Why EU industrial players are considering to invest in low carbon heating and cooling?

Veolia perspective by Kamila Waciega

Advisor to Director, Public Affairs Department

About us

• Global environmental services provider and operator of infrastructures

• Veolia designs and deploys solutions for water, waste and energy management, participating in the sustainable development of cities and industries

Veolia business lines

Management of the global

water cycle, from production

and distribution of drinking water

to the collection, treatment

and recycling of wastewater.

WATERLiquid and solid non-hazardous

and hazardous waste management

Our expertise covers the entire

waste life cycle from collection

to recycling, leading to the final

recovery of waste as materials

or energy.

WASTEEnergy efficiency, efficient

management of heating

and cooling networks, green

energy production, all unique

expertise for a sustainable world.

ENERGY

Veolia presentation Our key figures for 2015

3,303wastewater treatment

plants managed

100million people

supplied with water

WATER

39million people provided

with collection services

on behalf of municipalities

42.9million metric tons

of treated waste

553,500business customers

WASTE

4,245water production

plants managed

€24,965 Min revenue

employeeson 5 continents

173,959 53million MWh produced

2,027industrial sites managed

3.4million collective housing

units managed

779heating and cooling

networks managed

ENERGY

Our expertise in the field of H&C• In the H&C market Veolia represents the district heating

and cooling networks operators

• and delivers the benefits of district heating through the use of a centralised energy plant to provide heat and potentially electricity and cooling for groups of buildings - ranging from private developments, social housing, community, educational and commercial buildings, campuses or even whole cities

Our expertise in the field of H&C• Veolia can also manage distribution network

installation and scheme management through a dedicated Energy Services Company (ESCO) arrangement - this can also be used for investment

• For Veolia, efficient and green District Heating networks are part of the circular economy approach to resource management

• They are also, if the principles of smart heat are applied, part of the smart city puzzle

Examples of contracts

GermanyHungerkamp

8 000 tons/year of CO2

emission avoided

One Cogeneration and One Biomass boiler

More than 3 000 households served

PolandPoznan

Length: 494 km

Cogeneration Energy mix:

Biomass, coal, fuel

Substation number: 4 552

Size: 131 841 housingequivalent

ChinaHarbin

Owned by Veolia since 2007 (unlimited)

17M m² supplied

Dismantling of more than 500 small coal-fired-heat-only boilers

124 586 residential contracts, 9 916 non-residential contracts

and 240 public buildings

USABoston-Cambridge

Gas-fuelled

Cogeneration plant

475 000 tons – annual reduction of the region’s

GHG emissions

250 customers served

44M sq ft area of buildings receiving thermal energy

1 738 hospital beds served

SpainTorrelago

31 buildings representing1 488 dwellings covered

Three Biomass boilers = 3.4 MW

Reduction of 94% of CO2

emissions

37% of energy savings

Examples of contracts• Veolia operates the biggest district heating network in Europe

Veolia Warsaw DHN

The length of the network:

1700 km

Network span: 25 km

Powered area: 190 km2

Substations: 16 700

Heat sold: 34 100 TJ

Heat source: owned and

operated by PGNiG TERMIKA

Customers served: 18 600:

• 120 cultural, leisure and sport

facilities

• 190 hospitals (14 000 beds)

• 15 200 housing units

• 190 industrial sites

• 950 education facilities

• 1 020 offices

What do we mean by “low carbon” ?

• The “energy efficiency first” principle

• Withdrawing from coal-based installations

• Where renewable energy sources cannot be sourced or exploited, replacement of coal-based installations by high-efficiency cogeneration based on gas

• Replacement of fossils fuels by renewable energy sources, in particular by biomass

• The use of waste to heat and waste heat

• The reasoning at the level of districts to optimize both energy supply and demand at buildings level

Examples of contracts• In Pécs, the fifth largest in Hungary (170,000 inhabitants),

since November 2013, the largest biomass cogeneration heating network in Europe has been in operation

• 180,000 metric tons of straw (sourced from some twenty farmers from the South West Hungary) and 400,000 metric tons of wood now power every year the city’s heating network;

• Its operation prevents the release of 400,000 metric tons of CO2 into the atmosphere yearly

• 170 jobs were created for through this activity

Examples of contracts• Lodz – the second-largest heating network, which meets 60% of the city's

heating needs and serves some 500,000 people

• Poznan - a population of 600,000 with a network providing heating to 200,000 people

• In both cities Veolia contributed to upgrade the energy supply system by investing in biomass boilers and a comprehensive logistics system for its sourcing

• Over 15% of total energy produced for these networks has came from clean sources since 2012– 492,000 MWh clean electricity per year

– 634,000 metric tons of biomass burned per year

– 587,000 metric tons of CO2 prevented

The concept of EcoDHN

The concept of EcoDHN

• Minimizing a city environmental footprint thanks to renewable energies

• Guaranteeing the continuity & reliability of district heating operations

• Promoting access to essential services

• Optimizing district heating performance & efficiency

• Valorizing heat & energy recovery sources

• Guaranteeing cost efficiency through stable energy price

Key drivers for low carbon DHN

Internal • Integration of an internal carbon price in our investment

decisions, which considerably changes the investment cost/return on investment ratio

• Our commitment in the framework of the fight against climate change as a part of the Paris 2015 agreement and our 2020 targets to reduce scope 1 and scope 2 CO2 emissions

Our 9 commitments for SD

1 SUSTAINABLY

MANAGE natural

resources

by supporting

circular economy

SUPPLY AND

MAINTAIN

services crucial to

human health and

development

GUARANTEE

a healthy and safe

working

environment

ENCOURAGE

THE

PROFESSIONAL

development and

commitment of each

employee

GUARANTEE RESPECT

for diversity and human

and fundamental social

rights

within the company

2 CONTRIBUTE TO

combating climate

change3 CONSERVE AND

RESTORE biodiversity

4BUILD NEW

MODELS

for relations and

value creation

with our stakeholders

5 CONTRIBUTE TO

local development 6

7 8 9

Our 9 commitments for SD2

CONTRIBUTE TO

combating climate change

2020 TARGETS:

‒ Capture over 60% of methane

at the landfills we operate.

‒ Achieve 100 million metric tons of CO2

equivalent of reduced emissions and

achieve 50 million metric tons of CO2

equivalent of avoided emissions for the

period spanning from 2015 to 2020.

2015 PERFORMANCES:

‒ 57% of methane captured.

‒ 16 million metric tons of CO2 equivalent

of reduced emissions and of 6 million

metric tons of CO2 equivalent of avoided

emissions.

Key drivers for low carbon DHN

External• Positive drivers – public policies:

– For the promotion of DHN as a high efficiency heating solution for new and renovated buildings

– For the promotion of green energy fuel mix, i.e. support schemes for renewables and alternative energy sources

– Robust and generalised carbon pricing

• Constraining drivers – for instance, the existence of CO2 tax can be a potent factor in forcing the companies to change their energy mix

Open question for discussion

• How does the issue of empowerment of public authorities in the development of sustainable plans for low carbon heating and cooling fit into the equation of positive vs more constraining drivers for DHN operators ?