Sparse district-heating in Sweden

This paper presents a review of the sparse district-heating research programme undertaken in Sweden between 2002 and 2006. The goal of the programme was to increase the future competitiveness for district heat in low heat density areas, e.g., suburban single-family houses and small villages. Such areas are unfavourable, since revenues from heat sold are low compared with the investment cost for the local distribution network. In Sweden, district heat has a dominant position in the heat market for residential and service-sector buildings. In order for the business to grow, it is necessary to increase the rate of expansion in the detached-house segment. This is why the programme was initiated. The extent of the programme was set at € 3.6 million with equal financing from the Swedish District-Heating Association and the Swedish Energy-Agency. The research was carried out in three phases: a state of the art survey; a development phase focused on productivity gains where new research on both technology and customer interaction was performed; and finally a demonstration phase where new methods were tested in full-scale field operation. The programme has shown that the Swedish district-heating industry needs to adjust in order to reach a higher profitability for sparse district-heating investments. Tradition from large-scale high-density district heating is hard to scale to fit sparse district-heating systems. For example, the construction becomes very labour intensive and the industry is weak when it comes to market-oriented business logic, sales and private customer interaction. Innovation seems to be a way forward and active management of innovations is a way to create increased value of the investments. Other keys to improving the profitability of sparse district-heating investments are more efficient working routines (resulting in higher productivity) and revised ways of customer communications. These seem more important than increasing efficiency in district-heating technology.     

Possibilities and consequences of deregulation of the European electricity market for connection of heat sparse areas to district heating systems

The objective of the study is to analyse the conditions for connection of residential buildings in heat sparse areas to district heating systems in order to increase electricity production in municipal combined heat and power plants. The European electricity market has been assumed to be fully deregulated. The relation between connection of heat sparse areas, increased electricity and heat production as well as electricity prices, fuel prices and emissions rights is investigated. The results of the study show that there is potential to expand the district heating market to areas with lower heat concentrations in the cities of Gävle, Sandviken and Borlänge in Sweden, with both economic and environmental benefits. The expansion provides a substantial heat demand of approximately 181 GWh/year, which results in an electricity power production of approximately 43 GWh/year. Since the detached and stand-alone houses in the studied heat sparse areas have been heated either by oil boiler or by direct electricity, connection to district heating also provides a substantial reduction in emissions of CO₂. The largest reductions in CO₂ emissions are found to be 211 ktonnes/year assuming coal-fired condensing power as marginal electricity production. Connection of heat sparse areas to district heating decrease the system costs and provide a profitability by approximately 22 million EURO/year for the studied municipalities if the price of electricity is at a European level, i.e. 110 EURO/MWh. Sensitivity analysis shows, among other things, that a strong relation exists between the price of electricity and the profitability of connecting heat sparse areas to district heating systems.     

Combined heat and power in the Swedish district heating sector—impact of green certificates and CO2 trading on new investments

Combined heat and power (CHP) has been identified by the EU administration as an important means of reducing CO₂-emissions and increasing the energy efficiency. In Sweden, only about one third of the demand for district heat (DH) is supplied from CHP. This share could be significantly larger if the profitability of CHP generation increased. The objective of this study was to analyse the extent to which the profitability for investments in new CHP plants in the Swedish DH sector have changed thanks to the recently implemented trading schemes for green certificates (TGCs) and CO₂ emissions (TEPs). The analysis was carried out using a simulation model of the Swedish DH sector in which the profitability of CHP investments for all DH systems, with and without the two trading schemes applied, is compared. In addition, a comparison was made of the changes in CHP generation, CO₂ emissions, and operation costs if investments are made in the CHP plant shown to be most profitable in each system according to the model. The study shows that the profitability of investments in CHP plants increased significantly with the introductions of TGC and TEP schemes. If all DH utilities also undertook their most profitable CHP investments, the results indicate a major increase in power generation which, in turn, would reduce the CO₂ emissions from the European power sector by up to 13 Mton/year, assuming that coal condensing power is displaced.     

Stockholm CHP potential—An opportunity for CO2 reductions?

