Needs-Challenges-Barriers-Opportunities

Needs/challenges, barriers, opportunities

Country

Spain

PART 2: Needs/challenges, barriers, opportunities

Country

SPAIN

Urgent Needs/Challenges

The most urgent need to develop the DHC sector in Spain is a change in the current legislation, due to the lack of it. This is done because of the absence of DH/DHC in Spain because of the historic and social evolution of the country such systems didn’t success.

Related to it, an important change is imminently necessary is a social change about the point of view of these systems diffusing the advantages of it with the aim of convincing policy makers and potential users.

The knowledge to develop DH/DHC systems is only in a few sectors and most of it belongs to foreign companies working in Spain, so a transfer of this knowledge may be necessary to lose the fear of these installations.

An important current challenge in this country is the building sector which has increase in a high way the latest years and nowadays it’s quite stopped, so the main sector in which DH/DHC has to be developed is in the existing urbanized areas, i.e. as an improvement in rehabilitation of cities, towns and industrial areas.

For such reason the investment of DH/DHC networks increase exponentially rising investment returns so investment companies are not so much interested. A public investment is necessary and a good measures of low-interest financing.

The main changes in legislation should be the obligation of the installation of DH/DHC for a minimum housing or services in urban plans added to incentives to buildings for the adherence to existing networks. Also an economical legislation of tax reduction for these systems and an easy system to finance it.

Main Driving Forces

The main forces driving the existing and planned DH/DHC are mainly town halls. And these are in most from big cities trying to improve their global energy efficiency inside energy framework add to a policy framework and the image it gives to the city.

The second force driving DH/DHC are energy services companies which together with town halls promote these installations. This companies are looking forward the bonus given by the cogeneration legislation which incentives this production so the investment return decreases in time.

There is no more “force” involved in driving DH/DHC due to the high dimensions it has so it’s hard to improve this situation scheme.

Main Barriers

The existing barriers for DH/DHC are most of them in the planning phase. We have to disguise in two parts:

- Existing urban areas:

The principal barrier in the social one. Change an existing system which actually works for a new and unknown system of which there’s no information about. Socially people are afraid of new things and it has had no promotion in this Country. So the planning of a DH/DHC network it’s hard difficult and with a lot of initial costs.

To this sector is added the annoying works of construction of the network and the installation of a generation centre near the urban areas. Socially also the distrust to the private companies investing there.

To the companies, the principal barrier is the high investment they have to do in these installations due mainly to the civil works on streets. There is no financial facility to this kind of installation and town halls are not always by their side. If this is it, the legal formalities are so complicated given the magnitude of the works in public land.

- New urban areas: In new urban areas, the main barriers are also in the planning phase. It has been the urban planners (usually from the administration) who plan urbanize an area. The most common situation of them is an indifferent position about it.

Another barrier common to both is the social and cultural one. In this country, traditionally all the heat generators are individual. The sense of property is very high and also the independence sense. Population have so many doubts about having a common system not in a building also in a neighbourhood and they would want to have the option of having two systems. From this idea the energy services companies try to loyalty contracts between them and the users being it a thing that culturally doesn’t’ like.

The bad experiencies having in centralized buildings made in the 60’s made people think that the comfort is less than with an individual one, and the energy cost is more expensive.

To overcome these barriers is necessary a diffusion of these systems in many different aspects. To population in general, making meetings to architects, engineers, urban planners and energy agencies. Including these systems in energy classes inside university and into technical courses as a mention to give it to known.

There are so many systems working in a very good way and these examples had to be seen by population.

Legislators may change current laws adding articles about DH/DHC to impulse the promotion of it at least in new urban plans. Generating new financing lines with public resources decreasing the tax for the construction of these.

A diffusion of the advantages of being connected to a DH/DHC network can be a good measure to overcome the cultural barriers by the fact that there is no maintenance of the equipments, free space in the place of the individual boiler, chiller or DHW storage tank. If there’s any problem with the system, the costs of fix it are paid by the energy services company so users don’t need to pay more than their flat fee and their consumption.

Main Opportunities

Investment companies:

The main opportunity is having DH/DHC is the legislation about cogeneration (661/2007) which incentives the sale of electricity taking profit of the waste heat.

Investment companies saw an opportunity of benefit developing DH/DHC networks in new urban areas with the idea of commercialize the heating and the electricity. By the moment, most of these installations are having subventions energy subvention plans because of the will of energy institutes and town halls.

The latest two years there have been a subventions line to DH/DHC networks in many regions. This use to be implementing at the rest of regions.

Socials:

The users of current installations in general are satisfied with the system and very proud of having it in despite of it there is no diffusion of it.

If these users detect an important economic saving and in general an energy saving too with no lack of service It has to be diffused by the rest of population as an successful example of a DH/DHC system in this Country. Also systems in other countries should be examples for these people explaining advantages and savings.

Environmental and legislation:

Due to the new energy plans (attaining the EU energy policy targets) in Spain marks that the future for energy consumption and the generation of it has to decrease. New development plans try to impulse the use of DH/DHC networks so it would contribute to the development of it creating new specific legislation for it.

The boom have had the renewable energies make easy this path. Renewable energies can be mixed with DH/DHC systems so the way to diffuse it is quite easy. A combination of DH/DHC with biomass, solar energy (thermal and photovoltaic) is possible and increases the bonus from the cogeneration legislation. It would be an important environmental and economic opportunity to accomplish the environmental targets also the energetic business and the continuous develop of technology.

Description of the situation.

