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1 Introduction District heating and cooling systems are thermal energy networks that distribute hot water, chilled water, or steam through insulated pipes to serve commercial, residential, institutional, and industrial energy needs for space heating, space cooling, and industrial purposes. District heating and cooling systems permit energy, as distinguished from fuel, to be bought and sold as a commodity. While district heating has been used for more than a century and is a well-understood technology, it remains relatively unknown to the general public. Many people live or work in buildings served by district heating and cooling systems without knowing it. In part, this stems from the var. iety of names the technology is known by. In the United States, district heating and cooling systems have been known as central plant heating, cooling, and steam; municipal heat, power, and steam; campus or areawide heating; total energy systems; municipal integrated utility systems; integrated central energy systems; and total integrated or community energy systems. In Europe, the terms for such systems generally translate as distance heating or urban heating. In some cases, European district heating is called block central systems, referring to systems that supply heat to more than one building from a central heating source. In part, the different U.S. and European terms reflect differing energy needs. For example, district cooling is found mainly in the United States; most European systems supply hot water or steam for heating and domestic hot water only. Most major U.S. cities are located farther south than their European counterparts with district heating, and many high-rise buildings require air conditioning on their southern and western sides most of the year. In addition, Americans have become accustomed to air conditioning. Further, European district heating systems are defined as only those that sell heat to many different customers. In the Netherlands, systems are further limited to those that use waste heat* or municipal . *Waste heat refers to thermal energy recaptured from either industrial processes or electrical generation that would otherwise be lost to the environment. 7

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8 solid wastes as a fuel source. For these reasons, many Europeans view district heating's contribution to the U.S. energy supply as minimal (IEA, 1983~. In the United States, however, most district heating and cooling systems now serve high-density unitary developments such as college and university campuses, industrial and commercial complexes, military bases, and similar institutions. These applications are not like European systems in that they do not strictly involve the buying and selling of energy. Nevertheless, they are characterized by the same increased energy efficiency* (compared with multiple smaller heating plants) and low-cost energy services achieved by supplying thermal energy from a central source. This report will not address the issue of buying and selling energy in determining the extent of district heating and cooling in the United States, nor in discussing the technological features, prospects, and impediments of various systems. District heating and cooling have had two basic development patterns in the United States (see Chapter 2 for a discussion of their history and current status). In the first, steam systems were developed to serve a variety of users and types of buildings located in an urban area, typically in the central business district. Such urban systems are typically run by private, for-profit corporations subject to regulation and taxes. Most have been operated by investor-owned electric utilities. The second type of system was developed to serve institutional needs. These systems serve a single user, a single or a few related buildings, or a complex of buildings. They are typically found on college and university campuses, military installations, industrial parks, multifamily housing developments, and office, commercial, and medical complexes. These systems are frequently referred to simply as Central heating." Institutional systems are generally run by nonprofit groups, such as governments, hospitals, and universities, which are generally not regulated or subject to taxes. Nevertheless, there are some institutional systems that are owned by private enterprises to serve their industrial, commercial, or residential uses. The Caterpillar Tractor Corporation, for example, operates a district heating and cooling system for its administrative offices and manufacturing facilities in Peoria, Illinois (Figure 1-1~. More recently, a third type of district heating and cooling system has emerged. Most new urban systems have been developed and owned by nonprofit corporations or municipal governments. At the same time, several older investor-owned systems have been turned over to nonprofit corporations or cooperatives. These urban systems are growing in number and amount of energy provided (see Chapter 2~. *As used in this report, energy efficiency refers to the total usable energy obtained relative to the energy content of the fuel burned.

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..... its 1' 2 ~ : l :~ FIGURE 1-1 Caterpillar tractor plant, Peoria, Illinois (courtesy North American District Heating and Cooling Institute).