The potential for combined heat and power (CHP) generation in Stockholm is large and a total heat demand of about 10 TWh/year can be met in a renewed large district heating system. This model of the Stockholm district heating system shows that CHP generation can increase from 8% in 2004 to 15.5% of the total electricity generation in Sweden. Increased electricity costs in recent years have awakened an interest to invest in new electricity generation. Since renewable alternatives are favoured by green certificates, bio-fuelled CHP is most profitable at low electricity prices. Since heat demand in the district heating network sets the limit for possible electricity generation, a CHP alternative with a high electricity to heat ratio will be more profitable at when electricity prices are high. The efficient energy use in CHP has the potential to contribute to reductions in carbon dioxide emissions in Europe, when they are required and the European electricity market is working perfectly. The potential in Stockholm exceeds Sweden's undertakings under the Kyoto protocol and national reduction goals.     

Cogeneration — allocation of joint costs

In planning district heating projects based on cogeneration, a rule is required to split the simultaneous costs over electricity and heat. This article formally structures the discussion on this issue, and an allocation rule, using the long-run marginal generation costs of the byproduct, is argued to be the best one from a district heating planning viewpoint.     

Holistic methodological framework for assessing the benefits of delivering industrial excess heat to a district heating network

In Sweden, over 50% of building heating requirements are covered by district heating. Approximately 8% of the heat supply to district heating systems comes from excess heat from industrial processes. Many studies indicate that there is a potential to substantially increase this share, and policies promoting energy efficiency and greenhouse gas emissions reduction provide incentives to do this. Quantifying the medium and long-term economic and carbon footprint benefits of such investments is difficult because the background energy system against which new investments should be assessed is also expected to undergo significant change as a result of the aforementioned policies. Furthermore, in many cases, the district heating system has already invested or is planning to invest in non-fossil heat sources such as biomass-fueled boilers or CHP units. This paper proposes a holistic methodological framework based on energy market scenarios for assessing the long-term carbon footprint and economic benefits of recovering excess heat from industrial processes for use in district heating systems. In many studies of industrial excess heat, it is assumed that all emissions from the process plant are allocated to the main products, and none to the excess heat. The proposed methodology makes a distinction between unavoidable excess heat and excess heat that could be avoided by increased heat recovery at the plant site, in which case it is assumed that a fraction of the plant emissions should be allocated to the exported heat. The methodology is illustrated through a case study of a chemical complex located approximately 50 km from the city of Gothenburg on the West coast of Sweden, from which substantial amounts of excess heat could be recovered and delivered to heat to the city's district heating network which aims to be completely fossil-free by 2030.     

National energy policies: Obstructing the reduction of global CO2 emissions? An analysis of Swedish energy policies for the district heating sector

The effect of national energy policies on a local Swedish district heating (DH) system has been studied, regarding the profitability of new investments and the potential for climate change mitigation. The DH system has been optimised regarding three investments: biomass-fuelled CHP (bio CHP), natural gas-fuelled combined cycle CHP (NGCC CHP) and biomass-fuelled heat-only boiler (bio HOB) in two scenarios (with or without national taxes and policy instruments). In both scenarios EU’s tradable CO₂ emission permits are included. Results from the study show that when national policies are included, the most cost-effective investment option is the bio CHP technology. However, when national taxes and policy instruments are excluded, the DH system containing the NGCC CHP plant has 30% lower system cost than the bio CHP system. Regardless of the scenario and when coal condensing is considered as marginal electricity production, the NGCC CHP has the largest global CO₂ reduction potential, about 300 ktonne CO₂. However, the CO₂ reduction potential is highly dependent on the marginal electricity production. Demonstrated here is that national policies such as tradable green certificates can, when applied to DH systems, contribute to investments that will not fully utilise the DH systems’ potential for global CO₂ emissions reductions.     

Future use of heat pumps in Swedish district heating systems: Short- and long-term impact of policy instruments and planned investments

Heat pumps constitute one of the major technologies used in district heating systems in Sweden. Totally about 6 TWh of heat are supplied annually by heat pumps, equivalent to 12% of the heat supplied in district heating systems. New policy instruments that have recently been introduced will change the conditions for technologies in the district heating systems. It is likely that the incentives for waste incineration and combined heat and power will be improved. This study estimates how different policy instruments, and new investments in waste incineration and combined heat and power, affect heat pumps in Swedish district heating systems. The results indicate that heat pumps are affected in both a short-term and a long-term perspective, and that heat pumps will play a less important role in district heating systems in the future. Depending on the policy instruments applied in the district heating sector, the long-term use is between 18% and 71% lower than current use. In a long-term perspective, it is in the systems which currently use heat pumps during a large part of the year that new investments in waste incineration and combined heat and power can be expected, resulting in a convergence between different district heating systems regarding how much heat is supplied by combined heat and power and waste incineration, and regarding the annual operating hours for heat pumps.     

