HOT|COOL NO.1/2021 - "Fuel, Flexibility & Green Transition"

NO. 1 / 2021

INTERNATIONAL MAGAZINE ON DISTRICT HEATING AND COOLING

FUEL FLEXIBILITY AND GREEN TRANSITION

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Contents

FOCUS ON FUEL FLEXIBILITY AND GREEN TRANSITION

PREFACE LOADING RENEWABLE ENERGY - 8%

25 26 22 3

4 8 12 18 16 14

RINGSTED DHC’S HEAT RECOVERY KICKSTARTS A NEW ERA OF GREENER DISTRICT HEATING By: Drew Turner

DISTRICT COOLING IN ASIA ON THE RISE By: Zhaohui Wang,

MEMBER COMPANY PROFILE: PERNEXUS SYSTEMS

A GREAT PLACE FOR SKIING - AND DISTRICT HEATING By: Albert Moles and Jordi Travé

RENEWED FOCUS ON THE GREEN TRANSITION IN THE UNITES STATES – SO FAR SO GOOD! By: Niels Vilstrup

FROM ELECTRICITY TO HEATING OR COOLING - OR VICE VERSA! By: Raymond C. Decorvet

SCOTTISH VENTURE INTO WATER- SOURCED DISTRICT HEATING AT SCALE By: Michael McGuinness

AMBITIOUS FIRST LEGISLATION ON DISTRICT HEATING By: Jacob Byskov Kristensen, Mathias Grydehøj Mikkelsen and Rune Nielsen

DECARBONIZATION OF THE AUSTRIAN DISTRICT HEATING SYSTEMS By: Ralf-Roman Schmidt, Edith Haslinger, Roman Geyer, Benedikt Leitner and Dragisa Pantelic

DBDH Stæhr Johansens Vej 38 DK-2000 Frederiksberg Phone +45 8893 9150

Editor-in-Chief: Lars Gullev, VEKS

Total circulation: 8,000 copies in 60 countries 4 times per year

Layout: DBDH / 071.dk

Coordinating Editor: Henrik Søndergaard, DBDH hs@dbdh.dk

Prepress and printing: Kailow Graphic A/S

info@dbdh.dk www.dbdh.dk

ISSN 0904 9681

District heating and cooling (DHC) benefits energy security, the economy, and the environment. It is one of the most effective means to implement renewable energy, utilize surplus heat, and benefit from heat and power coupling. But, as you could read in the last issue of Hot Cool, the DHC potential remains mostly unexploited globally. Only 8% of energy consumption in DHC networks is renewable energy today - as illustrated on the cover of this magazine!

It is too bad! We can do better! There are opportunities in almost any country to improve the RE seriously.

In this issue of Hot Cool, you can read about how utilities in Asia, Andorra, Austria, Denmark, and Scotland deployed new DHC infrastructure, improved the energy efficiency, and integrated higher shares of renewables into existing networks. DBDH publishes Hot Cool, but the main business is helping cities or regions in their green transition. We help you find specific answers for a sustainable district heating solution or integrate green technology into an existing district heating system. Any city, or utility in theworld, cancall DBDHandfindhelp for agreendistrict heating solution suitable for their city. A similar system is often operating in Denmark, being the most advanced district heating country in the world. DBDH then organizes visits to Danish reference utilities or expert delegations from Denmark to the city. For real or virtually in webinars or in digital meetings.

DBDH is a non-profit organization - so guidance by DBDH is free of charge. Just call us.

We'll love to help you district energize your city!

Lars Hummelmose Managing Director, DBDH lh@dbdh.dk +45 2990 0080

By: Zhaohui Wang, Ph.D., CTO Shenzhen Qianhai Energy Technology Development Co., Ltd.

The need for cooling inAsia rises fast and is demanding for the environment and the electricity supply. District cooling (DC) in Asia, especially in China but also in India, have tremendous market potentials. Commercial buildings with a relatively stable cooling load and a predictable demand profile could be a priority building category for district cooling. Still, DC of airports, data centers, hospitals, industries, and other buildings with high-density cooling demand would also be feasible development. Unlike traditional air-conditioning systems, DC uses different resources (including renewable energies) to improve energy efficiency and indoor climate significantly. District cooling will bring in considerable savings on power consumption, power demand, carbon footprint, and life cycle cost. Below are short descriptions of the DC market potentials for India and China supplemented with two cases. Amaravati, the new state capital of Andhra Pradesh, India, and Shenzhen in south China, showcases low-carbon and highly efficient DC solutions that inspire other developing Asian cities.

District Cooling development in India In India, installing cooling capacity across all technologies in use is likely to grow 4x over the coming decade to 296 MN Refrigeration Tons (RT), an 8% Compound Annual Growth Rate (CAGR). The fastest- growing market sub-segment is Variable Refrigerant Flow (VRF) technologies (preference around cost, efficiency & flexibility). But, large chillers, conducive for district cooling, is also likely to grow at a CAGR of 11% to 25 MN RT. Adopting DC will require broader market awareness and successful pilots. It requires stronger local eco- systems for project execution and O&M too. Furthermore, there is a need for business model innovation to fit an India-specific model that incorporates existing best practices from the country.

DC projects in India are still few, but the demand is rising, and with some good reference projects, there will be a large growing market for district cooling in India.

