District Heating and Cooling a song of ice and fire! Martin Fogsgaard Nilsson, Advisor Centre for Global Cooperation Danish Ministry of Energy, Utilities and Climate February 9, 2017 Page 1
GEUS The Geological Survey of Denmark and Greenland Danish Geodata Agency The Telecomm unications Board of Appeal DMI- The Danish Meteorologic al Institute Ministry of Energy, Utilities and Climate Danish Climate Council Danish TSO Energinet. dk Danish Energy Regulation Authority Danish Energy Agency Established in 1976 An agency under the Ministry of Energy, Utilities and Climate Around 350 employees
Partner Countries China Vietnam Indonesia Ukraine Turkey South Africa Mexico Ethiopia (2017) Export initiative UK Germany USA DEA work with energy regulation, energy policy formulation and energy analysis both national but also internationally February 9, 2017 Page 3
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Decentralization of technical system = Decentralization of decition Centralized production in the mid 80 s Decentralized production of today And market based pricing on electricity
Spot price, wind power and market dynamics In 2015, the wind power generation in Denmark corresponded to 42 per cent of the electricity consumption. In the course of the next 10 years, the share is expected to increase to approx. 60 per cent 6
The electricity system - Increased volatility leads to higher value of flexibility February 9, 2017 Page 7
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District energy systems serves as a vital part of the integrated (smart grid) infrastructure, and provides cost effective flexibility (storage) February 9, 2017 Page 9
Potential Total socio- and business economic potential in Denmark estimated at 2200 MW (equivalent to 40% of total estimated cooling need) today less than 1% is covered by DC. Compared with the district heating where 70% of total heating can be meet with DH and today more than 62% of total potential is covered. Annual effect from developments of district cooling, on projected CO2 emissions, tax revenue, and consumer savings. District Cooling total delivery CO2 emissions -average 2016 2020 2025 2030 2035 GWh 34 182 393 638 896 1000 tons -3-21 -34-50 -63 Impact on tax revenue Mil DKK -2-6 -4 7 30 Consumer savings Mil DKK 8 42 91 147 207 Estimated data for the development of future fuel composition. Usage is divided into cooling for production (70%) IT and servers (5%) and indoor cooling of office spaces (25%). February 9, 2017 Page 10
Benefits Synergies with (district) heating Peak shaving, load shifting and grid balancing Increased energy efficiency Enables more energy development strategies and flexibility! Potential for local job creation and benefits to the local economy (an estimated 10 billion DKK 1,2 billion pounds) Export potential February 9, 2017 Page 11
Barriers and challenges Lack of knowledge of DC solutions, potentials, technologies and business models (both with utilities, municipal planners and private stakeholders) Finance and seed money for feasibility studies Challenges existing structure of district heating companies as non profit Not all technologies are approved for DC Existing utilities are unable to supply DC across municipal borders February 9, 2017 Page 12
Regulation Visualize and communicate potential More professional costumers require less regulation Existing utilities needs more regulation! Legislation reviewing barriers identified (non economic) resulting in: - Regulation on utilities across municipality borders - Regulation on cross subsidization of DH/DC - Development of business case models, technology catalogue, cookbooks, task forces for the promotion of HP, Assessments of technical potential etc. February 9, 2017 Page 13
Assessing the technical and economic potential Page 14
+ Data February 9, 2017 Page 15
+ Data February 9, 2017 Page 16
Companies and projects Status for district cooling Number Companies Utilities currently supplying district cooling Planned projects for district cooling 6 Bjerringbro varmeværk a.m.b.a. Løgstør Fjernvarmeværk a.m.b.a. Hjørring Varmeforsyning Thisted Varmeforsyning HOFOR A/S Vestforsyningen Varme A/S 4 Carlsberg byen, Valby, Frederiksberg Fjernkøling Frederiksberg, Frederiksberg Fjernkøling Odense, Fjernvarme Fyn Høje Taastrup, Høje Taastrup Fjernvarme Known Project plans 1 Aalborg, Aalborg Forsyning February 9, 2017 Page 17
Companies and projects Primary economic drives, decreased capacity costs, better utilization of capacity (full load hours), storage and the use of excess heating. Secondary drivers: Environmental, O&M costs, less noise, less space used for technical installations in buildings Mostly existing utilities already engaged in DH are creating DC companies with the possibility to make profit, and better utilisation of existing businesses. There are currently around 10-15 ongoing projects in Denmark, with an annual increase in capacity of app 40MW February 9, 2017 Page 18
Cooperation, mentoring and knowledge sharing February 9, 2017 Page 19
Thank you for your attention! February 9, 2017 Danish Ministry of Energy, Utilities and Climate Page 20 Publication and tools available on DEA s global cooperation webpage https://ens.dk/en/our-responsibilities/global-cooperation
EXTRA SLIDES February 9, 2017 Page 21
Security of Supply DK UK Enhanced operations and increased coal flexibility 12 February 2016 22
District heating transition District heating by production fuel Heating installations in residential buildings 31% 63%
The future of district heating in Denmark Production of future District Heating (PJ) Resulting in Solar Surplus heat Heat pumps/electric boilers Boilers Combined Heat and Power Larger share of biomass (especially wood and straw) thereafter green electricity Introduction of heat pumps and electrical boilers Over time CHP will decline, to give way to 100% electricity producing units (Wind/solar PV) Solar Heating and Industrial surplus heating increases An increased role in the flexible energy system for district heating February 9, 2017 Page 24