APEC Project EWG 24 2013A Prepared by Low Carbon Design & Research Institute (LCDRI), Pan China Construction Group, China #1702, Shifeng International Mansion, No.19,Yacheng Yili, Chaoyan North Road, Chaoyang District, Beijing, China Tel: +86 (10)8776-5074 Fax: +86 (10) 8776-5034 For Asia Pacific Economic Cooperation Secretariat 35 Heng Mui Keng Terrace Singapore 119616 Tel: (65) 68919 600 Fax: (65) 68919 690 Email: [email protected] Website: www.apec.org © 2013 APEC Secretariat APEC#215-RE-01.4 APEC Project EWG 24 2013A 1 / 177 Tabel of Contents 1. Introduction ....................................................................................................................................... 5 1.1 Background ............................................................................................................................... 5 1.2 Objective ................................................................................................................................... 6 2. Overall Information .......................................................................................................................... 6 2.1 Definition of District Energy ..................................................................................................... 6 2.2 Typical District Energy System ................................................................................................. 7 2.3 Advantages of District Energy .................................................................................................. 7 3. Case Study of Selected Countries .................................................................................................. 10 3.1 District Energy System in United States ................................................................................. 10 3.2 District Energy System in Canada .......................................................................................... 25 3.3 District Energy System in Japan ............................................................................................. 41 3.4 District Energy System in Denmark ........................................................................................ 51 3.5 District Energy System in United Kingdom ............................................................................ 61 3.6 District Energy System in China ............................................................................................. 78 4. Conclusion for Case Studies ........................................................................................................... 95 4.1 District Energy Development History ..................................................................................... 95 4.2 District Energy Development Status ....................................................................................... 96 4.3 Energy Structure Comparison ................................................................................................. 97 4.4 District Energy Policy ........................................................................................................... 100 4.5 Inspiration ............................................................................................................................. 101 5. District Energy Application and Practice Guidelines ............................................................ 103 5.1 Definition of District Energy ................................................................................................. 103 5.2 Object of District Energy Application ................................................................................... 103 5.3 District Energy Application Process...................................................................................... 103 5.4 Application Technology of District Energy ........................................................................... 104 5.5 Development Road Map for District Energy Development .................................................. 106 5.6 Analysis of Promotion and Application Factors of District Energy ...................................... 108 5.7 Guidelines for the Key Issues during Promotion of District Energy ......................................114 5.8 Conclusion ............................................................................................................................ 123 6. Reference ........................................................................................................................................ 125 Appendix 1 Case Study of DES Project in Selected Countries ..................................................... 132 APEC Project EWG 24 2013A 2 / 177 Acronyms APEC Asia-Pacific Economic Cooperation AEI Advanced Energy Initiative BCET Buildings and Communities Energy Technology Program CHP Combined Heat and Power CCHP Combined Cooling, Heating and Power CWSRF Clean Water State Revolving Fund CCTP Climate Change Technology Program CIEEDAC Canadian Industrial Energy End-use Data and Analysis Centre CED Clean Energy Dialogue CRCE Canadian Renewable and Conservation Expenses CCA Capital Cost Allowance CHPSOP Combined Heat & Power Standard Offer Program COMFIT Community Feed-in Tariff CEGB Central Electricity Generating Board CPS Carbon Price Support CHPQA CHP Quality Assurance CCA Climate Change Act 2008 CERT Carbon Emissions Reduction Target CESP Community Energy Saving Programme CPF Carbon Price Floor DES District Energy System DHC District Heating and Cooling DH District Heating DC District Cooling DOE Department of Energy DEA Danish Energy Agency DoE Department of Energy EWG Energy Working Group EPAct Energy Policy Act EU ETS EU Emissions Trading Scheme ECO Energy Companies Obligation ECA Enhanced Capital Allowance FERC Federal Energy Regulatory Commission FCM Federation of Canadian Municipalities FIT Feed-in-Tariff GHG Greenhouse Gas APEC Project EWG 24 2013A 3 / 177 GDP Gross Domestic Product GST Goods and Services Tax GIB Green Investment Bank IEA International Energy Agency IDEA International District Energy Agency ITC Investment Tax Credit LDC Local Distribution Company LNG Liquid Natural Gas LPG Liquefied Petroleum Gas LEB Local Electricity Board NARUC National Association of Regulatory Utility Commissioners NRSL Net Revenue Support Level NBP National Balancing Point nZEB nearly Zero Energy Buildings OECD Organization for Economic Co-operation and Development Ofgem Office of Gas and Electricity Markets OFFER Office of Electricity Regulation PURPA Public Utilities Regulatory Policy Act QECB Qualified Energy Conservation Bonds RECS Residential Energy Consumption Survey RPSs Renewable Portfolio Standards RPG Renewable Portfolio Goal REAP Renewable Energy for America Program's RAP Repowering Assistance Program RECs Regional Electricity Companies ROCs Renewables Obligation Certificates RHI Renewable Heat Incentive SPV Special Purpose Vehicles SGIP Small Generator Interconnection Procedures SGIA Small Generator Interconnection Agreement SEP State Energy Program SD Sustainable Development TPES Total Primary Energy Supply U.S.A. United States of America US/U.S. United States U.S.EPA U.S. Environmental Protection Agency UKCS UK Continental Shelf UK United Kingdom APEC Project EWG 24 2013A 4 / 177 1. Introduction 1.1 Background District energy systems (DES) produce steam, hot water or chilled water at a central plant and pipe them underground through a dedicated piping network to heat or cool buildings in a given area, reducing energy costs and greenhouse gas emissions. As a result, individual buildings served by a district energy system don't need their own boilers or furnaces, chillers or air conditioners, which frees up valuable space in customer buildings and optimizes the use of fuels, power and resources[1,2]. The district energy supply may come from a conventional boiler or chiller, geothermal wells, a water body such as lake or river, or waste heat captured from industrial processes or electrical generation (combined heat and power). DES is often more energy efficient than the conventional boilers and chiller systems, and is also advantageous in terms of reducing the burden on infrastructure and reducing fossil fuels usage, as well as limiting the associated carbon emissions. In the statement of APEC Energy Ministers’ meeting held in St. Petersburg in 2012, more energy efficient transport, industry, buildings and power grids, combined in more energy-efficient communities, can reduce both the direct use of fossil fuels and the demand for electricity which continues to be generated in large quantities from natural gas and coal. The development roadmap study of DES in APEC economies directly respond to APEC Energy Ministers’ statement and the EWG work plan in promoting energy-efficient measures. Many other techniques and approaches, including solar power and biofuel, can be rather expensive measures for many developing economies. However, most DES techniques, e.g. Combined Heat and Power (CHP), are proved to be one of the most cost-effective options of heating and cooling for dense downtown areas, colleges and universities. Promotion of DES in APEC developing economies offers these members an affordable measure of energy conservation. To be cost-effective, a DES system needs to be incorporated into a project early in the design phase. Careful consideration of the upfront costs versus the return potential is required with DHC, since not all projects are necessarily good candidates for the technology. In a larger scale, the promotion of DES might