Innovation and institutional change: the transition to a sustainable ...

Stability and transformation in the electricity system 97
4.7 Distant heating as a form of cogeneration
The penetration of hybrid forms of gas and steam turbines did not change the
basic technological configuration of the electricity system as a whole:
centralised, large-scale, fossil-based electricity generation, with high voltage
transport and low voltage distribution to customers. However an additional
characteristic of combined cycles were the opportunities for application of
heat. This was particularly interesting in the light of energy saving policies
introduced after the oil crisis, including the stimulation of heat distribution
projects. The electricity industry was less enthusiastic regarding heat
distribution, among others because it reduces electrical efficiency and
because it implied large investments in terms of heat infrastructure 20 , but was
pressured by government to develop this new technological path. A
committee was set-up in 1975 to investigate the potential of district heating.
Although the SEP was initially sceptical regarding the economics of district
heating, in light of energy saving targets, government pressure, and growing
insights regarding the potential, from 1977 on 16 large scale district heating
projects were initiated. The focus on larger scale was expected to improve
the cost picture. Initially, the district heating projects were not very
successful due to several factors (Novem, 1994; Arentsen et al, 2000):
– The lack of a infrastructure for heat distribution made the projects very
costly;
– Early calculations were too optimistic regarding the heat demand, also
because energy saving measures (such as isolation of houses) led to
lower heat demand;
– Power plants were not designed to produce heat, and needed to be
redesigned both in terms of technology and location;
– Technical and economic knowledge of distant heating systems was
lacking and the projects were hit by several technical and economic
problems;
– Distant heating had to compete with local heating on gas based on the
extensive gas infrastructure in the Netherlands, this included competition
with gas companies;
– Distant heating suffered from negative consumer image.
In the course of decades, however, accumulated experiences with district
heating led to better fine-tuning of power plants with local heat demand,
while also combined cycles (and their more flexible scales) were better
suited for district heating.
20 In central cogeneration the heat produced by large scale power generation is distributed to
significant sources of heat demand, such as housing districts, horticulture. Tapping the
heat leads to some loss of electrical efficiency of the power plants.