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NO. 3 / 2023
INTERNATIONAL MAGAZINE ON DISTRICT HEATING AND COOLING
TECHNOLOGY & SUSTAINABILITY
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Contents
THIS EDITION'S FOCUS THEMES
TECHNOLOGY AND SUSTAINABILITY
By Tuukka Teppola 4 3
CIRCULAR BIOMASS ENERGY By Ann Bouisset
HYPER LOCAL WEATHER FORECAST
NEW HEAT SOURCES
By John Tang Jensen 7
HOW TO GET LOW ENERGY COSTS
IF YOU'RE WILLING TO CHANGE THE WORLD LET HEAT PUMPS BE YOUR ENERGY! By Raymond C. Decorvet 12 14 GRENAA IN DENMARK IS BETTING HEAVILY ON ITS OWN ELECTRICITY By Joel Goodstein 17 MEMBER COMPANY PROFILE: INNARGI
HOW TO ESTABLISH A DH COMPANY
The cover photo of this Hot Cool edition shows the 12 MWth / 1 MWe cogeneration Sorø Bioenergy Plant from the article by Dall Energy on page 3. You see only pure steam rising from the chimney. Photographer: Steen Knarberg.
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CIRCULAR BIOMASS ENERGY
Energy plant in Rouen, France with Dalkia, or where there is solar heating in the district heating mix like in the Silkeborg, Denmark or Salon de Provence, France projects. The gasification process allows for very low emissions without bag or electro-filters. The Dall energy furnace combines updraft gasification with gas combustion in the same chamber, which results in full performance and environmental benefits without the histor- ical problems related to external combustion. Primary air in- jection is about half of what is used in traditional grate inciner- ation, which results in very low NOx emissions. The gas velocity in the bottom part is very low, so dust emissions out of the oven are between 30-60 mg per Nm3. Also, most of the parti- cles are subsequently removed by a quench bringing the dust levels down to 10 -20 Nm3, thus complying with EU standards without using expensive bag or electro filters. The advantages of Dall Energy gasification technology are recognized not only in Denmark but also in France. The advantages of the technology receive great recognition. Dall Energy recently signed a contract for a 20 MW biomass gasification plant with Silkeborg Forsyning in Denmark and several contracts in France with large energy companies and industrial customers. WITH CITIZENS HEATED BY THEIR GARDEN-PARC WASTE 10,000 tons CO2 reduction per year The Sorø Bioenergy plant converts approximately 30,000 tons garden-parc waste to climate friendly heat and electricity. By utilising garden-parc waste instead of gas 10,000 tons of CO2 is saved per year. This saving is equivalent to each of their customers driving 1.3 times around the earth in a car.
By Ann Bouisset, Cand. Oecon/MBA, General Sales Manager, Dall Energy
Operational for over a year since its inauguration, Sorø Bio- energy converts garden-parc waste from the municipalities into heat and electricity. The 12 MWth biomass plant is a perfect example of using local biomass resources correctly. AffaldPlus, the plant owner, collects the garden-parc waste in 13 waste-receiving depots located throughout the six mu- nicipalities and prepares the garden-parc waste in their bio- mass platform in Næstved, Denmark. Here the garden parc waste passes through a simple two-stage process: it is shred- ded and screened into three fractions, fines for composting, fuel ready for biomass gasification, and oversized, which is put back into the shredder again. Annually 53,000 tons of garden waste is aggregated. Of this, 11,000 tons are used in the gasification process to create heat, and 32,500 tons are composted. Unique patented gasification technology makes it possible. The Dall Energy gasification furnace allows the Sorø Bioenergy plant to use very inhomogeneous biomass, with qualities that vary substantially over the year. The flexibility of mixing a wide range of fuels and with humidity levels from 20-60% makes it possible to use biomass that could previously not be used. The technology also allows for a great load-flexibility, from 100% right down to 10%, without compromising on emissions such as dust, NOx, and CO. This flexibility is crucial, especially for plants operating without accumulation tanks like the Dall
For further information please contact: Ann Bouisset, apb@dallenergy.com
Left: The 12 MWth / 1MWe cogeneration Sorø Bioenergy plant. Middle: The gasification furnace can use a mix of difficult fuels such as garden-parc biomass. Right: The top of the Dall Energy gasification furnace in Sorø
Photos: Steen Knarberg
HYPERLOCAL WEATHER FORECASTS
Cutting down unnecessary initiation of power plants and excessive district heating water temperature with hyperlocal weather forecasts is a new way forward.
