Supported by:
Ministry of Foreign
Affairs of Denmark
DANIDA
DISTRICT ENERGY IN CITIESA GLOBAL INITIATIVE TO UNLOCK THE POTENTIAL OF ENERGY EFFICIENCY AND RENEWABLE ENERGY
Incorporating District Energy into City
Energy and Low-Carbon Strategies
MULTIPLE BENEFITS TO ACHIEVE
DIVERSE POLICY OBJECTIVES
Multiple Benefits
Cities and countries develop DES to
achieve a variety of objectives
HCFC emissions
Reduced CO2
emissions
Local, free and RE Sources
Lower cost of cooling
Reduced blackouts/ grid stress
Energy efficiency
and access
Balancing RE power
Green economy
and resilience
Most DC systems shift
peak electricity demand
using cold storage
lowering power
transmission investment
GIFT City could lower
electricity
consumption for
cooling by 65-80%
Paris reduced refrigerant
emissions from cooling
by 90%
Dubai provides cooling that is
30-40% cheaper than stand-
alone systems
OBJECTIVES, STRATEGY AND
TARGETS
▪ Cities need to assess and demonstrate the benefits of district cooling
in the context of local objectives and its potential.
▪ Long-term development of district cooling requires its incorporation into
local energy strategy and targets.
ADVANTAGES
1. Stakeholder buy-in
2. Reassure investors
3. Justify resource
expenditure
4. Justify local policy changes
5. Advocate for national
policy changes
Shares of the 45 champion cities that have targets for
district energy and broader energy targets
OPPORTUNITY OF SMART CITY
PROPOSALS
Shivaji Nagar, Smart City proposal, BhopalAll five cities have smart city proposals:
▪ Mixed use new development with
significant anchor loads
▪ Promoting compact land use
▪ High local government influence on
design and sustainability criteria
▪ Very few building developer(s),
reducing coordination of multiple
stakeholders
▪ Phased development can be timed
with district cooling expansion
KEY FIGURES
Development area: 1.4 million m2
Standards: Mandatory building pre-
certification of LEED/GRIHA to Silver/Gold
Cooling load: ~ 60,000 TR
Residential floor space: 22%
Commercial floor space: 39%
Institutional floor space: 39%
BEST PRACTICE IN VANCOUVER:
CITY-LED DEMONSTRATION
• City owned demonstration project: Southeast False
Creek Neighbourhood Energy Utility (SEFC NEU).
• City-owned greenfield district heating network
using waste heat from sewage
• Financially structured like a private sector project
to prove commercial viability.
• Demonstrated new connection policies in the city.
• Has led to one new district heating system and the
switching of two other systems from gas to
renewables.
BEST PRACTICE IN VANCOUVER:
CITY STRATEGY
• Demonstration project made the case for district
energy
• New city strategy in 2010 prioritised renewable
district heating and conversion of steam systems
• Multi-stakeholder consultation
• Strategy targets specific network development up
to 2020
• Strategy and vision based on the demonstration
project
Vancouver’s Greenest City Action Plan
GOTHENBURG, SWEDEN: SWITCH
FROM OIL TO WASTE HEAT
POLICY
SUPPORT
TECHNICAL
ASSISTANCE
2014
80 PERCENT OF DISTRICT HEATING
RENEWABLES/WASTE HEAT
POLICY
SUPPORT
TECHNICAL
ASSISTANCE
Gothenburg, Sweden
REDUCED POLLUTANTS
BY 50-100 PERCENT
POLICY
SUPPORT
TECHNICAL
ASSISTANCE
Gothenburg, Sweden
Mayoral Targets - 2025
• 60% CO2 emissions reduction (on 1990 levels)
Interim targets• 2015 - 20%• 2020 - 40%
CO2 emissions 1990 = 45.05 MtCO2 p/a
CO2 emissions 2012 = 40.75 MtCO2 p/a(10% reduction on 1990 levels)
• 25% Decentralised Energy
London’s Policy Framework
MAYOR OF LONDON
11
• Annual CO2 reduction of 3.5 million tonnes
• Tenfold increase in generating capacity
• £8 billion of investment
• National political is creating a favourable policy framework for DE - changing investment environment
• Public sector is working to remove barriers and harness the private sector’s financing and delivery capability
The Opportunity
MAYOR OF LONDON
Scheme Types
MAYOR OF LONDON
The generation of electricity local to demand and recovery of waste heat for building space heating and domestic hot water production
• Type 1 - Single sites• Small or medium CHP units 0.3 to 3.0MWe• Limited infrastructure - up to 3,000 residential units• Capex up to £10 million and a pay-back period of
around five years for commercially viable schemes
• Type 2 - Multi-site mixed use schemes• CHP units 3.0 to 40MWe• 3,000 to 20,000 residential units• Capex up to £100 million and an extended pay-back
period of around ten years
• Type 3 - Area wide heat transmission projects• Extensive heat pipe networks connecting multiple heat
producers such as power stations, industrial waste heat or energy from waste facilities
• May serve 100,000 plus residential units and a large range of mixed public and private commercial facilities
• Paybacks in excess of 10 -15 years but with the potential for steady
• Cash flow and utility type yields
Decentralised Energy Project Delivery Unit•DEPDU provides technical, financial and commercial advisory services to help others develop and bring to market larger scale DE projects
- €3.3m funding (90% from the European Commission’s ELENA technical assistance facility, 10% from the GLA)
- Private and public sector support
- Focus on heat network schemes supplied from CHP and sources of waste heat
- Targets: projects with total investment of £60.5m to market by July 2015 (leverage ratio 25:1)
•To date the GLA has supported over £62m of DE projects to market. The programme is actively supporting a pipeline of 18 DE projects, with a total investment potential of over £150m.
