Times Are Changing for District Heating

Article published by Decentralized Energy

As recently as a few years ago, politicians in the Netherlands saw district heating as old-fashioned – but it is gaining in popularity as it enables the distribution of both renewables and surplus heat, writes Klaas de Jong

Times are changing in the Netherlands. Henk Kamp, the Dutch minister of the Department of Economic Affairs, limited the production of natural gas in Groningen to 27 billion cubic metres in 2016. That is only half the production of the top year, 2013. Earthquakes in the Groningen area were the reason for these restrictions. At the same time, Kamp presented a vision for heating in which he suggested that natural gas grids could be replaced by district heating grids – a remarkable change of policy.

A few years ago Dutch politicians regarded district heating as old-fashioned, but nowadays it is becoming popular because it enables the distribution of both renewable and surplus heat. In 2008 Warmtenetwerk, the Dutch association for district heating, was founded. This association, now with 200 Dutch and Flemish members, plays an important role in the changing image of district heating.

New initiatives

The Dutch government’s new policy towards district heating did not come as a total surprise. Several new initiatives across the country showed in practice that district heating is a feasible and sustainable alternative to the so-dominant Dutch gas infrastructure.

The eye-catchers are activities in the cities of Rotterdam and Amsterdam. The growth of district heating in these cities is an inspiration for the rest of the country. The province of South Holland is developing a provincial grid with connections between the cities of Rotterdam, The Hague, Schiedam, Delft, Leiden and Dordrecht and the horticulture areas Westland and B-triangle. In 2015, Amsterdam followed by founding a coalition for a metropolitan heating grid.

In the eastern part of the Netherlands, the cities of Arnhem and Nijmegen are realising an inter-city district heating grid. Illustrative of the change is the northern city of Groningen, the European capital of natural gas, which will start this year with a heating grid for at least 11,000 houses. Deep geothermal heat from well at the Zernike university campus will be the main heat source.

Gas-fired cogeneration or renewables

Large power stations have traditionally been the main source for district heating. The existence of district heating in the big cities of Rotterdam, Amsterdam, Utrecht and The Hague was due to the presence of gas-fired power plants, and a coal-fired power plant owned by RWE Essent which supplied the cities of Tilburg and Breda. In several new urban areas, district heating has been implemented with combined heat and power (CHP) units as the main heat producers.

The big price difference between coal and natural gas and the growth of renewable electricity (mainly imported from Germany) dramatically changed the electricity market in the Netherlands. Existing gas-fired power plants and CHP plants drastically reduced their operating hours in order to minimize financial losses. At NUON’s (Vattenfall) new high efficiency gas-fired cogeneration plant in Diemen, a large heat storage tank was installed in 2015 to enable heat delivery for up to 48 hours without running the gas turbines. Heat storage is necessary for flexible operation on the electricity market without losing heat.

However, in general, gas-fired cogeneration is in big trouble in the Netherlands. There is no governmental support, and Dutch politicians accept the loss of efficiency due to a reduction in operating hours or even mothballing of cogeneration plants and CHP units. Their only interest seems to be in renewable energy.
For district heating, however, renewable energy was not bad news in the end. In 2012 the Dutch government decided to support renewable heat. Just as for renewable electricity, producers of heat receive a fee per unit of energy. This programme, called SDE+, proved to be very successful. It resulted in several new district heating schemes, but also in a changeover from cogeneration to renewable heat sources on existing grids.

SDE+ operates on the basis of competition per unit of energy. By doing so, the government hopes to achieve the maximum amount of renewable energy production for the lowest costs. As renewable heat is much cheaper than renewable electricity, since 2012 the main part of the SDE+ budget has gone to heat generation.
Waste-to-energy is now the main heat supplier

Rotterdam and Enschede recently changed from gas-fired cogeneration to waste incineration plants. In the cities of Amsterdam, Alkmaar, Nijmegen and Arnhem the heating grids are being extended on a large scale thanks to the availability of heat from waste-to-energy plants.

The old city of Dordrecht decided a few years ago to realize a district heating grid for some 10,000 houses in existing city areas. The main reason for this decision was the availability of heat at the HVC waste-to-energy plant.

The heat from a waste-to-energy plant is regarded as 50% renewable according to EU regulations. This is important because the Netherlands has promised to achieve a 14% share of renewables in its total energy consumption by 2020, but in 2015 it was still only less than 5%. The Dutch government has therefore strongly increased its support for renewable heat – and this support is a key factor for the development of new heating grids.

The owners of the waste incinerator are happy with the developments in district heating. The generation of electricity is not very profitable. In the night hours the price of electricity is extremely low nowadays. Selling heat makes sense, while in the past plant owners focused on maximum power production.

Several new grids thanks to deep geothermal

In 2007, tomato grower Rick van den Bosch had the guts to drill first for deep geothermal heat in the Netherlands. His well proved successful, and others followed. At the start of 2016 there are more than a dozen deep wells in operation.

