Stockholm, district heating and Warren Buffett

In Stockholm, even the guards at the palace are looking cold, and there is still ice floating down the river.

Guard at the Royal Palace in Stockholm.

The plane arrived this morning through low clouds and into a light spatter of snow and rain. The formalities were relatively easily dealt with and there is a fast and comfortable commuter train that took 20 minutes to get into the city, and then into the hotel, which is still pleasantly quiet, and comfortably warm. Though like most European hotel rooms it is small. Passing through the airport we missed a coming attraction, which is going to be one of the largest ground-source heat pump establishments. In essence the airport, which plans on being carbon neutral by 2012, has to find a way to control an energy demand that is equivalent to that of a city of 25,000 folk (though there aren’t nearly that many around). The plan is therefore, as with most ground-source heat pumps (English) (International) (FAQ ), to drill pipes down into a large undergound aquifer and draw the cool water out of that storage in the summer, returning it as a slightly warmer source that builds up heat, that can then be used in the winter for melting the snow from runways and similar energy intensive operations. It is expected, when it is finished later this year, to save 4 GWh of energy directly, and an additional 15 GWh will be provided for district heating.

Source Arlanda


There were not a lot of folk on the streets for a Saturday, but then I was wandering around above ground, so it wasn’t until I got into the Old Town (the Gamla Stan) that the streets became full of tourists, and the café’s and restaurants busy. There was something going at the art galleries, which were serving wine to willing patrons, but I missed why. And it was only on the way back, that I found where folks were. Because, like many other Northern Cities, there is an under-layer to the city, with large, well lit, shop lined concourses between the mall-like stores that lie around the center of the city. Anyone with any sense could have wandered around in comfort, beneath the streets, instead of having to duck into the Royal Shop to buy a scarf.

Stockholm, as with many of the Nordic Cities uses district heating. As this is explained

District heating meets the diverse thermal energy needs of residential, commercial and industrial users. Thermal energy needs or demands include space heating for maintaining human comfort, domestic hot water requirements, manufacturing plant process heating, etc.
District heating can be combined with electricity generation to create a more efficient total energy utility. Conventional condensing power stations generally utilize less than 40% of the fuel they burn for electricity generation (over 60% is lost in flue gases and in cooling tower or cooling water). Much of this waste energy can be reclaimed by recirculating hot water or steam to buildings, for space heating or industrial processes giving an overall efficiency of about 85%. Waste heat can also be used to drive chillers for cooling.

The difference in fuel efficiency between combined heat and power plants and condensing power plants can be illustrated with the following example:
For each EIGHT "barrels of energy" consumed in a combustion plant:
ONE "barrel of energy" is lost through the chimney or in the plant.
THREE "barrels of energy" are converted to useful electricity.
FOUR "barrels of energy" are wasted in cooling systems 
OR 
FOUR "barrels of energy" is converted to useful district heating.

Because Stokholm is build on a series of islands it is more practical to have more “districts” for the heating than a single source, and this city of 1.9 million folk started with district heat in 1953. Because of where it is, it has problems with lack of sun, and not a huge amount of wind, and so is limited in what it can use. The country gets slightly more than half its power from nuclear and hydro-electricity but also uses a lot of biofuels, with pellets being one of the domestic resources. It has become one of the largest systems that combine district heating with power generation in this part of the world, with new power plants focusing to use 70% biofuel, and with a current user demand of 12 GWh/yr. They are also using the biomass to provide biogas, which is being introduced as a fuel for buses, with a target of 130 bio-fueled buses this year. They are also using ethanol to drive some 380 buses out of their total fleet of 1,800. They also found that imposing a congestion charge for downtown worked, dropping traffic by 20% while increasing access and lowering pollution.

In short the city would be considered green, apart from the winter plumage it currently wears.

