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APPENDIX ~
District Heating in Europe
During the past two decades urban district heating has grown
considerably faster in several European countries that in the United
States. Europeans have increased the number of their systems, uses
served, and energy supplied, particularly in Sweden and Denmark.
Similar growth has taken place in West Germany, the Netherlands,
France, and Great Britain, although mostly since 1973.
Comparing European and U.S. systems is not easy. In the first
place, Europe now has few district cooling systems; most are for
heating only. Also, most European countries have no cheap source of
oil or natural gas. Most depend on imported DetrOleum ~ wh itch i
costly and not always in reliable supply.
. ,= ~_ ~. , . . ~
In addition, the European tradition of long-range planning by a
strong central government contrasts sharply with the focus on local
government and the free market in this country. Similarly, until
recently few European homes had central heating, which has made
district heating more attractive in Europe than in the United States.
Nevertheless, there is something to be learned by reviewing some
district heating systems in Europe, especially about how such systems
are planned and put into effect. The discussion that follows is based
on ~ ~
the committee's visits to district heating sites in France,
Belgium, the Netherlands, West Germany, Denmark, Finland, and Sweden.
FACTORS INFLUENCING DI STRICT HEATING IN EUROPE
Clearly, there are reasons why district heating systems have, until
very recently, declined in U.S. cities while they were growing in
European cities. A number of factors influence whether district
heating will be adopted and how successful it will be. These include
*Except where noted, this appendix is drawn from papers presented at
the National Academy of Sciences' recent International Symposium on
District Heating and Cooling (National Research Council, 1984) and
from Schipper (1983, 1984a, 1984b).
130
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131
climate, population density, heating standards, costs and ownership
patterns, and planning and government policy, among others.
Climate is an important factor affecting district heating in
Europe. In general, the longer the heating or cooling season the more
economically viable district heating will be. Climate cannot be
measured solely in degree-days; load duration must also be
considered. Load duration is measured by dividing installed capacity
by sales. Values between 1,700 and 2,000 hours are considered
desirable.
The Swedish and Danish winters, with load duration values between
1,800 and 3,000 hours and few great cold peaks, are more favorable to
district heating than those of the northern United States. In the
latter, a somewhat shorter winter (1,500 hours) has occasional outdoor
temperatures far below those experienced in Denmark and most of Sweden
(IEA, 1983~. Moisture, wind, and the thermal properties of buildings
further determine how much heating or cooling is required to maintain
a given temperature.
Providing domestic hot water increases the potential use of
district heating. In Sweden and Denmark, for example, per capita
domestic hot water use is similar to that in the United States. This
increases the use factor approximately 25 to 33 percent per
household. Hot water loads in commercial buildings tend to be smaller
except for hospitals, which have large, 24-hour requirements for hot
water. Because of such special conditions, very high temperature
water may be needed.
Population density is even more important than climate in
determining the success of district heating systems. Higher-density
areas have higher demand per square mile. Density is measured in
connected load (or sales) per unit length of the distribution system.
Most European systems serve high-density residential areas. About 80
percent of the French, German, Swedish, and Finnish systems are
located in densely populated areas. In Denmark, however, low-density
detached and semidetached residences account for 50 percent of the
district heating load. Thus, the Danish experience suggests that
low-density residential areas can be served economically by district
heating.
In addition to climate and population density, heat demand is an
important factor for district heating. In Europe, heat demand is
typically lower than in the United States because Europeans are
accustomed to lower indoor temperatures than Americans.
Heating standards in Europe have influenced district heating
economics. Prior to 1972, a typical Danish apartment used about 85
million Btu annually for heat and hot water, with oil as the fuel.
This figure dropped to approximately 52 million Btu in 1984. The unit
demand has declined so dramatically that the economics of conversion
to district heating are altered. Similarly, in newer Swedish suburban
areas, construction techniques have reduced heating demand per
apartment to less than half that of pre-1972 buildings.
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132
In Sweden, however, more than 80 percent of apartment buildings
were not centrally heated when district heating began to grow
significantly (Figure C-1. Those central systems that did exist in
Sweden and Denmark were generally old enough to require modification,
which facilitated the conversion to district heating. Sweden and
Denmark made almost universal use of hot water distribution systems,
which also made conversion to district heating relatively easy.
District heating has three important economic characteristics.
First, it requires a significant, early capital investment, usually
with a long payback period. This makes the profitability of district
heating and cooling systems vulnerable to the cost of capital.
Second, the relative attractiveness of new district heating depends on
both the costs of competing energy sources and on the operating costs
of the system itself. Operating costs may be as high as 80 percent of
total annual costs, but can be significantly reduced if cogeneration
is used. Finally, extension costs (for adding new users in
high-density locations) are relatively low once the system is in
place, but only until the system is operating at maximum capacity.
