25 Feb 2015

Modernizing District Energy Systems Could Reduce Heating and Cooling Primary Energy Consumption by up to 50% finds New Report

With cities accounting for 70 per cent of global energy use and for 40-50 per cent of greenhouse gas emissions worldwide, District Energy in Cities: Unlocking the Potential of Energy Efficiency and Renewable Energy, reveals how local authorities and national governments can develop energy-efficient, climate-resilient and affordable district energy systems as one of the most cost-effective and efficient solutions for reducing greenhouse gas emissions and primary energy demand, and for helping to keep global temperature rise to two degrees Celsius above pre-industrial levels.

District energy systems can also contribute to the green economy transition through cost savings from avoided or deferred investment in power-generation infrastructure and peak capacity; wealth creation through reduced fossil fuel expenditure, local tax revenue; and employment.

"Our response and our ability to keep the world within a 2°C scenario, has led us to focus on district energy in cities. These are practical, reliable, bring benefits to consumers and they generate benefits in terms of our response to climate change," said Achim Steiner, United Nations Under-Secretary-General and Executive Director of UN Environment.

"In launching this report, we want to draw attention of the world's decision makers, mayors, leaders at the community level, to the importance of district energy systems and hopefully through the lessons learnt in many parts of the world, ensure that this is yet one more element of our response that will allow us to practice and draw upon solutions already in place, proven and part of the transition to a green economy."

Currently, heating and cooling, of space and water, account for half of the energy consumption in some cities, with systemic inefficiencies incurring massive economic and social costs, and acting as a major barrier to universal access to modern energy.

Cooling demand in particular is growing worldwide, spending on energy services is increasing. According to the International Energy Agency, energy consumption for space cooling increased 60 per cent globally from 2000 to 2010, and is set to expand by 625 per cent by 2050 in selected regions of Asia and Latin America.

District energy systems - which pipe steam, hot water or cold water around a city from a central location for use in buildings - are being used in a variety of cities worldwide because of their higher energy efficiency which can significantly reduce the greenhouse gas emissions of cooling and heating. This can result in improved air quality, and, where district systems use renewable power sources, reduce reliance on fossil fuels and energy imports, increasing the resilience of cities to fuel price shocks.

The city of St Paul, Minnesota, USA, for example, uses district energy fuelled by municipal wood waste to displace 275,000 tons of coal annually and to keep US$12 million in energy expenses circulating in the local economy. And in Toronto, Canada, the extraction of lake water for district cooling reduces electricity use for cooling by 90 per cent, earning the city US$89 million from selling a 43 per cent share in its district energy systems, which it could use to fund other sustainable infrastructure development. Paris, France, is providing cheaper, more renewable heat through district heating and, by owning a third of its district heating company, also benefits from an annual dividend of $US 2.6 million and an annual concession fee of $US 9.1 million.

"Cities are crucial partners in making Sustainable Energy for All a reality. With their help we can change the environment, change the way we produce and use energy and at the same time significantly mitigate climate change, accelerate economic development, reduce environmental pollution and alleviate extreme poverty and thereby making cities a lot more resilient," said Kandeh Yumkella, UN Under-Secretary-General, Special Representative of the Secretary-General and CEO of the Sustainable Energy for All initiative.

Through an analysis of the 45 'champion cities', which have collectively installed more than 36 GW of district heating capacity (equivalent to 3.6 million households), 6 GW of district cooling capacity (equivalent to 600,000 households) and 12,000 km of district energy networks, the report finds that while contributions of district energy are significant and growing, the full potential of these systems remains largely untapped, with significant opportunities existing for growth, refurbishment and new development.

Gujarat International Finance Tec-City, known as GIFT City, India, is developing the country's first district cooling system, which could reduce electricity demand for cooling by 65-80 per cent. Yerevan, Armenia, is retrofitting and modernizing its district heating systems, which historically had losses as high as 50 per cent. After the first phase of refurbishment, 10,000 residents were reconnected, reducing energy consumption by 50.2 GWh annually and providing heat at cheaper rates than with residential gas boilers. While a Booz & Company 2012 study of the Gulf countries found that district cooling could provide 30 per cent of forecasted cooling needs by 2030, avoiding 20 GW of new power capacity and 200,000 barrels of oil equivalent per day in fuel.

Local governments are uniquely positioned to advance district energy systems in their various capacities as planners and regulators, as facilitators of finance, as role models and advocates, and as large consumers of energy and providers of infrastructure and services (e.g., energy, transport, housing, waste collection, and wastewater treatment). For example, in 2012 alone, the Greater London Authority's integrated energy and land-use planning policy resulted in US$213 million of investment in heat network infrastructure.

The policy options available to cities often are influenced by national frameworks and the extent of devolved authority. This publication outlines the policy best practices that local governments can use within these four broad capacities, accounting for diverse national frameworks.

To facilitate the transition to modern district energy systems, UN Environment has launched a new initiative on District Energy in Cities, as the implementing mechanism for the Sustainable Energy for All (SE4ALL) District Energy accelerator. As part of this initiative UN Environment has developed a policy and investment road map comprising 10 key steps to accelerate the development, modernization and scale-up of district energy in cities.

A decision tree, developed as an outcome of this publication and of the exchanges with the 45 champion cities, will guide cities through these various stages and highlight tools and best practices that could be available to local governments in their roles as planner and regulator, facilitator, provider and consumer, coordinator and advocate. Twinning between cities - matching champion ones with learning ones - will be a key component of the new district energy initiative led by UN Environment.

