HOT|COOL NO. 2/2023 "AI & Digitalization"

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!

NO. 2 / 2023



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HEAT SOURCES By Anders N. Andersen

TAKING THE INITIATIVE IN HEAT TRANSITION By Theo Venema, and Marco Attema 14 18 THE VIRTUAL BATTERY By Anders Dyrelund, John Flørning and Søren Møller Thomsen 24 SCIENTIST CORNER



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,

Coordinating Editor: Linda Bertelsen, DBDH

ISSN 0904 9681

FIRST THINGS FIRST Digitalization, including the use of AI solutions, is an undeniable step in utilizing the full potential of the increasingly complex district heating sector and ensuring an efficient and resilient system — now more critical than ever. But it doesn’t start with technology.

By Steen Schelle Jensen, Head of Business Development, Kamstrup

half of them provide hourly time series. Imagine what we can do when all these data points are turned into actionable in- sights! Many DH operators have already harvested significant results from the transparency smart meter data provides , including lower temperatures, more capacity, and reduced losses. This is great, and I’m happy to see that digitalization is now a top-ic in almost every DH event, just like national associations are expressing digital ambitions and sharing customer success stories. At the same time, international working groups are un-derway in Euroheat & Power, IEA DHC, etc. Keep up the good work! However, back to my point about digitalization often being the go-to answer — the fact remains that developing not just dig- ital solutions but the RIGHT digital solutions for DH operators starts with an in-depth understanding of the industry’s com- plexity, challenges, and processes that they must address. So, much like ChatGPT can provide an answer that isn’t wrong but lacks depth and tangibility, we, as suppliers, cannot sit in our ivory towers trying to guess what DH operators need and how to support them. The best digital solutions are those based on joint efforts of leading DH operators and innovative solution providers com- bining their hands-on experience with our deep technological expertise. We need to explore new opportunities together to make sure we are attacking and solving the right challenges for the benefit of our entire industry. Over the past 2-3 years, I’ve been involved in multiple dedicat- ed co-creation sessions doing exactly that: Having open dis- cussions, sharing strengths and weaknesses, data crunching, and prototyping together before ending a long workday with a pizza and doing it again the next day. A truly unique experi- ence that created the crucial openness and trust between all involved — and I look forward to many more. So, consider this my open invitation to combine our power of imagination — across DH operators and suppliers — to create the best possible solutions together. Because that is step one of driving the necessary digital transformation of district heating.

”Digitalization is an essential step in the evolution of district heating systems. It not only improves the reliability of the sys- tems but also makes them more sustainable and customer friendly”. This is the answer I got from ChatGPT when I recent- ly asked the AI service if digitalization was relevant in district heating. And it’s actually not a bad one. I’ll come back to that. Whenever things get complex, digitalization is considered the go-to answer. Few industries have seen an increase in com- plexity like the one in district heating — only intensified by the challenges the world has faced over the last few years, includ- ing the war in Ukraine and its impact on global energy supply. The necessary transition to renewables and waste heat, also known as 4th generation DH, represents a massive change. Multiple decentralized heat sources, a high degree of electri- fication, sector coupling, the need for lower temperatures, dif- ferent kinds of storage, active buildings, etc., are becoming the new reality. Efficiently balancing the fluctuating heat production and de- mand in an increasing number of connected buildings — with- out jeopardizing reliability — requires a fully connected value chain from production to end users. This truly calls for digital solutions for operational aspects as well as asset management, new attractive service offerings to end users, etc. Ultimately, digitalization has the potential to revolutionize the way we plan, maintain, and operate our district heating systems. And it’s already ongoing. Not least due to the mandatory roll- out of smart meters required in the Energy Efficiency Directive. However, a recent survey from the Euroheat & Power DHC+ Platform concludes that the demand side of the district heat- ing value chain (buildings/end users) is underserved, as many existing solutions mainly relate to production, forecasting, and energy trade. The smart meter roll-out creates a unique oppor- tunity to take a fully data-driven end-to-end approach to the DH system. The other day, I saw the latest numbers for Kamstrup’s hosting center and the smart metering solutions we manage on our customers’ behalf. We now collect data from more than 1.3 million heat meters across 400+ DH operators – and almost


By Jan Eric Thorsen, Director, Global Application Expert, Danfoss

Emanuele Zilio, Solution Engineer, Danfoss

Tomaz Benedik, Solution Manager, Danfoss

Oddgeir Gudmundsson, Director, Projects, Danfoss

Recent history has shown the current energy system is vulnerable to disruptions in the fuel supply chains, leading to high and unpredicta- ble natural gas and electricity prices. The path towards a more resilient energy system is the green energy transition, which can only be ex- pected to accelerate from now on. The accelerated green transition is a new paradigm that the district energy sector needs to adapt to with an increasingly forward-looking response.

installations, the utilization of the building thermal mass and reliable demand forecasting of each building. With an end-to- end focus, the full potential for leveraging the flexibility of the district heating infrastructure can be unlocked. This will enable the efficient use of a wide variety of heat sources, such as data centers, supermarkets, Power-to-X, Carbon Capture, industry, wastewater treatment, and renewable sources, such as bio- mass, wind, solar thermal, or geothermal energy. This union of flexibility, efficiency, and adoption of intelligent digital tools significantly increases the resilience of the district heating infrastructure. The impact reaches far beyond the dis- trict heating systems, making the whole energy system smart- er, more efficient, and more reliable. For this reason, we are continuously digitalizing our hardware portfolio to create smart components upgraded with ad- vanced artificial intelligence (AI) based software solutions that maximize the value of information for helping utilities and building owners to make better and fact-based decisions.

