**7. A valuable infrastructure**

tive biofuel, electricity, steam, heat and cooling, which partly is used within the processes but largely is output from the plant. Similar arrangements can be made for other types of industry. A combined heat and power plant can produce district heating, electricity and dis‐ trict cooling as well as steam, which is supplied to an industry. The joint generation of sever‐ al energy carriers increases the utilisation of installed capacity, increases revenues from

The deployment of combined heat and power production in district heating systems con‐ nects the heat and power sectors in such a way that the overall production efficiency will be improved substantially. Poly-generation plants that produce automotive fuel connect the stationary energy system with transportation, like electric cars and trains do, and increase the number of options for biomass utilisation and transport provision. The linkage with the transport sector is especially important since the electricity, heat and transport sectors cause more than 60% of globally generated carbon-dioxide emissions from fuel combustion [9]. A combined action within these three sectors will definitely reduce emissions. In this aspect, biomass is a vital resource to meet energy and environmental targets. Using biomass just for heating purposes could be a step toward sustainable development particularly in areas where non-renewable sources are used now. However, other technologies, such as co-gener‐ ation (CHP), tri-generation (CHP + cooling), and poly-generation, should be considered to maximise the benefit of using biomass. This is especially important in areas where the de‐ ployment of CHP is difficult due to barriers, such as insufficient heat load, unfavourable power prices, high investment costs, lack of infrastructure etc. Furthermore, low heat-de‐ mand periods are a challenge in district-heating systems with CHP as base load production. This situation can possibly worsen with increasing efficiency within the residence sector where lower heat demand is expected (Sect. 8.1). There is also a desire to cut heat produc‐ tion costs through additional revenues from sales of electricity and automotive fuel since district heating is not always the cheapest alternative in some places. With this background,

delivered energy and may make plant investment more profitable.

10 Sustainable Energy - Recent Studies

the poly-generation concept can be helpful for tackling the mentioned issues.

district heating and biomass-based power production.

Studies indicate that there are economic and environmental benefits of applying poly-gener‐ ation concepts. For instance, increased power production from CHP plants can be achieved by integrating lignocellulosic ethanol plants with district heating [15]. Another similar study uses the MODEST model (Sect. 2) to show that a poly-generation configuration would result in lower production cost for heat and reduced emissions as a result of integration [16]. There are also other poly-generation applications where products, such as steam, electricity, heat and wood pellets are generated simultaneously. Such plants are already available, for in‐ stance, in Sweden and Norway. Revenues obtained from sales of, primarily, power and ve‐ hicle fuel together with renewable incentives seem to encourage the use of biomass resources efficiently and thereby create a favourable condition for the competitiveness of

District heating plants and networks have low operation costs when using low-grade energy resources but they require large initial investments. The cash flow is negative for some years during the establishment of a new district-heating system and the payback time can be rath‐ er long, which makes financing more difficult. A long-term perspective on profitability and business models with low risks are essential for the deployment and modernisation of dis‐ trict heating systems. Prevailing public policy support may also be needed to facilitate the development of district heating infrastructure, like for other large-scale systems. Due to the heavy investments made, existing district heating systems are valuable assets, but some sys‐ tems may require substantial improvements [17].

The district-heating value chain goes from fuel through heat production and distribution to consumer. Most Swedish district heating companies encompass all central parts of this chain, that is, heat production, distribution and sales, which enables utilisation of operation‐ al synergies. This arrangement can be favourable because if many actors are involved, a ser‐ ies of agreements are required, which increase business risks, which in turn makes financing more expensive, which may make investments unprofitable [17].

Heavy investments, such as waste-incineration and CHP plants, require a certain size to be profitable and therefore they also need a large district heating system to be suitable. Such a district-heating network may sometimes be achieved through connection of smaller systems.
