City. Velika Gorica. Supporting partner UNIZG FSB. Map showing local heating and cooling demand and supply

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1 City Supporting partner Velika Gorica UNIZG FSB Map showing local heating and cooling demand and supply Work so far: The group at the Department of Energy, Power Engineering and Environment at the Faculty of Mechanical Engineering and Naval Architecture, University of Zagreb is in the process of developing a heat demand map for the city of Velika Gorica. The preliminary results can be seen bellow: The map in Figure 2 presents the useful heating demand distribution for the city of Velika Gorica on a scale of m essentially showing the amount of useful heat required in kwh/10000m2. The map is also available on a smaller scale (approximately 11 meter) but this was discussed with the city representatives and representatives of the DH company and it was determined that such a scale is too small and not realistically needed. A map demonstrating the heating demand on a scale of 11 km and can be utilized if necessary. Work in progress: The developed maps are currently being calibrated to determine if the assumed specific heat demands are correct. Figure 1 Useful heating deamnd in the city of Velika Gorica The process is utilizing data collected from the national energy census, the cities SEAP and similar information sources that provide an aggregated and annualised energy balance. Some data related to energy supplied from district heating to individual customers is being collected from the district heating company and, when and if finalized, will be compared with the developed maps. This will cover only a part of the city. The possibility to obtain and utilize date related to the distribution of natural gas to individual addresses is also being pursued. Due to the fact that most housing units are being managed by one company that has ordered the development of energy audits of all building under their management (meaning most buildings in the city) we will most likely get access to the data within them. Currently we have a portion of them analysed and are pursuing the rest. Future work After the calibration process a cooling demand map will be developed and calibrated. It is planned that the maps are transferred to a GIS interface based on the demand from the cities. Additional layers including the gas and DH grids will be added as well as the information related to potential waste heat sources. Due to fact that most of the buildings have or should have an energy audit, data gathered within them will also be added as an additional layer. Depending on the available data, information on the actual heat supplied by the DH companies as well as gas delivered by the suppliers will also be added. Additional layers and features will be implemented based on the feedback from the users. Figure 2 GIS map showing useful heating demand in the city

2 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 Method used: Figure 3 Simplified representation of the method used The figure to the left demonstrates a simplified representation of the method used in order to create the heating and cooling demand maps for the city of Velika Gorica. The initial step in the process is the utilization of the online building census that unfortunately only provides the locations and rooftop view areas of the buildings to create a matrix and with that a basic set of info telling us if a certain spot is covered by a building or not. After the initial step, the number of floors of every building is determined to calculate its total gross area, multiplying the area with the number of floors. This information was not available in the census and was collected partially from energy audits, where available, and info provided from the cities themselves. This data was very scares usually covering only public and public owned buildings that make a minority of the overall building stock. In order to complete this process, buildings on the initially developed map were color-coded based on the number of floors manually using google street view or other available data sets. Finally, the buildings were classified into 6 categories based on age and type; old house, new house, old apartment building, new apartment building, industrial facility and sky rise. These data were also collected the same way as the information on the number of floors. A coherent and publically available building census would drastically reduce the time intensity of this methodology and allow the user to develop such maps quickly, easily and with great detail. Current challenges - opportunities The city of Velika Gorica is located some 16 km southeast from the capital city of Zagreb. According to Croatian census from 2011 it has a population of about people making it the 6 th largest city in Croatia. City area amounts up to 328 km 2 with population density of 190 inhabitants/km 2. Velika Gorica is the largest settlement and the administrative