By Tuukka Teppola, Growth Manager – Wx Beacon Vaisala Xweather
more efficiently and effectively, improving customer satisfac- tion, lowering environmental burdens, and increasing profits. Two key factors that impact load forecast are human behav- iour and weather. While human behaviour is quite predicta- ble — based on daily, weekly, and annual patterns — weather prediction is a much trickier case. That is why district heating companies depend heavily on weather forecasts. Unfortunate- ly, significant forecast errors are not uncommon; plants then waste fuel and increase emissions. It all comes down to cor- rectly forecasting the weather in the location that matters for your energy operations — for upcoming minutes, hours, and days.
Every district heating company faces this challenge: there is an upcoming cold weather front, and as a heating provider, you strive to meet the demand. You must decide how much heat to produce and adjust your network’s water temperature. It’s cold outside, so you initiate your additional heating plant and start burning fuel. You raise the water temperature and get ready to pump the water to every corner of the network. But the cold weather never comes, and you end up with increased emissions and heat loss, all for nothing. It would help if you had better weather forecasting in your planning, one that can ac- count for your city’s unique characteristics and minimizes the errors in the forecast. Minimizing unnecessary plant initiations, and optimizing wa- ter temperature are feasible and relatively easy ways to reduce environmental footprint (and potentially increase profits). In- itiating and running additional plants consumes enormous amounts of energy and other resources. The same is true for the excessively high water temperature in the network: extra fuel, unnecessary production mix, electricity for pumping, per- son-hours, heat losses in pipes; you name it. When trying to choose the perfect mix of optimal heat pro- duction, the right supply temperature, and the correct heat distribution, heat load forecast is everything. Accurate heat load forecasting helps district heating companies operate
Now, regarding weather forecasts, the number of errors is everything.
Accurately representing the current state of the atmosphere be- gins with observations. Today, we leverage both in-situ (in place) and remote sensing networks to observe the atmosphere. In-si- tu, surface-based networks are numerous but only represent a small part of the atmosphere. Remote sensing capabilities, primarily from space, measure more significant portions of the atmosphere but struggle to see all variables (especially near the surface) and have their own challenges (like getting satellites to space and keeping them functioning there). Continues on page 6
Wx Beacon
Up to 36% forecast accuracy improvement - up to 200% ROI in just one year*
21.4 °C
To determine the potential benefits of Wx Beacon’s hyperlocal weather forecast for your district heating operations, you can schedule a call with our experts or send us an email . During the call, we will do a micro-climatological areal study to assess the local climate impact on your district heating operations.The consultation is free of charge. Deploying an accurate hyperlocal weather forecast is the best way to optimize your energy production and make truly informed energy trading decisions.
°C
What’s included in the study? - Areal weather evaluation
- Site-specific analysis - City’s weather patterns
GO THE ONLINE CALENDAR TO BOOK A FREE CALL WITH AN EXPERT
www.xweather.com/wx-beacon
+358 504362603
Due to microclimates within the city, air temperatures can vary significantly, even over short distances. The graph demonstrates air temperature data from two -> three hyperlocal identical weather sensors only 7 km apart in the city of Espoo, Finland
Generally, surface-based networks are built to serve the gen- eral public and transportation infrastructure (e.g., airports and harbours). For this reason, they do not capture all the local weather patterns that are levant to a particular district heating network. Yet, understanding those patterns is the key to effi- cient weather forecasting in the context of district heating op- erations. Even within a mid-sized city, outdoor temperatures can vary drastically from one location to another. A city cen- tre with a densely built environment can, for example, have a different microclimate compared to a nearby district located either close to a body of water, higher above the sea level, or in a valley. The temperature difference within just several hun- dred meters can vary by several degrees. This is where accu- rate, hyperlocal weather forecasts can help. A data-driven heat production plan starts with a correct prediction. Wx Beacon by Vasiala is an enhanced hyperlocal weather fore- cast that measures local conditions in the areas of customer interest to ensure the best possible accuracy. It carefully con- siders important local topography factors such as building environment, water systems, and vegetation in various parts of the district heating network. Local measurements (space- proof technology) are combined with an in-house forecasting model (top-ranked globally), using AI/ML technologies, im- proving the city’s regional accuracy of the weather forecast. “Let’s look at the example of Fortum’s network in Espoo, Fin- land. The graph above demonstrates how significantly temperature can vary between measurement points within a relatively small area. Adding hyperlocal Wx Beacon forecast enhanced with sensor observations decreased the number of significant er- rors (over 2.5°C) by 74% and improved overall accuracy by up to 36%, helping minimize heat loss and unnecessary emissions.