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10 This report will concentrate on urban district heating and cooling systems. Nevertheless, it will also discuss the institutional systems, particularly as they relate to urban systems. In the United States, the former outnumber the latter, are growing in number, and represent a base for expanding urban systems in the future. The technology for urban systems is also essentially the same as that for institutional ones. Table 1-1 covers the relative advantages and disadvantages of steam and hot water systems. The table covers aspects of hot water systems in the low-temperature (250F; 120C), medium-temperature (350F; 175C), and high-temperature (450F; 230C) ranges, with their respective required pressurizations. Not all elements of the table apply to each temperature or pressure level. Plastic pipes, for example, are not suitable for high-temperature use. HOW DI STRICT HEATING AND COOLING SYSTEMS WORK All district heating or cooling systems have four basic components: the fuel or resource, thermal production, transmission and distribution systems, and an end user or customer (RDA, 1981~. Urban district heating and cooling systems take many different specific forms. A factory may sell waste heat to surrounding properties, a cogenerating electric utility may sell hot and chilled water or steam, or a municipal solid waste incinerator may sell heat to a thermal production plant. Systems also vary from single production facilities with a single distribution system to networks of independent producers and distributors (Figures 1-2 and 1-3~. The technologies and fuels used to produce thermal energy likewise vary. Simple boilers can be used to distribute hot water in a single loop to a variety of buildings. Boilers and chillers can provide hot and chilled water to users, with supplemental systems for specialized large users. The system may consist of a large number of independent production sites using direct combustion, recovered heat, cogeneration, and direct electricity to provide heat, cooling, and domestic hot water. The end user is usually the owner or operator of a single building or group of buildings. A heat exchanger is used to convert the thermal energy that the system provides into heating or cooling for the end user. Demand for energy, measured in British thermal units (Btu) per hour or its equivalent, is influenced by climate, building size and characteristics, and the needs of end users. Consumption or sales reflect the total energy supplied to end users. Fuels The resource is the fuel or fuels used. District heating and cooling works best when abundant and renewable low-cost fuels are used, taking

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11 TABLE 1-1 Comparison of Steam District Heating and Hot Water District Heating System Advantages Disadvantages _ Steam district heating Pumps not required Can be a one pipe system with no return Retrof it of old urban steam buildings may be easier Piping range of 1 to 2 miles (1.6 to 3.2 km), 3 miles (4.8 km) maximum, for older systems; newer ones can achieve longer ranges with improved insulation. If steam is extracted from a cogenerator, a great deal of electricity is sacrificed. Steel pipes are required-- they are expensive and they corrode. Water must be conditioned to prevent mineralization. If condensate is not returned (it usually is not), water, water conditioning, and low- grade energy are wasted. Use of high-temperature steam for space heat/service water heating is a poor energy and use match. High heat loss during distribution (15-45 percent). Piping, boiler, personnel codes are stringent; steam is not as safe as hot water. Installation is difficult--pitched piping, steam traps, pipe expansion, manholes. Maintenance costs are higher than for hot water systems.

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12 TABLE 1-1 Comparison of Steam District Heating and Hot Water District Heating (continued) System Advantages Hot water district heating Piping range of 15 miles (25 km), possibly up to 70 miles (110 km). Less cogenerator electricity sacrifice than for steam. Plastic pipes can be used--less expensive, no corrosion. Water need not be conditioned; if it is, closed loop anyway. Closed loop, so water is not wasted; nor is low- grade energy. Good energy end use match. Low heat loss during transmission and distribution (5-15 percent). Construction and operation codes easier to meet; relatively safe. Installation, retrofit to buildings generally easier than for steam. Lower maintenance costs than steam systems. Metering energy use is relatively easy. Disadvantages - Metering energy use is difficult. Very susceptible to missizing or loss of large customer. Difficult to operate under conditions of varying loads. Pumps are required--system balancing is important. System needs two pipes. Cannot provide high pressure steam if a customer on the circuit requires it--can act only as preheat.