European experiences vary widely. The costs of starting a system
in West Germany today appear higher than those for heating with
natural gas (Suding, 1984~. Thus, subsidies are now necessary to
implement district heating systems in West Germany, but not to expand
them. This may explain why there are more systems in Scandinavia than
in West Germany, whether measured per capita or as a fraction of all
energy used by residential and commercial users.
Scandinavian systems began to grow strongly before 1973, which
suggests that the essential motivation was a source of reliable,
low-cost energy. In Sweden, the fuel base was low-cost heavy oil
rather than expensive light oil. The fuel base in Denmark was heavy
oil and cogeneration. In Scandinavia new district heating systems
were seen, especially after 1973, as able to proceed relatively
risk-free.
While the type of ownership can affect the success of district
heating and cooling systems, there is no single pattern of ownership
in Europe. Swedish systems were developed by municipalities, normally
using existing electric utilities, which often were distributors
rather than producers of electricity. In Sweden, district heating is
often delivered by separate municipal companies having similar
ownership patterns. In Denmark, district heating systems are both
privately and publicly owned, with similar ownership patterns for
heat-only and cogenerating systems, although the larger systems are
often parts of municipally owned electric utilities. The same is true
in Switzerland. In France systems are both privately and municipally
owned.
Electrical generation accounts for 90 percent of the revenues for
most U.S. municipal or investor-owned public utilities, while district
heating and cooling accounts for less than 10 percent. These figures
reflect the decline of steam systems owned by large utilities in the
United States. In Europe, district heating may represent a
significant or even dominant source of utility revenues.
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133
35
30
c, 25
111
he
>
~ 20
I Cities al ready possessing D. H.
I I I pi us new locations
15
10
5
To
Situation in 1980
_
1 973
a..-.......
~ ~//////~////~_
11
1
(about 1 7)
IShaded area
since 1973
oil embargo)
1950 1960 1970 1980 1990 2000
YEAR
FIGURE C-1 A 1980 forecast for district heating development in Sweden
(courtesy Swedish District Heating Association).
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134
The widespread use of district heating in Scandinavia warrants more
detailed review. The growth of new suburban areas and a massive
national housing effort during the 1960s have significantly
contributed to district heating use in multifamily housing.
Similarly, residential cooperatives have provided a base for district
heating in Denmark. Energy conservation was rarely considered in
either Denmark or Sweden in the 1960s. The cost advantage of district
heating appears to arise from its efficient use of low-cost fuels,
which, in combination with the Scandinavian climate, gives a high
value to a reliable, affordable supply of energy.
The same conditions should have applied to West Germany, but
central district heating was found in only 12 percent of residences in
1960 compared with 73 percent in Denmark and nearly 80 percent in
Sweden (Schipper, 1983~. West Germany's lack of a well-established
central heating tradition probably explains the difference. Swedish
building owners and tenants have used central heating and apportioned
the costs without metering since long before the appearance of
district heating. In Germany and France, a tradition of estimating
the cost of heating individual apartments yielded slowly to a use of
imprecise evaporation meters to determine how to apportion costs in
centrally heated buildings. Heating in these countries was, in
general, considered a private matter, not a public service.
The Scandinavian success with district heating may result from the
common recognition of the desirability of reliable and affordable
comfort (Lagerholm, 1984~. After 1965, central heating was used to
heat most new apartment houses in Sweden and Denmark.
While the oil embargo caused a great change in public policies
toward energy and heating in every European country, the essential
planning elements were already in place in Scandinavia to expand and
even accelerate district heating by expanding existing systems. In
West Germany, on the other hand, a national district heating plan (see
Figure C-2) had to be developed, with little effect to date (Ebert
1984~.
During the postwar reconstruction of West German cities, the need
to build new houses rapidly, the lack of a central heating tradition,
and the low price of light heating oil and coal made individually
fired boilers the dominant heating system for new buildings. This
different approach to heating may reflect a real difference in social
attitudes in Scandinavia and West Germany about collective heating.
GOVERNMENT PLANT ING
Government planning in Europe has played a central role both directly
and indirectly in developing district heating systems. Government
planning directly helps organize and design district heating systems
and indirectly controls the urbanization that creates the population
density needed for district heating. Such government planning does
not occur in the United States.
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136
European government authorities plan the production, transmission,
and distribution of district heating. Public and private enterprises
are engaged in production and distribution, with distribution normally
the responsibility of public enterprises. In most cases, systems are
developed by organizations created for that purpose and coordinated
with the planning agencies of local governments. The latter typically
enhance the opportunities for district heating.
Since district heating benefits from dense development, most
systems begin in urban centers where there are commercial and
multifamily residential units. However, as district heating becomes
more pervasive, planning and development controls play a larger role.
