Deliverable 3.a (Combining former deliverables 3.1; 3.2; 3.5)
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1 City Supporting partner Kortrijk, Belgium VITO Map showing local heating and cooling demand and supply Map indicating the heat demand for space heating per address (highest segment: 16.6 to 1837 MWh/year/address) on a 300m x 300m grid and on a 100m x 100m grid. Similar maps are available for the heat demand for sanitary hot water and for electricity.
2 Thermographic scan of the roofs The thermographic scan of the roofs in Kortrijk indicate considerable heat losses in the city centre. This indicate a high potential of energy savings by building renovation. Source: - consulted on Aug 2016 Mapping methodology H/C demand H/C infrastructure Sustainable H/C Excess heat Energy efficiency potential Geothermal Bio-energy Solar thermal City only Neighbourhood only Individual installation No details Additional Info Monitored data x x x
3 This heat demand map is based on individual gas and electricity metering data from end-consumers. Annual heat and electricity consumptions are derived from these. Estimations were made for the heat consumption of buildings which are not connected to the gas grid and use other fuels for heating purposes. These heat and electricity consumptions were added on either a 100 m x 100 m grid or a 300 m x 300 m grid and recalibrated to kwh/m². Grids with less than four end-consumers are left blank in order to protect the privacy of these end-consumers. A thermographic picture, indicating the heat loss of the roofs was taken on January 19 th, These images are processed and mapped on a one-line platform: An extract from the Pan-European Atlas was added for the sake of comparison, see below. It indicates the heating and cooling demand on a 1 km x 1 km network. This extract is compared with the Flemish Heat Map of Flanders, showing areas of interest to develop district heating networks. This maps is based on fuel consumption data: gas metering data for gas consumption collected by the local network operator and estimation of heating oil consumption based on electricity consumption. This maps also takes the potential supply of excess heat of industry and CHP into account. It finally combines both data layers, together with cost characteristics to develop district heating networks to calculate and map the feasibility to develop such networks. Current challenges - opportunities Kortrijk is situated in West Flanders; it has more than inhabitants 1 on 80,02 km² (population density of approx. 940 inhabitants / km²). The heat consumption of Kortrijk amounts to 954 GWh (final energy), which leads to an average heat density for the city of 11.9 GWh/a.km² or 42.9 TJ/a.km². Mainly low grade heat (for space heating and sanitary hot water) is demanded; about half of the heat is consumed by the residential sector, while the other half is almost equally spread over the commercial and industrial sector, see the table below (year 2012). Only 4% of the heat is from renewable sources (including CHP). Final (GWh) Fuel (GWh) Elec. (GWh) Electricity 423 Residential CHP heat 1 Commercial Fossil fuels 896 Industry non-ets Renewables 57 Industry ETS TOTAL 1377 TOTAL The Flemish Heat Map of Flanders indicates that developing a district heating grid can be feasible in the area. The south of West-Flanders is a densely populated area; as a consequence, the bio-energy resources are very limited. Nor is there a potential of (deep) geothermal energy. The industrial fabric mainly consists of small and medium sized companies, leaving a low potential for industrial waste heat. Nor is there a thermal power plant nearby. The mean potential source of waste heat is a waste incineration plant, east from Kortrijk in the neighbouring municipality Harelbeke, at a distance of 2.5 km from the city centre of Kortrijk. Its residual heat capacity is estimated at 4000 MW. There are specific plans to develop district heating grids tapping this waste heat and bringing it to new urban developments in Harelbeke, see picture below. There is also a potential to bring this waste heat to Kortrijk. These actions are taken under the impulse of the Covenant of Mayors signed by 13 municipalities in this south-west corner of Flanders, Belgium in January 2013.
