The energy sector accounts for more than two-two thirds of global greenhouse gas emissions. Despite the rapid growth of renewable energy solutions and worldwide installations, fossil fuels remain the primary source of energy. (source: World Energy 2015 Report, BP, Statistical Review 2015)
Cities currently represent more than 70% of the global energy demand. Moreover heating, cooling and hot water use amount to over 50% of the EU’s energy use. Concentrating on these main energy demands, and replacing the needs with more renewable energy will significantly reduce consumption of fossil fuels. One solution that has been implemented selectively around the world and requires further investigation is geothermal energy. Worldwide district energy is increasingly gaining momentum. This is exemplified by the EU’s recently released Heating and Cooling Strategy, Heating is Cool and the UNEP’s initiative District Energy in Cities. The heart of both of these strategies is better energy efficiency and the implementation of renewable energy.
Renewable district heating not only contributes to the fight against climate change, it reduces dependence on energy imports, provides for cleaner air, more energy security and saves money.
In Europe there are already 10.000 district heating systems in operation, largely powered by fossil fuels. The challenge is to transform and/or retrofit these existing district heating systems into renewable district heating systems and how to implement more renewable district heating systems in urban areas. To enable this transformation two things are essential; funding and the involvement and capacity building amongst the municipalities and local stakeholders.
Can a remote island in the North Atlantic be an inspiration to other countries in the decarbonisation of the heating sector? Iceland’s transformation to geothermal district heating began in the 1930´s and today heats over 90% of households. It is estimated that since the 1960’s 21 million euros have been saved in oil imports, this is equal to approximately 7% of the country’s GDP. The key to the swift and efficient transition in Iceland was government funding for the drilling of the geothermal wells and capacity building at the local level.
This week, EurActiv reported that Brussels has cleared the way for China to invest billions of euros into the European Fund for Strategic Investments, or the Juncker Plan. According to EurActiv China will contribute up to 10 billion euros to the plan, making China the largest non-EU contributor to the fund. China’s contribution is part of their Silk Road investment plan strategy.
Why would China’s contribution make a difference for transforming Europe’s heating sector from fossil fuels to renewables? The growth of the Chinese geothermal district heating and cooling sector has grown exponentially in the past ten years. The Chinese clearly realize the effectiveness and benefits of implementing geothermal district heating and cooling and are taking action, not with just with words, but also their money.
In cooperation with the Icelandic geothermal Industry, the world’s largest geothermal district heating system has been built in China, providing heating for over million customers in the provinces of Shaanxi, Hebei, Shandong and Jiangsu. These facilities reduce close to 2 million tons of C02 emissions combined. The air quality of the provinces has improved significantly and the health of residents is directly and immediately bettered by this transition.
According to the GeoDH project, at least 25% of the EU population lives in areas that are suitable for geothermal district heating. It is very likely that the Chinese see a profitable investment opportunity in expanding geothermal district heating to Europe. A significant investment on their part surely indicates something. Europe has either not realised this yet, or is decidedly waiting on the sidelines to see what happens. However, it is now time for Europe to take a more active approach to their energy strategy.
Author: Ágústa Ýr Thorbergsdóttir, Managing Partner, Navigo