5th gen district heating & cooling: monopoly, market, or commons?

I’m working in Heerlen the Netherlands, for Mijnwater BV, a company that is building a new type of district heating grid. It makes use of the disused coal mines under the town, partly as geothermal source of heating en cooling, and partly for storage of heat and cold (because the geothermal source has limited capacity).

This is a new type of thermal grid that is set up so it can simultaneously deliver heat and cold to customers. If a customer needs heating, it returns cooling. If a customer needs cooling, it returns heat. This way, energy is exchanged between e.g. a shopping centre that needs cooling, and homes nearby that need heating.

The reservoir of mine water is used to balance the system, e.g. by storing heat in the summer, and by getting it back out of the mine in the winter. The geothermal source is enough to correct for the limited longer term imbalances.

Heat pumps at the side of the customer are used to drive the system, run electrically. But 1 kWh of electricity can currently deliver 5.5 kWh of heating or cooling power out of the system. When the system grows, we hope that this efficiency factor will grow further.

Now my question: the system is hardwired to exchange heating and cooling power. Some people have described this system as one with ‘prosumers’, and it has been suggested that we should set up some kind of market to buy or sell heat or cooling power with the customers. My feeling is that the exchange is hardwired, so there is no real choice involved, and selling or buying seems unnatural. So I am wondering if this should be organised as a ‘commons’, without any selling and buying.

… but how would one organise such a commons? And would customers for heating and cooling even be interested in thinking about it in that way?

Another alternative (what we’re doing now) is that the company owns the grid, operates as a monopoly utility, that facilitates the heating and cooling in the way that best optimised the system as a whole, while keeping everybody happy. Customers pay a fixed rate for that safety and comfort, and another part that is proportional to the energy use. Because it is driven with electrical heat pumps, and we have huge storage of thermal energy, we can also manage our electricity use in a way to provide some flexibility to the electricity grid (needed for variable wind/sun).

So: we’ve got an energy system that is regenerative, and is set up to reuse cooling for heating, or store it for later times. The current heating/cooling district is rather efficient (a COP of 5.5), and operates purely on electricity. We are making use of waste heat from shops and a computer centre, and we’re busy with industry … which is more complicated.

This type of heating/cooling district can in the future go to zero CO2 by making use of renewable electricity, and feeding the system with some additional waste heat and renewable heat. In places without a disused coal mine, it is possible to set up other types of thermal storage (tank with water, bore into an aquifer, etc). So this 5th generation district heating & cooling (5GDHC) could be a real revolution. In warm countries, you can imagine that such systems would balance more towards cooling, and replace the usual air conditioning systems, using much less energy.

I’m interested in your suggestions if this should be governed as a commons. And how that could then work. Current thinking in EU projects that we are in, is more towards the market option.

Hi Nichol

That’s most interesting…
In brief reply have you thought about setting up an energy co-operative?
I’m no expert but aware that co-ops have a long history in the energy sector.
A quick Google turned up this helpful looking guide which I sense will be of interest to you.

More information on energy coops here

The coop movement is huge internationally and generally v closely allied to #DoughnutEconomics in thinking.

Hope that helps

Tony

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yes, a cooperative may be one way to do it. Of course … we cannot really decide on this anymore, since it was first started by the Municipality, then made into a company owned by the municipality, which has now been taken over by the provincial energy fund. I think that this is really like a utility, with pipes and infrastructure running through public land, connecting to private properties. A direct connection to local government is very important, to make such a thing work. A cooperative would not facilitate that easily?

On the other hand: what is a commons, is this like a commons, and would a cooperative be the appropriate form to manage such a commons?

Hi Nichol,
Thanks for posting your approach on community heating using a District Heating Grid. In Oxfordshire, there is a focus on community energy, retrofitting homes, and eventually community heating / cooling. Here is a link to a group that is a cooperative that is funded through community bonds (lots of local investors) to fit or build energy sources (hydro and solar power) and sell back the energy to cover the bonds and interest. The number of these types of organizations appears to be growing (Tony may have shared the wider list).
Low Carbon Hub
The area of “what is in the commons” is quite interesting. Obviously, open source software is a part of this commons.
As another example, I view the UK NHS as a part of the ‘commons’. The UK Government has chosen to fund the NHS from Government and National Insurance sources. This service is provided to citizens as a common shared resource.
The USA has taken a market based approach where the primary health delivery is in the Market with a small amount in the commons (see embedded economy model) and the US government is setting the rules for the market (or not… e.g. trickle down thinking to benefit the few).
Community heating along with the focus on Micro-grids will start to move the focus back to local communities where people are now talking about Oxford (or even Oxfordshire) as a net energy producer.
The shift is starting. There are other examples such as the city of Oxford moving to a totally electric fleet of vehicles and building central recharging facilities for the fleet.
I’m looking forward to seeing / sharing the number of exciting approaches that are being taken in this area.
Regards, Bruce

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Yes, there is clearly no law of nature that can tell us what is best private, and in the markets, or public, under government control, or in the commons, shared by the community according to certain types of rules. Many things are a bit of a mix. The Doughnut Economy book has revived the concept of the commons. Something we cannot escape, since just nationalising or privatising them will have bad results.

It’s a pity I cannot refer you to a clear general description of this 5GDHC concept, yet. But the main aspects are that it can reduce energy demand at district level by combining the following features:

  1. enable the exchange of thermal energy (heat and cold) between buildings
    -> this is possible on a two-pipe system, with heat distributed heat pumps
    -> result: system that is not designed to distribute from central energy sources
  2. store energy for different time scales, enabling energy exchange across time
    -> opportunity to optimise the system a lot over different time scales
    -> electricity use can be shifted, to aid electric grid
  3. the remaining energy need can come from sources available, but unused
    -> electricity to run the distributed heat pumps that deliver the right temperatures
    … the trick is to minimise this need, so it can be covered by renewables
    -> low temperature waste heat (from cooling, industry, …)
    -> low temperature heat from renewable sources (sun, geothermal, …)
  4. the buildings themselves must be seen as part of the system
    -> they need to be able to make use of low temperature heat
    -> the average building should be well insulated,
    such that total energy demand of the district can be reasonably met
    -> if buildings improve over time, and need ever less heating,
    such a system must still remain a collective asset, useful to all, paying for itself.
    A nice feature: the system can evolve to be more efficient when more buildings
    are added with more cooling demand. And well insulated homes, in warmer
    summers, will create more cooling demand.