Amaravati, India – district cooling project The new state of Andhra Pradesh in India has a Greenfield capital city planned in Amaravati with world- class and sustainable infrastructure features, including an elaborate and interconnected District Cooling Scheme to serve cooling loads of up to 100,000 TR. The Amaravati Government Complex (AGC), featuring the State Assembly, the High Court, five secretariat towers, and two future mixed-use towers, is planned among the capital city's initial developments with a cooling requirement of 19,989 TR. The Andhra Pradesh Capital Region Development Authority (APCRDA), an authority entrusted with developing the capital city, launched a Design, Finance, Build, Own, Operate and Transfer (DBFOT) tender for a District Cooling System (DCS). It will be developed in a phased manner after proving the significant benefits that a DCS could provide in meeting the cooling demand of AGC sustainably vis-a-vis the standalone cooling systems. It will make the AGC DCS India's first cooling scheme developed in a Public-Private Partnership (PPP) concession model. The DFBOT global tender for DCS by APCRDA attracted several bids from which Tabreed (amongst the world’s largest District Cooling utility based out of UAE) was selected as the winner with an investment commitment of INR 3750 million (US$ 50 million). The tender process successfully culminated into a 32-year cooling concession agreement between APCRDA and Tabreed. Tabreed became the first global district cooling utility to start operations in India through its country office set-up in 2019. Amaravati Government Complex District Cooling Plan Based on the estimated development timelines of the AGC buildings, a phased expansion of the DCS capacity has been envisaged by APCRDA to avoid any significant pre-investment in the project. The various benefits that accrue from a DCS for meeting AGC’s cooling needs compared to standalone water- cooled or air-cooled systems are:

50% energy demand reduction with 100% use of clean energy

Reduction in installed cooling capacity

Visually Appealing

More Freed up Area in each building

• Free terrace area for rooftop gardens, solar panels or to enhance aestetic appeal

• DC plants built up in 30% lesser area requirement

building designs

• Better acoustic management in buildings

Lower lifetime cooling costs

• 20% lower lifetime cooling costs

District Cooling development in China While district cooling (DC) still is at its beginning in India, the DCmarket in China is fast growing. In China, the district cooling market at present (>5.9 TWh) is more extensive than both the Japanese (3.5 TWh) and European (3 TWh) markets and could reach the level of North America (25 TWh) within five years if it grows by up to 5.39 TWh yearly as projected.

Figure A: A study performed for AsianDevelopment Bank (ADB)* shows some strengths, weaknesses, opportunities, and threats (SWOT) for district cooling in China:

OPPORTUNITIES Huge market growth potential of 5.39 TWh or 4.2 GW yearly, larger than the current Japanese district cooling market as well as the European market Greater environmental awareness among the general public and within government Increased public expectations of comfort Success stories THREATS Consumer protection measures related to pricing and quality of services Unsatisfactory feasibility studies Delayed load buildup and high processor occupancy Inexperienced project planners, designers,

STRENGTHS 25%–50% increase in energy efficiency Improved environmental efficiency

long life span of up to 50 years, leading to lower maintenance cost and better management Financial competitiveness (given the right preconditions) compared with traditional split air conditioners WEAKNESSES High initial costs (front-loaded investments) Financially competitive only for areas with relatively high energy density Lack of incentives and regulations Need for well-structured and coordinated planning, design, and proj

and implementers

Qianhai District Cooling System (DCS) in Shenzhen, China

The cooling plants are attached to main buildings to save land resources, and the Qianhai authority has guided the enterprises in the free trade area to use the DCS by making it one of the conditions of land transfers. In the future, the developers plan to apply seawater, surplus heat, and reused water-cooling technologies to optimize resource use and increase energy efficiency in the area. The DCS business model is that the Qianhai authorities own the plant buildings and the pipe network. In contrast, Qianhai Energy owns the plant equipment and also operates the cooling facilities.

In the masterplan for the Qianhai DCS, Shenzhen, China, there are 10 district cooling plants with a total cooling area of 19 MMm2 in an area of 15 km2. • The pipeline network length: 90 km. • The full cooling capacity is 400,000RT, with energy storage: 4000 MWh. • The total investment is expected to reach RMB 4B. Qianhai has set an excellent example for low-carbon development. Over the past few years, Qianhai has been working on DCS, a highly efficient and energy-saving energy consumption model. Two centralized cooling plants, which use ice thermal storage technology, have been put into service to provide chilled water to nearby office buildings. Other renewable energy sources, such as a seawater condenser system, gray water utilization condenser, steam waste heat, and solar energy, have been studied and may be used in other cooling plants under construction in Qianhai's district cooling system.

For further information please contact: Zhaohui Wang, wangzh@qhholding.com

* District Cooling in the People's Republic of China Status and Development Potential, January 2017, ADB

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UP TO 25% HEAT LOSS REDUCTION

FULL CONTROL

EASY AND REAL-TIME MONITORING

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GRUNDFOS iGRID IS A NEW SOLUTION FOR DISTRICT HEATING With this solution we fight heat losses and prepare for utilisation of renewable energy sources through intelligent temperature control, which reduce CO 2 emissions and operational costs significantly. By utilising de-centralised Temperature Zones and real-time data logging, temperatures can be lowered to meet the actual demands in those zones and thereby deliver exactly the heat energy needed – nothing more and nothing less!