3 centre of the traditional Turopolje region. The district heating grid is owned by the city and operated by HEP toplinarstvo. The system consists of 13 local boiler plants, 3 of which are connected in one large district heating grid. The total hot water network is 9,4 km long and serves customers. The connected load is 46,2 MW and the installed power 69,6 MW. All of the plants were originally operated by fuel oil but a switch to natural gas is slowly but systematically being implemented so today s fuel mix consists of 70% natural gas and 30% light fuel oil. Currently, approximately a third of the installed capacity is converted to natural gas but it represents roughly 60% of the energy supply with the rest, mostly during peak demand hours, being covered by the fuel oil fired boilers. A biomass plant was planned in the city on few occasions but the project was always stopped. The city of Velika Gorica has a lot of potential for the upgrade of its district heating system through several key steps. First of all the full connection of its individual district heating grids and a complete switch away from fuel oil. The city also has a high potential for the utilization of renewable biomass and cheap electricity through heat pumps and electric boilers. Options into the utilization of solar heating and heat storage should also be explored. One good location for such a project is an apartment building block in Cibljanica neighbourhood as shown in Figure 5. It is located south from the Ivana Pavla II avenue, highlighted blue, and Jurja Dobrile street, highlighted purple. About 450 residents live there in two five store buildings that are connected to the local light fuel oil furnace that is used for space heating and domestic hot water preparation (SHW). These buildings were never refurbished and today still have minimal or almost no thermal insulation, so their average annual heat consumption is estimated to be between 170 and 185 kwh/m 2 a. About 60% of all apartments in the building blocks are owned by the city which is a good start because current refurbishment law prescribes that Figure 5 Location of the apartment building block Figure 4 Location of the city of Velika Gorica minimum of 50% of the apartment owners have to give approval that the refurbishment works should be carried out. City ownership could quicken this exhaustive procedure of collecting the required documentation. Using light fuel oil for space heating and DHW is far from today s strict environmental friendly standards that focus on reduction of CO 2 emissions. Also, light fuel oil heating is almost 20% more expensive than natural gas heating which is also more efficient. There are several opportunities that could potentially reduce the current heating bills, but the most feasible

4 and eco-friendly solution is development of small solar district heating network with seasonal heat storage in the nearby public park area highlighted green in Figure 5. Another good location for development of new small scale DH network is in the village of Buševec that falls under the administration of the city of Velika Gorica. It is located in the Turopolje area at the highway between Zagreb and Sisak. According to the last Croatian census from 2011 it has 886 inhabitants living mostly in family houses and residential buildings. Figure 6 Map of the small DH network in Buševec Areas of priorities Construction of almost 50% of all buildings in Croatia was carried out before 1970 s when there were no restrictions and policies that would encourage construction of energy efficient buildings. Therefore one of the priorities is refurbishment of these thermal inefficient buildings through installation of proper thermal insulation that would reduce specific annual heat consumption from 175 kwh/m 2 down to 45 kwh/m 2. Good example of proper insulation is shown in Figure 8. Figure 8 Christian Bickel (2006). House in Reykjavík in renovation. Thermal insulation underneath the corrugated sheet metal. [Online image]. Retrieved March from Another area of priority is implementation of solar district heating in the old neighbourhood Cibljanica, in combination with seasonal underground hot water storage that could be constructed in the nearby city owned field area. An example of such storage is shown in Figure 7. Figure 7 Ulrichulrich (2010). Districht heating accumulation tower of Theiss, near Krems an der Donau, Lower Austria with cubic meters volume [Online image]. Retrieved March from Third area of priority is replacement of old oil fired furnaces and development of a small scale biomass fired DH network for heating five public buildings in the village of Buševec.

5 Solar fraction Storage size Identified projects List of considered projects: Replacement of the remaining fuel oil fired boilers with a combination of biomass, natural gas and potentially solar Interconnection of buildings into small DH network Project 1 Two buildings in the residential apartment block were built in the same time period with no or minimal thermal insulation. Almost 60% of the apartments and nearby field area, highlighted green in the Figure 10, are owned by the city. The main focus of this project is refurbishment, installation of proper thermal insulation in the five store high apartment block, highlighted red in Figure 10, and utilization of solar energy for space heating and domestic hot water (DHW) preparation. This small apartment block was chosen because of the nearby public 4000 m 2 park area that could potentially be a god location for the seasonal heat storage. Total heated surface area of the block amounts up to m 2. Since its annual specific heat consumption ranges between 165 to 185 kwh/m 2 a, their current average annual heat demand amounts to about MWh. The whole area is heated through central light fuel oil furnace that has average efficiency of about 50% so the current annual heating costs sum up Figure 10 Buildings that are chosen for the refurbishment (red) and potential location for seasonal heat storage (green) to about Refurbishment could reduce annual specific heat consumption to about 45 kwh/m 2 which could potentially reduce the heat demand to about 795 MWh. Through this, heating bills could also be reduced by a factor of up to 3.7. If part of the available roof area was covered with solar collectors fuel consumption could also be reduced by another 125 MWh. In this case annual heating bills could be reduced by additional In order to verify these assumptions a case study, with detailed techno-economic analysis has been conducted. In this case study two different scenarios Table 1 Parameters from analysed scenarios Scenario Reference A B Heated area (m 2 ) Roof area (m 2 ) Specific heat consumption (kwh/m 2 ) Heat demand (MWh) Heat from solar collectors (MWh) Potential savings ( ) CO 2 emissions (t) Figure 9 Storage size and solar fraction were analysed. Scenario A analyses reduction of annual heat demand and fuel consumption through refurbishment of buildings in the area highlighted in red. In Scenario B refurbishment and installation of small solar DH network in the same area has been analysed. Refurbishment of the selected apartment block includes external solid wall insulation, which improves its thermal efficiency which lowers primary energy 25% 23% 21% 19% 17% 15% 13% 11% 9% 7% 5% Solar fraction Storage 25% 40% 55% 70% Roof coverage

