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High-Efficiency CHP, District Heating and District Cooling in Finland 2010-2025

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1 VTT-R-04071-15 10.11.2015 STUDY REPORT High-efficiency CHP, district heating and district cooling in Finland 2010-2025 Authors: Terttu Vainio, Tomi Lindroos, Esa Pursiheimo, Teemu Vesanen, Kari Sipilä, Miimu Airaksinen, Antti Rehunen Confidentiality rating: public domain 2 VTT-R-04071-15 10.11.2015 Name of report High-efficiency CHP and efficient district heating and district cooling in Finland 2010-2015 Client’s name, contact person and contact details Client’s reference Ministry of Employment and the Economy TEM/2350/13.01.01/2014 Ministry of the Environment YM2/612/2015 Finnish Energy order 23.12.2014 Project’s name Project’s number/short title High efficiency cogeneration of heat and power and efficient district 102719/heat map heating and its potential Project’s authors Number of pages/attachments Terttu Vainio1, Tomi Lindroos¹, Esa Pursiheimo¹, Teemu Vesanen¹, 53/10 Kari Sipilä¹, Miimu Airaksinen¹ and Antti Rehunen2 Keywords Report number CHP, district heating, building, housing, population, heat map VTT-R-04071-15 Abstract A significant portion of the heated building stock of cities and densely populated municipalities is connected to a district heating facility. Heating energy consumption and the statistics on district heating indicate that 90 % of apartment blocks, 30 % of industrial buildings, and more than 60 % of other buildings are heated by means of district heating. The figure for (semi-)detached houses is around 10 %. The total market share for district heating is 45 % (35.9 TWh, 2010). By 2025, the forecast for district heating is 40 TWh. The period 2010-2025 could see new district heating capacity of 1 500 MW appear on the scene, of which CHP heating would account for 0-1 000 MW and power 0-500 MW, with the construction of new CHP plants. The figure for additional heating generation would be 4 TWh and for electric power 2 TWh. Primary energy savings would be approximately 14 % up comparing new and old CHP generation and 25 % of that for the separate production of power and heat. Part of the capacity would replace the old capacity. If the old heavy fuel boilers were replaced with CHP plants using renewable fuels, the figure for primary energy savings would be about 27 %. Waste-to-energy plants are being built in Finland – in Tampere, Leppävirta and Salo. The total for district heat generation from them will be approximately 600-700 GWh per annum. Other multifuel investment projects now with the go-ahead will be located at Naantali (power station: district heating power of 250 MW) and Nokia (heating plant: district heating power of 68 MW). The estimate for the potential use of heat from industrial processes using heat exchangers in district heating systems is approximately 1.6 TWh per annum. If heat pumps are used, the potential is two to three times that 1 VTT Technical Research Centre of Finland 2 Finnish Environment Institute 3 VTT-R-04071-15 10.11.2015 figure. The remainder of the planned demand for heat will be met using fuels suitable for the location in separate boilers, heat pumps, renewable energy sources, waste energy and the residual heat from industrial and other- heat-generating processes. Each year around 1.4 TWh of energy is used to cool buildings and other facilities. Predictions suggest that the demand for cooling will grow to 1.7 TWh by the year 2030. The market share for district cooling in 2014 was a good 10 % of overall demand. It is possible that the increase in sales will continue at the present rate for the next 15 years, with the cooling market growing by around 20 GWh per annum. The market share could go up to as much as 25 % of the cooling market. Confidentiality rating public domain Espoo 10.11.2015 Author(s) Reviewed by Approved by Kari Sipilä Tiina Koljonen Tuula Mäkinen Leading Researcher Team Manager Head of Research VTT Technical Research Centre of Finland contact details Kari Sipilä, PO Box 1000, 02044 VTT, [email protected] , tel. 020 722 6550 Distribution (clients and VTT) Ministry of Employment and the Economy, Ministry of the Environment, Finnish Energy The use of VTT names in advertising or the partial publication of this report is only possible with written permission from VTT Technical Research Centre of Finland. 