With regards to CO2, monetary, and resource-saving, every net- work differs. To contextualize this, we can distinguish several different aspects in which more accurate local weather can benefit DHC companies:
Help to avoid initiating fossil plants and instead operate with a greener heat portfolio.
Allow lower water temperature. For example, a 10°C de- crease in water temperature is estimated to lead to 8.5% reduced heat losses*. Minimize situations where CHP is driven by the electric- ity-price-first approach, not the heat-demand-first ap- proach (heat to scrap). Help to make better decisions on spot markets. With CHP peak electricity production of 50MW, estimation of 150k€ yearly savings.
Save electricity thanks to optimal water pumping.
*2021, Ikävalko, Master’s Thesis
For further information please contact: Tuukka Teppola tuukka.teppola@vaisala.com
How to get LOW ENERGY COSTS
By John Tang Jensen, Senior Advisor Danish Embassy London
Often decision-makers and poli- ticians miss that low energy costs are a combination of low energy prices and low energy consump- tion. The primary learning is that low energy costs can be achieved if industry, heating, and electricity sectors are integrated by establish- ing district heating networks able to collect losses, save consumption and provide flexibility. This article explores 20 learnings that will lead to low energy costs for industry and consumers if decision-makers go for it.
It is often the ambition of governments to have the cheapest energy prices of all. The purpose of this understandable and, by most people, approved target is to ensure that the industry is competitive, and that energy is affordable for consumers. In this context, energy for industry and consumers are defined as electricity and fuels for processes, transportation, and buildings. When setting low-cost targets like this, most governments look at electricity and fuel prices, and the target is to hold these prices below or on the same level as in other countries. Some countries recognise it as a matter of low fuel and elec- tricity prices and lowering consumption in industry, vehicles, and buildings, i.e., if the consumption can be lower than in other countries, the costs will be lower if prices are the same. Standards for equipment and buildings have been developed in most countries, and the need for energy per produced piece of goods, per transported km, or heated sqm has decreased. Still, the population, consumption of goods, vehicles, and total square meters of buildings have increased simultaneously, and in most countries, the total energy demand hasn't decreased significantly.
The present energy price crisis on fossil fuels due to the Rus- sian-Ukrainian war has shown that some countries are more vulnerable regarding energy prices and costs than others. This cannot only be explained by having poorly insulated buildings or a high energy-demanding industry. There are other explana- tions from which countries most exposed to high prices could learn. The below statements are observations and recommendations to governments wanting energy prices and costs to be as low as possible for industry and consumers. The learnings are divid- ed into fuel, electricity, heat, and infrastructure chapters and can be used separately or combined. Learnings regarding the use of fuels Oil and natural gas prices have increased dramatically from the beginning of the Russian-Ukrainian war until October 2022. All countries have had the same price increases on fossil fu- els. Differences in actual fuel prices are mainly related to fuel transportation costs and, in a few cases, long contracts or gov- ernment subsidies.
els. Most renewable fuels are not following the same market mechanisms. Still, they will more likely follow the price of the fuel they replace, which means prices will follow other fuels, and often the deviation in prices is developing slowly. Renew- able fuels are getting more competitive when fossil fuel prices go up, which speeds up the replacement of fossil fuels. As with fossil fuels, a country can depend on the import of renewa- bles, which can increase price risks. To avoid this, the govern- ment should monitor available resources – like straw, wood, food, garden waste, building waste, municipal waste, manure, etc.- and implement resource strategies to avoid imbalances between demand and supply. Countries with a large share of combined heat and power (CHP) production have managed much better than those without. The reason for this is simple. The costs for fuels used for CHP production are shared between the electricity and heat sides. Then marginal heat and electricity production price does not go up as much compared to producing heat and electricity alone. CHP is simply more efficient than heat and power-alone production, and the saved fuel costs keep price increases lower. Learning 1: High building standards and standards for energy conversation prevent high energy costs, no matter the type of energy used.
Countries with a large share of combined heat and power (CHP) production have managed much better than those without.
Learning 2: CHP ensures low fuel consumption and lower costs.
