|
Items in cart [1] |
Questions? Call 888-624-8373 |
| ||||||||||||
| Copyright © 2009. National Academy of Sciences. All rights reserved. Terms of Use and Privacy Statement |
Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter.
Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 76
5
Leadership, Strategy, and
Institutional Arrangements
This report has mentioned a number of urban and institutional district
heating and cooling systems as examples of what has been and could be
done to extend the technology's use.
Successful systems have been characterized by three important
elements: leadership, an implementation strategy, and innovative
institutional arrangements. Because of the complexity of large
systems and their correspondingly high costs, the strategy of starting
small and growing later has proved most effective.
Chapter 1 identified three basic types of district heating and
cooling systems: urban systems run by for-profit corporations,
usually electric utilities; urban systems run by nonprofit
corporations, often owned or incorporated by a municipal government;
and institutional systems, such as those of government agencies, the
U.S. Army, and universities.
The most common organizational structure in Europe is like that of
a municipal public works department in the United States. In Europe,
independent staffs operate as entrepreneurial private enterprises,
with public corporations either for shareholders or board. The
European approach tailors the staff and corporate structure to match
the competition, to avoid unnecessary bureaucracy, or both.
LEADERSH I P AND STRATEGY
Leadership is an important factor in the success of district heating
and cooling systems. Coordinating the actions of various municipal,
state, and federal agencies, local utilities and banks, community
action groups, labor unions, and trade and professional organizations
is no easy task. Leadership can come from the business community,
municipal, state, or federal officials, or concerned citizens.
76
OCR for page 77
Leadership is necessary to bridge the gap at the community level
between energy consumers and providers. Energy is often considered a
product rather than a resource or community service like water supply
and waste disposal. These conditions and perceptions further
complicate the already complex planning and implementation of district
heating and cooling.
Successful projects combine leadership and strategy to manage the
different views and interests of local government entities,
developers, property owners, labor, consumers, and large energy
producers and users. The preconstruction phases of a project need to
develop appropriate community arrangements. The demonstration of
technical, economic, and financial feasibility can consume up to 10
percent of a project's costs. Leadership, strategy, and institutional
arrangements are essential to controlling these costs (OTA, 1982~.
Regarding strategy, community partnerships need to be established
and lead organizations identified for assessing, planning, and
developing district heating and cooling. Two examples--Baltimore and
St. Paul--show the interrelated roles of strategy, leadership, and
innovative institutional arrangements. Both these cases have been
discussed in previous chapters and are discussed in greater detail in
Appendix A.
In Baltimore, the Housing Authority of Baltimore County (HA9C)
experienced difficulties heating the Cherry Hill public housing
projects. Baltimore Gas and Electric Company (BG&E) also decided in
1983 to leave the district heating business after nearly 80 years of
providing service. One reason was the closing of a municipal
incinerator, which produced steam from burning solid waste.
Independently, the Northeast Maryland Waste Disposal Authority built a
new facility capable of burning 2,250 tons of waste per day. The new
disposal facility is located only about two miles from Cherry Hill.
With the construction of a new waste-to-energy facility underway,
the Maryland Waste Disposal Authority and the facility's owner and
operator, Refuse Energy System Company (RESCO), pursued the
possibility of developing markets for the thermal energy and
electricity that waste incineration could produce. These markets were
identified in feasibility studies and were taken into consideration in
developing project financing.
Thus, the elements for a successful strategy were present: a
source of thermal energy, 1,600 units of public housing with an old
steam distribution system, a reliable source of low-cost municipal
solid waste as a fuel, and the interest of municipal authorities in
district heating and cooling.
The most important strategic decisions were made by the two primary
project participants--HABC and RESCO--and they were made early in the
system's development. The Baltimore Planning Department established a
panel of agencies interested in district heating and cooling systems,
which provided the basis for expanding and developing the system.
In St. Paul, Minnesota, the personal commitment and involvement of
the mayor led to an innovative and rapid implementation of a new
OCR for page 78
78
district heating and cooling system. St. Paul formed the nonprofit
District Heating Development Company (DHDC) in 1979 to build a new
system for the city. m e local electrical utility, Northern States
Power Company (NSP), owned and operated an old steam system that
served about one-third of the St. Paul business district. This system
was reaching the end of its useful life by the late 1970s . NSP
cooperated with DHDC in designing and implementing the new system.
To get the project approved and completed, the mayor of St. Paul
had to work with the city council, the local Housing and Redevelopment
Authority, the Minnesota Energy Agency, and the U.S. Department of
Housing and Urban Development (HUD). Negotiations had to be conducted
with banks to secure financing and then with the system's customers to
get them to agree to the binding 30-year contracts that the lenders
required. Cooperation had to be secured from labor unions, building
owners, and various community groups.
In addition, arrangements had to be made with NSP to use its old
Third Street District Heating Plant and to purchase cogenerated
thermal energy from its nearby High Bridge Power Plant. Finally,
complex legal and political work was required to establish DHDC and to
appoint its 15-person board of directors. The board was set up to
include representatives of the various participants, thus giving each
a stake in the project's success.
The leadership and ingenuity shown in the Baltimore and St. Paul
projects is common in U.S. and European developments. Good local
leadership and creative strategies and institutional arrangements are
essential for the success of district heating and cooling systems.
