and tweaked for higher efficiencies while the US standard is not hot water district energy specific and is primarily for steam networks. Having said that, it is important to take full advantage of the European design code. Ramboll has investigated several US designs completed, based on the European standard that doesn’t take full advantage of the recent code. We have examples of campuses purchasing European pipes but design them based on American standard. One classic wasted opportunity is too many bends compared to what is really needed and even called for in the European design code. Another one is the lack of utilizing the flexibility in the thin-wall pipe. If you design, construct and supervise based on the European code you will have a life span of 50 years. See figure 1 for a comparison between the codes.

See an example of a contracting model in figure 2.


North American standards Ontario Regulation 220, CSA B51, ASME B31.1, etc.

EN 13941 Design and installation of pre- insulated bonded pipe systems for district heating



X-ray not required

X-ray not required on 10% of welds

Performance specifications

Detail design specifications

Alignment to be within 2 mm (approximately 0.079 inch)

Alignment to be within 1 mm (approximately 0.04 inch)

Pre purchase

Pre purchase

Hydrostatic pressure test to be 1.5 times the design pressure, held for 10 minutes, then reduced to design for leak test

Pressure test is not required, but weld leak tightness test of all welds is required

EPC Contractor

General Contractor

Recommended for known technology

Recommended for new technology

Welding a thin-wall pipe requires more attention as the margin for error is smaller (see the comparison in the table). However it has been proven that with proper training and supervision this is indeed manageable for any contractor. A final example is how to clean the pipes after construction. The preferred method in the US is hydro flushing. In Europe, the much cheaper soft-foam-ball method is often applied.

CONCLUSION We really hope to obtain a clearer picture of what is keeping the prices in the US higher than in Europe. More importantly, we hope to have some ideas to solve these challenges in order to facilitate the realization of more hot water district energy projects. The project will run for one year. All results will be presented at IDEAs Campus Energy conference in Baltimore March 2018. The conclusions will also be publicly available at Ramboll's homepage.

For further information please contact:

Ramboll Att.: Jens Ole Hansen Global Market Director

Phone: +45 5161 8591

J O U R N A L N 0 . 3 / 2 0 1 7

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