• 2016 successor being planned – Energy for London
MAYOR OF LONDON
Cofely’s Olympic Park and Stratford City Energy Network
MAYOR OF LONDON
• 2008, awarded a 40 year concession to provide a heating and cooling network for the Olympic Park and adjacent Westfield Stratford City Development
• >£100m, design, built, finance operate two energy centres and 18km of district energy network.
• Combined cooling, heat and power (CCHP) using both gas and biomass boilers.
• First energy centre provided heating and cooling to the 9 major competition venues within the Olympic
• Second energy centre provides similar services to Westfield’s Stratford City Shopping Centre.
• Combined capacity of 200 MW heating, 64 MW cooling and 30 MW electricity, the district energy network will serve remaining venues and new homes and businesses to be built in the coming years.
Gospel Oak DH - Camden Council- Heat network supplied by heat
from a new 4.6MW gas turbine CHP at the Royal Free Hospital
- 3.5MW GT heat recovery system
- 1.3km heat network supplying about 1,500 units on existinghousing estates
- CAPEX: £5.7m
- Project commissioned in 2012
- CO2 savings: 2,890 t/year
- DEPDU role: assist LB Camden with initial feasibility, design and energy supply contract preparation
MAYOR OF LONDON
Case Study – South Kilburn DE (LB of Brent)
- Regeneration project
- 2,400 new homes and related facilities and infrastructure
- The LB of Brent is procuring a £15m site-wide heat network through an ESCo concession agreement
- OJEU notice issued in 2011 and 3 bidders selected to be taken to the Invitation to Tender (ITT) stage
- DEPDU role: assisting the LB of Brent with initial feasibility study, ESCoprocurement process and development of a concession contract
- Expected construction start date: 2016
- 3.1km heat network
- 1.5MWe / 2.5MWth CHP
- CO2 savings: 835 t/year (estimated)
MAYOR OF LONDON
Brent’s South Kilburn
London’s EfW Potential
MAYOR OF LONDON
Veolia’s SELCHP: heat network implemented 2013 serving Southwark Estates. Network expansion under development
Grundon’s Lakeside EfW: investigating heat off-take potential towards London supported by GLA
Cory’s Riverside Resource Recycling EfW: energy master planning with the London Borough of Bexelyand the GLA
Viridor’s proposed BeddingtonEfW project: a London Borough of Sutton ESCo initiative to build and operate a Sutton-wide heat network. GLA supporting the energy master planning for the Hackbridge area and the heat network technical procurement.
The NLWA’s Edmonton EfW: heat network development business plan led by the Lee Valley Heat Network, a North London Borough initiative
London 2050 Infrastructure Investment Plan
• The energy demands of the growing city will put increasing pressure on the existing system which is already close to capacity.
• Regulatory system makes it difficult to prepare for that growth.
• National policy moving towards the electrification of heating and transport, meeting this objective becomes increasingly more expensive.
• Need to ensure energy supply infrastructure that is:
• Secure and reliable
• Affordable and cost-competitive
• Delivers 80 per cent carbon dioxide emissions reduction by 2050 in line with Mayoral and national government policy
• Electrification of heat: a 50% decentralised scenario would result in an electricity distribution capacity 50% smaller than a centralised scenario ie one that derives all heat from the national electricity system.