Read more about Grundfos iGRID at www.grundfos.com/igrid for more information.

A GREAT PLACE FOR SKIING - AND DISTRICT HEATING A GREAT PLACE FOR SKIING

What role do district heating systems play in the energy transition, price competitiveness, and electricity demand management? And how does all this fit into a context of decarbonization?

THE QUESTION:

By: Albert Moles, CEO of FEDA and Jordi Travé, Director of FEDA Ecoterm

Andorra, a country surrounded by mountains Andorra is a country with 468 square kilometers located in the Pyrenees center between France and Spain. It lies among mountains from 850 to 3,000 meters high. The stable population is just 75,000, but the country welcomes more than 8 million tourists every year, mostly in the winter season when people come here to ski. Andorra's climate is mountainous with Mediterranean components. The country has hot summers and cold winters with abundant snow. Access to Andorra from neighboring countries is by mountain roads, while the energy supply question presents a certain complexity.

Small-scale energy transition States, experts, and energy sector companies agree that decarbonization will entail a sharp increase in electricity use. It will acquire a new investment, converting power stations using fossil fuels to renewable energy facilities. Working at a small country scale requires adapting measures to the territory's reality and using all available means to achieve the transition. In short, a systemic vision of the issue is required, along with the capacity to adapt global policies to local realities.

- AND DISTRICT HEATING

WHY DISTRICT HEATING IN ANDORRA?

A heating system historically fuelled by gas oil Energy demand in Andorra is approximately 2,400 GWh/year. Electricity represents only 25% of this energy demand: the transport sector (people and goods) accounts for 50%, while 25% is consumed in heating. Until the early 2010s, heating was nearly all generated by domestic fuel and individual boilers. As a consequence of the crises of 2007 and 2008, which led to increased volatility in European energy markets and had a direct impact on fossil fuel prices, new and rehabilitated buildings in Andorra have more and more been installed with electric heating systems. As a result, the country's demand for heating oil has decreased by 35% over the last 15 years. Moreover, this trend has been reinforced even more by the need to reduce CO 2 emissions in response to climate change. Accordingly, whether due to the variability of fuel prices or raising awareness of the need to contribute to climate action, Andorran society is increasingly reluctant to invest in systems based on fossil fuels. However, most of the country's heating is still fuelled by gas oil. Furthermore, the managed electricity grid could meet the expected increase in demand and integrate renewable energy sources. More investment could be made in the network and in production infrastructure to absorb the demand for heating that currently covers diesel consumption. But this would not be energy efficient at all..

DH systems enable the transformation of the energy model. They respond to heat demand – which is very high in Andorra and has been historically covered by fossil fuel – while also guaranteeing service quality and competitive prices. Moreover, as these systems reduce electricity demand, they also avoid the need for a large investment in theelectricitygrid to respond to peaks in demand. In this way, district heating helps to reduce the risk to the competitiveness of electricity prices.

and the different technologies all have their peculiarities. Lack of space to store large volumes of water and the fact that the country only has small river basins means that hydropower is produced mainly in the spring. Solar power is generated mostly during the summer, spring, and autumn months, while wind power is obtained consistently throughout the year. Accordingly, to cover demand in winter – which is much higher due to Andorra's peculiarities – none of these renewable energy sources is sufficient. All this explains FEDA's commitment to the development of the district heating system. Here, the aim is to prevent the power grid from having to supply heating formerly provided by gas oil while also increasing power production through cogeneration projects that permit production at times of highest demand, combining heating and power generation. A northern model in southern Europe is possible Despite its location in southern Europe, Andorra’s climate is more like that of a northern country, especially in winter. Winter tourism, revolving around snow, skiing, and mountaineering, is a hugely important income source. European regions inspire FEDA’s management model and status as a multi-service business model with a similar climate. To prevent the long- term collapse of the power grid and avoid extra investment costs to cover peak demand, the company created FEDA Ecoterm. It has the dual mission of reducing the need for electric heating (channelling this demand into district heating systems) and increasing domestic electricity production at peak demand times. This initiative has also had a notable impact on diversifying Andorra’s energy risk and creating local jobs.

Low national production, mainly hydro power Despite a small share of recovered energy and the introduction of photovoltaic power, national electricity production depends essentially on hydropower, with little storage capacity. During the months when the snow is melting, the country's energy meets 50% of national demand, but in the winter months, this production covers less than 10% of consumption. The country's water resources are limited, so Andorra is developing photovoltaic and wind power projects to reduce substantial energy imports to cover demand in the winter months. Especially during spells of cold weather and in the evening and at night. Andorra has to acquire this energy in markets in neighboring countries when prices are high and when, in the future, restrictions on supply will be imposed due to the variability of renewable energy sources. The use of renewable energy is expected to grow continuously, gradually replacing power generation based on fossil fuels.

District heating: the necessary solution to Andorra’s energy transition strategy

After the 2008 crisis, FEDA began working to mitigate commodity risk in the purchase of energy. Accordingly, the company launchedmeasures to structure and cover purchases, structure and manage demand, and increase production.

