more possibilities for chp/dh in the european heat markets

Euroheat & Power Conference, Brussels, June 22, 2006

1

More possibilities for CHP/DH in the European heat markets

Sven WernerDepartment of Energy and Environment

Chalmers University of Technology, Sweden


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ECOHEATCOOL – District Heating (Work Package 4)

• Main purpose: Overall quantification of the benefits of expanded use of district heating in Europe

• Target area: EU25 + ACC4 + EFTA3 = 32 countries

• Information source: IEA Energy Balances with some additions from Eurostat

• Heat unit used: All heat volumes are expressed in Joule (MJ, GJ, TJ, PJ, or EJ)

• Reference year: 2003


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Outline

• District heat demand

• District heat generated with origin

• Strategic heat source options for DH

• Institutional and market barriers

• Implications from improved heat generation and doubling heat sales

• Conclusions


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Demand – Heat Dominates End Use

0

10

20

30

40

50

60

70

80

90

Total Primary EnergySupply

Total Final Consumption Total End Use (estimated)

EJ

Losses in the energy transformationsectorLosses in end use

Combustible Renewables and Waste

Solar/Wind/Other

Geothermal

Hydro

Nuclear

Natural Gas

Petroleum Products

Coal and Coal Products

Transportation

Electricity

Heat

EU25 + ACC4 + EFTA3 during 2003Total Primary Energy Supply = 81,1 EJ


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Demand –Natural Gas and Electricity dominate

Final end use of net heat and electricity for EU25 + ACC4 + EFTA3 with origin of supply

0

2

4

6

8

10

12

14

Industrial sector Residential sector Service sector

EJ heat

Solar/Wind/Other

Combustible Renewablesand Waste


Petroleum Products

Natural Gas

Electricity

Geothermal

Heat


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Demand –Summary for the target area for 2003

• More than 5000 district heating systems in operation

• District heat deliveries: 2,0 EJ

• District heat generated: 2,3 EJ

• Total net heat demand in the industrial, residential, and service sectors: 20,8 EJ

• Corresponding electricity demand: 10,2 EJ (omitting the transportation and agricultural sectors)


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District heat generated

Figure 2. The composition for the energy supply in district heat generation during 2003. When CHP plants were used, the energy allocation principle was used (assuming equal conversion efficiency for power and heat). 6 countries omitted due to no or very low district heat supply (Cyprus, Greece, Ireland, Malta, Spain, and Turkey). Source: IEA Energy Balances with own corrections.

Energy supply composition for heat generated during 2003

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%A

ust

ria

, EU

15

Be

lgiu

m, E

U1

5

De

nm

ark

, EU

15

Fin

lan

d, E

U1

5

Fra

nce

, EU

15

Ge

rma

ny,

EU

15

Italy

, EU

15

Lu

xem

bo

urg

, EU

15

Ne

the

rla

nd

s, E

U1

5

Po

rtu

ga

l, E

U1

5

Sw

ed

en

, EU

15

Un

ited

Kin

gd

om

, EU

15

Cze

ch R

ep

ub

lic, N

MS

10

Est

on

ia, N

MS

10

Hu

ng

ary

, NM

S1

0

La

tvia

, NM

S1

0

Lith

ua

nia

, NM

S1

0

Po

lan

d, N

MS

10

Slo

vak

Re

pu

blic

, NM

S1

0

Slo

ven

ia, N

MS

10

Bu

lga

ria

, AC

C4

Cro

atia

, AC

C4

Ro

ma

nia

, AC

C4

Ice

lan

d, E

FT

A3

No

rwa

y, E

FT

A3

Sw

itze

rla

nd

, EF

TA

3

Heat

Electricity

Waste

Combustiblerenewables

Solar/Wind/Other

Geothermal

Nuclear

Natural Gas

Petroleum Products

Coal and CoalProducts


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Figure 5. Renewable and recovered shares in heat generated during 2003. 6 countries omitted due to no or very low district heat supply (Cyprus, Greece, Ireland, Malta, Spain, and Turkey). Source: IEA Energy Balances with own corrections. Recovered heat is here defined as the sum of heat from fossil and nuclear CHP together with surplus heat recovered from industrial processes and with heat pumps.

