District Energy - 2008 4th Quarter

Members
Speak Out
Does District Energy
Fit Into America’s
Energy Future?
David W. Wade, PE, President, RDA Engineering Inc.

Editor's Note: "Members Speak Out" runs in each issue 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 dww@rdaeng.com – or email IDEA with your response for publication in the next issue.

With so many competing priorities
and emergency situations, how
can district energy – a quiet,
mostly underground, energy
technology – compete for
consideration?

When I began writing this column, I had outlined a discussion that demonstrated how district energy was a reliable, low-cost and environmentally friendly energy system that fit perfectly into the energy plans proposed by our two presidential candidates. Unexpectedly, the news became filled with the Wall Street meltdown, the need for a $700 billion rescue plan, U.S. presidential politics and a gasoline shortage in the southeastern United States. It made me pause to think about the place district energy currently occupies in the U.S. energy supply system as well as our future energy planning. With so many competing priorities and emergency situations, how can district energy – a quiet, mostly underground, energy technology – compete for consideration?

Let’s review some fundamentals: District energy is a capital-intensive, long-term commitment to a community’s infrastructure. In fact, the full benefits of district energy are only realized on a life-cycle basis. District

energy enables fuel source independence, the use waste heat and the effective use of capital on a community scale. From the big picture perspective, a district system can be an ideal complement to nuclear and coal-fired power plants, which can provide CHP-derived energy for a community’s heating and cooling needs. On a small scale, the district energy loop can support development of micro-cogeneration on a neighborhood basis where waste heat can be shared with close-by buildings. A district energy network can also provide the means to match cyclical heating and cooling requirements with generation equipment availability through thermal storage on a large scale. All these attributes have potential for tremendous long-term benefit. To realize these benefits requires long-term commitment.

Development of district energy systems in the U.S. is hampered by policies rewarding short-term decisions, deregulation of the electric industry, support for special interest

groups and a lack of overall long-term energy planning. Unlike many European countries, the U.S. has generally allowed private energy companies to develop their own energy delivery systems and networks. In most cases, this approach does not consider integrating community energy needs for electricity, heating and cooling. Each utility seeks to maximize shareholder value without considering energy efficiency.

A comprehensive approach would consider fuel sources, CHP and waste heat use on a life-cycle basis. Many countries where government is more involved in the energy sector support district energy systems as part of a comprehensive energy plan. A recent example of this is the Middle East region, where the extensive district cooling development happening today would not be occurring without central planning and direction by governing authorities.

By the time this column is published, I sincerely hope that Congress has adopted an appropriate rescue plan for the financial system and that our leaders are once again focused on our nation’s long-term well-being. I invite you once again to review the energy plans proposed by John McCain ( www.john mccain.com, “American Energy” under “Issues”) and Barack Obama ( www.barack obama.com, “Energy & Environment” under “Issues”) in light of the district heating and cooling industry. District energy and CHP are not addressed in either candidate’s plan at this time. However, ask yourself which candidate’s approach would be more receptive to the benefits of district energy.