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District energy refers to a system in which a shared central plant distributes steam, hot water, and/or chilled water to multiple buildings via underground pipes. In this episode, Rob Thornton of the International District Energy Association shares about district energy’s newfound popularity and the role it could play in the clean energy transition.(PDF transcript)(Active transcript)Text transcript:David RobertsDistrict energy is one of the oldest concepts in all of energy, dating back at least to the ancient Romans. It simply refers to connecting multiple buildings to a common source of heating and cooling — a furnace, heat pump, geothermal well, or what have you — and distributing the heat via water or steam flowing through underground pipes. There are hundreds of district energy systems in operation, in every country in the world. (Virtually all of the buildings in Iceland, which I visited recently, are heated by district energy systems running on geothermal.)However, fossil fuel heat has been so cheap for so long that district energy has never quite become the default — it’s just been too easy to stick a natural gas furnace in every building. There hasn’t been much pressure to share heat.But with the climate crisis and the clean energy transition, that’s changing. These days, lots of people are looking for cleaner sources of heat and more efficient ways to share it, so district energy is becoming sexy again. Among other things, it’s a great way for cities to meet their carbon goals without overburdening their electrical grids.With all that in mind, I contacted Rob Thornton, the head of the International District Energy Association, to chat about the clever new sources district energy systems are drawing on (everything from sewage to deepwater lakes), the infrastructure they can integrate with, and the other services they can provide.All right, then. With no further ado, Rob Thornton of the International District Energy Association. Welcome to Volts. Thanks so much for coming.Rob ThorntonThanks for having me, David. Pleasure to be here.David RobertsI am super into district heat, so I was delighted when you all reached out to me. I've been meaning to do something on it, but I think it's, at least in the US, not particularly familiar or well understood to most people. It's relatively rare in the US, which we will discuss later. So, let's start with a definition. What is district heating?Rob ThorntonSo, we call it district energy because it's both heating and cooling in cities, campuses, communities. Essentially, it's a central plant that's providing steam, hot water, and/or chilled water to an underground thermal piping network to provide heating and cooling to buildings in a city central business district, campus, airport, hospital, healthcare, et cetera. So, it really is the aggregation of multiple users of heat or cool provided by a central plant. So, each individual building doesn't need to dedicate space or equipment, right, to boilers, chillers, et cetera. So, yeah, that's the simple definition.David RobertsCould not be more simple. It's using one source, a single source of heating and cooling for multiple buildings, which you think seems like an obvious thing to do. What, in terms of existing district energy systems in the world, what is that central source? Typically, empirically, what's the most common current central source?Rob ThorntonI'd say at the moment, still natural gas.David RobertsJust a big boiler?Rob ThorntonWell, often large boilers, sometimes gas turbines, recovering the heat, making additional electricity. So, combined heat and power. But that's shifting with the energy transition appetite for lower carbon solutions. There's a lot of integration, optimization happening. Industrial heat pumps, renewable heating and cooling, a variety of sources. That's the advantage of district energy. You change the central plant, and actually the benefits flow to multiple, sometimes hundreds, thousands of customers by updating the central plant.David RobertsIs it safe to say these days that all things being equal, natural gas is probably the cheapest, that's why it's the most common?Rob ThorntonWell, it's cheapest, it's cleaner than some other solutions. It's dispatchable, available, widely available. And it wasn't always that way. District energy started really by the Romans, but then Thomas Edison I would really characterize as the inventor back 140 plus years ago, and he discovered he couldn't really just sell electricity. He had to actually sell heat, too. Building owners saying, "Oh, I'll buy your power, but what am I going to do with the dynamo in my basement that provides the heating?" And so Edison realized, in order to make a profit at this enterprise, I have to sell both the heat and the power.So, while it's not commonplace, in fact, district energy is prevalent. 