by Linda Bertelsen
Motivation tariff - Spreadsheet with coins and calculator

Viborg District Heating Company constantly works to improve the efficiency of the network. Lowering the temperature is essential, but the company needs the customers to cooperate – i.e., by lowering their return temperature. As an important tool for this goal, the district heating (DH) company has developed a motivation tariff, which gives some customers a discount, whereas others will have to pay more.

The direct economic outcome of the tariff is a loss of approximately 270,000 EUR per year (income minus cost), but the efficiency gain in the whole network adds up to more than 679,000 EUR per year. This means a net benefit of around 400,000 EUR annually – a surplus converted into lower general heat costs.

By Tom Diget, Chief Operating Officer, Viborg District Heating Company

Motivate the customer to lower the return temperature

A DH company has many good reasons to lower the temperature in its network. Lower temperature gives a lot of different possibilities compared to a network with high temperatures. Not least, a lower temperature will help stay economically competitive against other heating technologies.

The DH company controls the supply temperature and can reduce it in times of lower heat consumption. But when the supply temperature has reached a certain level, the return temperature limits how much further it is possible to lower the supply temperature.

In Viborg, as in many other cities, the domestic hot water demand sets the minimum supply temperature in the DH network most of the year. In existing systems with older, more inefficient housing stock, there are limits to how low a supply temperature can be reached, typically around 60 degrees, which is higher than the required temperature for heating – most of the year.

The consumer controls the return temperature. Therefore, the DH company has a clear interest in helping consumers lower the return temperature. However, to a consumer, “low return temperature” is, at best, of very little interest. Consumers want comfort, i.e., warm homes in the most simple, secure, and cost-efficient way.

Of course, the cost of heating must be low enough to be competitive against other options – but no one is interested in the return temperature. Thus, the consumer will act disloyally if another opportunity calls. So, to be able to lower the temperature substantially, the DH company must find a way to motivate the consumers to lower the return temperature even more.

The benefits to the end-costumers

To motivate the consumers, they must understand what the benefits to them as consumers are. The list of benefits to the DH company includes lower heat loss, longer lifetime of pipes, more benefits from flue gas condensation, higher COP at heat pumps, and many more. But to most consumers, the real motivation will always be saving money through lower heat costs.

Some will be interested in other aspects (general benefits to society, climate change), and they should not be forgotten, but for most, the real motivation will be to save money.

Setting the goals for supply and return

Supply temperature
The short-term goal for the supply temperature simply is a temperature high enough to supply a well-operated network. The long-term strategic goal should be to aim at the lowest temperature possible with the best available technology, and then even a bit lower, as technology evolves and will allow for even lower supply temperature in the future.

In Denmark, the DH companies supply heat to cover primarily heat for two different demands: Domestic hot water and the comfort heating of the building. During a year, one of the two heat demands sets the required supply temperature. The comfort heating sets the temperature needed during the winter when the outside temperature is coldest. When the temperature outside rises above a certain level (around zero degrees Celsius), the domestic hot water demand starts to influence the required temperature level to deliver safe domestic hot water.

The figure below shows the normal supply temperature at the consumer over a year in different building types. The different heat curves show the supply temperature for comfort heating in different buildings, where the heating system has been dimensioned to different supply temperatures – mainly based on the energy efficiency of the building and the radiator system. Sometimes it is possible to divide the heat network into separate sections.

In this case, it is possible to take advantage of the different demands for supply temperature in the design of the various heat network zones. As shown in the figure, the demand for domestic hot water (supply temperature at 65°C) will set the temperature demand for most of the year. Even with the 90°C-degree heat curve, only around 900 hours a year will require a supply temperature above 65 to provide comfort heating.

Figure 1 - Temperature level comfort heating compared to domestic hot water.

Figure 1 – Temperature level comfort heating compared to domestic hot water.


The return temperature must be lowered

In essence, the DH company in Viborg must deliver a supply temperature of 65°C for around 8,000 hours every year. Hence, finding ways to motivate consumers to lower the return temperature is interesting. The return temperature is set by the temperature level of the two heat demands. It is recommended to have comfort heating in houses at around 21°C. The theoretical return temperature is, therefore, close to this temperature.

Typically, approximately five degrees higher is possible. So, a goal of 25°C from the comfort heating is not impossible to reach. Domestic hot water needs a circulation temperature of 50°C, so the return temperature from this is usually higher than from comfort heating. If there is no circulation, the domestic hot water can have a return temperature at the same temperature as comfort heating since the temperature on the cold side is the domestic cold water.

The goal is to save money for the customers

To motivate the consumers, there must be a goal for them individually. In Denmark, there are different models of how to do that. The motivation tariff used in Viborg is a model where the supply temperature as a yearly average is used to calculate the goal for the return temperature.

The average supply and return temperature can be collected from, e.g., Kamstrup energy meters as used in Viborg. Viborg DH Company also works closely with their customers to help them save money, improve comfort, and thereby add to the substantial saving for the district heating company. They rent out the heat interface unit, so it’s easy moneywise to have an updated one, but that’s another story.