The case for combined heat and power in the U.K.

Most analyses of the potential for combined heat and power (CHP) in parallel with a central electricity generating industry value the electrical output by means of an assessment of the marginal benefit to the central supply of units and capacity provided by the local system. This approach has defects, especially when applied to a growing system with a choice of investments. This paper suggests an alternative approach without these defects. It concludes that CHP is extremely attractive if load factors on the local plant are high, as in industry. This conclusion is insensitive to future costs of fuel and plant. If there were enough sites of this nature then there would be no case for CHP from district heating loads. If, however, high-load-factor sites are not available then CHP from district heating could be a second best alternative. the paper investigates this hypothesis and concludes that this may be so, but that in this case the answer is very sensitive to future costs of fuel and plant.     

On the potential trade-offs between energy supply and end-use technologies for residential heating

In Sweden, where district heating accounts for a significant share of residential heating, it has been argued that improvements in end-use energy efficiency may be counter-productive since such measures reduce the potential of energy efficient combined heat and power production. In this paper we model how the potential trade-offs between energy supply and end-use technologies depend on climate policy and energy prices. The model optimizes a combination of energy efficiency measures, technologies and fuels for heat supply and district heating extensions over a 50 year period. We ask under what circumstances improved end-use efficiency may be cost-effective in buildings connected to district heating? The answer hinges on the available technologies for electricity production. In a scenario with no alternatives to basic condensing electricity production, high CO₂ prices result in very high electricity prices, high profitability of combined heat and power production, and little incentive to reduce heat demand in buildings with district heating. In contrast, in a scenario where electricity production alternatives with low CO₂ emissions are available, the electricity price will level out at high CO₂ prices. This gives heat prices that increase with the CO₂ price and make end-use efficiency cost-effective also in buildings with district heating.     

Total planning of combined district heating,cooling and power generation systems for a new town—Part II

The objective of this study is to introduce one of the main results of the project for studying energy conservation technologies in a new airport town, which is organized by the Osaka Science and Technology Center, Japan. First, based on the estimated energy demands in the new town, technological aspects are investigated for the district heating, cooling and hot water supply system. Then, the economic and energy saving characteristics are compared for several alternative systems according to the differences of the type of absorption refrigerating machine and so forth. Assuming that a combined heat and power plant is used as the heat source plant of the district thermal distribution system, the optimal combined district heating, cooling and power generation system has been selected from a comprehensive economic viewpoint. Lastly, it is ascertained that if fuel costs continue to rise at the rate of 8 per cent per year, the best energy conservation system becomes superior economically to the conventional district thermal distribution system.     

Geothermal energy in Turkey: the sustainable future

Turkey is an energy importing nation with more than half of our energy requirements met by imported fuels. Air pollution is becoming a significant environmental concern in the country. In this regard, geothermal energy and other renewable energy sources are becoming attractive solution for clean and sustainable energy future for Turkey. Turkey is the seventh richest country in the world in geothermal energy potential. The main uses of geothermal energy are space heating and domestic hot water supply, greenhouse heating, industrial processes, heat pumps and electricity generation. The district heating system applications started with large-scale, city-based geothermal district heating systems in Turkey, whereas the geothermal district heating centre and distribution networks have been designed according to the geothermal district heating system (GDHS) parameters. This constitutes an important advantage of GDHS investments in the country in terms of the technical and economical aspects. In Turkey, approximately 61,000 residences are currently heated by geothermal fluids. A total of 665 MW_t is utilized for space heating of residential, public and private property, and 565,000 m² of greenhouses. The proven geothermal heat capacity, according to data from existing geothermal wells and natural discharges, is 3132 MWt. Present applications have shown that geothermal energy is clean and much cheaper compared to the other fossil and renewable energy sources for Turkey.     

Biofuel Based Cogenerative Energy Conversion Systems

The goal of this study is to investigate how co-operation between industry and district heating companies can improve profitability of biofueled cogenerative investments in small to medium-sized applications. Currently advanced biomass gasification and gas turbine combined cycle has been found to be a promising cogenerative conversion technology for the recovery of heat present in biomass fuel. Increased biofuel based cogenerative power production in the future is clearly dependent on the improvement of both performance and investment costs of new high performance technology, and on the nature of policy instruments designed to promote the technology. The use of biofuels for cogeneration on a large scale is focused mainly on forest industry sites, where considerable quantities of biomass are available. While cogeneration provides several environmental benefits by making use of waste heat and waste products, air pollution is a concern any time fossil fuels or biomass are burned.     

