Long after the Iron Curtain was lifted, Europe’s ex-Soviet nations remain reliant on combined heat and power (CHP) plants feeding district heating schemes for which renewables could make an attractive fuel source, writes Rachada Raizada.

District heating (DH) is a leftover of the centralized economic plan- ning, guided by the objective of providing universal access to housing and utilities, that traditionally played the starring role in urban heating systems in the planned economies behind the Iron Curtain. The first Soviet electrification plan of 1920, and successive five-year plans, emphasized cogeneration and waste-heat recycling from turbine steam for district heating of urban residential areas and industrial facilities. Fuel savings at electric power stations, the major producer of waste heat, were an important performance indicator for the Soviet Ministry of Power and Electrification.

With a domestic oil economy devastated by civil conflict, many of Russia’s first power plants used peat, for lack of alternatives. But growing urbanisation and the development of the oil and gas industry after World War II led to the dominance of fossil fuels for DH across the communist bloc.

With the transition to market economies after the collapse of the Soviet system, these same countries – some of which have since joined the European Union (EU) – must grapple with the task of modernising these networks without neglecting ambitious environmental targets amid difficult economic times and rising energy prices.

Euroheat & Power (E&P), a major European industry association for the CHP and district heating and cooling sectors, estimates in its 2011 survey that in 2009 the share of citizens served by DH totalled 64% in Latvia, 60% in Lithuania, 53% in Estonia, 50% in Poland, 41% in Slovakia, 38% in the Czech Republic, 23% in Romania, 17% in Slovenia and 10% in Croatia.

The share of recycled heat in these systems ranges from a high of 92% for Romania to a low of 38% in Slovakia and Estonia. Recycled heat is defined as: CHP, including from combustible renewables; waste-to-energy plants; industrial processes independent of the fuel used for the primary process; and two thirds of the energy delivered by heat pumps.

Cogeneration is less common in Estonia since most of its electricity came from oil shale plants in one region. Meanwhile, mother Russia’s DH system boasts a trench length for the pipeline system of some 173,000 km.

Direct use of renewables – in heat-only boilers and non-CHP installations – ranges from a high of around 14% in Estonia, Latvia and Lithuania to 2% or less in the Czech Republic, Poland, Romania and Slovenia.

In the EU-27 countries, the share of recycled heat in DH increased from 70% in 1990 to 80% in 2006, with most from the ‘others’ category. The share derived directly from renewables increased negligibly. In Germany, which along with Poland is the biggest DH market within the EU, the share of recycled heat is 89.5% (mainly from coal, oil and natural gas, with 10% from combustible renewables and waste).

From E&P’s viewpoint, a modern DH system should be based on capturing waste heat, and phasing out direct use of fossil fuels for heating. Johannes Jungbauer of the European Affairs Office of E&P, says fuel source is not an accurate indicator of efficiency. Cogen greatly increases primary fuels’ efficiency compared with condensing power production and heat-only boilers.

Europe pushes for energy efficiency

With the EU seen as trailing in its goal of reducing primary energy consumption by 20% by 2020, and heat losses from the EU-wide energy system estimated at as high as 50%, energy efficiency is now at the heart of EU policy. In July 2012, the EU Parliament’s Energy Committee unanimously voted in a new Energy Efficiency Directive (EED), repealing Directives 2004/8/EC and 2006/32/EC, and enshrining the 20% efficiency target in law by stipulating mandatory measures, such as renovating public buildings and energy-saving schemes for utilities.

Member States must complete a ‘comprehensive assessment’ by December 2015 of the potential of high-efficiency cogeneration and efficient district heating/cooling, set their own targets and present national efficiency action plans in 2014, 2017 and 2020.

DH offers several benefits over decentralised heating in areas of high heat-load density. But the efficiency and environmental benefits depend on the fuel source, technical characteristics of the heat distribution system and boiler plants, in addition to the institutional market structure. DH enables fuel switching, and can run on a variety of fuels, such as coal, oil, natural gas, peat, biomass, geothermal and municipal or industrial waste.

Vronska in Slovenia hosts the country’s first solar thermal DH system Credit: EVN

E&P emphasizes heating’s contribution – and particularly the recuperation of waste heat – to achieving energy efficiency targets. Of the EU’s final energy demand, 40% is for heating (space, water and low-temperature industrial processes), and met largely through imported fuels or low-efficiency electricity. If progress in achieving the 2020 targets is found insufficient in a 2014 review, national energy efficiency targets will be proposed.

‘Of course we appreciate it,’ says E&P’s Jungbauer. ‘But we were hoping for more. Article 10, which includes an energy-efficiency obligation scheme, has been watered down, and could have been stronger.’ Results will depend on how Member States choose to implement the directive: ‘The EED raises awareness but there are a lot of ‘shalls’ and ‘shoulds’ in the text,’ he says.

Poland aims for cleaner power

For the EU’s largest coal producer – Poland – where domestic hard coal accounts for around 74% of energy production, meeting the EU’s 2020 goal of reducing CO2 emissions by 20% will be particularly challenging, and further complicated by the EU’s Industrial Emissions Directive, which necessitates investment to reduce particulates and SOx/NOx emissions. In 2013, the ‘white certificates’ scheme for emissions trading was introduced to ensure that energy companies meet their energy-efficiency obligations.

Allocations for CO2 emissions are currently obtained free of charge, but from 2013 the number of allowances will be gradually decreased to zero in 2027, and the shortfall will have to be purchased through the Polish Power Exchange.