4 VTT-R-04071-15 10.11.2015 Foreword This project was commissioned by the Ministry of Employment and the Economy, the Ministry of the Environment and Finnish Energy to examine the production capacity of district heating, its distribution, the demand for it, and the potential for all these factors up to the year 2025. An estimate has also been undertaken, in parallel with this survey, of the market potential for the cooling of the Finnish building stock. The project involved the organisation of four management meetings. The management team consisted of: Pentti Puhakka, Ministry of Employment and the Economy Pekka Kalliomäki, Ministry of the Environment Mirja Tiinen, Finnish Energy Hille Hyytiä, Motiva (company promoting efficient and sustainable use of energy and materials) Antti Rehunen, Finnish Environment Institute Miimu Airaksinen, VTT Kari Sipilä, VTT We would like to thank the management group for their comments and their lively input. Espoo 10 November 2015 The authors 5 VTT-R-04071-15 10.11.2015 Contents 1. Introduction 1.1 Background 1.2 Energy Efficiency Directive 1.3 Directives related to energy efficiency 1.3.1 Energy Performance of Buildings Directive 1.3.2 Renewable Energy Directive (Directive 2009/28/EC of the European Parliament and of the Council on the promotion of the use of energy from renewable sources) 1.3.3 Energy Efficiency Directive 1.3.4 EcoDesign Directive (Directive 2009/125/EC of the European Parliament and of the Council establishing a framework for the setting of ecodesign requirements for energy-related products) 1.4 National targets in the heating of buildings 2. Objective and implementation 3. Results 4. The Finnish building stock 4.1 The Finnish building stock and its development 2010-2025 4.1.1 The Finnish building stock in 2010 4.1.2 Communities and building efficiency 4.1.3 Development of the Finnish building stock 2010-2030 4.1.4 Market share of district heating 4.2 Heating of the Finnish building stock 4.2.1 Heat consumption models 4.2.2 Changes in heat consumption 5. Production of district heating in Finland 5.1 Heat production capacity in Finland 5.1.1 Data sources 5.1.2 District heating plants 6 VTT-R-04071-15 10.11.2015 5.1.3 District heating produced by industry 5.1.4 The trend in heat production capacity 2010-2025 5.1 District heating systems in Finland 5.1.1 Existing district heating systems 5.1.2 The energy density of district heating systems 5.1.3 Potential new areas for district heating 6. Assessment of the demand and production of district heating and of system enhancement 6.1 Assessment of the demand for district heating and of the building stock connected to a district heating facility in 2025 6.2 Assessment of district heating generated with CHP 2025 6.3 The potential for savings of primary energy 6.4 Assessment of the potential for improving the energy performance of the district heating infrastructure 7. Cost-benefit analysis of heating and cooling 7.1 Definition of the cost-benefit analysis 7.2 Present value of investment 7.3 Conducting a cost-benefit analysis 8. District cooling of buildings 8.1 Evaluation 8.2 Demand for cooling energy within the building stock 8.2.1 Building stock 2015 and 2030 8.2.2 Demand for cooling in buildings 8.3 District cooling 8.3.1 Current situation with regard to district cooling 8.3.2 The potential for district cooling by 2030 9. References Annex: Area density by statistical rectangle in the largest cities 7 VTT-R-04071-15 10.11.2015 1. Introduction 1.1 Background Directive 2012/27/EU of the European Parliament and of the Council on energy efficiency (Energy Efficiency Directive) obliges Member States to report on their current situation with respect to the cogeneration of heat and power and consumption of district heating and present an assessment of the trend over a time horizon of approximately 10 Years. An assessment is required concerning the realisation of production capacity of electricity of 20 MW or more as CHP or using the residual heat from industrial processes. 1.2 Energy Efficiency Directive The Energy Efficiency Directive (2012/27/EU) was adopted on 25 October 2012. Its purpose is to ensure that the European Union’s 20-20-20 targets for energy and climate are achieved as regards energy efficiency. The objective is for the overall consumption of energy to be at least 20 % less in 2020 than it would be according to the trend predicted in 2007. According to Article 14 of the Directive, by 31 December 2015, Member States must carry out a national comprehensive assessment of the potential for the application of high- efficiency cogeneration and efficient district heating and cooling. At the request of the Commission, the assessment must be updated and notified to the Commission every five years. Member States must encourage at local and regional level the use of efficient heating and cooling systems, in particular high-efficiency cogeneration. A cost-benefit analysis should be undertaken if (a) a new thermal electricity generation installation with a total thermal input exceeding 20 MW is planned, in order to assess the cost and benefits of providing for the operation of the installation as a high-efficiency cogeneration installation; (b) an existing thermal electricity generation installation with a total thermal input exceeding 20 MW is substantially refurbished,
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