A rapid-assessment model on the potential of district energy: The case of Temuco in Chile

Abstract

District energy systems (DES) offer an optimal solution for decarbonising the heating and cooling sector while attaining multiple additional benefits. The first step to analyse the potential of DES in both new and existing markets is through rapid assessments (RA). Currently, publicly available models lack rapid assessments of the technical-economic and environmental potential of DES. This RA model was developed within the framework of UNEP's District Energy in Cities Initiative to identify DES's potential spending low time and monetary resources. In this light, the study presents a model for conducting a rapid assessment applied to the case of Temuco, Chile. Results show that a total of 55 MW DH (district heating) capacity is required to cover the heating demand. A wood-chip boiler of 25 MW capacity and a gas boiler of 30 MW capacity are considered in the calculations. The total CAPEX of the project is around 25 billion CLP, with a NPV of 10.5 billion CLP and an IRR of 14%. The project is also estimated to achieve an annual reduction of 24,382 tons of PM10 and 23,692 tons of PM2.5. The model was validated against an independent study conducted by an international consulting company, and the results were found to be in close proximity with the study. Thus, the model can be an effective tool for performing rapid assessments of DES projects in the region and subjecting attractive projects to more detailed pre-feasibility analysis.

Keywords

• District heating
• District energy system
• Rapid assessment
• Sustainable energy
• Chile