However, the capacity for renewable energy production in Andorra is limited by the country's mountainous nature,

COVERAGE ON DEMAND

70.000 MWh

60.000 MWh

50.000 MWh

40.000 MWh

30.000 MWh

20.000 MWh

10.000 MWh

0 MWh

IMPORTED ELECTRICITY

NATIONAL HYDRAULIC PRODUCTION

SOLDEU COGENERATION PLANT

PRODUCTION OF THE WASTE RECOVERY CENTER (CTRASA)

Description of projects managed, and value generated Accordingly, in 2014 an intense phase was launched for the construction of district heating systems, with specific projects closely adapted to the particularities of each different area. The first system was installed in Soldeu (a village with a ski resort at an altitude of 1,600 metres, used as the venue for World Cup competitions). The energy source for this district heating system, which supplies the ski resort as well as homes and hotels, is liquefied natural gas, used to generate 13 GWh/ year of thermal energy. The facility is also equipped with a cogeneration engine which produces 6 GWh/year of electricity in the winter months. This district heating system made it possible to replace individual oil heaters at existing facilities and avoided the need to install electric heating in new buildings. A second, very different system was built to provide heating in the urban centre of the country’s capital, Andorra la Vella. In this case, the energy comes from a waste recovery facility that supplies 30 GWh/year of heating energy to the system for residential and service buildings, preventing the emission of 6,700 tonnes of CO 2 . The steam generated by the incineration of waste is also used to produce 20 GWh/year of electricity, distributed over the 12 months of the year. New buildings in the area will no longer use electric heating. Similarly, a new neighbourhood in Escaldes-Engordany will also be supplied by a district heating system powered by centralised heat pumps. Managing the network’s inertia and temperature, the aim is to avoid the production of heat in the grid during peak demand periods. Finally, work on a fourth project is about to begin. Pas de la Casa is a ski resort located at an altitude of 2,000 metres. The aim is to replace the energy provided by individual boilers through the installation of a district heating system fuelled mainly by biomass. The electricity required by these projects will be provided by a high-altitude wind farm currently at the study stage, and which will produce 40 GWh/year.

Future vision In order to manage the energy transition and achieve a CO 2 - free model, FEDA, Andorra’s electricity system operator, has chosen the path of global energy management and transformation into a multi-service, multi-energy company. The systemic vision adopted enables the operator to optimise energy management and efficiency. Throughout its activity, moreover, FEDA is driven by a local vision, closely adapted to the needs of the territory and its customers.

ABOUT FEDA

FEDA is the public corporation that manages the power grid in Andorra, producing nearly all the country's electricity and importing the rest from neighboring countries. FEDA is the driving force behind the energy transition to a more sustainable and environmentally-friendly model. After the crisis of 2007-2008 and the volatility that this generated in prices in energy markets, FEDA began integral management of energy risk in Andorra by diversifying production sources, restructuring demand, and ensuring flexibility. As part of these measures, FEDA became firmly committed to district heating, which is now a key element in transforming the energy model and Andorra's decarbonization. The company's subsidiary, FEDA Ecoterm, established to develop DH, currently manages four projects.

For further information please contact: Jordi Travé, jtrave@fedaecoterm.ad

Renewed focus on the green transition in the Unites States – so far so good! But what about district energy...?

The calendar shows March 2021. A renewed focus on green energy is a reality in the United States. The big question is what it actually means for the district energy (DE) industry and markets locally and for Danish companies in the future. I will try to elaborate on that in this article.

By: Niels Vilstrup, Head of District Energy Advisory, Royal Danish Embassy / Ministry of foreign affairs Denmark

Challenges in the US DE market First, it is worth noting that most district heating systems in the US are still

Compared to Denmark, the limited federal regulation also presents challenges when working with DE projects because the states can regulate as they see fit, which means the local landscape is generally harder to navigate. For instance, some states are against putting up individual energy meters in households, e.g., billing hot water and cooling water, because they can be viewed as someone trying to resell energy through the meters rather than making sure that you only pay for what you actually use. Another challenge is the lack of financial incentives and supports schemes. The business case for larger DE systems, especially in cities, is often not in place. As a result, we experience a great need for knowledge-sharing and expertise to create a long-term and profitable business case for DE. This is one of the areas where Denmark has excellent potential to contribute going forward. The return of investment horizons for implementing DE systems is often down to 5-7 years. And this is one of the main barriers to why many DE systems cannot materialize in the U.S.

based on steamwith supply temperatures up to 220 °C / 430 °F or sometimes even higher. That goes for cities and campuses like universities, colleges, medical campuses, military bases, etc. Therefore, the general perception in the U.S. about hot water as surplus heat, from e.g., industries, power plants, etc., with a temperature less than 70 °C / 160 °F, is mainly viewed as a waste product. As a result, DE has not been high on the political agenda. Neither on the federal level nor state levels. That might still be the case in the future. However, the fact that the U.S. has a renewed focus on climate change, has re-joined the Paris Agreement and plans to approve trillions of USD for a greener transition and climate change adaptions will, without doubt, boost the DE market in the USA. The fact that DE has not been high on the political agenda both has its advantages and disadvantages. One disadvantage is that DE is not strongly regulated. Therefore, financial incentives and support schemes on federal and state levels to support and boost the development and implementation of DE have been limited.

DE is crucial in reaching carbon neutrality – colleges are leading the way

Federal funds for transformative clean energy open the door for D.E.

