AGFW-Statement. Public Consultation. Roadmap for a low carbon economy. Frankfurt am Main, 8th December 2010 Or

Transcription

1 AGFW-Statement Public Consultation Roadmap for a low carbon economy by 2050 Frankfurt am Main, 8th December 2010 Or

2 Preliminary Note AGFW is an international district heating and cooling and combined heat and power (CHP) association representing 226 district heating utilities and approximately 180 industrial members from various European countries. AGFW is registered in the Register of interest representatives; the registration number is CHP and District heating and cooling are very energy efficient technologies, satisfying local heat demand by utilising resources that would otherwise be wasted. The base principle of a CHP plant is an extraordinarily efficient energy conversion. CHP plants systematically use the heat potential that results from the production of mechanical energy through fuel combustion. When heat and power are produced separately additional primary energy is needed to cover the heat demand. The possible primary energy savings of a CHP plant are affected by its design and operation but account for up to one third in comparison to the separate production of heat and power. 1 Primary energy savings also lead to a reduction of CO 2 and other emissions. CHP is a very flexible energy efficiency technology that can be used with different fuels, ranging from natural gas to biogenic fuels such as wood and biogas. District heating and cooling is an energy efficiency service providing ready-to-use heat or cold, using a distribution network and utilising a plethora of possible heat sources, for example recycled heat from CHP and industrial processes and the direct use of renewable energy sources such as geothermal energy. 1 Schmitz/Schaumann, Kraft-Wärme-Kopplung, 3rd print run Berlin 2005, p. 6. 2/13

3 CHP and district heating and cooling: Key technologies to combat climate change The CO 2 savings of CHP alone are about 100 million tons per annum in EU27 and as an energy saving technology CHP contributes 2 % towards the 20 % annual primary energy savings objective of the European Union for CHP and district heating and cooling therefore represent key technologies in the combat against climate change, one of the biggest challenges we face. The climatic advantages and the potential of CHP and district heating and cooling is subject of the ECOHEATCOOL study. 3 This study was supported by the Intelligent Energy Europe program of the European Commission and analyses resource efficiency in the heating and cooling sector of 32 European countries. These countries consist of the former EU25, ACC4 and the EFTA3 countries. The study shows that Europe wastes more heat than it consumes. CHP and district heating and cooling contribute to using surplus heat that would otherwise be wasted and thus help saving primary energy and reducing CO 2 emissions. Doubling district heating alone would, according to ECOHEATCOOL, reduce CO 2 -emissions by 404 million tons per annum, corresponding to 9.3 % of all CO 2 -emissions from fuel combustion in the study s target area or more than all annual CO 2 -emissions from fuel combustion in France. Compared to individual heating solutions such as individual boilers based on heating oil or wood pellets, CHP and district heating and cooling also help reducing the environmental impact of traffic and transportation. Assuming that 10,000 boilers are in use in a city, each consuming 20,000 kwh per annum, the required intensity of road transport for boilers using fuel oil would result in 794 deliveries by fuel tanker trucks, each with a capacity of 25,000 litres of fuel oil. For boilers using wood pellets, the required intensity of road transport would result in 2,000 deliveries by wood pellet silo trucks, each with a capacity of 20 tons of pellets. 2 Commission Communication COM final Europe can save more energy by combined heat and power generation, p All project deliverables can be downloaded at 3/13

4 CHP and district heating and cooling helps keeping the traffic down in cities and therefore contribute to additional greenhouse gas reductions. Additionally, with targeted reductions of up 85 % of the greenhouse gas emissions on the horizon 2050 (compared to 1990), individual oil- and natural-gas-fired boilers will have to disappear from the heat supply system. Source: UBA/ifeu/WWF, AGFW Combating climate change in a cost efficient way Reducing CO 2 -emissions, increasing energy efficiency and reducing primary energy consumption is one thing, doing it in a cost-efficient way is another. CHP and district heating and cooling help reducing CO 2 -emissions at low costs for society. This is demonstrated by various studies when comparing different CO 2 abatement costs. In new buildings district heating supply even achieves negative CO 2 abatement costs, beating competing technologies to reduce CO 2 -emissions by a large margin. 4/13

5 CO 2 abatement costs of select technologies for heat production costs in EUR per ton of CO 2 (new buildings) 25 % better than building regulation (multi-family house) 25 % better than building regulation (single-family house) Biomass Geothermal District Heating (small network) District Heating (large network) Solarthermal Heat pump Condensing boiler (natural gas) Source: Blesl, IER, 2008 The same holds true for CHP, which is a very cost-efficient way of reducing CO 2 -emissions in the electricity production. However, economies of scale dictate much higher cost efficiency with larger scale CHP plants, which can be used in conjunction with district heating and cooling. These installations also deliver the absolute majority of greenhouse gas reductions of CHP. Therefore district heating and CHP contribute to the stability and functioning of the whole energy system, while delivering cost efficient reductions of greenhouse gas emissions. 5/13

