IVL Swedish Environmental Research Institute

The literature indicates that there might be special conditions in the environmental technology market segment, which makes time to market longer for enterprises in this segment compared to enterprises in other industries. However, no study has been found to actually compare time to market for enterprises in the environmental technology market segment with similar start-up enterprises active in other segments.

The European Union State aid rules have several aims, two of which are relevant to this study: to bridge the investment gap/funding gap in the start-up phase until young enterprises reach the expansion phase, and to protect and improve the quality of the environment. There are, thus, twin objectives for aiding environmental technology enterprises in the early phases.

There is no exact definition of when the expansion phase begins. The threshold between micro-enterprises and small enterprises has, in this study, been used to define when an enterprise moves from the start-up phase to the expansion phase. For this study 443 eligible limited companies still active in September 2016 have been chosen as the sample population. The statistical analysis shows that an average new eligible environmental technology enterprise, which succeeds in its growth, needs more than five years after registration to (i) go from start-up phase to expansion phase and to (ii) no longer fulfil the non-time related eligibility criteria of Article 22. In average it takes 13 fiscal years (i) and 13-15 fiscal years (ii).

For the most successful enterprises turnover and balance sheet total indicate that a distinct growth phase starts around the 9th and 12th fiscal year respectively. The growth accelerates around the 16th fiscal year. Later on, the growth seems to level out for turnover, but continues for the balance sheet total. These results are in line with other studies, which show that a growth phase among Swedish enterprises seems to start around the 8th year and that high-growth enterprises have a mean of 19.8 years when they start the high-growth phase. If the ambition of public funding is to bridge the investment gap to the expansion phase for the majority of the enterprises, this study indicates that the five-year time limit may not be adequate for this purpose when applied to environmental technology.

Further studies are needed to determine if there is a more appropriate time limit that would bridge the investment gap. The growth patterns also need to be analysed more in depth. It would be of special interest to analyse further the innovative enterprises, since there are indications in the data used in this study that they have lower growth. Also, it would be of interest to compare the growth of new environmental technology enterprises with other new enterprises. It is essential to investigate if more enterprises would be expected to reach the expansion phase, if state aid is given to enterprises older than five years. Such a study is not easy to carry out, but nevertheless of great importance. Such further analysis would give valuable information to policy makers. It would be instrumental in designing the state aid system, so as to better promote the growth of start-up enterprises and the diffusion of environmental technology.

Den pågående stadsomvandlingen i Kiruna, att en stor del av staden måste flyttastill följd av LKAB:s fortsatta gruvverksamhet, skapar möjligheter att etablera etteffektivare energisystem och bidra till att uppnå stadens klimatmål. I dag tillgodosescirka 15% av stadens fjärrvärmebehov med restvärme från LKAB och målsättningenpå sikt är att nå 100% restvärme i systemet. Investeringsbeslut som togs 2021kommer att resultera i en ökning av restvärmeandelen på upp mot 70% till 2024 dåLKAB frigör högvärdig restvärme genom att internt ta tillvara på lågtempereradvärme. För att öka andelen restvärme ytterligare finns ett behov av att lagra värmefrån sommarperioden då det finns ett överskott till vinterperioden när behovet ärsom störst.

I projektet skapas en helhetsbild av restvärmelösningen i Kiruna frånsamspel mellan aktörer till teknik vilket genererar ny kunskap om effektivenergiomställning till hållbara städer med restvärmeåtervinning.Det finns flera alternativ för termiska säsongslager vars tillämplighet baseras påtermogeologisk förutsättningar. Borrhålslager och bergrumslager valdes ut förvidare analys givet förutsättningarna i Kiruna. Genom energisystemmodelleringoptimerades Kirunas fjärrvärmesystem fram till år 2040 genom scenarioanalys. Medett energilager i systemet möjliggörs att en större mängd restvärme kan användastotalt sett över året och särskilt minskar det behovet av värmeproduktion underperioden med störst värmebehov (vintermånaderna), vilket innebär minskadanvändning av spetslastpannor. En nyttokostnadsanalys genomfördes på tvåmodellscenarier.