Currently, renewable energy sources (RES) account for less than 10% of national energy production, although Poland’s share of the 2020 EU target is 15% energy from RES. Since 2005, Polish support for RES has consisted of a rainbow of tradeable renewable energy certificates in shades of green, yellow, red, violet and brown. These are issued to producers of renewable energy, providing them with a secondary revenue stream. Poland’s use of renewables in DH (CHP or not) in 2009 was around 7%, most of which was derived from combustible renewables.

DH is an important industrial sector in Poland. The Chamber of Commerce Polish District Heating estimates that around 500 companies operated in this sector, earning an income of about €4.1 billion (US$5.3 billion) in 2010. With an urban share of 60%, national DH capacity is 59,260 MW, served by a trench length of 19,400 km of pipeline systems.

The chamber, spurred on by the Polish Energy Policy to 2030, has recognised the potential of cogeneration, and along with the Polish CHP Association, has presented to the Ministry of Economy a programme for developing cogeneration from its present 63% level.

The average profitability of heating companies is far lower than the industrial average, which means that the sector also faces serious competitive challenges. This has caused the sector to contract, and from 2005–09 DH capacity fell from 65,189 MWth to 59,970 MWth, while district heat sales dropped from 295 PJ to 239 PJ.

Renewables projects get underway

The RES considered most feasible for district heating are biomass, geothermal and solar, with biomass considered to be the most viable.

Fortum, a Finnish energy company, has CHP assets in operation in Russia, Poland, Estonia, Latvia and Lithuania, with a total heat production capacity of 14,107 MW in Russia and a combined 2432 MW in the latter four countries. In 2011, it announced the inauguration of a new biomass CHP plant in Parnu, Estonia, with a multifuel circulating fluidised bed (CFB) boiler, offering 100% fuel flexibility with peat, wood and industrial waste. It also invested in a new biofuel CHP plant in Jelgava, Latvia, the first of its scale in the country. Its Czestochowa CHP plant in Poland uses hard coal and co-fires up to 25% biomass in a 186 MWth CFB boiler.

Dalkia has announced two biomass cogeneration projects in Poland, its largest biomass operation to date. Around 700,000 tonnes of biomass will replace coal, and supply electricity to the national grid and heating to the 700,000 inhabitants of Lod´z and Poznan, served by DH. The project will require a €70 million investment.

Solar and geothermal energy as fuel sources are naturally limited by their availability. Demonstration solar DH plants (large-scale solar thermal technology generating heat from large collector fields) operate at competitive costs in countries such as Sweden, Denmark, Germany and Austria, but are new to Eastern Europe.

A consortium of Slovenian and Austrian companies completed the first large-scale solar thermal plant in Slovenia in March 2012. Solar collectors with an area of 842.3 m2, or 590 kW, feed into a 93 m3 storage tank, which in turn feeds into the Vransko DH grid, supplying heat to around 2500 inhabitants.

Iceland, where 99% of the population is currently served by DH, is in the enviable position of being able to use its geothermal resources to generate 77% of its district heating.

Geothermal district heating dates back to Roman times, and now has potential in Poland and Hungary – the latter being considered a ‘hot’ market by the European Geothermal Energy Council.

Hungary currently has around 16 geothermal DH projects in operation, with over 500 MWth of installed capacity, and this number will double by 2014. PannErgy, a Hungarian energy company, focuses on the use of geothermal resources for DH energy in the Carpathian basin. With technology and know-how supplied by Iceland’s Mannvit, and with the help of partnerships with municipalities, a 3.2 MWth plant (replacing a natural gas boiler) is already in operation in Szentlorinc, and another will open soon near Miskolc.

The potential of municipal and industrial waste as a DH fuel is significant and under-used. Polish waste- management legislation adopted in 2011, which requires the reduction of land filling from the present 90% level, opens an opportunity for investments in waste-to-energy plants. The EU has also announced its intention to ‘phase-out biodegradable waste going to landfill in 2020–25’.

Currently the Czech Repub- lic, Slovakia, Poland and Hungary only host a handful of installations for generating heat or power from municipal waste. Fortum has announced a new waste-to-energy CHP plant and distribution company in Lithuania, in a joint venture with the city of Klaipeda. Commercial operation is planned for early 2014, when 270,000 tonnes of municipal and industrial waste will be expected to produce around 150 GWh of electricity and 400 GWh of heat annually.

Renewables DH outlook

While RES are associated with localised energy production, DH systems work on a centralising economies-of-scale principle. The EU Energy Roadmap 2050 emphasizes that decentralized and centralized systems must interact: ‘In the new energy system, a new configuration of decentralized and centralized large-scale systems needs to emerge, and will depend on each other, for example, if local resources are not sufficient or varying in time.’

CHP DH systems can even be used to balance fluctuating electricity production from intermittent renewables, such as wind or solar. For example, on excessively windy days overcapacity can be shifted from feeding the grid to using heat pumps to heat water. Torshavn, in the Faroe Islands, is setting up a 10 MW boiler to link its DH system to the grid. In Germany a research project co-ordinated by the Steinbeis Research Institute for Solar and Sustainable Thermal Energy Systems is also examining solutions for decentralized feed-in to solar DH systems.

DH’s fuel flexibility, along with extensive inherited networks offer great potential for Central & Eastern Europe’s (CEE) energy future. But due to its synergy aspects, DH has never fitted neatly into energy statistics or policy. However, national energy policies must embrace DH more closely to achieve EU energy policy targets in energy efficiency, or in the use of renewables and CHP.

Rachana Raizada is a freelance journalist, who writes on the energy sector.

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