6 CO 2 abatement costs of select technologies for electricity production costs in EUR per ton of CO 2 Water power (modernisation) Water power (reactivation) Water power (new construction) Combined cycle CHP (200 MW) Combined cycle CHP (100 MW) CHP (wood) Large scale wind power (5.5 m/s) Water power over 1 MW (new construction) Small scale wind power (5.5 m/s) Large scale wind power (4.5 m/s) Water power 100 kw - 1 MW (new construction) Micro-CHP (50 kwel) Micro-CHP (5.5 kwel) Water power kw (new construction) Mini-CHP (rape oil) Rooftop photovoltaic installation (60 m²) Source: Blesl, IER, 2008 Fostering the use of renewable energy sources Furthermore, CHP and district heating and cooling are the only energy efficiency technologies that can supply heat and electricity from renewable energy sources on a large scale and cost efficiently. A large share of electricity from renewable energy sources is expected to originate from biomass and waste, as numerous studies and analyses show. 6/13

7 160 Baseline TWh TWh Reference Tidal, etc. Geothermal Biomass/waste Solar Wind offshore Wind onshore Hydro Tidal, etc. Geothermal Biomass/waste Solar Wind offshore Wind onshore Hydro Source: European Commission. When utilising resources such as biomass, waste and industrial surplus heat they have to be used in the most efficient way possible, preferably in CHP and district heating and cooling. District heating and cooling networks thus form an important infrastructure to deliver renewable, ready-to-use heat and cold to customers. Due to the flexibility of the technology district heating and cooling networks can also be used to work as storage for electricity from renewable energy sources. Volatile electricity can be utilised in heating networks for heat and cold deliveries for space heating and cooling and hot tap water preparation, while flexible CHP installations provide balancing energy for the grid. The EU policy most effective to deliver emission reductions and how to improve it The CHP Directive therefore has the potential to be the most effective policy in terms of delivering emission reductions. 7/13

8 However in its Communication COM final Europe can save more energy by combined heat and power generation the Commission states that the implementation of the CHP Directive has progressed more slowly than initially expected. Member states reporting has been equally slow and according to the Commission the existing reports do not give much clear information or figures that can be meaningfully compared. Some key issues were identified by the Commission: CHP requires an appropriate useful heat demand nearby; high investment and fixed costs for CHP induce low profitability and long payback period (which are not offset by the same level of support as competing technologies receive); decreasing heat demand in buildings affects the use of CHP in district heating; unclear long-term prospects of government support; complex legal frameworks (federal/regional levels); complex and time-consuming administrative procedures; effects of other legislation; and availability of grid connection at a reasonable price and timeframe and costs to update the grid to accommodate CHP electricity; unfavourable conditions for back-up electricity supplies from the grid. In order to ensure and exploit CHP s full potential throughout the member states these issues have to be resolved. First of all, in order to tap this potential binding targets for CHP development are needed. Since the potential for CHP differs, these targets should be differentiated between the member states and can be based upon the results of the reporting already necessary under the current CHP Directive. Modernisation and preservation of existing CHP installations should be incentivized; this is especially of great importance for eastern parts of the European Union. Since CHP requires an appropriate useful heat demand nearby, which is decreasing due to various reasons, the CHP Directive should also focus on heat sinks for CHP. This could be incentives for the industrial or public use of heat from CHP for instance in heating networks. 8/13

9 In order to tackle the problem of grid connections for CHP installations the CHP Directive should implement rules similar to those set in the Directive 2009/28/EC on the promotion of the use of energy from renewable sources. Biogenic fuels should be used in CHP and district heating and cooling to make use of their greenhouse gas reduction potential in the most effective way. Therefore the use of these fuels in CHP and district heating and cooling, also when co-firing, should be incentivized. The EU Emissions Trading Scheme The EU Emissions Trading System is considered to be one of the main policy instruments to realize an envisioned low carbon energy system in the European Union. But due to the sectoral approach of the trading system, a distortion of competition is inevitable. Only installations above a threshold of 20 MW th are subject to the system. Therefore in the market for space/floor heating the only technologies that are included in the trading system are CHP and district heating. These energy efficiency technologies are contributing towards the goals of the EU s energy and climate change goals and ultimately towards the emissions trading system itself. However, they are being put at a disadvantage compared to the dominant players in the market, namely individual boilers based on natural gas and oil. It is therefore necessary to level the playing field. The proposed CO 2 element of energy taxation (CO 2 tax) for installations outside of the emissions trading system should play a vital part in such a levelling of the playing field. One of the main reasons for introducing this element is that a CO 2 tax is able to internalize external costs. The majority of emitters would have to bear the costs for their emissions. Only then will an efficient allocation and a level playing field be possible. A CO 2 tax would also help incentivizing investments in energy efficiency, since installations like CHP plants above the 20 MW th threshold are generally more efficient than smaller installations and feature complex flue gas cleaning. The latter helps reducing particulate matter pollution, a very serious issue, especially in densely populated areas. 9/13