Båda scenarierna resulterar i ekonomiska kostnadsbesparingar ochminskade externa kostnader (förbättrad folkhälsa som minskar till exempel uteblivetarbete, sjukvårdskostnader och förtidiga dödsfall) jämfört med referensscenariet, attinte uppföra ett energilager.Ett energilager, borrhålslager och bergrumslager, i storleksordningarna 30 GWh och20 MW simulerades i Kirunas fjärrvärmesystem. Baserat på det värmebehov ochrestvärmeleverans som ligger till grund för lagersimuleringar visar resultaten pågod prestanda framför allt för ett borrhålslager kombinerat med värmepumpar. Förde simulerade alternativen, samt ett jämförelsealternativ med en biobränslepanna,togs investeringskalkyler fram som visade på en övervägande positiv kalkyl för ettborrhålslager med värmepumpar.

Totalinvesteringen för alternativet med borrhåloch värmepump uppgår till ca. 300 Mkr. Borrhål och värmeväxlare är ungefär 1/3 avinvestering, värmepumpskostnad 1/3 och resterande projektkostnader ochinstallation. Återbetalningstiden är drygt 9 år. Investeringskostnaden för anläggningav bergrumslager är hög vilket försämrar lönsamheten. Troligen skulle investeringskostnaden vara betydligt lägre om befintlig geologisk formation finnstillgänglig att konvertera till energilager. Sådan formation har inte identifierats idetta projekt men givet Kirunas långa gruvverksamhet är det möjligt att fleralternativ finns som skulle kunna utredas.Underlaget som är framtaget inom ramarna för detta projekt pekar på att ettsäsongsenergilager för att ta tillvara på mer restvärme är den långsiktigt optimala lösningen för Kirunas värmeförsörjning. En initial uppskattning av tidplan visar påatt ett sådant lager skulle kunna tas i drift 2028. För det valda energilagret har enhandlingsplan tagits fram som visar nästa steg som behöver tas i Kiruna för attkomma närmare att realisera energilagret och därmed kunna nyttja mer restvärme.

Lågtempererad fjärrvärme har diskuterats länge i Kiruna. Kombination med ettenergilager och lägre framledningstemperatur skulle vara gynnsamt eftersomurladdningstemperaturen från energilagret inte skulle behöva höjas lika mycket.Skulle Kiruna i ett senare skede, efter att energilagret har uppförts, sänkatemperaturen i nätet skulle det för ett borrhålslager med värmepumpar innebära etteffektivare och lönsammare system. Framför allt skulle mindre el behövas tillvärmepumparna vilket är gynnsamt givet Kiruna Krafts ambitioner om att minskaandelen el som går åt till värmeförsörjningen.Det finns en stor outnyttjad restvärmepotential i Sverige och Europa. Genom enfallstudie av Kiruna har lärdomar för andra städer om effektiv integrering avrestvärme genererats. Framgångsfaktorerna i Kiruna och lösningar påförekommande hinder kan hjälpa andra städer att etablera ett effektivt ochlångvarigt samspel kring industriell restvärme. Att initialt fokusera på att bygga enrelation mellan parterna och etablera förtroende är en viktig nyckel för att kunnaidentifiera lösningar på andra förekommande barriärer. Flera ekonomiska barriärerhar haft stor påverkan och de har lösts genom transparens i kalkylerna, med ettgemensamt uppsatt mål att samarbetet inte ska påverka stadens invånareekonomiskt och genom statligt finansieringsstöd.

