A FEASIBILITY ASSESSMENT OF AN INNOVATION IN
CONNECTING EXISTING RESIDENTIAL BUILDINGS.
ARCADIS BV AND VRIJE UNIVERSITEIT AMSTERDAM
3 July 2012
Master thesis by Boudewijn Vogelaar (s2506000)
For Environment and Resource Management
Supervisor VU : Prof. dr. F.G.H. Berkhout
Supervisor Arcadis: J.W.J. Oostra
User-Producer interaction in a geothermal district heating case
A Master thesis for Environment and Resource Management
Written by:
Boudewijn Vogelaar
Madoerastraat 9
7556 SM Hengelo boukev@gmail.com
Internship placement at:
Arcadis BV office Arnhem:
Beaulieustraat 22
6814 DV Arnhem
Supervised by:
Dhr. Jolt Oostra
ERM office:
Faculty of Earth and Life Sciences
VU University Amsterdam:
IVM-ERM (Room A-503)
De Boelelaan 1087
1081 HV Amsterdam
The Netherlands
T +31 (0)20-59 89508
E erm@ivm.vu.nl
Copyright © 2012, Institute for Environmental Studies
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photo-copying, recording or otherwise without the prior written permission of the copyright holder
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User-Producer interaction in a geothermal district heating case
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User-Producer interaction in a geothermal district heating case
Figure 2 Column of Opportunities in the build environment ............................................................................. 10
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User-Producer interaction in a geothermal district heating case
This master’s thesis has been carried out at Arcadis BV, an engineering and consultancy company. The thesis is also the final product for the graduation of my master study Environment and Resource
Management at the Vrije Universiteit Amsterdam. During the period from April 2012 to the end of June
2012 I have worked on a feasibility study for the connection of existing residential buildings to a geothermal based district heating system. During this time I managed to visit a symposium on geothermal drilling ‘Geothermal Update 2012’ and the Caspar presentations about geothermal heating organized by
Kivi Niria. I also had multiple interviews with persons both from Arcadis and from external relevant organizations. During the course of the thesis I have learned a lot about geothermal wells, district heating and the social aspects that are important for the implementation of innovative technologies.
I am grateful for the comments and advice I got from my IVM supervisor Frans Berkhout and from my instructor Jolt Oostra, senior consultant renewable energy at Arcadis. I would also like to express my gratitude to the persons who I have interviewed during the course of this research: ‘Leon Ammerlaan from Ammerlaan - The Green Innovator, Stephan Mes from Eneco – Warmte en Koude, Peter Bell from
Municipality Pijnacker, Peter Barendsen from Ceres Projecten and Lex Bosselaar from Agentschap NL’.
I would also like to thank my colleagues at Arcadis: ‘Vincent Rijsdijk, Nicon Quaijtaal, Paul Brouns en
Linda Bouwman’ for helping me complete this research and giving their well-received advices.
I am also grateful for the continuous encouragement and support I got from my family, Amy and my friends.
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User-Producer interaction in a geothermal district heating case
This report assesses the feasibility of connecting existing residential buildings to a district heating network based on geothermal energy in the area of Pijnacker-Noord in the Netherlands. This project is important because of the possible reductions in carbon dioxide emissions and as a step in the energy transition towards a renewable energy supply. The project could also cause a cost saving for the residents. Near to a residential area in Pijnacker, consisting of 5-story apartment buildings and row houses, is the geothermal well owned by Ammerlaan located. Ammerlaan is an indoor plant producer which also has a geothermal well to supply heat to its own greenhouse and a nearby school and sporting facility. The geothermal well has an excess of heat available that can be transported to the nearby residential area of Pijnacker-Noord.
The heat is transported over a 70-40 degree district heating network which is economically feasible by the application of relatively new technologies such as: “Twin-piping, Plastic piping and the use of single connections to mirrored buildings”. The connection of row houses relies on even more innovations in capacity increasing heat releasing system within the residential houses to facilitate the connection to a 70 degree district heating network. It also relies on the willingness of users of conventional heating systems to switch to a district heating system. Correct timing of this switch is also an important aspect.
The financial analysis showed the possibilities of a positive business case for the district heating system in a certain setup with an investment cost of €675000, a net constant value of €487000 and a payback time of
13 years with a 30 year lifetime. This positive business case is dependent on the matter of participation of the residents which need to be connected. This degree of participation is influenced by the social acceptance of the system, which is further influenced by the costs of energy for the residents and the amount of nuisance they suffer due to the construction of the network. A short sensitivity analysis showed that the financial feasibility is highly sensitive for the size of the heat demand of the residential buildings.
This could cause a negative business case if a string of warm winters or further insulation measures inside the buildings reduce the heat demand.
The feasibility of this project also relies on the amount of interaction that will take place between the stakeholders involved. This project is one of the first efforts to connect existing residential buildings to a geothermal based district heating system which makes it a new technology. Since this new technology needs to be implemented and thus needs to compete with the existing gas based network it can be seen as an innovation process. The process of innovation heavily relies on the interaction between stakeholders and the successfulness of an innovation is also influenced by user-producer interaction. This study uses a model by Vandeberg and Moors from 2006 to assess the status of the interaction between the various stakeholders with a special focus on the interaction between the users (residents) and the producers of the innovation. The model describes both the conditions required for interaction and the process of interactive learning in which the stakeholders can learn from each other and improve the innovation. Highly important is the formation of a network in which the stakeholders can communicate and share knowledge.
A comparison with a geothermal heating project in The Hague shows the possibilities of creating a shared vision between the stakeholders which could result in a partnership. Such a partnership greatly increases the chances of the innovation in connecting existing residential buildings to a geothermal based district heating network. Final recommendations are firstly to increase the interaction between stakeholders to enable the network formation and secondly to do a more extensive feasibility study which can act as a tool in communication or promotion towards external stakeholders.
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Dit rapport bestudeerd de haalbaarheid van het aansluiting van bestaande woningbouw aan een warmtenet gebaseerd of geothermische energie in de omgeving van Pijnacker-Noord in Nederland. Dit project is belangrijk door de mogelijke verminderingen van de koolstof dioxide uitstoot en als een belangrijke stap in the energie transitie richting een energie levering op basis van hernieuwbare energie.
Tevens kan het project lagere energiekosten opleveren voor de bewoners in het gebied. In de buurt van een woongebied in Pijnacker, bestaand uit appartementen flats en rijtjeshuizen, ligt de geothermische bron van de firma Ammerlaan. Deze firma is een producent van indoor planten, deze heeft tevens een geothermische bron die warmte levert aan zijn eigen broeikas en een nabijgelegen school en fitness centrum. De geothermische bron heeft een overschot aan hitte beschikbaar welke getransporteerd kan worden naar het aansluitende woongebied van Pijnacker-Noord. Dit warmtenet is economisch haalbaar door de toepassing van een aantal relatief nieuwe technologieën zoals “Twin-piping, Kunststof pijpen en het gebruik van één verbinding naar 2 gespiegelde huizen”. De aansluiting van rijtjeshuizen vereist nog meer nieuwe technologieën in capaciteit verhogende maatregelen voor de indoor verwarmingssystemen om het gebruik van een 70 graden warmtenet mogelijk te maken. De financiële analyse in dit rapport laat de mogelijkheden van een positieve business case zien voor het warmtenet. Een specifiek systeem heeft bijvoorbeeld investeringskosten van ca. €675000, een netto contante waarde van €487000 en een terugverdien periode van 13 jaar over een 30 jaar lange levensspan. Deze positieve business case is afhankelijk van de participatiegraad van de bewoners die aangesloten moeten worden welke beïnvloedt wordt door de energiekosten van de bewoners en de hoeveelheid overlast die de bewoners ervaren van de constructiewerkzaamheden van het warmtenet. Een sensitiviteitsanalyse laat tevens zien dat de financiële haalbaarheid sterk wordt beïnvloedt door de grote van de energievraag afkomstig van de woningen. Dit kan resulteren in een negatieve business case als er een reeks warme winters of verdere isolatie wordt toegepast in de gebouwen welke beiden de warmtevraag reduceren.
De haalbaarheid van het project wordt ook bepaald door de hoeveelheid interactie die er plaats vindt tussen de belanghebbenden. Dit project is één van de eerste pogingen om bestaande woningbouw te verbinden aan een warmtenet gebaseerd op geothermische energie, wat er voor zorgt dat het geheel nieuwe technologieën vereist. Sinds deze nieuwe technologie moet worden geïmplementeerd en tevens moet concurreren met het huidige gasnetwerk kan het een innovatie proces genoemd worden. Het proces van innovaties vertrouwt hevig op de interactie tussen belanghebbende en het succes van een innovatie wordt ook beïnvloedt door de hoeveelheid gebruiker-producent interactie die plaatsvind. Deze studie gebruikt een model van Vandeberg en Moors uit 2006 om de status van de interactie tussen de verschillende belanghebbenden en dan met name de interactie tussen gebruikers (bewoners) en de producent van de innovatie te analyseren. Het model beschrijft de condities die nodig zijn voor het interactie proces en het beschrijft tevens het proces van wederzijds leren in welke belanghebbenden van elkaars kennis kunnen leren om zo de innovatie te verbeteren. Hierbij is het belangrijk dat de formatie van een netwerk in welke de belanghebbenden kunnen communiceren en kennis kunnen uitwisselen plaatsvindt. Een vergelijking is gemaakt met het aardwarmte project in Den Haag waar de mogelijkheden van het creëren van een gedeelde visie en vervolgens een partnerschap tussen de belanghebbenden wordt aangetoond. Een dergelijk partnerschap kan de kansen van een innovatie in het aansluiten van bestaande woningbouw op een geothermisch warmtenet sterk vergroten. Uiteindelijke aanbevelingen uit dit rapport luiden om de interactie tussen de verschillende belanghebbende te versterken om het netwerk te ontwikkelen en om een meer uitgebreide haalbaarheidsstudie te doen welke tevens kan dienen als communicatie instrument naar externe belanghebbenden.
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1
Many societies, governments, international organizations and individual people have recognized a growing need for renewable energy. While the energy usage of the world keeps growing and growing the cries for more sustainable forms of energy than fossil fuels becomes stronger and stronger. Many countries in the world have set limits on the amount of carbon dioxide emissions and have set targets for the amount of energy that should be generated from renewable energy sources. The Netherlands also has a target of
14% production of renewable energy and the country would like to reach this target by the year 2020.
Additionally, there is a target to reduce the carbon dioxide emissions to 80% in 2050 compared with 1990.
These targets have been set in an agreement with the European Community and can be characterized as
‘hard’ targets. In other words The Netherlands faces penalties when targets are not met.
Besides environmental concerns, the fact that the gas supply in the Netherlands is expected to reduce to
20% of its current production before the year 2034 gives more incentive to switch from gas based energy to renewable forms of energy (Ministerie van Economische Zaken, Landbouw & Innovatie, 2011). Since the largest portion of the energy demand in the Netherlands comes from the demand for heating, substantial steps in reducing the carbon dioxide emissions and improving the share of renewable energy can be made in heating. A large sum of this heat is used to heat building so a big potential to reduce carbon dioxide emissions can be found in existing buildings in The Netherlands.
One of the possible forms of renewable energy that can help in reaching the targets is the energy coming from our earth’s core. Geothermal energy is energy in the form of heat extracted from the ground. The earth is a continuous source of heat fuelled by various thermal processes originating from the centre of our planet. Slowly this heat is being transported to the surface which leads to a gradual increase of temperature with depth. Some soil layers in the underground are porous and contain large quantities of water. This heated water can be extracted by drilling a well into the porous layer. A pump can extract the water to the surface where the water can release its heat, the now colder water is reinserted into the ground to maintain the water pressure within the underground reservoir and avoid contamination on the surface with, often saline and contaminated, underground water. The heat is generally extracted from the underground water with the help of a heat exchanger which transfers the heat onto a new heat carrier.
