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, EstoniaFaced with this huge competitive disadvantage in themarginal cost of power generation, some existing CHPfacilities will shut down and construction of new CHPplants will be choked off.In the ACES, DHC systems are not directly coveredentities unless they qualify as ‗electricity sources‘.District systems would be covered indirectly throughthe costs of allowances built into the prices ofpurchased fuel oil, or natural gas if purchased from thegas LDC. However, gas purchased on the wholesalemarket or coal users not qualifying as an electricitysource would not be required to submit allowances.This is a fundamentally good framework with theexception of the concerns about CHP systems to becovered or not. However, if the upcoming legislativeprocess results in modifications that make many DHCsystems covered entities, it is critical that changes inallowance allocations be made as discussed below.For example, if the final climate change bill regulates allsources with emissions greater than 25 000 metric tonsCO2e (the threshold generally used in the ACES aswell as a number of past bills), over 70% of DHCsystems and over 95% of DHC output would becapped. In such a way, more efficient systems will havecompetitive advantage, because the quantity ofallowances needed per unit of energy will be lower.American Clean Energy Leadership Act (ACELA) inJune 2009 and Federal Renewable/Energy EfficiencyStandard establishes a Renewable Electricity Standardwhich includes provision for energy efficiency credits aswell as renewable energy credits that can benefit DHCas well.Renewable Electricity and Energy Efficiency Standardestablished by ACELA is applicable with the electricutilities selling >4 TWh a year. The utilities are requiredto supply 20% of demand from combination ofrenewable sources and increased energy efficiencymeaning 15% renewable together with 5% efficiencyincrease. If the state determines that it cannot meet therenewable requirement, then the portion of renewablesources may fall lower to 12% but with efficiencyincrease equal or higher than 8%. These requirementsprovide important leverage for DHC/CHP development.CONCLUSIONThe survey work is still underway, and therefore, thelessons learned and recommendations will be issued inthe final report in spring 2011.ACKNOWLEDGEMENTThe authors express their gratitude to the interviewedspecialists, Mr. B. Gilmour (Canadian Urban Institute),Mr. K. Church (Natural Resources Canada), Mr. M.Wiggin (Public Works and Government ServicesCanada), Mr. R. Thornton (<strong>International</strong> District EnergyAssociation – IDEA), Mr. D. Kaempf and Ms. P.Garland (U.S. Department of Energy), Mr. B. Hedman(ICF <strong>International</strong>) and Messrs. G. Draugelis and P.Salminen in the World Bank.REERENCES[1] National DHC Survey, Canadian DHC Association(CDEA), 2009.[2] Ministry of Construction, China City ConstructionStatistic Annual. The DH data does not includeindustrial steam and hot water.[3] T. Kerr, IEA Collateral, Sustainable Energy inChina: The Role of CHP and DistrictHeating/Cooling, 2008.[4] A. Tsarenko, Overview of Heating Sector, CASEUkraine, 2007.[5] IDEA Report, The DHC Industry, 2005.[6] DHC Services, Commercial Data Analysis for EIA‘sNational Energy Modeling System, Energy andEnvironmental Analysis, Inc. and <strong>International</strong> DHCAssociation, 2007.[7] M. Spurr, Climate Change Legislation in Dollarsand Cents, presentation in IEA DHC inGustavelund, Finland, in Aug 2009.Energy and Water Development Appropriations Act of2010 will provide $15 M for DHC feasibility studies.222