6 Subsidy consumption, and thereby reduces heating bills. Almost all of the buildings from this apartment block were made out of concrete and masonry bricks, and have no cultural or historic value, so there will be no need for additional government or conservation permissions that could potentially increase the investment costs. In Croatia typical price range for refurbishment of such buildings is around 120 /m 2. Given that total heated surface area amounts up to m 2, total investment costs of external solid wall insulation sum up to about 2,121 million. In Scenario B integration of small solar DH network with thermal storage has been analysed. Diagram in Figure 9 shows how roof coverage with solar collectors relates to the solar fraction of the system and optimal volume of the heat storage that is needed for such a system. In this scenario solar collectors cover 50% of total roof area which is about m 2. Optimal storage size for such a system is 580 m 3 of water equivalent, or heat capacity of 34 MWh. Average solar collectors price, which include installation and heat exchanger costs, sum up to 250 /m 2. Average price for underground heat storage in Croatia is about 200 /m 3 of water equivalent, so the total investment costs in Scenario 2 sum up to Total annual savings that arise through reduced fuel consumption in both scenarios are shown in Table 1. The analysis of the whole project was carried out so that 95% of the 40% Insulation Storage investment costs was financed through a bank loan, while the Solar collectors Natural gas rest of it was financed with own founds. Calculations in both 35% scenarios were carried out so that the subsidy from potential funds was optimised in a way that the whole project was cost 30% effective after period of 20 years. Results from both scenarios are represented in Table 2. It can be seen that in both 25% scenarios total amount of subsidy required from the EU or some other type of funds should be near 25%. Acquisition of 20% funds for the Scenario B is more plausible then for the Scenario A because it also uses renewable energy source, 15% whose integration in current systems is always higher on the priority list. 10% -20% -10% 0% 10% 20% Price variation Figure 11 Sensitivity analysis for the most influencing parameters from Scenario B Table 2 Results from both scenarios Results Scenario A Scenario B Total investment costs ( ) Subsidy (%) 28,41 24,32 True investment costs ( ) Bank loan ( ) CO 2 savings (t) Sensitivity analysis regarding the optimization of the amount of subsidies needed for the project in the Scenario B has also been conducted. Four financially most influent factors such as insulation, heat storage and solar collector investment costs, as well as natural gas prices have been increased and reduced by up to 20 %, with increments of 5 %. Figure 11 is a graphical representation of the sensitivity analysis from where it can be seen that the most influential factors are light fuel oil prices and total costs of the external solid wall thermal insulation. Since heat storage and solar collectors represent only a fraction (20-25%) of the total investment costs their influence on the required subsidy is relatively small. It can be seen that the amount of required subsidies ranges from about 38% in worst case scenario, when oil prices are the cheapest as total potential annual savings are lower, to 12% in best case scenario when either insulation costs are reduced, or gas prices are increased by 20%. Conventional light fuel oil furnaces operate at average seasonal efficiency of under 50%, which is the main reason why this project has high potential for reduction of heating costs (up to 75%). This is the only reason why such project is cost effective with low percentage of subsidy from EU or other types of funds.