This study is focused on a geothermal well located in Pijnacker in the Netherlands owned by the firm
Ammerlaan which uses the extracted heat to warm its greenhouses and a nearby swimming pool, fitness centre and school building. The geothermal well has an excess of energy available and the well could be used more effectively if other users with a heat demand can be connected to the heat network.
This is where district heating networks may help. District heating is a term used for describing a technology that transports heat from a source to the end consumer in the form of hot water or even steam.
The heat is produced in a central location and is then transported through a network of pipes towards the end user where a heat emitting source heats up their room and building. Afterwards, the water which has lost most of its heat is returned to the source to be reheated.
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User-Producer interaction in a geothermal district heating case
Any heat producing location can be the source for district heating. Examples of successful systems include combined heat and power plants, geothermal resources and waste incineration plants as energy sources.
Closely located near the geothermal well from Ammerlaan in Pijnacker is the residential area of Pijnacker-
Noord. These residential buildings, built in the 1970s, have a certain heat demand that is currently being supplied by gas and electric boilers. The switch to district heating could prevent a substantial amount of carbon dioxide emissions while supplying heat at a lower cost for the residents. Since the existing building stock in the Netherlands can’t be replaced completely before 2050, steps have to be taken to provide the existing buildings stock with less carbon intensive forms of heating.
There are, however, difficulties in supplying existing residential buildings with geothermal heating through the use of a district heating network. The entire project needs to be feasible. There are many aspects that influence the feasibility of the project of connecting existing residential buildings to the heat derived from the geothermal energy source. The feasibility relies not only on the financial status of the project but also on whether the residents accept the new technology and on the interaction between the stakeholders involved in the project. Since the required knowledge about district heating is scattered across the stakeholders, interaction is needed to provide possibilities for the creation of the district heating network.
The effectiveness and successfulness of geothermal heating in a district heating system for existing residential buildings also relies on the implementation of certain new technologies. This system in its entirety can be called an innovative technology since this system has never been created in this combination in the Netherlands. Innovation can be defined as the creation or improvement of better and more effective products, services, technologies or ideas, which are implemented into the market or society.
Innovation focuses not only on the manufacturing of the product but also on the use and implementation of the product. A successful innovation is not only effective in its purpose but is also penetrated into the market or society and is actually being used. The project has to be implementable.
The interaction between stakeholders in this project is highly relevant for the feasibility of the project.
Since the residents, which can be seen as the users, of this project have to accept the new technology it is important that the producers of the innovation interact and communicate with the users to make the innovation as successful as possible.
This report will provide a first analysis about the feasibility of connecting existing residential buildings to a district heating network supplied by geothermal heat for the case in Pijnacker. The following chapter
for the implementation of renewable energy. It will also describe why it is important to look at the interaction between the different stakeholders and how user to producer interaction enhances the
innovation process. Chapter 3 will provide the case characteristics about Pijnacker and will provide
readers with information on some of the problems that arise in the execution of this project. The financial
technologies needed for the execution. Since the implementation of the project relies on the interaction
between stakeholders, the stakeholders and their interactions have been described in Chapter 5. To
compare the potential of interaction among the different stakeholder a comparison project is introduced in
Chapter 6. The stakeholder organization and their interaction in the Geothermal Heat project in The
Hague are used as a comparison for the situation in Pijnacker. The final Chapter gives conclusions and recommendations for the future of the project in Pijnacker.
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User-Producer interaction in a geothermal district heating case
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This research is a feasibility study for the innovation of connecting a district heating network to existing residential buildings in Pijnacker-Noord. This chapter will explain how district heating systems can be beneficial for the environment, why we cannot depend on newly build buildings alone in the energy transition and how user-producer interaction is relevant for the success of this innovation.
2.1
DISTRICT HEATING
The relevance of district heating can be found in the fact that certain renewable sources need district heating to supply its energy to the end users.
The government of the Netherlands has set a goal for the share of renewable energy in their energy mix in
2050. To reach this goal intermediate goals have been set for every decade. The goal for 2020 is to obtain
14% of energy usage in the Netherlands from renewable sources. The energy usage in the Netherlands is currently split up into 27% for electricity, 35% for transport and resources and 38% for heat (Agentschap
NL, 2010). In the Netherlands 3233 PJ of primary energy is used from sources such as oil, coal, gas and renewables. About 1224 PJ (38%) of this energy is used for heating. District heating networks can enable combined heat and power plants to work at fuel efficiencies exceeding 90% which is 40% more efficient in the usage of energy than conventional power plants by utilizing the heat created in the power production
(Gustafsson, Delsing, & Deventer, 2010). Other more renewable sources such as waste heat from industrial processes, heat from waste or biomass processing plants, solar heat and geothermal heat can also be distributed with a district heating network to be used to the fullest (Kelly & Pollitt, 2010). District heating networks are necessary for the utilization of geothermal energy which requires extensive heat networks to distribute its heat to the users. Geothermal energy is considered to be a hot topic in the Netherlands in
2012. In the latest state of national subsidy request for renewable energy (SDE+) 46% of the budget and the subsidized power is requested by geothermal projects (Agentschap NL, 2012). To enable all this renewable energy to help reach the goals set out by the government of the Netherlands extensive district heating networks will be required.
2.2
EXISTING BUILDING STOCK
Of the 1224 PJ of energy used in the Netherlands for heating, 555 PJ (45%) is used for heating the build environment. This can be split into residential buildings (323 PJ) and commercial buildings (232 PJ).
Residential heating covers almost 10% of the primary energy usage in the Netherlands. This heat is mainly generated from the burning of natural gas causing carbon dioxide emissions and puts greater pressure on the depletable fossil fuel resources (Agentschap NL, 2010). The heat required for residential and commercial buildings is no higher than 100°C and is considered low valued energy. It is considered a waste of a high dense energy source such as gas to use it for low valued heating (Innovatienetwerk, 2006).
Connecting the built environment to a heat network would enable low valued heating sources to be used.
The focus on existing residential buildings is necessary due to the speed, in which new residential
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User-Producer interaction in a geothermal district heating case buildings are being built. The average construction of new residential buildings has been on average 1,37% year since 1988 (Centraal Bureau Statistiek, 2012). Even if all buildings since 1988 would be constructed in a manner suited for renewable heating then it would still take almost 50 years at the current growth rate of new buildings to replace all buildings in the Netherlands. It is also impractical to replace the existing buildings since historic buildings are usually located in the best areas and consumers look for features such as location and feeling above energy efficiency.
It is therefore necessary to generate energy savings in the existing building stock, one method to reach these savings is to implement district heating in the existing buildings.
Figure 1 Number of residential buildings (Centraal Bureau Statistiek, 2012)
2.2.1
HEATING SYSTEMS
According to AgentschapNL’s statistics almost all heat generated in residential buildings has natural gas as its energy source (93%). The heating systems used consist of 85% central heating, 6% block, city or district heating and 9% local heating such as gas and wood furnaces (Agentschap NL,
2010). The figure on the right side of this page shows an opportunity column which gives a visual representation of the opportunities for the implementation of district heating. (Didde, 2012).
The heating systems in existing residential buildings are usually designed with a temperature regime from 90 degrees input and 70 degrees output. The room in residential buildings is generally heated by radiator systems which use both convection and radiation to supply heat to the environment. The required temperature by residents is highly variable and depends on a lot of variables such as air temperature, humidity, air speed, temperature gradient and even more subjective variables such as personal preferences and the amount of clothing an individual wears indoors (McIntyre, 1973).
The system based on geothermal heat supplies heat with a maximum temperature of
70 degrees Celsius. This temperature has to be sufficient to heat the entire room up to a desired temperature by the residents. There are several methods which can supply the necessary comfort with an input temperature of 70 degrees Celsius but any method which compromises the integrity of the house too much leads to high costs and a low willingness to implement changes.
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Figure 2 Column of Opportunities in the build environment
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User-Producer interaction in a geothermal district heating case
An example of such a system would be floor heating which is perfectly suited for low temperature heating. It is however not practical to implement in existing residential buildings due to the need to break open the floor and make excessive adjustments to the structure of the building. The applicability of a 70 degrees district heating system will only be feasible if the existing residential buildings can be provided with the same comfort as the old 90 degrees system without intensive adjustments to the residence.
Besides technical aspects because of the innovative nature of this system the system also has specific social aspects that need to be considered while developing the project.
2.3
USER PRODUCER INTERACTION
The connection of a district heating system to existing residential buildings with a temperature regime of
70 to 40 degrees Celsius has been made possible by a combination of inventions in district heating and heating systems. The entire system that needs to perform the task of getting the heat from the geothermal energy source to the residences can be seen as one innovation. The implementation of this innovation will affect and require multiple stakeholders and this sub-chapter will introduce the relevance of both stakeholder cooperation and user-producer interaction in the innovation process.
2.3.1
STAKEHOLDER INTERACTION IN THE INNOVATION PROCESS
Innovation can be seen as a combined effort from multiple stakeholders who work within a certain innovation system. Vandeberg and Moors state: “The innovation system is perceived as a framework in which innovation is conceived as interactions of distinct actors (e.g. companies, market, government and supporting organizations), acquiring, understand and combining knowledge and producing, diffusing or using technologies, which result in the (re-)design of technical systems” (Vandeberg & Moors, 2006).
Within such an innovation system the learning occurs through communication or interaction between the stakeholders involved. These stakeholders can consist of suppliers, producers, users, researchers, etc.
Stakeholders interact in the network in order to create new products, processes and services. Interaction between actors/stakeholders can reduce problems of ‘sticky information’. This term created by Von Hippel
(2005) describes the problem that information about users’ needs and manufacturers’ capabilities is highly contextual, tacit and difficult to transfer from one site to another. Interaction between stakeholders during the innovation process should reduce the ‘stickiness’ of the information by allowing the information to transfer between the stakeholders..
This report and its focus on innovation also relies on ideas first proposed by Schumpeter who defined development (or innovation) as the carrying out of new combinations (Schumpeter, 1934). In his view, entrepreneurs were the main driver of economic development and innovation. The combinations that are made between the different stakeholders create the development and innovation necessary to create a transition of the status quo.
The creation of combinations between stakeholders and the reducing of ‘stickiness’ can be seen as a form of learning between the stakeholders involved. Following this context, Lundvall writes that especially interactive learning is an important type of learning. Interactive learning is “a process in which agents communicate and even cooperate in the creation and utilization of new economically useful knowledge”
(Lundvall, 2002). Especially the creation of a shared vision between the actors can become a driver for the innovation which brings diverse stakeholders together in collaboration towards a shared goal (Vertragt,
1988). Berkhout shows that, although visions can enrol various actors, stabilise networks and even become self-fulfilling prophecies, it is important to realize that the visions cannot exist outside the social processes
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User-Producer interaction in a geothermal district heating case of coalition formation and commitment. Visions thus reflect the processes deployed by interested insiders and outsiders (Berkhout, 2006). Whether the network creates the vision or the vision creates the network is not highly relevant for this study since the effect of having a shared vision causes the same benefits unrelated to its origin. But it is important to realize that visions are created by the perspectives and normative values of the actors involved.
Interactive learning is especially relevant in emerging technologies such as district heating from a geothermal energy source for existing residential buildings. Technologies pass different stages on their way to maturity. They move from the idea (invention) to the successful application of the invention
(innovation). Due to the process of diffusion of innovations (Rogers, 2003) and the changes in technical performance of the innovation over time an S-curved graph can be identified that shows the different life stages of the innovation (Tidd, Bessant, & Pavitt, 2001). The first stage of an innovation is the development phase. Technologies in this phase are often called emerging technologies. Emerging technologies can be defined as technologies which are not yet or hardly commercially available and for which no dominant design is present (Utterback, 1994). Emerging technologies have unclear futures and in this phase the future and state of the technology is highly uncertain. There is however an increase in connections or combinations between diverse stakeholders. The formation of this network can lead to the creation of a shared vision. During this stage of uncertainty it is difficult for stakeholders to comprehend the technology, see the benefits and specify the desired characteristics. On the other hand, later in the life stage of an innovation when things are more certain the possibility to change the trajectory of the innovation is more difficult. This trade-off is called the Collingridge dilemma (Collingridge, 1980). Interactive learning and the cooperation of actors at an early life stage of the innovation can create a shared vision and allow the creation of a dominant problem definition which can be a driver for the innovation (Vertragt, 1988).