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13 TABLE 1-1 Comparison of Steam District Heating to Hot Water District Heating (continued) System Advantages Disadvantages Not as susceptible to missizing as steam systems are. Easy to operate under conditions of varying thermal load. Hot water can be stored. SOURCE: Office of Technology Assessment (1982). respective capital cost comparison into account. The fuel may be heat recovered from an industrial process, municipal solid waste incineration (Figure 1-4), or electric power generation. Technological integration makes it economically feasible to convert geothermal and solar energy, coal, and other underused energy sources into thermal energy. Thermal Production System Depending on community needs, the thermal production system can be either a centrally located facility or several interconnected plants. Numerous technologies are used to meet the thermal and electrical loads of a community, including coal- and solid waste-fired boilers, chillers, internal combustion engines, heat exchangers, and central heat pumps. District heating and cooling systems can also rely on cogeneration, the simultaneous production of electricity and thermal energy. Cogeneration recaptures much of the heat usually lost during electrical generation and uses it directly or converts it into thermal

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14 a uc F ~Cogenerellon) :/ ~ Resource Recovery I .~Thermal Loodi .. .~ ' ~ Geotl`-r~nal~ ~ ::~\ nstu a' 9a A) oil Co nal Bollere ~---\ Industrial Waste Heat Recovery Increases Energy it'\ ~ Low Temp Industrial Process Heat ~_~ Institutlonal Heating Air Conditioning A\ '..4 \ .4V Reeldentlel Heating Water Heating Supply \ ~ Options ~ V Hest Pump Comme clef Fleeting Conditioning FIGURE 1-2 Possible elements of district heating and cooling systems (Argonne National Laboratory).

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15 ~3 Thermal production plant Transmission line / Distribution line~ / ~ ~ b Consumer building containing in~building equipment FIGURE 1-3 Schematic diagram of simplif fed district heating and cooling system (Santini and Bernow, 1979~.

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16 U] a) o - '4 ~

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17 energy. Cogeneration plants (Figures 1-5 and 1-6) have an overall energy efficiency rate of about 70 to 80 percent in the United States, whereas facilities that generate only electricity operate at about 30 to 35 percent efficiency (RDA, 1981~.* European cogenerating facilities reportedly show efficiencies of up to 90 percent (Lars Astrand, personal communication, 1983~. This increased efficiency benefits both thermal and electrical customers. Transmission and Distribution The transmission and distributior~ system (Figures 1-7 and 1-8) transports thermal energy to end users through a network of insulated pipes. The pipe loop carries energy in the form of steam or hot or chilled water to the end users. A separate pipe returns water with most of the energy removed (or added in the case of cooling) to the production plant for reprocessing. The pipes-can be buried directly in the ground, placed in tunnels or concrete culverts, or located above ground. Communities with high space cooling requirements and high densities may choose to distribute both hot and chilled water, depending on the season. In hot water systems, piping is typically effective for a distance of up to about 15 miles (25 km). Booster pumps can be used to extend the range up to 70 miles (110 km). Steam systems (Table 1-1), on the other hand, have ranges of only up to 3 miles (5 km) although newer steam systems can have longer ranges. Long-distance thermal transmission systems (without thermal loss) are not yet economically feasible, although the technical capability exists. Storage capacity may be incorporated into the distribution system if demand does not always coincide with supply. Storage systems can be built both above and below ground. The economics of the distribution system is important in determining service areas for new and expanding systems (OTA, 1982~. The relationship between load density and piping costs influences which areas within a community can be profitably served. Because of the high capital costs of district heating and cooling systems, they are typically planned to serve high-load, high-density areas, such as central business districts, first, with expansion later to lower- density areas (see Chapter 41. - *This comparison of the efficiency rates of cogeneration and electrical generation does not address the question of quality of energy, which is beyond the scope of this report.

