12th International Symposium on District Heating and Cooling

The <strong>12th</strong> <strong>International</strong> <strong>Symposium</strong> on District Heating and Cooling,September 5 th to September 7 th , 2010, Tallinn, Estoniarealistic. To substitute natural gas, DHC based onbiomass and possibly with CHP is a superior option.For DH, two-tier tariffs are used in which energy fee ispass-through of energy costs, and the fixed fee coversthe profit, the connection costs and all other costexcept energy. The fixed fee can be adjustedannually/biannually with CPI (Consumer PriceIndex).The customer contracts are made for a longperiod, say 10-20 years, during which the capital costhave been discounted to the fixed fee. Municipalcompanies operate as non-profit but private companieswith reasonable profit.1.2. Market DriversIn Canada, the federal government is committed toreducing GHG emissions by 17% below 2005 levelsby 2020, being the main driver of DHC. The DHCmarket is expanding smoothly to start creating adifferent infrastructure to substitute depleting resourcesof natural gas.As mental drivers, there is strong interest inmunicipalities to consider DHC introduction and furtherexpansion very much based on European practise.Many municipalities have set voluntarily targets to thereduced GHG emissions. DHC systems are widelyrecognized as a potential measure to achieve thetargets. The DHC is considered a tool for the urbanplanners but not an energy issue per se.As an example of investment support, Ontario PowerAuthority (OPA) subsidizes investments in electricitysavings by paying up to $800/kW of the saved electriccapacity. The subsidy used to be 400/kW, but wasdoubled at the end of 2009. Customers can use thatmoney as the partial payment of the connection costsof DHC, thus DHC companies indirectly benefittingfrom the subsidy system as well.1.3. Main BarriersThere is no formal DHC strategy or policy supportingDHC and CHP development in Canada. TheGovernment does neither have the tradition nor thewillingness to take strong position in DHCdevelopment. The private sector that could bringinvestments and entrepreneurship cannot be muchinterested, because starting the DHC is risky: long paybacktimes ranging beyond 10 years, limited access tomunicipal property, challenging contracting ofresidential, municipal and federal buildings, overallbilling and collection of different types of customers.Nevertheless, the municipalities are rather weak,because the municipal taxation only covers propertyand tourism taxes but no corporate or income taxes.Moreover, municipalities have no mandate on energy.The federal government hesitates to take a strong rolewhile fearing of intervening the private sector drivenheating market.1.4. Current ActivitiesThe Integrated Community Energy Solutions (ICES)Roundtables have been established to accelerateprogress toward reducing GHG emissions by bringingtogether senior-level stakeholders to exchange viewson the best way forward from here. The Roundtablesbuild upon ICES. The Roadmap for Action, which wasreleased by the Canadian Council of Energy Ministersat its annual meeting in September 2009, describes therole that Canada's federal, provincial and territorialgovernments can play in advancing ICES and it setsout a broad strategy for action. It also includes a varietyof options from which the governments can choose,according to their priorities, to advance communityenergy performance and complement existing energyefficiency activities in different sectors.The ongoing collaboration of key energy actors andenablers across Canada from the private and publicsectors through the Quality Urban Energy Systems ofTomorrow (QUEST) collaborative also informed theRoundtable discussion. In particular, preliminary resultsfrom a QUEST-led study suggest that ICES couldreduce GHG emissions at the community level by asmuch as 40% to 50%, resulting in reduction of 65 Mtby 2020, which is about 20% of Canada's official2020 target reductions. These results are verypromising and highlight how ICES could contributesignificantly to improving Canada‘s energy and GHGperformance.2. P.R. China2.1. Status of DHCIn China, the DH development has been very strong,more than 10% annually during the past decade onaverage. By the end of 2005, DH supply (includingsteam and hot water) was over 2 100 PJ; of which CHPaccounted for 47% and boilers accounted for 51%.Inthe supply of steam and hot water, steam supply is 715PJ, of which CHP accounts for 81% and boilersaccount for 17%; the total hot water heating supply is1395 PJ, of which CHP accounts for 29% and boilersaccount for 69%. The heating supplied by CHP unitsand boilers are respectively 992 PJ and 1086 PJ.Apart from Europe, only SH is supplied by the DHsystems, and the DHW by individual systems: solarcollectors, propane, electricity, etc. [2,3]During the few years to come, China will become thelargest DH country in the world.216