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Energy Policy in Denmark

MONGOLIAN ENERGY DELEGATION9 September 2013

Danish Energy Agency

Program

• Welcome by Director Energy Technology Anton Beck

• Danish Energy Policy with emphasis on District Heating by Senior Adviser Niels Bisgaard Pedersen

• Integration of wind and solar energy in the power and heat supply by Senior Adviser Anders Højgaard Kristensen

The Danish District Heating SystemKey figures

Covers 2/3 of heat demand for space heating and hot water in residential sector

Approximately 130 PJ (20% of final energy consumption)

45% from 11 large scale CHP plants 20% from ~600 small scale CHP – mainly natural gas 20% from heat only boilers – mainly biomass 15% from recovery of industrial waste heat and industrial

CHP

Biomass 28%

4

0

500

1000

1500

2000

2500

3000

1981 1990 2000 2011

1000 Units

Oil boilers Natural gas boilers District heating Other

Heating installations in residential homes

Source: Statistics Denmark

Decoupling Economic Growth and Energy Consumption

5

Background

• Energy crisis 1973-74 • 99% dependent on oil imports, • Low energy efficiency in production and

consumption• Economic crisis and high unemployment• SUSTAINABILITY

• Efficiency • Domestic resources, natural gas replaces oil• Renewable Energy

Measures to decouple economic growth and energy consumption

• Decentralisation• Energy Taxation • Modern Energy Legislation for electricity and

heat sectors in the late 70ties• Heat Planning, • District Heating• Combined Heat and Power production

• Energy Efficiency in buildings, households and industry

• Diversified Supply

Infrastructure 1985 – 2009Decentralisation

Municipal heat planning

• New regulation heat supply in 1979• Allocation heat supply in geographical

areas based on economic principles• Definition of areas where different forms of

heat supply should be prioritised

• Location of heat supply installations and pipelines

• ‘Zoning’ of heat supply in DH, natural gas and individual solutions

Heat Plannning - Zoning

1)

3)

2)

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District Heating generation from 1975

12

0%

20%

40%

60%

80%

100%

1990 '95 '00 '05 '11

District heating Electricity

CHP share of thermal power and district heating production

13

0

50

100

150

1990 '95 '00 '05 '11

Heated floor space Final energy consumption Final energy consumption per m2

Climate adjustedIndex 1990=100

Energy consumption for heating dwellings

Today the energy demand in buildings is only 25% of the demand in 1977, before the subsidies Subsidies for energy improvement of

buildings

Building codes First code 1977 Next 2015 - 2020

Electricity and Natural Gas Market

• 1998 package• 2005 package• Interconnections • Power exchanges• NordPool• http://www.energinet.dk/Flash/Forside/inde

x.html?target=el_net• http://www.statnett.no/en/The-power-syste

m/Production-and-consumption/State-of-the-Nordic-Power-System-Map/

15

Share of renewable energy

0

5

10

15

20

25

1990 '95 '00 '05 '11

%

Share of renewable energy according to the EU method of calculation

0

20

40

60

80

100

120

Electricity and district heating Final energy consumption

PJ

Wind Straw Wood Biogas Waste Other renewables

Energy Agreement 2020

• Broad political consensus about an ambitious green transition up to 2020 and a vision for 2050

• 12% reduction of energy consumption in 2020 compared to 2006

• 35% renewable energy in energy production in 2020

• 50% wind energy in the electricity production in 2020

• 100% renewable energy supply in 2050• Fossils fuels will be phased out

The Future of District Heating ?

1) New customer in existing areas2) Extension of existing areas3) New district heating areas

HAS THE POTENTIAL for DH in DK BEEN EXHASUSTED WITH CURRENT TECHNOLOGIES ?

1)

3)

2)

2nd round - Heat Planning today

• Heat planning had low focus for many years. Now 2nd round has begun

• District Heating is again the key

• New drivers: Green cities – strong interest in many municipalities• National driver: policy on phasing out fossil fuels• Flexibility tool for large amounts of wind power in the electricity system

• District heating enables large scale use of renewables, e.g. biomass and solar heating

• Competitive advantage due to no excise tax on biomass• Significant tax reduction on electricity to DH boilers under certain conditions

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Fuels used for District Heating: Development 1990-2011

0%

20%

40%

60%

80%

100%

1990 '95 '00 '05 '11

Oil Natural gas Coal Renewable energy and waste

District heating and wind power

• Huge challenge to integrate increasing amounts of wind 30% in 2012 and 50% in 2020

• The main tool is the strong interconnectors and integration into the Nordic Power market

• The district heating system will serve as important flexibility tool• Heat storage already in place, enabling flexibility between power

generation and heat demand for up to 8-10 hours • Legislation on electricity taxation changed excluding tax on electricity

used for district heating under certain conditions• A small no of electric boilers with a total capacity of around 200-300

MW being installed these years.

District heating and wind power

• Large scale heat pumps foreseen to be introduced - will keep efficiency high and will operate during longer periods

• Substitution of CHP with electricity boilers has double effect• Drives power generation down (at CHP plant)• Introduces new demand

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Solar heating – a feasible supplement

• Today big interest in large scale solar heating collectors for

district heat generation

• Mainly as supplement, but also as main source with seasonal storage

• Driver is lower cost of fuel and taxes. Cost of Natural gas is increasing

• Size of 10.000-50.000 m2• Total 300.000 m2 + 280.000

m2 under construction

Example – Gram District Heating41.000 m2 solar collector110.000 m3 heat storageInvestment 93 mio DKKCost reduction 15-25%

Conclusion

1) District heating is part of the sustainability

2) Green Cities are very important in an efficient energy system

• Heat Planning

• Expansion of district heating reduced dependence of oil• Conversion to CHP was important element in deployment of domestic natural gas

•Power and district heat generation integrated• Very high overall thermal efficiency• Flexibility and economic efficient

•A new role for district heating • Important flexibility to wind integration • Possibility to use more biomass and other renewables