Assessment of integrated urban energy options

Abstract

An initial comparison is carried out for the following residential space and water heating options: electric resistance heating, electrically- driven heat pumps, distribution of condenser temperature water combined with heat pumps to extract heat at the point of use, district heating via hot water from a combined heat-electric utility energy source, and individual gas furnaces. This comparison indicates that district heating is potentially competitive with conventional technologies for new urban areas. A more detailed analysis of the district heating option is undertaken to clarify its economics. Base case urban models, economic assumptions and distribution networks are defined and a computer program is developed to select optimum pipe sizes for the networks and to calculate life cycle costs. Cost optimization is carried out by considering thermal energy production costs as well as thermal conveyance costs. Because of the large number of variables entering into the cost determination, sensitivity analyses are performed to examine the effects of variations from base case assumptions. Variations in the installed pipe cost, interest rate, maintenance costs and degree of market penetra- tion are shown to have the greatest effect on energy cost. Pumping power and heat loss are found to be relatively insignificant cost items. Proper phasing of system inplementation with urban growth is shown to be very important. Initial use of temporary heat sources located near the loads coupled with implementation of only local piping networks is advantageous for present gas and oil prices if the urban growth occurs over a period of 15-30 years. There is shown to be an economically optimum time for conversion to a large centralized thermal energy source. Several potential institutional barriers to district heating system implementation are identified. These barriers will be more difficult to overcome than any technical or economic barriers, and success in over- coming them will determine the national significance of district heating. Given positive government efforts to overcome the institutional barriers, district heating can play a major role in the U.S.