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PURCHASES 1.7 % COAL 66.2 % 3.14 x 10 NATURAl GAS PURCHASES COAL 85.8 % 1 2 5.48 x 10 OIL =,~_ _ FED _ _ =19_ _ _ 3 ~ 2~:#'-~1' ~. . ~ ~:~ 5= ~ 0 ~ ~ r9 . ~ ~ INDUSTRIAL '.: ' ~ 2.~ 1 ~ xl F~,~-=~--~X x _ it__ c ~ 6,15 X 108 . ~ =1 1 ~ ~ ~ V. 5.77X.01 _ LOST ENERGY 70.4% 1 3.31 X 10 2 USEFUL ENERGY ~ 2 9.6% _ 1.39 x loll _~= ~ CONVENTIONAL ENERGY FLOW - 1980 P I O U A . POWER PLANT By_ _ _ _ . ELECTRICAL ENERGY GENERATED ~ o_ _~ 1,47 X~C ~ ~2.96'X i6~' _~ _~ _ _~ , ~**+? ~#:::'# 1 ~ ~ ~2 ~ 3 x lo ~COMMERCIAL ~ ~ ~ 6.2 %-~ ~ ~ =.= ~ ~ ~ ~ 3.96 x 10 ~ ~ 4.414 X 101 _' _~ ~ [ ' ~ ~ ~ 5.711X109 [~-l.1 ~ jU:.?',. NATURAL ~ ~9 ~ ~ j ~ 6.5%1 ~ g . _ 2.19x107 l.] ~ 4.17 X 1ol1 ~\ ~3 ~ ~D ~_ ! 4.e7 ~ lO~ ~ ~ \\. ~ I--~ \\ ~GOVERNMENT | \\~ TRANSPORTATION | 3.50 x 10' 1 ~ DISTRICT HEATING ENERGY FLOW | - 2000 .. ~.. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ | LOST ENERGY 45.9% t:: :::::::::: ~2,93 ~ ~ o 2 :...'.,:! i~i ''1 ~USEFUL ENERGY 54.1% _ 12 _J.45 x 10 FIGURE 1-6 Energy flow analysis, 1980-2000, for the Piqua, Ohio, district heating and cooling system (Resource Development Associates).

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20 FIGURE 1-7 District heating transmission line in New England connects a downtown heat distribution grid to the thermal production plant several miles away (North American District Heating and Cooling Institute).

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21 ~ ~7 ~ ~'!~:~'t~ :: ~ I: : 'I: ~ .', I: . I, ~ ~ : ~ ..,. .,, ..,.. ~,.~" ~ ~. " ' ' ~ ~ ~ ~ : ~ ~ ~ ~ ' ~ " ~ ~ ' ~ ' ~ . ~ , . ~ ~ ~ , ~ , . , ~ , ~ ~ , ~ , ~ ~ ' ~ ~ . ~ . . :~:~:~::~:~::'~:~:~::~.: ~ :: ~'~,''~.~,~L',:~.~',~ :~..:.,', ''"... ::'.~) ~ ~,.~:~t,.,....~,,,.~,., ~ i: .:.::' - , . ~.~ ,,~, ...'.2'2'.."" '."'.'. *a a:::: :: if ~ . ~ . ~ . : it', ~"~:t FIGURE 1-8 Welding 10-inch steel for 320F hot water distribution pipe to the state capitol, Trenton, New Jersey (North American District Heating and Cooling Institute).

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22 Customers End-use buildings require either heat exchangers or heat pumps to convert the steam or hot or chilled water into heating, cooling, or industrial energy for residential, commercial, medical, or industrial users. Planning for a system should consider how much energy users will require, when they will need it, and the temperature at which they will use it. The system should provide thermal energy at rates that are economically attractive and stable. To be competitive, operators have to recognize that customers expect their energy costs to represent a relatively constant share of their total budgets. The determining factor, however, will be the costs of district heating and cooling compared to those of competing fuels. Whether particular systems are developed may depend on the costs to end users for equipment and its installation, as well as the cost of the energy delivered. The cost of converting an existing building to district heating and cooling will range from less than $0.70 per square foot ($7.50/m2) (Table 1-2) to more than $2.70 per square foot ($29/m2), depending on building type and mechanical system (Santini and Bernow, 19791. ATTRIBUTES OF DISTRICT HEATING AND COOLING SYSTEMS District heating and cooling has several attributes that make it advantageous to end users. All are subject to variables such as finance costs, costs of competing fuels, and type of use. Still, these attributes are what make district heating and cooling attractive. 0 Low cost. District heating and cooling systems can be designed and operated competitively. Because they can use coal, municipal solid wastes, and cogenerated thermal energy, their fuel costs are typically lower than competing systems that use oil or natural gas. O Reduced capital costs. These systems reduce users' capital investment by eliminating the need to buy and install furnaces, boilers, and air-conditioning systems. Such costs are, in effect, shifted to other investors. o Increased building space use. Such systems permit more profitable and efficient use of building and housing space. The area they require is substantially less than that required for conventional heating and cooling equipment. One central plant can replace individual boilers in each building. The space saved can be used for other purposes, for example, more rental units, office space, or hospital rooms. o Reduced operating and maintenance costs. By eliminating the need for onsite boilers, district heating and cooling also reduces operating, maintenance, and insurance costs in that it transfers some or all of these costs and responsibilities from the building owner or operator to the district heating and cooling system.