Thus interactive learning and user-producer interaction can reduce the Collingridge dilemma.
2.3.2
USER AND PRODUCER INTERACTION
Innovations are usually produced to try and solve a problem but the producer of the innovation and the eventual user of the innovation can have very different views on what the problem is and how it should be handled. Von Hippel (1994) identified this as a differentiation of the locus of (view on) the problem between the user and the producer. He furthermore argued that in absence of communication between the user and the producer the problem solving (or innovating path) will be carried out at the producer locus.
Also relevant is that he acknowledges that the costs of transferring information sufficient to solve an innovation related problem can be substantial both in time and resources. When these costs seem to be high it is very likely that a firm will try to keep to its own locus to avoid substantial costs in trying to identify the user locus.
It is however important for the success of an innovation to try to create user-producer interaction. Firstly, according to Spaargaren, citizen-consumers, which are the users in this case, are the ‘change-agents’ who make transitions happen (Spaargaren, Martens, & Beckers, 2006). Instead of trying to guide the user or citizen-consumer into a certain behaviour by forcing technologies onto them, they should be included in the creation of the innovations so their behaviour is influenced by the recognition of their own role in the energy transition. This can only work if the innovation suits the needs of the user which leads to the second effect user-producer interaction has on the innovation system.
The success of an innovation can be increased by interaction between users and producers. The userproducer interaction helps to identify the needs and preferences of users (Clark, 1985). Communication between user and producer can also provide information about the marketability of the innovation. If major inconsistencies between what the product can deliver and the willingness to pay for the innovation
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User-Producer interaction in a geothermal district heating case can be identified at an early stage of innovation than a lot of effort and resources can be saved by abandoning the project early on, during the development stage instead of the production phase.
A fourth possible effect of user-producer interaction during the initial life stages of an innovation is an early familiarization of the user with the innovation. All new technologies suffer from an initial barrier to change in which the user is objecting the change. An early introduction and the resulting familiarization of the technology might make the user more acceptable to the innovation when it is eventually released or implemented (Nahuis, Moors, & Smits, 2001).
A last interaction between users and producers is a process in which the user becomes the innovator, this advantage is probably not relevant in the case of district heating and this report since the average and even the knowledgeable user is probably not specialized and active enough to contribute to the innovation itself. There are however situations thinkable in which the user has innovative ideas about the heat releasing system. Also relevant is the housing association, which represents a compilation of users, who might have more specialized knowledge that can be beneficial for the innovation process.
Other forms of interaction between user-producer are not relevant since the application of district heating to existing residential buildings can be seen as a rigid technology. According to Nahuis, Moors & Smits
(2001), rigid technologies have a strong design logic specifying particular affordances and limitations. This means that there is no possibility of customized configuration for the end user. In our case the user has no influence on the method of construction of the district heating network or the way in which it is transported. The user simply receives the heat to their residences.
2.3.3
FRAMEWORK TO ASSES USER-PRODUCER INTERACTION IN AN EMERGING
TECHNOLOGY
Although much research has been done in the outcome and the importance of interactive learning, little has been done to describe the interactive learning process itself. Since this report would like to assess the status of the interactive learning process for a specific case application, a micro level assessment, of an innovation a framework has to be used that describes the conditions that influence the interactive learning process between the different actors in the system. Due to the focus on a micro level of interactive learning frameworks that describe macro effects and national interactions are not suitable for this research. Due to this focus on a micro case the national system of innovation framework by both Lundvall and Freeman is not useable for this research (Lundvall, 1998) (Freeman, 1995). A study by Mierlo et al. made the connection between the macro level of the innovation system with the micro and local effect of learning but the social-psychological framework focused more on perception of stakeholders regarding their capabilities than on describing the learning process itself (Mierlo, Leeuwis, Smits, & Woolthuis, 2010).
Vandeberg and Moors however made a framework for interactive learning in emerging technologies that is especially useable to identify the conditions that influence the potential of interactive learning between the different actors (users and producers) which is applicable on a micro level case (Vandeberg & Moors,
district heating for existing residential buildings in Pijnacker.
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3
3.1
INFORMATION
The firm in the case study is called Ammerlaan, the Green Innovator. It is based in Pijnacker in the west of the Netherlands. It cultivates tropical plants in a greenhouse of 4 hectares. Ammerlaan has made a first step to base its production on a renewable source of heat. Since 2010 the Firm Ammerlaan, the Green
Innovator has installed a geothermal doublet which heats the greenhouses with heat derived from the earth at a depth of 2km. Besides heating its own greenhouses Ammerlaan is the first company in the
Netherlands which shares it’s geothermal heat with others. A nearby swimming and fitness centre and a school are being heated as well.
The temperature of the water that is being pumped up is around 70 degrees Celsius. There is however an excess of heat available at the geothermal source. To improve the effectiveness of the geothermal plant this excess heat should be used as well. Close to the geothermal well of the firm Ammerlaan is a residential area, which has a certain heat demand. The difference in energy price between the greenhouse users and the residential users is almost 14 euro per GJ of energy. This difference creates an opportunity for a positive business case for the firm Ammerlaan to sell its energy to the residential area instead of selling it to the nearby greenhouses.
3.2
GEOGRAPHICAL POTENTIAL
To use the heat supplied by the geothermal source most effectively it is important to reduce the amount of transport needed within the district heating network. It is therefore logical to find the nearest heat demand to supply the energy to. Located closely to the Geothermal well of Ammerlaan is a residential district called Pijnacker-Noord. This district consists of buildings from around 1970 and consists of a large number of row houses and apartment buildings.
When heat networks are implemented, they are generally connected with newly built houses. This has two major reasons: Firstly, the construction of a heat network infrastructure is costly and becomes even more costly when constructed within an already built environment. Secondly, heat networks generally have a lower temperature than required for conventional home heating systems. New and innovative home heating systems such as floor and wall heating are better suited to heat a building with a lower temperature heat source. It is very costly to implement floor or wall heating in existing residential buildings. There are however possibilities to connect low temperature heating of about 70°C to old 90°C systems. This might be possible due to the fact that the old heating systems are designed to heat an uninsulated house with old central heating systems (Kerrigan, Jouhara, O'Donnell, & Robinson, 2011).
Existing dwellings which have received insulation during the course of their lifetime might have an overcapacity in their heating delivery systems and might be able to deliver the same comfort at 70 degrees input instead of 90 degrees input. New innovative technologies in heating delivery systems might also create the possibilities to use water with lower temperatures than 90 degrees Celsius while still sufficiently
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User-Producer interaction in a geothermal district heating case heating the houses during cold periods. Examples of such technologies are: “Flow regulating thermostats, thin wire radiators and fan based radiator systems”.
The apartment flats in Pijnacker-Noord have recently been renovated and have had their insulation improved. This created a possibility to replace the temperature regime of the existing gas boilers to below
70 degrees Celcius. This provides an excellent opportunity for the application of the geothermal district heating network to these apartment buildings. The row houses located in Pijnacker-Noord have not been collectively renovated and the status of the insulation and the heating systems differs per house. Although these houses can be connected to district heating systems, innovative technologies to enable the use of lower temperature regimes may need to be implemented.
current trace of the heating pipe network. The red lines show the current pipelines that distribute heat to the sport centre of ‘De Viergang’, the school and the swimming pool. These pipelines are located underground and where constructed by horizontal drilling. The yellow lines are possible underground pipelines needed for the connection of residential buildings. The blue lines represent the possible pipeline trace needed for the connection of existing residential buildings in Pijnacker-Noord. Not shown in this picture are side lines which transfer the heat from the main lines to each individual building.
Figure 3 Network distribution map Pijnacker Noord
Each location that consists of a set of relatively similar houses has been named according to their location.
The most efficient and feasible apartments flats to use the heat are indicated in green. These locations are apartment buildings, which are currently being heated by shared gas boilers, each apartment flat has one or two gas boilers to supply the heat for the apartments. The locations have been separated in a couple of different locations that could each be connected separately. The row houses are indicated in the orange
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User-Producer interaction in a geothermal district heating case areas. The spread and variability in the location of the row houses in each area has influence on the construction costs of the district heating network required for connection of these row houses.
The abbreviations used in the tables in this report are shown in Figure 4.
Figure 4 Location abbreviations
3.3
CONNECTION POSSIBILITIES
To assess which buildings can receive the heat, it is important to understand the different heating systems each building has and the possibilities of the connection to a district heating system. The connection to existing residential buildings instead of newly built houses causes extra costs since old heating systems have to be replaced while the impact on the living conditions should be as minimal as possible. In
Pijnacker-Noord the apartment buildings heating systems have already been replaced in the last two year.
This paragraph analyses the possibilities for different types of buildings in Pijnacker-Noord of connecting to district heating.
3.3.1
APARTMENT BUILDINGS
Research by Roos (2011) for BuildDesk showed that the most feasible option to connect existing residential dwellings to district heating is to replace the gas boilers in apartment flats that are used for the heating of the apartments and keep the gas connection for the hot drinking water supply. This method is showed in
heating system would also be able to be replaced within a day. This would cause only a minor disturbance for inhabitants during construction and connection of the new system.
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User-Producer interaction in a geothermal district heating case
Figure 5 District heating connection replacement of central gas boiler without drinking water supply (Roos &
Manussen, 2011).
A second option is to give each apartment an individual connection to the district heating network. This has according to Roos some benefits such as: ‘Better individual measurement and regulation of heat consumption per apartment, responsibility for quality of the connection lies with energy company and longer length of insulated pipelines’ (Roos & Manussen, 2011). The major cost and barrier to individual connections is the expansive construction needed within the apartment buildings to replace the water boilers. New pipelines need to be added and the entire heating system needs to be adjusted. These constructions have great financial costs and are a real nuisance for inhabitants. Due to the existence of individual water boilers for drinking water in each apartment and the absence of a collective tap water system the costs and nuisance from connecting tap water to the district heating system are too high to be implemented. This research does not further assess the possibilities of adding tap water delivery for apartments flats to the district heating network.
3.3.2
NON APARTMENT BUILDINGS
The expected costs in supplying non apartment buildings with district heating are extensive. Non apartment buildings such as row houses and detached houses require individual heat delivery units and individual construction of pipeline infrastructure for each house separately. These both have considerable costs in construction both financial and hindrance wise. It is therefore not advised in multiple reports to try and connect individual existing dwellings to district heating (Roos & Manussen, 2011) (Rooijers, et al.,
2002) (Hildigunner, Thorsteinsson, & Jefferson, 2010) (Rafferty, 2003). However recent innovations by
Arcadis including the combining of two mirrored row houses to one heating unit and the use of plastic based piping have resulted in a cost reduction that makes the application of district heating to existing row
houses more feasible. Figure 6 shows this principle of how two closely situated buildings could be
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User-Producer interaction in a geothermal district heating case connected by one heating unit. The decrease in costs are about 60% if such a system is applied compared with a system of 2 heating delivery units.
Figure 6 Visual presentation of connecting mirrored row houses to district heating.
Regarding the supply of domestic hot water (DHW or tap water) row houses already have an individual production method of DHW which can be replaced by a system based on the district heating system.
