By Lars Gullev, Senior Consultant, VEKS
Published in Hot Cool, edition no. 1/2025 | ISSN 0904 9681 |
There are many DH companies in Denmark supporting the transition to a greener energy solution. The establishment of Bjæverskov District Heating Company exemplifies local citizens’ efforts to phase out individual heating systems powered by fossil fuels like oil and natural gas. Instead, they choose collective district heating solutions based on surplus heat from a large electric transformer station, air-to-water heat pumps, electric boiler, and initially, an existing natural gas boiler.
The establishment of both the DH company and the heat network happened through symbiotic cooperation between the local authority and a group of citizens who now form the board of the DH company.
Bjæverskov District Heating Company is expected to supply the town’s approximately 1,000 households and its industries and institutions with green, environmentally friendly, and reliable DH (total annual heat demand of 24,000 MWh). By August 2024, agreements for heat delivery had been made with nearly 90% of the households.
The step from a great idea to the possibility of establishing a DH company and network with their own heat production in Bjæverskov was taken as an integrated part of the wider climate and energy planning for Køge Municipality’s (the municipality Bjæverskov belongs to). The climate plan, which aligns with the Paris Agreement’s goals for reducing greenhouse gas emissions and climate adaptation, significantly emphasizes the importance of involving citizens in matters that affect their future heat supply.
Citizen involvement in the Bjæverskov DH venture created the opportunity to establish a shared heating solution, which was the best choice for the town’s overall green transition. A collective solution would enable the utilization of surplus heat from a nearby large electric transformer station and keep prices in check.
The transformer station is part of the Kontek Connection, a 170 km HVDC transmission (600 MW, 400 kV) line linking Denmark and Germany. A transformer station needs to be cooled down – and here the electricity system can benefit from DH and vice versa.
The connection was commissioned in 1995.
Furthermore, electricity from the upcoming Kriegers Flak offshore wind farm will enter the Danish power system in Bjæverskov via the so-called “Kriegers Flak Combined Grid Solution.” This connection links the Kriegers Flak wind farm with the two German offshore wind farms, Baltic 1 and 2. As a result, the cables transporting electricity from the wind farms to shore deliver wind power to consumers and transmit electricity back and forth between the two countries. This ensures that the cables are utilized at close to 100% capacity, increasing competition in the electricity market and improving energy security in both countries.
German 50 Hertz and Danish Energinet initiated the “lighthouse project” at Kriegers Flak.
Link: German 50Hertz and Danish Energinet inaugurated a “flagship project” at Kriegers Flak | Energinet.
Utilizing surplus heat from the transformer station in Bjæverskov was only possible through a collective heat supply solution—it is not feasible with individual solutions.
The DH project in Bjæverskov has the benefit of an existing (rather old) natural gas boiler that can be used in the DH system. In the beginning, for a short time as the main heat source, later as a peak at reserve load – and finally decommissioned at end of life. The most important impact the natural gas boiler has is that it can deliver heat to the first heat customer from very early. For a DH project it is important to have income as early as possible. In Bjæverskov there is no need to wait for the heat pump to be build and connected to the transformer. They can start selling heat once the first house has been connected.
The initial idea behind the DH project in Bjæverskov was to utilize surplus heat from the transformer station connected to the “Kontek Connection.” However, this energy source can only cover approximately one-third of Bjæverskov’s heating demand. More is needed.
The location of Bjæverskov, close to the transformer station, makes it economically viable to initially extract surplus heat from the cooling of transformer vents. The water from the cooling process is at approximately 35°C; a heat pump then elevates the water to the required supply temperature of 75°C for the DH network using a heat pump. The next step, started in the autumn of 2024, is to explore the possibility of utilizing surplus heat also from the oil cooling at the transformer station. increasing the share of surplus heat available from the transformer.
“Surplus heat can, for now, cover about one-third of Bjæverskov’s heating demand,” says Lars Have Christensen, chairman of the board for the newly established DH company. He also emphasizes the potential for more surplus heat over time, but for now, he focuses on getting as many customers connected as possible.
