Implementing CHP District Heating – Reducing Energy Costs and CO2 Emissions
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Transcript of Implementing CHP District Heating – Reducing Energy Costs and CO2 Emissions
District Energy & the WMCWG Study
What is CHP & District Energy ?
Transmission Power Losses
Cooling Towers Heat Rejection
CHP Centralised Power Generation with gas fired boilers
Stack Heat Rejection
Space Heating and
Hot Water from boilers
Transmission Power Losses
Electricity and waste heat used locally for space heating and hot water - instead of being rejected to atmosphere.
CHP Decentralised Energy Generation with CHP
Piping heating & potentially cooling to buildings – “Energy Linking”
Heat Losses - 1°C per km
Reliability ~ 100% (99.98% for Southampton)
District Energy
National Context
District Energy in the UK today ?
Sheffield
Milton Keynes
Birmingham
Woking
Southampton
Nottingham
London – • Olympics and Stratford City • Bloomsbury Heat & Power • Whitehall
Lerwick
Newcastle
Leicester
Exeter
Our Members supply over 600 GWh of low carbon heat each year
Gas Fired CHP, 42%
Energy from Waste, 54%
4%
Owners and operators of the largest district energy schemes in the UK We face the pains and successes of district energy on a daily basis Joining the organisation will ensure you gain the tools to develop your
scheme
Together the UKDEA Members represent
Over 100 MW of low carbon generation plant (CHP, biomass, EFW etc)
Supported by over 500 MW of conventional back up boiler plant
Delivering over 600,000,000 kWh of heat each year
across energy networks which, if combined, would extend for more than 200 km
Key Facts
Who are we ?
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GDF SUEZ – The Business Lines
Leading Global Energy Player Operating in over 40 countries
218,000 employees 6 Business Lines
Turnover €89 billion
ENERGY FRANCE
ENERGY EUROPE&
INTERNATIONAL
GLOBAL GAS &LNG
INFRASTRUCTURES ENERGY SERVICES ENVIRONMENT
€14 Billion turnover
17% of the group’s turnover
80,000 employees
40% of total GDF SUEZ Staff
1,300 locations in Europe
30 Countries
GDF SUEZ: Financials
1st company in the “utilities” sector worldwide (Forbes Global 2000);
€30 billion net invested over 2008-2010;
73 GW of installed power-production capacity;
Rank Company Sales (US$BIL) Profits (US$BIL) Assets (US$BIL) Market Value (US$BIL)
17 GDF Suez (incl. IP) 120.97 10.05 255.82 75.61
27 EDF Group 89.46 4.73 278.76 71.53
62 E.ON 120.74 1.76 215.15 47.44
129 National Grid 21.91 6.34 75.17 21.69
236 Scottish and Southern 30.27 1.73 27.69 14.34
282 Veolia Environment 50.39 0.56 66.17 10.3
579 Centrica (British Gas) 31.16 -0.21 25.93 19.69
660 United Utilities 4.69 1.8 20.54 4.93
Cofely’s UK District Energy Schemes
£2.5bn revenue stream over the concessions
77,000 tonnes CO2 saved per annum
270 GWh energy sales per annum
Manchester
MediaCity UK Midlands
Leicester District Energy Birmingham District Energy Berryfields Estate Coventry Heatline
London
South Coast
Olympic Park & Stratford City Whitehall Bloomsbury Heat & Power Greenwich Millenium Village Equinox, Hatfield
Southampton Geothermal Eastleigh
Cofely District Energy
Services to Energy Companies
External Clients
Energy Companies
New ESCOs
SGHC
Cofely Ltd
GDF SUEZ
GDF SUEZ Energy Services LTD
Cofely District Energy Group Ltd
ICE (UK)
Cofely District Energy Ltd
BDEC
BHP
LDEC
Case Studies
Southampton Geothermal Heating
Company, Southampton
City Wide DE Scheme
70,000,000 kWh energy
generated p.a.
11,000 tonnes CO2 saved p.a.
Providing heat chilled water &
electricity to
45+commercial consumers
800+ residential consumers
Energy Efficiency in Action
– Energy Efficiency in Action
• Energy Efficiency in Action
BBC TV Studio’s
Parkview RSH
Hospital
Civic Centre
Southampton Solent University
Skandia Life
DeVere
Hotel
Quays
West Quay The Heat Station
IKEA
Carnival
ABP
Birmingham District Energy
Company, Birmingham
City Wide DE Scheme
12,000 tonnes CO2 saved p.a.
3 Core Partners
Providing heat chilled water &
electricity from
3 Energy Centres
6.1MWe CHP
A Partnering Framework
25 year contracts with BCC, Aston and BCH
Financial savings (developed on a whole life costing basis) maintained throughout the contract by indexing charges to national fuel prices, RPI etc.