7 Business model of project 1 Key Partnerships City of Velika Gorica Appartment owners Key Resources Thermal insulation Solar colectors Thermal energy storage Knowledge Key Activities Refurbishment of the apartment block Utilization of solar energy Integration of seasonal heat storage Value Proposition Tackling the high heating bills Low carbon heat and reduced GHG emissions Increased energy security Social & public benefits Channels Word of mouth or direct contact Conduct case studies Telephone service City s webpage Customer Relationships Energy savings and trust Customer segments Multi-residential buildings, Cost structure Investment cost in thermal insulation: Investment cost in solar collectors: Investment cost in seasonal heat storage: Revenue Streams Savings from reduced fuel consumption Capacity fees Investment grants Bank loans Costumer Segment About 440 people living in multi-residential apartment block that is 60% owned by the city. Rest of it are private Value Proposition Renovation of inefficient buildings with average annual specific heat consumption of around 165 to 185 kwh/m 2 which have never been refurbished. Consequently heat demand for space heating and the GHG emissions would be reduced. Solar heating utilizes renewable non-carbon energy source for heat production and increases the security of energy supply. Channels Majority of apartments are owned by the city. This simplifies the communication because only smaller part of the apartment owners should be informed about the planed project. Individual meetings with could be organized where all the information should be shared and case study presented. All the information should be available on the cities official website or through telephone service. Customer Relationship Since the proposed project would be applied to the whole buildings all customers would benefit from the reduced energy consumption. Trust should be developed separately, the city of Velika Gorica should be approached professionally while the rest of the owners should be approached personally. Revenue Streams Savings from reduced fuel consumption are the main income stream. Building renovation should partially be funded through grants from the EU renovation funds and partially through bank loans. Key Resources Proposed project is in Croatian terms a medium sized project which amounts to total of almost 3 million mainly for building renovation. This could be attractive for EU renovation fund and Croatian fund for environmental protection and energy efficiency. Banks could also be interested in offering a specific loan with reduced interest rate. Solar

8 heating and existing small DH network that runs on fuel oil would be the only supply utility that would offer heating for the whole apartment block. The knowhow is another key resource that offers energy savings and implementation of optimal technology. Key Activities Renovation of old buildings through installation of external wall insulation, and connection to the new solar heating utility (1.767 m 2 of solar collectors) that is connected to the local DH network. Installation of new 34 MWh thermal energy storage. Key Partners City of Velika Gorica and private apartment owners from the apartment block, EU funds and investment banks. Cost Structure Investment costs related to the refurbishment of the buildings in the apartment block amount up to Investment cost in to the solar collectors amount up to Investment costs in seasonal heat storage amount up to Fuel oil prices in Croatia are pretty stable and don t vary much on the seasonal basis. Project 2 Buševec is a small Croatian village that falls under the administration of the town Velika Gorica. It has a small centre where all public buildings, including fire station, kindergarten, elementary school, cultural centre and a small church, are located, as it is shown in Figure 12. Currently all of these buildings have individual heating systems that mainly run on LFO (light fuel oil) or LNG (liquefied natural gas). Buildings B-1,B-2 and B-4 from the Table 3 run on LFO, B3 runs on LNG and B-5 doesn t have any heating system at all. Since all four heating systems are from the late 1970 s there is urgent need for their modernization. Proposed project focuses on development of small scale DH network with one centralised biomass HOB (heat only boiler) that would be integrated in building B-1 where currently Figure 12 Map of the small DH network in Buševec largest from the mentioned LFO boiler s is located. This location has many advantages as it is located in the middle of all five buildings, meaning that the required length of larger pipelines, as Table 3 Technical specifications of the buildings well as the total investment costs in DH Surface Heat network are as low as possible. Size of Heating Building Type area consumption DH pipes, and capacity of thermal [m 2 ] [kwh/m 2 technology ] substations has been dimensioned B-1 Elementary school l LFO according to the maximum heat B-2 Fire station l LFO demand from particular buildings. B-3 Kindergarten l LNG Pipeline dimensions, their length, as B-4 Cultural centre l LFO well as the capacities of the thermal B-5 Church substations and investment costs are presented in Table 4. The size of biomass HOB has been determined based on the maximal total hourly heat demand

9 and simultaneity factor that takes into account all the combinations of buildings that are simultaneously heated. Required heat power of the HOB, including DHW (domestic hot Table 4 Techno-economic data for the DH network water), is about 201 kw. Investment costs into the biomass DH Pipeline HOB, including modernization of the boiler room, project Type Length Specific Total documentation, as well as costs of inspection and technical [m] / investment costs [ ] service sum up to 139,286. Total net investment costs sum Amount cost [ /m] up to 183,756. In order to verify all of the assumptions total of five scenarios were analysed. Scenarios A1 and A2 represent the specific case where whole project would be carried out locally, meaning that the whole system would be owned and operated by the public company. In scenarios B1, B2 and B3 such project would be developed and operated by a private company which would sell heat to the mentioned buildings according to similar rules from DH company in city of Velika Gorica. Public buildings would pay heat according to the prices and fees from the Table D ,922 D ,00 1,613 D ,800 D ,802 Total ,137 DH thermal substations 30 kw , kw , kw ,267 Total , For every scenario fees for the installed power were constant. Prices for heat consumption were optimised in such way that NPV of project would equal 0 after 20 years, which is expected lifetime of the installed equipment. In scenarios A2 and B2 minimum amount of grants from the investment funds required for maintaining current heating Table 5 Results from the analysed scenarios Scenario Ref A1 A2 B1 B2 B3 Production of heat Grant % Energy /kwh Power /kw Distribution of heat Energy /kwh Power /kw Charge for using the thermal substation With DHW kn/m Total annual costs 23, , , , , , Total savings 0-3, , , bills has been determined. In scenario B3 maximum available amount of grants for such project has been analysed. From it it s clear that total potential annual savings could sum up to about 4,690. Main benefit would be the reduction of GHG (green house gasses) by almost 80%.

