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Risk assessment of industrial excess heat recovery in district heating systems

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  • Lygnerud, Kristina
  • Werner, Sven

Abstract

The recovery of industrial excess heat for use in district heating systems can be characterised by great political interest, high potential, low utilisation and often high profitability. These characteristics reveal that barriers are present for its greater utilisation. One identified barrier is the risk that industries with excess heat can terminate their activities, resulting in the loss of heat recovery. Excess heat recovery investments are therefore sometimes rejected, despite them being viable investments. The risk of termination of industrial activities has been assessed by a study of 107 excess heat recoveries in Sweden. The analysis verified that terminated industrial activities are one of two major explanations for terminated heat delivery. The other major reason is substitution by another heat supply. These two explanations correspond to approximately 6% of all annual average heat recoveries. The identified risk factors are small annual heat recovery and the use of heat pumps when low-temperature heat was recovered. The main conclusion is that a small proportion of industrial heat recovery has been lost in Sweden because of terminated industrial activities. The risk premium of losing industrial heat recovery for this specific reason should be considered to be lower than often presumed in feasibility studies.

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  • Lygnerud, Kristina & Werner, Sven, 2018. "Risk assessment of industrial excess heat recovery in district heating systems," Energy, Elsevier, vol. 151(C), pages 430-441.
    • Handle: RePEc:eee:energy:v:151:y:2018:i:c:p:430-441
    DOI: 10.1016/j.energy.2018.03.047
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