District Energy: Delivering Clean Thermal Energy From Surplus Heat

Transcription

1 District Energy: Delivering Clean Thermal Energy From Surplus Heat Presented by: US DOE/Midwest Clean Energy Application Center Waste Heat Workshop September, 2010

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3 District Energy Community Scale Heating and Cooling Underground network of pipes combines heating and cooling requirements of multiple buildings Creates a market for valuable thermal energy Aggregated thermal loads creates scale to apply fuels, technologies not feasible on singlebuilding basis Fuel flexibility improves energy security, local economy

4 Infrastructure for Local Clean Energy Economy Connects thermal energy sources with users Urban infrastructure hidden community asset Energy dollars re-circulate in local economy High quality jobs in construction & operation

5 Impact on End User/Customer Customer capital costs reduced or amortized over long term service agreement Reduces size mechanical room; electrical vaults; condenser shafts and roof loads Colder CHW supply improves HVAC performance Lower owning, operating and maintenance costs More leasable space

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7 Higher Value Buildings Without District Energy With District Energy

8 Wasted Energy Is a Huge Challenge and Opportunity Energy Flows in the Global Electricity System Source: IEA, CHP: Evaluating the Benefits of Greater Global Investment (2008). 2/3 of the fuel we use to produce power is wasted -- CHP can more than double this efficiency

9 U.S. Primary Energy Consumption by Source and Sector, 2009 (Quadrillion Btu) Source: U.S. Energy Information Administration, Annual Energy Review 2009

10 Efficiency Power Engineering Magazine, November 2009

11 Opportunity: District Energy District heating and cooling is an integrative technology that can make significant contributions to reducing emissions of carbon dioxide and air pollution and to increasing energy security. International Energy Agency DHC/CHP Executive Committee District Heating and Cooling: Environmental Technology for the 21 st Century

12 IPCC Recommendations Measures to reduce greenhouse gas (GHG) emissions from buildings fall into one of three categories: reducing energy consumption and embodied energy in buildings, switching to low-carbon fuels including a higher share of renewable energy or controlling the emissions of non- CO2 GHG gases. Community-scale energy systems also offer significant new opportunities for the use of renewable energy. Intergovernmental Panel on Climate Change Chapter 6 - Residential and Commercial Buildings

13 CHP as a Share of Total National Power Generation Source: IEA, CHP: Evaluating the Benefits of Greater Global Investment (2008). The global average is just 9%

14 European District Energy Policy

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18 District Energy Networks Make Efficient Use of Local Renewable Energy Sources and Surplus Heat Industrial surplus heat Solar, geothermal Surplus heat from waste Surplus heat from biorefineries Biofuels Fossil fuels and heat pumps Combined heat and power

19 Heating Transmission Systems

20 The Greater Copenhagen DH system municipalities 4 integrated DH DH systems 500,000 end end users 34,500 TJ TJ (9,600 GWh, 32,700 GBtu) Approx % heat heat demand in in Denmark

21 CHP share of DH and Power 100% 80% 60% 40% 20% 0% 1980 '85 '90 '95 '00 '05 '07 District Heating Electricity Source: Danish Energy Authority

22 District Heating and RE - Composition of Fuels for District Heating Production 100% 80% 60% 40% 20% 0% 1980 '85 '90 '95 '00 '06 Oil Natural Gas Coal Renewable Energy etc. Source: Danish Energy Authority

23 National Energy Account Billion DKK '85 '90 '95 '00 '05 '07 Total Oil Natural Gas Coal Electricity Source: Danish Energy Authority

24 Denmark in Numbers - GDP, CO 2 and Energy Consumption 180 Index 1980 = '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 GDP in Constant Prices Gross Energy Consumption, Adjusted CO2 Emissions, Adjusted ( ) Source: Danish Energy Authority

25 Recent US Policy Initiative

26 Thermal Renewable Energy and Efficiency Act of 2010 (TREEA) Senate Sponsors - S Al Franken (D-MN) Kit Bond (R-MO) Earl Blumenauer (D-OR) House Sponsors - H.R Betty McCollum (D-MN) Jay Inslee (D-WA) Paul Tonko (D-NY) John Olver (D-MA)

27 Thermal Renewable Energy and Efficiency Act of 2010 (TREEA) Goal Stimulate investments in low-carbon thermal energy infrastructure, focusing on use of renewable energy to supply heating and cooling Major provisions Renewable thermal production tax credit Expands availability of tax-exempt bonding for district energy infrastructure Modifies authorization for grants for institutional sustainable infrastructure

28 TREEA Title I Thermal energy production tax credit Expands current PTC (USC Section 45) to production of renewable thermal energy Geothermal and closed-loop biomass get 2.1 cents/kwh ($6.15/MMBtu) Open-loop biomass, landfill gas, and municipal solid waste get 1.1 cents/kwh ($3.08/MMBtu) Impact: increases after-tax cash flow, thereby increasing return on investment to attract equity investment

29 TREEA Title II Tax-exempt bonding U.S.C. 26 Section 142 currently provides for Exempt Facility Bonds for district energy distribution systems TREEA expands eligibility to district energy plant and building connection assets Plant investments provide opportunities for increased efficiency, use of surplus thermal energy and reduced carbon emissions Impact: reduces interest rate, thereby cutting debt service costs and increasing financial feasibility

30 TREEA Title III Energy Sustainability Grants for Institutions Energy Independence and Security Act of 2007 (EISA) authorized program (Section 471) TREEA amends the authorization to eliminate constraints that impair program effectiveness Amendments will enable grants to larger projects with greater efficiency gains, and will result in an increased number of beneficial projects Impact: grant funding reduces total investment requirements, thereby increasing financial feasibility

31 TREEA Beneficiaries Renewable thermal production tax credits Tax exempt bonding Amendment to Section 471 grant program For-profit district systems For-profit district systems Colleges and universities Direct Performance contractors Non-profit district systems Local governments Municipal utilities Non-profit district systems Designees of the above Colleges and universities Equipment vendors Equipment vendors Local governments Consultants Consultants Indirect Municipal utilities Performance contractors Performance contractors Non-profit district systems Equipment vendors Consultants

32 TREEA PTC Impact on Biomass Economics

33 TREEA PTC Impact on Geothermal Economics

34 Related Legislation H.R Rep. Inslee (D-WA) + 15 cosponsors Increases CHP ITC ceiling to 25 MWe H.R Reps. Thompson (D-CA), Kind (D-WI), Van Hollen (D-MD) and Linder (D-GA) Increases CHP ITC ceiling to 25 MWe H.R Reps. Paul (R-TX), Inslee (D-WA) and Berkley (D-NV) Provides 30% ITC for waste heat to power H.R Rep. Tonko (D-NY) + 16 cosponsors

35 Related Legislation S Sens. Bingaman (D-NM), Wyden (D-OR), Shaheen (D-NH) and Collins (R- ME) Provides 30% ITC for energy storage including thermal S Sens. Snowe (R-ME), Bingaman (D-NM), Begich (D-AK) and Gregg (R-NH) Provides ITC for residential conversion from oil to natural gas or biomass S Sen. Tester (D-MT) Authorizes and directs a program of RD&D for geothermal direct use and geothermal heat pumps

36 Regulatory Issues EPA Boiler MACT comments submitted EPA Voluntary GHG Reporting Amendment for Cogeneration Comments submitted Aug 23 Recognizes increase in onsite emissions and reduction in regional emissions Published in Federal Register Monday Sept 27

37 Thank you for your attention Rob Thornton