Many district heating systems have taken important steps in the last decades, such as consolidating multiple local networks into one large system and operating multiple and varied heat sources instead of the traditional single-source approach. They are also transitioning from high-temperature to low-tempera- ture operation. Those steps enable efficient operation of, e.g., heat pumps for taking advantage of locally available waste energy and low-temperature renewable thermal sources and moving away from fossil fuels. While the systems are inevitably becoming vastly more complex, they are also opening an enor- mous opportunity for holistically optimizing the whole system from one end to the other. The question is how to deal with the increased complexity this transformation brings. In Danfoss, we see the solution in the extensive use of digitaization and AI throughout the entire dis- trict energy supply chain - in planning of new systems and in the extension or modernization and maintenance of existing systems. We also see the solution in the strategic location of new heat plants and in optimizing the heat generation and network operation in multi-source systems based on reliable demand forecasts. Last, but not least, we see the solution in the continuous operation parameter optimization of building

Danfoss solutions The outcome of our digitalization journey is a portfolio of soft-

ware and services under the umbrella of Leanheat for the con- trol and optimization of district energy systems, from the pro- ducer to the consumer. The Leanheat software suite includes four different solutions. • Leanheat Production: An advanced software for load fore- casting, planning, and optimizing district energy produc- tion and distribution. The cornerstone of Leanheat Produc- tion is a six-day AI-based demand forecast. The software calculates the cost-optimal production mix from available heat sources based on the estimates and energy spot prices. • Leanheat Network: A thermo-hydraulic modeling tool de- veloped specifically to support district energy system plan- ning, design, and operation. With the help of the Leanheat Network digital twin in the planning and design process, the cost of establishing new and modifying existing district energy systems can be minimized. Once in operation, the digital twin will support the district heating utilities by opti- mizing the operation, leading to lower operational expenses. • Leanheat Monitor: A dedicated software for efficient remote monitoring, optimizing, and managing substations and heating installations. Leanheat Monitor further simplifies collecting and visualizing data that the district heating util- ity can use to optimize its operation. By using the software, district heating utilities can remotely detect faults or wrong settings and perform tasks that before required on-site in- tervention – thereby resulting in time and cost savings. • Leanheat Building: A software solution for optimizing the operation of heating installations of buildings with a cen- tralized heating system. It utilizes the latest AI and machine learning developments to generate accurate thermody-

namic models of the buildings it controls. It combines in- door climate monitoring and weather forecast to achieve energy savings and decrease the volatility of indoor temper- ature associated with traditional heating control strategies, improving living conditions for occupants. Furthermore, the control algorithm can optimize consumption and shift load while maintaining indoor comfort. Case example: Flexumers project in Copenhagen with HOFOR and Copenhagen City Properties & Procurement. An example of a Danfoss software application is to be found in Copenhagen. Here HOFOR (district heating utility), Copen- hagen City Properties & Procurement (Municipality’s building department), and Danfoss are currently testing the potential of minimizing peak heating demand to increase CO2 neutral base-load heat production usage in Copenhagen by utilizing Leanheat Building AI-based heating control. The first part of the demonstration took place during the heat- ing season 2021/2022 and included 17 municipal buildings (mainly daycare centers). The buildings were already equipped with Danfoss communicative heating controllers, and they were connected to the Leanheat AI control via the Danfoss ECL portal. The main goal of the demonstration was to reduce the peak in heat demand that occurs in the mornings (6-10 am) by mak- ing the heat consumption more flexible. Thus, the project has been named district heating Flexumers since the buildings that previously were only seen as energy consumers have be- come an active part of the district heating system. Each build- ing acts as a virtual heat plant by increasing its consumption when heat production is cheap and ecological and decreasing during times of high demand by providing flexibility on the consumption side.

Figure 1. Average daily heating profile with and without Leanheat control

Figure 2. Hourly peak power in buildings, with and without Leanheat control

HOFOR sees district heating Flexumers as an important measure to minimize fossil-based peak load production and incentivize renewable-based heat-producing units. The same principle of peak power optimization can be utilized in de- mand-response solutions for district heating concerning charging and discharging the thermal energy in the building mass. Leanheat can offer flexibility from an aggregated build- ing stock, making it possible for the district heating company to produce heat and use it in the buildings when it is most beneficial economically or ecologically. The DH company will thus reduce the use of fossil-based heat sources and prior- itize renewable-based ones. For example, with the advanced knowledge of the building thermal mass, Leanheat Building can enable price signals to adjust the building heat supply to take advantage of low-cost periods, for example, when there is a large share of fluctuating renewable energy in the system. Case example: optimization of domestic hot water storage tank control. Having data available from communicative components or controllers gives a high degree of freedom for testing and val- idating new functionalities. Besides the heating supply to the building, the domestic hot water (DHW) system is also relevant for improving performance based on digitalization and AI. As part of the HEAT 4.0 project (Digitally supported Smart Dis- trict Heating, IFD ref. no.: 8090-00046B), the operation of DHW storage tanks was analyzed to develop a control method for reducing the district heating return temperature and the peak power. One of the test site installations is shown in figure 3.

