DBDH publishes Hot Cool, but the main business is helping cities or regions in their green transition. We will help you find specific answers for a sustainable district heating solution or integrate green technology into an existing district heating system in your region – for free! Any city, or utility in the world, can call DBDH and find help for a green district heating solution suitable for their city. A similar system is often operating in Denmark, being the most advanced district heating country globally. DBDH then organizes visits to Danish reference utilities or expert delegations from Denmark to your city. For real or virtually in webinars or web meetings. DBDH is a non-profit organization - so guidance by DBDH is free of charge. Just call us. We'd love to help you district energize your city!
SPECIAL COLLECTION EDITION
No. 2 / 2023
INTERNATIONAL MAGAZINE ON DISTRICT HEATING AND COOLING
DISTRICT HEATING SUCCESS PROJECTS HOW TO ESTABLISH A DISTRICT HEATING COMPANY?
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Contents
THIS EDITION'S FOCUS THEMES
INARGI 8 4
EXCESS HEAT FROM STEEL MILL FOR CROSS-BORDER DH COOPERATION By Dr.-Ing. Volker Kienzlen, Reiner Hagemann and Sabine Schimetschek
HOW TO ESTABLISH A DH COMPANY?
MEMBER COMPANY PROFILE:
AI AND DIGITALISATION
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THE CURIOUS CASE OF DISTRICT HEATING COST STABILITY TRANSITION AND DEVELOP A NEW ECONOMIC MODEL IN SCOTLAND By Duncan Smith HOW DISTRICT HEATING NETWORKS RUN NOT-FOR-PROFIT CAN ENSURE A JUST DISTRICT HEATING STEPPING STONES – TOWARDS A SUSTAINABLE HEAT SOLUTION By Lars Gullev
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DH SUCCESS PROJECTS
By Oddgeir Gudmundsson and Jan Eric Thorsen 14 THE IMPORTANCE OF KNOWLEDGE SHARING By Oddgeir Gudmundsson and Jan Eric Thorsen 19
TECHNOLOGY AND SUSTAINABILITY
By Christian Damsgaard Jensen 22
CYBERSECURITY IN DISTRICT HEATING INFRASTRUCTURES
28
END-USER INVOLVEMENT IS THE KEY TO GREEN, RELIABLE, AND AFFORDABLE DISTRICT HEATING By Steen Schelle Jensen
By Lars Gullev 32
HOW TO START A DISTRICT HEATING COMPANY
36
Cover photo: From a UK delegation visit arranged by DBDH. Here at Envafors in Slagelse, DK, where Managing director, Carsten Lunde
DIGITALISING DISTRICT HEATING REQUIRES A PARADIGM SHIFT, BUT YOUR NEXT STEP IS THE MOST IMPORTANT By Steen Schelle Jensen
presented the Halskov-værket. Photo by Lars Hummelmose
DBDH Stæhr Johansens Vej 38 DK-2000 Frederiksberg Phone +45 8893 9150
Editor-in-Chief: Lars Gullev, VEKS
Total circulation: 5.000 copies in 74 countries 10 times per year
Grafisk layout Kåre Roager, kaare@68design.dk
Coordinating Editor: Linda Bertelsen, DBDH lb@dbdh.dk
info@dbdh.dk www.dbdh.dk
ISSN 0904 9681
What if digitalisation could make energy more sustainable?
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Read more at kamstrup.com
Schemabild Elektroöfen © Badische Stahlwerke
On the German-French border in the region of Strasbourg-Kehl, a showcase project for cross-border cooperation in the municipal heat transition is emerging. In the future, 7,000 households on both sides of the Rhine will be supplied with waste heat from the local steel mill. Due to its transnational nature, the project faces several challenges. Nevertheless, the high level of commitment of all partners and the active support of governmental institutions combined with financial support from French (ADEME), German (BAFA), and European (INTERREG) funding agencies have made the project possible. EXCESS HEAT FROM STEEL MILL FOR CROSS-BORDER DH COOPERATION
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HOTCOOL SPECIAL COLLECTION no.2 / 2023
By Dr.-Ing. Volker Kienzlen, KEA-BW
Reiner Hagemann, Badische Stahlwerke GmbH (BSW)
Sabine Schimetschek, Calorie-Kehl Strasbourg (CKS)
Badische Stahlwerke has been looking for a way to use this waste heat for decades. In the nearby industrial area of the port and the town of Kehl, three kilometres away, there are no suitable customers for such large quantities of heat. On the other side of the Rhine lies Strasbourg - a city that already op- erates large district heating facilities and would like to expand these even further regarding the climate policy goals. By 2050, at the latest, Strasbourg's heating networks are to be entirely climate-neutral. Therefore, Strasbourg not only plans to extend the district heating system but also intends to lower the net- work's temperature. The first idea to use the enormous amount of excess heat dates back to 2014. In 2018, the KEA-BW, the state energy agency in Baden-Württemberg, initiated another attempt to use the heat that cannot be used within the company. The rising importance of climate protection and the neces- sity to become climate-neutral was a new baseline for the discussion with BSW and the cities of Kehl and Strasbourg. Improved funding conditions were also helpful. In July 2018, the Baden-Württemberg Ministry of the Environment com- missioned a study to the engineering company EGS-Plan, confirming the project's technical and economic feasibility. Since then, the Eurometropolis of Strasbourg, the Badische Stahlwerke, and the city of Kehl have been working with KEA-BW, dena1, ADEME2, and several other stakeholders to push forward the German-French cooperation project. This was followed by further studies to clarify the potential, the heat requirements in Strasbourg and Kehl, as well as the pos- sible layout of the heating grid. Since the district heating network in Strasbourg is rather old, some areas of the network still require flow temperatures of more than 140 °C when the ambient temperature is very cold. For BSW, this means that the outlet temperature in the heat exchangers has to be raised to 160 °C, which increases the operating pressure significantly. The existing system cannot meet the safety requirements, which is why the entire prima- ry cooling system must be rebuilt. This also includes replacing the heat exchangers for the secondary cooling tower circuit, which ensures heat dissipation during low district heating de- mand periods. The part of Strasbourg’s district heating system relevant to the project consists of the two interconnected heating networks, Esplanade and Elsau. Two gas-fired boilers are used to cover the peak load. The base load is generated by a biomass co-