The transportation sector in most countries has seen the same price increases, maybe to a lesser degree in Norway, which is fortunate to be less dependent on fossil fuels and have a large share of electric vehicles compared to other countries. For countries not using much natural gas and oil for industry and heating buildings, the impact of increased fuel prices has been low compared to very dependent countries. Especially for countries with high winter heat demand based on fossil fu- els, the crisis has hit hard, though it seems that countries with high building standards have managed better than countries without. Renewable fuels have to some degree, followed the increase in fossil fuels, and shortages have been seen due to increased consumption and hoarding. Generally, prices for residues and waste used for incineration and gasification have been least affected without significant increases compared to fossil fu-
Learning 3: Alternative and renewable fuels lower risks for fast price deviations and get more competitive when fossil fuel prices increase. Learning 4: A resource strategy to reuse and recycle as much as possible and allocate residues suitable for energy to CHP or biomethane plants ensures lower costs. Learnings about getting low electricity prices Electricity prices vary significantly from price area to price area in Europa during the war. The countries with an electricity sec- tor mainly dependent on natural gas power alone plants set- ting the marginal power production price in most hours have been hit hardest. Even large renewable electricity production from wind turbines and solar collectors hasn't led to low prices if renewable electricity production does not exceed demand. Renewable power producers have increased profit significant-
demanding consumers and transport costs for electricity ex- ported out of the local grid on behalf of consumers able to deliver local demand and supply flexibility. This makes it more expensive for everybody because it requires more investments in grid capacity. The consumer gets the lowest electricity prices if local cheap marginal electricity capacity exceeds local demand, and sur- plus electricity production can be exported to neighbouring price areas. Companies and consumers producing electricity for their own use decrease local demand and support low mar- ginal electricity prices for all.
ly, and consumers have often paid the natural gas-related electricity price around 2.5 times higher than the natural gas price per kWh. When the renewable share of capacity is get- ting higher than demand, the number of hours where natural gas power alone will set the market price will decrease. At that point, electricity prices will drop. Countries dependent on coal or nuclear power alone produc- tion for marginal electricity production have managed better, and prices have not increased as much as for natural gas pow- er alone countries. Countries with natural gas CHP setting the marginal electricity price have managed much better than power-alone countries, primarily when CHP plants also use other fuels like waste for waste incineration, biomass, residues, coal, and biomethane CHP. Having electric interconnectors to other countries will only benefit your consumers if the price in the neighbouring area is below your own. Suppose your country is situated between a neighbouring price area with high prices and another with low prices. In that case, your price will always be between the two depending on the connector capacity. Suppose capacity is the same for both cables to neighbouring price areas. In that case, your area will mainly deliver transition capacity, and your price will be close to the country with the highest electricity price. The price difference between the two areas should pay for the interconnectors' cost, including electricity loss costs. If the economy on interconnectors is not transparent, there is a risk that the end consumer will pay costs unrelated to con- sumption, leading to higher tariffs. If interconnectors lead to higher tariffs for consumers, it can be considered to increase tariffs for producers using the interconnectors for export and transition. Electricity tariffs often discriminate against certain consumers and flexibility providers. An electricity kWh tariff may give high incentives for energy conservation but indirectly tends to sup- port energy loss in the transportation and production systems by discriminating solutions with low marginal transportation costs. Suppose the electricity tariff system supports flexibility for avoiding expensive import of electricity from neighbouring areas and electricity production by high loss (high marginal price) in peak hours. In this case, the share of low marginal price electricity will be higher and decrease overall costs for all. Additionally, tariff systems often cross-subsidize high-capacity
Learning 5: Expand solar, wind turbine, and water turbine ca- pacity – lowest marginal prices.
Learning 6: If fuel-based capacity is needed, establish only CHP – income from the heat side decreases marginal electric- ity price. Place CHP plants nearby industry and heat networks or establish a heat network if necessary. Learning 7: Monitor the economy on interconnectors. Inter- connectors do not necessarily deliver lower prices for consum- ers. The price difference must pay heat loss in interconnectors. Learning 8: If local solutions can avoid investments in trans- mission lines (interconnectors), share saved investments with consumers delivering solutions. This benefit depends on how local solutions can be established to the same costs as large, centralised solutions. Additionally, the security of supply can be achieved. Learning 9: Allow direct lines and energy communities, which will decrease local demand and increase the number of hours with low marginal electricity prices.
Learning 10: The electricity tariff system should support flexi- bility, and payments should follow actual costs.
