Posted by: Monika Kuusela
For a long time heating and cooling remained in a shadow of European Commission corridors leaving the spotlights for electricity, until now – now HEAT is hot. As a part of the Energy Union initiative the European Commission took on the agenda creation of Heating and cooling strategy.
Having in mind that buildings are using approximately 40% of EU’s final energy to provide heating, cooling and hot water, security of sustainable supply is crucial.
EU has recognised this issue as well as the fact that heat supply is currently dominated by fossil fuels. That raises the issue of decarbonisation of heating and cooling that are used in buildings.
The discussion with the wider audience was inaugurated by the Commission in last February. Since then several meetings have taken place and lots of information collected.
One of the most important findings during this process was that there are no European wide and comparable statistics available on heating and cooling, or a definition of what heating and cooling markets actually are. Common definitions and comparable and reliable data would be required to assess the potential for improvements in the sector.
In Fortum we believe in customers and in competition.
We believe that encouraging the customers to choose their own heating or cooling method will enforce competition and the developments of the sectors. Competition ought to be understood as between different technologies; e.g. heat pumps, district heating, direct gas, oil or electricity, solar, etc., and it should take place on equal and fair grounds, which, in turn, requires defining relevant heating markets.
Those markets, as well as competition within them, vary between countries. Some countries, for instance, are regulating part of heat market, most commonly district heating. We’d like to encourage EU to seek for targeted, efficient heat target market model to be implemented in all Member States.
Fortum operates district heating systems supplied mainly with highly efficient combined heat and power plants (CHPs).
Further development of such systems will help to achieve higher share of clean and renewable energy for heating and cooling. District heating is a safe, reliable and, when operated effectively and efficiently, sustainable solution for space heating. District heating is also the solution to reduce emissions in cities, where citizens still use individual fossil fuelled boilers. It can be supplied by various sources and contribute e.g. to decrease landfilling by recovering energy from waste not suitable for recycling. Moreover, it can utilize excess or waste heat from e.g. industries, data centers and hospitals. Smart district heating systems, where the network operator is purchasing excess heat from its own customers based on commercial agreements, are increasing the efficiency of district heating. This innovation is already in use in some European countries. Well-designed market setup, competition, investor friendly environment and existing sufficient heat load will certainly bring additional new innovations also in heating and cooling sectors.
We are encouraged by recent documents prepared by European Commission on Heating and Cooling Strategy. However, this is just a beginning of the road and we shall see what kind of regulatory\legal setup it will bring. Nevertheless we have started the journey and are eager to continue. We hope that a similar development that has taken place in the electricity sector would also start in the heating and cooling side: Customers should have freedom to choose their heat supplier, and various heat producers should be able set their prices on economical merits, without regulatory steering.
We look forward to the next round of discussion with the European Commission and other stakeholders during the upcoming fall with a strong belief in the bright future for district heating and cooling.