BSW, the Badische Stahlwerke, runs a steel mill in Kehl. In the harbour area north of Kehl, they produce 2 million tons of steel per year, mainly for the construction sector. Two electrical fur- naces use steel scrap to produce reinforcing steel. The main waste heat source is the exhaust gas from the two electric arc furnaces where the steel scrap is melted. There are also other potential sources of excess heat, e.g., the pusher furnaces, where billets are reheated for further processing. In the first step, the waste heat from the electric arc furnace will be used. In the future, however, other waste heat potentials could also be used. The exhaust gases, up to 1,300°C hot, will flow through a water-cooled heat exchanger, which pre-cools the gases to approx. 600°C. The cooling water in the heat ex- changer runs in a closed circuit and has a flow temperature of approx. 70 °C and an outlet temperature of up to 90 °C. Due to the melting process, the water temperature fluctuates greatly since cold scrap is charged at the beginning of the process, and molten steel is tapped at 1,600 °C at the end. In addition, there is a short production downtime in summer and a three- week downtime in winter. On average, a heat flow of 20 mega- watts is cooled to ambient air. Based on the production data of the steel mill, this results in a total available waste heat of 135 gigawatt hours per year.
Direct dedusting of electric arc furnace
to the baghouse
electric arc furnace
dedusting
heat exchanger (160°C)
Badische Stahlwerke GmbH
Schemabild Elektroöfen © Badische Stahlwerke
1 https://www.d-f-plattform.de/fileadmin/dena/Publikationen/PDFs/2022/RZ_dena_Factsheet_U__berarbeitung_Strassburg-Kehl_DE_digital.pdf
2 French environment and Energie management agency - https://www.ademe.fr/en/ademe-the-french-ecological-transition-agency/our-organisation/
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Badische Stahlwerke
To District Heating Network Strasbourg
District Heating Network Kehl
The coordination effort is very high, given the many players from both countries involved. In the practical implementation, many organisational and legal issues must be solved. This in- cludes a suitable binational organisational structure. For the construction and operation of the necessary pipeline, a mu- nicipal public company was founded under French law, al- lowing foreign local authorities to participate. In this “Société d’économie mixte locale Calorie Kehl-Strasbourg” (SEML CKS), the Eurometropolis of Strasbourg has the largest share of 47 %. Smaller shares are also held by the city of Kehl (12.75 %), the region Grand Est (12.75 %), the state of Baden Württem- berg (12.75 %), and the French Banque des Territoires (CDC) (15 %). Badische Stahlwerke (BSW) also holds one share and is involved as an observer. The general director of Calorie Kehl-Strasbourg, Sabine Schimetschek, was born and raised in Germany but worked most of her professional life in France. Thus, she embodies the cross-border character of the project. Since the common goal is to start operating the system by 2027, CKS pushes the design and planning process forward. The rise in construction costs combined with increasing ener- gy prices due to the energy crisis of 2022 requires an update of the calculation of project economics. Now, an engineering company analyses the outline of the pipeline with the need to minimize construction costs and the requirements in the approval process at the same time. The initially preferred micro tunnelling minimizes the interference with existing infrastruc- ture but is the most costly solution. Therefore, alternative con- struction methods are investigated.
generation plant and the municipal waste incineration plant. This means about 60 percent of the heat is already provided by renewable or CO2-neutral energy sources. As the heat from the biomass cogeneration plant is still subject to a multi-year pur- chase obligation, the waste heat from BSW will only be able to replace a significant part of the heat produced by gas boilers in the winter months. The planned increase in annual district heating sales from the current 256 GWh to 318 GWh in 2030, however, allows for more and more waste heat use, especially in the transitional months of the year. With the expansion of Strasbourg’s heating system in mind, further sources of excess heat from the steel mill can be used. Furthermore, the opera- tor of Strasbourg’s district heating system intends to lower the operating temperature in the long run. In the coming years, the new development “Zollhofareal” will also be built in Kehl, on the southern Rhine harbour near the main station, which will also be supplied with waste heat from BSW. Accordingly, at least 70 GWh of the total available waste heat of 135 GWh can be used in the district heating networks of Strasbourg and Kehl. 7,000 households can be supplied with this energy, thus saving almost 20,000 tons of CO2 emissions per year. Kehl’s district heating system is already at a much lower temperature level. With a maximum temperature of 90 degrees, the return flow from Strasbourg can be used today as a supply for Kehl. This leads to an increased temperature spread in the transport pipe and reduced pumping energy. Should the return temperature from Strasbourg be below Ke- hl’s operating temperature in the long run, an injection system can raise the temperature level for Kehl. Implementing district heating projects using industrial waste heat is complex and costly. The cross-border dimension of the project faces additional challenges. The different languages spoken on the two sides of the Rhine and the different cultures of project management require additional effort to make the project successful.
