Heat and power experts: EU energy policies overlook heat losses

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EU energy strategies are currently overlooking significant energy savings that could be achieved with an integrated approach that allows the use of waste heat, according to Fiona Riddoch, managing director of Cogen Europe, and Sabine Froning, managing director of Euroheat&Power. They spoke to EURACTIV ahead of their joint annual conference today (2 June).

Fiona Riddoch is managing director of Cogen Europe and Sabine Froning is managing director of Euroheat&Power. Their organisations represent Europe's combined heat and power (CHP) and district heating industries.

They were speaking to Susanna Ala-Kurikka.

To read a shortened version of this interview, please click here.

The cogeneration and district heating industries have teamed up to organise a joint annual conference this week (2 June). What are you aiming to achieve with such cooperation?

Riddoch: With the new Commission and the new Parliament, it's a great opportunity for Cogen Europe and Euroheat&Power to get together and highlight the common areas of interest that are of real importance to Europe as well. I'd put those as heat, energy efficiency and heat networks.

We are organisations that share an interest in both the electricity and heat market, and in that way we are unique as a lobby in having this focus. That gives us a different perspective on total energy delivery and that's the perspective that we want to draw out in this joint conference.

Froning: We take a system perspective on energy, so not just considering one product or one type of technology, but looking at how you can optimise the supply using local resources to meet local demand.

The European Commission is currently drawing up a 2050 roadmap to a decarbonised society. Do you think the current discussions pay enough attention to heat or are they too focused on electricity?

Froning: The question is whether we can afford to have so many losses. If we look at low-carbon electricity-production technologies, they are all relatively inefficient, with an efficiency even below what we have today. If we consider that we already have more than 50% losses in the energy system as a whole, it would only increase if we do not take care of the heat at the same time.

Biomass, for example, is one of the biggest contributors to the renewable energy target, but has rather low efficiency if you produce only electricity. Any production technology combined with carbon capture and storage produces even more waste heat.

At the same time, renewables are limited resources, especially biomass, so we also have an obligation to use these resources as efficiently as possible.

Riddoch: The existing approach focuses very much on single supplies of fuel, which comes back to the system approach that Sabine is talking about.

Most of the scenarios and the new scenarios that have come out in the past six months focus very much on individual supply sources in meeting demand, rather than looking at the demand side and how to provide that in the most efficient way without the losses that come from the supply-side demand approach.

The losses are very often thermal losses, the heat, at different points of the system.

If you begin to look at a system approach, you find a more diverse way of meeting a particular energy demand. You can bring in renewables as well as some of the traditional supply methods and waste heat to supply heat, and electricity generation can be done in different ways as well.

Our approach is very much about optimising the supply of total energy, both electricity and heat, and making that the basis of our supply.

We can see now that cogeneration provides at least a 10% – modern technology up to 25% – primary energy saving between separate production of heat and electricity. And that's just one example of the kind of integration cogeneration can provide today. If you bring a diverse use of new renewables into a district heating network with cogen and then you use the heating network as storage, you get other optimisation possibilities for that total energy.

Froning: It's a similar approach as you have in waste management. We see how what cannot be used in one sector can be transferred into another sector. The remaining demand that cannot be covered by recycling heat: there we can see how to cover that with renewable energies.

Our idea is that there should be no direct use of fossil fuels for heating purposes, because there is much more waste heat available in the energy system than we actually need. The problem of the heat market is not a problem of availability of fuels or carbon content. It's a question of organisation and investment, replacing energy by infrastructure investments.

Is the new Commission taking this on board in its long-term strategy?

Riddoch: I think they're gearing up quite rapidly now, but it's such an early stage. We are hoping that through the outreach of the conference we will be able to demonstrate better what is possible.

The Commission has stated that it will produce an energy efficiency action plan and an energy action plan, and we would like to see cogeneration and district heating featuring strongly in those.

What concrete measures are you thinking of?

Riddoch: We are looking for stronger measures to implement the national potential that member states have identified for cogeneration. They have identified 122 GW of additional cogeneration, which could be implemented by 2020.

That is electricity generated on a heat load of around 1000 terawatt hours, so that is electricity generated by using the waste heat. There's no reason why member states should not implement that, and we’d like to see the Commission supporting the member states in doing that.

Froning: For district heating, there is the whole organisation and infrastructure investment aspect that so far has not been addressed. Even the cogeneration directive so far does not even mention that there is a need to have heat networks and heat infrastructure, and cooling is not an issue. All this area has been left out entirely, and we would like to see it addressed.

We would also like the Commission to spell out a clear hierarchy of energy use, because so far our impression is that with this very fragmented action there is really no hierarchy that is helpful at the local level to bring about the changes that are needed.

The kind of change we would like to see needs to happen at the local level, communities, cities, but for that they need to be empowered. They need the legal basis to do these things – which is not always the case in every member state – they do not have the legal means to do this. And secondly they need guidance on how to structure this kind of approach.

Do you expect the Commission's upcoming energy infrastructure package to address some of these infrastructure issues?

Froning: I'm afraid not because so far the Commission focuses much more on infrastructure to import more energy than infrastructure that would avoid new energy imports.

