Industry News

From District Energy Magazine, Second Quarter, 2015

Cities are "getting it" about district energy. Cities account for around 70 percent of global energy use and 50 percent of greenhouse gas emissions annually. It seems nearly every week IDEA learns of a new city or community taking control of energy planning and exercis­ing greater responsibility for deployment of cleaner, more resilient energy infrastructure. In particular, more and more cities are recogniz­ing the importance of district energy if they are to achieve meaningful emissions reduc­tions and leverage combined heat and power on an economical scale.

District energy has emerged front and center at organizations like EcoDistricts, C40 Cities, Urban Sustainability Directors Network (USDN), Renewable Cities and, of course, the excellent work undertaken by the United Nations Environment Programme (UNEP) with its District Energy in Cities Initiative. If you have not yet read the UNEP report and shared it with your mayor's office, your members of Congress and your children, I urge you to send it around. It reports on the experiences of 45 different cities investing in district energy to cut emissions, strengthen the local economy and move to a lower-carbon future. The point is clear: It can be done, it has been done, and cities should look to each other to learn and replicate success.

Collaboration is a common approach among cities, more so than among private corporations. Cities are not in direct com­petition and are thus more inclined to share best practices. For many years now, large-city mayors have strongly embraced the notion that they must take ownership of climate adaptation and emergency preparation for their citizens. When the next Superstorm Sandy hits, mayors will once again be held accountable for ensuring public safety, operational resiliency and prompt restoration of commerce. The frequency and severity of such storms are increasing, and mayors are no longer content to leave energy resiliency solely in the hands of traditional utilities. They are taking responsibility for planning, implementation and performance.

In late March, mayors from 30 major Euro­pean cities gathered in Paris to sign a pledge to collectively invest in more efficient, lower-carbon solutions. The statement, available at http://tinyurl.com/k67pytu, says in part, "If climate change is global, solutions are first and foremost local. Because large cities are at the crossroads of these two levels, they are at the forefront of the fight against climate change."

Paris will be hosting the next U.N. Confer­ence of the Parties (COP21) Climate Change Conference Nov. 30-Dec. 11, 2015. With its inherent density, Paris already boasts world-class district heating and cooling networks serving many of its iconic buildings along with a robust urban residential market. Most of the baseload heating is provided by waste-to-energy along with biomass and geothermal, and an innovative district cooling network has an impressive track record of reliability and efficiency. But these systems are largely invis­ible, and therein lies our greatest challenge.

Our assets are mostly underground and hidden from view. They do not advertise their presence like soaring wind turbines or blue solar farms. But as mayors, planners and economic development officials look for meaningful solutions, they're discovering the potential of these hidden assets, particularly district energy and CHP.

In order to capitalize on this increased in­terest in district energy, IDEA and its members have a responsibility to support the newly curious leaders seeking guidance. We have the experience and insight to offer produc­tive learning and advance the industry. But every community has its own opportunities and challenges. For every 50 cities exploring district energy, there may be 50 different sce­narios involving a wide range of local invest­ment strategies and technical permutations.

Even though there's no one-size-fits-all solution, most successful district energy ventures share the following attributes: an engaged and well-capitalized devel­oper, an enthusiastic business develop­ment team supported by experienced construction and operations manage­ment, an informed and supportive city hall or public-sector champion, and a competitive value proposition incorpo­rating transparent energy rates, proven technologies and, most importantly, a compelling narrative. The narrative is critical in describing the features and benefits to stakeholders in the com­munity. It often involves an overarching local environmental or economic driver such as integrating CHP with the city's arena, tapping regional biomass or ex­tracting surplus heat from local industry.

Reaching out to scores of individual cities across North America will require the engagement of IDEA member organi­zations. IDEA staff is collaborating to our fullest extent, but the volume of activity and regional nature requires more hands on deck. We need our experienced mem­ber companies to become more actively engaged in education and collaboration with new industry entrants. You will find ample opportunities for partnering and awareness-building at the upcoming IDEA Annual Conference in Boston.

It is indeed encouraging to see municipalities paying more attention to what we do as an industry. However, getting from discussion to implementa­tion isn't easy. In recent months, I have witnessed some frustration as new par­ticipants realize that there is no concise, step-by-step menu to planning and de­veloping district energy. Every commu­nity has its own unique mix of geography, commerce, utility franchises and politics. In 2012, when we released Michael King's Community Energy: Planning, Devel­opment and Delivery for the U.S. market, it was intended to educate local energy and planning specialists on the sequence to successful project development. These are not hard rules; they are suggestions informed by practical experience. At the same time, the consulting space is being occupied by a number of newly minted experts who, while well-meaning, may lack the full range of experience to ap­preciate the variability and nuances of district energy development.

Another challenge is the lack of funding to conduct feasibility assess­ments. Some cities, states and founda­tions have stepped forward to under­write such efforts, but more is needed. IDEA has developed a first-order screen­ing tool to help determine the economic viability of a project relatively quickly. But even a screening involves a commit­ment of time and resources in data gath­ering, market intelligence, scenario de­velopment and iterative evaluations. The process developed by New York Prize for microgrid projects provides a sequential submission and qualification process for communities to compete for $100,000 of feasibility funding, followed by next-stage funding for implementation. The stepped sequence and scale of funding makes good program sense and should be replicated elsewhere.

Even greater frustration arises around the context of urban multibuild­ing microgrids, where a planner envi­sions a downtown district energy/CHP facility designed to provide electricity to nearby buildings in addition to thermal energy. Arcane regulations or confusion around rules often impede market ac­cess. Decades of utility franchise protec­tion coupled with the interpretation that crossing city streets is an inviolate prin­ciple has clouded the marketplace and limited progress on opening competition for local distributed resources. A recent study by Harvard Law School found that municipalities actually hold authority and approval over wires crossing public rights of way, and that utilities are not the sole determinant of market access.

IDEA is working with the city of Boston on evaluating and developing new approaches to allow for multibuilding microgrids in cities, taking them beyond single-owner campuses where most mi­crogrids are found today. At the IDEA An­nual Conference, aptly themed "Inspiring the Next Generation," we will be hosting a workshop for the Urban Sustainability Directors Network in conjunction with the city of Boston, Pace University Energy and Climate Center and Raab Associates to help urban sustainability leaders from Boston, New York, Chicago, Washington, D.C., and Cambridge, Somerville and Northampton, Mass., grapple with regula­tory and policy issues. We are pleased to have them join us for the larger conference as we inspire the next generation of more resilient and sustainable energy for cities.

District energy has achieved greater visibility as a critical economic asset for any city that is serious about cli­mate adaptation and mitigation and is seeking to deploy more reliable and resilient energy infrastructure. We look forward to sharing the vision of the city of Boston with our global guests at IDEA2015:Inspiring the Next Generation in June. Please join us.