Leanheat’s AI learns how the building’s thermal mass reacts to ambient conditions and evaluates the flexibility potential based on the forecasted weather and set comfort require- ments. The district heating utility can then use the estimat- ed flexibility to minimize the load during peak-load periods. For example, during the morning peak, the control allows the discharging of the heat previously stored in the buildings by reducing the supply temperature for space heating by up to 30%. After this, it is recharged as soon as possible before the following day. The variation of supply temperature during this period still ensures that the thermal comfort in the building stays within the recommended limits. As presented in Figure 1, the initial results of the demonstra- tions for the cluster of 17 buildings show that the average morning peak decreased by 14%, compared with the average peak consumption before the implementation of the smart control. The connected buildings also reduced their heat- ing energy consumption, predictively factoring in upcoming changes in weather, such as solar radiation and wind. Based on the demonstration results, the overall economic and envi- ronmental benefits of Flexumers in Copenhagen will be quan- tified by mid-2023. The peak demand data measured at the buildings in Figure 2 show that the maximum peak power has decreased from 27.5 kW/building to 21.5 kW/building (-22%). The calculation compares the highest peak during load shifting to the high- est measured peak in the previous heating season at the same outdoor conditions.

Figure 3. DHW storage tank with an internal heating coil (background) and heating mixing shunt (foreground)

a pre-set value is exceeded. While the functionality sounds straightforward, it has certain complexities in determining an appropriate setting. A too high setpoint results in no or limit- ed engagement of the function, and a too low setpoint com- promises the DHW temperature. Further, the optimal setpoint varies over the year due to seasonal variations in the cold-water temperature and the district heating supply temperature. The ratio of the DHW consumption and DHW circulation will also influence the optimal settings. Examples of seasonal variations are given in the figures below: As Figure 4 shows, the cold water varies by 12°C during the year, and the daily DHW demand varies by ~+/-35% of the annual average DHW demand. Based on these variations, it’s under- standable that the setting is not straightforward. An adaptive method was developed to address this challenge. The adaptive return temperature principle continuously adjusts the control- ler settings and adapts to the actual boundary conditions. An example where the adaptive control is compared to the refer- ence control can be seen in Figure 5. In the shown example, a reduction of the district heating re- turn temperature of 3.7°C and 4.6°C was realized, compared to pre- and post-reference periods, respectively. The temperature spikes are related to the disinfection of the DHW system, which has a similar impact on the reference and adaptive control pe- riods. Because of the control principle, the DHW temperature is slightly reduced in short periods during the adaptive control period, engaging the limiter function in an optimal way. In addition to the adaptive district heating return temperature limiting function, a power limiting function was developed. This control principle requires an energy meter to measure the power supplied to the DHW tank, which is becoming more ap- plied due to general energy awareness and heat cost alloca- tion. An example is given in Figure 6, where a reduced district

Often DHW tank applications suffer from high district heat- ing return temperatures and high-power peaks. This typically relates to poor controller settings, wrong control valve sizing, poor heat transfer via the tank coil, poor DHW stratification, and a high share of DHW circulation loss compared to DHW tapping. To improve the performance of DHW tank applica- tions, a new functionality was developed for the Danfoss ECL controllers. The new functionality is an intelligent district heat- ing return temperature limiting function. It works so that when a pre-set return temperature is exceeded, the charging flow to the tank coil is reduced, and thus the district heating return temperature will be kept below the pre-set value.

In the same way, there is the option for a power limiting function, limiting the district heating charging power when

Figure 4. Seasonal variation of cold-water temperature (left) and energy used for preparing DHW (right)

heating return temperature of 6.2°C and 6.7°C was realized. Further, the power (magenta line) generally shows fewer and lower peaks during the adaptive control periods. Based on tests in six buildings, the realized flow-weighted re- turn temperature reduction is, on average, around 2°C for the adaptive return temperature limiter and around 4°C for the adaptive power limiter annually. This is a significant decrease in the district heating return temperature for the service of DHW. Regarding peak power reduction, a 25-30% reduction is real- ized based on 30 min average values. Conclusion The energy transition is high on the agenda, and it’s great to see how district energy is a key enabler and a fundamental part of the future smart and sector-coupled energy system. Digitalization and AI-based tools are a precondition for district energy systems’ efficient, cost-optimal, and resilient operation.

utilization of green resources, avoidance of fossil-based peak load boilers, and better utilization of the existing distribution infrastructure. The example of optimizing the DHW tank charging resulted in a reduced return temperature of 2-4°C and 25-30% peak pow- er reduction, leading to distribution heat loss savings, better utilization of the energy source and is often a precondition for reducing the supply temperature or increase of the distribu- tion capacity. The presented cases are two of many underlining that we are continuously developing new and improving existing prod- ucts and offerings at Danfoss. We believe digitalization and AI- based end-to-end control solutions are the keys to unlocking the grid’s full potential and realizing District Energy 4.0.

