A rapidly growing part of VEKS’ business is the development of VEKS Distribution, including Køge Fjernvarme. In Køge, the task over the next five years is to supply district heating to 7,000 new customers who typically live in single-family houses.
By Thomas Hopp, Distribution Manager at VEKS
The core business of VEKS transmission company is to supply surplus heat from large central cogeneration plants and waste energy plants to 20 local district heating companies.
From a few large to many small customers
When VEKS broke ground for Køge Fjernvarme well over ten years ago, the target group for the extension was only large customers – customers over 300 m2. A joint venture between Aarsleff and Wicotec won the overall contract, and Ramboll was the client’s advisor for VEKS/Køge District Heating. In mid-2014, the first stage of the district heating system and the pump and exchanger station was established and ready to supply large new customers with district heating.
But why did VEKS venture into a completely new business area? Back in January 2009, the government encouraged Køge Municipality, like all the country’s municipalities, to boost the expansion of district heating through natural gas conversion. The goal was to reduce the total emission of CO2 in Denmark.
VEKS was asked to take on the municipal task, as district heating was/is one of the most essential instruments for complying with Køge municipality’s climate plan. The environmental benefit of the project is an annual CO2 reduction of 40,000 tons.
The project has since changed character.
From CO 2 reduction – and now away from gas prices
In Køge – a municipality approximately 30 km south of Copenhagen – 7,000 private customers are now queuing to get district heating. Expanding district heating is crucial in Denmark’s climate goal of reducing CO2 emissions by 70% by 2030. Politically, the ambition is simultaneous to become independent of Russian natural gas, thereby reducing the importance of gas in the energy supply. But for the current natural gas customers in Køge, the desire for district heating has become very urgent. They are under personal financial pressure from the current international energy crisis, which has led to skyrocketing natural gas prices.
Large tasks are, therefore, also in the queue at Køge Fjernvarme before the district heating can heat the homes of the many new customers.
From operation to close customer contact
At VEKS, our approach is that if the spread of district heating is to succeed in Køge, the customer experience must be positive.
The future task in relation to private customers is very different from servicing the current customer group in Køge, which are primarily large customers in the form of businesses, housing companies, institutions, etc. Functions for VEKS Distribution have so far been about operating and maintaining the existing network.
With 7,000 new customers on the way, one of the first tasks has been to recruit employees and new skills internally in VEKS and externally.
Several new employees have joined. They already receive many customer inquiries, participate in customer meetings, draw contracts, manage communication during the process, etc. At the beginning of 2023, the department will be staffed with about ten employees, primarily based in Køge.
Everyone in the department is focused on maintaining an overview of the district heating project’s practical rollout. Planning, project planning, and rollout are handled by other departments in VEKS, which makes mutually high demands concerning internal coordination.
Campaigning to get new customers
The first sales campaign started in the spring of 2022 in a residential area in the northern part of Køge with 1,700 potential new customers. More than enough customers are interested, so construction work can begin early 2023.
The focal point for the campaign is Køge Fjernvarme’s website, partly about timetables, Q&A, background information, etc., and partly about the actual registration for district heating, which takes place online. Køge Fjernvarme also has a Facebook page that informs about the project and allows users to ask questions and comment.
As the campaign is rolled out to new areas, potential new customers will receive printed sales material. However, doubts and the need for further clarification can always arise. The employees in the distribution department are ready to receive customer inquiries via mail or telephone and possibly arrange a meeting with the customer.
The new distribution department will have an office in connection with Køge combined heat and power plant but also operates with a customer office close to where the customers come daily. In mid-October, the office opened in Køge Midtby (Køge town center) after having had an address in northern Køge for a few months.
In addition to expanding district heating for single-family houses, district heating must also be established for new construction.
Finally, new smaller customers must be connected with branch lines in the areas where district heating is already established but only supplies the current large customers. This “densification” will take place over time.
The construction project
In addition to establishing a more customer-oriented distribution department, in connection with the rollout of district heating in Køge, VEKS has hired several internal employees to manage the construction work.
However, some external services and resources are also included in the project. A consultancy agreement and an agreement regarding the first significant contractor services have been entered. Later, there are additional contractor tasks to be offered. The new private customers can also purchase their district heating installation on a subscription scheme that Køge Fjernvarme offers. This means that for a small, fixed monthly payment, the customer gets a district heating unit installed, owned, and serviced (and possibly replaced) by Køge Fjernvarme. The actual setting up of units is also offered to external contractors.
Cooperation with the municipality
Throughout the entire process – back from the groundbreaking in 2012 – VEKS/Køge Fjernvarme has closely collaborated with Køge municipality.
