EU warms to the efficiencies of district heating

Date: 24 October 2014

Financial Times, October 22 (extract):

EU and UN policy makers are coming to a rather unexpected conclusion about how to cut energy wastage, one in which district heating may play a starring role. Done efficiently, as in Copenhagen and Helsinki, district heating could be a global model.

Until recently, heating lingered at the bottom of the political agenda, but its importance is increasingly evident.

According to the UN, cities account for 70 per cent of all energy use, and 50 per cent of urban energy consumption is for heating and cooling. If the EU wants to rein in consumption, it has to undergo a revolution in the way it heats buildings. That revolution appears to be coming.

Copenhagen is widely hailed as the model for a rethinking of Europe’s heating system. The city started a district heating network in the 1890s, but the oil shocks of the 1970s sparked a massive expansion. Some 98 per cent of heat is now provided by the district heating network, the world’s biggest.

According to the OECD and International Energy Agency, a regular thermal power station only makes efficient use of 36 per cent of the fuel fed into it, whereas so-called cogeneration plants (producing electricity and heat together) convert 58 per cent of energy inputs. Capturing the heat reduces electricity produced, but the trade-off adds up. The latest Scandinavian projects, a world apart from those in eastern Europe, can be 85-90 percent efficient.

Jørgen Abildgaard, executive climate project director for Copenhagen, says the Danish paradigm is attracting international attention, particularly from Britain. London has set a target of expanding district heating networks to 25 per cent of supply by 2025. Rotterdam last year completed the Warmte­bedrijf project, using 26km of pipeline to transmit waste heat from industry to households and businesses.

The shift to renewable fuels is the second phase of the district heating revolution, with power stations moving from coal and gas to biomass and geothermal power.

There is also a trend towards using smaller power stations to serve individual districts more efficiently. Copenhagen is planning to run entirely on renewables by 2025.

The biggest challenge is to find a financing model for such huge structural changes across the EU. Mr Abildgaard notes that the Danish capital’s network runs on a non-profit basis, which is not necessarily a model other cities would seek to follow.

Leading companies that would benefit from any overhaul of heating networks include Denmark’s Danfoss, Sweden’s Vattenfall and France’s Dalkia.

Paul Voss, managing director of Euroheat & Power, which represents the heating industry in Brussels, says he has struggled in recent years to persuade EU policy makers to focus on cutting consumption, saying their priorities lie in finding new gas supplies. However, the conflict in Ukraine and fears about Russian deliveries have steered the debate towards energy efficiency, he says.