For further information please contact: Jan Eric Thorsen,

The Copenhagen Flexumers case showed an average capaci- ty reduction of 14% during peak load hours, leading to better

Figure 5. Comparing district heating return-temperature during adaptive control and reference control periods

Figure 6 Comparing district heating return temperature and power peaks during adaptive and reference control periods


This article gives a description of the Danish district heating company, Hvide Sande Dis- trict Heating, which has become independent of fossil fuels by using wind and solar energy. This has resulted in lower consumer heating prices in a time when other fossil fuelled district heating plants are raising their heating prices due to higher fossil fuel pric- es. The article describes the flexibility that daily optimization tools must have to be used to handle the multiple heat sources and the participation in the multiple electricity mar- kets, and the need of digital twins for the medium- and long-term planning of the plant.

By Anders N. Andersen, PhD, Ext. Ass. Professor at Aalborg University, R&D projects responsible at EMD International

However, to take advantage of this flexibility, a vast digitaliza- tion of the plant together with advanced bidding methods have been required. Figure 1 shows a picture of the Hvide Sande fishing town. The solar collector is shown in front, the three wind turbines are placed close to the North Sea and the two red arrows points at the two thermal storages, the one placed at the solar collector site and the other placed at the site with the CHPs, heat pump and electric boiler. The production units are shown in details in this YouTube film Planning of day-ahead bids in Hvide Sande Even in the day-ahead market, the daily market-based produc- tions are a challenge to plan. The manager has before 12 o´-

Hvide Sande, at the West coast of Jutland in Denmark, is a small fishing town. The district heating plant provides heat to 1,637 consumers. From being a natural gas fired Combined Heat and Power (CHP) plant, it has in recent years become more resilient by investing in a solar collector, wind turbines, a heat pump, an electrical boiler as well as more thermal stor- age capacity. Today, it is independent of natural gas. Fact-box 1 shows the present production units and storages at Hvide Sande District Heating. The two thermal storages of 2,000 m 3 and 1,200 m 3 , respective- ly, are able to store around 200 MWh-heat, which allows a very flexible market-based production on the different production units. The heat delivered to consumers can thus be produced many hours or days before delivery.

Figure 1: The small fishing town Hvide Sande at the West coast of Jutland in Denmark. The red arrows show the location of the two thermals storages.

Factbox 1:

exported, which shall be offered to the variable operation and maintenance costs of the wind turbines.

clock the day before to decide for each of the hours tomorrow how much electricity he wants to sell and how much electrici- ty he wants to buy in each hour, and at which prices. Because of the large thermal storages, the manager must look more days ahead, when deciding the bids for tomorrow as well as considering the heat amount in the thermal storage right now. His decisions are based on forecasts more days ahead on wind velocity, solar radiation, ambient temperatures, and fore- casts more days ahead for Day-ahead prices. Furthermore, what complicates the Day-ahead bidding in Hvide Sande, is that the wind turbines are behind own me- ter (is private wire operated). This means that the electricity delivered by the wind turbines and used by the heat pump avoids grid and tax payment. Therefore, the sale price bids for the wind turbine production shall typically be split into two parts. The amount of the wind turbine production matching the consumption of the heat pump shall be offered at a lower price compared to the wind turbine production that will be Present production units and storages at Hvide Sande District Heating: • 2 natural gas fired gas engine Combined Heat and Power units each 3.7 MW-elec and 4.9 MW-heat • 3 wind turbines each 3 MW-elec • Heat pump of 5 MW-heat • Electrical boiler of 10 MW-heat • Solar collector of 9,500 m2 • Hot water storages at plant of 2,000 m3 • Hot water storages at solar collector site of 1,200 m3 • Gas peak boilers

Hvide Sande participates in three out of four balancing markets Factbox 2 gives an overview of the balancing markets in West Denmark. Hvide Sande District Heating participates regularly in three out of these four balancing markets. It participates in the FCR, mFRR and mFRR EAM markets. Participating in FCR To participate in the FCR market, bids must be made symmet- ric in 4-hour blocks and shall be able to be activated in 30 sec- onds. The electrical boiler can easily fulfil an activation in 30 seconds. Note that to make a symmetric bid on the electrical boiler, the offered capacity has at least to be traded in Day- ahead market in the same 4-hour block. As an example, if a 2 MW symmetric bid in FCR is given for the electrical boiler from 00:00 to 04:00 tomorrow, at least 2 MW must be purchased in the Day-ahead market in the same hours, which will allow both positive and negative frequency regulation of 2 MW to be made on the electrical boiler. Also, FCR-bids, are regularly being made on the CHPs. A gas engine CHP cannot regulate in 30 seconds if it is not running. So, what Hvide Sande District Heating has done is only to sell 80% of the CHP capacity in a certain 4-hour block in the Day- ahead market. Thus, being able to offer the remaining 20% of the capacity in the FCR market. Participating in mFRR The mFRR market is an hourly reserve market. Winning a mFRR capacity bid in a certain hour tomorrow, gives an obligation for the plant to make an offer of this capacity into the mFRR EAM market. However, the plant decides itself at which prices the upward regulation is offered.