100% risk transfer to Cofely District Energy
As scheme expands profits are shared with these core consumers – number of potential connections in the pipeline
BDEC in Numbers
6.7 MWe of CHP
60,000 MWh of heat per annum 4,900 MWh of chilled water 4 energy centres distributing via a network of 4km buried pipework & cables £6 million per annum energy sales
£7 million capital cost to date 12,000 tonnes of CO2 saved per annum
BDEC: The Commercial Framework
25 year agreements with BCC, Aston and BCH
Financial savings (on a whole life cost basis) maintained throughout the contract by indexing charges to national fuel prices, RPI etc
As the scheme expands profits are shared with these core consumers – number of potential connections in the pipeline
100% risk transfer to Cofely District Energy
Scheme supplies heat, chilled water and electricity to agreed output specifications with penalties for non performance
Savings to consumers >£0.5M p.a.
Emission reductions of 12,000 tCO2 p.a. with target for 20,000 tCO2 through growth and low carbon supply
Energy Efficiency in Action
– Energy Efficiency in Action
• Energy Efficiency in Action
The Combined Schemes
Broad Street Scheme
Eastside
Regeneration Area
Potential future energy links
Broad Street Scheme
Eastside Scheme
Phases 1 and 2
Eastside
Regeneration Area
Westside Regeneration
Area
Olympic Delivery Authority
Energy Centres for London 2012
£100 million investment
40 year concession
Energy price regulation
16 km of energy network
2 energy centres
(district heating & cooling)
Olympic Delivery Authority
Energy Centres and network for London 2012
Olympic Park & Stratford City
• £100M capex
• 40 year Concession Agreement
– longest district energy services
concession agreement in the UK
• Mandated Connections within
Zone of Exclusivity – enabled by
a price control formula - again a
first in the UK
• 16 km network, 2 energy
centres
• Up to 200 MW heating, 64 MW
cooling and 30 MW electricity
Kings Yard Energy Centre
Biomass Boilers Chillers
Gas Fired CHP
Gas Boilers
“The Olympic Park and Surrounding Area is London’s single most important regeneration project for the next 25 years” Boris Johnson Mayor of London
Heating
Cooling
Leicester District Energy Scheme - Leicester
CHP and large scale district networks -
3,000 Council Dwellings
15 Administration Buildings
City Wide DE Scheme
25 year contract with
Leicester City Council
£15 million investment
Coventry District Energy Scheme - Coventry
Unique “heat shipper” contract
Concession to purchase all heat from existing incinerator and supply into the City
City Wide DE Scheme
25 year contract with
Coventry City Council
1 mile “heatline” into the City
Study Methodology
West Midlands Collaborative Working Group
The following Authorities supplied data to take part in the study:
Coventry
Wolverhampton
Dudley
Walsall
Solihull
Authorities Involved
Buildings considered for each study were originally identified by their respective LA, who:
a. Conducted site visits to each building to examine energy
generation plant (boilers primarily);
b. Inspected and measured plant spaces;
c. Gathered actual energy consumption data: gas and
electricity either metered or from invoices; and
d. Determined potential third party consumers enthusiasm
to being part of a wider district energy scheme.
Desktop Study Methodology
Potential Networks and Connected Buildings
Coventry Wolverhampton
Examples....
Load Benchmark Assessment
Whole Life Cycle Cost
Analysis
Selection L/Z Carbon
Generation Plant
Operational Strategy
(Heat lead)
Operational
& financial
modelling
(hourly
basis)
Optimisation via User
Feedback
Solution
Iteration
Desktop Study Methodology
Energy
&
CO2
savings
Case Study – results for Walsall
What’s happening in Walsall?
Base case
o Five buildings were offered
o Total GIFA 32,952 m2
100% Council Owned buildings (Mixed type)
o Total heat demand circa 4,900,000 kWh p.a.
o Total Electricity consumption circa 4,200,000 kWh p.a
o £620,300 estimated energy costs p.a.
o 3,070 Tonnes CO2 p.a.
Solutions developed
2 modelled options considered are:
1. A DES to include all buildings identified by WMBC
2. A DES as per Option 1 with removal of one thermal branch
corresponding to the Garage Building
Option one delivers the greatest financial and environmental benefits to the core
consumers
Walsall Option 1 Analysis Option 1
Walsall Operational Analysis (Option 1)
>The Scheme will: 1. Comprise all buildings offered by WMBC
2. Based on single CHP:
– 334KWe (installed at Civic Centre)
3. Save 613 tonnes CO2 (20%) p.a
4. This CHP will deliver:
– 51% (2,551,426 kWh) of the scheme’s total heat consumption p.a.
– 44% (1,898,473 kWh) of the Civic’s Centre electricity demand p.a.
5. Export 4% (74,847 kWh) electricity to the national grid
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1 1001 2001 3001 4001 5001 6001 7001 8001
He
at L
oad
(kW
)
Hours
Walsall Town CentreAnnual Heat Load Duration Curve
Boilers
CHP
Load
Walsall Operational Analysis (Option 1)
Option 2 Capex
£Cost
Total CAPEX £1,037,745
ESCO Finance £1,037,745
WMBC/External grant £ -
ESCO operating profit £29,714
Walsall Financial Analysis (Option 1)
Consumer Energy cost
savings (p.a)
CRC EES
Revenue
(£/p.a.) Walsall Borough Council £31,016 £7,355
Walsall: Key Benefits
It is recommended to proceed with Option 1: Zero financial contribution from WMBC;
Greatest CO2 savings over base case achieved;
Highest energy cost savings to consumers per annum on WLC basis;
Largest volume of energy contribution from CHP;
Further potential savings from the CRC EES to WMBC of approximately £7,356; and
Opportunity to grow a district energy scheme to serve future 3rd party consumers and
levied via connection charges.