3.4
SUPPLY AND DEMAND BALANCING
One important aspect of the geothermal energy source of the project is heat delivery. The geothermal energy source has a constant outflow of energy so the supply is extremely steady. This is because the temperature that is available from the geothermal source cannot be varied. The efficiency of the geothermal well is highest when all the energy is used during the entire year. The balancing of supply and demand is even more important in the case of Pijnacker since it will not be possible to supply the existing residential apartment buildings with domestic hot water from the district heating network. The costs in replacing the current gas systems and pipelines in apartment buildings are too expensive to be feasible for this project. The removal of demand for domestic hot water (DHW) for apartment buildings causes an even more variable demand for heat than in other geothermal heating projects. This effect is especially relevant in the summer when the heat demand is only provided by the demand for DHW, as seen in
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User-Producer interaction in a geothermal district heating case
Figure 7 Yearly load for area of low energy single houses (Ottosson, Zinko, Wollerstrand, Lauenburg, & Brand, 2012).
There are three methods which can influence the supply and demand to improve the efficiency of the geothermal district heating network: “Cutting peak demand, Off-setting demand and Cascading”. The application of different methods also influences the capacity of the geothermal well. The amount of houses that can be connected to the network depends on the capacity and the usage of the energy supplied by the geothermal well. These methods are highly relevant for the feasibility of the business case and should be further analysed in future feasibility studies. This report supplies a short analysis of the possibilities but does not provide case specific solutions or calculations in the matter of meeting supply and demand.
3.4.1
CUTTING PEAK DEMAND
A typical household in The Netherlands needs heating during the autumn, spring and winter period of the year. The most heat is required during the coldest days. Extreme cold days are a rare phenomenon but any heating system must be able to have the power required to provide enough heat during these rare cold days. Since the temperature output of a geothermal well is constant over time it would be illogical to design the well and the district heating to constantly supply the full power for these rare cold days. This would cause a huge inefficiency of the geothermal well. A typical load duration curve of the heating
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User-Producer interaction in a geothermal district heating case
Figure 8 Load duration curve (33,248 MBtu/Yr) (Bloomquist, 2003)
Peak demand can be supplied through conventional fossil fuel boilers, electric boilers or heat pumps. Since the peak only occurs during the coldest days (3-5% of the time), the penalty from using fossil fuels is easily offset by the savings from using peak demand cutting. Using peak demand cutting gives savings in pipe diameter, increased peak temperature provides lower network flows, reduced energy use from pumps, and it improves the efficiency of the geothermal well (Gustafsson, Delsing, & Deventer, 2010). This results in more homes that can be connected to the same well (Bloomquist, 2003). The existing boilers in the relevant apartments can be used to supply the peak demand.
3.4.2
OFF SETTING DEMAND
A second method to improve the efficiency of the geothermal district heating network is to connect the network to different consumers. A typical household has an average daily heat demand as shown in
Figure 9 Horticulture and residential daily demand graph (Meulen, 1997).
This graph shows that although the peak demand is almost the same for both demand curves there is still a lot of efficiency to gain by supplying both systems from one geothermal source. Especially during the early morning and during office hours a lot of energy can be used by supplying both consumers. Both patterns are somewhat complementary (Rooijers, et al., 2002). The geothermal well of Ammerlaan in the
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User-Producer interaction in a geothermal district heating case case of Pijnacker is also connected to a nearby swimming pool which has quite a constant daily heat demand, which causes even more demand to be off-set. The swimming pool could even be heated during the early morning hours so less energy is needed during operating hours.
A second method to offset the demand is to provide district cooling during the summer. Since heat demand is low during the summer the energy from the geothermal well could be used to provide district cooling. There are, however, substantial costs included in supplying district cooling including the construction of a cooling network and cooling delivery systems inside the residential buildings. District cooling might be a possibility for the nearby school, which already has a cooling system in place but is not considered to be feasibly for residential buildings (Platform Geothermie, 2012).
3.4.3
CASCADING
The last method to consider for increasing the efficiency of the geothermal district network is cascading. If the output temperature of one consumer could be used as the input temperature for another consumer then the energy could be used to its maximum potential. Cascading is the term used for this method of
in Pijnacker in supplying both the greenhouses of Ammerlaan and the swimming pool at the end of the cascade chain with lower temperature input. Although highly relevant for the owner of the energy source, this effect and the possibilities are outside of the scope of this research. Thus this effect won’t be taken into account in this study.
Figure 10 Example of cascading in a geothermal district heating network (Platform Geothermie, 2012)
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User-Producer interaction in a geothermal district heating case
4
The feasibility of the project is important for all the stakeholders involved. If there is no economic incentive for both end user and producer of the heat network than the likelihood of the project going forward is low. The potential carbon savings alone is not enough justification for the project to be developed. It is therefore important that the project is feasible in economic terms. In this chapter the feasibility of the project is assessed by doing a general assessment of the available energy and the costs in transporting this energy to the end users who will buy the energy for a certain price. Next to the economic aspects it is important to realize that the end users also need to accept the new technology and actually switch from their current energy supply based on gas to a district heating system based on geothermal energy. Since the connection of each additional house costs more money it is essential for the feasibility that the degree of participation of the residents is as high as possible. The acceptance of the technology by end users is thus highly important for the feasibility of the project.
4.1
SOCIAL ACCEPTANCE
In order to reach the required degree of participation to keep the district heating project feasible the homeowners need to be persuaded to switch to district heating. For many inhabitants in the Netherlands the use of district heating has a negative image. This is because there have been several important problems in the past that gave district heating its bad name. These issues are:
ï‚·
Unreliable pricing
Insufficient measurement methods lead to a lot of errors in billing and administration of used heat.
ï‚· Inconsistent heating
Apartment buildings suffered from connected systems where the bottom floors were heated more than the upper floors due to the construction of the pipes or the connectedness of the system. Users were also unable to individually arrange their temperature.
ï‚·
Reliability
Leaks and faults have caused loss of warm water in the past causing water damage and risk to the surroundings. This was also caused due to improper mapping of the pipe network.
All of these issues have been resolved in modern district heating systems but large part of its bad reputation presists. An added problem is that there is an extensive and qualitative gas network present in the Netherlands. This gas network can be considered as a sunk cost since the investments have already been made in the past. The extensive network and the fact that there are multiple companies supplying the gas leads to a flexible market in which homeowners can switch to the energy/gas company they prefer.
District heating networks are not so expansive and are owned, in most cases, by one supplier of energy.
This leads to an inability to switch heat suppliers and a dependence for residents to one single heat provider. Many residents may dislike this dependence but consumers are protected against monopolization in The Netherlands by the Heating Law (‘Warmtewet’).
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User-Producer interaction in a geothermal district heating case
There are, however, also benefits of district heating systems for the residents. District heating systems have proven to be reliable sources of heat, which results in minimum amounts of maintenance and interruption of heat supply. The geothermal source in the Pijnacker case supplies lower costs per GJ and causes a stable energy price independent of the gas price. Finally, the geothermal energy source of the district heating network results in the environmental performance of the district heating system. Residents are hardly aware of the benefits of district heating and judge the system on its historical performance.
There are however possibilities to influence the homeowners’ adoption decisions of district heating. In a questionnaire in June 2005 in Östersund, Sweden, 84% of the homeowners responded that they did not intend to install a new heating system to replace their resistance heaters. After being influenced in the following period by an investment subsidy by the Swedish government to replace their resistance heaters with district heating and a marketing campaign by the local district heating company 78% of the homeowners were influenced to adopt the district heating system. Results from a follow-up survey showed that the investment subsidy and the marketing campaign combined created the demand for the district heating system and that the marketing campaign successfully motivated the homeowners to switch to district heating (Mahapatra & Gustavsson, 2009) .
The homeowners in Pijnacker-Noord have a choice in which heating system they decide on. When district heating is connected to newly built houses the project developer usually decides on the heating system to avoid duplicate costs in building two supply networks. Existing residential housings have to make a switch but suppliers of existing heating systems try to influence their potential customers. To motivate the homeowners to make a switch requires an understanding of their needs, perception of relative advantage of different heating systems and communication behaviour. The need of homeowners to adopt a new heating system is a precondition required before a switch can be made (Dieperink, Brand, & Vermeulen,
2004) (Rogers, 2003) .
According to Rogers each system provides the same function (space heating) but each system also has its own advantages and disadvantages. He states that the system with the higher perceived advantages is likely to be adopted (Rogers, 2003) . The successfulness of the district heating project depends on the attitudes and perceptions of the homeowners and their driving forces which creates their willingness to change from their gas based heating systems to a district heating system supplied by geothermal energy. Mahapatra & Gustavsson show that these aspects are further influenced by both internal and external factors to the potential adopter. Among the internal influences are socioeconomic factors and the external factors can be marketing campaigns and government subsidies
(Mahapatra & Gustavsson, 2009) .
A number of factors have been identified in a research by the ‘Bouwfonds’ that influence the willingness of homeowners to pay for more sustainable houses. These factors are highly related to the willingness to pay for a more sustainable heating system. One important aspect is that human decisions and behaviour do not always reflect the stated behaviour by the homeowners. Even though homeowners indicate that they put a great value on the environment this statement cannot be found in their purchasing behaviour
(Bouwfonds, 2010). This is mainly due to the fact that other considerations like price and quality aspects seem to be more important in the actual decision (Steg, 1999) (Beckers, et al., 2004). The research by
‘Bouwfonds’ also showed four attitudinal factors that play an important role in the decision-making process. These attitudinal factors are also highly relevant for the social acceptance of district heating in the case of Pijnacker. The attitudinal factors are: ‘Environmental awareness, Price benefits, Comfort and
Health’. While all four aspects are relevant, the research found that environmental and health concerns hardly play a role in the decision making while financial benefits have by far the greatest influence. Only under strict conditions like a guaranteed reduction of the energy bill and an improvement in comfort were users willing to invest resources in sustainable houses (Bouwfonds, 2010). This research shows the
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User-Producer interaction in a geothermal district heating case importance of the social acceptance of an environmental system, which may be a lot less important for the residents than the municipality and environmental organizations are aware of.
The importance of the social acceptance of the district heating system shows a need for good interaction between the user and the producer in the innovation. Without a high level of participation by homeowners the business case for the producer of the innovation will be unviable for row houses, the connection of apartment buildings depends on the willingness of the housing association.
4.2
ECONOMICAL
The economic feasibility is highly relevant since the system has to have an economic benefit for the parties involved. Three variables have been identified within this project that greatly affect the outcome of the economic calculations. The first is the degree of participation: how many of the participants will actually switch to the district heating system? This influences the size, the income and the costs of the district heating network. The second variable is the discount rate. Since the project duration is long, 30 years, and the costs are mainly upfront, the discount rate has a big impact on the economic evaluation of the project.
The third variable is the amount and type of buildings connected to the heat network. The heating network has been split up into different sections that can be connected separately. In an early chapter in this report it was reasoned that detached houses are too costly to connect to a district heating system and these are there for ignored in this calculation. The connection of row houses however has been made possible by innovations in district heating by Arcadis that led to a cost reduction for connecting row houses. The connection of row houses lead to different benefits and costs compared to the connection of apartment buildings. These are described in the following paragraphs.
4.2.1
PROJECT COSTS
The costs of the project are estimated by assessing related projects and their costs and reflecting those costs
are high level numbers which are general assessments of the total costs of a product including costs such as personnel- and transportation costs. The values have been derived from similar projects and have been adjusted for specific aspects of the Pijnacker case.
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User-Producer interaction in a geothermal district heating case
Horizont al direct ional drilling is used when mult iple crossings wit h exist ing inf rast ruct ure exist in an un pat h wit hout sidebrances. There are subst ant ial ext ra cost s involved in t he usage of HDD.
The mainpipe of t he dist rict heat ing net work is of a larger dimension t han t he sidepipes and t hus cost s more in mat erial and const ruct ion of t he pipeline.
Sidepiping is used t o connect individual residences or apart mencomplexes t o t he dist rict heat ing net work. They are cheaper t han t he mainpiping net work due t o t heir decreased capacit y and higher ground placement .
If t he t race of t he dist rict heat ing net work crosses a road or river ext ra cost s are made in t he const ruct ion of t he heat net work.