10 Low carbon economy success stories There are countless success stories and examples which demonstrate the impact of CHP and district heating towards the political goal of reducing CO 2 -emissions. Many utilities pursue an investment strategy for the expansion of CHP and district heating based on sustainability in order to tackle the subject of CO 2 -emissions on a regional level in the most cost efficient way. The success stories presented here are just a small excerpt. The Stadtwerke Hannover (Hannover public services) have calculated CO 2 emission factors for heat and power for the climate protection alliance of the city of Hannover. The city of Hannover wants to reduce CO 2 -emissions from the consumption of heat and power by 40 % or annually by 1,840,000 tons per annum by 2020 compared to 1990 (4,640,00 tons). This ambitious target is to be achieved among other measures by an expansion of CHP and district heating. The calculated factors are related to end energy use and therefore comprise heat distribution losses. Incorporating the upstream chain a gas-fired boiler has specific CO 2 emission factor of g/kwh. District heating in Hannover achieves a far lower factor of g/kwh. Using this specific emission factor and the district heating overturn in Hannover and comparing it with the alternative of heat from a boiler CHP and district heating reduce CO 2 -emissions by over 250,000 tons per annum. The Stadtwerke München (Munich public services) have commissioned a study in order to quantify the CO 2 reductions of CHP in the city of Munich. Much like Hannover the city of Munich has ambitious goals to reduce their CO 2 -emissions. CHP and district heating play a major role in the realisation of these goals. CO 2 reductions of CHP were calculated to be 660,000 tons per annum in comparison to the separated production of heat and power. DREWAG - Stadtwerke GmbH (DREWAG - Dresden Public Services llc) has been developing district heating in Dresden rapidly between 1990 and These investments into district heating and CHP have more than halved CO 2 -emissions in Dresden from over 2,000 kilo tonnes per year in 1991 to less than 1,000 kilo tonnes per year in Other emissions, like dust, particulate matter, SO 2 and NO x were significantly reduced as well. In the same timeframe electricity production in Dresden tripled from 500 GWh in 1992 to 1,600 GWh in Outside of Dresden the electricity production in CHP reduces CO 2 -emissions by an additional 1 million tons of CO 2 per year, substituting electricity predominantly from condensing power 10/13

11 plants. Due to political will and the combat against climate change Dresden wants to further reduce CO 2 -emissions. According to the city council s decision, the share of district heating in Dresden s heating market should be raised by 20 % until This energy concept 2020 will contribute further to the reduction of CO 2 -emissions both in and outside of Dresden. Realizing the full potential would result in a further reduction of CO 2 -emissions by 70,000 tons per annum. MVV Energie AG (MVV Energy plc) wants to significantly develop the District Heating supply in the area of Mannheim, Germany. The current market share of District Heating in Mannheim is at around 59 %. MVV Energie wants to raise that share to 70 %. This translates to buildings with apartments being connected to the District Heating network. In close cooperation with the city of Mannheim the concept was approved after extensive analysis. The extensive analysis comprised the company as a whole, factoring in declining sales of natural gas among other things (MVV Energie also sells natural gas) and the market potential in the region of Mannheim. Driving forces behind the initiative was the incorporation of the District Heating development project into the climate protection programme of the city of Mannheim and the contribution of District Heating based on CHP for climate change goals on all levels, regional, federal and European. For the company the fact that it can operate in a liberal, unregulated market was another criteria since such an environment leaves room for the expected growth of District Heating, all while providing secure, environmental friendly and reasonably priced heating for the customers. Existing networks are being densified in the whole area of Mannheim. The network is also extended in different areas of the city. Around 30 km of new heating pipelines will be laid. District heating is currently reducing CO 2 - emissions in Mannheim by approximately 300,000 tons per annum. The projected development will reduce CO 2 -emissions by an additional 17,600 tons per annum. Likewise primary energy savings attributed to District Heating amount to 1,955,000 MWh annually in Mannheim, with the District Heating Development Project Mannheim adding an additional 115,000 MWh of primary energy saved per year. On top of these ecological benefits the District Heating Development Project Mannheim also has a positive effect on society, especially in the region itself contributing to the regional value creation. The investment volume of project amounts to EUR 50 million, whereas most of the contractors are located in the Mannheim region. The project initiates further investments in the renovation and retrofitting of heating systems, which account for another EUR 120 million. Accompanying refurbishment measures in the building stock for heat insulation and other measures add up an additional EUR 30 million. The effect on employment translates to 4,000 man-years. Over 50 % of the effect on employment will affect the Mannheim region. 11/13

12 Conclusion CHP and district heating and cooling are key technologies for achieving a low carbon economy. However there are still barriers for the further development of these energy efficiency technologies that need to be tackled. A level playing field is necessary. Especially the emissions trading scheme, which CHP and district heating and cooling should be benefiting from, puts these systems at a serious disadvantage against its competitors, who also enjoy higher levels of support. The odds have to be evened to give these energy efficiency technologies a chance to further develop and contribute to the challenges of climate change. 12/13

13 Herausgeber: AGFW Der Energieeffizienzverband für Wärme, Kälte und KWK e.v. Stresemannallee 28, D Frankfurt am Main Postfach , D Frankfurt am Main Telefon: Telefax: Internet: copyright AGFW, Frankfurt am Main 13/13