Source: UN Environment

Find the full report here

Find other DES Publications here


Notes to Editors

One of the three objectives of the Sustainable Energy for All initiative is the doubling of the global rate of improvement in energy efficiency by 2030. The Global Energy Efficiency Accelerator Platform was established to help reach this objective, by supporting accelerated action to improve energy efficiency in specific sectors, such as district energy, lighting, appliances, vehicle efficiency, buildings or industry. The Global Initiative on District Energy in Cities is the implementation mechanism for the SE4ALL District Energy Accelerator.

Additional quotes

"Today, cities account for over 70 per cent of global energy consumption. This asks for a swift and sustainable transition in urban heating, cooling and electricity.With the publication of District Energy in Cities: Unlocking the Potential of Energy Efficiency and Renewable Energy cities get practical guidance on how to achieve this transition while increasing reliability of energy supply, saving money, creating jobs and decreasing emissions. Being a lead partner of the initiative, ICLEI offers support to cities interested in successfully managing their versatile and crucial role for delivery on the ground - from integrated urban and energy planning to bringing stakeholders together- to harness the multiple benefits of district energy in cities," Gino Van Begin, Secretary General, ICLEI - Local Governments for Sustainability.

"The District Energy in Cities: Unlocking the Potential of Energy Efficiency and Renewable Energy publication offers essential information and practical guidance to any city interested in a local low-emission energy supply mix. The City of Seoul is honoured to be a contributor to this handbook as well as the Accelerator platform, hoping for other local governments to also start applying district energy in their communities," Park Won-soon,Mayor of Seoul, South Korea.

"It is an honour for Sonderborg with our ProjectZero transition project to be featured as district heating champion city in the UNEP publication. Green district heating is the backbone for our ZEROcarbon goal and we are grateful to inspire other cities. The publication is a great tool for every city that wants to meet ambitious carbon targets and they are all welcome to visit Sonderborg - as seeing is believing," Erik Lauritzen, Mayor of Sonderborg, Denmark.

"The need for cities and towns to become more sustainable and to reduce their carbon emissions is imperative as urban populations grow rapidly. Leaders of many municipalities are already showing strong initiative to improve the lifestyles and livelihoods of their citizens while improving the environment, both locally and globally. District Energy in Cities: Unlocking the Potential of Energy Efficiency and Renewable Energy highlights key technology options available to communities to provide heating and cooling services in a cost-effective manner and with low environmental impacts. The findings of this report should be studied carefully by all policymakers and private developers who are endeavouring to achieve a more sustainable future," Ralph Sims, professor at Massey University, New Zealand, and member of the Scientific and Technical Advisory Panel of the Global Environment Facility.

"District Energy in Cities: Unlocking the Potential of Energy Efficiency and Renewable Energy is a timely, comprehensive and useful knowledge tool. An essential part of the agenda for sustainable cities, district heating and cooling offer a tremendous, cost-effective opportunity to reduce greenhouse gas emissions while improving energy security and providing affordable energy solutions for residents. This publication provides a pragmatic, high-level analysis of major issues - including technological solutions, costs, business models, and the roles and capacities of the public and private sectors - and offers the way forward. It includes an extremely useful set of nearly 40 specific, practical examples of best practices from around the world. Overall, the District Energy in Cities Initiative offers a great platform for cooperation among cities, the private sector and multilateral development institutions," Alexander Sharabaroff, Operations Officer (Energy), International Finance Corporation.

"With the publication of District Energy in Cities: Unlocking the Potential of Energy Efficiency and Renewable Energy, UNEP has made a hugely valuable contribution to the climate and energy debate. Not only does it rightly identify the specific challenge of supplying low carbon heat to the urban environment as a necessary element of the general energy transition, it provides highly practical advice and analysis for policy-makers on how this can be achieved. An elegant demonstration of the value of thinking globally while acting locally, UNEP's effort to drive emergence of District Energy as a solution for cities is the right initiative at the right moment!" -Paul Voss, Managing Director, Euroheat & Power.

"District Energy in Cities: Unlocking the Potential of Energy Efficiency and Renewable Energy provides a critical set of information to cities as they develop action plans to meet sustainability, energy and climate goals. By providing thoughtful analysis of both key barriers and successful best practices, this handbook helps decision makers quickly identify important issues and successful tactics from peer cities as they move forward with district energy. The District Energy Accelerator is a valuable platform to advance district energy through resources such as this and by connecting stakeholders for greater collaboration," Katrina Pielli, Senior Policy Advisor, Office of Energy Efficiency and Renewable Energy, U.S. Department of Energy.

"We very much support UNEP's work on District Energy in Cities - this publication shows that energy-efficient district energy systems as basis for climate mitigation and socio-economic benefits are not a question of technology. It is a question of forward-looking and sustainable city planning. It is a question of always looking for solutions. And cities show that they are already today the pragmatic implementers of this technology. This publication is clearly a guide for all mayors that want their city to be at the forefront of low-carbon development for healthy and liveable cities. Danfoss invites all interested private sector actors to join the District Energy in Cities Initiative and support the dissemination of this knowledge and transfer of technical expertise in cities and countries worldwide," Niels B. Christiansen, Danfoss CEO.

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