The United States differs from European countries in its approach
to planning and control of development, particularly with regard to
property rights and land use planning. European local governments
more often curtail individual property rights in the public interest
than do those in the United States.
In West Germany, for example, some state constitutions provide for
a municipal urbanization zone in cities that grants property owners
development rights. Property owners outside this zone lack such
rights. In Scandinavia, there is a long tradition of public ownership
of land for future urban development. When such land is sold for
development, a connection to a district heating system may be a
condition of sale. With recent fragmenting of governments in
Scandinavian metropolitan areas, however, some of these systems have
broken down.
In contrast, property owners have development rights in the United
States. The only question is what restraints on exercising these
rights may be appropriate. While in some cases the restraints are
severe, particularly for environmentally sensitive areas, this is more
the exception than the rule. In Oregon, state law requires each city
to establish an urban service boundary approved by the State Land Use
Commission. The metropolitan area of Minneapolis-St. Paul has a
similar requirement, as does Hawaii. In both cases, however, the
limit on individual development rights is not as absolute as in West
Germany.
Partly by controlling development, European countries have produced
more compact and clustered cities than those in the United States. In
Europe, land is controlled typically by dividing large areas into
residential, industrial, commercial, or other zones.
In the United States, on the other hand, land is zoned by
designating a specific use for each parcel. The more common zoning
system, used worldwide, details a three-dimensional plan for
development. This more complete three-dimensional development control
facilitates the integration of cost-effective district heating systems
In Europe, national laws in each country require local governments
to plan for a wide variety of municipal services and developments,
including energy use. European governments are more rigid in
controlling development than the United States, and the options for
district heating use are clearer.
137
Density of development and heating demand are important factors for
district heating systems, since by far most of their costs are for
their distribution systems. The pattern of urbanization is
particularly important for comparisons of district heating systems as
multicommunity networks. Generally, urban densities are similar in
the United States and Europe for city centers and smaller communities.
In comparing how the United States and European countries approach
local government planning, it is important to understand that the
sizes and populations of government jurisdictions affect what powers
are exercised. Local governments number in the hundreds in West
Germany; those in the United States number in the tens of thousands.
Yet West Germany's national government deals with municipalities only
through states, while the U.S. government deals with them directly.
The gross densities of northern Europe, including Denmark, are
similar to those in the Boston-to-Washington corridor in the United
States. The settlement patterns are also similar, except that major
U.S. metropolitan areas are somewhat larger and U.S. communities are
somewhat farther apart. The gross densities and settlement patterns
of Scandinavia are more like those of several less densely settled
Midwestern, northern, and western U.S. states. U.S. states are
similar in area and population to European nations, and U.S. counties
are similar to European states.
National energy planning is considered particularly important in
West Germany and Denmark (Trojborg, 1984; Bernsen, 1984; Furboch,
1984~. One West German planning program identifies surplus heat
generators adjacent to major areas of demand, delineates discrete
regions for potential district heating supply plans, brings together
appropriate local interests in these regions, and uses the regions as
the basis for federal and state funding (Furboch, 1984~. Another
program (Figure C-3) seeks potential areas for district heating near
fossil fuel-fired power plants (Ebert, 1984~.
The Danish Energy Planning Act of 1979 requires the Ministry of
Energy to cooperate with local and regional authorities in developing
plans for a nationwide heat supply system (Figure Con. The planning
considers waste heat from existing and new power plants, industries,
and municipal waste incineration plants, as well as natural gas and
renewable energy resources such as surplus straw, waste wood, wind,
sun, and wet biomass. Such energy planning is typically carried out
by state and local governments in the United States, although usually
not as systematically as in Denmark or elsewhere in Europe.
District heating in Scandinavia received no unique subsidies to
make them more competitive with other energy systems through the
mid-1970s. However, district heating was promoted by a combination of
factors, including the growth of planning, into which district heating
development could be incorporated, the predominance of successful
utility ownership that recognized the advantages of combined heat and
power generation, the premium price paid for imported oil, coal, and
steam, and no source of natural gas. Further expansion of district
heating has been made more difficult in Sweden in the 1980s by
138
RHINE /
1~0- RH KIN
139
DISTRIBUTION OF HEAT CONSUMPTION
it'
00
90
80
70
60
50
40
30
20
10
Oh
1977
.
_
1982
2000
Individual oil
Renewable energy
both D.H. and
individualized
Conventional
District Heating
Cogeneration
Natural gas
Electrical heat
Year
FIGURE C-4 Planned distribution of district heating in Denmark in the
year 2000 (Bernsen, 1984~.
140
low-cost hydroelectric power and radically lowered heating demand in
new homes. This has led to direct subsidy programs, as well as more
aggressive marketing by district heating companies.