The cost s f or connect ing t he apart ment building t o t he dist rict heat ing net work pipelines. Imagine cost s such as placing a pipeline t hrough t he out er wall t o t he heat exchanger and insulat ion cost s.
The cost s f or connect ing each rowhouse building t o t he dist rict heat ing net work pipelines. Imagine cost s such as placing a pipeline t hrough t he out er wall, and bet ween mirrorer residences t o t he heat exchanger and insulat ion cost s.
Since t he rowhouses have not been adjust ed f rom 90 degree heat syst ems t o 70 degree heat syst ems some addit ional adjust ment cost s are needed. Such as improved radiat or valves or ext ra insulat ion measures.
The cost s of supplying one residence wit h a Heat exchanger. The cost s f or connect ing rowhouses is a percent age of t hese cost s (0,7x per residence), while t he cost s f or connect ing apart ment s are a mult iplicat ion of t hese cost s depending on t he size of t he apart ment building.
The cost of maint enancing t he heat exchangers, heat net work, piping and dist ribut ion st at ions in t he heat net work.
Figure 11 Table of cost estimates for district heating.
4.2.2
PROJECT BENEFITS
The benefits are considered to be generated from the reduction in costs resulting for switching from higher priced gas usage to lower priced geothermal heat minus the consumption of gas that remains to address peak loads (30%) in the new system. Since the residents degree of participation will likely drop significantly when an upfront investment is used, a capital contribution to connection costs (BAK =
Bijdrage Aansluit Kosten) is not taken into account as a possible benefit for this project. The residents of the row houses also receive an additional bonus of 10% reduction of their energy costs to ensure the benefits of district heating outweigh the costs of nuisance due to construction of the district heating system. The residents in the apartment buildings will hardly suffer from any nuisance so their costs,
(which are the projects benefits), are based on the ‘not more than normal’ (NMDA = Niet meer dan anders) principle.
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User-Producer interaction in a geothermal district heating case
Figure 12 Table of projected benefits by location.
4.2.3
ECONOMIC ASSESSMENT
The financial assessment of the project will be done by looking at the Internal Rate of Return, the Net
Costant Value and the Benefit-Cost ratio of each of the alternative plans (Wortelboer-van Donselaar,
Rienstra, & Korteweg, 2009).
Most of the possible combinations of different locations have been assessed and the most feasible and extreme options have been included in this report. Calculations with other locations included can be found in the Appendices. An example of a system of multiple locations included in one district heating network
Additional apartments [RA] and the Row houses South Line [RSL]. The example system is called
C+R+RA+RSL. Included in the analysis is also a System All which connects all possible row houses and apartment buildings to a district heating network.
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User-Producer interaction in a geothermal district heating case
Figure 13 Map of System C+R+RA+RSL
been made as if 100% of the residents in apartments agree to be connected to the district heating network with a discount rate of 4%. The degree of participation of 100% is probable for the apartment buildings but unlikely for the connection of row houses. Thus for the individual connections of the row houses a relatively high degree of participation of 70% is calculated. Some of the costs can, however, be avoided if certain row houses do not choose for a district heating connection.
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Figure 14 Break even graph (Netto costs per year)
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User-Producer interaction in a geothermal district heating case
First conclusions that can be drawn from this graph are the following:
ï‚·
The increase in the size of the district heating system leads to an increase in the costs for the
ï‚·
ï‚· district heating network which differs per area that is connected to the district heating network.
The addition of row houses leads to a reduction in economic feasibility for all alternatives.
The extra benefits in adding the smaller and more distant apartments do not outweigh the extra costs involved.
ï‚·
The smaller alternatives have the best economic feasibility.
result and colour coded green when it is the best possible result.
Alternatives
System C+R
System C+R+RA
System C+R+RA+RSL
System All
System C
Investment Costs
€ 523.197
€ 675.037
€ 1.002.817
€ 3.408.985
€ 268.609
Net Constant Value
(NCV)
Benefit-Cost-
Ratio (BCR)
€ 414.246
€ 477.994
€ 440.343
-€ 304.389
€ 138.343
1,46
1,42
1,29
0,93
1,32
Internal Rate of Return
(IRR)
10,4
9,8
7,7
3,2
8,3
Figure 15 Financial assessment at project lifetime of 30 years.
without small side paths to RA and T lead to the best financial results for the project. The addition of row houses is not to be advised since the costs do not outweigh the benefits except in the case of RSL where the row houses are very symmetrical and have a beneficial spatial arrangement reducing the costs of the heat network extensively. The inclusion of row houses into an alternative also increases the risk due to the
reliance on innovations needed to increase the capacity of the in-house heating systems (see 4.4.2
owners. On the other hand it improves the supply and demand balancing due to the use of domestic hot water in the summer period.
4.3
ENVIRONMENTAL BENEFITS
Besides economic benefits, the project has environmental benefits as well. The gas consumption is replaced with heat generated from a renewable source, which reduces the amount of carbon dioxide emitted to the environment. In our current calculations the amount of gas-generated heat that is replaced with geothermal heat per household is 15,2 GJ per year for apartments and 27,2 GJ per row house. These numbers are based on an average consumption of gas used for heating. This takes into account that each apartment heats up surrounding apartments through its walls reducing the average consumption well below that of the national average for houses in the Netherlands. Seventy percent of the total gas consumption is reduced due to the fact that 30% of the gas is still used to meat peak loads.
It would be erroneous to assume that geothermal heat has zero CO
2
emissions, the pumps run on electricity, which is produced by fossil fuels and during the extraction of heated water some gas is extracted as well. This gas will be burned or used for the generation of electricity or heat in Combined
Heat and Power (CHP) installations. The weighted average of CO
2
emissions for electric power generating plants is 122 g/kWh compared with 900 g/kWh for gas production (International Geothermal Association,
2002). In another research report the carbon dioxide emissions for gas was found to be 600 g/kWh while
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User-Producer interaction in a geothermal district heating case the emission level for geothermal energy was 90 g/kWh (Bloomfield, Moore, & Neilson, 2003). Both studies show a reduction of 85% in CO
2
emissions when geothermal energy is used compared with energy from gas. Although our case is not based on electricity production, the amount of reduction of CO
2
will still give
a good indication of the amount of reduction. This is shown in Figure 16.
Energy of gas CO2 Price m3/GJ
28,4
Energy reduced per apartme nt
GJ
15,2
Energy reduced per rowhous e
GJ
27,2
Carbon dioxide emission s of gas
Emission reduction
(85%) gCO2/m3
1770 gCO2/m3
1504,5
Emission reduction per apartment
Emission reduction per rowhouse kgCO2/year kgCO2/year Euro/tCO2
649 1162 15
Figure 16 Calculation of emission reduction
This leads to a reduction of 650 kg of Co2/year per apartment, which leads to a total amount of carbon dioxide reduction.
Figure 17 Total CO2 reduction per system
Figure 17 shows the total amount of CO
2
reduction for each system. The amount of CO
2
saved by the project does not have a serious impact on the feasibility of the project. Even if we assume a carbon price
(or tax) of 100 euro/tCO
2
(currently 15 euro/tCO
2
) the NCV of the best CO
2 saving alternative is hardly affected.
4.4
REQUIRED INNOVATION
There are multiple innovations required that can influence the feasibility of the project. The reliance on rather new technologies to reduce costs and ensure the level of quality to be provided are risks. These innovations need to be researched and tested before their usability can be assessed. The first innovation is a reduction in costs for the construction of the heat network and the second innovation should enhance the capacity of the existing heat releasing system for the residential dwellings to be able to operate on a 70 degree temperature regime instead of a 90 degree temperature regime.
4.4.1
INNOVATION IN NETWORK COSTS
In recent projects Arcadis has realized a cost reduction in the construction of district heating networks.
These cost reductions make the connection of existing residential buildings to district heating cheaper and thus more feasible in future projects. The innovations include plastic piping, twin pipes and the application of mirrored houses. Future research should indicate if the same amounts of cost reduction can be accomplished in the project of Pijnacker.
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User-Producer interaction in a geothermal district heating case
District heating networks are traditionally constructed with steel piping, which is welded together piece by piece. Due to the low temperatures in the district heating network of Pijnacker, the use of plastic piping becomes possible. Plastic piping does have a couple of advantages over steel piping. It is flexible and less prone to rust and is cheaper. It is not only cheaper per meter of piping but also in the connecting of the pipes. Welding steel pipes requires expert welders while plastic piping can be fused together with automatic systems.
Since the supply and return pipes have to be laid out along the same track, it is possible to replace both pipes with one pipe that contains both pipes. This method saves space in the underground and requires less work in construction. An added benefit is that only one pipe needs to be insulated and the reduction in temperature along a distance is less than with separate piping. Construction costs might be higher due to the need for specialized components for separations and mergers.
The third cost reduction can be found in the application of mirrored houses. Closely located houses could suffice with one supply and one return pipe to supply both homes with district heating. This could be even further extended by supplying both houses by one heat delivery unit, but this would reduce the amount of customization in the heat supply possible for home owners. The application of a single pipeline and a single heat delivery unit could substantially reduce the cost of connecting row houses to the district heating system.
4.4.2
INNOVATION IN HEAT RELEASING SYSTEM
There are multiple innovations in heat releasing systems that could provide the necessary capacity increase to enable 70-degree temperature regimes to sufficiently heat the row houses. The innovations needed would cause minor disturbance for the residents during construction. Residents might not participate in district heating if their home is being significantly disturbed. Any improvements in insulation causes the required capacity to be reduced and helps the transition to a lower temperature regime. An added benefit of lower temperature heating systems is that health issues regarding dry air caused by high temperatures is reduced (Hasan, Kurnitski, & Jokiranta, 2009).
Increased radiator size
The capacity of a radiator is calculated by the size of the radiator. By increasing the contact area with the air in the room the capacity of the radiator increases as well. A first method to increase the capacity is thus to simply increase the size or amount of the radiators in the room. This however is quite intrusive for the residents since they lose space.
Ventilation based radiators
A second method to increase the capacity of the heating system is to add fans to the radiators. Radiators heat the surrounding area by two methods, namely: convection and radiation. Convection distributes warmer air in the room while radiation heats up the objects in the room. The convection of a radiator can be increased by improving the air flow along the radiators. The diffusion of heat through the air increases the ability of the radiator to heat the area (Myhren & Holmberg, 2009). Add-on fans can be attached to existing radiators but their effects are minimal and each radiator requires a specific fan type. This can increase the costs if the radiators differ among the dwellings. The construction of these fans can be a minor nuisance for inhabitants and can be fitted only when problems in capacity arise. According to Johansson &
Wollerstrand (2010) installing the add-on-fan blower application on existing radiators the temperature level in the heating system can be substantially reduced.
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User-Producer interaction in a geothermal district heating case
Low temperature radiators (LT-radiators)
There are companies who sell special LT-radiators. These radiators are especially designed to work on lower input temperatures. They are generally a combination of fans and thin plate radiators. The thin plates increase the contact area between radiator and air while the fans increase the airflow passing these radiators. Other systems include systems with heat pipes and large fin surfaces, which increase the temperature in distribution (Kerrigan, Jouhara, O'Donnell, & Robinson, 2011). LT-radiator systems are generally equal or smaller in size than regular radiators and have an increased capacity on a lower temperature regime. Their costs are however higher and there is still disturbance for the resident since the old radiator systems have to be replaced.
Individual flow thermostats
Individual flow thermostats regulate the water flow inside the radiators. They can contain the flow to assure maximum disposition of heat to the room. This ensures a low return temperature, which increases the effectiveness of the district heating network and geothermal well. This method also increases the capacity of the radiators. The construction causes minor disturbances to the residents since the only thing that needs to be replaced are the individual thermostats on the radiators. A recent study showed that it is possible to control the radiator system based on the primary supply temperature while maintaining comfort by controlling the radiator system flow by a control-loop while maintaining comfort. The improvements in the difference between input and output temperature was however hard to distinguish
(Gustafsson, Delsing, & Deventer, 2011).
