FOCUS BIG MARKETS: CHINA & POLAND
By Oddgeir Gudmundsson, Director, DHS-AP Danfoss and Atli Benonysson Vice President, DHS-A, Danfoss A/S,
After decades of rapid expansion, the Chinese district heating sector is beginning to focus on increased energy efficiency. The sector is actively looking for new and cost- efficient technologies to increase the energy efficiency and has the mindset to embrace the benefits digitalization has to offer. Together with high-quality control components, the Chinese district heating sector can become an innovation leader of new district heating business models. EARLY DEVELOPMENT OF DISTRICT HEATING IN CHINA The history of district heating (DH) in China began in the 1950’s in Beijing with the introduction of Soviet era thermal power plants and DH technologies. The sector remained small and negligible until mid-1980’s, when a change in policies promoted a rapid expansion of the infrastructure, which still is ongoing today. In fact, the Chinese DH market grew by staggering 270-fold between 1985 and 2016.
This changed with China’s 2003 heating reform, where the foundation for transforming the sector from a welfare system towards a market-oriented system was introduced. The heating reform envisioned that the sector would be transformed from an area-based billing towards a heat consumption-based billing. For various reasons this goal has been elusive and hard to realize. In certain aspects, it can be said that the sector has become a victim of its success as well as its original supply philosophy: Due to the philosophy of DH being a welfare service, with billing based on the heated floor area, there has been no driver for providing individual controls to the heat consumers, and consequently the level of automation remains low which in turn leads to large inefficiencies and losses. ROAD TO MODERNIZATION With China’s 12th five-year plan, running from 2011-2015, energy efficiency was identified as a key issue. Focus was set on policies promoting clean energy retrofits, further expanding combined heat and power (CHP) plants and DH development in northern China. In existing DH systems policies were introduced to consolidate huge number of small inefficient coal-fired boilers to the centralized and more effective ones. The 12th five-year plan initiated an important step change when it comes to energy modernization of the Chinese DH sector. The focus on cancelling small, inefficient and polluting coal boilers, and consequently enlarging the distribution system, has facilitated a break in the deadlock of the move towards more automatic control. As the distribution systems have been consolidated and control complexity has grown, the Chinese DH industry has been forced to adapt new ways of thinking and embrace the enormous benefits automated heat supply control brings. Currently, the automated control equipment is making its entry at the heat plants and area substations, corresponding to the 2nd control level in Figure 2.
Figure 1. Growth of the Chinese district heating sector. Market size is normalized to the market size in 1985
From 1950 to 2003 the primary driver for DH was to provide a welfare service to vulnerable citizens. The systems were traditionally set up with small and inefficient heat only coal- fired boilers, with an average of only 60-65 % boiler efficiency. In general, there were multiple isolated distribution networks covering each city. If the area supplied by an individual boiler was large the basic boiler control was supplemented with large manually controlled area substations, covering from 100,000 – 500,000 m2 of heated floor area. The operational goal was to supply just enough heat to keep 18°C indoor air temperature.
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