En viktig framgångsfaktor har varit etablerandet av en strategisk samarbetsplattform som garanterat enkontinuerlig dialog. En kontinuerlig dialog krävs dels under etablerandet avsamarbetet men är lika viktig under pågående leverans för att inte riskera att tappabort relationen och förtroenden.För att identifiera vilka faktorer som kan påverka att innovativa energilösningarimplementeras för restvärmeåtervinning har projektet gjort en jämförande analys avbeslutsprocessen vid valet av fjärrvärmeteknik i Nya Kiruna Centrum ochBrunnshög i Lund. Beslutsprocessen resulterade i konventionell fjärrvärmeteknik tillNya Kiruna Centrum och ett lågtempererat fjärrvärmesystem i Brunnshög. Eninnovativ målsättning, särskilt i de externa direktiven, kunskap omrestvärmeåtervinning, antingen internt eller hos en långvarig samarbetspartner ochen holistisk syn på staden där många aktörer engageras för att man bättre ska kunnaförutse förändringar på lång sikt har identifierats som viktiga. För effektivenergiomställning av städer med restvärmeintegrering behöverrestvärmepotentialen kartläggas och inkluderas i stadens energiplanering i ett tidigtskede och i samverkan med relevanta aktörer. Energiplaneringen bör ske samtidigtsom, och i samråd med, andra större förändringar i staden för att undvikasuboptimala system där energieffektiviseringsprincipen inte tillämpas.

In this report, business models have been developed for the demonstration sites in the REWARDHeat project with the purpose to uncover lessons learned about the shift in business logic when transitioning from conventional DH business models to low temperature schemes. The business models have been developed in an iterative process with the DH companies participating in the project, during the first three years of its elaboration. A particular focus has been placed on the innovative component of the business models, i.e., the green value creation and its value to different stakeholders. Selling heat as a service (instead of as a commodity) has been the starting point in developing the business models. Contractual considerations and ownership forms have been analyzed for each of the demonstration sites.

The findings enable the project to respond to the main questions of the deliverable: How does the REWARDHeat business model experiences differ from a conventional DH business model and what can we learn from the transition to low temperature DH solutions?The aggregated results show that the demo sites focus on technical innovations but seven out of 10 also develop business innovations by increasing the service offer to customers. The business logic of low temperature DH makes it more efficient to develop the business innovation simultaneously with the technical innovation.The lack of EU legislation on waste heat recovery is causing uncertainties. Investors need to know whether the investment is considered sustainable. The value of green is created at all demo sites and valued by most stakeholders. It is however only exploited in the business model at three demo sites.Offering more advanced service to customers necessitates a shift towards being more customer oriented.

By assuming ownership and maintenance of the substation at the customer site, the boundary condition is shifted to inside the customers’ buildings. It creates a value of carefreeness for the customer as the DH company assumes more risk. The DH company gains from increased control of the network, something increasingly important in low temperature solutions. Three demo sites are offering advanced services resulting in a co-dependent relationship with the customer where the collaboration requires integration of processes.The main change in the business model canvas for low temperature installations, in comparison to conventional DH, is the necessity to manage relationships. Relationship building is required for new partnerships, due to multiple decentralized heat sources, and for the prosumer customer segment, instated from waste heat and renewable energy integration. As decentralized energy sources are introduced to the DH network the distribution network becomes more important and large-scale centralized production plants less important. The business logic of low temperature solutions is more on circulating available resources, utilizing the available flexibility in the distribution network, and implementing more advanced control to manage the system efficiently.

This study has been undertaken to understand whether business models for heating, cooling and hot water can be categorized as circular. The study addresses the case of new, combustion-free technology by resorting to low-temperature district energy. Such systems necessitate smart infrastructure with efficient demand and supply matching ensuring the most cost-efficient use of heat supply over time. By studying 10 cases in a research project stretching across 3 years, it is identified that all cases display circular economy features, across the categories of reuse, reduce and recycle. The category of reverse logistics is only identified in 7 cases where energy is circulated within the networks. The integration of excess heat exhibits a particularly strong circularity case, covering all four circular economy dimensions. The circularity of low temperature district energy business models is, however, not free, but comes at a cost compared to conventional combustion-based technology, as new key resources and consequential investments are needed. The major conclusion of the study is that low temperature district energy business models are inherently circular, an important information for European policy making, fostering a circular energy transition.

Excess heat could meet approximately 25% of the heat demand in the European building sector. However, the recovery of excess heat is low, which has been attributed to financial, technical and organisational barriers. There is limited information on the perceived risk exposure of excess heat recovery at different points in time, before undertaking the investment or after having undertaken the investment, and at locations with existing district heating networks or not (greenfield). This is unfortunate because experience can enable new collaborations. In this paper, we compare the perceived risk exposure of four greenfield and two ongoing industrial excess heat recovery collaborations.