When it is windy or sunny it will often be cheaper to produce the heat on the heat pump, the electrical boiler, or the solar

Factbox 2:

The balancing markets in West Denmark FCR, Frequency Containment Reserves The FCR market is a rather small market, and as the name of the market indicate, this market shall not bring the frequency back to 50 Hz, but only contain a frequency problem, e.g., stop a reduction in frequency. A production unit shall be able to be activated in maxi- mum 30 seconds, and the activation shall be able to be maintained 20 minutes. The bids are split into 4-hour blocks and is symmetric, that is the won FCR shall be able to deliver both positive and negative frequency regulation. Gate closure is 8 a.m. the day before, and there is Marginal pricing. That is all won bids gets the same price. There is no payment for energy activation.

FRR, automatic Frequency Restoration Reserves Month ahead market. The reaction time is maximum 15 minutes. The bids are symmetric. The prices are settled as Pay-as-bid. mFRR, manual Frequency Restoration Reserves The reaction time is maximum 15 minutes. Asymmetric bids are allowed, either for upwards regula- tion or for downward regulation. Hourly bids and there are Marginal pricing. Gate closure 9.30 the day before. mFRR EAM, Energy Activation Market in mFRR Gate closure is one hour before the operating hour. For won mFRR bids in a certain hour it is obligatory to make an offer of this capacity into the mFRR EAM in that hour. Marginal pricing. The mFRR EAM market is often called the regulating power market.

Figure 2: The red arrow points at a won activation of the two CHPs in mFRR EAM. The green prices show the prices in the Day-ahead market. The blue prices show the upward regulation prices and the yellow prices show the downward regulation prices in mFRR EAM. The lower graph shows the content in the two thermal storages. As is seen, the heat produced in the won activation of the two CHPs is partly stored in the thermal storages.

collector, rather than producing the heat on the CHPs. In such an hour tomorrow, it is obvious to offer the CHPs in the mFRR market, and when coming to the hour and if there is not suffi- cient content in the thermal storages the obligatory activation bid can be made sky high to avoid winning the activation. The heat pump is operated in many hours. In these hours it is again possible to offer mFRR, because closing a heat pump reduces the electricity consumption and thus offers an upward regulation. Participating in mFRR EAM As mentioned, after winning an mFRR bid in a certain hour it is obligatory for the plant to make an offer of this capacity into the mFRR EAM. However, even if it has not won an mFRR bid in a certain hour, it may still offer activation in mFRR EAM. The simple starting point for making bids in mFRR EAM is to make it as the opposite bid as won in Day-ahead. As an example, if 1 MWh purchase bid has been won on the heat pump in Day-ahead in a certain hour, the opposite bid of 1 MW can be offered as upward regulation in mFRR EAM. Note that winning an upward regulation on the heat pump has the consequence that less heat is produced, which may have the consequence that the thermal storages will be emptied, and the gas boilers must be started. But that is in fact the way bidding prices are calculated – as the economic consequences of winning a bid. At we show online the operation of Hvide Sande District Heating. Figure 2 shows an example of a won activation of the two CHPs in mFRR EAM.

used for the daily planning of bidding amounts and bidding prices in the different electricity markets. However, it is also im- portant that the manager maintains a digital twin of the plant. The daily optimization will often give inspiration to new invest- ments to be made. It is also about finding the right balance between investments in production units, storages, and grid infrastructures and regularly the manager has to make budg- ets for the coming periods. That is what the digital twin shall be used for. In Figure 3 is shown the digital twin that Hvide Sande District Heating is using. An overview of different digital twin tools is shown in this article

Figure 3: Hvide Sande District Heating is using the energyPRO energy system analysis tool for making the digital twin of the grid and plant, that it uses for budgetting and investment analysis.

Digital twin of Hvide Sande District Heating This article illustrates that daily optimization tools must be

For further information please contact: Anders N. Andersen:

TAKING THE INITIATIVE IN HEAT TRANSITION The Dutch municipality that’s making heat for the public good.

By Theo Venema, WarmteStad and Marco Attema, municipality of Groningen

In 2014 in the north of the Netherlands, the Groningen municipality joined forces with the Groningen Water Company to give the city a publicly owned district heat grid company with the public’s interests at heart. Striving to make the city CO2 neutral by 2035, the company draws on different sources and applies various techniques to ensure affordable security of supply for its customers. It’s a partnership that sets an example for other municipalities and energy companies in the Netherlands – and maybe further afield.