For further information please contact: Volker Kienzlen, volker.kienzlen@ kea-bw.de
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HOTCOOL SPECIAL COLLECTION no.2 / 2023
Member company profile:
Innargi is currently constructing the most extensive coherent geothermal district heating system in the EU, supplying 36.000 households with clean, sustainable heat from 2-3 kilometres depth from Earth’s surface.
BRINGING GEOTHERMAL ENERGY INTO DISTRICT HEATING
Clean, emission-free, and sustainable Geothermal heating is a highly climate-friendly heat source for district heating. When paired with renewable power from so- lar or wind, geothermal heating is not just carbon neutral; it is essentially emission-free. Geothermal heating is a dependable and stable energy source day and night through all seasons. The underground reservoir is its own storage facility, ideal as a baseload in district heating. Once a plant is up and running, there is no pollution, almost no noise, no smell, and no waste, making geothermal heating a “good neighbour” in the city.
In January 2022, ATP and NRGi joined as cornerstone investors. ATP is one of Europe’s biggest pension funds and fits perfectly as a long-term investor contributing with a deep understand- ing of the importance of longtermism to support the green transition. NRGi is one of the biggest utilities in Denmark and has committed to investing in more sustainable energy pro- jects. At the same time, it supports the green transition and the collaboration of the power and heating sector. We engage – support from local communities is crucial. The key to success for all infrastructure projects is public sup- port. It is not only a question of understanding local plans and regulations and securing local permissions. We invest in secur- ing the support of local communities – both those who govern them and those who live in them, and we strongly believe that transparent and clear information at all stages of the process is the way to gain respect and trust from the local communities and NGO’s.
Geothermal district heating at low risk and competitive price
Historically, geothermal projects were often one-offs, making them risky and potentially expensive. Innargi has developed a business model where we take 100% of the risk and cost of the initial exploration phase. We have the funding to take the risk, see things through, and invest in long-term partnerships, and we require no payment until the heat flows. We have developed a business model in which we take the responsibility and risks related to the sub- surface, from the initial test drilling to supplying the energy from the warm water to the district heating company. That way, district heating companies and their customers can be sure that there will be no unanticipated added costs, even if things do not go as planned. Stable and predictable prices let the district heating company control its heating costs by removing the uncertainty of fluctuating commodity prices.
FACT BOX
What we do? We finance, develop, construct, and operate large- scale geothermal heating plants for district heating companies taking. We take 100% of the risk and cost of the initial exploration phase. We have the funding to take the risk and invest in long-term partnerships. We require no payment until the heat flows. By industrializing geothermal heating, we are both driving down costs and leveraging the learning effect
Long-term partnership and deep knowledge of all processes
We have operated the facility for 30 years and guarantee heat availability and performance when it is up and running. Be- cause geothermal is a baseload, it is always there when needed. Innargi was founded in 2017 by A.P. Møller Holding, a Danish investor well known for the Maersk brand, which has been drill- ing for oil and gas for decades. This deep knowledge of subsur- face conditions, drilling, and technical expertise is now used to find and drill for hot water since Maersk sold off its fossil fuel businesses.
For further information please contact: Phil Gosney, philip.gosney@innargi.com
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HOTCOOL SPECIAL COLLECTION no.2 / 2023
DISTRICT HEATING STEPPING STONES – towards a sustainable heat solution Focus on supporting a green transition does not necessarily mean that the only right path is to transition 100% from fossil fuels to renewable energy in one go. Nevertheless, carbon neutrality or CO2-negative emissions is the goal – and there should be a plan to reach it.
By Lars Gullev, Senior Consultant, VEKS
Previous investments in fossil-based production facilities will not be wasted. They can be used as a step or steppingstone towards a green heat supply, as the historical development of the Danish district heating sector confirms. For clarity, the expansion is divided into phases, but the phases can overlap. Today, through careful planning, we can gain early access to introducing sustainable heat sources, thus more rap- idly displacing fossil alternatives. Finally, it demonstrates how Copenhagen has gone through this development – and pro- vides a hint at the next stone. Buildings are individually heated with fossil fuels, such as natural gas. A range of buildings are individually heated with their small boilers using coal, oil, or natural gas as fuel. An alternative to this individual solution is to base the build- ing's heat supply on a common heat center and a district heat- ing network that distributes heat to individual buildings. Ide- ally, this heat center should be based on sustainable biomass, but the next best thing would be a heat center based on fossil fuels.
Transitioning a city from, for example, natural gas to green heat sources is a massive undertaking. This article argues that the goal of CO 2 neutrality is right but that the path to it consists of a series of stepping stones, each contributing to the goal, with cities gradually reducing the use of fossil fuels over time. We must be careful not to let the dream of having the perfect system in a few years hinder us from taking important steps in the right direction as early as tomorrow, bringing us to our goal within the set time frame. The primary goal must and should be to ensure a complete re- duction in CO 2 emissions. This can be achieved by transitioning from fossil fuels such as coal, oil, and natural gas to sustainable biomass, solar or wind-based electricity, industrial waste heat, or waste heat from waste incineration plants. A significant and essential first step is to transition smaller individual fossil-based systems to district heating partially based on coal, oil, or natu- ral gas – as a starting point. As mentioned, this article describes that just because you can- not transition to 100% CO 2 -neutral heat production right here and now, it does not mean you should do nothing.
