From heating network feasibility to start of development

On the 8th of September 2015, the Belgian city of Turnhout, the developer ION, Eandis and Veolia signed a cooperation agreement for the development of the district heating network in the “Niefhout” neighbourhood. This heating network will be powered by an energy mix of biomass and natural gas. 3E gave shape to this project during the concept phase by analyzing the feasibility and assisting the developer ION in the actual elaboration of the heating network.

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Key elements of the feasibility analysis:
  • Since the Niefhout neighbourhood will be developed in several phases over the course of the coming years, a progressive increase of the energy performance of the buildings towards NZEB (and therefore decrease in heating demand) was taken into account. With a heat density of 2.6 MWh/m, the economic viability of the heat network case however remains standing.
  • The feasibility of the heat network case was evaluated from the perspective of a heating company. For the future customers of this heating company, the total costs for heating and sanitary hot water were assumed identical to a reference case using individual gas boilers. Cashflows were evaluated over a period of 15 years (significantly shorter than the life span of a heat network) to allign the feasibility analysis with the time frame of potential parties interested in developing and operating the heat network. Applying a conservative approach, residual values for the heat network and/or other installations after the evaluation period of 15 years were ignored.
  • For investments within the buildings itself, 3E assumed identical cost between the individual (reference) case and the heat network case. Due to limited experience with collective concepts by contractors, costs can currently still exceed those of the individual case. However, detailed analyses and discussions with a broad range of stakeholders clearly indicate that costs for the collective case should be lower (or at most equal) to those of the individual case.
  • The selected biomass based heat network case allows all buildings to comply with the minimum share of renewable energy, without additional investments in e.g. PV. By transferring (part of) the avoided investments from developer to heating company, it is possible to increase the profitability of that heating company.
Key elements of the actual elaboration of the heating network:

During the negotiation phase between the different involved parties, 3E assisted developer ION on technical and financial matters. Draft contracts, EPB-related calculations and heat net tariffs were reviewed by 3E. This type of due diligence helped ION to take the right decisions. Those are now finalised in a definitive contract between all concerned parties. 3E will continue to support ION on an ad hoc basis throughout the next project phases.