Floor heating
Floor and wall heating systems, air circulation systems and roof ventilation systems are also methods in which lower temperature regimes can be used. These however cause major disturbances and costs during construction and are considered to be unfeasible to be used in existing residential buildings (Kerrigan,
Jouhara, O'Donnell, & Robinson, 2011). They are however perfect for connecting low temperature district heating networks to newly built dwellings.
4.5
SENSITIVITY ANALYSIS
Since there are a lot of factors that influence the feasibility of the project of connecting existing residential buildings to a geothermal based district heating network it is important to realize that any economic calculation is sensitive to changes in the input variables. For example if the expected price difference between the energy source and the energy price for the residents is smaller than the incomes of the project is reduced. The lifespan of 30 years for this project creates a strong influence of certain variables on the feasibility of the project. This paragraph gives a first short analysis to identify which variables have the biggest influence on the feasibility of the project. To identify these variables the economic analysis has been redone with different input variables. Initially the analysis is only done for the most feasible system:
feasibility of the project.
Interesting to note is that the biggest influences on the economic outcome of the project are focused on the amount of heat and the price of that heat that is being delivered by the system. Especially if the power of the geothermal system is inadequate to supply the heat or the heat demand of the buildings is lower than expected, incomes drops substantially. Due to the long timespan changes in the investment costs have only a minor influence on the financial outcome in the longer run. This analysis shows that it is highly important that the performance of the system in supplying heat to the residential buildings is sufficient.
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User-Producer interaction in a geothermal district heating case
Figure 18 Sensitivity analysis of system C+R+RA+RSL
The price in which the heat is delivered to the system by the energy source is also highly relevant for the business case. And lastly the variance in temperature and thus in heat demand is also highly important for the feasibility of the project. This could mean that an unusual amount of warm winters and thus a low heating demand can be devastating for the project. This effect is created due to the fact that the incomes for the project are solely coming from the actual heat that is being delivered to the residential buildings.
Without a possibility to ask for a one time connection fee, the possibility of a steady income stream independent on energy demand is impossible.
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User-Producer interaction in a geothermal district heating case
5
5.1
STAKEHOLDER IDENTIFICATION
An important first step to generate user and producer interaction is to identify who the users and producers are in this specific case. It is important to think about who might represent the users and who might be the producer of the innovation.
5.1.1
USER IDENTIFICATION
In our case, the final consumer of the heat is also the final user of the innovation. The residents of the existing residential buildings are the ones who create the value in the system by paying for the supply of heat to their building. They are a heterogeneous group with very different demands and expectations of the supplied heat. Some residents prefer high temperatures with fast response times while others might prefer lower temperatures and a less dry environment.
Most buildings in our project are owned by a housing association called ‘Rondom Wonen’. They rent out the buildings to residents. Housing association ‘Rondom Wonen’ can be seen as a group of represented users. They can make decisions about the heating system for the residents to which they rent out their buildings. They are there as an important representative of the users in our system. Their motives might not be the same as the residents and their knowledge about the demands and desires of the residents might be incomplete. Nevertheless, the housing association can make decisions for a large group of residents and is therefore a key stakeholder for the successfulness of the plan. The users in this system can, therefore, be identified as the homeowners in the vicinity of the heating network including the housing association ‘Rondom Wonen’ who represent a segment of the users. Interesting is the question if housing associations can decide for their renters what heating system is used in the buildings. This might be in conflict with the Heating Law (‘Warmtewet’) of The Netherlands which protects against monopolization of the heating systems.
5.1.2
PRODUCER IDENTIFICATION
The producer of the innovation is the party that decides and develops the entire system that will provide the heat to the users. The producer of the innovation is the stakeholder that makes the decisions about which tasks the system should perform and how it will perform these tasks. They also make the decisions about pressures, temperatures and volumes used in the system and which machines or constructions are needed. The producer identification is more complicated in this project than the user identification. There is no clear stakeholder that is the producer of the innovation in this project. ARCADIS is an international company providing consultancy, design, engineering and management services in the fields of infrastructure, water, environment and buildings. They aim to enhance mobility, sustainability and quality of life by creating balance in the built and natural environment. Arcadis has identified the possibilities of a
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User-Producer interaction in a geothermal district heating case district heating network for this project case. Arcadis has no intention to be an energy provider and is searching for a company who would be the energy provider in this case. Therefore Arcadis cannot be identified as the producer in this case. There have been ideas to form an Energy Service Company (ESCO) specific for this project. But the feasibility of the heat network depends on a stakeholder that is willing to be the producer/operator of the system.
5.2
USER
– PRODUCER COMMUNICATION
There is a mutual dependence between the different stakeholders of the project. The communication
among the different stakeholders is explained using the visualization in Figure 19.
relevant dependence on each other. The following paragraph will describe the various stakeholders and their influence on the system. The green arrows in the following figure show the user-producer interaction.
Figure 19 Stakeholder and physical network Pijnacker
Energy provider
The energy provider is the supplier of the energy in this system. The firm Ammerlaan will sell its energy to the owner of the heat network, which will transport the energy to the users through its distribution system. The producer of the innovation (the heat network connecting to existing residential buildings) depends on collaboration with the Ammerlaan firm to make sure that the systems correctly function. Since there is a mutual goal that both producer and energy source have (to distribute the heat), communication and cooperation is easy to maintain and beneficial for both. Also the owner of the heat distribution network will most likely be held responsible for a good delivery of the product (heat). Reliability of the heat production and feeding of the distribution system is therefore very important to the distributor.
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User-Producer interaction in a geothermal district heating case
District heating network
The distribution system is the heat network that transports the heat to the apartments; the connection between the energy source and the heating system that is used in the apartment buildings. It is managed and constructed by the producer of the innovation.
Users
The user –residents pay for the heat supplied to them from the producer and have preferences about the quality of the heating supplied to them. They are partly represented by the housing association who rent out most of the apartments .
Producer of innovation
The producer manages the innovation system and tries to develop a system that functions to provide heat from the geothermal energy source to the apartment buildings. In order to fulfil this task, the producer needs to communicate not only with the owner of the energy source but also with the users as shown in the green arrows.
5.3
CONDITIONS OF USER-PRODUCER INTERACTION
The quality or amount of user-producer interaction is defined by certain conditions.
In the current state of the project there are conditions that prevent functioning of the user-producer interaction needed to make the innovation successful. To assess and understand these conditions we use the framework of interactive learning in emerging technologies by Vandeberg and Moors (2006). They have identified five conditions influencing interactive learning in emerging technologies. These conditions are based on the proximity two actors have and how the different forms of proximity influence the possibilities for interactive learning among the actors. The relevance of the proximity is also acknowledged by Lundvall (1985). An assessment of the user-producer interaction in the case of Pijnacker can be made by looking at the status of the required conditions for the cooperation between the producer and the users.
The users are represented by the housing association in this particular case.
Figure 20 Frame of interactive learning in emerging technologies (Vandeberg & Moors, 2006).
Geographical proximity
Geographical proximity is a representation of the distance between the two stakeholders. Geographical proximity is important because it enables face-to-face contacts, which is an important aspect of interactive learning (Gertler, 2003). Face-to-face communication is the grandest form of communication and is highly important for interactive learning. It facilitates a greater form of cooperation and is necessary to form a shared vision about the goal that the innovation needs to be achieved.
In the case of a heat network in Pijnacker the geographical proximity influences the cooperation in several ways. The housing association ‘Rondom Wonen’ is located only in Pijnacker and therefore has a local focus of operation. Arcadis on the other hand has a more national and even international focus and is located at several offices in the Netherlands. Both stakeholders do not meet each other in normal business
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User-Producer interaction in a geothermal district heating case operations and face-to-face contact can only be arranged by planned meetings. This prevents spontaneous collaboration and communication and widens the gap between the users and producers. The same problems arise in communication with user-residents and producers since Arcadis does not have a local contact point for residents to communicate with. Arcadis also does not have an already existing relationship with the user-residents, which an energy company might have.
Cognitive proximity
Innovation relies on combining complementary knowledge of heterogeneous organisations. It is difficult to assimilate knowledge from outside one’s organisation into your own. Cognitive proximity is a term used to show the distance between another actor and themselves. If the cognitive proximity is large then the knowledge from one organisation will only penetrate into the other organisation with great effort from both organizations due to the gap in knowledge base or methods used between the two organisations
(Boschma & Lambooy, 1999).
It is difficult to indicate the cognitive proximity of two companies. Obviously two companies that operate in the same field probably have large overlapping cognitive capabilities but two companies from different fields can have quite a different perceptions of the same aspects. In the case of district heating, Arcadis has a very different view about the possibilities that can arise from the combination of different innovations into a heat network system than the users. The users and ‘Rondom Wonen’ might not have the same knowledge about the possibilities that have arisen from recent innovation in the field of district heating.
This knowledge gap might cause a gap in cognitive proximity, which can only be bridged by sharing the possibilities and innovations that Arcadis foresees with’ Rondom Wonen’. There is however a reluctance that can be found in Arcadis to share the knowledge which might lead to a loss of competitive edge for
Arcadis, this is identified as unwanted spill overs of knowledge (Cantwell & Santangelo, 2002).
Regulatory proximity
Regulatory proximity is the distance between the regulations that each stakeholder has to comply with
(Vandeberg & Moors, 2006). As Schumpeter already identified in 1934, rules are almost always beneficial for the status quo. The innovation has to challenge this current status and is hindered by a need for restructuring of the existing rules which takes time and resources (Schumpeter, 1934).
There currently is an uncertainty in the rules and regulations of energy labelling for residential buildings in the Netherlands. During the creation of this innovative heat network the use of geothermal energy might have different effects on the energy label of the buildings and the concurrent benefits of such a label.
The policies regarding the energy label are uncertain during the project and this causes a risk and uncertainty for the housing association in assessing the benefits of the system. The producer of the innovation (Arcadis) does not depend on the energy labelling since they benefit from the price users pay for the heat they therefore have other risks and uncertainties. This difference in dependence on regulations creates a gap in regulatory proximity, which can be bridged by providing mutual agreements. The construction of these mutual agreements is difficult, since the newness of the innovation and the project create large uncertainties, which are difficult to contain in contracts.
Cultural proximity
Cultural proximity defines the distance in informal rules of the stakeholders in the network. The informal rules of the stakeholders consist of individual habits, routines, established practices, norms and ways of working. Each community or organisation has its own method of working, which influences the ability to work with other communities and organisation. A common found example of a gap in cultural proximity is the sharing of research results. Academic organisations share knowledge through the creation of articles and have set rules for the use of this knowledge while industrial organisation rely on patents and
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User-Producer interaction in a geothermal district heating case protection of knowledge within their own organisation. Cooperation between industry and academics may be hampered by the different approaches applied in using knowledge. The sharing of tacit knowledge which is a prerequisite of collaborated innovation depends on trust between the two organisations . Trust is easier to generate between organisations that have a close cultural proximity since the informal rules of communication are more compatible.
A consultancy and engineering company such as Arcadis relies heavily on contacts with other organization both in cooperation and management for large projects. They rely on external organisation to supply them with work and projects. An organisation like the housing association ‘Rondom Wonen’ is more internally orientated providing work and projects in-house. Therefore, they have less contact with external organisations and have a more internal focus of operation. This difference might hamper cooperation. A second problem that enhances the gap in cultural proximity is the fact that Arcadis has a stake in the production of projects since it generates work for their organization. The housing association
‘Rondom Wonen’ might see the effort Arcadis tries to put into this project as a method to sell something to the housing association. There is a big difference in interaction between buyer and seller as opposed to a collaboration of two organisations to develop a project.