Financial Summary for Whole Study
Total CAPEX : £7.9M
Total CO2 savings achieved: 5,300 Tonnes CO2 p.a.
Total energy cost savings to consumers > £0.2M p.a.
Total potential savings from the CRC EES >£60k
Next steps
Deliver district energy schemes across the indentified areas as combined procurement process
Include other authorities to deliver economies of scale for all
Note - Coventry have fast tracked their procurement (due to specific HCA grant) and via open tender have selected Cofely District Energy to deliver their scheme using waste heat from the existing EFW plant – “Heatline”
Next Steps
Business Models
Option A - LA funding & ownership
Theoretically more control over ESCO development (but the same can be achieved via joint cooperation);
Not core business to LA (generating and selling energy)
Exposure to financial risk (CAPEX cost overruns, etc.)
Exposure to operational risk: • OPEX cost • Plant efficiencies • Plant and network replacement + cost (LTR)
Not effective risk transfer
Option B - ESCO funding & ownership with Joint Co-operation
The engagement of an ESCO (Energy Services Company) can be
utilised by each LA to:
1. Reduce risk exposure to the LA, from the delivery of the
scheme.
2. Reduce the capital costs for development of the Scheme;
3. Bring certainty to the projected energy cost and carbon savings;
4. Achieve other key objectives (sustainability targets, etc)
OJEU procurement will be required as Scheme will breach OJEU
services threshold (£156,442)
An ESCO would generally:
1. Design, build, finance (or part finance) & operate the scheme; 2. Take all risk on energy supply and plant availability/efficiency; and 3. Provide Energy on an output specification basis with:
i. Agreed energy costs savings; ii. Carbon savings;
Each LA and other Public Sector bodies would:
1. Enter into a long term energy supply agreement with the ESCO (20+ years).
ESCO delivery
In return for the long term energy revenues/contracts an ESCO would:
1. Deliver energy to agreed standards – high quality, availability etc..
2. Deliver energy to agreed prices – although annual charges are split into fixed and unit
elements
3. Set these total prices to give savings year 1 against alternative costs of heating, cooling and
electricity supply
4. Ensure on going savings by indexation in accordance with an agreed basket of indices;
5. Purchase all fuels including all back up/top up fuel
6. Take full risk on availability operation of CHP plant etc..
7. Operate, maintain, repair and replace all plant in the Energy Centre and Distribution Systems
8. Fund and install 100% Backup/Top-up conventional heating/cooling plant as well as the
“sustainable” plant in the energy centre
“the Key Terms”
ESCO obligations
The Birmingham Model
Strategic Board
Energy Board
Operational co-ordination
Development co-ordination
Ownership &
Investment
Project
Governance
Risk Transfer
Joint Co-operation
Energy Services
Partnering Awards for the Birmingham Scheme
A useful road map is GPG 377:
Guidance on procuring energy
services to deliver community heat
and power schemes
“Used by Birmingham City Council to deliver the BDEC scheme”
Useful guide
Future Expansion
Once a scheme is developed there is significant potential for the LA to encourage expansion:
Planning obligations via PPS1 and other obligations via Section 106 Agreements can help to incentivise private business to connect to DE Schemes.
LA can also develop a Joint Cooperation framework with an ESCO to connect buildings where WLC analysis demonstrates viability, thus providing an ESCO with a critical energy density to develop a wider DE scheme.
Expansion to Third Parties should deliver a profit share to the core Local Authority partner, as well as delivering cost and carbon savings to consumers
Expanding the Schemes
Energy Offering to Third Parties Once Scheme is Developed
• Capital cost savings – connection charge up to 20% less than conventional plant
• Space savings – direct connections mean no plant space required
• Planning gain – environmental benefits and no roof mounted cooling plant
• Operating cost savings – up to 10% compared to alternative cost of heating/cooling
• Savings guaranteed – prices linked to market levels to ensure savings maintained
• Carbon Savings - Delivers on LA 21, Kyoto and CSR targets
• Risk Transfer – with off site energy supplies
Why Take a Thermal/Cooling
Connection ?
• Capital cost savings – connection charge up to 20% less than conventional plant
• Space savings – direct connections mean no plant space required – very valuable in urban areas
• No roof mounted plant – planning gain
• Operating cost savings – up to 10% when compared to the alternative cost of heating/cooling (Cofely Business Model)
• Guaranteed savings – prices linked to basket of indices to ensure savings maintained throughout life of the contract
• Delivers on carbon saving targets and indicators
C
Contact
Mike D Smith
Non-Executive Director and Public Sector Advisor, Cofely District Energy
E-mail: [email protected]
Mobile: 07976 606858
Web: www.cofely.co.uk