An enviro-economic function for assessing energy resources for district energy systems

Highlights

• Developed a function to assess various energy sources for a district energy system.

• Considered CO₂ emissions and economics as two main factors.

• Applied renewable energy resources technologies as the suppliers for a DE system.

• Yields environmental benefits can lead to financial benefits by tax breaks.

• Modified enviro-economic function for the TES integrated into a DE system.

Abstract

District energy (DE) systems provide an important means of mitigating greenhouse gas emissions and the significant related concerns associated with global climate change. DE systems can use fossil fuels, renewable energy and waste heat as energy sources, and facilitate intelligent integration of energy systems. In this study, an enviro-economic function is developed for assessing various energy sources for a district energy system. The DE system is assessed for the considered energy resources by considering two main factors: CO₂ emissions and economics. Using renewable energy resources and associated technologies as the energy suppliers for a DE system yields environmental benefits which can lead to financial advantages through such instruments as tax breaks; while fossil fuels are increasingly penalized by a carbon tax. Considering these factors as well as the financial value of the technology, an analysis approach is developed for energy suppliers of the DE system. In addition, the proposed approach is modified for the case when thermal energy storage is integrated into a DE system.

Introduction

One means of mitigating energy and environmental concerns is through the use of district energy (DE) systems, since they can integrate renewable energy and other complementary systems like thermal energy storage (TES) [1], [2], [3]. Since economics and environmental impact are major factors in decision making and design, many assessments accounting for these aspects have been performed of DE systems. District energy can provide efficiency, environmental and economic benefits to communities and energy consumers [4]. Difs et al. state that DE systems usually exhibit lower environmental impacts compared to conventional systems [5], and use heating load analysis to demonstrate that expanding DE applications in industrial processes leads to increased resource energy efficiency.

The energy source for district heating systems can be fossil fuels or other energy sources, and hybrid systems combining two or more energy sources, such as natural gas, wood waste, municipal solid waste and industrial waste heat, can be economically feasible [6]. Persson and Werner consider heat supplies for DE to include heat from combined heat and power (CHP), waste-to-energy (WTE), biomass and geothermal energy plants, as well as industrial excess heat [7]. Ostergaard et al. investigated a DE system with integration of geothermal heat, wind power, and biomass [8]. This flexibility is one advantage of district energy systems. The thermal energy needed by the district grid is often supplied by a dedicated plant, but industrial waste energy can be an attractive alternative because it permits depreciation and maintenance costs for the power plant to be reduced [9]. Although fossil fuels are commonly the primary sources of the thermal energy supply [10], hybrid systems combining renewable or alternative energy technologies such as solar collectors, heat pumps, polygeneration, seasonal heat storage and biomass systems, have begun to be used as the energy sources [11].

Vallios et al. describes various designs for biomass DE systems [12], covering technical aspects like boiler, heat delivery network and heat exchanger design, as well as environmental and economic factors. By considering a hybrid solar heating, cooling and power generation system including parabolic solar collectors, Zhai et al. show that this type of solar collector is financially more attractive than conventional solar thermal collectors [13].

Combined heat and power (CHP), or cogeneration, is often economic and can reduce both greenhouse gas (GHG) emissions and fuel consumption in a community [14]. New technologies have enabled cogeneration to be cost effective, even in small-scale applications in communities or individual sites. The European Parliament recognizes CHP as a method to increase energy system efficiency and decrease CO₂ emissions [15]. In Denmark generating electricity and heat by CHP is balanced with using renewable resources [16] and optimized accounting for electricity price fluctuations [17]. The price of generated electricity by CHP in a smart grid is investigated by Danish research teams [18], [19].

Environmental externalities need to be taken into consideration in economic models, to make them comprehensive [20]. Consistent with this thinking, a model was suggested which considers economic and environmental factors for a DH system having various configurations [21]. Data from a 300-km district energy system in Brescia, Italy were used to carry out an economic comparison with a comparable domestic gas boiler system [22]. The thermal network system was observed to recover through energy savings in a few years the costs to purchase and implement the equipment for the installation of the thermal network, and also to yield environmental benefits.

Given the various options for DE system resources and technologies, an approach is needed to model and appraise resource alternatives. That model needs to account for the major factors, which are technological, financial, and economic. Technology aspects interact with economic and environmental factors. But it is beneficial to combine the latter two factors in terms of economics, and that is the focus of this study. Here, environmental and economic analyses models are developed separately, and then combined based on fundamental economic equations to provide an informative tool for assessing the performance of energy resources, in a manner that is useful for project managers, design engineers, industrial decision makers and government policy developers. The developed model is then expanded to account for the TES(s) integrated into a DE system. The concept of converting different characteristics of a technology into financial measures is not entirely new, however, this concept has not been extensively applied to complex energy suppliers for DE systems. Most of the models are incorporated into computer packages having various levels of sophistication, depending on the main objectives, but most approaches involve evaluating environmental and financial factors separately when examining energy technologies. Hence, the development reported in this study provides a novel and useful approach and tool, which allows for a sufficient level of accuracy for the preliminary evaluation of energy resources for DE systems, while providing a straightforward analysis tool that can be applied broadly in the energy and building sectors.