New German 70/70 Strategy

Date: 2 June 2015

The “70/70-Strategy” study has been released (in German) by the Institute for Energy Economics and the Rational Use of Energy (IER) of the University of Stuttgart and by the Fraunhofer Institute for Manufacturing Technology and Advanced Materials (IFAM) of Bremen. The study focuses on the 70 most highly populated German cities under the aspect of a consistent development of district heating, coming from CHP and renewable energies, with the goal of going climate neutral by 2050. This will be achieved by means of producing 70% of the heat supply with district heating.

Over 80% of the emissions world-wide come from cities and metropolitan areas. Therefore the most effective means to efficiently handle primary energy and to reduce emissions is to be found here. Many people understand this already. The UNEP promotes in their current sustainability initiative “District Energy in Cities/Unlocking the Potential of Energy Efficiency and Renewable Energy,” the European commission understands it and places the topic “District Heating and Cooling” at the center of its future strategy. The Scandinavians have developed highly effective district heating and combined heat and power systems. In Germany, we have over 120 years of experience with this technology, which must now take center stage.

The magic formula is “energy efficiency”! With only building insulation, our cities will not achieve their CO2 reduction goals. We need the right combination of a moderate, affordable refurbishment and a highly efficient (district) heat supply. This will lead to the goals of “climate neutral cities” in the long run.

Almost 50% of the entire primary energy consumption in Germany is used to provide heating. As a highly efficient technology, CHP makes a vital contribution to the protection of climate and resources in Germany today. With their decentralized locations placed close to the energy users, CHP systems have a stabilizing and load-reducing effect to the grid.

However, often only the district heating infrastructure provides an adequate solution for the integration of CHP and renewable energies into the heat supply of cities. Beyond that, today and in the future this infrastructure will continue to contribute to more flexibility as well as a sustainable and secure heating service. Because of the interaction of CHP, heating networks, thermal storage and power to district heat, the system is smarter, more future-oriented and socially accepted for both the electric power and the heating markets.

To be able to demonstrate all this with facts and figures in the ongoing debate on energy transition, the AGFW managing board initiated the “70/70-Strategy.” The study by the IER of the University of Stuttgart and by the Fraunhofer IFAM of Bremen focuses at the 70 most highly populated German cities under the aspect of a consistent development of district heating, coming from CHP and renewable energies, with the goal of going climate neutral by 2050. This will be achieved by means of achieving 70% of the building heat supply with district heating.

In the study, economic effects are highlighted, such as, the costs of achieving greenhouse gas reduction goals and CO2 abatement, the development of district heating distribution and/or supply, with regional effects including local added value as well as the overall achievement of the “Energiewende” goals by the development of these technologies.

The 70 most highly populated cities in Germany are at present home to around 24 million people—almost 30 % of the nation’s entire population. Big cities have a higher density of population which leads, of course, to a higher density of heat demand per km².

Altogether, heat demand within cities accounts for approximately 30% of the heat demand for residential and non-residential buildings in Germany. Regarding the district heating supply of households and trade/commerce/services buildings within these cities, around 131 PJ of district heat is marketed. This is approximately 52%, or half, of all district heating sales within these sectors in Germany in total.

The development of district heating is mainly an investment in infrastructure. This is the only technology, enabling to act flexible to any challenge related to energy policy in the future.

To summarize the study:
1. The 70 most highly populated cities in Germany will be able to achieve the target of becoming climate neutral with implementation of the strategy. In the medium term, independent of the assumed expansion plan and generation option, the greenhouse gas reduction goals of the energy policy will be achieved by 2030. By 2030, district heating can avoid 17 to 23 million tons of CO2 in the cities in question; by the year 2050, up to 32 million tons of CO2 will be saved.

2. The CHP share in electric power will rise by around 5 percent before 2020, and by around 9 percent before 2030. Implementing the 70/70 strategy will ensure the achievement of the federal government’s goal of a 25% CHP share in electric power by the year 2030.

3. The 70/70 strategy is an economical instrument for the fulfillment of the energy transition. It will require investment in infrastructure of only 35 billion euros until 2030; 40 billion euros will be needed by 2050. Compare this to expenses of 23 billion euros per year for renewables in electric power.

4. Depending on the degree of non-achievement of the 70/70 expansion goal, additional economical costs of over 3,5 billion euros will accumulate by the year 2050.

5. The job creation effect from the development of the district heating means 12,000 new jobs before 2030. An additional 1,250 jobs will come from the operation, maintenance and management of the infrastructure.

6. By 2030, the 70/70 strategy will lead to municipal value-added effects from 9.6 to 12.2 billion euros (income tax, net occupation, trade tax and corporate profits). The direct and indirect job-creation effect leads to a doubling of this value added by 2050.

7. The additional annual effect of the municipal added value for operation of district energy will be in the range of 22 to 215 euros per KW of installed district heating generation service (depending on the operation technology).

8. And last not least – a fact which is often ignored – up to 70 percent of each euro the customer pays for district heating will remain local! In comparison, with natural gas this is approximately 25 percent, and with fuel oil only 7 percent.

Conclusion
CHP in connection with district heating is the ultimate efficiency technology. By its consequent development, less efficient technologies for power and heat supply will increasingly disappear from the market. Since the greenhouse gas emissions of today’s CHP/District heat combination already have fallen below the demands of the Federal Government for the year 2050 in the heating market, this is a consistent strategy for a functioning and payable “Energiewende”.

The 70/70 strategy can be downloaded here (in German)
Source: IDEA