Organisational proximity
Organisational proximity relates to “the extent to which relations are shared in an organisational arrangement” (Boschma R. , 2005). Hierarchies, markets and networks are the three identified types of organisational settings. Hierarchies lead to strong ties, which are good for the coordination but cause some inflexibility of the stakeholders. Markets lead to great autonomous flexibility and opportunities for each stakeholder to do their own innovation and research but lead to low amounts of coordination and control between the different stakeholders. Lastly networks give both the flexibility to perform activities within one’s own organisation and the control and coordination needed for the creation of an innovation.
The collaboration between producer and user in the case of district heating for Pijnacker is currently only based on the organisational setting called market. There is currently hardly any communication or coordination between the producer and user about the development of the innovation and the producer is generating the innovation to be able to sell it to the user when it is completed. The switch to a network setting requires intensive communication and interaction between the user and producer, which is currently not active. The market setting hampers the innovation due to the lack of control and coordination between stakeholders.
5.4
POTENTIAL OF USER-PRODUCER COMMUNICATION
After the analysis of the conditions that effect the interactive learning it is important that the realization is
of interactive learning is based on 4 aspects: “Network formation, Prime mover, Intermediary and knowledge flows”. These processes are fundamental for the development of the innovation of connecting existing residential buildings to a district heating network in Pijnacker based on geothermal energy. In the following text this report will give a few suggestions on how these processes can be enhanced for the case of Pijnacker.
In emerging technologies, such as the case of Pijnacker is, networks are not already in place. Network formation is there for an important aspect of the interactive learning process since the different stakeholders get to meet each other and communication channels can be established. This network formation can be seen as a precondition for learning by interacting (Leeuwis & et al., 2005). To facilitate the formation of this network each stakeholder could assign a contact person within their organisation to
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User-Producer interaction in a geothermal district heating case channel the communication between the different stakeholders. This would require time and effort from each organization but would greatly increase the possibility of network formation.
Also important for the interactive learning process is the existence of a Prime mover. A Prime mover or a network builder is an actor that plays an important role in the creation of the stakeholder network. The
Prime movers is the driving force of the network creation that stimulates and enhances the participation of the different stakeholders in the network. Prime movers are usually represented by entrepreneurs who promote a certain technology, invention or product. The absence of a Prime mover might be one of the reasons that causes problems in the network formation in the case of Pijnacker. None of the actors involved currently have the will to heavily invest in the project. A possible Prime mover could be found in the intermediary organisation. The intermediary organisation is required for the interactive learning process if the knowledge that needs to be shared is complex and cannot be understand by all stakeholders involved. The intermediary organisation connects, translates and facilitates flows of knowledge (Van
Lente, 2003). This intermediary could create mutual understanding between stakeholders. Arcadis as an engineering and consultancy firm could provide this role in the process. To enhance this process and the formation of the network presentations could be held about the possibilities of the district heating network for all the stakeholders involved. A more thorough feasibility study would enhance the argumentation for the development of the district heating innovation.
The last aspect of the interactive learning process is the existence of ‘knowledge flows’. The project benefits from an open and shared method of knowledge flows between the various organizations. This knowledge flow can only take place if the actors involved can trust each other enough to share possible discrete, competition wise, material.
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User-Producer interaction in a geothermal district heating case
6
6.1
CHARACTERISTICS LOCATION
To assess the difficulties that arise in the development of connecting a heat network to existing houses in
Pijnacker a comparison can be made with the only other project in the Netherlands that attempts to connect existing houses to a heat network based on geothermal heat with a temperature regime of 70 degrees Celsius. The situation is comparable with the project in The Hague. There is, however, a major difference because in The Hague, existing buildings have already been connected and major parts of the heat network have already been developed. This provides learning opportunities applicable to the
Pijnacker project.
There are several organizations involved in the development of The Hague heat network. The
Municipality of The Hague, the energy companies Eneco, E.ON Benelux and the housing corporations
Staedion, Vestia and Haag Wonen are joining forces in the Geothermal Heat The Hague Partnership
(Aardwarmte Den Haag v.o.f., 2012). The six parties have formed a partnership and share knowledge and expertise to be able to benefit from the geothermal resources.
The geothermal well was initially set up to provide geothermal heat to newly build residential areas, each housing association would supply a number of newly built houses to be connected to the district heating network. The economic and housing crisis starting in 2007 impacted the housing market and the building plans of the corporations were significantly reduced (Elsinga, Jong-Tennekes, & Heijden, 2011). They are contractually bound to provide houses connection to the district heating system and as a result, initiatives have been made to connect existing houses to the system to be able to use the available heat without building new houses.
One example project has been implemented in which two apartment-flats of 24 apartments each have been connected to the district heating system. And an extensive research has been done to identify the major barriers for connecting other nearby buildings. This research is confidential and could not be used for this research. Important characteristics of these apartment flats is that they have been completely renovated during the connection of the district heating.
6.2
DEVIATIONS FROM PIJNACKER
To compare both projects the differences have to be identified. There are both differences in technical and economical possibilities as in the social constructions used and in the interaction between users and producers.
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User-Producer interaction in a geothermal district heating case
6.2.1
TECHNICAL AND ECONOMICAL
One of the major differences between the Pijnacker and The Hague projects is the existence of the heat network. The heat network in The Hague has already been constructed to supply the newly build houses with the geothermal heat. A lot of the construction costs of the heat network have already been made. This causes some buildings to have low connection costs since the central pipe is already laid in the near vicinity of the buildings. An added benefit is that the geothermal project in The Hague is an important pilot project, which receives a lot of subsidies. This made the completion of the project financially feasible.
This was also the case in the example project in The Hague. Two 24-large apartment flats were located next to the heat network’s main supply line. Extensions from this line could easily be created which connected the apartment buildings to the heat network. Another difference in projects can be found in that the apartment buildings in The Hague case were part of a major renovation which provided the opportunity to strip the apartments fully and implement far reaching reconstruction measures. This provided the opportunity to connect each apartment individually to the heat network with the help of individual connections and individual heat delivery systems. The entire gas network including tap water production and cooking gas have been replaced with district heating and electricity cooking. This has removed the connection costs of the gas network and has provided more investment room for the district heating.
According to Ceres Projects, part of the Vestia housing association in The Hague, the tap water system and individual connections to the district heating system could only be realized due to the absence of residents and the timing with the major renovation. The related nuisance for residents would have been too high to be able to implement such a system during occupancy of the buildings.
In Pijnacker the apartment buildings are already supplied with a collective heating system, which makes it possible to change the heating system to district heating with minor nuisance. The switch to district heating for tap water causes major nuisance and is therefore more difficult.
The renovation of the apartment buildings included improved insulation measures. The old heating system, which was based on individual central heating systems and gas furnaces, was based on a 90 degrees regime. The improved insulation measures combined reduced the capacity need while minor enlargement of the radiators improved the capacity necessary to function on the 70-degree regime of the geothermal district heating. Since replacement of the radiators is considered a major renovation the
Pijnacker project has to rely on other measures to increase the capacity of the existing radiators.
6.2.2
USER-PRODUCER INTERFACE
The overall scheme to visualize the organization system in The Hague can be seen in Figure 21.
There are two major differences with the organisation in the Pijnacker scheme. Firstly, the major organization representing the energy source, the housing associations and the municipality as a mediator are all part of the partnership that develops the innovative district heating network based on geothermal energy. This causes much shorter communication lines and causes co-dependency among the stakeholders. The participation of large energy companies E.on and Eneco provide large bodies of knowledge in the field of district heating and networks. The inclusion of the housing associations give users a voice in the development of the system. The housing associations can specify their needs and desires, which the system should fulfil.
In the case of the construction of newly built houses, the users are a less important factor in the creation of the geothermal district heating system. The housing association can fully represent the residents since the
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User-Producer interaction in a geothermal district heating case buildings are sold with an already installed district heating system and the preferences of the residents is less important than in the case of existing buildings.
The switch to the connection of district heating to existing buildings greatly increases the importance of the residents in the project. Users have to be persuaded to participate in the district heating networks and need to agree on the constructions / renovations needed to supply the system. The municipality can play a role alongside the housing associations to influence the residents into choosing the district heating network. Residents can also play role in influencing the housing association. More and more housing associations recognize their tenants as customers. Customers have to be met in their needs and demands.
In this way if the reputation of district heating improves than residents may demand district heating, pressuring the housing associations to provide this product of cheaper energy.
Figure 21 Stakeholder and physical network The Hague
6.2.2.1
INTERACTIVE LEARNING
The improved interaction and cooperation between users (housing association) and producers in the case of The Hague is evident when compared to the current situation in Pijnacker. To assess the causes of this improved interactive learning we return to the frame work of Vandeberg and Moors (2006) shown in
Geographical proximity
All organisation included in the Geothermal heat Partnership The Hague are either located in The Hague or have large projects in The Hague. All organisations have a history in working together in various projects around The Hague. The close geographical proximity provides close networks and familiar connections between both people and organizations
Cognitive proximity
There are some differences in the knowledge base between the energy companies and the housing associations. For example the energy companies have greater knowledge about the geothermal well while
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User-Producer interaction in a geothermal district heating case the housing associations have a greater insight in residential demands. The gap between the level of knowledge is probably small, since they are both experts in their own field. The participation of multiple organisations from each sector increases the chances that employees with relevant knowledge of the other sector are present within the organisations.
Regulatory proximity
The direct participation of the municipality in the Geothermal Heat The Hague Partnership creates a close proximity to the regulatory institute. Regulatory issues and opportunities can be identified early on and may be used for the benefit of the innovation. Previous projects between municipality, energy companies and housing associations have built a relationship of trust, which enabled the creation of contracts and deals between the different organizations. Contracts such as the minimum amount of buildings housing associations need to connect to the district heating system minimize the risk for the district heating network.
Cultural proximity
The housing associations included in this program have a long lasting history of commitment to do more in sustainable initiatives than is lawfully required. Housing association Vestia has had the policy to do
10% more than required by law in the field of sustainability. They were early in adopting high efficient heaters and air circulation measures. The municipality The Hague is also strongly committed to the production of renewable heat with a specific focus on the production of geothermal energy. Energy companies Eneco en E.on also realize the potential of renewable energy and the need for sustainability.
This shared focus between stakeholders and the results obtained from previous collaborations lead to the creation of a shared vision between the stakeholders. This shared vision has greatly improved the innovation process by creating shared goals which all parties wanted to reach. The fact that no party wanted to be considered as the laggard in the innovation process also greatly improved the effort put in by the undertaken efforts.
Organizational proximity
The creation of the partnership is a good example of an attempt to reduce the organizational proximity between the corporations. By including all relevant stakeholders in the partnership the ties and communication between stakeholders is improved greatly. Relevant knowledge is shared due to the mutual dependencies and the coordination of the innovation is greatly improved. A possible negative effect of the partnership could be a lock-in effect in which the flexibility of the innovation is hampered.
Figure 22 Comparison in proximity
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6.3
LEARNING OPPORTUNITIES
The creation of the partnership in The Hague has caused a great surge in the creation of the innovation systems in the case of geothermal heat in The Hague. The absence of the influence of residential users was a great benefit for using the geothermal heat to connect newly build houses. The mandated switch to connecting existing residential buildings due to the economic crisis and its effect on the building market will have great influence on the successfulness of the geothermal district heating network. Getting the required degree of participation from residential users is suddenly a major important factor in the successfulness of the geothermal district heating network. The current existence of the partnership shares the burden of this extra difficulty between the different stakeholders. Both the municipality and the housing associations can try to persuade the residential users in adopting the district heating system and the partnership will provide the collaboration necessary to improve this process.
The case of Pijnacker can take some lessons from the situation in The Hague. Firstly, the existence of a formal partnership can reduce the distance that exists between the producers of the innovation and the users of the final system. By including both the municipality and the housing associations, a shared vision can be created that will enable the commitment of time and resource to the project. A great hindrance to the successfulness of the project is the absence of a dedicated energy company providing the energy source. The firm Ammerlaan is focused on growing plants first and being an energy provider second. A third party to supply the necessary knowledge for the construction and management of a district heating network should be found. An important obstacle for an energy company in cooperating with Ammerlaan could be the requirement or desire of the energy company to be the owner of the energy source. They have this desire because they feel the need to own the source so they can guarantee the production of heat to their end-users.