The fact that low carbon DE is not high on the political agenda also has its advantages. Private actors mainly drive the DE sector without any fundamental limitations. The higher education campuses currently represent approximately 75 % of the market for Danish companies within DE. Ivy league campuses incl. Stanford University, Harvard University, M.I.T., Princeton University, and Dartmouth College lead the way with campus-wide steam to hot water DH conversions. This transition often includes replacing old fossil-fuelled steam boilers with geothermal heating and storage, heat pumps, biomass, C.H.P., Renewable Fuel Oil, and solar thermal DE production, to mention a few. Additionally, a rapidly growing number of state-owned universities and colleges are planning for and currently implementing DE. They work closely with the private sector

As mentioned, the renewed focus on climate change will, without doubt, boost the DE market in the U.S. Even though DE is not explicitly mentioned in any green transition relief packages or anymajor green energy transition announcements so far, the outlook for DE is still very positive. For example, a USD 100 million fund for transformative clean energy technology research and development was announced through the U.S. Department of Energy (DOE) on February 11th, 2021. With the right local partners for Danish companies and with suitable project applications, the fund through DOE could very well tie directly into supporting new DE systems and boost the industry in general. The first deadline for submitting applications to this fund is April 6th, 2021. More similar funds

to make that happen. Now, DDEA is connected to more than 30 educational campus projects in various stages, and that number is rapidly growing. More and more local utilities are also developing and implementing DE systems – either as new systems (heating and cooling) or as steam to hot water conversions (heating and cooling). We also see an increasing trend that big-scale national and international utilities and utility investors expand their market in the U.S. and Canada. They often acquire outdated steam and/or DE system on, e.g., an educational campus or a city. Within that deal, the utility would guarantee to transform the entire system so that the campus or city meets their carbon emission goals, energy efficiency goals, and climate action plans. The utilities would then operate and maintain the system for a certain amount of years, selling heating and cooling to the client. This market is growing rapidly as well. Danish companies are currently representing approximately 20 % of the market.

directly and/or indirectly tying into DE is likely to be announced under this current administration. DDEA is continuously monitoring that. Relaunching the Danish District Energy Alliance to boost the implementation of DE DDEA is also focusing on promoting DE implementation through different channels on state and city level and local DE industry associations and NGOs. DDEA estimates an export potential for Danish companies in the U.S. and Canada (mainly within DE production and distribution) totaling more than USD 1 billion over the next 5+ years. It is heavily supported by global financial export potential outlooks that estimate DE market potential in the U.S. alone of roughly USD 50 billion over the next 6-7 years. Currently, DDEA is committed to supporting Danish companies, and facilitating knowledge-sharing with the local DE industry to develop the growing market further. This is also the reason why the DDEA Alliance is relaunched later in 2021. It will increase focus on project scouting for Danish

ABOUT THE TRADE COUNCIL NORTH AMERICA (TCNA) AND THE AUTHOR Niels Vilstrup is working at The Embassy of Denmark in Washington D.C. as part of The Trade Council North America (TCNA). He is head of TCNA dis- trict energy (DE) efforts in the USA and Canada through the DanishDistrict EnergyAdvisory (DDEA). Currently,DDEAiscommittedto supporting Danish companies, and facilitating knowledge- sharing with the local DE in- dustry to develop the growing market further.

Lastly, more and more cities are becoming aware that DE is crucial in becoming carbon neutral, reducing GHG emissions, and reducing air pollution. They want to integratemore renewable energy production and intelligent energy infrastructures in their cities. D.D.A. is currently working with several cities in the U.S. and Canada that have seen the potential of DE systems. This market is also growing for Danish companies, now representing approximately 5%of themarket.

companies, financing opportunities, project development, partnerships, lead generation, and knowledge-sharing locally. We cannot wait to welcome your company on-board DDEA in 2021.

For further information please contact: Niels Vilstrup, nivils@um.dk

Scottish venture intowater-sourced District Heating at scale

By: Michael McGuinness, Economic Development Manager, West Dunbartonshire Council

How do we as a small nation contribute to the climate change emergency? What can a local authority public body do to reduce our Carbon footprint and provide green energy at affordable prices? West Dunbartonshire Council is a small Local Authority supporting 90,000 citizens west of Glasgow, the host city for COP26 in November 2021, and located next to the famous Loch Lomond Trossachs national park with its wonderful natural environment. A new District Heating Energy Centre Most of the Local Authority has the banks of the River Clyde along its length. And our new District Heating Energy centre takes pride of place at the heart of what was the John Brown Shipyards where the three magnificent ocean-going liners of the Queen Mary, Queen Elizabeth, and Queen Elizabeth 2 were constructed and launched. Those traditional industries have long gone in our main town of Clydebank; however, we continue to strive and regenerate our communities in particular large vacant and derelict sites such as this site we now call Queens Quay. The Council, in partnership with the landowners, embarked on a venture to transform the former shipyard site many years ago. We have seen some successes with a new College complex, two office blocks, and a new Leisure centre developed. We also have the oldest giant cantilever crane in the world in the Titan Crane, which operates as visitor experience facility. In the last few years, the Council has built a ninety-bed care home, a new block of 149 social homes is coming out of the ground, along with a magnificent new Health centre for our