The beginning “Some 20 years ago,” explains Theo Venema, Senior Business Developer at WarmteStad, “the municipality of Groningen set a goal to be carbon neutral by 2035. Putting the city onto a sustainable heat grid seemed an obvious way; the question was how best to do it. Groningen’s decision to develop a heat grid as a municipality, at this scale, was ahead of its time for the Netherlands, so we needed to look abroad, specifically to Denmark, for inspiration and best practices. Denmark’s system, however, is well-established and has developed over decades. In contrast, Groningen lacked the time, the infrastructure, and the supportive legislation, and had to deal with a completely different sociological background.” In the 1960s, the Netherlands switched from coal heating to gas-fired boilers. It was cheap, relatively clean, and provided a reliable and affordable heat source. Even as consumers have become more aware of climate change and become increas- ingly keen to make a difference, switching away from gas has been difficult. Affordability is one obstacle; habit, the sociolog- ical factor, is another. So how can WarmteStad’s experience

help other municipalities, government organizations, energy companies, and housing associations start to make the shift even more quickly than they did in Groningen? Theo Venema and Marco Attema, Senior Strategic Advisor for Energy Transi- tion at the municipality of Groningen, have four tips. Start with small steps. The municipality of Groningen was one of the first to develop a heat transition plan, aiming to connect 50 to 75% of its house- holds to the heat grid before 2035. This would mean 50,000 to 75,000 homes would be on the grid. The goals were aimed high, and the time frame was short, yet there was a clear real- ization that they could only be attained by taking small steps and leading the initiative themselves. In 2014, the municipality joined forces with the Groningen Wa- ter Company to create WarmteStad. As a public company, it aims to produce, supply, and exploit sustainable heat at man- ageable costs for socially responsible returns. “The water com- pany could share its experience regarding grid infrastructure and 24-hour services,” explains Attema, “while the municipality

Attema: “To provide a good, stable network, you must have multiple sources. Ideally, you should be able to choose which source of heat you use to best suit your consumers at that mo- ment, whether it’s wind, thermal, solar, or biofuel. If you’re flex- ible, you can anticipate change.” Involve the stakeholders. The choice of energy source isn’t necessarily the one with the best technology. For the Groningen heat grid, the stakehold- ers were asked for their opinion, including the general public, housing associations, the city’s university, consulting firms, and businesses. The high public support for using the waste heat from the data centers led to that choice. The next stage for the heat grid is to get private households on board, and again, the involvement of the stakeholders is the key. One of the ways WarmteStad will achieve this is by work- ing with an energy cooperative, in this case, Grunneger Power. The cooperative is the contact with the households. They are going door to door and promoting the concept of the heat grid, and inviting homeowners to become members. Attema: “Being a member is important because it means the energy cooperative represents you as a homeowner, and WarmteStad is simply the supplier. This is an innovative approach as the co- operative benefits from not having to invest in energy supply systems and sources yet does have an influence on the tariffs, the communication, and, to an extent, even the technology. And it means the grid continues to be a socially responsible venture rather than commercial.” Anticipate change. Legislation is changing, but there are limitations to how far it can go. The Netherlands aims to be gas-free by 2050, but the government can’t make it a legal requirement for homes. What it can do is put in legislation that allows municipalities to dismantle gas pipe networks. “We expect this to come into effect in the next five years,” says Venema. “It will mean house- holds will be quickly forced to think about where their heat will come from. They’ll still have a choice of sources because

offered stability and had the trust of the city’s first movers. Both parties had extensive expertise in the field, knew each other well, and were committed to heat transition.” WarmteStad started with small projects and new urban devel- opments (ground-coupled heat exchangers), which meant the sociological hurdle didn’t play a role as there was no history of gas-fired systems. They proved to the housing associations that WarmteStad was committed, eager to learn, and could deliver what they promised to do. And with each project, the municipality and the water company got to know each other better and drew on each other’s strengths. When competence, trust, and capacity have been created, it is time to move to- wards larger and more complex steps, like connecting private- ly owned single-family houses and making good use of the experiences and learnings of the less complicated connections of apartment buildings. By the time the Dutch national gov- ernment shifted the task of planning and executing the heat transition from natural gas to renewable ways of heating to the municipalities in 2019, Groningen was already well on its way. Ensure multiple sources. In 2016, they got the go-ahead to build the district heat grid. Venema: “We knew we needed to avoid a monoculture like gas had grown to be, so we set about choosing the right alternative energy sources. Biomass was suitable, but public support had dropped. Geothermal drilling was considered by the mining authority to be too risky as Groningen is sensitive to seismic activity caused by the depletion of what was once Europe’s largest natural gas field. The obvious alternative with strong public support was a heat grid using the residual heat from data centers located next to the heating plant. Towards the end of 2023, we’ll add a large solar thermal plant as an addi- tional source with a seasonal storage system, so we’ll then have three renewable energy sources connected to our heat grid.”

“We have three renewable energy sources connected to our heat grid.”

they can always opt to install their own heat pump, but joining a heat grid like WarmteStad’s will be far more affordable – and is aesthetically more pleasing. And it gives them access to the power company’s multiple sources, with no lock-in, so they get constant heat whatever the season.” “We’re also working very closely with the Dutch Ministry of Economic Affairs, the Netherlands Enterprise Agency (RVO), the Dutch Association of Municipalities (VGN, an organization in which all the Dutch municipalities work together), and the Dutch public sector bank,” explains Attema. “We’re one of the few municipalities working this closely with the national gov- ernment on finding financing solutions. One of the innovations we’re developing is a guarantee fund for heat district networks which will enable public heating companies to get financing at a lower interest rate, with lower initial reserves, and with much of the paperwork already completed. We're very pleased with this collaboration. It is very important to us and to fu- ture developments in the rest of the Netherlands. Once this arrangement is in place, district heat grids can be developed faster in other municipalities.” Attema: “Groningen is setting the example and trying to make conditions as healthy as possi- ble for us and other municipalities, with the proper legislation and access to finance. We can’t progress if we take away the gas supply and still not be able to invest in heat grids. It all has to come together. If we take Denmark’s example, we see heat grids are successful because they are publicly supported. There are good financial conditions, so that the heating company can borrow the necessary funds.”