4 Extract of PETA Flemish Heat Map
5 Project ideas in Harelbeke, east of Kortrijk About 530 dwellings planned About 150 dwellings planned Concrete factory Source:
6 Areas of priorities Kortrijk plans about 12 refurbishment projects all over the city, which would add amongst others more than 800 living units to the city and a new swimming pool, see the yellow circles on the map below. The city council considers developing a district heating grid in the city connecting these new developments. These developments will be phased out in time. A first development took place from 2010 until the end of 2015; the reconversion of the social neighbourhood De Venning (indicated by blue circle and blue arrow) was pivotal in developing an energy strategy for the city. A second development is the reconversion of an old railway hangar in combination with the construction of a new swimming pool (indicated by red arrow). This could be a next stepping stone towards a district heating grid connecting the new urban developments in the city of Kortrijk. These two projects are described more in detail.
7 Identified projects List of considered projects: 1. Reconversion of the Venning neighbourhood 2. Reconversion of an old railway hangar building of a new swimming pool Project 1 Reconversion of the Venning neighbourhood The neighbourhood De Venning has been built by the city s social housing company Goedkope Woning (means Cheap dwelling ) in the sixties. It is located at about 1.5 km east from the city centre. The social neighbourhood was at the time built as a so-called garden-quarter, 163 separate entities each with a small garden.. The well-meant 'social character' (affordable renting houses for the low-income people) has - in people's perceptions - evolved towards bearing the hallmark of 'social ghettos'. The renovation and the creation of inhabitable houses must at the same time go hand in hand with the restructuring of the neighbourhood and its public space and with a better integration into its wider district area. A master plan for reconversion was made in Value proposition The city has chosen to aim for a carbon neutral social housing estate after conversion. Kortrijk wanted to present the Venning neighbourhood as a best practice that is exemplary for reconversion of other (social housing) estates in Belgium. There are two options to achieve this: 1. By reducing the heat demand by insulating the dwellings well 2. By generation and distributing heat in the most efficient way while respecting the climate ambitions of the city An optimum between these two options needed to be looked for. Following final strategy was chosen: The 49 smallest dwellings were demolished and replaced by 82 new apartments with a passive house standard (high insulation standard, air tightness, orientation that allows PV, collective ventilation system type D with heat recovery) 64 dwellings, with 2 or 3 bedrooms, are demolished as well and replaced by new ones with a passive house standard
8 The remaining 50 dwellings, with 2 or 3 bedrooms, were renovated to a low-energy standard Several scenarios for the heat production were examined: Base case: all dwellings are equipped with an individual gas boiler with a thermal capacity of 25 kw. The total heat generation capacity would then amount to about 5 MW. Sustainable scenario: a district heating grid; this scenario allows to reduce the heat generation capacity to 1 MW The sustainable scenario was opted for. The graph besides indicates the split of the annual heat demand between space heating, sanitary hot water consumption and heat losses. Key activities The district heating grid will be operated by the social housing company Goedkope Woning. The involvement of an ESCO in a later phase is under consideration. Key resources A fourth generation district heating grid of about 1 km long o Temperature regime for the dwellings with a passive house standard: 60 / 25 à 40 C o Temperature regime for the dwellings with a low-energy standard: 80 / 25 à 60 C A wood chip boiler of 1 MW was selected as the base load heat source backed by a 450 kw gas boiler A 10 kwe CHP installation was selected to compensate for the thermal grid losses and the electricity consumption of the boiler A water buffer of 15 m³, corresponding to an extra thermal capacity of 350 kw, was selected to optimally balance heat demand and supply PV panels are installed on the well-oriented roofs Key partnerships The complete reconversion had be finalised within 6 years, which was quite a challenge. The fact that the whole estate is property of one single housing company catalysed the reconversion. The district heating grid was also entirely installed in private ground without the need to occupy public ground. The engineering company Ingenium took care of the optimal design of the energy infrastructure. There is a collaboration with the University of Ghent that monitors the energy flows in order to have a better understanding of the performance of the energy infrastructure and the energy consumption behaviour of the residents. Customer segments Most of the residents of the Venning are all vulnerable customers at risk of energy poverty. Customer relationships The residents rent the dwellings from the social housing company. Channels The residents mobilised themselves in 2010 to claim reconversion of their neighbourhood. The social housing company Goedkope Woning now wants to involve the residents in the objective to became a carbon neutral neighbourhood by training them in an energy-lean living style and by creating a community of residents who can stimulate each other to maintain/improve this living style. Cost structure
