[bizaro86]

Originally Posted by timun

I don't know exactly what you're envisioning with the "capital contribution" you're speaking of, but I can tell you that the customers bear the capital costs of tying into the distribution system and the building of the "energy transfer station"—what Enmax/CDHI (Calgary District Heating Inc.) call the heat exchanger(s) at the customer's building. There is no other upfront payment (that I know of) to tie into the system in the first place.

The Thermal Energy Service Agreements (TESAs) have two charges on them:

1) a fixed charge for the cost of operating the distribution system, i.e. the pipes out in the street that distribute the heating water from the central plant. This is akin to the T&D charges on your electricity bill, and delivery charges on your gas bill. This is how CDHI recoups the capital and operational costs of the plant and distribution system.

2) a variable charge for the thermal energy

The TESAs are typically a minimum 20-year agreement, and rates are negotiated on a customer-by-customer basis (district energy isn't a regulated public utility, so there is no "regulated rate option" like gas & electricity).

The upfront costs of tying into the district system are: the cost of trenching into the street and tying into the heating water pipe mains, pipes between the main lines in the street to the building, an "energy transfer station" room to house the heat exchanger(s), the heat exchanger(s), and relatively simple controls to make the system work. Building your own boiler plant requires: the cost of trenching into the street and tying into the gas main, the gas piping from the street through the building to wherever your boiler plant room is, the boiler plant room itself (which is much bigger than the energy transfer station), the boilers, boiler circulation pumps, (more complicated) boiler controls, flue vents, a condensate acid neutralization system on the flues (presuming you're using condensing boilers somewhere near the thermal efficiency of the ones at the district heating plant), and combustion air intakes.

The O&M costs for the district heating connection are almost negligible, the heat exchangers are a passive device that just need periodic cleaning/descaling. The boiler plant requires far, far more.

I'm not privy to all of the TESA rates previously negotiated with the 20 or so customers of the district energy system, but on the projects I have worked on that tied into it it was a no-brainer to go with district heat.

Sure, I agree with all of that (also mechanical engineer). My point was more that the capital cost of building the district facility is getting recovered somehow. In some projects I've seen upfront fees paid to connect, while sometimes that capital is built into the utility rates. I'm not specifically familiar with this plant. There's no free lunch, although district wide should be more efficient.