2003-12-10 Euroheat & Power 1 Boosting Innovation from Research to Market District Cooling in Europe Potential and Benefits Tomas Bruce President Euroheat

2003-12-10 Euroheat & Power 1

Boosting Innovation from Research to Market

District Cooling in Europe

Potential and Benefits

Tomas Bruce

President Euroheat & Power

Chairman Capital Cooing Europe AB



District CoolingTurning a potential threat

into a great opportunity

for

the energy companies,

their customers

and

the community



Status and TrendsAir-conditioning and process cooling

80% in USA and Japan, commercial and institutional buildings

<50% in EU, but is expanding rapidly

About 40-50% of the cooling energy relates to process cooling in commercial and institutional buildings, computer cooling etc

AC within the residential sector has a strong position in urban areas and is expanding rapidly

Investments in the AC business within the EU will increase to meet the phase-out of HCFC and are predicted to be 5 billion € in 2004 or 60-100 billion € up until 2010



0

100

200

300

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1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

GW

h/y

ear

Stockholm (Fortum) Solna/Sundbyberg (Norrenergi AB)Lund (Lunds Energi AB) Göteborg (Göteborg Energi AB)Västerås (Mälarenergi AB) Uppsala (Vattenfall Värme Uppsala AB)Övriga (22 st)

District Cooling Sweden

1992 - 2002

District Cooling in Sweden 1992-2002



District Cooling in Europe

0

100

200

300

400

500

600

700

MW

GWh



The EU perspectivechallenges and triggers

ElectricityCapacity shortage - production and distribution

EnvironmentThe Kyoto agreement: 8% reduction in 2012HCFC phase-out, EU in the same situation as Sweden 1996 Increased environmental awareness, consumer and energy companies

AuthoritiesSecurity of supplyDe-regulation of the electricity marketReduction of CO2 emissionsLegislation, regulations Taxes and environmental fees



The DC potential in Europe- based upon Swedish development and statistics

Sweden – population 9 million Statistics for 2002: 28 cities with 10.000 to 750.000

inhabitants

600 GWh or 500 MW ~40% of the energy is year round base load Prediction for 2010:

2 TWh 20-25% of the non-residential market

EU – population 380 million Status

~ 2 TWh Potential 2010-2015: Up-scaled and adjusted to the warmer climate

100 TWh 20-25% of the non-residential market

The residential sector could add another 100 TWh



Potential savings using District Cooling

Total energy efficiency ratio EER for cooling Conventional local solutions

EER 1,5 - 3 Conventional chillers

EER 3 - 7 Aquifers for AC Centralised District Cooling solutions

EER 6 - 8 Industrial chillers/heat pumps with efficient condenser cooling

EER 8 - 25 Combined DH/DC

Absorption chillers or waste heat

Free cooling



Potential savings using District Cooling, contd

DC electricity savings potential, non-residential 40 TWh/25.000 MW 1-2% of EU electricity demand

Electricity capacity peaks in summer Saved investments in production Saved investments in distribution

European Commission: +44% electricity demand up to 2020 750 power plants/300.000 MW



Critical success factors

Between 2003 and 2008 there is a great opportunity to establish and position DC on the EU market

To be able to handle the high investments the DC business has to be established with:

step by step solutions

short lead times

the right price strategy



Critical success factors, contd

The business must be set by a party that:

is trustworthy on the local market

has a long term perspective as energy supplier

can build energy infrastructure with low risk

is a suitable, and natural actor in the building of a sustainable society



New business opportunities for energy companies & local authorities

New products and services to offer the end-user market Reduced investment costs in the distribution infrastructure of electricity Increased revenues Strong environmental profile Increased customer loyalty A bridge for an expansion of the District Heating business

“A new profitable business for the energy companies that establish long term relationship with the customers”



New profits for property-owners and end-users

Capital and resources are released Risks linked to owning, operating and maintaining cooling plants are

eliminated The price picture is stabilised and maintenance costs are reduced Reliability increases through secure cooling supplies and simple, safe

technical solutions Floor-space is made available Environmental profile is sharpened

“A new flexible, reliable and cost effective solution for the customers with high environmental profile”



Profits for the community

Adjustment to the Kyoto protocol and stricter, new environmental norms Reduced emissions of CO2 and environmentally hazardous HCFC “freons” Enhanced aesthetics and an improved local environment Avoid shortages of electricity capacity Increased energy utilisation and reduced electricity consumption

“Savings of 1-2% of the electricity consumption and up to 25% of the EU commitment according to the Kyoto agreement, or 20-40 million tons of CO2”

“By establishing a 100 TWh D.C. Business, EU will avoid 25 billion € of investments for peak electricity capacity”

Documents

2003-12-10 Euroheat & Power 1 Boosting Innovation from Research to Market District Cooling in Europe Potential and Benefits Tomas Bruce President Euroheat