900 systems in North America, thousands all over the world. Every major city has district energy from Paris to New York City, obviously, Boston, San Francisco, Denver to Moscow. And even recently, though, the shift in the United Arab Emirates, all across the Middle East, massive investment in district cooling. As you would expect, right. Air conditioning is the driver there, so the industry is growing quite substantially.David RobertsWhat does it look like, just as a side thing here? Because I think a lot of people run up on this. Their intuitions break a little bit when they think about this. If you have a central source of heat, how do you use that to cool buildings?Rob ThorntonWell, I mean, heat in the form of steam can move equipment, right? So, steam, you use the pressure to drive a compressor. And in New York City, there's hundreds of buildings that use steam — turbine drive chillers, so they're still making cold water, but they're using steam instead of a motor.David RobertsGot it.Rob ThorntonRight. Instead of electricity to drive the compressor, they're using steam. You can also use heat with an absorption machine. And that basically you use heat to kind of change the chemicals, and you will absorb the heat from water. So, I don't want to get all nerdy and too scientific for you, but it isn't so much heat as much as sort of the optimization of process in a central plant to both make heat and cool and or power.David RobertsGot it. And for the record, we love scientific and nerdy here. Don't feel like you need to restrain yourself at all.Rob ThorntonAll right, noted.David RobertsOne of the cool things about these systems, and you alluded to this, is that as they evolve, we're discovering that there's all kinds of things that you can use as that source beyond natural gas, boilers and turbines. Really, you just need a big source of heat or cool to tap into. And it turns out this is something this podcast returns to over and over again is the sort of as the energy transition proceeds, we're starting to think more about heat. We're starting to think about it more than we used to because it just was very, very cheap.Fossil fuel heat was just very, very cheap. And we didn't value it, think about it much, or optimize it much, or worry about it that much. But now we're trying to phase out fossil fuels. So, we're thinking a lot more about where is heat, how can we use it, reuse it, where can we find it? So, talk about some of the other clever ways that district energy systems are — where they're finding that heat? Like, for instance, sewage.Rob ThorntonYeah, so one of our members, CenTrio, they own systems in multiple communities across North America. They're recovering heat out of the wastewater treatment, as you mentioned, the sewer system. So, Vancouver has a very similar system. I forget the year of the Olympics, but basically, the district heating system that was built to support the Olympics in Vancouver, British Columbia, was constructed to provide low carbon, reliable heat from the sewer main to the Olympic community, like the housing campus, which has become Falls Creek. And it's really been a whole economic development success. So, yeah, you're right. We were talking earlier offline about the oil embargoes, right, the first and second oil crisis that really hit Scandinavia.And they were highly dependent on imported oil. And basically, the valve closed and the price quadrupled overnight. And some of these countries, Norway, Finland, Denmark, they said, "Well, if you're going to make electricity here, you got to recover the heat." And so they required cities to do heat planning and to develop municipal heat plans. And so they recognized the value of heat, not so much for heat itself, but as a byproduct of making electricity — let's not throw it away, let's use it. And so now, today, Copenhagen, for instance, 98% of the buildings in Copenhagen are on district heat.They don't have their own boiler. And it is both like an environmental as well as an economic strategy. So, I'll come back on that, but I'm not sure if I answered your question.David RobertsWhat does Copenhagen use as their source? It's just all the different kinds of things you can use as a source that I'm interested in.Rob ThorntonSo, primarily waste heat recovered from electricity generation and waste to energy plants. In Copenhagen, there's this new asset called Copenhill, I guess, and it's basically a waste incineration plant. They recover all the trash and they use it for heat instead of pushing it to landfill. And now, this asset actually also has a public ski hill on it, right?David RobertsOh, yes. I'm familiar with this.Rob ThorntonIt's brilliant. And so I think they've really understood the scarcity and the value of using the full kind of hydrocarbon value of energy instead of throwing 60% of it away, like we have historically done with power plants in the US. They're remote, they're dumping heat into the river, the bay. In Europe, that heat is heating Paris and Copenhagen and Oslo and Stockholm. So, it's an infrastructure opportunity and challenge.David RobertsThis raises another question, which is electricity. You can transmit very long distances with relatively low losses. Heat, not so. Heat is much more difficult to transport over long distances. How close does the source need to be to the users to make this work? How far out could a power plant be that you're recovering heat from and still get the heat, say, to your village? Is there