There won’t be a Pick Points, tonight, but had there been, then the piece that follows, would have been in it.
“So here I am at Newark Airport with a four-hour layover, and while the airport was relatively quiet when I arrived, the part we are in is where some of the larger aircraft leave, including ours that is heading for Europe, and so, as the afternoon wears on the seats are filling up. Coming to St Louis I subscribed to Newsweek on my Kindle, since I usually pick one up to read on the ‘plane and the Kindle cost for the magazine is a fraction of the paper price. So now, in Newark, I am glancing through the March 9th edition and I come to the letter that Warren Buffett sent to his shareholders this month. It contains the following:

Last year I made a major mistake of commission (and maybe more; this one sticks out). I bought a large amount of ConocoPhilips stock when oil and gas prices were near their peak. I in no way anticipated the dramatic fall in energy prices that occurred in the last half of the year. I still believe the odds are good that oil sells far higher in the future than the current $40 - $50 price. But so far I have been dead wrong. Even if prices should rise, moreover, the terrible timing of my purchase has cost Berkshire several billion dollars . . . .”

Well at least I wasn’t the only one making mistakes.

And so to dinner.

Stockholm from the Royal Palace

P51. Pick Points

Half-a-dozen or so stories of interest:

The energy lobby is not thrilled about the latest plans to increase taxes on the industry and is now forming a group to speak up for the industry. As an alternative North Dakota is thinking about putting 25% of the oil generated income into a trust fund. While Ecuador is going after some unpaid taxes that it claims Perenco, a French oil company, owes due to the “extraordinary profits” the company has made. Michigan’s Governor is asking for a gas tax to fix the crumbling roads in the state. The intent is to shift the rate from a per gallon, to a percentage of the price. Because state and federal revenues from existing taxes are no longer enough the Congress is also looking at ways to restructure the system to raise more revenue, one of the thoughts being considered is a mileage charge. Massachusetts has a similar problem, and are considering a 25% increase in the state gas tax (which would bring in about $650 million), as is Oregon.


Ugo Bardi has his post on “Fire and Ice” up on the main TOD board, (it was on TOD Europe before) and just for the historical record, it was I (not some guy from the USGS) who disagreed with Dave Rutledge down at ASPO 2007 – which did not stop the pair of us, with a group of others, adjourning to the bar to discuss the topic thereafter.

Speaking of conferences the MIT student Energy Club just held their conference at which the Swedish company Vattenfall said that they would be carbon neutral by 2050. Sweden has previously said that it will wean itself from oil within the next fifteen years . Sweden gets most of its electricity from nuclear and from hydro, so that the major use of fossil fuels is in transportation. I should be in Sweden this weekend (there will be a slight hiatus since it is a long flight and I am going to work) so I will post on what I hear.

At the start of an Energy Conference in Qatar the Exxon CEO has used their success with Qatar (they will have doubled the LNG production to 62 million tonnes this year, leading to the establishment of fourth and fifth LNG trains). Half the vessels for the 4th train are now delivered, and 5 of the 6 for the 5th train. The LNG is coming into a market that is currently seeing (outside of South Asia) a surplus of natural gas (hence all the rig closures in the US) and the LNG entry is likely to soften the market further. However if the predictions of a drop in US well production hold up, then the LNG will be coming on market just as it would otherwise tighten. China, which currently uses 13 million tonnes of LNG , with imports from Russia and Kazakhstan, is also aiming for a target of 60 million tonnes a year by 2020, with some of that to come from Qatar. A local shortage of natural gas is also causing Saudi Arabia to fast-track the development of two off-shore gas fields.

Development of the Arabiyah and Hisbah gas fields, which are not associated with oil production, would supply around 1.8 billion cubic feet per day, MEES reported. The projects were included in Aramco's expansion plan through 2014, it said.

"Bringing these fields on line would make sense," one industry source in the kingdom told Reuters yesterday. "They really need the gas."

Success offshore has not been matched with equivalent searches for natural gas on land, and particularly in the Empty Quarter.

Utility operators in the United States continue to be concerned over the future of coal, and are scrapping even more plans for expansion, part of the problem lies in the uncertainty over future regulation. Just this past week a utility in Montana has given up on the fight with local environmentalists and will now be installing a gas-fired plant, even though the costs may be higher. There are still, however, some 28 coal-fired plants under construction. To prevent more ash dam failures, EPA is seeking the necessary information on the sites where such impoundments exist. There may be as many as 300. Idaho Power, having seen the writing on the wall, has also changed its mind, and instead of a coal-fired plant will be installing a 300 MW plant in Payette county. The site is close to an existing gas pipeline, and an existing 230-kV transmission line. Now all they need to worry about is the long-term availability of the fuel.