Modelling the impact of energy taxation

Energy taxation in Sweden is complicated and strongly guides and governs district energy production. Consequently, there is a need for methods for accurate calculation and analysis of effects that different energy tax schemes may have on district energy utilities. Here, a practicable method to analyse influence of such governmental policy measures is demonstrated. The Swedish Government has for some years now been working on a reform of energy taxation, and during this process, several interest groups have expressed their own proposals for improving and developing the system of energy taxation. Together with the present system of taxation, four new alternatives, including the proposed directive of the European Commission, are outlined in the paper. In a case study, an analysis is made of how the different tax alternatives may influence the choice of profitable investments and use of energy carriers in a medium‐sized district‐heating utility. The calculations are made with a linear‐programming model framework. By calculating suitable types and sizes of new investments, if any, and the operation of existing and potential plants, total energy costs are minimized. Results of the analysis include the most profitable investments, which fuel should be used, roughly when during a year plants should be in operation, and at what output. In most scenarios, the most profitable measure is to invest in a waste incineration plant. However, a crucial assumption is, with reference to the new Swedish waste disposal act, a significant income from incinerating refuse. Without this income, different tax schemes result in different technical solutions being most profitable. An investment in cogeneration seems possible in only one scenario. It is also found that particular features of some alternatives seem to oppose both main governmental policy goals, and intentions of the district heating company. Copyright © 2002 John Wiley & Sons, Ltd.     

Electricity dependency and CO2 emissions from heating in the Swedish building sector—Current trends in conflict with governmental policy?

Coal-condensing power is marginal production in the deregulated Nordic power market and an increase in electricity consumption will therefore result in increased CO₂ emissions. One goal of the Swedish energy policy is to reduce the amount of electricity used for heating in the building sector. This paper investigates the potential for reduction in electricity dependency and CO₂ emissions from heating, taking the energy infrastructure into account, here defined as the capital stock of the buildings and heating systems together with geographical variations in heat intensity. In order to include the energy infrastructure in the analysis the study is made on a regional level (Southern Sweden) applying a comprehensive database describing the energy infrastructure of the region. The paper compares two scenarios for converting the heating systems of the region: one employing energy savings and with the aim to phase out the oil and most of the electricity used for heating purposes and a second which illustrates the effect if the current trend in the heating market continues. Both scenarios apply commercially available technologies only.From the second scenario it is seen that the current trend—contrary to the aim of the Swedish Governmental policy—shows an increase in electricity dependency for heating, mainly due to a large diffusion of heat pumps, but also due to installations of electrical floor heating and electricity heating systems installed in newly constructed one- and two-dwelling buildings. However, the options proposed in first scenario show that it is possible to reach significant reductions in the electricity dependency due to heating and in corresponding CO₂ emissions. An analysis of the age structure of the heating systems shows that the transformation of the heating system is not completed until the year 2025, if new investments for replacement of heating systems are made only provided they have reached their economical life time, and only applying heating technologies which at present are known to be economically competitive. It can be concluded that future policies on transforming the energy system should be based on an analysis that takes the entire energy infrastructure (in this case of heating system) into account (e.g. not directed towards single technologies). More specifically for the region studied, which is considered representative for Sweden as a whole, policies should aim at installing heat pumps to replace electricity heating only in regions with low heat density where district heating is not competitive, in contrary to the present situation where heat pumps replace all types of heating systems.     

A techno-economic assessment of NuScale and DHR-400 reactors in a district heating and cooling grid

Many companies are developing small modular reactors (SMR), but only few are in a licensing or demonstration phase. Several papers have studied the economy of the SMRs, but district heating studies were carried out without a reference energy system that has a high impact on the results. We modeled NuScale CHP and DHR-400 (heat only) units as a part of a city-level district heating and cooling grid. In the studied reference system, NuScale CHP and DHR-400 look cost-efficient investments with internal rates of return from 7% to 20%. Modeled heat only reactor had better profitability than CHP reactor in almost all cases except when assuming higher than 50 €/MWh electricity prices. Large heat pumps with COP of 3.5 had similar economic performance than studied SMRs. Large heat pumps are less capital intensive than SMRs and easier to accept by public, but their potential is limited by the available heat sources.     

