Economic and environmental benefits of converting industrial processes to district heating

Abstract

The aim of this study was to analyse the possibilities of converting industrial processes from electricity and fossil fuels to district heating in 83 companies in three Swedish counties. Effects on the local district heating systems were explored, as well as economic effects and impacts on global emissions of greenhouse gases. The study was conducted considering two different energy market conditions for the year 2030.The results show that there is a potential for increasing industrial district heating use in all analysed counties. The greatest potential regarding percentage is found in Jönköping, where the annual district heating use in the manufacturing companies could increase from 5GWh to 45GWh. The annual industrial district heating use could increase from 84GWh to 168GWh in Östergötland and from 14GWh to 58GWh in Västra Götaland. The conversion of the industrial production processes to district heating would lead to district heating demand curves which are less dependent on outdoor temperature. As a result, the utilization period of the base load plants (above all of the combined heat and power plants) would be prolonged; this would decrease district heating production costs due to the increased income from the electricity production. The energy costs for the industrial companies decrease after the conversions as well. Furthermore, the increased electricity production in the combined heat and power plants, and the decreased electricity and fossil fuel use in the industrial sector opens up a possibility for a reduction of global greenhouse gas emissions. The potential for the reduction of global greenhouse gas emissions is highly dependent on the alternative use of biomass and on the type of the marginal electricity producers. When the marginal effects from biomass use are not considered, the greenhouse gas emissions reduction is between 10thousand tonnes of CO2eq and 58thousandtonnes of CO2eq per year, depending on the county and the type of marginal electricity production plants. The highest reduction is achieved in Östergötland. However, considering that biomass is a limited resource, the increase of biomass use in the district heating systems may lead to a decrease of biomass use in other energy systems. If this assumption is included in the calculations, the conversion of the industrial processes to district heating still signify a potential for reduction of greenhouse gas emissions, but this potential is considerable lower.