How solar thermal is playing a key role in Decarbonizing District Heating in Europe and worldwide?
Tell us about your background and what drew you to the renewable energy industry.
I am a Nuclear Engineer; I was 12 when I decided I wanted to get into nuclear energy. Back in the 70s it was considered a solution for global warming. While I changed to renewable energy, my goal remains pretty much the same.
In your view, why is decarbonization at industry and utility scale, and why now?
As Churchill said once: “we live in a time of consequences”. Climate change is unrolling before our eyes. This is no time for dawdling, but to take action instead. We have everything needed to decarbonise our society, except time. Stakeholders need to trust our current clean tech industry to be up to the task. Energy users, policy makers, financing institutions, and even the fossil fuel industry need to be on board.
What are the biggest challenges currently facing the decarbonization of utility-scale energy supply, such as district heating systems?
I might mention many factors and hurdles, such as funding, bureaucracy, insufficient support from governments, hesitant legislation. But certainly not technology. We have all the needed solutions to decarbonise energy supply. In fact, the hardest challenge is to overcome the tendency of a vast majority of stakeholders (users, investors, legislators, etc.) to stick to business as usual.
It’s understandable, but not acceptable anymore. We all need to face this problem, to decarbonise every energy consumption, and work together to solve it.
Fully decarbonised District Heating systems are a key solution. In some cases, like densely built cities, this is the only solution to achieve zero CO2 heating and cooling systems.
The time is now for District Heating operators to show their ability to execute investments, to attract resources and generate impact towards a zero-carbon urban environment.
Where do these projects fit into the broader picture of global efforts to combat climate change?
Heat is 50% of all energy consumption. Decarbonising urban heat is crucial and it can be done in a number of ways, one of them being solar heat projects for district heating, integrated with other solutions such as electrification of heat, sector coupling, digitalization, waste heat recovery, energy efficiency and so on. I would add that it HAS to be done in a number of ways. Any District Heating operator will need to build his own portfolio of energy generating assets, based not only on imported external resources, such as gas or electricity, but also on locally generated renewable heat, like solar thermal. This will add resilience to their business and stability of prices over decades.
Can you describe some examples of TVP solutions successful utility-scale renewable heat projects that have helped decarbonize industrial and district heating systems?
Our flagship project as of today is the Solar District Heating plant in Groningen, the Netherlands. It is the fourth largest solar thermal plant ever built. 48,000 m2 of our new generation of high vacuum flat plates, installed on 12 hectares, to provide 25 GWh/y of heat to the city’s district heating network, which is about 25% coverage of the consumption.
In Sondershausen Germany, we are building a 6000 m2, 4.5 MW solar thermal plant, and a number of projects are under development.
In Switzerland – Geneva, we have been running for the past 2 years our SDH plant, feeding the city’s network with heat at 80C even during the cold season, this pilot installation has over performed every year.
These results are pretty exciting, and our clients and partners worldwide agree.
We are even putting our own “skin in the game”. TVP is investing directly in the capital of certain projects. Same goes for the Groningen project, where we are taking long term commitment in guaranteeing the energy output of the plant, for its whole lifetime.
We are not just solution providers, or hardware manufacturers, but rather thermal energy providers, with a full range of options for the user to adopt our solution.
Are there any particular regions or countries that are best-suited to adopting solar thermal district heating? How big is the market in Europe overall?
The whole continental Europe is home to thousands of DHNs, all of which can, in principle, accept solar thermal energy. We are developing and building projects in Germany, France, Italy, Netherlands, and Switzerland. Of course, there is so much more to be done, for example in Spain, in the central-eastern EU, in the Balkans etc.
The limiting factor is really the availability of project area in proximity to the DHN pipelines. Spatial planning and streamlined procedures for project construction permits would unlock a huge potential for new investments and long term decarbonization.
Let’s talk about cost for a second. How does TVP district heating perform against traditional fossil fuels? Where do you see these costs going as we approach 2030 targets?
We have proven already that TVP’s solar thermal energy can be cheaper than fossil fuels, even natural gas at current costs. Just to give you some figures, the TVP cost of thermal energy ranges between 20 and 70 €/MWh depending on a combination of factors like solar irradiance, operating
temperature and good O&M.
We don’t see costs as being an issue to compete with fossil fuels. We are cheaper now, in most situations, and our costs are improving, while we scale up production and improve both the supply chain and installation costs.
Can you describe any innovative financing models that are being used to fund utility-scale renewable energy projects for district heating?
