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.
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HOTCOOL no.6 2023
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