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www.dbdh.dk
Expansion of the district heating network There is still surplus heat available that cannot be utilized be- cause the heat demand in the existing district heating system is limited. Therefore, there is now a basis for expanding the district heating system to utilize more surplus heat – thereby further reducing the use of fossil fuels, both from new custom- ers converted to district heating and from fossil-fired boilers in the district heating system. The fossil-based boilers continue to cover heat demand when heat deliveries from surplus heat providers are insufficient to meet heat demand. Establishment of green heat sources Now that all surplus heat has been utilized, the district heating network continues to expand with new customers. The imme- diate consequence is that the proportion of heat produced by fossil-based boilers increases. This is not good for CO 2 emis- sions. In reality, this effect is reduced by the early introduction of green heat sources while expanding the network.
The decision-making basis for such a decision – FID (Final In- vestment Decision) – will involve comparing the total costs (TOTEX) for heating in the individual scenario with the corre- sponding costs in the district heating scenario. For both solutions, both CAPEX (capital costs) and OPEX (op- erating costs) need to be calculated before a clear picture of TOTEX is obtained. When district heating was significantly expanded in Denmark in the 1960s, the price difference between the light gas oil used in individual oil-fired boilers and the heavy fuel oil used in large boilers drove the development. The reduction in OPEX by establishing district heating could fi- nance CAPEX in the pipeline network and the central boiler, so TOTEX for the district heating solution was lower than TOTEX for the individual solution. The development of district heating in the 1960s in Denmark was thus market-driven – today, such growth can also be based on a political demand.
Utilization of surplus heat Now, buildings are supplied with district heating based on the next-best solution - coal, oil, or natural gas – with better fuel utilization than the previous individual solution. This has creat- ed the opportunity to utilize local surplus heat resources in the district heating system. An option that was not present when individual buildings were solely responsible for heating. A significant portion of the surplus heat can now be utilized, perhaps 4,000 hours per year. The remaining heat demand still needs to be covered by coal, oil, or natural gas-fired boilers. This reduces CO 2 emissions in two steps – first, from the indi- vidual scenario to the district heating scenario based on fossil fuels, and further through the utilization of surplus heat, which reduces the use of fossil fuels. The fossil-based boilers now shift from units that cover the base load of heat demand to units that cover heat demand in peak load situations and when there is a need to activate re- serve capacity due to interruptions in heat supply from surplus heat providers.
Therefore, it is now relevant to investigate the possibility of es- tablishing new production capacity to reduce heat production from fossil-based boilers. This could involve production units based on sustainable biomass or heat pumps, solar, electric boilers, surplus heat from CCS/U (Carbon Capture Storage/Uti- lization), hydrogen production, or other local options.
Again, we need to look at TOTEX, CAPEX, and OPEX for such production capacity before deciding to build something new.
If it proves economically attractive to establish new production capacity, it will likely be integrated into the "hierarchy," with heat from surplus heat producers having priority, the new pro- duction unit having second priority, and finally, the fossil-fired boilers having third priority. The fossil-based boilers continue to cover heat demand when heat deliveries from surplus heat providers and the new pro- duction unit are insufficient to meet heat demand. In the long term, they will only serve as peak and reserve loads.
10 HOTCOOL SPECIAL COLLECTION no.2 / 2023
The overall district heating system benefits significantly from the flexibility of these fossil-based boilers.
the next few years, large electric boilers will replace some of the larger oil-fired boilers.
Copenhagen walked the talk! Is the above brief description of the possible development of a district heating system just theory? No – if we briefly look at the district heating system in the western part of Greater Copen- hagen, the historical development here has been as follows. In the 1960s and 1970s, 19 local, independent district heating companies comprised the district heating system. The district heating supply was based on fuel oil or coal-fired boilers and small local waste incineration plants. In the late 1980s, the many district heating companies were connected to a central district heating transmission network (VEKS – www.veks.dk), which supplied surplus heat from large central combined heat and power plants (coal-fired) and large waste incineration plants to the local distribution networks.
Conclusion If there had not been an expansion of district heating in the western part of Greater Copenhagen based on coal and oil- fired boilers 50-60 years ago, the foundation would not have been laid for a well-functioning, energy-efficient district heat- ing system in the western part of Greater Copenhagen in 2025, which will be based on 100% CO2-neutral heat production. The next step is to reduce biomass consumption and utilize more surplus heat from future sources – such as CCS/U – more about this can be read in this article describing Copenhagen's heat plan up to 2050.
At the same time, the small local waste incineration plants were closed, and the local coal-fired boilers were shut down. The central boilers in the local district heating companies were retained – over time, fuel oil was phased out and replaced with light gas oil. Some boilers were equipped with dual-fuel burn- ers so that they could use both gas oil and natural gas. Today, only 2-3% of the district heating demand in the western part of Greater Copenhagen is covered by produc- tion from oil and natural gas-fired boilers, while the remain- ing 97-98% is covered by surplus heat from combined heat and power (CHP) plants, which now use sustainable biomass, surplus heat from waste energy plants, and surplus heat from industry. The CHP plants were converted from fossil fuels to sustainable biomass between 2008-2020. Today, the originally oil-fired boilers still have a significant func- tion in the overall district heating system. Their role today is not to cover the entire heat demand but solely to serve as peak and reserve load when it is very cold – or when the large, CHP plants or waste-to-energy plants cannot meet the heat demand. Over
The Copenhagen system demonstrates the stepping stones used back then. Now we need to move ahead stepping on similar stones without building new fossil-based production capacity. So, starting the green transition by connecting fos- sil-based customers to a fossil-based district heating system can be the first step on the "green journey." Let’s not sit around waiting for all conditions to be perfect; there are several step- ping stones, and we gather knowledge by every step we take.
