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


By Anders Dyrelund, Senior Market Manager, Ramboll

Modern electronic heat meters will help the cities to implement and operate cost-effective heat supply, almost as efficient as if the city had been a campus with one single owner.

There is, unfortunately, no perfect tariff, but the following example for a DH tariff has some new qualities. It includes several logic components: CONNECTING EXISTING BUILDINGS TO DISTRICT HEATING The contract with the consumer includes the following: • The DH company invests in branch line, heat meter and a consumer substation for heating and hot tap water. • The DH company offers to supply heat directly to end-users in the building, i.e. a substation and a heat meter to each apartment, through an internal pipe system in the building, installed and owned by the building owner. In this way, the building owner does not have to take care of cost allocation, billing and collection. This can be done more efficiently by the DH company. • The consumer pays for the connection: • A small connection fee in Euro/kW for the subscribed capacity with discount to large consumers to cover part of the installation costs. This will encourage the consumer to subscribe the necessary capacity. • A payment for branch lines longer than a standard length, which depends on the heat capacity. The larger capacity, the larger free length. This will encourage the consumer to find solutions for shorter branch lines. CONNECTINGNEWBUILDINGS IN URBANDEVELOPMENTS In addition to the payment above for existing buildings, the developer or the consumers pay the investment costs of the smallest distribution pipes and branch lines in the urban development area. This will encourage the developer to find the most optimal solution combining pipes in the street and in the building complexes.

Campus owners, like universities and military camps, have the opportunity to plan, implement and operate heating and cooling in the most cost-effective way, being owner of all buildings and energy facilities. One discount rate, e.g. 4%, could be a profitability criteria for all investments in buildings, district heating (DH) and district cooling (DC) infrastructure. The DH and DC grids will then be optimized and all buildings connected to the network. Unfortunately, cities have severe difficulties to find the same smart solutions. Even if the city is able to plan the optimal solution, the problem will be to encourage all consumers and other stakeholders to join it. Our advice to the cities and the DH&C companies is to establish transparent contracts, accounting and tariffs that are competitive and reflect the cost structure of the heat supply. The tariffs shall ensure that all stakeholders in the city will benefit from taking part in the most cost-effective solution, and that all building owners connect to the grids, use the heat in an optimal way and invest in cost effective energy saving measures. Following COP21, communities have to reduce the consumption of fossil fuels. The challenge will be to do this in a cost-effective way for the energy consumers. That is to implement cost-effective long-term investments both in the buildings and in the energy supply systems. The challenge is to communicate this to all the end-users. A transparent municipal or consumer ownership serving the interest of the consumers, transparent management and information campaigns are important instruments, but not enough. A cost- based tariff, which reflects the costs depending on time and quality, is just as important.

The modern electronic heat meters with remote reading enable the utilities to introduce such tariffs and contracts.

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