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23 TABLE 1-2 Costs of Retrofitting Buildings to Use Cogenerated Hot Water (1979 $/ft2) Gross Building Area (ft2) Heating Office building, 10 floors Absorption chilling Steam/hot water heat Office building 10 f loors Compression chiller Steam/hot water heat Apartment building Window air conditioning Hot water heat Retail store, rooftop direct-expansion air conditioning Steam heat Hot water heat Retail store, rooftop direct-expansion air conditioning Gas/air heat SOURCE: Santini and Bernow (1979~. 200,000 400,000 200,000 400,000 200,000 400,000 1,500 1,500 0.76 0.37 0.41 0.21 0.76 0.41 0.32 0.24 0.88 0.74 2.45 2.29 12.20 18.67 7.67 18.67 30,000 2.78 4.19 Cost ($/ft2) - Air Conditioning Total 1.13 0.62 1.64 1.15 2.77 2.53 30.87 26.34 6.97 0 Improved air quality. There is evidence that replacing many individual, untreated boilers with one treated central pi ant generally reduces emissions and thus contributes to reduced air pollution (see Chapter 4~. O Increased profits. Both electrical utilities and some manufacturers can sell the heat they generate from their industrial processes as thermal energy to other users, thereby gaining a new source of revenue.

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24 o Renewed commercial development. District heating and cooling can also help stimulate economic development and the revitalization of downtown areas in older cities (Latimer, 19841. Reliable, cost-effective systems attract industry and business. Stable, affordable energy supplies can help revitalize downtowns and surrounding residential neighborhoods, particularly for moderate and low-income citizens, by retaining dollars in local economies. District heating and cooling production and delivery systems represent an investment in a city's infrastructure that uses initial capital investment to achieve long-term cost savings from a reduction in the amount of energy used (Hanselman, personal communication, 1984~. The ability to use several fuels can be engineered for each system to take advantage of local energy sources while, on a national level, reducing the need to import oil, thereby minimizing reliance on unstable supplies and taking advantage of world price fluctuations. Based on a model developed by Argonne National Laboratory (for more detailed information on the Argonne model, see Chapter 3), the Department of Energy (DOE) estimates that each quadrillion Btu* of energy supplied through district heating** will create a demand for $19 billion worth of construction and manufacturing employment. The DOE figures show that this represents a $27 billion market for piping and other equipment and a $1 billion market for domestic fuel sales annually. DOE also estimates a net national fuel savings of more than $11 billion annually after 20 years from reduced fuel imports if district heating were to grow to account for 3.5 quads of energy delivered (Teotia et al., 1981~. In part, the employment figures represent the value of the new jobs that any large-scale public works project, such as installing new sewer or water pipes, would entail. But this further illustrates how a district heating and cooling system would help revitalize a city and, in particular, its downtown area. *One quadrillion Btu or "quad" equals 1015 Btu of energy. It is equivalent of about 500,000 barrels of oil per day for a year, or about 50 million tons of coal, or the output of 18 1,000-MW power plants at average use (OTA, 19821. **The model looked at district heating only, not district cooling. Thus, these figures may be conservative when considering systems that supply both heating and cooling.