community, all due for completion in late 2021. The journey to regenerate the site regained impetus about five years ago, and one of the early ambitions was to ensure that the Council could contribute to our Climate Emergency and look at how we could provide green energy across the site, reducing our carbon footprint. Water-sourced heat pumps Early studies were embarked on with several expert consultants, and we came across a local Glasgow company Star Refrigeration. They were very keen to look at water- sourced heat pumps, primarily based upon their Drammen experience many years previously. Our site was next to the tidal River Clyde, and we had an ideal basin arrangement to extract and deposit the large volume of seawater required to run a district heating energy centre. The Council and partners were convinced following our visit to All-Energy exhibition and guidance from our consultants together with an introduction to some very knowledgeable Danish veterans in heat supply that we could make this work. However, this would require significant Capital funding and commitment from the Council. The Scottish Government had introduced a competitive grant funding entitled Low Carbon Infrastructure Transition Programme in 2015 made up of European Structural Funds. Following a feasibility study, we pulled together a £12.1m application seeking £6.1m from the fund. Following extensive discussions and a significant amount of work developing a working financial modelling tool, we embarked on developing the District Heating network at Queens Quay.

Convincing customers not to use cheap gas Our early ambition was to contribute towards reducing fuel poverty amongstmany of our citizens. One of the key challenges we face is convincing customers that the carbon burning gas that only costs approximately 2 pence per kWh in the UK is not sustainable. The alternative electricity cost is about 14-15 pence

The landowners convinced us their development partner could manage the build-out of a shell building. We tendered and secured Vital Energi to assist us in fitting out and running the pipework. Through Vital engaged with Star Refrigeration to build us two 2.6MW heat pumps, we call the twins to aim for a 75-80 degrees Celsius system using ammonia as a refrigerant.

per kWh, and our electrical network is becoming ever less carbon reliant with significant wind provision across Scotland. The modelled price point to deliver our heat cannot currently match the process of gas. However, through education and legislation, we see this changing. Scottish Government has introduced legislation that from 2025 no newly built homes will have a gas-burning boiler heating system. Alternatives are currently more expensive, but our water-sourced energy centre will be very competitive in terms of price in 2025. We just have some convincing to do!

Benefits in the Masterplan One of the benefits of the masterplan of the overall Queens Quay site was the balance of commercial facilities versus homes. Themasterplan envisages over 1,000 newhomes across the area and the District Heating system required significant capacity built-in to cope with this forecast demand. The energy centre has the capacity for additional heat pumps, additional backup gas boilers, and an additional 135,000 litre storage tank. This was particularly important as our ambitions stretch beyond the Queens Quay site towards the large Hospital complex of the Golden Jubilee Hospital, some 1.5km from the centre, which we are progressing well with. We also installed pipework in the ground that stretches across the main road from Queens Quay into Clydebank, where there are a business park and shopping centre that could be future customers. The system was commissioned and operating from October 2020. At a visit to Titan Enterprise, a Council-owned multi- occupancy office just before Christmas, I enquired how the staff experienced their new heat being provided from the Energy centre? The answer I got was a surprise, but maybe it should not have been. The answer was ‘what new heat’? They experienced no difference, just a nice warm building with low carbon generated heat rather than the gas-burning boiler systems previously. A long and winding road – leading to a real showcase The journey has been long and not without its challenges. We are pursuing new customers and constantly checking our financial model stacks up. We believe having the UK's largest water-sourced district Heating network will provide a real showcase for others. And importantly, provide heating across a large part of the estate and contribute to addressing a ‘fuel poverty situation that, as a public body, we must do everything in our power to change. With a little help from our Danish friends The journey has only just really commenced, and with tremendous mentoring support from our Danish friends, we believe this is just the start and look forward to continuing to deliver hot water to heat the businesses and homes of the future.

A showcase building close to the river Building close to the river at the basin, the pride of place on the site required us to look at the building design and its essential function. Our planning service was determined not to build a large non- descript grey box at the basin. And the Council, along with our designers/architects, worked together to deliver something special: glass-fronted, with mirror section, framed by a bronzed cladding and incorporating a large 30m ‘golden’ flue tower. Our investment partners and the Council wanted a ‘showcase’ demonstration project, and we believe we have achieved this with our fantastic-looking building. But it added to the build cost. The rest of the Queens Quay site was under development with roads and wider infrastructure, so installing the 5km of pipework was incorporated into these wider works. We had some delays as works were not originally planned in parallel. However, it was a cleared site with minor obstructions to allow the dig and installation of pipework to progress rapidly. £20m cost to public purse One other key aspect of delivering a networkwas gaining access to the basin and constructing a large extraction chamber below what would be a public accessible basin pathway. Our landowner partners sold us the access rights across their land to the river and constructed the pump and filter extraction chamber on our behalf. The extent of the chamber and the cost to access required additional funding from the Council, which we secured. Importantly we had to ensure our financial modelling could recover these costs over the lifetime of the project and forecast income from customers was realistic and achievable over 40 years. The building and infrastructure have cost the public purse close to £20m, significantly over our planned budget. However, we have a fantastic quality facility at our basin of Queens Quay. The modelling required us to consider a range of customers, from commercial businesses, public partners such as the National Health Service (NHS), the college, and social housing.

