District Heating workshop on the opportunity for district heating in Ireland - focus on rural towns and villages.

1. Tipperary Energy Agency
District Heating for Rural Regions
Paul Kenny, B.E. C. Eng. MIEI
Chief Executive Officer

2. Lessons from SmartReFlex
- Intelligent Energy Europe Project
- Focus on skills and policy
- Slides from CA RES II workshop

3. Smart and flexible 100% renewable district heating
and cooling systems for European cities
Key lessons for Member states
State needs to create eco-system for long term infrastructure
financing. (balance of grants, guarantees, regulation).
Other key points
National Long term policy goals and detailed implementation plans needed
Support for the business case for correct supply technology/ fuels/ systems.
Integrated energy system planning.
Local/ Municipal involvement is essential. Heat planning, Leadership,
Construction/ development support, stakeholder management, Financing (in
some cases)
Regulation regarding connection to DHC if available, governance of
connection requirements.

4. Smart and flexible 100% renewable district heating
and cooling systems for European cities
Return on Capital:
DH needs to be 20%-40% better per
kWh (split incentive)
- Tax the alternative,
- Grant the capex
- Subsidise heat
- Insure the revenue (FIT).
- Guarantee Finance (risk cost)
- Make it non-profit + some of
above
Individual DH

5. Smart and flexible 100% renewable district heating
and cooling systems for European cities
Perspective from a beginner:
German DH association, Danish DH association around a table.
Danish DH expanding, positive image, engaged consumers,
investment in efficiency (time or money).
German DH, negative image, monopoly issues, poor image, Lack
of investment
We explored the issues and discussed the learnings.

6. Smart and flexible 100% renewable district heating
and cooling systems for European cities
Who pays more?
Unhappy German DH Customers or happy Danish?
Danish DH costs more than German DH, but,
Danish is less than alternative, German more than alternative.
Pricing is relative to alternative.
However… Danish customer votes on main investment decisions,
sees full breakdown of costs; operational Efficiencies and actions
– in-effect set their own price.

7. Smart and flexible 100% renewable district heating
and cooling systems for European cities
Ownership Models (According to DH industry)
Denmark Germany
Ownership User owned (mainly) Municipal or For profit
Regulated Self regulated if user owned.
Highly regulated for profit.
For profit
Profit/ Surplus Returned to customers or re-
invested
Taken out of DH company
Main management
incentives
To reduce cost (of heat) for
shareholders/ users
To maximise profit
Efficiency/ investment drive
(long term)
Controlled by users Controlled by investors.
2011 Supply
(Waste/Fossil/Res)
70/20/10 90/10/0
Forced connections Rarely needed Significant issue

8. Smart and flexible 100% renewable district heating
and cooling systems for European cities
Ownership Conclusions
District heating is hard to make money on.
Investors unlikely to invest in long term improvement (e.g. Solar
DH, pipe replacement, Deep geothermal) without incentives
German DH Assoc. :
Little attention is given to optimisation,
Cities re-purchasing off private utilities
opposite of Danish experience.
Citizen control, efficiency investment, savings Vs alternative drive
satisfaction.

9. Lessons from Upper Austria

10. Business model: Biomass district heating
What is it?
• cooperatives of farmers that own forest land,
build and operate small-scale biomass district
heating systems which typically supply village
centers (e.g. local government buildings, schools,
businesses, housing)
• farmers become successful “heat entrepreneurs“
• cooperatives typically have around 10 members
• about 50-70% of the fuel comes from the
cooperative members’ own forests
Why?
• specific grant programme covers 40% of the
investment costs
• local added value, additional income for farmers
• environmental benefits

11. Agricultural district heating plants
Facts
• 322 plants realized, installed capacity: 300 MW
• district heating grid: > 4000 km
• customers: > 6300
• farmers delivering wood chips: > 5.300
Investment costs
• on average € 900 to € 1.200 per kW capacity
Costs for customers
• costs for connection: ~ € 200 per kW capacity
• heat costs: Base price per kW capacity + price
per MWh heat + metering price
• on average € 90 per MWh (excl. tax)

12. Opportunity for Rural DH

13. • Micro – DH (c. 2MW or less)
• 2-3 large customers and a number of small
customers
• Customer (heat user) owned.
• Lots of potential, business case isn’t there and
SSRH won’t change it.
• Little chance of success w/o concerted effort by
state.
• Village Example:
• Large facility, school, nursing home, village hall,
Creche. Total 800kW – 1MW. Waste from local
sawmills
Potential

14. • Medium – DH (c. 2-10MW or less)
• 3-5 large customers and a number of small
customers.
• Large Public Bodies
• Combination of Customer/ agri owned.
• Town example 7-10 MW DH scheme:
– Large Facility 1
– hospital
– Large health centre
– Hotel
– Several other small loads.
– Fuelled from local Forestry owners group.
– Current SSRH means 3 boilers, no DH.
TEA Plans

15. Easy:
• Standardisation of Tech & temperatures.
• Support Pipe costs
• Use SSRH for boilers
• Pay for heat mapping & identify case
• Develop LA/ Planning guidelines.
Not so easy:
• Incentivise uptake (particularly waste heat)
• Regulate ownership
• Fund retrofitting costs!!
TEA perspective