Up to now, all the owners of geothermal wells have been agricultural companies with large greenhouses. The thermal power of the deep wells (two to three km deep) even makes it attractive for the big horticultural companies to distribute heat to other consumers. This has resulted in eight new heating grids in horticultural areas. The largest project is Agriport A7, which features a double well with a total capacity of 26 MWth and a grid that connects eight greenhouse companies to the wells.

The horticulturist Ammerlaan in the village of Pijnacker came up with the idea of selling heat from his well to homes and public buildings. After connecting a school building, the municipal swimming pool and some offices to his well, Ammerlaan starts this year with heat delivery to some 500 apartments. Ammerlaan not only grows and sells plants, but is now an operator of a heating grid and sends bills to consumers for heat!

Groningen will be the first city to incorporate deep geothermal heat on a large scale in an urban area. An earlier project in The Hague failed due to the financial crisis.

In 2015 the Dutch government rewarded four initiatives for deep geothermal heat with financial support. The expectation is that, in 2016, there will be new applicants in the SDE+ for geothermal projects.

Bio-heat

The share of biomass in the fuel for waste-to-energy plants is 50% in Europe. But apart from this, waste wood has also become a source of energy for district heating.

Thanks to governmental support for renewable energy, there are now several district heating plants delivering bio-heat generated by wood boilers, and cogeneration plants fuelled by wood or biogas. The new De Purmer plant in the city of Purmerend is the largest in the Netherlands. The plant was commissioned in 2015 and utilises wood chips from the Forestry Commission (Staatsbosbeheer). The total heating capacity of the installed wood boilers is 44 MWth. The De Purmer heating plant is owned by the municipality of Purmerend, which also owns the district heating grid. Purmerend has the highest market penetration for district heat of all Dutch cities, with the grid connected to 70% of the buildings.

The municipality of Eindhoven is also a front-runner in the field of biofuel-based district heat. The city council is now building its third wood-fired cogeneration plant at the site of a former Philips factory. The decision to build new plants is due to the successful operation of the first plant. This wood-fired cogeneration plant, which produces 1 MWe and 5.6 MWth for the Meerhoven housing area, operates for around 8400 hours per year and produces quite nice financial results.

Bio-based heat enables the development of small-scale heating grids as well. Examples include a grid for 300 houses in the city of Zwolle, a grid for the village of Marum and an industrial area in Hengelo with an Eaton factory as its main customer. In these projects, wood-fired boilers are the main heat source. A peculiar example is the new Polderwijk housing area in Zeewolde, which features a heating grid for 1200 houses. A dairy farmer supplies the heat from a CHP system running on biogas, which is transported through a pipeline from the farm to the plant at the Polderwijk.

Masters in horizontal drilling

Dutch contractors have showcased their skills in some ambitious district heating projects.
The heat transport pipe from the AVR waste-to-energy plant at the isle of Rozenburg to the centre of Rotterdam was probably the most challenging. The route is 25 km in length and crosses several large waterways, railways and important motorways. To overcome these obstacles, contractor Visser & Smit Hanab applied the technique of horizontal directional drilling.

The longest drilling was in the heart of the town. In order to cross the Katendrecht area without digging, the contractor realized a 1500-metre drilling with a depth of up to 40 metres. Two pipe sections of 850 metres and two of 650 metres were transported by tug over the river and welded together at the drilling site for this unique operation.

The pipeline was commissioned in 2014. Heat transport company Warmtebedrijf Rotterdam invested €100 million in the project. Shareholders are the city of Rotterdam and E.ON.

The pipeline between NUON’s new 435 MW gas-fired cogeneration plant in Diemen and Almere was also a unique project. At 8.5 km, the length of the route from Diemen to Amsterdam is not as impressive as the pipeline in Rotterdam, but Almere is a new town in the Flevoland polder.

In addition, the pipes had to be laid at the bottom of the former Zuiderzee, now Lake Ijssel. Contractor A Hak developed new techniques to lay the large pipes 1.5 metres under the bottom of the lake. The dykes had to be crossed by means of horizontal directional drilling. Dykes are important for Almere as this town is in a polder, which is two to five metres below sea level.

In autumn 2016 a large project will be ready in Amsterdam. The northern part of the city will then be connected to the AEB waste-to-energy-plant in the port area south of the IJ. This water will be crossed by means of horizontal drilling. The route of the pipeline is 16 km. While the equivalent of 66,000 houses in Amsterdam are already connected to a heating grid, the city’s target is connection of 230,000 homes by 2040.

Regulations and policy

Tariffs for heat are based on the principle that the costs for a household with district heat should not be higher than the costs of an individual condensing gas boiler. This simple principle was the basis for the Dutch heat law, which protects heat consumers with a connection of less than 100 kW heating capacity. For larger customers, the heat price is free.

The price of natural gas is rather high for households due to energy taxes, while for large gas consumers such as industry, hospitals and greenhouses the taxes are very low. The development of heating grids in greenhouse areas, and of some steam grids in industrial areas, indicates that there are chances in these market segments.

In his heating vision in 2015, Minister Kamp said he aims to introduce a new heat law. He said the new law is needed to speed up the development of district heating. He also initiated a study for new market models for district heat. These models will be available in the spring of this year.