In doing so, we confirm previously identified barriers, such as difficulty to agree on the value of excess heat, the risk of a single heat source and lack of regulation. We also find that, with experience, changes to the excess heat-generating processes are increasingly important, whereas, greenfield sites find the lack of ‘know-how’ to be risky. However, the main conclusion from this paper is that the risks of industrial excess heat recovery collaborations appear to be over-emphasised. In fact, risk exposure of industrial activity can be reduced through industrial waste heat recovery as excess heat is characterized by limited price fluctuations and new environmental requirements from customers and authorities can be met proactively. Combining experience with a standardised excess heat recovery policy should significantly reduce the risk exposure of new collaborations.

This report is written as a part of the Grön BoStad project, financed by the European Regional Development Fund. The work reported here was performed by IVL Swedish Environmental Research Institute.

Damages in the distribution networks for district heating and cooling drives costs for utility companies. Being able to prevent damages and leakages in the distribution networks should therefore be of interest for utility companies. In addition to preventing damages, it is also important to be able to quickly and efficiently detect damages in the network whenever they occur. Many of the pipes and lines in distribution networks were installed many years ago, when digital surveillance systems were not available to the same extent as they are today. The use of damage detection systems is widely spread in Swedish distribution networks, but there is no summarized and general information in how they are used and how efficient they are.

This report has the purpose to investigate how district heating and cooling companies and property owners are working in order to prevent damages in district heating distribution networks and to quantify the value that this work creates. The investigation has been made through a literature review, collection and analysis of statistical data regarding damages in district heating networks and through interviews held with stakeholders in the industry. In order to place the study in an international context, some European distribution networks have also been included.

Swedish district heating and cooling companies are in general well aware of the advantages that can be achieved by having a systematic approach to the prevention of damages in the distribution networks, there is however a lack of standardized and industry-common methods for this. Statistics concerning damages in Swedish district heating networks has not been gathered on a national level since some years and it is therefore hard to get a general picture of the status of the networks. The trade organization Energiföretagen is at the time of writing this report working actively with organizing national statistical data and improving the knowledge regarding damages in Swedish district heating networks.

The use of damage detection methods varies between the district heating networks that have been studied in this report. The statistics from two Swedish district heating networks shows that 10 to 20 per cent of reported damages have been detected through automated systems. A large part of the damages is being detected by various, less direct, methods such as schedules inspections, thermography and through additional water being injected to the network because of leakages.

In light of the ever-increasing interest in hydrogen and number of hydrogen initiatives, there is a need to holistically approach the current business models for hydrogen and address how these can be strategically adapted to fit the future energy landscape of 2045, the year when Sweden has pledged to be climate neutral. The project has focused on hydrogen production, distribution and application in the transport sector, a fossil-dependent sector where hydrogen could play an important role in the decarbonization of the sector.The mapping of current business models for hydrogen in the transport sector shows a nascent and immature market, where the existing customer segments are within road transportation. The hydrogen actors are faced with major uncertainties concerning the market development and this requires them to collaborate closely with other actors along the entire value chain, including the pioneering customers. The customer value is fossil-free fuel, supplied to the customers. In 2045, the entire business model will be affected by external factors such as decarbonization of all sectors, the pace at which competing technologies develop, trends in the electricity price and, not least, by the possible expansion and upgrading of electricity and hydrogen distribution grids. These so-called boundary conditions, and the suggested layout for the future business models, could be used by hydrogen actors to make long-term strategic choices about how to develop their business model in the future.

Large investment volumes will be required for the hydrogen market to take off. Through interviews with investors, the investor perspective on the hydrogen business today and in 2045 has been highlighted. Investors who have invested in hydrogen today have a long-term perspective on the investment and do not expect high returns in the short term, but rather see hydrogen as a way to learn about a technology that is strategically important for the future. At the same time, most of the interviewed investors see hydrogen as a high-risk investment and limit its share of the portfolio. For hydrogen actors who need capital, it is important to understand which investor categories may be interested, how the investment is assessed and what risks investors see in the hydrogen business.