Learnings getting low-cost heat sector: If the heating sector is primarily based on individual solutions using fuels or electricity, the consumers are exposed to price variations directly. The better the building standards, the less exposed consumers are to increasing prices, which can ex- plain why some countries with good building standards man- age better. Heat pumps for individual buildings are more ef- ficient than other individual technologies. Still, if the power
An often-overseen factor regarding district heating systems is that combining heat sources dependent on different fuels and electricity can provide flexibility to the electricity system. If this flexibility is combined with a heat storage system, the bene- fit for consumers and the electricity system will increase. This will result in low heat prices if the heat source with the lowest marginal heat price is always preferred first. The benefits only increase with increasing demand for flexibility from the elec- tricity system. It is not just heating. Most cooling can be produced in combi- nation with heat, and especially for large buildings demand- ing both heat and cooling, combining the heat and cooling production can be beneficial, leading to lower prices for both. The heat can be used for heating, tap water, or delivered to a district heating network. The technologies are there and can be based on natural refrigerants not having significant green- house gas effects. When district heating networks are established in zones near cheap waste heat sources, the heat delivery capacity is some- times larger compared to heat demand. Then the heating network should be expanded into nearby urban areas. Alterna- tively, transmission lines can be established to nearby district heating networks areas having relatively high prices. Transmis- sion lines for heat will only decrease heat prices for consum- ers if the price difference between the two areas can finance a transmission line. It is for district heating networks important that tariff systems support flexibility in the same way as for electricity systems. Consumer payment according to actual costs should be pre- ferred. To avoid losses and ensure low heat prices, the payment for waste heat sources should never get higher than obvious al- ternative heat sources, which could be implemented in con- tracts or legislation. If many heat sources can deliver to a heat network, the lowest marginal price should always be preferred. It then can be considered to split heat source payment into marginal price payment and capacity payment. Learning 11: Establish district heating networks in all suitable urban areas. If a large heat pump solution in a heat network is cheaper than individual heat pump solutions for the same area and number of consumers, the area is suitable for district heating networks.
market marginal price setting is related to power-alone pro- duction, the electricity price is around 2.5 times higher than the fuel price. Then it does not help much if the heat pump COP (Coefficient of Performance) is on the same level (COP 2.5). And that is because the heating price using electricity will be close to the fuel price and often higher due to high electricity transportation costs. Then learning about low-cost electricity is also important for individual electricity-based heat prices.
An often-overseen factor regarding district heating systems is that combining heat sources dependent on different fuels and electricity can provide flexibility to the electricity system.
CHP and waste heat from the incineration of waste and in- dustrial processes delivered to a district heating system is the most important way to decrease fuel and electricity consumption and heat prices. Ultimately, a district heating system can be almost independent of fuel price variations. Combined with an electrical boiler, the CHP plant can deliver flexibility to the power system both when the electricity pric- es are high and low, which will benefit heat and electricity consumers. Electrical boilers can avoid curtailing renewable electricity from wind turbines and solar PV collectors. This is possible if production exceeds demand in a price area and may be cheaper and more flexible than building more cables to other areas with the same renewable electricity produc- tion profile. District heating systems can be non-fuel-based but will still depend on electricity prices for heat pumps to collect low-temperature waste and ambient heat sources. Howev- er, these sources have higher temperatures than individual heat solutions. This means that large heat pumps in district heating network systems will be more efficient than individ- ual heat pumps, including losses in heat networks, which will decrease costs and heat prices compared to individual solu- tions. Fuels should only be used in district heating systems for reserve and peak load purposes or if electricity prices, for some reason, are getting very high and CHP capacity is need- ed. Waste CHP incineration and, in some countries, not hav- ing much renewable electricity production, fuel-based CHP may be the exemption.
Learning 12: Do not allow direct fuel use in district heating boilers except for reserve load purposes. Peak load capacity and flexibility should be based on heat storage systems. Learning 13: Collect waste heat from power production (CHP), waste incineration (CHP), hydrogen production, carbon cap- ture and industrial processes, and any other renewable fuel production and use it in district heating networks. Learning 14: Heat sources for district heating should be low-temperature infrastructure (heat from wastewater treat- ment, freshwater systems, mines, underground rails, electricity transformers, gas compressors, etc.), waste heat sources, and ambient heat sources in combination with high-temperature intermittent sources like CHP, waste heat (non-constant high temperature) and heat from cooling. Learning 15: Establish electrical boilers in connection with CHP capacity when the number of annual hours with renewa- ble electric production capacity is above electricity demand of more than 500 – 1500 hours/year.
