As a district heating customer, you are saving the environment

Utilitas, Estonia’s largest producer of renewable energy, supplies heat to thousands of homes in the capital and seven other Estonian cities. Robert Kitt, Head of District Heating Companies at Utilitas, explains how the buildings connected to district heating benefit from it, what the company’s action plan is for meeting environmental goals, and why the price of district heating is competitive.

Why do you consider district heating the most reliable heating method?

District heating and hot water are available at any time and in any weather, and the heating company is responsible for their availability. Customers don’t have to worry about extreme cold or other weather effects. District heating provides the necessary room temperature even in more extreme weather conditions, such as, for example, when it happens to be -22 °C for three days in a row in winter.

Heat is generally provided by several different energy sources in the district heating network and, in the event of maintenance shutdowns or failures, the necessary amount of energy is always guaranteed to customers. In big heat production facilities, we can use different fuels or change the type of fuel as needed.

Since we use domestic low-value forest and wood industry leftovers and do not depend on imported fuels, we also mitigate energy security risks. Wood chips are produced in Estonia, which supports local employment and also keeps money in the local economy.  Thanks to the domestic commodity, we are less dependent on oil price fluctuations.

We constantly make investments and use modern technologies in both the production and distribution of energy, led by top specialists in their field, and experienced engineers. As we are vital service providers, high expectations are placed on us in terms of supply reliability.

What makes district heating so convenient for customers?

Once customers have set the automation of the building’s heating substation to the desired mode, it will automatically regulate the building’s heating depending on the outside air temperature. If it is warm outside, the automation switches off the heating and reduces heat consumption, and vice versa.

Customers do not have to worry about buying fuel, storing it, setting up boilers, or maintaining them. Only the in-house heating system and heating substation are the responsibility and maintenance of the customer, which require much less maintenance than local heating solutions that depreciate and need to be replaced more often.

In addition to comfort, safety is also very important to consumers. With district heating, fire and explosion risks associated with local solutions are excluded.

When did Utilitas begin moving towards environmental sustainability goals?

Utilitas is the largest renewable energy producer in Estonia. In 2020, we produced 75% of our energy from renewable sources. The environment has always been important to Utilitas, and the company has made significant efforts to reduce the use of fossil fuels. As early as 2001, we started to switch our boiler houses to renewable fuels in order to save the environment, and Haapsalu and Kärdla were the first locations. Now we produce most of its energy from renewable sources. We constantly look for new solutions to cease reliance on fossil fuels, develop fuel-free solar and wind energy, and increase its production efficiency. Utilitas aims to achieve carbon neutrality in all district heating and cooling networks by 2030.

Largely thanks to the renewable fuels introduced in district heating, Estonia already met its 2020 renewable energy goal in 2011. While all energy in Tallinn was produced from fossil fuels in 2008, over 70% of the heat consumed in Tallinn via district heating was produced in cogeneration plants from biomass and household waste in 2020.

By 2050, 80% of Estonia’s population will live in cities where most of the carbon dioxide associated with energy consumption is emitted. Since Estonian households consume nearly 58% of their energy as heat, it is not possible to achieve climate goals without the strong contribution of the district heating sector. As Estonia’s largest district heating company and renewable energy producer, Utilitas has a big role to play in this.

Is the price of district heating competitive?

The price of biomass-based district heating is very competitive. In addition to the fact that renewable fuels help to reduce dependence on the energy of countries outside the European Union and limit the emission of greenhouse gases, it makes the price of energy cheaper and independent from the fluctuating price of fossil fuels.

The pricing of district heating is transparent. It is based on the District Heating Act and the regulations of the Competition Authority and takes into account real production costs. The Competition Authority establishes a maximum price for each region, above which the heat price may not go.

At the moment, the Competition Authority has established maximum prices for nearly 180 different regions in Estonia. In most regions of Utilitas, the maximum prices of heat are below the Estonian average. Valga, Keila, Tallinn, Haapsalu, and Jõgeva are among the lowest heat prices. The use of renewable fuels and large-scale investments have made it possible to keep heat prices stable even in conditions of general price growth.

The share of renewable energy in Utilitas district heating networks was between 61% and 100% in 2020 (Estonia’s average is approximately 50%). The strengthening of environmental policies and the associated pricing of carbon emissions will lead to a withdrawal from the fossil fuel market on purely economic grounds. Thus, the price of heat in district heating networks operating with fossil fuels is also becoming more expensive, and the transition to renewable energy solutions is very important both in reducing the environmental footprint and in ensuring the competitiveness of the district heating service.

Why do you emphasize the importance of efficiency in your energy production and distribution?

Resource-efficient production and distribution is indeed one of our priorities. There is a big difference between whether an apartment can get heat and electricity from one certain amount of fuel for 1 year or 2.5 years, and whether the energy production pollutes or preserves the environment. The more environmentally friendly the fuels and the more efficient the technologies, the more beneficial it is for people and nature. Therefore, we consider it important to use both biofuels and the best technologies that help to get more energy out of fuel and keep the city’s air clean.

One such solution is the combined production of electricity and heat, as a result of which all the energy contained in the fuel is used. Both the electricity that is fed into the power grid and the heat that is used to heat buildings are produced in one process. In this way, more than twice as much energy is obtained from the same amount of fuel in a cogeneration plant than in a separate power plant, which is located far from cities, is not connected to district heating, and the efficiency of electricity production is only about 40%. Meaning that 60% of the energy contained in the fuel is lost.

Thanks to the smaller amount of fuel, cogeneration produces significantly less emissions. In addition, we use flue gas scrubbers and other cleaning devices that increase the efficiency of renewable fuel plants even further, up to 100%. The use of these devices makes economic sense only in larger production facilities that supply district heating, and Utilitas uses them in most of its boiler houses.

In addition to the efficiency of production, we constantly contribute to the efficiency of the heat pipeline, keeping the district heating pipeline modern and constantly renewing outdated sections of the pipeline. The goal is to replace the entire amortized heat pipeline by 2035.  For this purpose, we build nearly 15 km of pipelines every year.

The article was published in August 2021 in the magazine Elamu- ja Korteriühistu.