The Benefits of District Energy
Reliable. Building owners and managers can count on district energy systems. They’re operated 24 hours a day, every day of the year, by energy professionals specializing in district heating and/or cooling technology. With backup systems readily available, most district energy systems operate at a reliability of well over 99 percent. It is this high level of reliability that allowed the San Francisco system, for example, to successfully operate through the 1989 earthquake without interruption to customer service.
Lower life-cycle costs. Since buildings using district energy service don't need their own boilers or chillers, building owners can reduce their upfront capital requirements and ongoing operating, maintenance and labor costs. That means less financial risk and a better return on investment than with individual building heating and/or cooling systems. Not only are principal and interest payments eliminated, but the expenses associated with operating boilers and chillers are reduced – including property taxes for boiler and chiller installations and costs for security, hazard insurance, personnel and maintenance.
What’s more, district energy systems have the flexibility to use the least costly and most available energy source – whether that is electricity, oil or natural gas. For instance, a district energy system can switch from equipment that uses gas to equipment that uses electricity or oil to operate more cost-effectively. An individual building generally does not have that flexibility, often having to use just one energy source, no matter the cost.
In addition, lower fuel costs are realized because the district energy system can volume-purchase fuel – often using long-term hedge contracts – to serve many buildings at a lower unit cost than individual buildings could obtain on their own. This not only translates to lower fuel costs, but also minimizes the impact of supply and price variations, meaning more predictable energy costs for district energy customers.
Connecting to district energy may also relieve building owners with older boilers of another cost. Many boilers installed before 1978 are insulated with asbestos, a known carcinogen representing a continuous health hazard to building occupants. Replacing such a boiler can double the cost of a standard installation. Converting to district heating, however, will eliminate this expense – and concern.
As a district energy system grows, its cost-effectiveness increases even further for all customers. As more and more customers join the district network, fixed operational costs are shared over a larger user base; the result is more stable energy cost. As each new customer comes on line, the overall system efficiency will increase, and cost savings can be realized over the entire customer base.
Environmentally sound. District energy enables building owners and managers to conserve energy and protect the environment. With district energy, building managers no longer need to store or use fuels, chemicals or refrigerants on site. As a result, the site is safer and more environmentally sound, not to mention free from unsightly smokestacks and cooling towers. Because district energy systems employ stringent emission controls – more so than individual buildings scattered throughout a city or campus – they help improve the air quality of the area they serve.
Energy-efficient. When they connect to district heating and cooling, customers use – and pay for – only as much energy as they need. Arriving at a customer’s building as a finished product, steam, hot water and/or chilled water are 100 percent efficient ‘at the door’ – compared with lower efficiencies that result when burning natural gas or fuel oil in a building’s boiler.
Some district energy systems are part of combined heat and power systems, which take efficiency a step further. Typical utility electrical power plants only use one-third of the fuel burned to make electricity; the remaining two-thirds is wasted into the environment. Combined heat and power systems use much of the wasted energy to create steam or hot water for a district energy system. This capability nearly doubles a power plant's fuel efficiency, while reducing the emissions typically associated with standard electrical production. The less energy used, the less sulfur dioxide and carbon dioxide expelled into the environment.
Easy to operate and maintain. District energy is worry-free heating and/or cooling delivered directly to a customer's building, ready to use. Customers do not need to operate boilers or chillers, so there is less maintenance and monitoring and fewer environmental compliance requirements associated with heating and cooling their buildings. Repairs are also minimized: The steam, hot water and chilled water circulating in district energy systems utilize processes that help extend the life of customers’ pipes, pumps, coils and other equipment by preventing corrosion, calcification, and sludge buildup in the system. All this allows building managers to focus on their tenants, rather than energy operations. In addition, district energy customers do not need fuel deliveries, and handling and storage of hazardous chemicals, so there are fewer safety and liability concerns for employees and building occupants.
Comfortable and convenient. With district energy service, building operators are able to manage and control their own indoor environments, so building occupants can be comfortable and satisfied no matter what the outdoor temperature. District energy systems that supply both heating and cooling energy are able to provide either at any time: If there are unusually warm days in January, for instance, a building that would normally be using steam or hot water for heating can receive chilled water for air conditioning without having to start up its own chillers. In addition, district energy reduces vibrations and noise problems that annoy building occupants. It also frees up building space so more room is available to meet increasing tenant storage needs and for revenue enhancement.
Flexible. Buildings using district energy require no smokestacks, boilers
or cooling towers, fuel lines and other support equipment, so there is
greater flexibility in their design. Architects can easily design or renovate
buildings to be more spacious, versatile and aesthetically pleasing for
both occupants and the community.