Combined Heat and Power & District Heating Networks. For the East Midlands

Combined Heat and Power & District Heating Networks For the East Midlands

Introduction to Combined Heat and Power

The Basics Systems produce heat & electricity Production of electricity at the point of use is much more efficient than from grid Financial and environmental benefits derived from electricity production but this is limited by heat demand Ratio of elec to heat is around 1:1.1 for larger systems but reduces for smaller systems Common systems use gas but can use biofuels and biomass

The Basics

Key Considerations Limited modulation compared to gas boilers so need to be sized to meet constant heat demand Ideal for buildings with large heat demands leisure centres, hotels, halls of residence, hospitals etc Ideally aim to achieve annual running hours of 4500 or more Need to consider: Larger size of plant, Sound proofing, Flue height and Air quality implications

System Performance Increasing heat demand allows greater electricity generation this can be achieved through the use of: Adding loads Thermal storage Multiple units Absorption chillers Heat dumping

CHP economics When a CHP operates: Fuel is purchased Electricity is generated and provides revenues Heat is generated and provides revenues Maintenance costs are incurred Financial performance highly dependent on returns from electricity need maximise use/sales for on-site use

CHP sizing CHP will save money each hour it operates. The issue is how many operating hours in the year Economic optimisation: Too large short running hours, longer payback periods and limited operation in summer Too small shorter payback but limited impact on site energy costs and small CO 2 saving Optimum is when investment results in the lowest Net Present Cost for the energy supplies needed by the site Analyse: different sizes, multiple units and thermal stores Many of the parameters are non-linear: CHP costs and performance, energy prices

CHP sizing Base-load sizing maximises financial return on CHP investment but is not necessarily optimum for CO 2 savings If the CHP capacity is greater than the base-load then CHP operating hours reduce but the constraint is mainly an economic one Need a model to determine annual operating costs, fuel used, electricity produced, boiler fuel needed, electricity imported and exported, hours of operation etc Ideally need half-hourly data to conduct a detailed assessment

CHP sizing & CO 2 emissions CO 2 emissions generally larger the CHP the greater CO 2 savings as more CHP heat is provided and less boiler heat But hours are lost in summer if thermal store not large enough and CHP shuts down as not enough demand So size of thermal store is critical to maximise CO 2 savings But thermal store size might be limited by plant space and costs Balancing cost and CO 2 emissions depends on priorities

Base load sized CHP 500 450 400 Boiler heat produced CHP heat output for heating MWh Total Space heating and DHW demand MWh 350 300 250 200 150 100 50 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Page 12

Oversized CHP 500 450 400 Boiler heat produced CHP heat output for heating MWh Total Space heating and DHW demand MWh 350 300 250 200 150 100 50 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Page 13

Optimally sized CHP 500 450 400 Boiler heat produced CHP heat output for heating MWh Total Space heating and DHW demand MWh 350 300 250 200 150 100 50 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Page 14

CHP sizing example CO2 reduction (tonnes) 200 180 160 140 120 100 80 60 40 20 0 CO2 emission reduction Simple Payback period 225 330 526 CHP Electrical Capacity kwe 20 18 16 14 12 10 8 6 4 2 0 Simple Payback (years)

CHP electrical efficiency with size Electrical efficiency (%) 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 0 500 1000 1500 2000 2500 CHP Electrical Capacity kwe

CHP maintenance cost with size 2.5 Maintenance cost (p/kwe) 2.0 1.5 1.0 0.5 0.0 0 500 1000 1500 2000 2500 CHP Electrical Capacity kwe

Capital costs with size 2,500 Capital cost per kwe ( /kwe) 2,000 1,500 1,000 500 0 0 500 1000 1500 2000 2500 CHP Electrical Capacity kwe

Effect of emissions factors Variation of heat emissions factor with electricity emissions factor 300 CO2 emissions per kwh heat (g/kwh) 250 200 150 100 50 0 0 50 100 150 200 250 300 350 400 450 500 CO2 emission per kwh electricity (g/kwh) Direct electric Gas boiler at 85% CHP at 37% Heat pump (CoP 3.5) Individual heat pump (CoP 2.5)

Thermal storage Can supply heat at night when CHP is not economic to run Avoids using boilers for peak periods Enables low (summer) loads to be met to avoid turn-down constraint Allows CHP to generate electricity at times of highest price Allows CHP to operate at highest output and hence efficiency

Introduction to District Heating Systems

The Basics District Heating Networks also referred to as local energy networks or community heating Local generation and supply of heat and power Supplement or replace the traditional centralised infrastructure Opportunity to deliver significant and cost effective reduction in CO 2 emissions A key solution to delivering low carbon energy in areas with high energy demand density normally urban centers

The Basics Heat supplied from a central energy centre(s) to multiple buildings Large demands allow the use of low carbon technologies Large system and range of demands allows systems to run more efficiently Hot water distributed using a network of insulated pipes Individual boilers replaced with heat exchangers Range from a few buildings to city-wide schemes

The Basics

Components: Energy Centre Large buildings Large flue Double height Can be hidden or celebrated

Components: Heat Source Gas-fired CHP, spark-ignition gasengines or gas turbines Biomass boilers and biomass CHP Energy from waste Power station CHP Large-scale heat pumps Large-scale solar thermal Deep geothermal Electrode boilers Thermal storage

