District heating is a system for distributing heat generated in a centralized location for residential and commercial heating and hot water requirements . The heat is often obtained from a Combined Heat and Power Plant (CHP) burning natural gas, although heat-only boilers and biomass are also common. District heating plants can provide higher efficiencies and lower CO2 emissions and costs than localized boilers connected to a gas network.
Comfort levels, with no hassle instant hot water and heating make the system popular with end users.
Industry sources attribute District Heating with using the heat from a Combined Heat and Power unit is the cheapest method of cutting carbon, and has one of the lowest carbon footprints of all fossil generation plants. This contrasts with conventional power stations where heat is simply dumped into the atmosphere through cooling towers. In additional to lower generating efficiencies, “regular” power stations suffer further losses during the transmission of this electricity along the hundreds of miles of High & Medium Voltage transmission and distribution cables. In Ireland, the efficiency of electricity sourced from the grid is about 40% and has a CO2 content of between 400 and 500g/kWh (depending mostly on wind generation). In contrast, CHP generated electricity has a CO2 content of only 250g/kWh.
District Heating Systems (also District Energy Systems when they provide cooling) require an upfront investment in main plant items to Retrofit an existing site or a Greenfield site. This investment can be achieved as part of the original build or financed separately through an especially setup energy services company (ESCo), where end users are billed and some of the savings achieved over the “business as usual” model are used to pay back the capital investment.
Frontline ESCO agreements allow financing to enable the investment to take place in a structured and transparent manner. Although ESCO agreements take various forms, the intention is generally to enable 3rd party investment in energy efficient assets to be applied to a given site which pays back over the lifetime of the investment, typically between 7 – 15 years depending on the scale and quality of the end users.
Summary of District Heating Advantages:
- Safety: Boilers and other heat sources are kept in a separate plant room with appropriate supervision by the ESCo company. Reduces the chances of gas leaks or fires from a number of different boilers distributed through-out the building
- Comfort & Convenience: Hot water and heating is available instantly “on-demand”
- No annual boiler maintenance fees
- Back-up boilers and cost effective 24/7 backup available to ensure that any heating system downtime is keep to a very minor level
- Cost effective: The wholesale gas rates are cheaper than domestic rates and particularly if run together with a Combined Heat and Power plant, the cost of heat can be much lower than that generated by a domestic gas boiler