HOT|COOL NO. 2/2019 - "Smart Heating System Integration"


By Bent Ole Gram Mortensen, Professor, University of Southern Denmark

SURPLUS HEAT Many industrial enterprises have a challenge with surplus heat. The heat may originate from cooling or special processes. The heat is considered surplus when the enterprise cannot utilize it itself, and it often ends with the heat being cooled to the atmosphere or into a water source. At best this will be a waste of resources, but often flora and fauna in the recipient will suffer. And this really is a shame. We must stop considering surplus heat as a waste problem. For the enterprise's own sake and for the sake of the society, we must regard it as a resource.

It is important that the legislators observe the potential of the exploitation of surplus heat. E.g. an inappropriately designed tax system can destroy the incentives to have the surplus heat utilized. This has been debated in Denmark, where the government on the one hand would like to reduce the use of fossil fuels, and on the other hand fear the loss of fiscal revenue, if the use of the highly taxed fossil fuels is reduced. At a time when we are talking about circular economy, climate change and renewable energy, the legislator's task is to establish framework conditions that ensure optimal utilization of the surplus heat. For the industrial enterprise, the possibility of being able to utilize its surplus heat makes a difference. For some enterprises, the green image is essential, and the possibility for utilizing surplus heat may be crucial for where the next production plant is located. In fact, there are enterprises that are willing to give away for free the surplus heat, if it can be utilized. For other enterprises, the economic contribution from sales of surplus heat may be an element, which makes it possible to maintain a production facility rather than being outperformed by plants in places where wages and environmental costs are lower. Of course, there will be different interests, respectively, from the industrial enterprises and the district heating companies. Among other things, investment for the sake of utilizing and the price of surplus heat must be considered. Inspiration can be found in a pricing model that a district heating company in the vicinity of Copenhagen (VEKS) has entered into with an industrial enterprise. Here, the parties share the benefits that come from the utilization of the cheap surplus heat compared to the alternative costs of producing the same amount of heat using fuel. The industrial company receives the full benefit of the surplus heat project until their project-related investments have been repaid. Afterwards, VEKS receives the entire gain until their investment is repaid. After the investments of both parties have been repaid, the parties divide the profit by utilizing the cheap surplus heat for the common good.

Heat, especially surplus heat, is a low-quality energy source. It is not only wasted in industrial plants, but also in the energy sector. Even today, many power plants waste maybe 60% of the production, which is transformed into heat and not power. The use of cogeneration technology can solve these problems if there is a districting heating network nearby. One of the benefits of the district heating and perhaps its primary raison d'être is the ability to utilize low-quality energy source. One of the sources of surplus heat comes from data centers. It is a growing business. Both businesswise and as citizens we use more and more data connections and storage space in the "cloud". The servers in the required data centers must be cooled and thus surplus heat arises. There are several considerations that are crucial when determining the location of these data centers. It is optimal if the location decision also can include the possibility of utilizing the surplus heat. In some places, such placement can be facilitated through planning law. Elsewhere, it is the parties' mutual interest in exploiting the surplus heat that will carry the project. Who else than the district heating sector can at present utilize surplus heat from data centers? When I, as a professor of environmental and energy law, see a resource that is wasted, my first thought is whether there is anything in the legislation that is problematic. Are sufficient incentives given for the individual market players to perform also socioeconomical optimally? Is there even a barrier to this?


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