9 The cost of the total reconversion of the neighbourhood amount to 30 M. The installation cost for the energy infrastructure amounts to about 700,000. Revenue streams Part of the reconversion costs were covered by subsidies of the European Concerto programme ( The drastic reduction of the energy costs for the residents allowed the social housing company to raise the rent to cover part of the investment costs, without increasing the total cost of occupation for the residents. Business model of project 1 Key Partnerships Engineering company and university to find optimal energy configuration City of Kortrijk for the overarching climate ambitions and related urban planning policy ESCO for operating the energy infrastructure under consideration Key Activities Operation of energy infrastructure as part of operation of social estate Key Resources 4 th generation DH grid: 1 km / 1 MW wood chip boiler in baseline / 450 kw gas boiler as backup / small CHP / 15 m³ water buffer Value Proposition A comfortable dwelling with an affordable energy cost: opted for a combination of a 4 th generation district heating grid in combination with passive house / low-energy house standard dwellings Customer Relationships The residents rent the dwellings from the social housing company Channels Building a community with the residents in order to stimulate an energy-lean living style Customer segments In majority vulnerable customers Cost structure High reconversion cost of the dwellings Part of it covered by EU project Revenue Streams Higher rents are accepted as a result of a lower monthly energy bill Project 2 Reconversion of an old railway hangar building of a new swimming pool An old railway shed, 1 km south-west from the city centre, will be converted into 5 new units. It was opted for a micro-district heating grid, that will provide heat to these units, in line with the city s climate ambition A new swimming pool, replacing an older one nearby, will be built next to this shed. A gas boiler will provide heat to this swimming pool and to the micro-district heating grid. Customer relations The heat consumers will rent the reconverted premises; they will have to connect to the district heating grid. They won t have to possibility to opt for alternative heat sources. Key resources A 200 m district heating grid, connecting 5 heat consumers to a boiler in the new swimming pool. Estimated annual heat consumption: 1800 MWh A 2 MW gas boiler Kortrijk has looked for alternatives to gas; the option of a biomass boiler is disregarded by the city because of logistic
10 concerns (avoiding heavy transport in the city centre). Neither is there a waste heat source nearby, the waste incinerator of Harelbeke is at the other side of the city. The site is locked in by railways and highways. This makes an expansion of the district heating grid to the site of the high school in the west, where new buildings are planned, challenging. The railway needs to be crossed for that. The assessment of this case focused on two aspects of the business model: the key partnerships and the revenue streams. Old railway shed Location of new swimming pool High school Train station Existing swimming pool Picture of the current situation Key partnerships The main question the City of Kortrijk currently has is how it needs to structure the local heat market. Four market roles can be distinguished: Production of heat Distribution of heat Balancing: a party who balances the grid in function of varying supply and demand Data management / invoicing Kortrijk wonders to what extent these different market roles can be covered by one market party and when it makes sense to start to unbundle these market roles. Pure theoretical, 15 possible combinations are possible from a purely bundled market structure (all four functions combined in one market party) to an entirely unbundled one (all four functions split out in four different market parties). The City of Kortrijk has taken some decisions already, limiting the number of configurations: The heat producer will be a concessionaire for the boiler of the new swimming pool The heat distributor will be the local grid operator for electricity and natural gas Both concessions will have different life times All the 15 theoretical possible combinations of the 4 functions were analysed more in depth, by assessing the advantages and disadvantages for the market players involved. Some of these revealed to be either unpractical or rare. The practical combinations were then applied to this Kortrijk case.
