Industry News

From District Energy Magazine, Fourth Quarter, 2013

From its inception in 2009, a primary purpose of the Global District Energy Climate Awards has been to showcase how district energy systems can reduce greenhouse gas emissions, lower energy costs and strengthen local economies. Since the initial event in Copenhagen, held in conjunction with the U.N.’s COP15 climate conference, it seems that district energy/CHP has begun to emerge from its shell and is gaining recognition among policy makers, public officials and other energy sectors for its many environmental and economic advantages. This emergence is characterized by a marked increase in the number of inquiries we are receiving at IDEA, the growth in frequency of articles in the media, the addition of new conference offerings throughout the calendar and empirical evidence of industry growth around the world. By no means are we out of the woods, but there are many signs that our collective efforts at building awareness are beginning to bear fruit.

District energy systems unleash opportunities for low-carbon heating and cooling options like biomass, geothermal and waste-to-energy. They strengthen local economies by utilizing indigenous energy resources like surplus industrial heat or rejected heat from power plants, regional wood waste and other thermal energy sources that would otherwise be wasted. And the growing frequency and severity of disruptive storm events has created a new awareness of distributed power generation through district energy, CHP and microgrids.

At the recent climate awards summit in New York, a panel discussion focused on the scale of destruction Superstorm Sandy imposed on the Eastern Seaboard, a story that amazed our European colleagues. If there is a silver lining in that catastrophic event, it is the new appreciation that government leaders now have for district energy and CHP at places like Princeton University, Cornell University and Co-Op City in the Bronx, where the lights and heat stayed on. In New York, New Jersey and Connecticut, state governments are funding multimillion-dollar programs to help promulgate microgrids. From my perspective, we need to support these efforts with thoughtful guidance on energy mapping and thermal network planning to identify and promote robust community-scale opportunities for district energy and not just simple emergency backup power generation for select buildings.

While it’s easy to get frustrated at the slow pace of change here in the U.S., the Third Global District Energy Climate Awards showed the world what can be accomplished. District heating systems in smaller Nordic communities were recognized along with new large-scale chilled-water networks in the Middle East, such as Qatar Cool’s system at The Pearl-Qatar and the solar thermal system for Princess Nora University for Women in Riyadh, Saudi Arabia. Citywide schemes such as Helsinki Energy demonstrate how thermal energy infrastructure creates opportunities to convert surplus heat from data centers and buildings into useful thermal energy that displaces fossil fuel combustion and improves the energy trade balance. Another example of local economics is the waste-to-energy provider Twence in Hengelo, Netherlands, that built a pipeline to provide steam to a nearby salt factory, which in turn allowed the factory to cut reliance on imported natural gas, avoid capital investment, reduce operating expenses and emissions and, ultimately, resulted in this salt factory becoming one of the most efficient and productive among the corporation’s global facilities, preserving the operation and retaining jobs in the local economy.

Among the many insights to emerge from the climate awards was the importance of local leadership. For example, at one point, lawyers for the Aberdeen, Scotland, city council advised that they abandon the Aberdeen district heating project. Fortunately, the council stayed the course, and today thousands of Aberdeen citizens now live in properly insulated, comfortable housing, no longer having to choose between paying for expensive electric heat and feeding their family. Another example of CHP efficiency and flexibility was evident at Falu Energy & Water in Sweden, where they were able to optimize electricity generation in summer months by using the surplus heat to dry sawdust to make wood pellets for winter use or for export. At Joensuu, Finland, Fortum has advanced the largest CHPbased biofuel production facility so that scrap and residual forest waste can be converted into a low-carbon transportation fuel, creating an additional revenue stream for the district heating company.

The summit also featured stories of common sense that were not award winners but are certainly notable. For instance, in Cambridge, Mass., Veolia is building a pipeline across the Kenmore viaduct to capture and divert waste heat from the Kendall Station power plant currently being rejected into the Charles River. Instead of overheating the river with once-through cooling, the heat is recovered and recycled to provide district heating to buildings in downtown Boston, avoiding greenhouse gas emissions equivalent to 300 football fields of photovoltaic solar. The Kendall Station, now owned by NRG Energy, has a much better heat rate because it provides both power and useful thermal energy and is dispatched earlier by ISO New England because of this higher fuel efficiency.

The Kendall Station stands in stark contrast to the Brayton Point Power Station in Somerset, Mass., which I referenced in an earlier column, a traditional central power station burning coal and natural gas. Since 1964 Brayton Point has been rejecting an average of 47 trillion Btus of heat per year into Mount Hope Bay. The previous utility owner recently spent $570 million on new cooling towers to divert waste heat from the waters of the bay, instead rejecting it into the sky. The new owners have announced that it will be closed by 2017, claiming they were unable to reach a favorable price from ISO New England as declining capacity factor and growing compliance costs have diminished its competitiveness. It is difficult to determine if the ultimate demise of Brayton Point was due primarily to coal compliance costs, or the comparative lower costs of natural gas generators, or its poor heat rate due to exhausting two-thirds of its fuel as rejected heat. But its closure is another indicator of how the economics of inefficient central station power plants are changing the electricity paradigm.

From my perspective, the traditional utility model is giving way to distributed and local generation. Mayors and urban planners, witnessing what university presidents have long recognized as valuable and reliable campus district energy resources, are now looking to invest or endorse a local district energy/CHP system to support their local economy. As witness to nine examples of community-based solutions, the Global District Energy Climate Award winners demonstrate what is achievable with district energy. I hope they will inspire a new round of investment in communities around the world. These stories, along with video clips of the presentations, are available at http://www.districtenergy.org/award-winners-3rd-international-district-energy-climate-awards/. I urge you to read these stories and share the link with colleagues and community leaders.

While most of these impressive accomplishments have arisen from inspired leadership and collaboration at the local level, it is also important to continue our advocacy efforts in Washington. Over the past six months, IDEA Legislative Director Mark Spurr worked closely with Sen. Al Franken’s (D-Minn.) office to revise the Local Energy Supply and Resiliency Act of 2013 (LESRA). Both worked tirelessly in collaboration with numerous Senate offices, the DOE Loan Program and other D.C. allies. In September, Sen. Lisa Murkowski (R-Alaska) agreed to sign on as a co-sponsor for LESRA during the debate on the Shaheen-Portman Energy Efficiency Bill, which was critical for consideration as an amendment before the bill bogged down in partisan delays. It remains to be seen if Congress can rekindle a bipartisan spirit to move the energy efficiency legislation after the bitterness of the shutdown and debt ceiling debate. As we head through October and the debt ceiling fulcrum strains Capitol Hill, we have to keep our powder dry for the next legislative turn on the federal energy efficiency bill. If we can enact LESRA , it will help stimulate industry growth through feasibility studies and potential for loan guarantees to support early-stage district energy system deployment.

As we saw in New York at the climate awards, our industry has much to offer from an environmental and economic vantage point. We have both facts and experience on our side, but we need a louder, clearer voice to capture the imagination of policy makers and local governments. I welcome your suggestions on how we can elevate our industry and advance our mission for cleaner, more resilient energy systems for the cities, communities and campuses of tomorrow.