The example case in The Hague regarding the connection of two existing residential apartment buildings to the district heating network has shown some important lessons for Pijnacker. Firstly the construction of individual connection to the district heating network requires intensive renovation measures that are a real nuisance for inhabitants. Secondly the connection of tap water systems based on district heating requires almost as much renovation measures. Moreover the successfulness of using a lower temperature regime after the construction of improved insulation measures and minor enlargement of the size of radiators gives positive examples for the situation in Pijnacker. It shows that it is possible to connect old residential buildings to a lower temperature district heating without too much transitions in the heating system.
Lastly, the interviews held with the housing association showed the importance of the participation of the residential users. Users are not easily persuaded to switch to a district heating system if they cannot see the benefits reflected in their financial gains. The improved sustainability aspects of district heating are considered not an important factor in the residents choice. This is especially the case for tenants of housing association buildings since they are deemed to have less financial possibilities than the average inhabitant of the Netherlands. The product provided by individual gas heaters and geothermal district heating are seen as equal by the residents which causes a great need for financial compensation when a switch in system is agreed upon. This is due to the increased nuisance caused by the construction needed for the switch.
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7
This report has provided a first analysis of the feasibility of connecting existing residential buildings to a geothermal based district heating network. It used the case of a district heating network in Pijnacker as a case study to assess this feasibility. The feasibility has been assessed in three different areas which have overlapping influences. These areas where: “Technical feasibility, Financial feasibility and Social feasibility”.
This research showed that there are possibilities within the geographical region of the geothermal energy source of Ammerlaan to connect the nearby residential area of Pijnacker-Noord to a district heating network. The application of such a system depends on the application of certain new technologies which make the project feasible. Especially the connection of row houses, compared with apartment flats, relies on the use of new technologies to be able to heat the houses with an input temperature of 70 degrees
Celsius. The research showed that it is certainly technically possible to design a system for the connection of existing residential buildings to a geothermal based district heating network. The implementation of these new technologies however causes uncertainty of the costs and possible nuisance for residents during construction. The social acceptance of the technology also influences the feasibility of the innovation. The residents need to accept the new technology. This is not only the case for the individual row buildings but the larger apartment buildings mostly owned by the housing associations also need to accept the new technology. This research found in other studies that environmental issues seem to be not very relevant for the residents of the apartment buildings. Cost reductions and financial gains are, alongside the avoidance of nuisance, much more important in the decision of residents for their heating technology.
All these aspects have influence on the financial feasibility of the project. The economic analysis in this report showed that systems which rely on the connection of only the most closely located and bigger sized apartment buildings have the best financial outcomes. It showed that the connection of row houses generally reduces the financial feasibility of the project with an exception of those row houses which are spatially very conveniently located for district heating. The economic assessment showed that the internal rates of return for these kind of projects require a long term commitment of the developers of the system.
Furthermore the sensitivity analysis revealed that the feasibility of the project is highly sensitive for the amount of heat that is demanded by the residential buildings and the price difference that exists between the energy price that is requested by Ammerlaan and the energy price that is paid by the residents. This is a clear indicator of the risk that is involved at the income side of a possible project of connecting existing residential dwellings to district heating in the case of Pijnacker.
This research also hopes to have shown the importance of interaction between the various stakeholders involved in the development of this innovation. Various steps have to be taken to optimize the network around the innovation and get the stakeholders involved in the project. Hopefully a shared vision can be created which can act as a guide for further collaboration. The role of a Prime mover would need to be for filled by one of the stakeholders and the knowledge flows would need to be able to move freely across
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User-Producer interaction in a geothermal district heating case actors and the network. Without a proper network and interaction between the stakeholders involved, as well as interaction between the producers of the innovation and the users, which may or may not be represented by the housing association, the development of the innovation seems unlikely. The project in
The Hague can act as an example case in how the stakeholders can become involved with each other and the innovation. Lessons can be taken from the formation of a partnership between stakeholders in The
Hague.
To summarize this report has identified that the feasibility of the project of connecting existing residential buildings to geothermal district heating depends not on the financial aspects but also on the technical and social aspects. While the project can be financially and technically feasible it is paramount to realize the risk of investing in such an innovative new system. It is also highly important for the success of such an innovative system that stakeholder interaction and user-producer interaction are taking place. In the case of Pijnacker a couple of recommendations could improve the interaction between both users and producers and other relevant stakeholders.
7.1
RECOMMENDATIONS
The first recommendation is to do a more extensive feasibility study for the project in Pijnacker. There are more technical details that need to be analysed before a final decision can be taken about the business case of connecting existing residential buildings to geothermal based district heating in Pijnacker. While this report has shown the potential and made an initial financial assessment of the project, further study should clarify the possibilities even more. This report and the more extended research following it can also help as a tool to promote awareness among stakeholders to get the more involved in the project.
The second recommendation is to release and share the information contained in this report to the various stakeholders. This could be done either be distributing the feasibility studies or by presenting the results to stakeholders. This may improve the network creation among stakeholders which can improve the possibilities of the innovation. In a further stage, when the stakeholders are more involved in the project, the lessons from The Hague show us that the formation of a partnership between stakeholders that acts as a single unity towards residents can improve the user-producer interaction and the internal interaction between stakeholders. This can only be created if the different stakeholders have gained a shared vision about the possibilities of the development of the district heating network.
The sensitivity study showed the importance of the heat demand that is generated by the residential buildings. During the writing of this report it became evident that there is a shortage of information about the actual heat demand of specific buildings. This shortage provides an opportunity for further research in the heat demand of buildings. It is important for the transition from fossil fuels to renewable energy to not only have information about the supply of energy but also to have specifics about the demand for energy.
Lastly the supply and demand balancing within this system will greatly affect the amount of energy and power available from the geothermal well. All though supply and demand balancing has been kept outside of the scope of this research, it is still necessary to research the possibilities in Pijnacker.
7.2
DISCUSSION
Firstly, the numbers and values used in this report have been derived from similar district heating projects. The true costs of the construction and installation of a district heating system connected to existing residential buildings is largely unknown since such a system hasn’t been implemented in The
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User-Producer interaction in a geothermal district heating case
Netherlands so far. The values used in this resort are best estimates. In time cost estimates derived from practical examples will improve the quality of the estimates used in this report.
Furthermore the use of a four percent discount rate has a large impact on the financial feasibility of the project since the lifespan of the project is 30 years. The four percent discount rate has been used since it is a common number to use for Arcadis but other stakeholders might be more comfortable with other values.
The discount rate has a direct influence on the feasibility assessment of the project.
Thirdly, it is arguable that the application of the model of interactive learning might not be suitable for the study of interaction among various stakeholders, and especially for the interaction among users and producers. Individual homeowners in this case should all be represented individually but the interactive learning framework by Vandeberg en Moors does not allow this. However, the existence of the housing association as an user representation makes the interactive learning model more applicable.
Lastly, the absence of energy management and the balancing of demand and supply can greatly influence the practical outcome of the project. Since income is only present during cold periods a warm fluctuations in the first winters can influence the financial feasibility of the project. Supply and demand balancing and the required calculations needed to correctly assess the capacity of the geothermal well, should be included in future feasibility studies.
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User-Producer interaction in a geothermal district heating case
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User-Producer interaction in a geothermal district heating case
Building data
Name
Central Location
Right Location
Right Addition
Top Location
Left Addition
Far Location
Rowhouses North
F
RN
Rowhouses East RE
Rowhouses South line RSL
Rowhouses Central RC
R
RA
T
LA
Abbreviation
C
Number of
Apartments
#
168
Number of
Rowhouses Horizontal drilling
# [m]
0 211
Total distance Total distance Amount of
Main network
[m]
155 side network
[m]
138 average Heaters
#
42
Number of crossings
#
0
219
89
59
57
96
0
0
0
0
0
0
0
0
0
112
112
92
140
81
95
30
0
470
0
204
0
0
216
88
205
254
168
355
512
590
1037
164
90
105
96
157
1399
995
312,5
551
56
30
21
21
33
39,2
39,2
32,2
49
0
1
0
0
9
1
3
8
8
Extensive cost table
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Net Constant Value Graph all systems
User-Producer interaction in a geothermal district heating case
CO2 reduction + NCW graph
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User-Producer interaction in a geothermal district heating case
Financial effects table
Alternatives
System C+R
System C+R+RA
System C+R+RA+RSL
System All
System C
System C+R+RA+T
System C+R+T+LA+RA+F
System C+R+RA+RN
System C+R+RA+RE+RN
System C+R+RA+RC
Investment Costs
€ 523.197
€ 675.037
€ 1.002.817
€ 3.408.985
€ 268.609
€ 820.651
€ 1.369.014
€ 1.204.117
€ 1.802.239
€ 1.260.027
Net Constant Value
(NCV)
Benefit-Cost-
Ratio (BCR)
€ 414.246
€ 477.994
€ 440.343
-€ 304.389
€ 138.343
€ 475.298
€ 297.552
€ 302.115
€ 57.193
€ 334.505
1,46
1,42
1,29
0,93
1,32
1,35
1,15
1,17
1,02
1,18
Internal Rate of Return
(IRR)
10,4
9,8
7,7
3,2
8,3
8,8
5,9
6,2
4,3
6,3
Name
System C+R
Net Constant Value Table
1 2 3 4 5 6 7 8 9
-471 -421 -373 -326 -282 -239 -198 -158 -120
10 11 12
-83 -48 -14
13
18
14
49
15 16 17
80 109 136
18
163
19 20
189 214
21
237
System C+R+T+LA+RA+F -1276 -1187 -1102 -1019 -940 -864 -791 -720 -652 -587 -525 -465 -407 -351 -297 -246 -197 -149 -103 -59 -17
System C+R+RA -611 -549 -490 -433 -378 -325 -275 -226 -179 -134 -91 -49 -9 29 66 102 136 169 201 231 260
System C+R+RA+RN -1120 -1040 -962 -888 -816 -747 -681 -618 -556 -498 -441 -387 -334 -284 -236 -189 -144 -101 -60 -20 18
22 23
260 282
24
303
24 63 100
289 316 342
55 90 124
25 26
324 343
137 171
367 391
157 188
27
362
205
414
218
28 29
380 398
237 268
436 457
247 275
System C+R+RA+RE+RN -1699 -1599 -1504 -1412 -1324 -1239 -1157 -1078 -1003 -930 -860 -793 -728 -666 -607 -549 -494 -441 -390 -341 -294 -248 -205 -163 -122 -84 -46 -10
System C+R+RA+RSL
System C+R+RA+RC
System All
System C
System C+R+RA+T
-923 -845 -771 -700 -631 -565 -502 -441 -382 -326 -272 -220 -169 -121 -75 -30
-1171 -1086 -1004 -925 -850 -777 -707 -639 -574 -512 -452 -395 -339 -286 -235 -186 -138 -93 -49
57
440
335
-3236 -3070 -2911 -2757 -2610 -2468 -2331 -2200 -2074 -1953 -1836 -1724 -1616 -1512 -1413 -1317 -1225 -1136 -1051 -969 -890 -814 -742 -672 -604 -539 -477 -417 -360 -304
-246 -224 -203 -183 -164 -145 -127 -110 -94 -78 -62 -48 -34 -20
-749 -679 -613 -549 -487 -428 -371 -316 -263 -213 -164 -117 -72 -29
-7
13
6
53
13
18
54
29
91 128
93
40
131
-7
51
164 198
168
34
62
231
203
73 110
71
237
81
262 293
270
146
90
322
301 331
181 214
99 108
350 377
360
246
116
403
388
24
415
277 306
124 131
428 452
138
475
30 NCW
414 414
298
478
302
298
478
302
57
440
335
-304
138
475
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