WarmteStad WarmteStad is a public corporation providing sustain- able heat to the city of Groningen. It aims to aid the shift from fossil fuels to a sustainable heat supply in the city by producing, supplying and exploiting sustainable heat grids at manageable costs for socially responsible returns. Its ambition is to provide the equivalent of at least 30,000 households through its district heating grid by 2035. Theo Venema is Senior Business Developer at Warmte­ Stad. Marco Attema is Senior Strategic Advisor and Pro- ject Manager for Energy Transition at Groningen Munic- ipality. If legislation changes in the way WarmteStad hopes and ex- pects it to, then progress can be even faster. The company has proved to the municipality, its partners, and the Dutch national government that the system works, and so now hopes to be able to at least double – or even quadruple – efforts. The aim is then to connect 4,000 to 5,000 houses annually to the heat grid. But this is all on condition that policymakers are on board. Without policy and legislation changes, Groningen’s heat grid and other cities and provinces cannot be as successful as they need to be. Attema: “This is what being a frontrunner involves. Setting the example, identifying the hurdles, and looking back to those behind you to see what they need to be able to catch up. You carry this responsibility if you are to pave the way.”

The future for WarmteStad

“You carry a responsibility to others if you want to pave the way.”

For further information please contact: Theo Venema,

WarmteStad expects developments to accelerate even faster in the coming years. Real progress was made after 2017, and some 1,000 households a year are connected to the heat grid.

A public secret The fluctuating wind and solar PV shall be the main source for electricity in Denmark, but the ordinary electricity demand does not match these fluctuations. This creates problems for the grid company and wild price fluctuations for all consumers. But something happened. Let’s have a look at the electricity supply from the power grid to a typical Danish town. The annual average load is 20 MWe, and the peak load (the cooking peak 6 p.m., December 24) is close to 100 MWe, which is the maximal capacity of the power cable to the city. Re- cently the annual average demand has in- creased to 40 MWe without changing the maximal load. What has happened?

A closer look at the fluctuations of the demand shows 4 inter- esting features:

the maximal demand increases to 100 MWe when the elec- tricity price is close to zero, which it often is in a windy peri- od during night hours the demand falls back to the original 20e MW or even to zero MWe when the price is high, which it often is in weeks with no wind.

the town exports up to 20 MWe capacity to the grid in case of very large prices

the town offers competitive up and down regulation ser- vices to the grid, typically from 40e MW up regulation to 80 MWe down regulation.


By Anders Dyrelund, Senior Market Manager, Ramboll

John Flørning, Lead Consultant, Ramboll

Søren Møller Thomsen, Energy Engineer, Ramboll

The million-dollar question is not whether we can build enough renewables but how to use the renewable energy pro- duced cost-effectively. This article will discuss how the fluctu- ating renewable energy from wind and solar can be used for heating and cooling buildings. It will be very expensive or even impossible if we only look at the electricity system and individual buildings. The answer will likely be that we need huge electric battery capacities. But it will be very expensive and inefficient, seen from a societal per- spective. Looking at the whole energy system, we can do it cheaper and more efficiently due to the economy of scale and sector cou- plings. The answer is that modern hot water district heating systems are crucial to utilizing fluctuating renewable energy in a smart, cost-effective way. In fact, the district heating system acts as if it was a battery – for almost a decade, we have called it the virtual battery. Some have argued that the “battery” is not 100% CO2 neutral, as the renewable electricity stored in the “battery” does not return to the grid. True, but not important, as the impact on the power system is the same. Soon, we see new sector couplings in the pipeline, namely Carbon Capture and Utilization, CCU, and electrolysis, which close the circle. But how do we get started? We can describe the development of the virtual battery in steps in line with the development from the 1st to the 4th gen- eration of district heating and district cooling.

What is the secret of the town? Do they have a magnificent electric battery? No, they have a typical Danish district heat- ing system, which has supplemented the existing 40th MW gas fueled CHP plant and the thermal storage tank with an 80 MWth electric boiler and a 40 MWth electric heat pump. As we can see, this smart integrated system acts like a battery – there- fore we have called it a virtual battery. Some have argued that it is not 100% CO2 neutral. True, but it is not of importance for the cost effective decarbonization. Moreover, within 10 years we can foresee that the gas from the Danish gas grid will be 100 % biomethane and that electro fuels can substitute the fossil fuels in boilers offering vital resilient back-up capacity for wind, solar and gas in the European gas grid. How do we decarbonize the energy sector? The simple answer is: “we establish solar PV and wind tur- bines” and “buy green electricity.” But the ordinary electricity consumption cannot be adjusted to the fluctuations of wind and solar production. In periods with low wind and solar, the electricity consumption will be covered by hydropower or thermal power stations. Furthermore, the electricity market operates by the marginal pricing principle, meaning that it is always the most expensive marginal unit setting the electric- ity price. In case of high prices, the most expensive plant will likely be an inefficient natural gas-fueled condensing power plant. And in the case of zero or even negative prices, it is likely that wind or solar energy is curtailed, as it functions as the marginal unit.

