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Danish District Heating Sector, organization and cooperation in the sector District Heating projects in Ukraine Technologies and Financing 5 th of December 2017

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Page 1: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

Danish District Heating Sector, organization and cooperation in the sector

District Heating projects in UkraineTechnologies and Financing

5th of December 2017

Page 2: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

• Introduction to Danish District Heating

• Organisation of District Heating Division in Aarhus

• Collaboration with suppliers etc.

Mrs. Elsebeth Arendt

Head of District Heating Dept., AffaldVarme Aarhus, City of Aarhus

[email protected]

Agenda

Page 3: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

• 430 District Heating Companies

• Owned by the Consumers/municipalities

• Non-profit economy

• 65% of all houses in Denmark are heated by District Heating

• 60,000 km. district heating pipes

• Employments in the sector

– Direct, 7,700 persons at plants and District Heating Companies

– Indirect, 10,700 persons at suppliers, contractors etc.

Danish District Heating

Page 4: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

• Average single family house

– 19 MWh heat consumption per year

– 130 m2

– 14,000 DDK per year (1.900 €)

– Typical cost for heating is 3-7% of available income

• Typically cheaper than individual oil or gas heating

Danish District Heating

Page 5: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

• The national energy agreement from 2012

– No heat production from fossil fuels in 2030

– All electricity and heat based on renewable energy in 2035

– The entire energy supply in DK based on renewable energy in 2050

• Denmark as a showroom for green technologies and knowhow

• Apply taxes as means to achieve the climate goals

Political Terms

Page 6: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

Organisation of District Heating Division in Aarhus

Page 7: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

• 330.000 inhabitants

• Fastest growing city in Denmark

• 1,5% increase in inhabitants per year

About Aarhus

Page 8: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

• The waste and district heating department in Aarhus

• Annual turnover approx. 3.0 Billion DKK. (400 Mill. €)

• 370 employees

• Non-profit company

• Tariff financed

• Politically controlled, owned by the City of Aarhus

• The City Council in Aarhus is our board

About AffaldVarme Aarhus

Page 9: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

• 90 years tradition with district heating in Aarhus

• Supplying 95 % of the citizens in Aarhus with district heating for both heating and domestic hot water

• District heating supply both summer and winter

• 190 employees

• 55,000 meters (300.000 customers)

• 2,100 km pipes

District Heating Division

Page 10: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

The Municipality of Aarhus

City Council31 members

Mayor´sDept

Dept. for

Social Affairs and

Employment

Dept. for

Technical services and environment

Dept. for

Health andCare

Dept. for

Culture and Citizens´Services

Dept. for

Children and young people

7 committees

Page 11: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

Alderman

Kristian Würtz

Finance and Property

Management Urban Services

Urban Development &

Mobility

Environment and Energy

(AffaldVarme Aarhus)

Secretariat

Technology and Environmental Issues

Page 12: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

• The City Council approves

– Budgets

– New investments

– Tariffs

– Technical terms of district heating (temperature, payment etc.)

Local Political Terms

Page 13: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

3 rate elements excl. tax

• Flat rate 752 DKK

– Depending of the size of the meterCovers cost of administration and maintenance of meters

• Variable rate 10,20 DKK/m²

– Depending of the housing area Covers cost of maintenance of the district heating system

• Consumption rate 436 DKK/MWh

– Covers cost of heat production and heat loss

Tariffs

Page 14: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

Cost for heating for an average single family house in Aarhus

Cost for heating in Aarhus

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

2010 2011 2012 2013 2014 2015 2016 2017

Co

st ,

DK

K in

cl. t

axes

Maintenace andadministration

Depreciation

Interest

Taxes

Heat production

Finally costs

Page 15: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

• The City Council decides visions for the city

– A doubling of the area of natural beauty

– Countryside development which supports the quality of drinking water

– CO2 neutrality by 2030

Local Political Terms

Page 16: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

• In 2016, coal was converted into biomass

• Investing 1.2 billion DKK without raising prices for the customers

• Supply 3.100 GWh heat from 8 production sites

– 50 % Wood pellets (CHP)

– 25 % Waste (incineration plants)

– 20 % Straw (CHP)

– 3 % Surplus heat (heat pumps)

– 1 % Electricity (heated boiler)

– <1 % Biogas

– <1 % Oil

0

20

40

60

80

Coal Biomass

Prices and Taxes DKK/GJ

Tax

Price

Aarhus as a CO2 neutral city

Page 17: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

Collaboration with suppliers, contractor etc.

Page 18: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

• The pipe system (2,100 km) is

– extended annually by 20-25 km.

– replaced annually by 25-30 km.

• Yearly budget for maintenance is approx. 150 Mill DDK (20 Mill. €)

• 55,000 Heat meters has been replaced with intelligent meters the last 5 years

• 50 Heat exchanger substations are going to be replaced with new improved exchangers the next five years

Maintenance

Page 19: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

• We make tenders for all the components (pipes, valves, meters etc.)

• We don’t necessarily take the cheapest offer

• We score the supplier on parameters like;

– “Total cost of ownership”

– Services

– Warranty

– Etc.

Maintenance

Page 20: Danish District Heating Sector, organization and ...dbdh.dk/wp-content/uploads/4.-AffaldVarme-Aarhus.pdf · The Municipality of Aarhus City Council 31 members Mayor´s Dept Dept

• We develop new products with the suppliers

• We describe our needs

• We want

– to reduce the heat loss (20 % = 200 mill DKK per year)

– components that are less space demanding

– more data for operational optimization

New products and services