Peak electricity supply capacity
will need to increase by at
least 140% from 5.4GW in 2011
to more than 12GW in 2050
Peak electricity supply capacity will need to increase by at least 200% from 5.4GW in 2011 to more than 16GW in 2050
MAYOR OF LONDON
The City of Warsaw
Main features of the capital city of Poland:
• administrative area: 517 km²
• inhabitants within this area: 1.7 million
• inhabitants within agglomeration: up to 3.3 million
• density of population: 3300 per km²
• registered enterprises: 360 000
• registered vehicles: 1.2 million
• budget expenditure for 2015: € 3.4 billion
• unemployment: 4.5%
• 78 universities and colleges
• 270 thousand students
Sustainable Energy Action PlanCovenant Of Mayors initiative
•Warsaw joined in 2009
• Key document: Sustainable Energy Action Plan for Warsaw in the perspective of 2020 (SEAP)
SEAP target – improvement of energy efficiency and reduction of GHG emissions - calculated as:• 80% of CO2 emission in 2020 comparing to the base year,
• 80% of energy consumption in 2020 comparing to the base year,
• at least 20% of energy will be produced from RES.
Currently Warsaw prepares, within the new Polish scheme, the Low-Carbon Economy Plan, basedon SEAP and being its enhancement. It will cover specific projects with secured funding, will help in getting additional funds for their implementation and will give us a general vision of low-carbonWarsaw in future.
SEAP targets for 2020 compared to
the base year 2007
YearEnergy
consumption[MWh/year]
CO2 emission[MgCO2/year]
2007 28 394 431 12 952 984
2020 22 715 545 10 362 387
History
1952Zakład Sieci Cieplnej
Warszawa w Budowie
1953Miejskie Ciepłownie w m. st. Warszawie
1960Stołeczne
Przedsiębiorstwo Energetyki Cieplnej
(SPEC)
2003SPEC S.A.
2012Dalkia Warszawa
2014Veolia Energia Warszawa
Privatization
• Changes in ownership structure
• Strategic Committee with good cooperation
• Benefits for citizens
• Guaranteed investments
The biggest district heating network in EU
1 720 km of network
15 000 substations
18 600 buildings
22 000 meters
78% cities demands
Warsaw as a low heat prices area
Competitive heating prices
70% cheaper than electricity
55% cheaper than heating fuel
33% cheaper than natural gas
Investments
Investments 2015 2016 2017 2018
Modernization and construction of network
25 km 29 km 28 km 27 km
Modernization of substations
511 substations
1300 substations 1300 substations 1300 substations
1 308 equipments
Modernization of group substations24 21 100 until 2020
Construction of 2 pumping stationsbegining finalizing x x
New customers 115 MW 115 MW 115 MW 115 MW
Moduls of hot water (DHW)
5 MW 5 MW 5 MW 5 MW
167 180 180 180
BES - Building Energy Services Services for consumers
Intelligent Heating Network Project
79 chambers, 3 pumping stations, 1850 substations, RES, water loss detection system network
x
Automatic meter reading
12 695 substations
Ownership regulations 0,35 mln € 0,5 mln € 0,5 mln € 0,5 mln €
Expenditures 47 mln € 36,3 mln € 37.5 mln € 35 mln €
€ 250 million for Praga districts of Warsaw• Housing policy is the largest part of the Programme.
• Construction of new blocks of flats and renovation of old ones
with total investments equal to € 130 million.
• 5 000 flats will be connected to district heating.
• Level of investment in this project - € 17 million.
• The historical area of Praga (located, unlike
the rest of the City, on the right bank of the Vistula
River) is divided into 3 districts: Praga Północ,
Praga Południe and Targówek.
• The state of housing and energy solutions in the area requires huge improvements.
Selected Warsaw activities – second phase of revitalization programme in years 2015-2022
Public-Private Partnership –chances for Cities
• Public-private partnership may be a good solution to provide financing for projects, that generate substantial energy and cost savings. Warsaw plans to utilize PPP on much larger scale than before. Currently we are using PPP for financing 2 current building projects: on retrofit of school buildings and on construction of Mokotów District Hall Building.
• We identified up to 30 school buildings that need retrofit covering also electric installation and lights replacement, water supply improvement and energy management system with sensors. Certain level of savings should be guaranteed by the private partner (Energy Performance Contracting). In next months we will be completing energyaudits of the buildings.
• Energy efficiency and RES will be taken into consideration in the PPP project of construction and operation of the Mokotów District Hall Building. The building will be designed, built, financed and operated by a private partner, so the energy cost will consist a large part of the maintenance bill over the contract period, which may exceed 20 years in this case. The contract with the consultant which will assist with preparingthe construction tender was signed on 25th September, 2014.
Consolidation
•Very mature market for district energy with above 50 per cent of the market share for heating or cooling of buildings.
Refurbishment
•Very high market share of district energy
•However systems need some refurbishment in order to increase customer confidence, energy efficiency and profitability.
Expansion
•District heating and cooling systems appear in some areas, but the total market share remains low (15–50 per cent).
•Genuine interest in increasing the market share.
New
•District energy has a very low market share (0–15 per cent).
•The city is in the process of stimulating district energy, with small starter networks or demonstration projects envisioned.
