1. 2003-12-10 Euroheat & Power 1 Boosting Innovation from Research to Market District Cooling in Europe Potential and Benefits Tomas Bruce President Euroheat & Power Chairman Capital Cooing Europe AB

2. 2003-12-10 Euroheat & Power 2 Boosting Innovation from Research to Market District Cooling Turning a potential threat into a great opportunity for the energy companies, their customers and the community

3. 2003-12-10 Euroheat & Power 3 Boosting Innovation from Research to Market Status and Trends Air-conditioning and process cooling  80% in USA and Japan, commercial and institutional buildings  <50% in EU, but is expanding rapidly  About 40-50% of the cooling energy relates to process cooling in commercial and institutional buildings, computer cooling etc  AC within the residential sector has a strong position in urban areas and is expanding rapidly  Investments in the AC business within the EU will increase to meet the phase-out of HCFC and are predicted to be 5 billion € in 2004 or 60-100 billion € up until 2010

4. 2003-12-10 Euroheat & Power 4 Boosting Innovation from Research to Market District Cooling in Sweden 1992-2002

5. 2003-12-10 Euroheat & Power 5 Boosting Innovation from Research to Market District Cooling in Europe

6. 2003-12-10 Euroheat & Power 6 Boosting Innovation from Research to Market The EU perspective challenges and triggers Electricity  Capacity shortage - production and distribution Environment  The Kyoto agreement: 8% reduction in 2012  HCFC phase-out, EU in the same situation as Sweden 1996  Increased environmental awareness, consumer and energy companies Authorities  Security of supply  De-regulation of the electricity market  Reduction of CO 2 emissions  Legislation, regulations  Taxes and environmental fees

7. 2003-12-10 Euroheat & Power 7 Boosting Innovation from Research to Market The DC potential in Europe - based upon Swedish development and statistics Sweden – population 9 million  Statistics for 2002: 28 cities with 10.000 to 750.000 inhabitants 600 GWh or 500 MW~40% of the energy is year round base load  Prediction for 2010: 2 TWh 20-25% of the non-residential market EU – population 380 million  Status ~ 2 TWh  Potential 2010-2015: Up-scaled and adjusted to the warmer climate 100 TWh 20-25% of the non-residential market The residential sector could add another 100 TWh

8. 2003-12-10 Euroheat & Power 8 Boosting Innovation from Research to Market Potential savings using District Cooling Total energy efficiency ratio EER for cooling  Conventional local solutions EER 1,5 - 3Conventional chillers EER 3 - 7Aquifers for AC  Centralised District Cooling solutions EER 6 - 8Industrial chillers/heat pumps with efficient condenser cooling EER 8 - 25Combined DH/DC Absorption chillers or waste heat Free cooling

9. 2003-12-10 Euroheat & Power 9 Boosting Innovation from Research to Market Potential savings using District Cooling, contd DC electricity savings potential, non-residential  40 TWh/25.000 MW  1-2% of EU electricity demand Electricity capacity peaks in summer  Saved investments in production  Saved investments in distribution European Commission:  +44% electricity demand up to 2020  750 power plants/300.000 MW

10. 2003-12-10 Euroheat & Power 10 Boosting Innovation from Research to Market Critical success factors  Between 2003 and 2008 there is a great opportunity to establish and position DC on the EU market  To be able to handle the high investments the DC business has to be established with:  step by step solutions  short lead times  the right price strategy

11. 2003-12-10 Euroheat & Power 11 Boosting Innovation from Research to Market Critical success factors, contd  The business must be set by a party that:  is trustworthy on the local market  has a long term perspective as energy supplier  can build energy infrastructure with low risk  is a suitable, and natural actor in the building of a sustainable society

12. 2003-12-10 Euroheat & Power 12 Boosting Innovation from Research to Market New business opportunities for energy companies & local authorities  New products and services to offer the end-user market  Reduced investment costs in the distribution infrastructure of electricity  Increased revenues  Strong environmental profile  Increased customer loyalty  A bridge for an expansion of the District Heating business “A new profitable business for the energy companies that establish long term relationship with the customers”

13. 2003-12-10 Euroheat & Power 13 Boosting Innovation from Research to Market New profits for property-owners and end-users  Capital and resources are released  Risks linked to owning, operating and maintaining cooling plants are eliminated  The price picture is stabilised and maintenance costs are reduced  Reliability increases through secure cooling supplies and simple, safe technical solutions  Floor-space is made available  Environmental profile is sharpened “A new flexible, reliable and cost effective solution for the customers with high environmental profile”

14. 2003-12-10 Euroheat & Power 14 Boosting Innovation from Research to Market Profits for the community  Adjustment to the Kyoto protocol and stricter, new environmental norms  Reduced emissions of CO 2 and environmentally hazardous HCFC “freons”  Enhanced aesthetics and an improved local environment  Avoid shortages of electricity capacity  Increased energy utilisation and reduced electricity consumption “Savings of 1-2% of the electricity consumption and up to 25% of the EU commitment according to the Kyoto agreement, or 20-40 million tons of CO 2 ” “By establishing a 100 TWh D.C. Business, EU will avoid 25 billion € of investments for peak electricity capacity”