For further information please contact: Lars Gullev, lg@veks.dk
11 www.dbdh.dk
HOW DISTRICT HEATING NET- WORKS RUN NOT-FOR-PROFIT CAN ENSURE A JUST TRANSITION AND DEVELOP A NEW ECONOMIC MODEL IN SCOTLAND Over the coming decade, Scotland has to decarbonise heating and make our buildings as efficient as possible to meet our climate change objectives and have any chance of staying with a 2-degree rise in global temperatures. Of course, buildings and the built environment are just one piece of the decarbonisation puzzle we must solve. It's a huge task – even today, here in the UK, as much as 80% of our homes are still heated by fossil fuels – mainly natural gas. And while we've got to wean ourselves off the gas for heating, it's still cheaper when we compare it to the electricity price.
By Duncan Smith, Head of Energy & Sustainability at River Clyde Homes
And we can generate heat and power through decentralised energy centres that capture and reuse excess heat from local businesses and industries such as data centres. The Queens Quay project in Clydebank is a great example of the model I would like to see replicated up and down the country. It pro- vides heat to public buildings and homes and will be expand- ed this year to include the local hospital and six multi-storey towers. And the residents pay around a quarter of the standard electricity price that most of us in the UK are paying today - about 8 p (9 cents) per kWh compared to 34 pence (39 cents). The project cost around £20 million (approx. 23 million €) with the local authority and Scottish Government funding. However, rather than looking at the cost of the solution, which invariably many organisations will focus on, we need to see the value we can develop with district heating and not-for-profit delivery models. And I'd like decision-makers in local Govern- ment to look at the argument differently, from a different an- gle. I'd like them to look at the opportunity for an economic model that provides affordable heating for residents and sta- bility to local businesses – indeed, supports the new companies we'll need over the coming decade to solve the wider climate crisis challenge.
The cost of electricity – the "net zero" fuel we'll all need and use to heat our homes over the coming decades is part of the issue - if we are to go down a like-for-like route of replacing heating individually. The current model and the reluctance of the Government to intervene within the system to reform the pricing mechanism - and a regulator that hasn't been able to protect consumers in the way they should - has seen millions of households in the UK spend upwards of £2500 (2,895€) last year to heat their homes. It's also how we continue to produce energy – centralised and far away from most communities that need and use it. So, what is an alternative model? What model could create an equitable energy price for both the consumer and business? An energy model that could directly address fuel poverty and put money, millions of pounds, back into households' pockets, eliminating cold and damp homes, improving the health and lives of their occupants, and providing the basis for economic stimulation and skilled employment in local communities. We can develop locally owned heat and power networks with the resources we already have here in Scotland - through wind turbines, solar panels, and water-based heat pumps.
12 HOTCOOL SPECIAL COLLECTION no.2 / 2023
A good example of this is vertical farming in urban areas. The current energy system makes it very difficult for heat-hungry companies to survive – regardless of the merit of their output. By providing affordable energy to residential households, busi- nesses, and public buildings, we can develop decentralised, more egalitarian heat and power networks that serve society and commerce rather than the other way around. By developing heat networks like our Danish colleagues have done, from an ownership perspective, we can end fuel pover- ty and homes with dampness and mould. We can reduce the burden on the National Health Service, making our citizens healthier and more productive and creating local high-skilled jobs for many of our young people. In a recent article in Inside Housing, the Scottish Minister for Net Zero Buildings, Patrick Harvie, responded to whether the Government in Scotland is doing enough and willing to sup- port housing providers financially to achieve Net Zero finan- cially. His answer below might surprise some but should be seen as an opportunity.
"Some of these organisations can be anchor organisations for things like heat networks. I think over the course of this decade, for example, we're going to be seeing a lot more in the way of heat networks going in, where a social landlord is not just a customer but is contributing to running that business and see- ing a larger part of our energy system, at a local level, operating in the public interest." Later this year, each Local Authority in Scotland is required to publish a Local Heat & Energy Efficiency Strategy. The strategy should identify where district heating could be prioritised, with the Heat Networks bill providing legislation on how they are licensed.
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The commonality of infrastructure systems is that they enable not only cost-optimized opera- tion but also a cost-stable operation. District energy systems, whether district heating or cooling, are no different. By careful thermal planning, identification of possible heat or cool sources, and applying a favorable mix of thermal generation technologies, the district energy utilities can ensure optimal thermal generation cost, exceptional cost stability, and operational resilience. This article highlights the importance of choosing the optimal heat generation technology mix based on both investment costs (CAPEX) as well as operating costs (OPEX). By adopting mul- ti-source operation, district energy utilities can significantly reduce the thermal generation cost compared to single-source operation.