Types of city engaged in district energy
Consolidation
• Many cities in Nordic countries particularly Denmark
• Frankfurt
• Gothenburg
• Seoul
Refurbishment
• Many cities in China, Russia, Mongolia, and Eastern and South-eastern Europe
Expansion
• Rotterdam
• Dubai
• Vancouver
• Paris
• Tokyo
• Cyberjaya
• Toronto
• Milan
New
• London
• GIFT City
• Port Louis
• Kuwait City
• Sydney
• Christchurch
Example cities
o Ten key steps that cities can take to support the development of district energy systems
o These steps can be taken individually or packaged to meet specific city conditions and needs.
o Depending on city type some steps may have already been completed
Key steps in developing a district energy system
Annual energy consumption by building type in Paris (2009)
Cooling Electricity (not including cooling)
Hot water, cooking and other
Heating
Why have an energy strategy and energy targets?
• Most efficient and measurable way to meeting city objectives
• A long-term vision can reassure investors making possible longer-term infrastructure developments such as district energy
• Development of a strategy can mobilize district energy champions and bring together the broad range of actors needed to coordinate district energy development.
• The time and resources spent delivering district energy projects can be justified against the potential benefits defined in the energy strategy
These can relate to: air pollution, fuel poverty, stress on electricity network, greenhouse gas emissions, reduced fossil fuel consumption. Objectives can come from the national level such as pollution limits or CO2 reduction targets.
These actors include: local authority departments (planning, transport, waste, water), local utilities, consumer groups, external consultants, other cities, etc.
Such data should include: heat and cool consumption, building efficiency, fuel consumption, expenditure on heating and cooling
These technology pathways must account for costs, fuel price risks, timescales, changing regulatory environments and local economic benefits.Should include an assessment of district energy’s potential.
District energy specific targets are a key best practice and vary significantly by city and in detail
For example Paris’ 2007 Climate Action Plan targeted 60% of renewable energy in district heating by 2012 but the 2012 Climate Action Plan had to revise this target to be by 2020.
Developing an energy strategy that includes heat and coolObjectives
Identify city
objectives for the
heat and cool
sectors.
Different Actors
Bring together
the various
actors in the
development of the strategy to ensure it is holistic and has
full support.
Data Collectio
n
Ensure data is
collected on heating
and cooling that can link back
to the city objectives
Heat and Cooling
Assessment
Carry out a heat and
cooling assessmen
t that identifies technolog
y pathways to achieve
city objectives.
Targets
Develop technology specific targets to provide investor certainty
and to measure progress.
Reflection and
Revision
An energy strategy in
a city is constantly evolving
and should be updated after a period (e.g. 5
years) and progress
evaluated.
Ambition of DES in energy strategy will depend on city type
- Latvia: refurbishing and keeping heat tariffs lowMany of Latvia’s towns and cities have district heating systems in need of refurbishment. The objectives of such refurbishment is to reduce the subsidies required to district heat networks and make them more efficient whilst keeping heat affordable.
Many municipalities do not have the capital for large scale improvements. A lack of investment can push tariffs up making it harder to retain customers, which makes the problem even worse.
For many municipalities the solution will be slow and long-term with small incremental improvements made that do not impact the business model significantly.
Large refurbishment project that will include pooling of networks, connection of waste heat and removal of small coal-fired boilers. Strategy developed with Danish expertise (Danfoss and COWI) with significant driver being pollution reduction
Connection to a large transmission line and pooling of networks is being achieved in stages connecting and upgrading individual districts at approximately 200MW each stage
Short payback period of less that 2.5 years per stage means that capital for each stage can be reinvested in future stages and financial benefits can be demonstrated quickly.
- Anshan, China: refurbishing in stages
NATIONAL RECOGNITION FOR
DISTRICT COOLING
Barrier: Impacts of cooling and the potential
and benefits of DC not communicated
▪ Full impacts of cooling on environment,
electricity grid, economy and consumers’
finances not separately assessed
▪ The economic potential and long-term
benefits of DC not studied, particularly
waste heat and renewables use
Recommendation: Independent study of
cooling impacts and optimal technology
pathways
Image – cooling strategy – if itexists?
NATIONAL DISTRICT COOLING
STRATEGY
Barrier: Lack of national strategy and targets
can limit DC growth potential
▪ Unclear where responsibility lies to
champion the sector
▪ New policies, regulations and incentives
need to be justified against clear strategy
▪ Cities and developers not always
considering district cooling
▪ District cooling judged on short-term cost-
effectiveness only
Recommendation: Develop a district cooling
strategy to promote sector that specifies how
DC meets wider national targets/commitments
Best practice city policies
43
THANK YOU!
For more information on the Global District Energy in Cities Initiative
and to become a partner, please visit the website or contact:
• Ms. Lily Riahi, Programme Manager and lead, District Energy in
Cities Initiative, UN Environment [email protected]
www.districtenergyinitiative.org