Motivation model – effect on the customer

The motivation model used in Viborg is straightforward. If you cool the water well, the DH company offers a bonus. If your installation is old and inefficient, you will have to pay extra – a strong incentive to improve your system. Let’s look at three examples.

figure 2 - Motivation tarif Viborg 2022

Figure 2 – Motivation tariff Viborg 2022

Suppose the return temperature from a consumer is at the calculated level or up to 3° higher (this zone will be smaller the next year and disappear in 2024). In that case, the consumer pays the standard price for DH – a typical consumer with an average heat installation functioning normally. The customer is within the neutral zone, merely paying the normal price.

Money will be saved if the consumer can deliver a lower return temperature. If the annual average return temperature is below the calculated return temperature, the consumer will get a 1 % discount per degree below the calculated return. This is an essential saving for some homeowners compared to their overall energy bill. The saving can finance improvements in the heating system and potentially provide better comfort in their home.

Supply temperature in °C in 2022 Supply temperature in °C in 2019

Figures 3 and 4 – Left: Supply temperature in °C in 2022. Right: Supply temperature in °C in 2019

The saving area has been divided into two different parts, where the highest reduction is when the supply temperature is below the promised flow temperature by the DH company. This is done to remove the customers’ focus from whether the supply temperature is consistently above what has been promised and to whether they can heat their homes appropriately and simply be a happy customer, as they save even more.

If the consumer has a heating installation that delivers a return temperature above the calculated temperature plus 3 degrees (from 2024 0 degrees), they will have to pay extra. The extra cost is 1 % per degree above the threshold.

The additional cost can often finance needed improvements in the heating system, potentially providing better comfort in their home. This extra fee has effectively motivated building owners to upgrade their heating systems. The reduction is the top area with the most considerable effect on the overall system.

Customer interaction is key

Viborg DH Company intends NOT to make their customers pay more. The intention is to develop the heating system, thereby lowering the cost for all customers. Therefore, Viborg DH Company actively approaches customers with the worst delta-T (the highest return temperature) and advises them on modernizing and upgrading their system.

The result is that the customers save money, and at the same time, the DH company saves money, which can be transformed into lower prices for all customers. The customers who pay more due to the motivation model are not just left hanging there, paying more year after year. They are offered help to lower their heating bill by the DH company, which approaches the customers to provide assistance and guidance.

The two pictures illustrate the supply- and return temperatures set for all the customers of the DH company. In 2002, many customers needed a very high supply temperature and only managed to lower the temperature a bit. Whereas the picture from 2019 shows that very few customers need a very high supply temperature and that many have managed to decrease the return temperature.

In short, the motivation tariff has helped a lot. From this picture, it is also obvious who will be approached by the DH company to help lower the return even more – the ones with the highest return temperature and those in need of very high flow temperatures.

Results for the DH company

In Viborg DH Company, this has been a constant focus area since 1995. The motivation tariff has benefited the customers and the company – but there is still some way to go. So, the motivation tariff is here to stay for a long time.

The motivation tariff was introduced in 2002, and the temperature has since then gragdually dropped. In 2002, the yearly average supply temperature was 80°C, and in 2019 it was 65°C. In 2002, the annual average return temperature was 50°C; in 2019, it was 40°C. This is illustrated above. It has been calculated that the average supply temperature can be lowered by another 1-3°C over the coming years and still cover the comfort needs of all consumers.

But at the same time, the return temperature must also go down. The overall economy for the DH company is very positive. The motivation tariff costs the company more in reductions than what is paid extra from the customers who must pay more based on the motivation tariff. Looking at this way, the motivation model costs the DH company around 270,000 Euros per year. But that is not the entire picture and not the correct way to look at the model.

The reduced heat loss, due to the possibility of delivering at a lower temperature, more than compensates for the loss in the simple economy. The reduction in heat loss saves Viborg DH Company around 670,000 Euros per year. The overall effect of introducing the motivation tariff is savings of around 400,000 Euros per year, which will lead to reduced prices for all customers in the Viborg DH company. The reduction is as much as 10 % of the cost of heat losses in the network.

Significance of temperatures in future district heating

Today, as can be read, the temperature means a lot, but in the future, the temperature will mean even more due to the shift to new forms of production. The IEA DHC’s guidebook 2021, “LOW-TEMPERATURE DISTRICT HEATING IMPLEMENTATION GUIDEBOOK,” explains how the distribution temperatures (Supply and return) provide savings in production efficiencies of up to 6 times more than today’s combustion production plant.

The future production sources are geothermal, heat pumps, surplus heat, and solar heat. You will save significantly if the temperature is lowered before you invest in the new technologies.

Effect of motivation tariff – examples

Effect of motivation tariff - ExamplesFor further information please contact: Tom Diget, td@viborg-fjernvarme.dk

Meet the author

Tom Diget
Manager of Distribution, Viborg Fjernvarme
“Motivation Tariff” was published in Hot Cool Special Collection, edition no. 2/2022
Motivation Tariff - a key tool to a low-temperature District Heating Network, by Tom Diget, Viborg DHC
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