To phase out natural gas, it was logical that the remaining two-thirds of the town’s heating demand would also need to be covered by non-fossil energy sources. And it will!
The solution chosen includes:
A heat system relying 100% on heat pumps and electric boilers is super-exposed to high electricity prices. To ensure flexibility in the heating plant concerning heat demand, production, and fluctuations in electricity market prices, a 4,200 m³ heat storage tank will also be installed soon. This ensures that DH can be produced when electricity prices are low, regardless of immediate heating demand, thereby realizing the concept of system integration, where DH and electricity systems are interconnected to benefit both.
It is quite unique for Bjæverskov District Heating Company that heat production will be (almost) entirely based on electricity.
“We will have an (almost) fully electrified heat supply—a result of our thorough efforts to assess the market and prepare to supply the town with district heating as efficiently as possible,” says Lars Have Christensen.
In connection with establishing the new DH plant, it has been deemed appropriate to establish a temporary heat supply for the first customers before the production facilities at the new heating plant are completed. A temporary heat supply will allow for the phased commissioning of individual pipe zones over the period of 2024–2027 and will also provide an opportunity to connect and finalize individual customers’ house installations while the street piping network is being established. This way, contractors will only need to access the customer’s property once during construction. Additionally, the plant can undergo testing when there is a heat demand.
Overall, this is an advantage for the economy of Bjæverskov District Heating Company, as it enables the plant to start heat sales early– meaning the first heat will be sold in January 2025. Hence, the DH company can generate revenue at the earliest possible time, with the cheapest possible production form.
Temporarily, heat will be produced from an existing natural gas-fired boiler plant at the nearby greenhouse. After the main heat sources have been built, the boiler will function as reserve load. Later, it will be phased out, and a new gas boiler will be installed at the main production site.
For the upcoming DH customers of Bjæverskov District Heating Company, the annual total DH costs are calculated at DKK 15,200 (€2,030). In comparison, the costs for using natural gas and air/water heat pumps are calculated at DKK 14,100 (€1,880) and DKK 15,100 (€2,020), respectively.
90% of potential customers have already decided on future DH, likely due to the significantly different upfront investments required for the three heating options. For DH, the upfront cost is DKK 5,000 (€670); for a new natural gas boiler, it’s DKK 40,000 (€5,330); and for a new air/water heat pump, it’s DKK 120,000 (€16,000).
A business model with a unique and affordable DH connection and an annual heating cost that remains competitive is likely the key to the project’s success. The competitive heating price can largely be attributed to the inexpensive surplus heat from the transformer.
The fact that it is possible to sell heat very early in the project has a tremendous effect on the economy of the project. The “old” gas boiler can immediately produce heat to the first customers and thereby generate a revenue stream. With an overall investment framework of €36 million that needs to be repaid over 30 years, creating income as early as possible has a significant effect on the overall economy.
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Thanks to a dedicated board and support from Køge Municipality, Bjæverskov has successfully launched a new DH company. It is especially noteworthy that less than three years have passed since the initial ideas were put on paper to the commencement of construction work – an impressively short time from “Vision to Action”.
Although it is currently marginally cheaper to use individual natural gas, everyone can remember the dramatic price increases we saw for natural gas just a few years ago following the Russian invasion of Ukraine. The political vision in Denmark remains to phase out natural gas for heating within the next few years.
More and more customers are leaving the natural gas network, meaning that those who remain as natural gas customers will face rising costs, as there will be fewer and fewer customers to cover the fixed costs of operating the natural gas network. A fact that is not often mentioned but nevertheless is well known among real estate agents.
A green, reliable, and competitive heating price has been the foundation for the strong support of the project. The fact that these parameters also contribute to rising property prices for the benefit of current homeowners is an upside that should not be underestimated.
For further information, please contact Lars Gullev at lg@veks.dk
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