10 Business model of project 2 Key Partnerships Village of Buševec / City of Velika Gorica Private investors Key Resources DH network, 201 kw heat power biomass boiler, Knowledge Key Activities Development of small DH network, Replacement of old oil fired furnaces Installation of biomass boiler Value Proposition Tackling the high heating bills Low carbon heat and reduced GHG emissions Increased energy security Social & public benefits Customer Relationships Word of mouth or direct contact Conduct case studies Telephone service City s webpage Channels Energy savings and trust Customer segments Public buildings Cost structure Investment costs in biomass boiler: 139,286 Investment costs in DH network: 11,137 Investment costs in thermal substations: 33,333 Constant fuel oil and biomass prices Revenue Streams Savings from reduced fuel consumption Capacity fees Investment grants Bank loans Costumer Segment Five public buildings including elementary school, kindergarten, fire station, cultural centre and a small church. Value Proposition Current heating bills are extremely high mainly because of the old and outdated heating technology that uses light fuel oil as a heat source. New technology would offer heating through more sustainable, environmentally less intensive and cheaper heat source, such as biomass. These buildings would be connected to a small DH network that would be operated from one centralized station, taking care of all problems related to fuel supply and boiler maintenance. This way security of energy supply would be increased and GHG emissions would be reduced. Channels Four of the five buildings are owned by the city. This simplifies the communication because there is no need to organize individual meetings. Communication could be carried out via city office that could organize public meeting where all the information should be shared and case study presented. All the information should be available on the cities official website or through telephone service. Customer Relationship Since the proposed project would be applied to the whole buildings all customers would benefit from the reduced energy consumption. Trust should be developed through professional approach with the city of Velika gorica and representatives of the village of Buševec. Revenue Streams Savings from reduced fuel consumption are the main income stream. Another income stream are capacity fees. Key Resources Proposed project is in Croatian terms a small sized project which amounts to total of almost 185 thousand. This could be attractive for EU renovation fund and Croatian fund for environmental protection and energy efficiency. Banks could also be interested in offering a specific loan with reduced interest rate. New small DH network that

11 produces heat from biomass would be the only supply utility that would offer heating for all five buildings. The knowhow is another key resource that offers energy savings and implementation of optimal technology. Key Activities Development of a new 202 m long DH network that is connected to the biomass fired HOB. Key Partners City of Velika Gorica, village of Buševec and private investors, EU funds and investment banks. Cost Structure Investment costs related to the installation of new biomass fired HOB amount up to 139,286. Investment cost in to the DH network amounts up to 11,137. Investment costs in thermal substations amount up to 33,333. Fuel oil and biomass prices in Croatia are pretty stable and don t vary much on the seasonal basis. Results of the stakeholder meeting Date March 17th 2015 Participants Neven Duić, Tomislav Novosel, Goran Krajačić, Nikola Matek, Javier Felipe Andreu, Mario Marjanović The meeting related to the WP3 activities within the STRATEGO project was organized on the 17th of March at the Faculty of Mechanical Engineering and Naval Architecture in Zagreb. Three members of UNIZG FSB, two students working on their master thesis related to the district heating system in the city of Velika Gorica and one member of HEP Toplinarstvo d.o.o. have attended the meeting. Main focus of the meeting: Demonstrate the goals of the project; Current and future work; Mapping methodology and possible implementation; Assistance in the data gathering. Input into the local heating and cooling plan The local stakeholders (both the city representatives and the DH operators) in the city of Velika Gorica are very proactive. Some steps in the realisation of the proposed project have already been taken and a project similar to this should be proposed for EU funding in the near future.