Case 1, VEKS Annual Review 2021
Fundamental questions are to be discussed at executive level: Is the technology up to date? And will district heating be able to keep the pace?
–Yes! District heating is not outdated and finally we witness the politicians’ good graces, Lars Gullev, CEO, VEKS, notes. Even though district heating is well hidden below ground, it has obtained a greater visibility and political recognition in recent years. A vast and wide majority in the Danish Parliament adopted the Climate Agreement in 2020 in which district heating is recognised as part of the solution to our climate challenges.
– Everyday, we demonstrate that district heating is hot. We tap directly into the trend of today: We work with a circular, green and secure supply which is also based on community, Morten Stobbe, Vice President, VEKS, adds.
A changeable world
”The Future District Heating” is the name of a collaborative project where four heating companies in the Greater Copenhagen area have looked into the future, primarily by means of scenario analyses. In out-line, six scenarios have been set up based on six combinations of district heating production – and the consequential system costs have been calculated.
The analysis is based on a number of scenarios of how district heating matches different “futures” 2030 and 2050. The six CO2-free scenarios all measure up to a seventh baseline scenario which is not CO2 neutral – see figure “Scenarios 2050”.
Overall, the conclusion of the report is that district heating is sturdy, competitive and can provide the necessary link between the waste sector, the electricity sector, and the transport sector. Add to this the link to CO2 capture.
Is VEKS on the right track – or are they moving in a direction diverging from the conclusions in the report?
– In many ways, VEKS’ Strategy 2025 is far-sighted and goes hand in hand with the conclusions from the Greater Copenhagen area report. The highest praise to VEKS’ board of directors for giving the go-ahead to our ambitious goals and contributions to the green transition already in 2020, Lars points out.
Up until 2050, the biomass district heating and the waste district heating can be reduced when other technologies take over on the way to a district heating system that is even more multi-stringed. In the short run, new technologies can, however, not take over the use of certified, sustainable biomass of the Greater Copenhagen area before 2030.
– At first, it will be sensible to choose a multi-stringed supply. This offers sturdiness and adaptability relative to a world that is changing at top speed, Morten establishes.
Cooperation at a new level
– FFH50 has developed the cooperation between the four heating companies. This, both applies at technician, planner and executive level, Morten says. A spin-off of the Future District Heating is that a large number of the participating plan employees from the four companies will continue the cooperation as new common goals require continued common planning and knowledge sharing.
From a practical point of view, there are also ramifications. To improve the utilisation of the production units, VEKS will rebuild a heat exchange facility, e.g. at Vestforbrænding, so the companies can mutual-ly supply each other.
Moreover, the Future District Heating project has demonstrated that the industry is no longer based on forced marriages. – We have a common business, and we must help each other to reach the goal. This also applies at executive level. Gradually, we become increasingly depend on each other and more shoulders have to carry the massive investments of the future, Lars remarks. The overall settings are discussed, and the “electrification” of the district heating is, among others, a very topical subject. – Therefore, we also need to work closely together with Energinet. It is obvious that Energinet will be part of our next collaborative project about “The Future District Heating,” Morten reflects.
Arms and legs
What are the greatest challenges for district heating in the entire Copenhagen metropolitan area?
The lack of labour, VEKS’ executive board answers with one voice. So far, VEKS has succeeded in recruit-ing a number of new, competent employees who are primarily going to work with the planning and ex-pansion of district heating. – But we are in a heated market with many parties being ready to expand the district heating in our supply areas. SO many of us are requesting the same key components. As a starting point, subsidies are an important instrument in the green transition. – But right now, we are under more pressure than ever due to the subsidy deadlines. The compressed time just adds even more to the pressure of the limited labour, Morten establishes.
The surplus heat from the industry is already utilised to a high degree, both in the local district heating companies but also at VEKS, e.g. in the CP Kelco project which supplies heat corresponding to approx. 2,000 households. The report anticipates that the share of surplus heat, data centres included, will increase considerably in the years ahead.
It is also anticipated that large heat pumps, e.g. based on sewage and geothermal energy, will fill an important role in the future district heating. Furthermore, VEKS and Innargi have initiated substantive negotiations about the development of geothermal energy in the Greater Copenhagen area.
However, district heating will primarily become a gear that is even more central in the link between a number of energy sectors and society's overall transition to more electricity. – Carbon capture (CC) and hydrogen generation, also called Power to X (PtX), will probably become a reality sooner than we had dared to dream of, Morten says. Surplus heat from the technology processes will be essential for the economy to be coherent with the new technologies. VEKS already takes part in the Greater Copenhagen cooperation Carbon Capture Cluster Copenhagen (C4) together with a number of other large energy companies.
– No district heating, no development. Our district heating sector functions as a link between the elec-tricity sector and the transport sector, Lars establishes. The district heating can utilise the fluctuating energy (as the wind blows), e.g. by way of heat storages. Together with Høje Taastrup District Heating, VEKS will put such storage into use during 2022.
As regards green peak and reserve load production, VEKS has already started maturing a project about an electric boiler at Hvidovre Hospital (50MW). Over a short span of years, green biogas and biofuel will probably also come into play where the new types of fuel can be used in the existing boilers.
The Future District Heating argues in favour of reducing the temperature in the system. It is a strategic necessity but also a technically complicated move.
Customers in focus
Who are our closest cooperative partners? For which tasks?
– The customers, they answer with one voice again. – The heat suplly agreements are a good example of us being closer connected than before and forming plans together, Morten stresses. In VEKS’ custom-er forum we now have completely open discussions, e.g. about the position of new production units and how it will affect our common infrastructure.
– VEKS is built on a principle of solidarity. Our owners (the 12 municipalities) and our customers (the district heating companies) are increasingly of one mind about the fact that there is an increasing risk connected primarily to handling one’s own needs – at the expense of the safety in the community, Lars establishes.
Green transition must be based on even more district heating to even more customers. Therefore, a growing customer base is an important recommendation in “The Future District Heating” anticipating a potential to convert natural gas customers to district heating of at least 10-15% in VEKS’ supply area. Many local district heating companies have started expanding the district heating supply to new customers. In 2022, VEKS will introduce a huge project in Køge where 7,000 potential customers are wait-ing for the district heating.
The latest political statements are that the sector should speed up the process of phasing out natural gas – and we are of course also working on upgrading the district heating. The report recommends that we offer even more streamlined, digital solutions, subscription solutions, high service, etc. to the customers. However, we must also remember to inform new and existing customers about how important green, sustainable and secure district heating is when it comes to solving our climate challenges, Morten concludes.