Long an integral part of European energy and utility infrastructure, district energy is now poised to expand its presence in North America. With the potential to reduce carbon associated with heating and cooling large populations, district energy will likely have a growing presence in cities and as part of utilities’ portfolios of energy services.
District Energy Today
With its earliest origins dating back to the Roman Empire, district energy in a more familiar form started in the 1800s, notably at ConEd in New York City and at the US Naval Academy, and in the early 1900s at the Massachusetts Institute of Technology. From these humble beginnings, the global district energy market is projected to grow from $166.84 billion in 2022 to $205.55 billion by 2029, at a CAGR of 3.0% in forecast period, 2022-2029 (Fortune Business Insights). In the U.S., the Energy Information Administration reports that there are more than 660 district energy systems operating in the United States today.
To briefly level-set, district energy today is defined as a system that uses centrally or distributed facilities to generate thermal energy in the form of heat, hot water, or chilled water, usually for collections of buildings that form what can be called an “energy district.” To serve these energy districts, energy is transported through underground pipes to meet the needs of districts ranging from entire cities or neighborhoods to university and medical campuses.
Why District Energy Matters
More than just another cool energy application or system, district energy has numerous advantages and benefits, particularly in today’s new energy environment where fighting the climate battle is critical. To this end, note that district energy systems typically reduce primary energy demand in heating and cooling by 50% and can achieve operational efficiency of up to 90% (United Nations sources here and here).
Add to this the flexibility of using a number of fuel sources to generate the energy for the system - including diverse renewable sources like wind, solar, sewer heat, geothermal, biogas, biomass, and waste heat - and district energy emerges as a key part of the utility industry’s efforts in reducing its carbon footprint in a very cost effective and operationally efficient manner.
Managing District Energy in Today’s Energy Environment
With motivations that include a utility industry that needs greener energy and consumers desiring more, cleaner energy choices, North America is ready for district energy to ramp up. As this movement towards district energy grows, one consideration is that this will require managing a new, significant infrastructure. Central to managing district energy initiatives will be a holistic asset lifecycle management methodology.
Figure 1 below provides an overview of the district energy lifecycle, with the typical timeframes and stakeholder involvement at each stage of the lifecycle.
Figure 1. District Energy Asset Lifecycle. (Source: Bentley Systems.)
From initial planning, through to design and construction to operating and maintaining the infrastructure to real-time monitoring, control and optimization, managing the entire asset lifecycle is the recipe for successful district energy initiatives. Figure 1 also notes the need for “soft skills” in working with diverse stakeholders across the entire lifecycle.
Taking the asset lifecycle process to another level of effectiveness is to do so in a digital twin environment. A digital twin is a digital representation of a physical asset, process or system that often also includes engineering information enabling a better understanding of an asset or a system, while also facilitating modelling of the asset or system to assess and improve its performance.
A digital twin can be continuously updated with data from multiple sources, usually in a heavily-sensored real- to near real-time operating environment. The digital twin environment enables visualization of an asset or system, the generation of actionable insights, and predictive and optimized asset performance.
North America: District Energy Meets the Digital Twin
With the increased focus on addressing climate challenges in the utility and energy sectors, district energy presents an opportunity to use a flexible, greener fuel mix while delivering heating and cooling service to large swaths of the population in North America, especially in large urban areas, as noted by the US Department of Energy (see reference here).
The shift to a more significant role for district energy in the North American energy mix represents great potential, but this is not a trivial task. Recognizing the need for asset lifecycle management from Day 1 across the entirety of the project is an important first step. Similarly, leveraging digital twin capabilities will be a foundation for the development, operation, and optimization for any district energy undertaking.
To learn more about managing the district energy asset lifecycle and the role digital twins, see:
https://www.bentley.com/software/infrastructure-digital-twins/