The future role of district heating

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1 10th International Symposium on District Heating and Cooling September 3-5, 2006 Monday, 4 September 2006 Sektion 1 The European heat market of the future The future role of district heating H. Noske, Stadtwerke Hannover AG/Germany

2 10 th International Symposium on District Heating and Cooling The Future Role of District Heating Harald Noske Member of the Board Stadtwerke Hannover AG 2006 enercity The future role of district heating // Chart 1 // harald.noske@enercity.de

3 Issues >>Framework >>energy policy >>energy industry >>company specific >>Heat Production >>Distribution Network >>Conclusions for the Future The future role of district heating // Chart 2 // harald.noske@enercity.de

4 Who is Stadtwerke Hannover AG? >> electricity/gas/water/district heating/services >> turnaround: 1.75 billion EUR (2005) >> employees >> electricity sales growth: GWh ( ) / +more than 500 % >> electricity production: GWh/a >> district heat supply (2005): GWh (incl. industrial heat) >> Europe s first LCP study (1992) >> one of the first energy brands ( enercity ) in Germany The future role of district heating // Chart 3 // harald.noske@enercity.de

5 district heat production Hannover-Stöcken coal-fired CHP plant Hannover-Linden gas-fired combined cycle CHP plant Hannover-Herrenhausen gas-fired CHP plant Columbian Carbon surplus industrial heat The future role of district heating // Chart 4 // harald.noske@enercity.de

6 Hannover s heat market today areas of supply by own grid total heat consumption GWh/a 20% 10% 70% 10 km other natural gas district heat The future role of district heating // Chart 5 // harald.noske@enercity.de

7 The Benefits of District Heating systems based on CHP-Process CHP = very efficient technology >>energy savings % (depending on reference system) >>similar reduction of CO 2 emissions >>diversity of different fuels } especially in bigger plants >>reduction of import dependance >>savings of network infrastructure and transport losses The future role of district heating // Chart 6 // harald.noske@enercity.de

8 Relation: Primary Energy Demand/Useful Heat different technologies and various utilities 3,5 3,0 2,5 2,0 3,0 source: German energy saving directive (EnEV) source: utility information 1,5 1,0 0,5 0,0 electricity hard coal 1,1 1,1 1,1 oil gas heating station 1,3 0,7 0,63 0,59 0,58 0,39 0,25 0,24 0,20 0,12 0,11 CHP Chemnitz Hamburg Kronsberg Leipzig Hannover Köln Rostock München Dresden The future role of district heating // Chart 7 // harald.noske@enercity.de

9 Efficiency technologies Effects >>future-proofness >>cost effectiveness >>reliability of supply >>environmental benefits Requests >>high amounts of investment >>long periods of time for ROI >>sustainable maintenance philosophy The future role of district heating // Chart 8 // harald.noske@enercity.de

10 Main issues that influence the developement of DH + >> support by laws and directives >> high energy prices (oil, gas) >> limited ressources of oil and gas >> cost structure with low variable part >> home based technology/ low dependance on imports all these positive issues are however not yet really effective >> request for short ROI >> long lasting contracts >> small scale plants >> expensive distribution network >> gas/dh profit-competition in multi-utility companies >> owner-user-dilemma all these negative issues represent important obstacles.with regard to a strong growth of district heating! The future role of district heating // Chart 9 // harald.noske@enercity.de

11 Considering all these issues: What are the main challenges for DH for the next decade? >> future price development of oil and gas can inflate or deflate DH development >> design of DH price structure heat market price or similar to cost structure? >> decrease of specific heat demand/heat density >> unbundling of network structure only one system per street! >> addition of CHP units in DH system that work without CHP at present >> increase of lifetime and reliability of DH components (pipes, compensators etc.) >> early detection of network damages (e. g. thermography) >> development of cost-effective repair and renewing technologies The future role of district heating // Chart 10 //

12 back import prices of primary energy [EUR/MWh] Which way will it go? crude oil natural gas hard coal The future role of district heating // Chart 11 // harald.noske@enercity.de

13 sensitivity of heating costs to the doubling of oil/gas prices back index (today = 100) fue l overhead network operation comparison of cost structure between DH system + 15 % fuel overhead network operation and gas + 45 % gas system gas capital costs DH today capital costs DH: doubled fuel costs taxes and overhead grid costs gas today taxes and overhead grid costs gas: doubled fuel costs The future role of district heating // Chart 12 // harald.noske@enercity.de

14 back developement of heat demand density apartment buildings, dense housing in cities energy savings directive energy market prices climate protection shrinking population district heat supply reasonable for economic and ecologic reasons one-family-houses; new buildings with high energy standards; suburban areas kwh/m 2 of house surface kwh/m 2 of building land gas electricity, wood The future role of district heating // Chart 13 // harald.noske@enercity.de

15 back new ideas for the unbundling of gas and DH networks district heating aggregation areas district heating (black) and gas (yellow) in the same street a quite common scenario The future role of district heating // Chart 14 // harald.noske@enercity.de

16 determine the network s lifetime to manage renewal programs average age and life expectancy of different types of components maintenance of DH networks early detection of damages e. g. by airborne thermography back development of technologies for costefficient renovation of DH systems (e.g. relining ) average age short lifetime long lifetime years The future role of district heating // Chart 15 // harald.noske@enercity.de

17 political framework requested for DH development >> sustainable and reliable goals to increase energy efficiency >> clear quantification of the desired part of CHP application >> strong obligations for all actors concerned to reach the goals >> incentives for investors to acquire new customers for DH and CHP >> consideration of CHP application in the emission certificate trade framework >> encouragement for investors to invest money for long terms of return The future role of district heating // Chart 16 //

18 Outlook 2020: The role and the potential of district heating in Europe >> energy savings of million tons of OE per year >> CO 2 emission reduction of some million tons per year >> numerable effect to reduce energy import dependance >> numerable effects on employment and local/regional added value >> more safety of supply due to relatively simple change of fuel and application of energy extensive technology There s a lot to gain Let s do it! The future role of district heating // Chart 17 // harald.noske@enercity.de

19 Harald Noske Member of the Board Stadtwerke Hannover AG Ihmeplatz Hannover Telefon Telefax harald.noske@enercity.de