HOT|COOL NO.2/2021 - "Economics, Finance & Money"

By: Steen Schelle Jensen, Head of Business Development – Heat/Cooling, Kamstrup Green business and black bottom lines

Digitalization drives operational and financial sustainability

As the complexity of district heating continues to increase, digitalization provides an even stronger basis for decisions, making it a necessity for utilities to deliver both green business and black bottom lines. Front runners have already delivered measurable results from data-driven value creation throughout the value chain.

To further explore the optimization possibilities, Kamstrup recently joined forces with Norfors Utility and smart bypass supplier Frese in a collaboration to create the optimal balance in the network. This included considerations on utilizing capacity in the best possible way, running closer to the limits, lowering temperatures centrally, and compensating for it locally, when necessary, e.g., with a smart bypass. Utilities can also benefit from using data for complex decisions on network maintenance and expansion, which make up 12% of the costs. Digital twins (e.g., based on frequent meter data) enable utilities to monitor the performance of the pipes underground. This allows better utilization and renovation planning of existing assets so utilities can potentially avoid or defer heavy investments in this area. For instance, Aars District Heating uses data-driven analytics to find the network’s weakest links and prioritizing renovation efforts based on where it will have the most significant impact. Results so far include reducing annual heat loss by 7.8 MWh per consumer in one area by replacing poorly performing service pipes. Furthermore, they have gone from 200 to 16 bypasses and subsequently lowered the return temperature by about 3°C. Also, comparing the actual network load and capacity to its design criteria reveals how well they match so utilities can extend the current infrastructure’s lifetime and optimize dimensioning and planning of new networks to avoid expensive oversizing.

In many district heating utilities, finances are under pressure fromdecreasing revenues as winters get warmer and buildings become more energy efficient. However, if district heating is to remain relevant and assume its position in the future integrated energy system, utilities must offer low prices and attractive offerings to end-users. Supplying district heating against this paradoxical backdrop while delivering on the green transition requires true business excellence and continuous improvement, which is a massive task for any utility. But it also holds potential savings that are key to future-proofing district heating. This article explores that potential concerning four main business issues – and how digitalization enables utilities to unlock it. Improving the security of supply The core of security of supply is just that: ensuring a reliable supply to your end users of the heat you produce. But being able to document what you have delivered is only the result. Ultimately, security of supply is about getting to the point where you can also measure and optimize the very process and flow of heat. Where are the bottlenecks? How is the heat distribution throughout the network? How fast can you detect incidents? And the savings potential in running production closer to the limits is enormous.

72% of costs in an average Danish utility are related to production (figure 1), so optimizing this part of the value chain

has a huge impact. According to a Danish report from 2018, millions of Euros can be saved by optimizing temperatures based on data instead of theoretical considerations or simulation in hydraulic network models. The report concludes the potential savings in data-driven temperature optimization. Here, hourly values from intelligent heat meters are used to train an algorithm to determine the necessary temperature level on the production side based on a combination of meter data and weather forecasts.





Source: Danish District Heating Association

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