Smart Technologies for Heating and Cooling Networks

This case study was jointly submitted by the World Economic Forum (WEF) and Antin Infrastructure Partners.

Policy approach(es) used to catalyse investment: Availability of a government-sponsored innovation sandbox

Technology approach(es) used to catalyse investment: Implementation of a data platform or digital twin for greater transparency over performance 

SUMMARY

What is the problem being solved

The city of Nice in the south of France is continuously expanding, requiring additional urban space. A new district called “Nice Méridia” is providing over 500,000m² of space - mainly for housing, office space, retail, leisure, school, and a hospital.

In the context of climate change, scarceness of resources, and decarbonisation, Nice Méridia is becoming a real-life showcase for a smart energy network, using geothermal energy, a district heating and cooling network, and a smart grid.

The following energy objectives had been defined:

• Reduce energy consumption
• Maximise use of renewable energy
• Optimise the energetic self-sufficiency of the district
• Limit greenhouse gas emissions

In 2018 the Metropole Nice Cote d’Azur entrusted the company Idex with a Public Service Delegation contract over a period of 25 years to design, finance, realise, operate and maintain the production and distribution of heat and cold as well as to ensure energy efficiency by implementing a smart grid. Idex created a company dedicated to this project called Méridia Smart Energie.

The next major phase of the project will be completed in June 2021 when the geothermal powerplant will go on-stream and replace the temporary biogas powerplant.

What is the solution being developed?

The Smart Energy Network provides optimised levels of heat, cold and electricity to all users in the new Méridia district. This smart energy management is realised by Idex, which produces the heat and the cold, while electricity is produced by third parties.

The technical solution includes a district heating and cooling network (each of them 5.6km long), a geothermal powerplant (up to 10MW Pmax ), and smart grid supervision.

Technologies are used to aim for energetic self-sufficiency of the district and include:

• Geothermal energy
• Photovoltaic panels
• Energy storage for heat, cold and electricity

New approaches integrating the local energy ecosystem include:

• Flexibility and energy aggregation
• Energy sharing among users 
• Coaching on energy usage
• Introduction of local energy managers
• Open information system and interfaces

Specifically, the heating and cooling networks allow a reduction in carbon emissions, control of consumption and increased safety for subscribed buildings compared to traditional boilers and room air conditioners. Heat and cold are produced simultaneously in a power plant via thermo-fridge pumps, which are supplied by geothermal energy from the alluvial aquifer of the Var valley. Using this technical solution, the energy efficiency factor is significantly higher than using fossil fuel or traditional electricity-based technologies.

The energy is transported to the subscriber buildings by a so-called primary network, where a heat and/or refrigeration exchanger distributes heat and cold to users via a so-called secondary network.

When user consumption is lower than production, energy is stored and returned during peaks of heat or air conditioning demand, thus optimising the usage of the produced energy.

Artificial intelligence is at the heart of the network thanks to smart grid technologies; interconnected installations make it possible to collect consumption data and anticipate the energy needs of users.

Meridia Smart Energie's role extends to anticipating user needs and supporting them in controlling their energy bills. Energy storage and the smart grid make it possible to regulate the energy supply according to users' needs. The objective is to reduce consumption while limiting production losses, thus controlling the final energy bill of the subscriber.

Méridia Smart Energie will offer eco-coaching to users. More than a guide to good practices, our partner will support local stakeholders in reducing their consumption by offering eco-friendly actions and regular personalised challenges.

Top drivers for this project:

The top three drivers of the project are the following:

1. Political: The wish of public institutions to create a flagship case to demonstrating the impact of smart energy solutions on decarbonisation and the ecological transition.
2. Economic: The new district will be self-efficient and cost effective, creating value for its stakeholders. Initial economic feasibility is enabled through subsidies of the French state called “New emerging technologies – ADEME” and by the “Caisse des Depots et Consignations”. Moreover, with the new geothermal energy the production of heat and cold is more cost-efficient and less exposed to fossil fuel price variations.
3. Technological: AI is at the heart of the network using smart grid technologies; interconnected installations will collect consumption data and anticipate users’ energy needs enhancing efficiency and avoiding wastes.

Desired outcome:

1. Share of usage of renewable energy for heat and cold production: 80%
2. Share of locally produced photovoltaic electricity of the total electricity consumption: 20%
3. Reduction of greenhouse gas emissions by 20%
4. Reduction of energy bills by 40%

What were the top barriers, were they overcome, and if so - how?

1. So far, the smart grid was able to be implemented and managed by Idex.
2. Cooperation among stakeholders was important. During the upcoming phases of realisation of Nice Méridia, all stakeholders shall contribute required data to the smart grid system operated by Idex, even though individual buildings might be managed by other operators than Idex. Overall optimisation can be measured at all levels.
3. Public subsidies were granted in the beginning.

VALUE CREATED

What were the benefits in terms of efficiency and cost reduction?

1. Share of usage of renewable energy for heat and cold production: 80%
2. Share of locally produced photovoltaic electricity of the total electricity consumption: 20%
3. Reduction of greenhouse gas emissions by 20%
4. Reduction of energy bills by 40% plus a reduction of 20% for VAT

What were the economic, social and environmental benefits?

This project will:

• Reduce energy bills of up to 40% plus a reduction of 20% for VAT
• Reduce energy consumption and greenhouse gas emissions by 20%
• Share of usage of renewable energy for heat and cold production: 80%
• Create 60 full-time jobs during the construction phase and 5 full-time jobs during the operations and maintenance phase
• Increase the value of buildings

POLICY TOOLS REQUIRED

Legislation and regulation to incentivise adoption

• Subsidies for the implementation of renewable energy solution
• Subsidies for the implementation of a smart grid solution
• VAT advantages for users of energy

In addition, the legal framework favouring such projects contributed, especially the laws of Transition Énergétique Pour la Croissance Verte (TEPCV) and the Nouvelle Organisation Territoriale de la République (NOTRE).

Effective government institutions to establish good governance

Different public stakeholders contributed to make this project a success:

• Metropole Nice Cote d’Azur
• Region Sud
• Ministère de la Transition Ecologique
• Caisse des Depots et Consignation
• EPA Plaine du Var
• ADEME

Transition of workforce capabilities for effective delivery

Not Applicable

Enhancements to procurement and contract management process

Not Applicable

Funding and financing tools

Not Applicable

RISKS AND MITIGATIONS

Implementation risk

The utilisation of many innovative technologies (e.g. artificial intelligence, IoTs), energy storage solutions, and innovative smart energy networks create implementation risks.

Economic risks

The project does not have such economic risks on the job market. On the contrary, the project creates 60 full-time-equivalent jobs during the construction phase and 5 full-time-equivalent jobs during the operations and maintenance phase.

Social risks

No risks, as the technology usage is not perceptible for the users beyond the reduction of their energy bill.

Environmental risks

Geothermal energy is clean and the overall impact on the environment is highly positive.