Is District Energy
systems. Simply stated, the investment in a
long-term technology like district energy
can only be expected when the long- and
short-term energy climate is predictable.
Our industry must address this challenge
in three ways:
1. We must emphasize the reliability of
district energy systems.
2. We must increase the efficiency of
systems so they are the choice of cost-conscious planners and developers.
3. We must make our systems adaptable
to fuel switching so that we can always
use the lowest-priced fuels.
Editor’s Note: “Members Speak Out” runs in
periodic issues of District Energy magazine. Its
purpose is for a member to briefly share his/her
district energy experiences and opinions – and
obtain feedback from fellow members. If you
have comments on this column, please email
David Wade at the address below – or email
IDEA with your response for publication in the
Ask anybody these days and they
will tell you that energy prices are
going to keep going up well into
the foreseeable future. Ask engineers and
they will tell you that district energy systems have been around for more than a
hundred years; they are reliable and provide energy at stable prices. But ask utility
executives to develop a district energy system, and they will tell you it is too risky.
District energy technology is
not risky; it’s the overall energy
environment that is risky.
How can a proven technology that stabilizes energy prices be considered risky? Of
course, district energy technology is not
risky; it’s the overall energy environment
that is risky.
In the late 1970s, the U.S. Department
of Energy and the U.S. Department of
Housing and Urban Development sponsored
feasibility studies to look at district energy
development in numerous cities throughout the country. At that time, the oil embargo of 1973 was fresh in people’s minds,
and the combination of inflation and rising
energy prices made the future look bleak.
Spreadsheet models were new then, but
we used them to demonstrate how investments and capital-intensive projects like
district energy and trash-to-energy plants
would be financially attractive when compared to oil and natural gas expected to
increase in price at ten percent to fifteen
percent per year. Even with long-term
This energy climate has dampened capital-intensive energy
conservation investment and
development of district energy
David W. Wade, P.E., is
president of RDA Engineering
Inc. in Atlanta and has been
an IDEA member for more
than 20 years. He has served
on IDEA’s board and is a past
chairman of ASHRAE’s
national technical committees
dealing with Building Steam and Hot Water
Systems and District Heating and Cooling.
Wade may be reached at firstname.lastname@example.org.
Column also available at
benefits, most capital-intensive energy
projects still faced a short-term deficit
before savings were realized. Clearly, the
financial feasibility of capital-intensive
projects depended on long-term escalation of competing energy sources.
As we moved into the 1980s, few
communities embraced the idea of district
energy. Why? The double-digit inflation
predicted for natural gas and oil did not
occur. In fact, we began a roller-coaster
ride where the “I-told-you-so” crowd was
able to demonstrate that the price of
energy was going down, not up. Current
NYMEX natural gas prices are approaching
$10.00 per MMBtu for January 2006; the
2005 price was $6.20, 2002 was $2.55,
2001 was $9.98, and 10 years ago it was
$3.99. Care to place a bet on what it will
be five years from now?
This energy climate has dampened
capital-intensive energy conservation investment and development of district energy
Energy Space from