By Oddgeir Gudmundsson
Jan Eric Thorsen
Directors, Climate Solutions, Danfoss A/S
I. Introduction District heating systems have many desirable attributes addressing our modern-day challenges. In Northern Europe, they have proved to be exceptionally effective in decarbo nizing building heating demands and enablers of a future smart and efficient energy system. In Ukraine, they have proven to be exceptionally resilient to bombings during the Russian war on Ukraine. The Ukrainian cities with district heating sys- tems, even as outdated as they are, have proven to have safer, more reliable, more stable, and more predictable heat supply than cities with individual heating. In the United Kingdom, district heating is recognized as an important solution to fight
energy poverty. The key reason for the multi-criteria success of district heating is the fact that aggregating the demands of all connecting users enables access to a pool of diverse heat generation technologies. By properly combining heat sources and generation technologies, the district heating utility can ensure low heat costs, long-term cost stability, resilience to disruptions in energy vectors, and in the end, a reliable and future-proof heat supply operating in synergy with the overall energy system.
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THE CURIOUS CASE OF DISTRICT HEATING COST STABILITY
II. Multi-Source Heat Cost Optimization Principles The basic steps for minimizing heat costs in district heating systems are: A. Determine the annual heating demand. B. Identify locally available heat sources. C. Identify importable energy vectors. D. Assess the capital expenditure (CAPEX) and operating expenditure (OPEX) of potential heat plants. E. Determine the most suitable mix of heat generation tech- nologies concerning CAPEX, OPEX, and heating demands being fulfilled. A. Determine the annual heating demand. This article assumes we are designing a 100 MW district heat- ing system to supply an annual demand of 333 GWh. Figure 1. Annual heating demand (left) and demand duration curve (right). shows the annual heat demand curve (left) and the same annual demand sorted in descending order, commonly called a duration curve (right). The load figures clearly show that the system will run on a part load for a large part of the year. The aim of the utility is to design the heat generation to allow cost-effective heat supply at any given heat demand or time.
Figure 1. Annual heating demand (left) and demand duration curve (right).
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B. Identify locally available heat sources. To ensure the highest operational stability of the system, it is of utmost importance to explore local renewables and synergies in the local surrounding. Local renewable heat sources can, for example, be geothermal, lake, river, or sea. Typical synergies can be found with the waste sectors (household waste and wastewater), power generation, local agriculture waste bio- mass, and excess heat from industries. Local resources are commonly well suited for base and mid- load heat supply, as these energy sources are often both stable in cost and availability. C. Identify importable energy vectors. Importable energy vectors are generally any form of energy easily transported over long distances, such as electricity, natural gas, coal, oil, electro-fuels, and biomass. The common factor among these energy vectors is that their costs are influenced by their energy quality and international market conditions. Consequently, cost developments, both in the short and long term, tend to be unpredictable. The history has further shown that fossil-based energy vectors have been weaponized, e.g., the oil crisis in the 1970s and the war in Ukraine in 2022. D. Assess the capital expenditure (CAPEX) and operating expenditure (OPEX) of potential heat plants. Once the available energy sources have been identified, the next step is to access the key economic parameters influenc- ing the cost of heat from using them. For an initial evaluation, financial data can be found in various technology cost cata- logs, for example, from the Danish Energy Agency [1] . It is important to note that CAPEX is a one-time cost, the cost of establishing the heat plant, while OPEX is both fixed and variable. The fixed OPEX is the cost that falls irrespectively of the use of the heat plant; these can be due to general main- tenance schedules of building and equipment. The variable OPEX is the cost directly related to the heat generation; this is the fuel and maintenance costs directly associated with the plant operation (wear and tear). The rule of thumb is that heat plants with high CAPEX and low OPEX should be base load providers. In general, the cost of heat from these plants becomes lower the higher the plant utilization is, as shown by the blue line in Figure 2. At the other end of the spectrum are heat plants with low CAPEX and high OPEX. These plants are well suited as peak load plants, as the cost of the heat will reach a plateau around the variable OPEX, as shown by the black line in Figure 2.
E. Determine the most suitable mix of heat plants concerning CAPEX, OPEX, and heating demands being fulfilled. The following provides a simplified example of the heat cost optimization for the heat demand case shown in Figure 1. Annual heating demand (left) and demand duration curve (right).. The case is based on three heat generation technolo- gies, waste incineration (WtE), an air source heat pump, and a natural gas boiler, see Figure 3. Figure 2. Heat generation cost in respect to unit annual utilization. The black line represents low CAPEX / high OPEX heat plant, and the blue line represents high CAPEX / low OPEX.
Table 1 shows the cost of heat from a single heat generation technology fulfilling the demand in Figure 1. Annual heating demand (left) and demand duration curve (right).. As the table shows, the air source heat pump is the most cost-effective solu- tion from a single technology perspective. Figure 3. Cost of heat from 3 heat generation technologies given annual utilization.
Table 1. Cost of heat given a single heat generation technology.
Capacity [MW]
Share of annual demand
Plant utilization
Heat cost [EUR/MWh]
Plant
WtE boiler Air source heat pump Natural gas boiler
100
100%
37.9% 42.8
100
100%
37.9% 34.9
100
100%
37.9% 41.7
16 HOTCOOL SPECIAL COLLECTION no.2 / 2023
On the other hand, if one would designate the waste incine rator as a base load, e.g., ensuring high utilization of the invest- ment, followed by an air source heat pump plant for mid load and at last, apply natural gas boilers for peak load, a better re- sult can be achieved. In this case, the optimal solution would be as shown in Table 2 and visualized in Figure 4.
