District Cooling – assessment of price models supporting the efficiency

Abstract

The global cooling demand in buildings is expected to threefold by the year 2050. Compared to individual building cooling equipment, district cooling is a more energy efficient technology to supply this increased cooling demand. However, many district cooling systems suffer from low return temperatures, which usually originate from the buildings’ systems and substations and cause increased operating costs for the district cooling company. Previous studies have identified the need to provide economic incentives to district cooling customers for them to improve the return temperatures from their substations and buildings. The aim of this study is therefore to assess district cooling price models which reward customers who achieve high return temperatures. The study is based on operational data from an actual district cooling system located in Gothenburg, Sweden and 26 of its connected buildings. The current price model of the district cooling system, comprising the three price components energy, power, and flow, was evaluated for the 26 buildings for the years 2018-2020. The results showed the shares of the current price model’s components ranged from 19-63% energy, 28-78% power and 3-21% flow for the different buildings, based on average values for the three analyzed years. This demonstrates the individual variations for the shares of each price component are very large, primarily dependent on the total energy use of the building. It was also seen buildings with a low cost share of the flow component not necessarily had high return temperatures. Based on the current price model assessment, some incentives to maintain well-functioning substations achieving high return temperatures are provided, although the incentives are rather low. Altered price models, for example adjusting the relative cost of the flow component or changing to a return temperature component, are compared with the current price model to find which one is more favorable for customers with high return temperatures. The outcome of this assessment provides district cooling companies with guidance on how to design their price models.