Heating and cooling accounts for almost half of primary energy consumption in Europe, yet it has been largely ignored in the EU’s climate and energy policies. This is now starting to change. At the end of this year, member states in the EU must submit an assessment of the low-carbon potential provided by co-generation and district heating systems. Clare Taylor looks at some of the EU-funded district heating and co-generation projects that are already taking place and prospects for the future.
When we speak about energy, most of the discussion is centred on electricity generation or on transport. Heating is usually ignored – although almost 50% of total energy consumed in Europe is used for the generation of heat for domestic or industrial purposes!
Until recently the EU in its energy and climate policy paid scant attention to heating. One reason for this is probably that heating tends to be highly decentralised, making it more difficult to subject to general policies. But low-carbon solutions for heating do exist. In a report that came out last year, Linking Heat and Electricity Systems, the International Energy Agency noted that efficient district heating systems, in combination with co-generation (also known as Combined Heat and Power or CHP), can be “an essential part of strategies for greenhouse gas emissions mitigation and energy security.”
The IEA points out that these technologies are mature, yet progress in deployment has been frustratingly slow. The share of co-generation, for example, although it has an average conversion efficiency rate of 58% compared to 36% for conventional thermal power plants, went down from 14% in 1990 to around 10% in 2000, and has remained relatively stagnant since then.
By 2025 London aims to supply 25% of the city’s energy through decentralised energy sources
The use of district heating, which can be based on co-generation or on waste heat or renewables, has also been patchy. According to figures from the European Commission, most of the space and water heating (88%) in the EU is performed by individual boilers for self-consumption while the overall share of district heating is 12%. This average does mask radically different markets: the Nordic countries, where district heating is well-established (for example, 98% of Copenhagen’s heating needs are met through heat networks); Germany and Austria, where the market is expanding fast; UK, Netherlands and Belgium where market penetration is much lower but showing growth; Mediterranean countries with less than 2% market share; and the Eastern European countries where large scale heat networks are already in place, although in need of modernization. Here there are legacy issues to overcome, as poor service during the Soviet era has left reputational damage in its wake.
Policy and planning
Things may be about to change, however, This year, there’s a policy push from Brussels via the Energy Efficiency Directive (Article 14). By the end of 2015, all member states are required for the first time to submit to the European Commission a comprehensive assessment of the potential for the application of high efficiency CHP and efficient district heating and cooling.
Funded by the Intelligent Energy Europe programme, the Stratego project has been set up to support the development of these national heating and cooling roadmaps. Stratego has been developing a pan-European heat map, the European Thermal Atlas, which is soon to be published. This heat atlas will comprise an EU28 map of 1km2 grid resolution, which for each cell (1km2) will contain the modeled heat and cooling demand, the local density of both demands, the existing district heating and cooling supply infrastructure, the available waste heat resources and the potential for renewable energy sources (solar thermal, geothermal, relative accessibility of biomass).
According to Nicolas Février, who is coordinating the project, ‘City planners have a pivotal role in developing eco-districts where the upgrading of building stock goes hand in hand with the establishment, expansion or modernisation of district heating and cooling networks. This Atlas will allow them to rapidly check the thermal resources available in their region as well as the thermal demand.’
Some cities and regions are already moving ahead of the mandatory national heating and cooling plans. By 2025 London aims to supply 25% of the city’s energy through decentralised energy sources, like local heat networks. This would achieve an annual CO2 reduction of 3.5 million tonnes, represent a tenfold increase in generating capacity within the city – and requires £5-7 billion of investment. The Decentralised Energy for London programme aims to take £60 million of decentralised energy projects to market before summer 2015 and has produced the London Heat Map, an interactive tool that allows users to identify opportunities for decentralised energy projects. (Also worth a peek is the Scotland Heat Map.)
“This is not primarily a technological challenge. The real challenge is to organize collectively and getting people to understand the benefits of a collective system”
The Greater London Authority is in the process of applying for a junior electricity supply license that will allow it to buy excess electricity produced by local generators, such as London’s boroughs and public bodies, before selling it on, at a market competitive price, to other public sector organisations, such as Transport for London. This will allow local small-scale generators to increase their revenues and improve the viability of local energy projects in London – hopefully sparking an investment boom in the capital’s low carbon energy infrastructure.
Matthew Pencharz, the Mayor of London’s Senior Advisor on Environment and Energy, said, “We need to do everything possible to create a more secure, cost-effective and sustainable heat and power supply for London. By supporting locally sourced energy and heat networks which can reduce bills and lower carbon emissions, we can not only save money but also drive innovation, jobs and growth in this burgeoning sector.”
