Euroheat & Power Managing Director Paul Voss talks to SETIS

What is the potential contribution of sustainable heating and cooling to energy transition in Europe?

Well, as a point of departure, let’s bear in mind that heating and cooling account for more than half of the energy used in the EU today. Moreover, as the recently published EU Heating and Cooling Strategy made clear, they will remain the dominant source of demand through 2050 and beyond. With that in mind, it becomes clear that this sector is more than a potential contributor to the energy transition. It is an indispensable and non-negotiable element. There can be no energy transition without a fundamental shift in the way we heat and cool our buildings. One only needs to look outside the window of an office in Brussels to understand the problem. Nearly every building has a chimney at the top spitting out CO2 from an oil or gas boiler downstairs. We cannot credibly talk about 80-95% decarbonisation without a serious plan to replace these boilers with alternative solutions that do not generate GHG emissions. The good news is, there are plenty of technically and economically feasible low-carbon solutions available today and district energy networks can be an efficient means to deliver energy from these low-carbon sources to the end-users. If the European energy transition of the nature and speed required is really going to take place, these solutions will need to become the rule rather than the exception.

What are the main challenges that need to be overcome for district heating and cooling to reach its full potential?

In some ways, district heating and cooling (DHC) is quite typical in so far as the usual set of barriers (lack of long-term regulatory support/visibility, failure to internalise external costs such as CO2 emissions and insecurity of supply, financing) can be observed. Where the sector is rather unusual among sustainable energy technologies is that examples of more or less fully developed national markets already exist and can serve as models for other countries looking to carry out their own energy transitions. In the Nordic countries, DHC already supplies the overwhelming majority of citizens in cities, with Copenhagen, Stockholm and Helsinki being just a few examples. In all 3 cases, the successful development of these networks was the result of (1) a genuine commitment on the part of policy-makers to establish a sustainable means of supplying heating and cooling to the urban environment and (2) a thoughtful planning process aimed at delivering this vision in practice. There is well-documented potential for the use of district heating and cooling in cities and regions across the EU, including in countries such as the UK and the Netherlands, both of which currently rely almost entirely on the combustion of oil and gas for heating. The main challenge for the coming years is to consolidate the emerging political will to carry out this transition and to bring citizens/consumers on board by informing and involving citizens/consumers in the process.

Euroheat & Power joined an international collaboration initiative with Korea, China and Mongolia in 2015. How can the European heating and cooling market benefit from international cooperation and/or experience?

Yes, it is always an honour and a pleasure to work with colleagues and governments around the world to share ideas and identify solutions to our common challenges. First of all, given that we share a planet, we certainly have a common interest in ensuring that the climate problem is effectively addressed. Rather more selfishly, from a European point of view, the development of DHC on a global scale is a tremendous opportunity. DHC is one field where Europe retains unquestioned global leadership. Having previously worked for a leading Danish green tech company, I can tell you that there is an enormous appetite around the world for access to European companies’ knowledge in this area. By exporting our know-how and products to energy hungry markets around the world, we can simultaneously contribute to the emergence of a more sustainable energy system and keep money and jobs, particularly in key areas such as engineering and manufacturing, in Europe. With all this in mind, Euroheat & Power will certainly continue to cooperate with cities, governments and international institutions around the world to help ensure that the potential of DHC is understood and exploited wherever possible.

The European Commission proposed an EU heating and cooling strategy at the start of 2016. What impact will this have on the heating and cooling landscape in Europe?

The only thing that is certain for now is that the publication of this strategy was a vital and long overdue step forward. As set out above, heating and cooling is and will remain the single largest chunk of Europe’s energy consumption. The absence of a European perspective on this issue had been seriously undermining the credibility of the EU’s plans for the energy transition. With the strategy, we have a clear message from the Commission that there is a need for fundamental change. Crucially, this view has received strong support from the majority of Member States. This means there is a real opportunity to take action.

The challenge now is to translate the sound principles set out in the strategy into practice, not least through public policy. If this is done properly, a number of positive developments should follow. We know that demand for heating and cooling can be significantly reduced through cost-effective measures aimed at improving the quality of the building stock. In parallel, the strategy highlights the need to replace ‘obsolete fossil-fuel boilers’ with efficient, low-carbon alternatives. In cities, where the density of demand lends itself to the use of collective solutions, DHC networks are the ideal means of bringing locally available (renewable or recoverable heat from industrial processes, data centres, and even metro stations!) heating and cooling into a dense urban environment. We are hopeful that the publication of the heating and cooling strategy will be not an end in itself but rather the beginning of a process which will see Europe’s heating and cooling landscape completely transformed.

At the level of policy and regulation, is enough being done to create an enabling environment for DHC to flourish in Europe?

Of course it depends entirely where we’re talking about. As mentioned above, in the Nordic regions, such an environment has been in place for some time. In many other parts of Europe, it’s probably fair to say that this process remains at a fairly early stage. What is extremely exciting and encouraging at the moment is to see how quickly things are progressing, particularly in countries without a rich history of DHC. Primarily, though not exclusively, on environmental grounds, countries such as France and the UK (among others) have established clear and highly ambitious visions for the emergence of DHC as the principle means of delivering low-carbon heating and cooling to their cities. There are currently over 180 ongoing initiatives in the UK alone. This would have been nearly impossible to imagine just a few short years ago, but today it’s a reality.

Ensuring that this development continues at the speed and scale that the energy transition requires will indeed require a constructive and predictable regulatory environment. At the most basic level, this simply means a commitment across the various levels of governance (EU, national and local) to driving the energy transition by promoting energy efficiency and renewables over more conventional alternatives. At the level of the EU, it is essential that the concepts set out in the heating and cooling strategy are reflected in the forthcoming wave of new legislation in key areas such as the energy performance of buildings, renewables, energy market design, etc. Obviously, there is much that remains to be done but it’s difficult not to feel optimistic about the prospects for the development of district heating and cooling within the European energy transition.

Interview published in the SETIS Magazine