Table 2. Optimum technology mix for a multi-source operation.
Capacity [MW]
Share of annual demand
Plant utili - zation
Heat cost [EUR/MWh]
Plant
WtE boiler Air source heat pump Natural gas boiler
42
79.4%
71.7% 16.9
12
11.8%
37.4% 36.1
An alternative mix could be at point B, where the mix is a 38 MW WtE unit, a 25 MW heat pump unit, and a 37 MW natural gas boiler. The increase in the annual heat generation cost when moving from point A to B is only 2%. However, the flexi- bility impact of doubling the heat pump capacity from 12 MW to 25 MW could easily pay off, as the additional heat pump ca- pacity will offer significantly increased sector coupling oppor- tunities. For example, increased possibilities to take advantage of fluctuations in the power prices, provide balancing services to the power system and reduced reliance on natural gas, and consequently reduced dependency on imported fuels as well as reduced CO2 emissions. A larger heat pump plant could also take greater advantage of higher efficiencies achieved during daytime temperatures, compared to night temper- atures, and charge a thermal energy storage if available and limit, or avoid, operation at the coldest period of the night. Another opportunity could be to exploit synergies with other energy sectors, such as the cooling and industry sectors. Con- cerning the cooling sector, the heat pump could operate in synergy with district cooling systems or large building com plexes, such as malls, hospitals, or other large complexes. In respect to the industry sector, the heat pumps could utilize waste heat from various industry processes and, by that, achieve high heat pump efficiencies for the district heating utility and either save the industry the cost of cooling off their waste heat or, in some cases provide a revenue stream to the industry. For additional information on the potential of excess heat, see [2] . Figure 6. Sensitivity of the heat cost on the heat generation technologies capacities.
46
8.8%
7.2% 48.7
Total:
100
100%
-
22.0
Figure 4. Heat costs from the optimum mix of heat generation technologies, and their respective utilization.
Figure 5 visualizes the duration curve given the cost optimum heat generation mix.
Figure 5. The optimal heat supply mix given the defined CAPEX and OPEX for each heat generation technology.
By analyzing the sensitivity of the heat cost to the capacity distribution between the heat generation technologies, see Figure 6, interesting opportunities can be identified.
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Conclusions By opting for multi-source operation and optimizing the heat generation capacities based on the relation between CAPEX and OPEX, district energy utilities can achieve multi-fold benefits, such as:
References [1] Technology Data. Danish Energy Agency. https://ens.dk/en/our-services/projections-and-models/ technology-data [2] The world’s largest untapped energy source: Excess heat. Danfoss Impact, issue no. 2, Danfoss A/S, 2023. https://www.whyenergyefficiency.com/solutions/allsolu- tions/the-worlds-largest-untapped-energy-source-excess- heat [3] Pozzi, M., Thorsen, J.E., Gudmundsson, O., Marszal-Po- mianowska, A., Heiselberg, P., Jensen, S.S., Reus, A. and Koning, M. Digitalisation in District Heating and Cooling systems, Euroheat & Power, May 2023
1. Reduced thermal generation cost compared to a single energy vector strategy.
2. Long-term stable and predictable thermal generation costs, as thermal generation cost from base load plants, will primarily be based on the initial investment cost and sig nificantly less on operating the thermal plant. 3. Significant opportunities to optimize which heat genera- tion technologies to operate at any given time, for exam- ple, based on the cost of the input energy (electricity, fuel, surplus heat, renewables). 4. Optimizing parameters other than cost, such as flexibility, can enable a heat generation mix that offers additional opportunities to take advantage of local conditions and energy spot markets, e.g., balancing services to the power system. Another important conclusion from above is that in district heating, the heat cost sensitivity to the heat generation tech- nology mix is low. With the low heat cost sensitivity district heating enables a wide range of technology combinations with stable and low heat costs. This is important as new sys- tems can be built with long-term planning, e.g., starting with a cheap peak load boiler and later when the system grows to build the CAPEX-intensive base load technology. This heat cost stability further enables district energy systems to take a lead- ing role in the future integrated energy system, with enormous upside potential and limited risk. For maximizing the benefits of multi-source operation, ther- mal energy storage options, and sector coupling potentials, district heating utilities can take advantage of digitalization options for optimizing the whole heat supply system, from the end-user to the heat generation, see [3] . By embracing the benefits and opportunities the infrastruc- ture offers, district energy systems can ensure their relevance today and in the future.
For further information please contact: Oddgeir Gudmundsson, og@danfoss.com
18 HOTCOOL SPECIAL COLLECTION no.2 / 2023
THE IMPORTANCE OF KNOWLEDGE SHARING
In times of fundamental transitions, like the transition of the energy sector, it becomes imperative to facilitate effective knowledge sharing to boost the general understanding of the sector and raise public awareness.
By Jan Eric Thorsen and Oddgeir Gudmundsson, Directors, Climate Solutions, Danfoss A/S
Sector coupling – generating and sharing knowledge is key
Energy system experts actively share information in the format of white papers and research papers and participate in various communication forums and conferences. While these activi- ties are well suited to address specific audience groups, there is also a need to provide easy-to-grasp material, with as low entry barriers as possible, to communicate the benefits and importance of our sector to the politicians and the general public. In this aspect, we recognize that written documents can be considered a significant barrier in today’s fast-paced world, and a more relaxed and visualized approach may be better suited. With that perspective in mind, we started exploring the possibility of conveying our thoughts and insights on complex matters in a simple video-based format of shorter duration. As a first step in this journey, we have created a video series focusing on one of the trending topics in our sector: energy system integration via sector coupling.