When it comes to project financing for solar district heating, we do not need to reinvent the wheel, but rather apply the good practices already in place for renewable electricity projects. In the case of our Groningen project, we are equity shareholders, together with our Dutch partners, one of them being Novar, a well-established PV project developer and asset owner. The loan facility is provided by Triodos Bank and the project was awarded the SDE+ subsidy scheme (a feed in tariff). The energy off taker is Warmtestad, the city’s DH company, via a 30 years HPA (heat purchase agreement). So basically, the players and the financial packaging were entirely derived from the PV sector.
It is much more possible to structure the finance for a large project than for a small one. Hence the need to scale up the size of solar district heating projects.
TVP has stepped up to satisfy financing requirements by offering long-term performance and product guarantees, to minimize project risks.
Are there any regulatory or policy barriers that are hindering the deployment of utility-scale renewable heat for decarbonizing district heating?
Yes, and mostly they are the same barriers that we witness in renewable electricity projects: lengthy and uncertain procedures, overlapping competences of different types of regulators, lack of clear rules and guidelines, which makes it almost impossible to have standard procedures and documentation in the project development phase. The result is a minimum project lead time of 3-5 years for utility-scale projects.
Some critics argue that the push for decarbonization and utility-scale renewable energy is being driven by developed countries and may unfairly burden developing countries with the costs of transitioning. How do you respond to this criticism?
I do not share this vision where decarbonization is a burden. It is not a burden, neither for the developed nor for developing countries. The “burden/excessive cost” narrative was created by those opposed to change. If we only rely on facts, the renewable energy industry is an engine of development and an instrument for change and liberation from traditional energy dependency. The costs of transitioning are in fact, negative, in the sense that there is more profit to be made from renewables than from sticking to fossils. There is no shortage of capital in energy investments. Huge resources are being deployed right now in much riskier projects than renewable heat and electricity. Instead, there is a lack of good projects to invest in. Solar thermal district heating projects could become the new asset class that infrastructure investors are looking for.
TVP’s vision is to make this a reality by leveraging its technology and all the needed financial and engineering tools.
Some experts believe that using heat pumps, electrification of heat, or other low-carbon sources like nuclear power may be more cost-effective than utility-scale renewable heat to reduce carbon emissions in thermal processes. What do you think about this, and how do you see renewable heat fitting into the bigger picture of reducing carbon emissions in thermal processes?
Electrification is mainstream today, and it’s easy to see why. In principle, the electrical grid is versatile, it’s proven and established, large players, are fully engaged. But then you look at the figures, and wow!
In 2019, modern renewable share was 11.5%, while fossils accounted for 61%. This entails multiplying 6 times the cumulated renewable generation capacity only for that. Then you want to add electrical mobility and need to at least double these efforts. Then you add heating, and you need to triple it. This kind of global effort needs all the help it can get.
Therefore, if we can ease the burden by adding some local generation capacity as solar thermal district heating, it’s the most valuable and “cost-effective” thing to do.
How can end-users choose which technologies to focus on when developing renewable heat solutions for decarbonizing thermal processes at scale?
End users should be open-minded and consider all possible options in renewable heat generation. Each city will have different needs and resources, so their renewable energy mix must be tailored for them.
The one thing they all have in common is a need for energy planning and a political will to execute the plan. For example, allocating areas for solar thermal, planning the expansion of the network and reaching these areas with the pipeline to use reclaimed land as a generation asset could be a powerful tool to achieve higher energy independence for many cities and communities.
In your view, what specific policies and interventions by governments or the public have the greatest potential to accelerate the adoption of decarbonization technologies at scale, and how can these policies be designed and implemented effectively?
Governments should set clear and measurable goals for themselves and establish binding contracts with their communities, citizens, and businesses to improve their energy resilience, contain or reduce energy costs, incentivize good practices and reward healthy energy behaviour. The problem is that it’s too long a process, and there’s not much time left, so we probably will witness much more “top-down” decision-making. Our job is to promote rational solutions for them to be adopted first. Solar thermal is one of them.
Finally, what advice would you offer to policymakers, energy providers, and other stakeholders who are looking to promote the adoption of renewable heat in district heating systems?
Let’s work together, identify solutions, improve them, and adapt them to your needs and to those of your community. Let’s build projects and deploy them quickly, in compliance with the rules. Let’s invest together in a cleaner energy portfolio, controlled, and owned by each community that we serve with solar heat and cleaner air.