an outer limit?Rob ThorntonWell, you can move hot water more than 10 miles. In Beijing, they're doing that now. They've moved a lot of the power plants outside of the inner ring, 8 miles — they're moving the heat. Now, that requires very large piping networks underground, but it is technically conceivable. We have typically had district energy in cities, central business districts, because that was where both power and heat were generated at the time. Then in the 40s, 50s power plants got larger, they went from 200 MW to 2000 MW, they moved outside the cities. Probably the range for steam, because steam requires — it's a gas and it has to maintain under pressure.It's probably a couple of miles where after that, it begins to condense. Hot water you can push and pump tens of miles, but there is always, like an economic real estate question. Yeah, but there is an aggregation — we see district energy, there are 900 systems plus in North America and mostly clustered around vertically dense or urban requirements or college and university campuses where — they were formed at the time that the power plant was being built, like University of Colorado Boulder, the power plant was the initial building for the whole campus, and it grew from there.David RobertsOne other source I wanted to touch on before we leave, the question of sources is, I'm very fascinated by this one that uses deep lake water, which is super cold, presumably. How does that work, the physics? What are they doing there?Rob ThorntonYeah. So, think of cold like gravity. There's no such thing as cold. It's like the absence of heat.David RobertsRight.Rob ThorntonSo, just like you put ice cubes in a glass, they absorb the heat around them. They don't bring cold, they take heat.David RobertsRight.Rob ThorntonSo, what happens in Toronto or at Cornell University, these very deep lakes, the water — as you know, heat rises, right, so the surface waters are hot, but the bottom of the lake is generally always cold. In the case of Lake Ontario, 34 degrees F virtually year round. Right?David RobertsYeah.Rob ThorntonSo, what they do is they pull the water off the bottom of the lake and the pipeline goes out like a straw, and they pull it in. And that is actually the drinking water source. There's three straws that go out into Lake Ontario. That's the drinking water for the city, for the municipality. But before they use it at 34 degrees, they put that water through heat exchangers. So, the primary water is on one side of a heat exchanger. The other heat exchangers are connected to a network of underground pipes, supply and return cold water. And they basically — I need a graph to do this.So, you bring cold into a building. The cold flow is in a coil, like a radiator in your car. And the hot air in the building is breathed over that coil, and the water warms up, and the other side of the coil is colder. Right? It's like the radiator in your car. So, what we're basically doing is taking the heat out of the buildings, putting into a return network, and then that's a closed loop on the district cooling side, on the city side, what they do is they pump around like 40 degree water F, and the buildings heat it up to 54, 55 degrees, sometimes warmer.And that's a continuous circulation of cold water. And then on the lake side, that warm water, that's warming up the water before it goes into the drinking water supply of Toronto. This would be more effective if I were showing you the diagram.David RobertsIt's very visual.Rob ThorntonI'm probably confusing people more than clarifying.David RobertsNo. It's so clever how heat is fungible in some sense, right? You can just sort of trade it from one bit of water to another and move it around that way.Rob ThorntonAnd water is the most brilliant because it has a specific heat of one. So, every BTU you put in, you can get out. Water really is a remarkable — but you have to keep the water clean. You have to keep zebra mussels, et cetera, et cetera. It's not just simple standing water, but that's a chemistry story for another day.David RobertsSo, if I'm looking at a neighborhood and I'm contemplating whether it is suitable for district heat, are there characteristics? Is it just about density? Is that the beginning and the end of the story? Or what is it that makes an area or a neighborhood or a campus suitable for this?Rob ThorntonThere is an economy of scale that — you want to minimize your capital investment and optimize the number of customers that are using it. Right? So, I think that's self-evident. There are some rules of thumb, but what we're finding now, particularly in cities that are working towards reducing carbon emissions, etc., and they're really striving. They're seeing that there are these heat sources or cool sources that are really nearby that have been under-recognized, undervalued, underappreciated. So, there is a chicken and egg, right? Cornell — getting back to lake water — Cornell 22 years ago: It took them ten years of engineering, policy, education to permit the Lake Cayuga, the deep lake water cooling.But what they did was they traded an electricity bill going out to…
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