The terms smart energy systems, sector coupling, or sector integration are widely applied to scope the future green energy system. How it is perceived is often linked to the area of focus for the individual, where the terms are not always anchored in the bigger perspective, risking good intentions falling short of the true potential of the considered system. This calls for networking and cooperation of experts across sectors and professions to generate helpful insights for devel- oping a shared vision and understanding of the overall ener- gy system. It is about painting the big picture with adequate details for revealing the “why” and “how.” Over the years, we have had the privilege and pleasure of be- ing part of such cooperations through numerous research pro- jects and platforms, where the future energy system has been discussed, analyzed, and demonstrated. This has provided great insights and understanding we would like to convey further. Brian Vad Mathiesen, Professor Aalborg University: “The first principle of energy ef- ficiency is pivotal for handling the energy and climate crises. Through our research in Smart Energy Systems, e.g., in Heat Roadmap Europe, we can see that ener- gy system design and the connection be- tween sectors creates additional synergies and efficiency to the
Eloi Piel, Head of Policy & European Affairs, Euroheat & Power: “We must move beyond the rhetoric that the heat sector is complex and local. There is obviously complexity with the many actors involved and the diversity of potential solutions. And it is local, as operators valorize local streams
of renewable and waste heat. This being said the contribution of sustainable and competitive district heat to the broader transformation of the energy system must be further explained to citizens and policy-makers on the basis of expert knowledge.”
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local commitment and collaboration, and this unique com- munity is the foundation for our success in creating a sustain able Sønderborg area in development and growth.” Sector coupling videocasts Based on the knowledge gained from long-term cooperation with experts in the energy sector, we have made a series of videocasts focusing on sector coupling, intending to share the insights and knowledge obtained over the years. The first videocast intends to provide a general overview of why sector coupling is important and its key elements. This overview provides the general framework for the subsequent video- casts, which focuses on successful examples of district heating systems benefitting from the principles of sector coupling.
end demand savings. Based on our research, the heating sec- tor plays a major role in the green transition, and sharing and explaining the message is key.” Due to the complexity of modern energy systems, it is bene ficial to approach the topic with different zoom levels, starting with a helicopter view to establish a shared vision and subse- quently go into details of the building blocks of the energy system. This is particularly important when it comes to the in- troduction of fluctuating renewables and increasingly diversi- fied energy sources.
Anders Dyrelund, District Energy Plan- ning & Infrastructure Ramboll: “The Danish energy planning based on economic assessment for the consumers and the society, including environmental impact costs of CO2, has paved the way for many important sector couplings. Most impor- tant is the coupling between buildings and
district energy, as cities are growing, and district energy pro- vides numerous sector couplings for cost-effective, resilient, low-carbon energy supply in cities. In particular, the couplings between district energy and electricity. If power-only genera- tion is on the margin, district heating can utilize the surplus heat, thus cutting down fuel consumption for heating to less than 40% for society. In case of hydro, wind, or solar PV is on the margin and curtailed, district energy can utilize the sur- plus electricity which else would be wasted and even more offer balancing services to the grid. It is a cost-effective and simple “virtual battery.” Finally, district heating opens for environmentally friendly utilization of waste and surplus bio fuels and further on for carbon capture and utilization.” Due to the complexities and number of actors involved in the energy system, initiatives like ProjectZero in Sønderborg can play a central role in boosting the knowledge level in their local communities and support the citizens and local companies to identify and implement energy-saving improvements, as well as energy saving behaviors.
Copenhagen district heating Copenhagen has a long and successful history of district heat- ing, with the first scheme dating back to 1903. Over the years, more and more systems were built in Copenhagen and even- tually interconnected to utilize a wide range of energy sources effectively. Today, 98% of all buildings, approximately 500,000 households, in Copenhagen are heated by the district heat- ing system. The system is an excellent example of how large district heating systems can support and benefit from sector coupling. In the Copenhagen videocast, we present the main aspects of the system and explain how the district heating sys- tem is the key to ensuring a clean, affordable, and resilient heat supply to the city.
Anne Brenderup, Senior Project Manager Project Zero: “In Sønderborg, we have launched the ProjectZero mission back in 2007, with the aim to be CO2 neutral by 2029. Today, we are more than halfway on our journey. We cannot save the world, but we can show others that the solutions to keep global warming at a tolerable level for
Lars Gullev, Senior Consultant VEKS: “Establishing the Greater Copenhagen district heating system has been possible due to a clear political objective from 20 municipalities in the 1980s, intending to utilize excess heat from fossil-based CHP plants and waste incineration. Today and in the future, the aim is to base the heat pro-
future generations are already here.
duction on sustainable biomass, heat from waste energy plants, geothermal energy, large seawater-based heat pumps, surplus heat from Carbon Capture and PtX, data centers, and industry. The Copenhagen system is green and flexible; therefore, we are prepared for the future. And the future is not far away.”
In Sønderborg, we have great companies, research, and educa- tional institutions with energy efficiency and green technology knowledge. Right from the start, ProjectZero is built on strong
20 HOTCOOL SPECIAL COLLECTION no.2 / 2023
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