11 It is concluded from the analysis of the 15 theoretical possible combinations that the balancing role in small or medium market sizes is usually taken up by the market party in charge of the heat distribution. Balancing is the last role to be unbundled. The retailer role in small or medium heat markets can either be combined with the heat production or with the heat distribution annex grid balancing. However, the former combination seems considering the advantages, risks and future perspectives of both structures the most convenient one for a long lasting structure and future introduction of competition. Revenue streams The most convenient heat tariff for this micro-district heating grid was analysed as well. Two different pricing principles were compared: Alternative pricing: the heat price is calculated as the cost of heat of the current heat sources. This method is also known as not more than others. Cost-plus pricing: this methodology considers the fixed and variable costs and adds a reasonable margin to the consumers. Thus, the revenue of the heat company is variable. Both pricing principles resulted in very similar costs for the consumer based on first estimations of the cost for the heat infrastructure (gas boiler, district heating grid, heat exchanger). However, alternative pricing it brings along a high risk for the heat company in case that the real costs are higher than the invoiced prices although it might be a convenient approach to acquire new customers since it ensures that the consumer will not pay higher prices than with current heat sources. Therefore, the cost plus calculation is recommended in order to secure the business case of the heat company. Business model of project 2 Key Partnerships Heat producer: concessionaire of new swimming pool Heat distributor: operator of local electricity and natural gas grid Question is who of both should be in charge of balancing the grid and for retailing Key Activities Rent of premises in combination with heat supply Key Resources District heating grid (200) / 2 MW gas boiler Value Proposition Heat at competitive prices Customer Relationships The heat consumers rent the premises in the reconverted building Channels Obligation for the heat consumer to connect to the DH grid Customer segments 5 heat consumer; all small businesses, amongst a dancing hall Cost structure Estimated cost of total heat infrastructure: about 300,000 Revenue Streams The alternative pricing principle and the cost-plus principle would lead to similar heat costs for the heat consumer. Recommendation for the cost-plus principle
12 Results of the stakeholder meeting Date March 5, 2015 Participants 46 participants; 8 from Kortrijk Other stakeholders are distribution grid operators, potential heat suppliers, service and technology providers and the Flemish district heat association The meeting started with depicting the urban developments in the city centre of Kortrijk, which offer the opportunity to develop district heating grids in the city. The meeting continued with an explanation on what a district heating grid is, what its share is in heat supply in the surrounding countries, showing examples in Belgium and with a short discussion on the current legislative framework in Flanders and the associates challenges. Four parallel workshop then took place in which following aspects were discussed: On the need to have an excess heat source nearby before considering a district heating grid: it was concluded that this was not a condition for the development of a district heating grid, but can be an levier. A balanced energy mix is needed as well as a masterplan on city level On obliging the property-developer to invest in the district heating grid as well as the building cost of the connected buildings will be lower than non-connected buildings: considered as less likely On the current legislative framework: discussion on the current bottlenecks (main problem at the time: E- labelling for dwellings that is not in favour for district heating grids) On the role of the city: the need to have a plan on city level and the city needs to take a position concerning the development of district heating grids: to what extent what the city to be involved / what role is left to market players? Date December 10, 2015 Participants 42 participants; 6 from Kortrijk Other stakeholders are distribution grid operators, potential heat suppliers, service and technology providers and the Flemish district heat association The meeting started with a presentation of the conclusions of the stakeholder meeting of March 5, VITO then presented the STRATEGO project and the results of the study on the market structure for the incumbent district heating grid see Project 2. DNV-GL then presented 4 concepts of district heating grids for new urban developments in the city centre: 1. A district heating grid (70 40 C), gas fuelled CHP in base load backed by a biomass boiler 2. A district heating grid (70 40 C), a biomass boiler in base load 3. Combination photovoltaic heat pumps 4. Combination district heating grid with a biomass boiler in base load, PV with power storage The feasibility of these concepts was discussed in a workshop following these presentations
13 Input into the local heating and cooling plan There is in the city centre a significant potential to reduce the energy consumption on the one hand and also the potential to deploy district heating grids. The city of Kortrijk should tap both potentials. First of all does the case of the Venning neighbourhood demonstrate that one can find a good balance between reducing the heat demand of dwelling by renovation and still find room to deploy a district heating network. Second concerns the renovation potential many existing buildings, that will not be demolished, whereas the district heating network aims at new urban estates first. The City of Kortrijk should hence start planning the development of the district heating network in line with the plan to develop the new urban estates. It should result in a master plan for heating and cooling in the city. This plan should include with parts of the district heating network to develop first. The first small district heating network serving the new swimming pool and the converted railway hangar can act as a first stepping stone. Other stepping stones should follow that eventually lead to a future more integrated network in the city.
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