Commercial grid companies with a monopoly for transporting energy are an issue because a monopoly normally does not incentivize efficiency and deliver low-price service. Addition- ally, commercial companies with monopolies do not want to expand and develop the system if there are risks. They often try to get subsidies from the government if forced to develop and expand according to national objectives. Suppose com- mercial grid companies are regulated on prices by a govern- ment-appointed regulator. In that case, they will always try to get higher prices and costs approved if the government asks them to make developments according to Government objec- tives. In general, all infrastructure systems like railways, water supply, sewage systems, waste collecting, roads, highways, dig- ital networks, electricity grids, natural gas grids, district heating networks, etc., are essential for society and quality of life and Central and Local Governments should monitor, develop, and make joint planning for those infrastructure systems. Infrastructure companies deliver service to all and should therefore be publicly owned and non-profit. Security of sup- ply and low costs are essential for society and local revenue, which best can be achieved by local and public ownership of grid companies able to deliver on public objectives without subsidies. Grid companies should establish and provide capac- ity, including the security of supply. A model with commercial companies delivering the energy to publicly owned grids is a proven model in countries with low energy costs and prices. However, transparency is important regardless of the model for organising grid companies. Learning 19: Designate zones for the specific heating system – district heating, electricity, or gas (Natural gas, biomethane, or hydrogen) and be aware that district heating delivers addition- al energy conservation, flexibility, and low-cost heat in urban areas, which electricity and gas grids cannot. Learning 20: Energy grid companies should be transparent, non-profit, and publicly owned to ensure public objectives are met.
Learning 16: Require that large cooling systems produce cool- ing combined with heat.
Learning 17: Establish district heating transmission lines if the price difference between the two areas can finance invest- ments. Learning 18: Tariff systems in district heating systems should follow costs without disruption and cross-subsidizing pay- ments. Learnings organising infrastructure. Infrastructure for transporting energy in networks like the elec- tricity grid, natural gas grid, and district heating networks are natural monopolies. The costs for transporting energy in these networks depend on having a monopoly because it then can be optimised, benefitting all consumers. If, for example, a heat network is present in an area natural gas grid for individual supply is not needed, the electricity grid does not need to ex- pand to deliver capacity for heating, and everybody saves costs. Energy systems get expensive for consumers if the capacity for the same purpose is established in the same area. It will be cheaper for consumers if the type of heating system is decided for each area and zones are designated.
For further information please contact: johntang.jensen@beis.gov.uk
For further information please contact: John Tang Jensen, JohnTang.Jensen@beis.gov.uk
IF YOU'RE WILLING TO CHANGE THE WORLD LET HEAT PUMPS BE YOUR ENERGY!
By Raymond C. Decorvet, Senior Account Executive, Global Business Development ETES, MAN Energy Solutions
As the world wakes up to the reality of the energy security challenge, intelligent heat pump technologies and district heating could be the answer we're all looking for.
Renewables like wind and solar are intermittent. To successful- ly deploy them and still balance the grid requires large-scale storage. Ideally, such long duration energy storage (LDES) must be able to deliver power instantly and simultaneously retain energy on a seasonal time frame so that, for example, summer solar capacity can be used to meet winter energy demand. The solution to this complex issue is, in fact, deceptively simple - a heat pump system built around tried and tested compres- sor technology.
The conflict in Ukraine and the ensuing energy crisis have shown the stark reality that energy security is, at its best, ephemeral when it relies on external resources. In response, coinciding with a growing sense of climate urgency, national governments are looking at massively increasing the share of home-grown green power in their energy mix. According to the IEA's Electricity Market Report 2023, renewables' share of global power generation is forecast to rise from 29% to 35% by 2025. However, while this will lower carbon intensity and reduce energy dependence, it also represents a big challenge.
