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Demand-side response for district heating promises cost savings

In the future, smart flexibility models for district heating will offer cost savings for property owners, energy companies, district heating customers and society. They will also benefit the environment.

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Demand-side response is still a new concept in district heating solutions. However, smart flexibility models for district heating will offer clear cost savings for property owners, energy companies, district heating customers and society. The first studies into demand-side response for electricity were conducted decades ago but it is only in the last couple of years that the district heating business has opened its eyes to the idea.

"The technology has matured enough, and a general change in values has also raised interest in demand-side response. Environmental matters are increasingly important and consumers are more aware of them, so district heating companies are also required to present a new offering," states Heikki Ihasalo, a professor at Aalto University and Senior Consultant at Granlund Oy.

Increasingly fierce competition, rising energy consumption and more stringent EU energy regulations require alternatives to conventional generation methods and to reserve and peak power plants.

"District heat generation is overpowered to cover momentary consumption peaks, which only occur a few hours a year. A large amount of district heat generation capacity is forced to act as reserve power for those moments when peak power output is required in buildings," explains Ville Reinikainen, Director of Granlund Consulting Oy's Energy business area.

New research data on the best means of flexibility

Opportunities for demand-side response are being studied extensively within Granlund Group, and several university theses have been written on this topic. Energy expert Sami Sihvonen studied how the peak power requirements of buildings can be reduced by regulating building services systems.

"Adjusting the ventilation proved to be the best measure by some distance. Because ventilation also affects the building's indoor conditions, utilising it as a part of demand-side response requires knowledge of the typical usage and consumption profile of the building. The necessary expertise is already available at Finnish engineering offices and district heating companies. Hopefully property owners will not be afraid to begin experimenting with demand-side response."

In his thesis, energy expert Waltteri Salmi discovered another way of effectively cutting the peak district heating and electrical power requirements of buildings.

"Large office buildings have a great deal of potential for momentary flexibility. Although demand-side response can also be implemented using continuous price signalling, my research showed that large but momentary power reductions of 1–2 hours provide the greatest demand-side response benefit at system level. If the aim is to cut peak power within the building itself, my research showed that it was possible to cut peak power levels by more than 20 per cent in an 11-storey office building while maintaining good indoor conditions."

According to Salmi, the best way to level out peak power loads in the district heating system as a whole would be for the energy company to order momentary power reductions from several buildings in a multi-stage approach. Furthermore, it is important for property owners and energy companies to know that the correct timing of power reductions is easier to forecast with a ventilation system than a radiator network.

Cheaper, greener energy

Energy company Fortum believes in the opportunities of demand-side response.

"It is our goal to be able to utilise more cheap, energy-efficient heat sourcing methods and reduce the use of more expensive peak generation plants. More sustainable energy use will also help us to plan future plant investments more intelligently," states Niko Wirgentius, Fortum's Development Director.

The magnitude of the cost savings offered by demand-side response is impossible to know precisely, but energy companies believe they will recoup the investment costs at the least.

"When energy is used at more sensible times and the energy system becomes more efficient, demand-side response will prove its worth to us, to our customers and to society as a whole. The environmental benefits will also accrue to everyone, and customers will have greater opportunities to influence their own energy use. There are no losers in demand-side response. I believe that it will become a natural component of our service package in the future," Wirgentius states.

Machines learn to adjust and save

In the future, the best way of incentivising properties to use demand-side response will be to add smartness to systems. The very latest thing is machine learning: solutions that can learn by themselves.

"At the moment, almost all of the functions in a building must be predetermined by programming specific thresholds on the system. Machine learning will do away with thresholds because the machine will learn when people are typically at home, when the premises are empty and how quickly they cool down when the heating is switched off. Machine learning will make demand-side response much easier to deploy," Ihasalo states.

Joel Sarasti has researched machine learning for his thesis.

"In my research, I developed a smart, model-based control algorithm that is able to forecast the thermodynamic behaviour of a building. One of the greatest benefits of machine learning is predictive control, which also ensures that the building's indoor conditions remain good during periods of demand-side response."

The cost savings also look promising. "My research showed that using a control algorithm in a residential block of flats leads to savings of approximately 7 per cent in terms of heating costs, while the consumption of heating energy during price peaks fell by up to 47 per cent. The effects on the district heating network as a whole are substantial," Sarasti says.

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