Keep that fire burning: Fuel supply risk management strategies of Swedish district heating plants and implications for energy security

Recent decades have seen a strong increase in bioenergy utilization in Sweden, from 52 TWh in 1983 to 128 TWh in 2013. Much of this increase has been achieved by replacing fossil fuels with different forms of bioenergy in district heating. Increased use of bioenergy is generally seen as key to reducing fossil fuel consumption and greenhouse gas emissions and improving energy security.However, replacing fossil fuels with solid biomass fuels in stationary heat and power generation entails significantly more complicated fuel supply logistics, with geographically scattered material associated with storage difficulties and low energy density. Given these risks and challenges and the key role of biomass-based district heating in the Swedish energy system, disturbances in fuel supply to district heating could potentially be an energy security issue.Through literature studies and interviews with employees at 18 district heating plants, we mapped present and future risks and risk management strategies in district heating supply in the Mälardalen region, south-east Sweden. We found that although small disturbances to fuel supply are not uncommon, the likelihood of heat supply failures due to fuel supply problems is low. Risk awareness is generally high among fuel supply managers, with widespread use of multilevel redundancies and diversification as key risk management strategies. However, fuel supply to plants is highly dependent on functioning truck transport and, consequently, availability of diesel fuel for trucks. Risk management can be strengthened further by implementation of forward-looking risk assessments that are less reliant on past experiences.     

Heat planning for fossil-fuel-free district heating areas with extensive end-use heat savings: A case study of the Copenhagen district heating area in Denmark

The Danish government plans to make the Danish energy system to be completely free of fossil fuels by 2050 and that by 2035 the energy supply for buildings and electricity should be entirely based on renewable energy sources. To become independent from fossil fuels, it is necessary to reduce the energy consumption of the existing building stock, increase energy efficiency, and convert the present heat supply from fossil fuels to renewable energy sources. District heating is a sustainable way of providing space heating and domestic hot water to buildings in densely populated areas. This paper is a theoretical investigation of the district heating system in the Copenhagen area, in which heat conservation is related to the heat supply in buildings from an economic perspective. Supplying the existing building stock from low-temperature energy resources, e.g. geothermal heat, might lead to oversized heating plants that are too expensive to build in comparison with the potential energy savings in buildings. Long-term strategies for the existing building stock must ensure that costs are minimized and that investments in energy savings and new heating capacity are optimized and carried out at the right time.     

Cost minimization for a local utility through CHP,heat storage and load management

The energy-system optimization model MODEST is described, especially heat storage and electricity load management. Linear programming is used for minimization of capital and operation costs. MODEST may be used to find the optimal investments and when to make them. The period under study can be divided into several linked subperiods which may consist of an arbitrary number of years. MODEST is here applied to a municipal electricity and district-heating system during three five-year periods. Each year is divided into three seasons. Demand peaks, as well as weekly and diurnal variations of, for example, costs are considered. The electricity demand is divided into the three sectors households, industries, and service. The electricity demand may be reduced by energy conservation, replacement of electric heating and load management. The profitability of load management, as well as cogeneration with and without heat storage at different prices of purchased power is calculated. At traditional Swedish electricity prices, the local utility should build a woodchips-fired steam-cycle CHP (combined heat and power) plant. Consumers would find it beneficial to reduce their electricity use by conservation and switching from electric heating to oil and biofuel. If just marginal power production costs are paid, the utility should introduce biomass-fired heat-only boilers instead. Electricity conservation is smaller at these lower prices. Load management is mainly profitable at the first price scheme which includes output-power-related charges. The heat storage should be used threefold: to cover demand peaks, as well as to enable increased CHP output when it is limited by the heat demand or to run heat pumps at cheap night electricity instead of in the daytime. © 1998 John Wiley & Sons, Ltd.     

Factors impacting district heating companies’ decision to provide small house customers with heat

District heating companies’ efficiency of providing district heating to small houses in Finland and Sweden is studied. The method used is Data Envelopment Analysis (DEA). The results indicate that Finnish companies, overall, are more efficient when offering district heat to small house customers. In Finland, price increases demand and impacts district heating company efficiency the most. The lower price level in Finland, compared to Sweden, might be a reflection of competition between different heating goods. In Sweden, network size and company size (large companies are more efficient in providing small houses with heat than small ones) drive the efficiency of small house district heating.