Two MAN ETES heat pump units will decarbonize Esbjerg's heat supply © MAN Energy Solutions
The heat pump solution Electro-Thermal Energy Storage (ETES) is a unique bulk en- ergy management technology developed by MAN Energy Solutions. Centered on a large-scale heat pump plus storage concept, it links electricity, heating, and cooling in a highly efficient reversible process. The core technology is the multi- stage hermetically-sealed HOFIM® turbo-compressor that, in this application, operates as a heat pump. An ETES system progressively compresses and expands non-toxic and natu- ral CO2 to store or release energy from insulated water tanks. The simplicity of the energy storage is coupled with an incred- ibly robust and reliable industrial compressor that is already well-proven in the most extreme subsea oil and gas applica- tions. The current round-trip efficiency of ETES is of the order of 45%, with continued development expected to push that up to around 60% over time. However, unlike chemical batteries, the system efficiency and capacity remain constant throughout its 35+ years design life. In converting electricity into thermal energy and vice versa, the hot side may include up to four storage tanks for efficien- cy reasons, each at a different temperature, that can supply district or process heat, for example. Simultaneously, the cold side can supply rapidly growing markets such as data centers with significant cooling demand or district cooling networks. The ability of ETES to efficiently exchange energy forms also makes it ideally suited for sector coupling in which commer- cial, industrial, and residential energy needs have meshed. For instance, so-called waste heat from industry could be used to inject energy into the storage system for use as electricity by other consumers. The heat pump process can, of course, also be easily powered by renewable resources, When power demand is high, the sys- tem draws thermal energy from storage and converts it into electricity. The system's speed and flexibility mean it is ideal- ly suited to serve both the short-term electricity spot markets
as well as long duration energy storage (LDES). Thus, the ETES system can deliver ancillary services for the grid and capitalize on favorable conditions when they arise, offering significant ar- bitrage opportunities. A real-time reality As fantastic as this technological breakthrough sounds, its most straightforward configuration is already a reality. The Dan- ish port city of Esbjerg is close to completing a 50+ MWthermal heat-pump system that will play a significant role in making the entire city carbon-free by 2030. Danish multi-utility com- pany DIN Forsyning operates the city's district heating network. It will use two large-scale CO2 Heat Pump Units that will supply around 235,000 MWh of heat annually to 25,000 households. The heat pump solution will replace a coal-fired CHP and save up to 100,000 tons in CO2 emissions annually – the equivalent of the annual CO2 emissions of around 55,000 cars. The devel- opment marks a real advance in city-scale energy manage- ment. Coupling the heat pump system with a district heating net- work also gives another level of flexibility as the heating system itself retains thermal inertia. Esbjerg also has an existing 25'000 m3 hot water tank able to provide additional flexibility. Hence, the network can fully meet customer demands with zero in- puts for up to 10 hours. With the full-scale deployment of MAN's solution now under- way, heat pumps are proving that they can balance the diverse energy needs of a large modern city and succeed in a host of other applications besides. Meeting our needs for both energy security and net zero requires a radical rethink of our energy system, but we don't necessarily have to reinvent the wheel. Low-cost, easily scalable energy storage, and reliable, proven heat pumps are not a science fiction solution but a viable an- swer that can be deployed today.
For further information please contact: Raymond C. Decorvet, raymond.decorvet@man-es.com
GRENAA IN DENMARK IS BETTING HEAVILY ON ITS OWN ELECTRICITY
Translated from Joel Goodsteins article in the magazine "Fjernvarmen"
Grenaa District Heating Company invests 7.25 million € in solar cells to cover its electricity consumption, and, at the same time, the excess electricity will be sold to the grid. Next step could be a wind turbine to produce additional electricity for heat pumps and electric boilers and to sell more electricity to the grid.
In recent years, Grenaa District Heating (DH) Company’s heat production has undergone a green transformation, which has resulted in a combination of wood-chip boilers, solar heating, and heat pumps that supply heat to 5,650 consumers. - In 2020, we reached a situation where we cover the total annual heat demand completely with green heat produced at our different plants. But simultaneously, we faced a nego- tiation on a 10-year PPA agreement for buying electricity. We wanted budget security for our electricity expenses in the form of a fixed price agreement. But if someone could get a good deal out of entering a 10-year contract with us, then perhaps we should produce the electricity ourselves, and enter into a fixed price agreement with ourselves, says director Søren Gert- sen, Grenaa DH Company. So, in 2021 a decision was made to establish a solar (PV) cell plant at Grenaa DH Company - essentially an investment of 4.7 million €. In October 2022, 40,000 square meters of photovol- taic (PV) were put into use—expected and guaranteed annual electricity production: 6.2 million kWh. - A guarantee agreement with our supplier states that the sup- plier will install more PV cells at its own expense if we do not reach the guaranteed production, says Søren Gertsen.
However, only a few suppliers wanted to bid for the task.
- Together with COWI, we invited four suppliers of PV cells to submit offers. Only two ended up bidding for the job, and one has since gone bankrupt. On the other hand, we have been delighted with our supplier, and we are planning an expansion of our PV cell capacity during 2023 so that we reach an annu- al production of 10 million kWh in 2024, says Søren Gertsen further.