Components: Heat Source Key Issues: Gas-fired CHP: Proven technology, range of sizes, good support, limitations on temperatures, maintenance costs Biomass boilers: Wood chips or wood pellets, storage volumes can be large to minimise deliveries, slow response, best used with thermal store, particulate and NOx emissions Biomass CHP: only technically established at larger-scale, gasification and ORC technologies at smaller scale, availability and price of fuel, ROCs and RHI Energy from waste: common source for larger schemes, newer technologies could be smaller scale Power station CHP: Ideal, but power station location critical, needs steam turbine designed for DH

Components: Pipework Pre-insulated pipe systems Either steel-in-plastic or all plastic Thermal expansion provision Valves Surveillance systems EN standards Heat losses can be minimised using: Low temperatures Shortest possible pipe routes Locating within buildings

Components: Heat Exchangers Plate heat exchangers draw heat from the network Internal wet system is kept separate Often referred to as HIU s Heat meters to calculate usage for billing purposes

Benefits for LAs Potential for significant reduction in CO 2 emissions Energy cost reductions and possible long-term profits Energy supply security Improved EPC s and DEC s for LA buildings Contribute towards CRC returns Can be used to address fuel poverty Assist other sectors to meet CO 2 targets

Benefits for customers & developers Reduced capital costs Significant contribution to complying with Building Regulation standards (Zero Carbon in 2016/2019) Cheaper energy bills Reduces plant room space CO 2 savings (around 20% reduction on standard plant) Management and operation risks passed to a third-party High reliability

Suitability for area-wide schemes Number of key criteria Density and profile of heat demands Presence of existing large anchor loads Presence of existing heat generation plant or other infrastructure Sites for an energy centre Potential routes for hat network Customer attitudes ESCo interest Page 33

Suitability for new development schemes Informed by scale, density and building type: Realistically >1000 dwellings, or 10,000m 2 floor area commercial Pref. mixed use Ideally link to existing development/heat loads High heat loss at low density Impact of improved fabric efficiencies Examples: Olympic Park and Legacy, Wembley Park, Hanham Hall Page 34

A Future Path for District Heating in the UK Short-term - next 10 years DH in urban areas can be developed through the use of smaller-scale heat production technology (gas-engine CHP) Much of this will involve gas-fired CHP waste and biomass could also contribute Initially this CHP will displace coal-fired power stations and later older gas CCGT Medium term 10-20 years Small schemes could be combined to form larger schemes capable of taking heat from large thermal power stations and other renewable sources to achieve higher efficiencies All new coal or gas power stations and biomass/waste plants would need to be CHP ready and located near to major cities. Use of CCS for coal and CCGT Increasingly a diverse range of low-carbon sources will supply heat to networks Longer term - >20years The majority of city schemes will be connected to large thermal plant DH will also routinely use a range of other heat sources including large-scale heat pumps, solar, deep geothermal, electrode boilers Networks will offer important demand side management benefits, enabling more wind energy generation and reducing the need for electricity storage Gas-engine CHP may still be used to avoid use of operating OCGT or CCGT

Evolution of Networks 1 st Phase: New Build 2 nd Phase: Nodal Retrofit 3 rd Phase: City-Wide Market Increasing penetration on new domestic and commercial development Some pioneer retrofits in major cities Most major cities initiate or extend city-centre schemes in areas of high heat density Focus on anchor heat loads Extension and infill of major citycentre schemes Connection to major low-carbon thermal plant m 2 supplied Dwellings supplied energy supplied value of installation 201# 202# 2050

Key Drivers

Government Objectives & Targets Climate Change UK target to achieve an 80% carbon reduction by 2050 15% of energy to be from renewable sources by 2020 Energy security and costs Impacting on policy and regulatimns DH & CHP recognised as a key component of meeting these targets

The 2050 CO 2 Target

The 2020 Renewables Target

Future Building Regulations Increasingly stringent CO 2 emission requirements 2013: Next revision 2016: Zero Carbon homes 2019: Zero Carbon buildings Achieving this in urban areas likely to difficult without decentralised energy networks Allowable solutions element could provide source of funding

Allowable Solutions

Planning Policy Planning policy increasingly including policies to support DH infrastructure Requirements to connect or to be DH ready e.g. London District Heating Manual Safeguarding sites for energy centres or network routes Examples include London Plan, Barking, Peckham etc

Financial Incentives RHI Support for the use of biomass that could be used in a DHN or as fuel for CHP ROCs Support for large scale renewable heat generation CRC Additional incentive for large organisations including Local Authorities Others including ECA, Future specific incentives for DH & CHP?

Renewable Heat Incentive Launched on 28 th Nov 2011 Single payment Tariff fixed for 20 years Current tariffs released for non-domestic only Biomass and SWH could be considered for DH scheme

Government view of role of DH & CHP The Carbon Plan describes a vision for 2050 in which Half of domestic heat demand is met by house-level electric heat pumps, with the other half generated using network-level systems such as district heating and CHP

Summary of possible future heat strategy for UK Biomass CHP/DH CO 2 saving Large-scale CHP/DH Waste CHP/DH Heat Pump Micro CHP Biomass boiler Heat pump Solar thermal City centre Suburban Rural

Key Challenges

Challenges for CHP / DH Perception of not being in control of quantity of heat Confidence in technology especially reliability of heat mains, heat distribution Costs expected to be too high operating as well as capital Monopoly heat supply and market acceptability of district heating Is there a risk of technology lock-in for heat source?

Challenges for CHP / DH Metering of heat costs and accuracy Phased developments issues with incremental DH investments Finding sites for centralised energy plant within urban areas Need for experienced operation and maintenance staff Practicality of major heat mains in dense city centre areas?

Elements for successful delivery of DH Business Plan Economic optimisation Cost estimates Finance Procurement and contracts Committed customers Engineering design Legal Planning and consents Environmental assessment