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District hot-water heating enjoys cost-saving comeback

"Birdsill Lives" boasts T-shirts passed out by the International District Heating Association in Washington, D.C. A euphonious name that would suit a modern-day rock group, Birdsill Holly was a Lockport, N.Y., tinkerer who invented district heating 104 years ago. After building a boiler in his basement, he ran some pipes across some neighbors' yards and warmed their homes with centrally heated steam.

In 10 years, 19 towns in New York, Pennyslvania, Iowa, Connecticut, and Massachusetts had district heating; and by 1909, 150 systems had been laid around the country.

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But cheap, plentiful, and apparently endless supplies of oil and natural gas put most district-heating systems out of business.

Today, however, district heating is having a renaissance in several states, including California and Minnesota, a state probably better known for its pastoral lakes and burly Swedes than grappling with energy conservation.

Three towns -- Morehead, Fergus Falls, and Redwing -- intend to install hot-water district-heating systems. Two towns with the only steam systems of the 30 that once operated in the state plan to switch to hot water. And construction on the nation's largest hot-water system will begin next spring in St. Paul.

Norman Taylor, executive director of the International District Heating Association, believes that Minnesota is hosting the district-heating revival because it has a strong heritage from Scandinavia, where district heating is commonplace, and because of the keen interest by the state's energy agency and St. Paul Mayor George Latimer.

"The feasibility of district heating for St. Paul was confirmed by our population density and the oil savings possible by capturing waste heat through cogeneration district heating," Mayor Latimer says.

Using waste energy from an electric generating plant to heat the water for district heating not only provides cheap heat for homes and businesses, but it boosts the efficiency of power plants as well.

Ordinarily, more than two-thirds of a plant's energy is discharged into lakes or rivers as steam or water.

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Cogeneration pipes this energy to buildings as far away as 20 miles and increases a plant's efficiency by 50 to 60 percent. Construction for district heating systems also creates more jobs in the inner cities while the benign environmental effects of completed systems enhances life in these metropolitan areas.

A district heating system which Stockholm began in 1960 already has cut sulfur dioxide pollution by 40 percent. By the time construction is completed by the turn of the century, it is expected to slash SO [2] by 400 percent.

The $70 million to $80 million St. Paul system, which will start operating by next fall, will initially heat state capital buildings and the city's downtown. When finished about the year 2000 it will serve almost the entire city and pipe about 270 megawatts of energy, according to plans.

Despite projected savings of 39 million barrels of oil over the next 20 years , potential subscribers are balking at hooking up to the St. Paul system because of the steep costs -- and high interest rates -- of initially converting to hot-water heating.

Conversion costs will run between $40,000 and $700,000.

The short payback period and accumulated energy savings, however, are convincing other firms to sign up. One company which now uses three megawatts of energy a year for heating expects to save more than $1 million by the year 2000. It will recoup its $210,000 conversion costs in one year. The Hanover Building will break even on its $23,000 conversion bills in less than a year.

The key to these savings is the system's cost compared with oil or natural gas. Over the next few years, the St. Paul District Heating Development Company Inc. expects the city's district heating to cost almost 50 percent less than oil and about 25 percent more than gradually deregulated natural gas.

But by the end of the century, its cost should be less than one-third that of oil and less than half that of natural gas.

Mayor Latimer hopes these enticing economics will stem the city's loss of residents and business to the sultry Sunbelt. And, in fact, some business that had planned to move are reconsidering their plans.

Hibbing and Virginia, the last two towns in the state with district heating, are planning to soon switch from steam to hot water. Although both towns' systems now are vastly cheaper than fuel oil, Mark Mason, director of the Minnesota Energy Agency, said at a recent field hearing on district heating held by a Washington, D.C., think tank, the Northeast/Midwest Institute, that hot water is cheaper and can be carried farther than steam.

Further, he notes, steam loses about 45 percent of its heat while hot water loses only 7 to 10 percent.

Mason says that if all the state's communities with populations of more than 5,000 adopted district heating, it would provide 3.5 percent of the state's energy by the year 2000.

More than 220 million gallons of fuel oil could be saved each year.

While this exceeds district heating's current contribution to US energy needs -- less than 1 percent -- it is far less than its use abroad. It now supplies one-third of Scandinavia's space and water heating. District heating is connected to 40 percent of all Danish households and its reduced fuel consumptions saves the residents of Stockholm almost $11 million a year.

West Germany expects to get 25 percent of its energy from district heating by the turn of the century. The Soviet Union, with the world's largest district-heating network and boggling heating demands, heats almost half its homes through cogeneration.

Japan is crisscrossed by a network of thermal pipes.

"Why is Japan competing so successfully today?" asked Robert C. Embry Jr., former assistant secretary for community planning and development of the Department of Housing and Urban Development, at a recent conference on district heating.

"They learned what worked elsewhere and applied it," he said. "In energy, we would be ahead if we just applied what works elsewhere, such as district heating."

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