These cases also show the importance of institutional arrangements for
regulation, taxes, costs, and financing. The lack of information on
these systems impedes the development of others by requiring that
exceptional leadership or creative strategies and institutional
arrangements be developed anew each time.
COORDINATED POLICY ACTION
Because district heating and cooling projects can be used to address
number of urban problems, there is the temptation to address all
simultaneously. The opportunity to dispose of municipal solid wastes,
restore local infrastructures, and improve streets and traffic
patterns, however, complicates an already complex implementation.
Fortunately, policymakers in the United States more often tend to
attack problems piecemeal--by adjusting the tax code, refining
technology, or creating new organizational mechanisms.
Owing to the complexity of district heating and cooling systems,
more effective results can probably be achieved by addressing
individual problems in sequence according to a coordinated policy. A
key to successfully integrating district heating and cooling in local
planning is a coordinated policy that clearly states objectives and
opportunities. The policy should be flexible enough to capitalize on
OCR for page 79
79
opportunities as they develop. Evolution, rather than revolution, is
the most appropriate way to proceed.
Again, energy is not recognized as a community asset in many cities
and towns. Local governments have not often considered the effects
that transportation, land use, site development, and zoning actions
all have on energy use. Traditionally, local governments have lacked
the personnel to undertake such planning, although energy costs are
second only to personnel costs in municipal budgets (U.S. Department
of Energy, unpublished data, 1984~.
As was shown in the Baltimore and St. Paul cases, the achievement
of long-term, community-wide energy efficiency requires the
involvement of local and state governments, utilities, the business
community (particularly large consumers!, and the community at large.
A comprehensive energy plan will provide participants with a number of
alternatives relating to energy resources, including for generation
and distribution systems, design variables, equipment, capital
resource development, and institutional arrangements. Choosing among
the options requires coordinated policies.
Identifying the effects of community energy systems on the
environment, economics, costs, jobs, and system siting are further
products of comprehensive planning. Benefit and impact analysis
techniques would help identify the best opportunities. The
development of community energy systems, including district heating
and cooling, could be furthered by case studies, including an analysis
of the methods, costs, benefits, and other effects of successful
projects.
On the national level, the U.S. Department of Energy (DOE) has long
sought to encourage conservation, efficient energy use, and reduced
dependence on imported oil. District heating and cooling can help
achieve these objectives. To do so, coordination is needed among the
various offices within DOE and among federal, local, and state
government agencies (Teotia and Payer, 1983~.
In addition, both DOE and HUD have sponsored community energy
programs. HUD-sponsored programs include those in Portland, Oregon,
Lincoln, Nebraska, and Ann Arbor, Michigan. DOE's site and
neighborhood design program includes about 10 projects that integrate
energy supply and demand for communities. Five of these projects
sought to achieve the most self-sufficient combination of land uses,
site design, landscaping, and building orientation.
Jointly, HUD and DOE have sponsored technical and economic
feasibility assessments of district heating and cooling systems in 28
cities; 24 of these projects were rated as having positive potential.
In addition to showing the potential for district heating and cooling,
these cooperative programs have contributed to public and private
knowledge about such systems, aided in developing technical and
economic assessment techniques, and provided a number of interesting
case studies in planning, leadership, and institutional arrangements.
Organizationally, HUD programs are divided between offices for
housing and for community development. Public housing programs (see
OCR for page 80
80
Chapter 3) are administered by the first while the district heating
and cooling assessment program falls under the second. Sometimes,
however, the former may replace an old district heating system with
individual boilers, contrary to what the latter office is trying to
promote. Better coordination between these two HUD offices would help.
Federal policy discussions about urban revitalization and
reindustrialization now offer opportunities to develop new district
heating and cooling systems as a part of municipal water, sewer, and
street repairs. Siting of industrial facilities can favorably affect
district heating and cooling costs since the facilities' waste heat
can be used as a fuel. Integrating planning and development could
substantially reduce the cost of the distribution system. The
retrofit of existing systems could be included as part of urban
rehabilitation. Coordinating new and existing systems offers another
opportunity.
If HUD made district heating and cooling systems specifically
eligible for community development block grants, it would increase
interest in and information about district heating and cooling
nationally. At the same time, HUD could expand the technical
information and assistance it provides to community energy projects.
Municipal officials, planners, engineers, developers, and architects
might then begin to apply the technology more in community development.
Congress may pass urban enterprise zone legislation in 1985.
Smaller systems are well suited for heating and cooling these sites,
as St. Paul's Energy Park project shows. The use of industrial waste
heat would reduce fuel costs for such projects. Thus, district
heating and cooling could be a part of urban enterprise zone
projects.
Here, HUD could help supply knowledge of how to build and manage
the district heating and cooling part of these projects.
Both DOE and HUD have worked with professional, public interest, and
trade groups in carrying out a variety of programs. These
organizations sponsor conferences and issue publications that can help
disseminate information and encourage technology transfer. Government
funding for such activities has been reduced in recent years. These
organizations and their programs represent an opportunity for further
public and private cooperation on district heating and cooling (see
Chapter 3~.
Representative terms from entire chapter:
institutional arrangements