For further information please contact: Michael McGuinness, michael.mcguinness@west-dunbarton.gov.uk

AMBITIOUS FIRST LEGISLATION ON DISTRICT HEATING A unanimous Scottish Parliament recently passed the Heat Networks (Scotland) Bill - the first legislative framework for district heating in the United Kingdom.

By: Jacob Byskov Kristensen, Energy Counsellor, Embassy of Denmark, London Mathias Grydehøj Mikkelsen, Advisor, Global Cooperation, Danish Energy Agency Rune Nielsen, Advisor, Global Cooperation, Danish Energy Agency

The framework aims at expanding the current use of district heating - referred to as heat networks - by a factor of 20 in less than 10 years. Success and experiences from the widespread deployment of district heating in Denmark served as amajor source of inspiration for the bill and its amendments. Great Scottish climate ambitions Scottish climate policy ambitions are amongst the highest in the world. The aim is to reach 75% reductions in climate emissions by 2030 compared to 1990-levels. By 2017, emission reductions were down to 51%, but two-thirds of this achievement came from reductions within the power sector. To reach the 2030 goal, Scotland, therefore, has a herculean task in front of them, especially when it comes to the heating sector. Heating homes and office spaces currently account for roughly 21% of all emissions, with around 87% of homes heated by gas, oil and coal. Ambitions, therefore, include converting more than 1 million homes and an estimated 50,000 non-domestic buildings to using zero or low emission heating systems by 2030. To make this happen, many changes will have to take place in regard to policy drivers and investments – as well as current supply chain skills and capacity.

The Bill sets in place ambitious targets and some of the regulatory measures needed to meet them. Today, Scottish district and communal networks provide heat for roughly 32,000 homes (1% of Scotland's total heat consumption). With the new Bill, the aim is to have 650,000 homes connected to district heating by 2030 – roughly a 20-fold increase in less than 10 years. To concretize these ambitions, the Scottish Ministers must ensure that the combined supply of thermal energy from heat networks in Scotland reaches 2.6 TWh by 2027 and 6 TWh by 2030. A huge task that will require significant commitment and expansion of the current supply chain and local government planning capacity. The Bill in itself, however, only provides the direction and skeleton of the regulatory framework that is to deliver on these promises. Over the coming months and years, so-called secondary legislation is to be developed and implemented. This will be equally important in ensuring the success and possibility of meeting the ambitious targets now passed by parliament. The Bill and the subsequent process around secondary legislation are not the only elements that play into developing an attractive and ambitious district heatingmarket in Scotland. Financial support will indeed also be needed to help drive deployment. Some schemes are already in operation including a low-rate District Heating Loan Fund, development support through a Low Carbon Infrastructure Transition Programme (LCITP) as well as a few other smaller initiatives. Furthermore, the Scottish Government has recently released a consultation on a new Heat in Buildings Strategy. According to this document, the total investment required for transforming homes and buildings in Scotland is likely to be more than £33 billion. The current Government also states its intention to invest £1.6 billion of capital funding in heat and energy efficiency over the next parliamentary term (4 years), if re-elected. It is not specified howmuch of this figure relates to district heating networks. Still, the document does state ambitions to further incentivize anchor load buildings to district heating and financial relief for renewable district heating schemes.

50,000

“1 million homes and non-domestic buildings to using zero or low emission heating systems by 2030” *

Legislating for ambitious deployment of district heating

After years of consultation and development, the Heat Networks (Scotland) Bill was unanimously voted through the Scottish Parliament on the 23rd of February 2021. The Bill is a landmark not only for Scottish climate ambitions but also for the United Kingdom as a whole, as it is the first of its kind. However, the central Government in London is also working towards introducing legislation to the sectorin the United Kingdom.

* Draft Heat in Buildings Strategy

The Danish role in supporting Scottish ambitions within district heating dates back to 2014. In 2017, this cooperation was formalized as government-to-government cooperation on energy policy established at the Danish Embassy in London and the Danish Energy Agency. The Energy Governance Partnership (EGP), as this program is formally called, engages with other ambitious governments around the world on key climate policy areas. In this case, EGP ensures that lessons learned around regulation and development of district heating are made readily available for national and local policymakers. In the case of supporting the Scottish Bill process, the EGP provided inspiration and evidence from the Danish case through study tours, workshops, participation in working groups, written evidence, and a long-standing close dialogue with the Scottish teambehind the Bill. COVID19, unfortunately, meant that the Scottish parliamentary committee had to cancel a planned study to Denmark to give inspiration on Danish district heating systems. Instead, the committee was provided with written evidence, for which many of the committee members expressed their appreciation. The cooperation is run from the Danish Embassy in London in close cooperation between the Danish Energy Agency (Ministry of Climate, Energy & Utilities) and the Ministry of Foreign Affairs. Drawing on a team of policy experts at the Embassy and the Energy Agency, the program delivers inspiration and advice on a range of technical and legislative topics within district heating and energy efficiency in buildings.