I think the struggle there is really that the Commission has been dealing much more with cross-border issues. Everything has been driven by the liberalisation of markets so it's big technologies, big players, cross-border trade, international dimension. We're talking about local heat networks, smaller-scale technologies and a very scattered picture of actors to address, local welfare.

So it's a different dimension that so far has not been very much addressed by Community policies.

Riddoch: One of the areas that the Commission is looking at is the smart grids initiative, where it's looking at a much more electricity distribution rather than transmission network approach, which is more flexible and will accept distributed generation and will have within it local heat networks, one assumes, as well, incorporating them as energy sinks, as buffers, as storage of heat in the larger network. That's very positive.

But infrastructure tends to be more to do with energy security, security of supply and market liberalisation than energy efficiency.

Froning: But I think the smart grids initiative so far focuses mostly on the electricity side. There's not so much discussion about how to link the different types of energy and how to reach higher convertibility as well between different energy products.

Riddoch: You can see the awareness of the two systems in the smart meter activity, where the work is forcibly including both heat and electricity. But quite how storage and heat networks are going to fit into this remains to be seen.

Froning: If we look at those countries that are advanced in this area, like Denmark, which has a high share of wind power and a very high share of cogeneration, this has become an obvious issue. Such examples are something that can be transferred to other countries.

How does designing an integrated heat and electricity system differ from current practice?

Froning: If we were to look at a society where integration was the norm rather than the exception, you would start by identifying where heat loads are – where is heat needed and what is it needed for – and then finding the most efficient way of delivering that through either waste heat or through a combination of heat and electricity generation from a new generating source.

So you start by looking at what heat is needed and then you look at what electricity can be generated from that heat load.

The other way to do it is to decide centrally what electricity you need and then identify where you can distribute the heat round about that central electricity generation. But usually if you look from the heat first, you'll cipher electricity generation more appropriately.

As the fuel mix moves towards more renewables, you also have to take into account how that heat load is going to be met with passive solar or solar water heating, for example, and how that will be included in this overall picture.

So you no longer think 'how much electricity do I need, how much heat do I need'. You think first 'how much heat do I need, how am I going to supply that heat, what electricity can I generate from that heat, so where do I put the source?'

It is such a different way of thinking about how you supply energy. It is not the norm at the moment, but it is the case that 11% of Europe's electricity and about the same amount therefore of heat is provided by cogeneration at the moment.

Some EU states seem to have a much higher proportion of district heating and cogeneration than others. Where is the technology concentrated and what are the reasons for this?

Froning: The Nordic countries have a very high share of district heating and also Eastern Europe.

But in Eastern Europe it is both an enormous potential and an enormous challenge in terms of investment that is needed to bring these systems to the same level as in old EU member countries. So there is also an enormous potential for energy savings just by upgrading the existing plants and infrastructure systems.

So far, the smaller EU countries have been much more successful than the big five. So it's the five biggest EU countries that are lagging behind. It's the UK, Spain, Germany, France and Italy.

Very often, the choice for district heating was made during the first oil crisis, which I think is a very similar situation to the one we're in now; that is scarcity of resources and the problem of cost in the energy sector. There was not much discussion about climate protection at the time.

The smaller countries opted for this type of system optimisation, probably also because they were less centralised in energy decision-making, whereas the others have opted for big nuclear.

Then the heat demands are different although not to the extent that people tend to think. Nowadays, as cooling starts to play an increasing role, it's quite amazing that the first and biggest district cooling systems so far have been implemented in the Nordic countries.

Riddoch: Cogeneration comes in all kinds of capacities. What you find as well as with district heating is that CHP is widely used in particular industries and certain countries have a high proportion of CHP in their industries as well.

Countries like the UK, Spain, Italy have cogen in industries, so does Germany, and particularly in industries such as paper, chemicals, oil refining, a very high percentage of cogen is used.

It's more that certain industrial sectors tend to have it as norm and they tend to be quite heavy industry. Whereever that industry is concentrated, you will find cogeneration.

We're also seeing some quite small-sized CHPs put into university campuses or hospitals or sports centres. Then those small CHPs can become the centres of more local networks than district networks. CHP may not be taken on board completely in the planning stage of new district heating schemes, but you can see seeding of new CHPs in some light industries, hospitals and new applications.

But the economics of this are quite daunting: the funding of heat networks has to be addressed.

It's also true that moving from just buying fuel to provide heat and becoming an organisation that provides heat and electricity for itself is a big psychological change. So getting new industries of smaller concerns to adopt CHP is quite a big ask and we need to look at how to incentivise them to do that.

Europe's energy commissioner has said that the EU could use unspent recovery funds for renewables and energy efficiency projects in member states. Could this be used for such projects?

Froning: It's very welcome that finally some of those funds will go to the municipal and community level. It's a start.

What you can also use is the structural funds, but very often for member states it seems to be more popular to invest in new highways rather than into energy efficiency.

Riddoch: Maybe if structural funds were made dependent on energy efficiency improvements, we would find more investment for district heating and cogeneration.

The other opportunity for funding is through the auctioning revenues of the emissions trading scheme, some of which the Commission has said should be used for energy efficiency specifically. That is more like the kind of scale of investment that we're talking about.

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