A small note, it appears that having not had them built for very long, China has already filled the current round of tanks for their Strategic Petroleum Reserve and is thinking of adding more storage using tankers. (Which suggests they don’t think prices will stay down much longer, either). They currently have 34 days of supply in storage., but this may not count the 100 million barrels in the reserve. China is actively chasing after oil, and trying to ensure supplies when the price is right. And there are still those who think that the floor of the market has not yet arrived and that prices can sink some more.

And Pakistan has decided to go ahead with a gas pipeline from Iran, without having Indian participation.

More stories can be found at The Energy Bulletin and Drumbeat at The Oil Drum.

P31 Pick Points

Half-a-dozen or so stories of interest:

Sweden has just lifted its ban on nuclear power growth, with the intent of increasing from their current 10 nuclear reactors. Last October the NEA published its first Nuclear Energy Outlook with predictions up to 2050, and with the renewed interest and this global switch to a more favorable atmosphere concerns about supplies of uranium are rising. India has just signed agreements with Kazakhstan to assure its supply. With as many as 300 new reactors planned around the world, assuring supplies is becoming more necessary. India alone will bring four new reactors on stream this year. And just this week Areva has agreed to supply $6.3 billion worth of uranium to France. It will likely come from Canada, Kazakhstan and Niger. In regard to the weapons side of uranium purchases Iran is apparently finding it more difficult to find supplies. There is however a prediction that supplies of uranium (once mined) may well last 200 years though that carries the usual caveat of “at current levels of consumption.” With the growing number of reactors, that prediction becomes increasingly meaningless.

China is also pressing ahead with its nuclear power program, doubling its nuclear power target for the next decade. The country currently has 11 reactors generating about 1% (9 Gigawatts) of the countries needs. By 2020 the new target is 70 Gigawatts. Construction planned for this year will add over 8 Gigawatts alone. It may need the power since hydroelectric sources will be hurt as the country sees a lack of rainfall since October that has caused China to declare a state of emergency in eight provinces. 40,000 sq miles of wheat and red seed, about half the crop, are at risk.

It has been suggested that the creation of the Zipingpu dam triggered the Wenchuan major earthquake in China last year, this is a concern, since China is still building hydroelectric dams. This dam was set to generate 760 megawatts of electricity. That report is not stopping China Hydroelectric from raising $200 million to help with hydroelectric projects. China is also investing heavily in wind energy aiming for an installed capacity of 122 Gigawatts (the size of five Three Gorges Dam outputs) by 2020

The Xinjiang region of China found more gas in the last year than in the previous 50, and now considers that with 11 trillion cu m it has a quarter of the Chinese reserve. China used 76 billion cu m in 2008, up 12.3% over 2007. Note that this was down from the 23% growth rate of 2007, when it used 67.3 billion cu. M. China is expecting that its economy will lead the world out of recession. One way of doing this is to subsidize the purchase of appliances, particularly in rural communities.

Along those lines President Obama is raising the standards for energy efficiency in appliances, bringing the regulations into line with Congressional will. “We will save in the next 30 years, the energy produced over a 2-year period by all the coal-fired power plants in the United States.” (Incandescent bulbs are to be phased out by 2014). It is a message that more companies are hearing, and increasing renewable energy power, even though it is more expensive. A move to capture carbon dioxide in rock, however, may need to burn 40% more coal to power it (reducing reserves from 200 years to 100).

Iran is making some noises about being a possible source of gas for the Nabucco pipeline. And speaking of pipelines there is talk of providing load guarantees for an ethanol-only pipeline in the United States.

Interestingly just as Pakistan is seeing serious problems with shortages of natural gas , the onset of more LNG trains and the slowing economies of he world may be leading to a world gas glut, at least according to Platts.

For more stories see The Energy Bulletin and Drumbeat at The Oil Drum