District Heating and Cooling -Current challenges and trends

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					          District Heating and Cooling in
                 European policies

Frederic Hug
President Euroheat & Power
5 November 2012
    DHC in European policies

EU policies strongly affect DHC

The case of the Energy Efficiency Directive

The case of the Energy Roadmap 2050

How to respond ?
  District Heating in Europe today
• 550 TWh heat sales / turnover of ~ €20 B
• More than 5,000 DH schemes, supplying ~ 9% of total heat demand, with
  an uneven distribution across Europe (from ~ 0% to ~ 70%)
• A flexible infrastructure enabling to integrate a wide range of renewable
  / recovered energy sources (local heat / fuel sources that would have
  been lost or remained unused)
    o on a large scale
    o where most needed
    o where most difficult to make use of RES
• More than 80% of heat in DH schemes come from recovered heat,
  renewable energy and waste resources  Avoided CO2 emissions
  amount to ~ 110 Mt/yr

EU policies strongly affect DHC
                Ind. Em.    Directive    Energy
                Directive               Taxation


     Trading                                        rules


 Directive                   DHC                     Efficiency
There are good reasons why
• Heating & cooling are responsible for half of the energy
  consumption in the EU
   o The EU buildings sector accounts for 40% of EU final energy and 36% of
     CO2 emissions.
   o The majority of energy use for heating & cooling takes place in urban

• The 3x20 for 2020 are a the flagship of EU policy; there’s no
  way they can be reached w/o a strong focus on heat
   o Improve energy efficiency by 20% (translating into ~ 40% in buildings)
   o Reduce CO2 emissions by 20% by 2020
   o Increase renewables to 20% of the energy mix (heat & cool: half of the
     increase, mainly from biomass)
     Getting the policies right

• Sensitivity to provisions depend upon national
• Often lengthy and cumbersome process (e.g.
  continuous involvement in the ETS drafting from 2002
  to 2011… or more !)
• Powerful / high profile players (energy & others)
• Heat is the “invisible giant”

 Let’s take two concrete examples of what is at stake
        DHC in EU policies

EU policies strongly affect DHC

The case of the Energy Efficiency Directive

The case of the Energy Roadmap 2050

How to respond ?
EED – Savings obligation
• Obligated parties (energy distributors and/or retail energy
  sales companies) to achieve new yearly savings of 1.5% of the
  annual energy sales to final customers from 2014 to 2020
• Possibility for Member States to get 25% of the overall
  targeted savings achieved through flexibility measures: allow
  energy savings achieved in the energy transformation,
  distribution and transmission sectors, including efficient
  district heating and cooling infrastructure

   and repealing Directives 2004/8/EC and 2006/32/EC

EED – Heating
• Member State to prepare a comprehensive assessment of the
  potential for cogeneration and District Heating and Cooling,
• Member States to prepare a Cost-benefit Analysis (CBA) at
  territorial level. The CBA ‘shall be capable of facilitating the
  identification of the most resource and cost-efficient solutions
  to meeting heating and cooling requirements.’
• Member States to take adequate measures for efficient
  District Heating and Cooling and high-efficiency cogeneration
  to be developed and/or to accommodate the development of
  high-efficiency CHP

        DHC in EU policies

EU policies strongly affect DHC

The case of the Energy Efficiency Directive

The case of the Energy Roadmap 2050

How to respond ?
The 2050 Energy Roadmap
Residential and tertiary
    • Sharp decrease in final energy consumption (Nearly
      Zero Energy Buildings from 2021 onwards +
    • Decarbonisation of remaining consumption through
      electrification  90% overall emissions abatement

The built environment
…shifting energy consumption towards low carbon electricity (including heat pumps
and storage heaters) and renewable energy (e.g. solar heating, biogas, biomass),
also provided through district heating systems, would help to protect consumers
against rising fossil fuel prices and bring significant health benefits.

COM(2011) 112 final : A Roadmap for moving to a competitive
low carbon economy in 2050

Impact : what’s next?
 • Such prospects already influence current EU
   policy making. They are likely to have very
   strong impacts on forthcoming legislation
 • What’s next ?
    • From scenarios to targets for 2030?
    • Renewables, round 2: Towards harmonisation for RES-E?
      What about RES-H ?
    • Emissions trading, cont.: Higher prices?
    • Energy efficiency: Bridging the gap?
    • Energy performance in buildings: Which kind of Zero Energy
      Buildings ?
    • CO2 taxation: Ever or never?
        DHC in EU policies

EU policies strongly affect DHC

The case of the Energy Efficiency Directive

The case of the Energy Roadmap 2050

How to respond ?
   DHC: effective today & future-proof
• The main energy savings occur upstream of energy delivery to buildings. Local
  solutions allow to utilise vast resources of waste heat to substitute fossil fuels
• Primary energy consumption and cost-effectiveness should be key for comparing
  solutions, e.g. between :
    o waiting for a generalisation of “zero energy” buildings (what about grey energy?) ?
    o or supplying zero emissions energy to moderately refurbished buildings ?
• Integrated solutions must be privileged
    o   insulation + heating + cooling
    o   building envelope + technical installations + infrastructures
    o   energy efficiency + renewables
    o   mutualisation of needs and resources at district level

Our recommendations

                      16 - Let’s keep in touch!

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