Renewable and recovered shares in heat generated for district heating systems during 2003

0%10%20%30%40%50%60%70%80%90%

100%

Aus

tria

, E

U15

Bel

gium

, E

U15

Den

mar

k, E

U15

Fin

land

, E

U15

Fra

nce,

EU

15

Ger

man

y, E

U15

Ital

y, E

U15

Luxe

mbo

urg,

EU

15

Net

herl

ands

, E

U15

Por

tuga

l, E

U15

Sw

eden

, E

U15

Uni

ted

Kin

gdom

, E

U15

Cze

ch R

epub

lic,

NM

S10

Est

onia

, N

MS

10

Hun

gary

, N

MS

10

Latv

ia,

NM

S10

Lith

uani

a, N

MS

10

Pol

and,

NM

S10

Slo

vak

Rep

ublic

, N

MS

10

Slo

veni

a, N

MS

10

Bul

gari

a, A

CC

4

Cro

atia

, AC

C4

Rom

ania

, AC

C4

Icel

and,

EF

TA3

Nor

way

, E

FTA

3

Sw

itzer

land

, E

FTA

3

Recovered share

Renewable share


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Five Major Strategic Heat Source Options

• Combined heat and power (CHP) and also called cogeneration

• Waste incineration

• Surplus heat from industries and refineries

• Geothermal heat

• Fuel difficult to manage and handle in small boilers (wood waste, olive residues, etc)


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Strategic Heat Source Options

Figure 21. Summary of the five strategic district heat sources with the current contributions to the district heat generated during 2003.

Heat flows in EJ during 2003 for the target area of 32 countries

Residual heat from all thermal power generation

19,2

Potential for direct use of geothermal heat

1,6

0,03

370


Surplus heat from industries

1,1 0,03

2,0

Biomass potential

0,17

0,14

Waste incinerated

2,3

0,5

Non-recycled waste

13-18


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Institutional and market barriers

• Low fuel and electricity prices

• Short term investment preferred

• Inappropriate legal frameworks

• Energy supply focus in energy policies

• Price regulations with social considerations

• Distorted market prices

• Inappropriate cost allocations

• Ownership shifts


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District Heating Systems Do Not Grow!

Figure 1. Development of district heat delivered between 1992 and 2003 for various parts of the world. Source: (IEA, 2005) with own corrections for some European countries.

District heat deliveries 1992-2003

0,1

1,0

10,0

100,0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

EJ/year

World

Russia

World excl Russia

Europe excl Russia

EU25+ACC4+EFTA3

EU25

EU15

NMS10


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Doubling heat sales

The final end use of electricity and net heat in the industrial, residential, and service sectors,

excluding the agricultural and transport sectors

0

5

10

15

20

25

30

35

EU25+ACC4+EFTA3 during2003

Suitable for district heat Vision: Doubling the 2003district heat sales

EJ/year

ElectricityRenewablesIndustrial CHP heatBased on fossil fuelsPotential for district heatDistrict heat


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Improved district heat generation and doubling heat sales

Three situations for estimation of the overall benefits of district heating :

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2003 outcome Improved systems Doubling heat saleswith improved systems

Heat generated, PJ/year

Heat

Electricity

Waste

Combustible renewables

Solar

Geothermal

Nuclear

Natural Gas

Petroleum Products



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Profitability

Figure 24. The overall profitability for a district heating system recovering existing heat losses. The analysis is only based on the international oil price and the heat distribution investment cost, since the alternative is to use a fossil fuel instead of district heating. The various recovery factors reflect that recovered heat losses can not cover the whole heat demand in the district heating system. A heat recovery factor of 0,6 means that 60 % of the district heat demand is covered by recovered heat losses and 40 % from fossil fuels.

Overall profitability of recovering heat losses into district heating networks

0

2

4

6

8

10

12

14

16

18

0 10 20 30 40 50 60 70 80 90

International oil price, EUR/barrel

Payback, years

0,6

0,8

1

Various recovery factors:

Heat distribution investment cost: 30 EUR/GJ


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Implications from improved district heat generation and doubling heat sales

• Higher energy efficiency: Will reduce primary energy supply with 2,1 EJ/year

( = primary energy supply of Sweden)

• Higher security of supply: Will reduce the import dependency with 4,5 EJ/year

( = primary energy supply of Poland)

• Lower carbon dioxide emissions: Will annually be reduced with 400 million tons, corresponding to 9,3 % of the current emissions

( = current emissions of France from fuel combustion)


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Conclusions 1

• International energy statistics can be improved with respect to district heat

• Higher renewable share in current district heating systems compared to all primary energy supply

• The possible supply from the strategic heat source options are many times higher than the current net heat demand


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Conclusions 2

• Major institutional and market barriers appear

• A potential for expansion of district heating exists

• More than 5000 European district heating systems contribute to higher energy efficiency, higher security of supply, and lower carbon dioxide emissions


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Conclusions 3

• Large countries can learn from small countriesFinal end use of net heat and electricity during 2003

in the industrial, residential, and service sectors with origin of supply for EU25 + ACC4 + EFTA3

0

2

4

6

8

10

12

14

16

18

20

Germany, United Kingdom, France,Italy, and Spain

Rest of EU25+ACC4+EFTA3

EJ heatSolar/Wind/Other

Combustible Renewablesand Waste


Petroleum Products

Natural Gas

Electricity

Geothermal

Heat


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The End

Thank you for your attention!

more possibilities for chp/dh in the european heat markets

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