HOT|COOL NO. 3/2019 - "Big Markets: China and Poland

NO. 3 /2019

INTERNATIONAL MAGAZINE ON DISTRICT HEATING AND COOLING

BIG MARKETS: CHINA AND POLAND

FOCUS

A decade of District Energy development in the P.R. China

Release the full potential of smart metering

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CONTENTS

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THE COLUMN By Lars Gullev, Managing Director, VEKS

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OPINION POLISH HEATING IS PREPARING TO TAKE A BIG STEP FORWARD By Bogusław Regulski, Vice President of the Board, Chambers of Commerce Polish District Heating

Cli red sus pha Clim reduc sust phasi

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FOCUS BIG BANG OF THE POLISH HEATING SECTOR – ON THE VERGE OF CHANGES By Andrzej Rubczynski, Heating strategy Director in Forum Energii

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FOCUS SOLAR DISTRICT HEATING: TIBETAN COMMUNITIES RELYING ENTIRELY ON HEAT FROM THE SUN By Thomas Karst, CEO, Arcon-Sunmark

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FOCUS A DECADE OF DISTRICT ENERGY DEVELOPMENT IN THE P.R. CHINA By Mikael Jakobsson, Managing Director, NXITY, Executive Director, APUEA, Advisor, EU H2020 MAGNITUDE project

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FOCUS DISTRICT HEATING IN CHINA By Senior Advisor John Tang, Danish Energy Agency

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FOCUS CURRENT AND FUTURE DEVELOPMENT OF THE CHINESE DISTRICT HEATING SECTOR By Oddgeir Gudmundsson, Director, DHS-AP Danfoss and Atli Benonysson Vice President, DHS-A, Danfoss A/S

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A DISTRICT HEATING MARKET MECHANISM MARKETS AS MATURE CONCEPT FOR A MODERN DISTRICT HEATING INFRASTRUCTURE By Peter Lorenzen, Eng., Project leader, Smart Heat Grid Hamburg

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RELEASE THE FULL POTENTIAL OF SMART METERING By Peter Friis Østergaard, Senior Specialist, and Jakob Fester, Consultant, Danish Technological Institute

C re su ph

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DISTRICT HEATING IN THE EU By Paul Voss, Director, Euroheat & Power

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MEMBER COMPANY PROFILE: AALBORG CSP A/S

Front page: In Tibet, China large-scale solar district heating systems are supplying remote communities with CO2-free heating.

HOT|COOL is published four times a year by:

DBDH Stæhr Johansens Vej 38 DK2000 Frederiksberg Phone +45 8893 9150

Editor-in-Chief: Lars Gullev, VEKS

Total circulation: 8,000 copies in 60 countries

Layout: DBDH / AGENCY.071

Coordinating Editor: Kathrine Windahl, DBDH

[email protected] www.dbdh.dk

ISSN 0904 9681

Prepress and printing: Kailow Graphic A/S

E N E R G Y A N D E N V I R O N M E N T

P3

By Lars Gullev, Managing Director, VEKS

Climate chang eduction of CO2 em ustainable biom hasing out of fossil f ction of CO2 emissions, tainable biomass, ing out of fossil fuels imate changes, duction of CO2 emissions, stainable biomass, asing out of fossil fuels mate changes, Climate changes, reduction of CO2 emissions, sustainable biomass, phasing out of fossil fu ls Clim te changes, reduction of CO2 emissions, sustainable biomass, phasing out of fossil fuels, such as coal, oil and natural gas, have all become concepts that no politician or energy company today can ignore. The popular focus has simply become too significant. A wave runs through many countries: we must reduce the number of annual flights; we need to drive less by car; we need to eat less meat, as the production of meat requires more energy than the production of vegetable foods; we have to recycle more etc. This is all well and good - however, in many cases the starting point has not been aligned when discussing what needs to be done. In other countries, such as China, natural gas, electricity, geothermal heat, biomass, solar, industrial surplus heat, ultra- low emission coal (CHP), and nuclear power are defined as resources for “clean heating”. This definition says nothing about the emission of CO2 from the individual elements - for example, the production of electricity can be based on condensation operation with an efficiency of less than 40% based on coal as fuel. With such a rather broad definition, it is difficult to compare cross-border statistical material and to enter into debates about the energy systems of the future, as the framework conditions are very different from country to country. Just as we are challenged by electricity as “clean heating” in China, we have a general challenge in many countries regarding the use of biomass. If the biomass is obtained by deforestation without equivalent new planting in parallel, the overall climate account is not in balance. In many countries, including Denmark, natural gas is considered an equivalent alternative to district heating when determining the future heat supply. But this is not correct! Today, a very large part of district heating in Denmark is based on sustainable biomass - i.e. green district heating - while natural gas remains a fossil fuel. In other words: a "black fuel". It therefore makes no sense to compare "green district heating" with "black natural gas" when we have decided to phase out fossil fuels in the long run. It is crucial that the authorities (in Denmark, the Danish Energy Agency) – demand in their conditions for the future heat supply that "green district heating" is compared to "green gas". Such a comparison will quickly lead to a closer assessment of the potential for green gas - and where this gas should come from. It is therefore imperative that a common definition of sustainable biomass is established. In addition, it is crucial that biomass customers make the demand to all biomass suppliers that the biomass - both solid and liquid - must meet international, recognized criteria for sustainability. Otherwise, the energy sector will lose the credibility that is a prerequisite for gaining the public's acceptance of a green transition, of which a major part for the next 10-15 years will be based on phasing out natural gas, oil and coal in favour of sustainable biomass. J O U R N A L N 0 . 3 / 2 0 1 9 www.dbdh.dk

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FOCUS BIG MARKETS: CHINA & POLAND

OPINION

By Bogusław Regulski, Vice President of the Board, Chambers of Commerce, Polish District Heating

In many European countries, among others due to geo- graphical location, heat is essential for the quality of everyday life. Therefore, it is a very important element of social policy. What is more, it is also a necessary component of energy and climate policy. That is why everything that happens in this area at the European level, directly influences the decision-making processes in every EU country. This is also the case in Poland. For many years, the role of heating in European regulations was underestimated and marginalized. That is not the case anymore! Taking into consideration the directions of European climate and energy policy, transformation in heating is necessary. Energy efficiency and reduction of CO2 emissions become the driving force for actions, including a significant increase in the share of heat from renewable energy sources and other zero-emission technologies. Polish district heating (DH) has a difficult starting point, first of all, because of the fuel structure. It is not a secret that the majority of heat production in Poland is based on coal. According to various sources, its share in recent years has exceeded 75 %. This fact hurts us a lot, especially in the context of the CO2 emission reduction policy. For consolation, we have quite a large (reaching almost 60 %) share of heat generated for heating systems in cogeneration technology. However, when compared to the challenges for heating coming from the latest EU regulations (reducing CO2 emissions, increasing the share of heat from renewable sources, increasing energy efficiency), we also face the need for a deep transformation of the entire heat-related area, bearing in mind our own national goal - eliminating the so-called “smog" resulting from the fairly widespread use of low-quality coal.

The supply of DH from heating systems in Poland covers over 42 % of all households. Although it is not as high as for instance in Denmark, it is still significant for shaping future solutions in this respect. Because of this fact, district heating is very likely to have the most important place in this process. We set ourselves specific goals: obtaining by heating systems the requirement of an "effective heating system", which will lead to an increase in the use of heat from renewable sources and the development of cogeneration technologies in heat generation processes, as well as the widest possible use of heat from heating systems for household needs. Nevertheless, looking from a wider perspective, heat suppliers from heating networks in every country, where this type of heat supply is important, are facing, or will face in the near future, the dilemma of profitability of their business. I point out this problem especially because of the important changes in the energy efficiency of buildings and the possible zero- emission, environmentally friendly technologies providing thermal comfort on an individual scale. It is enough to mention the development of the use of heat pumps using renewable electricity. Meeting the expectations of new heat markets is a challenge for system heat suppliers in all EU countries.

For further information please contact: Boguslaw Regulski, [email protected]

E N E R G Y A N D E N V I R O N M E N T

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