More possibilities for CHP/DH in the European heat markets

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More possibilities for CHP/DH in the European
heat markets

• Sven Werner
• Department of Energy and Environment
• Chalmers University of Technology, Sweden

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ECOHEATCOOL District Heating (Work Package 4)

• Main purpose Overall quantification of the
  benefits of expanded use of district heating in
  Europe
• Target area EU25 ACC4 EFTA3 32 countries
• Information source IEA Energy Balances with some
  additions from Eurostat
• Heat unit used All heat volumes are expressed in
  Joule (MJ, GJ, TJ, PJ, or EJ)
• Reference year 2003

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Outline

• District heat demand
• District heat generated with origin
• Strategic heat source options for DH
• Institutional and market barriers
• Implications from improved heat generation and
  doubling heat sales
• Conclusions

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Demand Heat Dominates End Use
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Demand Natural Gas and Electricity dominate
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Demand Summary for the target area for 2003

• More than 5000 district heating systems in
  operation
• District heat deliveries 2,0 EJ
• District heat generated 2,3 EJ
• Total net heat demand in the industrial,
  residential, and service sectors 20,8 EJ
• Corresponding electricity demand 10,2 EJ
• (omitting the transportation and agricultural
  sectors)

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District heat generated
Figure 2. The composition for the energy supply
in district heat generation during 2003. When CHP
plants were used, the energy allocation principle
was used (assuming equal conversion efficiency
for power and heat). 6 countries omitted due to
no or very low district heat supply (Cyprus,
Greece, Ireland, Malta, Spain, and Turkey).
Source IEA Energy Balances with own corrections.
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District heat generated
Figure 5. Renewable and recovered shares in heat
generated during 2003. 6 countries omitted due to
no or very low district heat supply (Cyprus,
Greece, Ireland, Malta, Spain, and Turkey).
Source IEA Energy Balances with own corrections.
Recovered heat is here defined as the sum of heat
from fossil and nuclear CHP together with surplus
heat recovered from industrial processes and with
heat pumps.
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Five Major Strategic Heat Source Options

• Combined heat and power (CHP) and also called
  cogeneration
• Waste incineration
• Surplus heat from industries and refineries
• Geothermal heat
• Fuel difficult to manage and handle in small
  boilers (wood waste, olive residues, etc)

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Strategic Heat Source Options
Figure 21. Summary of the five strategic district
heat sources with the current contributions to
the district heat generated during 2003.
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Institutional and market barriers

• Low fuel and electricity prices
• Short term investment preferred
• Inappropriate legal frameworks
• Energy supply focus in energy policies
• Price regulations with social considerations
• Distorted market prices
• Inappropriate cost allocations
• Ownership shifts

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District Heating Systems Do Not Grow!
Figure 1. Development of district heat delivered
between 1992 and 2003 for various parts of the
world. Source (IEA, 2005) with own corrections
for some European countries.
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Doubling heat sales
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Improved district heat generation and doubling
heat sales
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Profitability
Figure 24. The overall profitability for a
district heating system recovering existing heat
losses. The analysis is only based on the
international oil price and the heat distribution
investment cost, since the alternative is to use
a fossil fuel instead of district heating. The
various recovery factors reflect that recovered
heat losses can not cover the whole heat demand
in the district heating system. A heat recovery
factor of 0,6 means that 60 of the district
heat demand is covered by recovered heat losses
and 40 from fossil fuels.
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Implications from improved district heat
generation and doubling heat sales

• Higher energy efficiency Will reduce primary
  energy supply with 2,1 EJ/year ( primary
  energy supply of Sweden)
• Higher security of supply Will reduce the import
  dependency with 4,5 EJ/year ( primary
  energy supply of Poland)
• Lower carbon dioxide emissions Will annually be
  reduced with 400 million tons, corresponding to
  9,3 of the current emissions ( current
  emissions of France from fuel combustion)

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Conclusions 1

• International energy statistics can be improved
  with respect to district heat
• Higher renewable share in current district
  heating systems compared to all primary energy
  supply
• The possible supply from the strategic heat
  source options are many times higher than the
  current net heat demand

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Conclusions 2

• Major institutional and market barriers appear
• A potential for expansion of district heating
  exists
• More than 5000 European district heating systems
  contribute to higher energy efficiency, higher
  security of supply, and lower carbon dioxide
  emissions

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Conclusions 3

• Large countries can learn from small countries

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The End

• Thank you for your attention!