District energy – policy, flexibility and renewables Daniel Møller Sneum Yale University 2 April 2018

Agenda European policy What is district energy? What are those Danes doing? District energy and integration of renewables Storage – hype and costs Important stuff

European energy policy 20-20-20 in 2020 Reduce GHG by at least 20% (OK) Renewable energy at least 20% of consumption (16.7 % in 2015) Achieve energy savings of at least 20% (16.9 % in 2015) 2030 Reduce GHG by at least 40% Renewable energy at least 27% of consumption Achieve energy savings of at least 27% 2050 GHG reduced by 80-95% compared to 1990

European policy on district energy 50% of final energy demand is heat in Europe EU strategy for district heating + cooling in 2016 New Renewable Energy Directive (RED II) includes heating and cooling for the first time Indirect directives combined heat and power industrial emissions emissions trading energy performance in buildings renewable energy waste management energy taxation energy efficiency

Q: What is district energy? A TECHNOLOGY, ONLY IMPLEMENTABLE IN CURRENT OR FORMER COMMUNIST COUNTRIES + AMONG THE HIPPIES IN NORTHERN EUROPE Illustration: https://en.wikipedia.org/wiki/Communism#/media/File:Communist_star.svg

A: An American invention By Birdsill Holly in NY Illustration: https://en.wikipedia.org/wiki/Flag_of_the_United_States#/media/File:Flag_of_the_United_States.svg

A: (cont.) Efficient way to heat and cool buildings Warm or cold water/steam in pipes From a multitude of heat sources Transmitted to consumers Image: Danfoss. http://districtenergy.danfoss.com/assets/img/desktop/d_1.jpg

District heating share of heat supply in 2014 FI 46% NO 8% SE 50% DK 51%

Denmark and Copenhagen 5.7 million inhabitants (3.6 with district heating) 31% of final energy consumption RE-based 54% of electricity RE-based 60% of district heating waste and RE-based 98% of Copenhagen heat supplied by DH Figure: https://www.sciencedirect.com/science/article/pii/S0360544216304352

>400 district heating ‘microgrids’ in Denmark Map: Danish Energy Agency. Regulation and planning of district heating in Denmark. Copenhagen: 2015.

THEORY: How can DE integrate renewables? Figure: http://www.nordicenergy.org/wp-content/uploads/2016/10/Flex4RES-WP2-DH-report.pdf

PRACTICE: How can DE integrate renewables? Figure: http://www.emd.dk/desire/hvidesande/

PRACTICE: How can DE integrate renewables? Figures: http://www.emd.dk/desire/hvidesande/ and https://www.energidataservice.dk

Storage costs are low for DH ELECTRIC Batteries closing in on pumped hydro; not on heat storages THERMAL Same order of magnitude Graphs: Lund H, Østergaard PA, Connolly D, Ridjan I, Mathiesen BV, Hvelplund F, et al. Energy storage and smart energy systems. Int J Sustain Energy Plan Manag 2016;11:3–14. doi:10.5278/ijsepm.2016.11.2. BNEF: https://www.bloomberg.com/news/articles/2017-04-26/the-cheap-energy-revolution-is-here-and-coal-won-t-cut-it

Comparing apples and oranges makes sense in some cases ? Storages are part of the ENERGY system – not just the ELECTRICITY system Images by Abhijit Tembhekar from Mumbai, India - Nikon D80 Apple, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=7823406 and https://upload.wikimedia.org/wikipedia/commons/7/7b/Orange-Whole-%26-Split.jpg Graph: Lund H, Østergaard PA, Connolly D, Ridjan I, Mathiesen BV, Hvelplund F, et al. Energy storage and smart energy systems. Int J Sustain Energy Plan Manag 2016;11:3–14. doi:10.5278/ijsepm.2016.11.2.

Important stuff District energy can be no/low emissions, RE- integrating, energy system-optimising solution If you forget about district energy – remember this ENERGY systems, not (just) electricity systems Storage is good – what kind solves your need? Explore different options – gas, transport, electricity, heat

Daniel Møller Sneum PhD Fellow, visiting scholar at Dartmouth College   US 111 Fairchild Arthur L. Irving Institute for Energy and Society Dartmouth College 03755 Hanover, NH +1 (603) 322-8385 Daniel.M.Sneum@dartmouth.edu DENMARK Systems Analysis Division Technical University of Denmark DTU Management Engineering Produktionstorvet Building 426, room 033A 2800  Lyngby DK +45 93511642 dasn@dtu.dk linkedin.com/in/danielmollersneum Publications

EXTRA: Where is DH in traditional flex definition? Demand-side integration (P2H) Dispatchable generation (CHP) Storage (Heat storage) Grid infrastructure System persp; not single-technology persp. As defined in IEA. The power of transformation. Paris: IEA; 2014. doi:10.1007/BF01532548.

District heating deployment in the Nordic countries Graph: Sneum DM, Sandberg E, Rosenlund Soysal E, Skytte K, Olsen OJ. Smart regulatory framework conditions for smart energy systems? Incentives for flexible district heating in the Nordic countries 2017. (unpublished primo 2017)

EXTRA: Why capacity tariffs can be bad for flexibility Capacity charge: 12 000 EUR/MW/month Example: 10 MW electric boiler, which pays to dispatch when electricity spot price is 7 EUR/MWh 12 000 EUR x 10 MW = 120 000 EUR Completely infeasible to operate! 10 MW x 3 hours = 30 MWh For comparison 120 000 EUR/30 MWh = 4 000 EUR/MWh Standard house 18 MWh/year = 72 000 EUR/year

Results: CHP + electric boiler depends on subsidies No subsidies = high LCOH & vice versa