Along with planning and legislation, a key challenge is in getting whole neighbourhoods to surrender individual boilers and sign up for a distributed heating system. ‘This is not primarily a technological challenge. The real challenge is to organize collectively and getting people to understand the benefits of a collective system,’ says Morten Hofmeister from Danish company PlanEnergi, who are involved in SmartReflex, an Intelligent Energy Europe-funded project working in six regions across Spain, Germany, Ireland and Italy to promote district heating through supporting legislation and planning.
Open for business
Another group of projects are using European funding to leverage further public and private investment into large scale district heating.
In the Netherlands, Etriplus – the energy development company of a consortium of Development Company Greenport Venlo (DCGV), distribution system operator Alliander, energy supplier Greenchoice, engineering company Arcadis and project developer Ekwadraat – aims at providing low cost and secure energy supply for the agro-industrial area of Greenport Venlo. Key stakeholders are area food companies, greenhouse owners, agro-logistic companies, local municipalities and the province of Limburg. Four projects are planned: a heating network based on a geothermal source, a gas and heating network based on CHP and HTU (high temperature storage), a cooling network and solar power. Plans include solar power fields and incentivising residents to install solar power. Aiming for a total investment of €54 million to realize these plans, €1.8 million has already been provided by the Intelligent Energy Europe MLEI- PDA facility (which now can be found under the Horizon 2020 programme here).
“I think 2015 is the beginning of a breakthrough – but to see investments and decisions take place, we’re probably talking about a 3-5 year timeframe”
Peter Elbers of DCGV explains the necessary bridging role of public funding: “The possible financial gap cannot be filled by market parties because of the risks. Public parties like DCGV, the province of Limburg, the national government or the European Union play a vital role.”
“Another other lesson we have learned”, says Elbers, “is that the development of these projects often lead to chicken-egg discussions between the investors and the energy consumers. The investors need a signed contract that gives assurance that the energy will be consumed at an agreed rate and for an agreed period of time, in order to receive financial close. The energy consumers on the other hand want assurance in advance about the specifications, volumes and price continuity prior to signing a contract. A close cooperation and communication between investors and consumers is essential to solve this issue.’
In Hungary, another beneficiary of MLEI funding (€285,000), the City of Kecskemét, is hoping to transform its natural-gas fired district heating network into a geothermal system – and aiming to attract investment of over €30 million for the project. In this region, the geothermal gradient (the temperature increase per meter of depth) is twice the global average, meaning that a 1000 meter borehole reaches earth with a temperature of over 50°C. A number of Hungarian cities operate district heating networks that can be powered by local clean geothermal energy. ‘It is a big market, and there are big opportunities’, says Pál Boza who is coordinating the project.
The CELSIUS project, funded under the EU Smart Cities & Communities/Seventh Framework research programme (to the tune of €14 million, with an additional €12 million from the project partners) is working in London, Rotterdam, Genoa, Gothenburg and Cologne on twelve projects in which district heating systems based on various waste heat sources are being developed. Market conditions among project partners vary hugely from the mature market in Gothenburg of more than 90 % penetration of the heat market, to around 2% market share in Genoa.
Just two months ago in Gothenburg, the project achieved a world-first when a district heating connection to the ferry Stena Danica was inaugurated. Previously the Stena Danica was supplied with hot water from oil burning when she was moored. Now oil burning is replaced with hot water from the Gothenburg district heating system.
On prospects for the European market, Jonas Cognell, program manager at the Celsius project, says: “We can see that there is some fresh movement, and new markets opening up. I think 2015 is the beginning of a breakthrough – but to see investments and decisions take place, we’re probably talking about a 3-5 year timeframe.”
Antonio Aguilo Rullan, project advisor on energy efficiency programmes at the European Commission agency EASME, adds: “There will be significant focus on this topic in 2015. People are starting to realise the need for sustainable heating and cooling solutions in the energy transition.”
For more information about the activities being supported under the Intelligent Energy Europe programme 2010-2013 in the area of heating and cooling, see here.
A high level conference focusing on the role of heating and cooling in the European energy transition will take place on 26-27 February 2015 in Brussels. The hot ticket here is the workshop on financing, which will include the launch of the next Energy Efficiency Financial Institutions Group report.
Clare Taylor is a journalist and communication specialist who currently works on ManagEnergy, a European Commission initiative supporting local and regional sustainable energy actions.