Photograher: Jesper Voldgaard
13.5 € per MWh heat The total investment for solar cells will be 7.25 million €. The gain is a production price for 1 MWh of the heat of 13.5 € when production takes place with a heat pump. The calculation looks like this: The electricity production price is 47 € per MWh. It must be divided by 3.5 due to the COP factor in the heat pump. This gives a heating price of 13.4 € per MWh of heat. Only 2 € per MWh will be added for heat pump maintenance. - A heating price of 13.5 € per MWh is very low, not least when compared to natural gas, which has, in periods, led to heating prices of up to 135 € per MWh, says Søren Gertsen. He also expects that Grenaa DH Company will be able to sell up to 2.1 million kWh of electricity per year. Income from elec- tricity sales will reduce the heating price. - But for us, it's not primarily about making money on the elec- tricity market; the most important thing is to keep the heating price down because we can produce our own electricity, he says further.
An essential prerequisite for a good business case is that you can operate with net billing for the part of the electricity you use yourself, which means that you do not pay net tariffs. Windmill is on the wish list. The PV cells will be able to cover the electricity consumption for heat production at Grenaa DH Company in summer, where at the same time, electricity can be sold to the grid. In winter, it will be necessary to purchase electricity. At least for now. Be- cause in 2023, an expansion of the PV plant will be put into operation - and in the long term, a 2 MW wind turbine may have to be established in Grenaa. - We have started discussions with the municipality, which must grant permission for a wind turbine. We are looking to buy a used German wind turbine of 2 MW, which will increase our electricity production so that we become even more self-sufficient. With PV cells and a wind turbine, we can pro- duce electricity more days a year than just with the sun, says Søren Gertsen. Today, wood chips make up approximately 74% of the heat production in Grenaa. In the long term, that share must be re- duced to approximately 50% as a consequence of own elec- tricity production. On the other hand, the share of heat pro- duction from heat pumps based on surplus energy must be increased. - We want to reduce heat production from wood chips and in- crease heat production from heat pumps and perhaps a future electric boiler that uses our own electricity. Less use of the chip boilers will have derived benefits in the form of less wear and tear and maintenance, thus an extension of life in addition to saved costs for chips, says Søren Gertsen.
The prerequisite for the investment is a calculation with an electricity price of 0.12 € per kWh when sold at Nord Pool.
- The electricity price fluctuates significantly, but in the past year, we have seen very high electricity prices, up to 0.4-0.5 € per kWh. We have set a conservative and cautious price as the basis for our calculations. We have a 25-year mortgage, so that is our repayment period, and it is the advantage for district heating companies that we can think about the long term, which helps to minimize the risk of the investment and thus the heating price, says Søren Gertsen.
Photograher: Jesper Voldgaard
Five good tips Find a suitable area - preferably a business area (with an approved local plan). Apply for a commitment to net settlement (equivalent to the Danish Energy Agency). Have a tender document drawn up - with a guarantee for production. Involve the network company as early as possible. Be aware that financing must be done with a mortgage loan.
Source: Søren Gertsen, Grenaa Heating Plant
for business. But the negotiations with the electricity network company are probably the part of the process that has re- quired most time and resources. We also have a tax status, so we don't have to pay tax on our electricity sales, even though we are, in principle, liable to pay tax. As a heat producer, elec- tricity production and sales are a new territory for us – both legislatively, technically, and commercially – so you should ex- pect to use expert assistance along the way. I don't know if all district heating companies will be able to gain from their own electricity production, but I think that many more than today would, says Søren Gertsen.
If the plan goes ahead, it will mean that half of the heat in the future will come from heat pumps, solar heating, and electric boilers. And that Grenaa DH Company, viewed over a whole year, covers all its own electricity consumption plus a little more. Important prerequisites Søren Gertsen estimates that other heating companies will benefit from establishing their own production of electricity, even though several factors must be considered carefully, fac- tors which can determine whether a business case is sustain- able or not.
For further information please contact: fjernvarmen@danskfjernvarme.dk
- We have been favored by several factors, one of which is that the land where we established the PV cells was already zoned
Grenaa Heating Plant 5,650 customers Primary production facilities: Two wood chip boilers: 38 MW Solar heating 1: 8.5 MW Solar heating 2: 14.5 MW Air/water heat pump: 4.5 MW
Planned and on the wish list: Utilization of surplus heat from the neighboring company De Danske Gærfabrikker (The Danish Yeast factories) - which will be able to supply 4 MW of surplus heat around the clock, corresponding to 30,000 MWh of heat - via a water-water heat pump. 2 MW wind turbine – awaiting approval from the municipality 10 MW electric boiler – which can utilize its own electricity production. New large business customers at the Port of Grenaa
Solar cells: 6,200 MWh of electricity annually (from September 2023, 10,000 MWh is expected annually with the expansion of solar cells).
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. 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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