The main stakeholders of DH/DHC networks are town halls and energy services companies.

Like most of energy laws, most part of them are from government decision, but influenced in it are companies. The decision needed to take about it is the imminent realization of a DH/DHC legislation affecting at least all the new urban areas. The difficult they would have making it would be the pressure from builder companies because of the increase in the costs.

To improve it a deal between town halls, builders and energy services companies would to be made with economical conditions to the payment of the new system.

The energy supply company and the costumers may be protected of the leaving of the other by closed contracts between them. It’s difficult to do it but energy services companies may assure the energy supply for a long time.

The main investors to DH/DHC systems are the same stakeholders of the market. Because of this reason, by the moment all the installations have been made have had a subvention from a public entity in a national, regional and municipal form.

If the DH/DHC market grows up, this financial scheme will change because the public money of subventions and town halls wouldn’t be enough to cover all new systems so the main thing has to change is the financial mode giving facilities to it.

More and more, investors have fear of DH/DHC in existing urban areas because depending on the location and the population of the area, consumptions are not ensure and so the investment return can be in a long term.

For this reason also in the near future, to save costs an action to be taken is to profit the urban works in combination with DH/DHC plans to do it together in the way to save the civil costs shared between both services. And to ensure the investment, future DH/DHC networks would to be made in high density of population areas (areas of high buildings, industrial areas depending on the heat uses, etc.)

Towards the 2020:

From now to 2020 developments are difficult to contemplate because there is no long vision of this market and there’s an uncertainty about new legislation, new energy targets, companies position and climate change.

The imminent change should to be taken is a change in energy legislation and new urban plans.

Referring to the stakeholders of DH/DHC, the activities they must do in next years are:

Local power and policy makers: initiative, political support and facilitate the implantation of DHC network, business impulse and supportive laws and establishment of priority to these systems.

Urbanism: DH/DHC incorporate in the common design of energy infrastructures.

Governments: access to specific lines of credit.

Universities: training in DH/DHC network.

Unsuccessful DHC project:

#1: unsuccessful DH:

This DH is an example of a network developed in an existing urban area. The housing of this areas is public housing until the moment where town hall decided to sell the housing. The amount of housing is about 2300.

As the last action to this neighbourhood a heating system was to be made. After a public consultation, the popular decision was made a self-managed DH system.

It consisted in a diesel boiler which supplied the heating and DHW consumptions of the 2300 housing.

DH system functioned well during 10 years. Energy and economic saving were enough high to make population glad.

After this 10 years, other popular decision was to improve the system by changing the diesel boiler for a gas boiler (reducing in this way the fuel consumption and improving the energy efficiency of the system), together with this measure was the installation of a solar photovoltaic

But the maintenance of the system hasn’t been done causing the deterioration of some pipes with the consequence that the totally of the housing are with no calefaction and no DHW system.

The reasons to avoid these necessities are the unknowledge of the real responsibilities.

This installation has been an unsuccessful example in the management of the same, but not in the social point of view in which population fight to fix their installation.

#2: unsuccessful DH project in the planning phase:

The unsuccessful project explained in this section is a project which stood in the planning phase.

It began as an initiative of the public entity responsible of managing some works in a neighbourhood built in the latest 70’s.

It was a good project involving accurately studies of viability and consumptions (a considerable sample of the neighbourhood was monitored).

The study was very expensive because it involved the handicraft industry (machines of cogeneration manufacturers, substation manufacturers, engineers a social dynamic company and the regional public administration).

At the beginning an initial study was made taking as a solution the viability of the installation making a DH for an amount of more than 1000 housing. The study results shown the optimized system to develop both for costumers as to energy services companies.

The second step began with the social questionnaire trying to show if the population of the neighbourhood would connect to this system in case of being made. It last for a year making interviews, social trainings, conferences and leisure activities to convince them of the advantages of the system, at the same time, a second study with the real demands obtained of the monitored flats, was made, taking a second optimized solution of the first study.

The main barrier to overcome in this process was the fact that the average age of population was so high, and the DH/DHC was only a factory of problems to their current life.

After the first phase of the second step, a meeting with the main stakeholders was made with the idea of know if some would be interested in the DH network.

The total process last for a year and a half to obtain approximately the number of populations would connect to the DH network. With these data the third study was made and the results were so take profit of the population but with no so longer benefit margin for the energy services companies.

The final decision was taken by energy services companies because of the risk of this installation.

- The average age of the population was so high (the consumption wouldn’t be so reliable in a long term.

- The cost of the network was so expensive because of the age of the urban area there would be the possibility of having so many contingencies.

- The benefit margin didn’t compensate the high risk of the installation.

The main failure of this project was the amount of public sources which were used in the process development.

Municipalities with no DH/DHC:

#1: Municipality with an unsuccessful plan of DH/DHC:

The reason of having not DH/DHC network is the difficult to find investments for it. The municipal budget wasn’t enough to subsidize part of it and the energy services companies didn’t saw as interesting the project. So the idea is filed with the intention of proposal in future new urban plans.

#2: Municipality 3: (responsible of urban planning).

The idea of develop a DH/DHC has never crossed by the town hall in any of our departments. We have no idea of develop it, the advantages, disadvantages and how it has to be done. We actually have no reference of how it works and it’s a complicated system to implant in our town.

#3: Municipality 3: (responsible of environmental department).

This idea have never been go out in the municipality meetings about the future urban plants neither in the actions to improve the consumption of energy in our city. I know that it works in other cities, but we have never had the plan of do it.