But though much is still to come, the new Bill is widely celebrated by stakeholders and industry as a crucial element of increasing investor confidence in the sector. As an example, the Association for Decentralised Energy in the UK welcomed the Bill, saying: "The Heat Networks (Scotland) Bill sets an ambitious precedent for the rest of the UK, and for the future of low carbon heat. […]. While delivering clean energy to thousands of homes across the country, this legislation will also increase decentralized energy systems' confidence, creating jobs and economic growth. […]"

THEREGULATORYFRAMEWORKINTRODUCED BY THE BILL INCLUDES:

• a Licensing system to ensure that those developing and operating the infrastructure are suitable to do so – as well as new rights and powers that alleviate challenges for the license holders • a Consent system to ensure that local factors and assets are considered before approving new developments • a nation-wide identification of suitable Heat Network Zones requiring close coordination between national and local authorities. Government is furthermore obliged to guide and find sufficient funding for local authorities • enabling the award of long-term but time-limited Heat Network Zone Permits – an exclusive right given to a single organisation to operate a heat network within a the given Heat Network Zone • introducing Transfer Schemes to provide a ‘Supplier of Last Resort’ and a means to fairly re- tender Heat Network Zone Permits • a Heat Networks Delivery Plan and Heat Network Supply Targets that on a continuous basis tasks the Government with monitoring and reacting to the Bill and subsequent policies' ability to meet set targets

“Scottish climate policy ambitions are amongst the highest in the world. The aim is to reach 75 % reductions in climate emissions by 2030”

Danish inspiration and support emphasised during parliamentary debates

Danish experiences and support played a significant role in the policy process surrounding the Heat Networks (Scotland) Bill. The results achieved by the Danish approach to planning and regulating for district heating were often quoted as an inspiration for the Bill and various amendments discussed during debates. Before the final vote, The Minister for Energy, Connectivity and the Islands, Paul Wheelhouse, also thanked the Danish Government for its support in giving the Scottish Government the benefit of its experience .

For further information please contact: Jacob Byskov Kristensen, jackri@um.dk

Decarbonization of the Austrian District Heating Systems

By: Ralf-Roman Schmidt, Edith Haslinger, Roman Geyer,

Benedikt Leitner, Dragisa Pantelic

One of the main climate goals in Austria is to reach carbon neutrality by 2040 1 . The renewable share in district heating (DH) is currently at 48.4 %, of which the vast majority is biomass 2 . This large share of biomass is mainly due to more than 2,400 small biomass-based rural DH networks 3 . Apart from these, there are some larger DH networks in all major urban areas, i.e. Vienna, Graz, Linz, Salzburg and Klagenfurt, mainly based on combined heat and power plants (CHP) using natural gas. The decarbonization roadmap of the Austrian DHC association In 2020, the Austrian Association of Gas- and District Heating Supply Companies published a scenario for the decarbonization of the Austrian DH sector 4 . Here, an increase in DH demand by around 30 % to almost 26 TWh is predicted, accounting for approx. 30 % of total heat consumption. On the supply side, besides the continuous use of waste heat and waste incineration, the largest increase is due to geothermal energy. However, the overall largest heat supplier in 2050 will be renewable fuels, reaching a share of 59 %.

Figure 1: Decarbonization scenario for Austrian DHC networks (adapted and translated from 5 )

Sustainability of biomass and the competition for renewable fuels Although there are rich biomass resources in Austria, their utilization in general and more specific for heating purposes is increasingly questioned. A recent statement 500 scientists addressed heads of the governments: “Trees are more valuable alive than dead both for climate and for biodiversity. To meet future net zero emission goals, your governments should work to preserve and restore forests and not to burn them” 6 . Furthermore, studies on the decarbonization of the Austrian industry sector show a large demand for renewable fuels 7 . Following this trend, cities like Helsinki are aiming for a decarbonization of their heat supply while using as little biomass as possible 8 .

Best practice Vienna With about 1.7 million inhabitants Vienna is the largest city in Austria. More than 30 % of its buildings are supplied with DH. Its supply mix is dominated by gas CHP (52 %), waste incineration (21 %) and waste heat (18 %), while boilers, ambient heat and biomass account for the remaining 9 % 9 . A study on the decarbonization of Vienna’s Energy system 10 showed the most important measures related to DH are the integration of deep geothermal energy and large-scale heat pumps. Renewable fuels are expected only to cover peak loads on cold winter days. For a coordinated decarbonization effort, an energy planning concept considering urban and spatial planning has been implemented 11 . Here, a focus is put on the use of digital information models 12 .

Figure 2: District heating in Vienna, development by 2022 13

The largest heat pump in central Europe Early on, Wien Energie invested in large scale power-to-heat projects, e.g., two electrode boilers with a capacity of 10 MW each have been installed in 2017 14 . Further on, since 2019, the largest heat pump in central Europe has been operating in Vienna, supplying about 25,000 households with heat. Cooling water from power plants in Simmering is used as heat source. The HP has a thermal output from 27.2 to approx. 40 MW and a temperature lift from 6 to 95 degrees Celsius 15 . A very recent project is related to the utilization of waste heat from cooling processes from the large office buildings of UNO City 16 . Options like flue gas condensation from waste incineration are currently investigated 17 .

Waste heat in the focus As one of the most important sources for heat pumps, waste heat is in the focus of investigations in Vienna. In 2017, the cities energy planning department published a map of waste heat potentials in Vienna 18 , based on a methodology described in a Blue Globe Report 19 . This effort is continued in the project Spatial Energy Planning 20 .

Figure 3: waste heat potential distribution in Vienna from the most relevant industry sectors 21

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