Figure 1 Electricity prices fluctuate mainly due to wind and solar PV – and it’s getting worse in the years to come.

Electricity price DK1 week 40 2022








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Individual buildings In case all buildings at a campus or a city are supplied with building-level heat pumps for base load and small electric boilers for peak load, the electricity consumption can only be interrupted for a few hours in case of very high electricity pric- es. Some building owners may claim that they hour by hour have bought renewable electricity and left the black electricity to the others, but that does not change the production. It is greenwashing. The flexibility provided to the electricity system to help inte- grate renewable energy is very limited if we install individu- al electric heating solutions per building. The recently seen combination of the individual heat pump solution with shared heat source “Ambient loop” (or mistakenly referred to as 5th generation district heating) has the same disadvantages in terms of flexibility as an individual heat pump. 1st generation district heating In case all buildings are connected to a 1st generation DH steam system supplied by a Combined Heat & Power (CHP) plant and steam boilers, this system can be backup in case of high electricity prices and shifted to boilers in case of low elec- tricity prices. It is, however, expensive and inefficient and has no thermal storage capacity.

The 1st generation DH systems do not add many benefits to the integration of renewable energy, seen from the electricity system. 2nd generation district heating If the steam system is converted to a 2nd generation DH hot water district heating system supplied by a natural gas boiler and a natural gas-fueled CHP in combination with a thermal storage tank, it is significantly more efficient. The thermal stor- age tank will unbundle the heat and power production. The CHP plant will replace inefficient, expensive condensing pow- er-only plants in the electricity market in case of high electric- ity prices. The CHP plant will bypass the low-pressure turbines or stop if the electricity prices are low, and the wind is on the margin. Thereby the system efficiency of heat generated by the CHP plant will be 200-300% once it is in operation. The ability to stop electricity production (in case of low electric- ity prices) and operate at full capacity (as soon as the electricity price increase) has the same impact on the electricity system as if an electric boiler or a battery was installed. Hence, from the development of 2nd generation DH, we begin to see the effect of the virtual battery.

3rd generation district heating Suppose the district heating company installs a large electric

Figure 2 CHP plant and electric boiler, Vestforbrænding, Greater Copenhagen How to fit a 40 MW electric boiler into an existing 33 MW gas-fuelled CC CHP plant The 33 MW CHP plant and the 40 MW electric boiler owned by Vestforbrænding is a perfect match, generating 33 MW of heat at high prices and 40 MW of heat at low prices to be stored in the 8,000 m3 pressure-less heat storage tank. Besides, the plant can regulate up and down and thereby stabilize the power grid.

boiler, e.g., with a capacity equal to the electric capacity of the CHP plant or the maximal capacity of the cable to the plant. In that case, the system has been upgraded to a 3rd generation DH system. This opens up the following benefits: The electric boiler utilizes “surplus” renewable electricity and reduces curtailment of wind and solar, e.g., loading the thermal storage tank with cheap electricity, which other- wise would be curtailed.

The electric boiler can be interrupted at any time in case of capacity problems in the electric grid.

The electric boiler can deliver down-regulation services to the ancillary service markets fast and efficiently in combina- tion with the thermal storage tank. The electric boiler can, combined with the storage, the CHP plant, and backup boilers, deliver more cost-effective, low carbon peak and spare capacity to the district heating system. This system will positively impact the power grid and its ability to integrate renewable electricity. It can operate even in case the buildings connected to the district heating system need high temperatures for heating. However, some heat may still be generated by gas/oil boilers if neither the electric boiler nor the CHP is competitive over a long period. 4th generation district heating In case the buildings have lowered the return temperature, and the need for a high supply temperature, the district heat- ing system can reduce the supply temperature and install efficient heat pumps and thereby be upgraded to what we call the final 4th generation district heating system. Thereby all heat can be generated by an optimal combination of CHP, electric boilers, heat pumps, and boilers. If the storage capaci- ty is optimized, the boilers will deliver large capacities but only generate a minor part of the heat energy. The boilers will serve as a vital backup capacity for the wind and solar, much cheap- er than a natural gas turbine. Yet, as we all understood during the energy crisis, natural gas turbines are of high value to the electricity system, albeit they have very few operating hours for the security of supply reasons. 4th generation district heating and cooling District cooling (DC) can develop from 1st to 4th generation cooling and complement the 4th generation DH forming a DH&C system. This 4th generation DH&C system is a further natural development in case there is a significant demand for comfort cooling and process cooling.

A DC network and a chilled water tank benefit from econo- my of scale and replace expensive and inefficient individual building-level chillers. The chilled water tank levels the consumption and opens for optimal operation of chillers in response to the electricity prices.

The heat pump will generate combined heating and cooling to the 4th generation DH and the 4th generation DC grids.

Some ambient energy sources, e.g., drain water, groundwa- ter, or wastewater, can provide ambient heat to the heat pump for heating in winter and ambient cold to the heat pump for cooling in summer.

To some extent, groundwater with two interconnected wells can store ambient cold and warm energy interseason.

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