Establishing district heating for the 7,000 new customers has been a “master plan,” which defines which areas in Køge the district heating will be rolled out first. This expansion plan is quite ambitious and requires constructive and open cooperation with Køge municipality. Where Køge Fjernvarme focuses on avoiding disappointed customers, the municipality wants to avoid dissatisfied citizens as far as possible.
They have agreed on a close partnership, which is reflected in the organization around the project. A political monitoring group meets four times a year. Members of the municipality’s climate and planning committee and interested parties from the finance committee meet with VEKS’ director, distribution manager, and planning and project manager. If necessary, VEKS’ chairman also participates in these meetings. In the political follow-up group, the status of the district heating expansion is given.
Regular orientation and coordination meetings are held between representatives of the administration and Køge Fjernvarme – some monthly and others with a frequency of every 14 days.
Along the way, there is also ongoing follow-up and briefing from Køge municipality on expansion areas and extensive new construction. New buildings must also be supplied with district heating.
In addition to informing and providing a transparent picture of the project, the purpose of the close contact is to jointly handle the problems and obstacles that will invariably appear in a large construction project so early that they cause the least possible delay for the expansion and thus, ultimately for the customers.
District heating novices
As mentioned, the aim is to make it attractive to become a customer of Køge Fjernvarme and to ensure that the overall customer journey is as smooth and understandable as possible. Køge Fjernvarme’s responsibility is to satisfy customers before, during, and after they become district heating customers. In short, customers should face as little hassle as possible.
For industry professionals, it can be challenging to understand the often relatively poor knowledge of district heating. The fact is that many new customers are novices. District heating is not a plug-and-play solution that is installed overnight. Therefore, the employees in VEKS’ distribution department must always prioritize the customer’s perspective: What does the customer want to know, what is the customer concerned about, and how do we make it easy for the customer? Disappointed customer expectations must be avoided as far as possible.
If the experience of getting district heating is positive, the new customers become the best ambassadors for district heating. They will speak well of the district heating to neighbors, friends, and family.
The new customer consultants and advisors in VEKS Distribution are very focused on ensuring that the collaboration with the customer continues, either when the delivery agreement is signed or when the district heating starts heating the house.
There will be trouble for new and “old” customers. They must have a quick response to their questions – as well as answers to the complaints that will inevitably come.
The total investment for Køge District Heating will be approximately € 110 million before the end of 2028.
However, this figure is still being determined, as the market is quite tight. It is not only Køge Fjernvarme that has an ambitious expansion plan, as many other district heating companies are also expanding in these years. The market is tight with many materials on backorder, prices have exploded, and there is a labor shortage.
For VEKS, it is crucial that the project’s finances are connected to ensure customers a competitive price. VEKS’s district heating price is reasonable, and new customers are offered an advantageous price for connecting to district heating. The environmental benefit is recognized, so Køge Fjernvarme has a firm offer for new district heating customers.
For further information please contact: Thomas Hopp, firstname.lastname@example.org
VEKS (Vestegnens Kraftvarmeselskab I/S)
VEKS is an inter-municipal general partnership that is operated as a non-profit enterprise. VEKS includes the production, transmission, and distribution of district heating in the capital area of Vestegnen (Western Copenhagen). Twelve municipalities in Vestegnen with a total of 500,000 inhabitants are jointly and severally liable to VEKS’ economy.
- VEKS was founded in 1984. Its primary objective is to utilize heat from the CHP plants and surplus heat from waste incineration, major industrial enterprises, etc.
- 135km of twin pipes have been laid with 62 heat exchange stations and 18 pumping stations transmitting heat to the local district heating systems.
- Most of the heat is supplied to VEKS from the Avedøre CHP plant, the other CHP plants in Copenhagen, and the waste-to-energy facilities ARGO and Vestforbrænding.
- The transmission system is controlled, adjusted, and monitored from a 24-hour staffed operations center in VEKS’ headquarters in Albertslund. The supply reliability is high in the area, with 29 local boiler stations being used as reserves and for peak load during particularly cold spells.
Thomas Hopp started at VEKS in mid-June 2022. Previously, Thomas Hopp has, among other things, worked in the Ministry of the Environment and Energy and was head of the secretariat in energy companies and municipalities. His most recent position before VEKS was customer director in the supply company FORS.
Inauguration of Køge District Heating on 29 May 2012
Finn Aaberg, VEKS’s chairman at the time, praised the quick decision-making process. He pointed out that it is only helpful if there is action behind words: “Here is the opportunity to realize the climate and energy policy that everyone agrees on is the way forward, but which can sometimes be difficult to bring from the political agreement to reality.”