District Energy – A Smart Option for Cities

Let’s talk recycling: Not plastic and paper, but power…

These days, by far, the majority of electricity used in high-income countries comes from thermal power plants; these operate by heating water into steam that then spins a turbine. Thermal power plants, however, typically only use 33% to 48% of the total heat they produce. The rest just gets released into water or air. It’s a shame; if only there was a way to recycle all that ‘low-grade’ heat.

Today, 37% of the energy demand in OECD countries is for heating of buildings; only about 21% of energy demand is for electricity. We use much more energy for heating and cooling than we do for electricity.  The low-grade heat that gets wasted by most power plants is still hot enough to be used for heating (and cooling) and water heating in buildings.

Why do we use so little of the heat we produce? That’s like buying a tub of fried chicken just to eat the skins!

We already have centralized power plants that generate electricity that is transmitted great distances. One big interconnected grid links many different power plants and delivers electricity to many homes and buildings. Imagine if in every building there was a separate power plant to produce electricity. That doesn’t seem practical. Each building would need its own equipment; maintenance would be a challenge.  Yet this is largely what we do for most of our heating needs; almost every building in Canada has some type of furnace.

But is this the best approach?

If we rely on centralized electricity, why not also with heating and cooling? Electricity can (in theory) be efficiently transmitted long distances with minimal transmission and distribution losses. However heating and cooling isn’t as efficient when it comes to distribution, but it is quickly getting better. With good management, current distribution losses for district heating networks are around 10%, whereas electricity distribution losses are typically as low as 6%.

Probably the best reason to use district heating and cooling is for the environmental benefits.  When both heat and power are used from a power plant, far less fuel is needed to produce the same amount of energy than in separate systems, therefore far fewer emissions.

Let’s not throw away all that extra heat while building small individual heating systems instead of larger more efficient options. District energy opens up a world of possibilities when it comes to heating and cooling technologies. Individual building heating systems typically can only use one technology or one type of fuel, since it would cost much more to install multiple systems. District energy systems allow for much more versatile fuel flexibility, including vanguard technologies like geothermal and deep-water cooling.

A big challenge, however, with district heating and cooling is the higher up-front capital costs. Even if much cheaper in the long run, district energy loses its appeal to many developers who may need to focus more on short-term budgets. Also there is more risk associated with construction and operation of district heating systems, as they are newer and less familiar to developers.

Maybe, similar to how cities started recycling solid waste, efforts are needed to encourage new district energy systems. Cities, developers and building owners will need to share the higher upfront costs, while everyone benefits from the lower overall costs and environmental benefits. District energy – a big part of smarter, more sustainable energy systems.