Eesti Gaas declares war on district heating

Photo: Andres Haabu / Äripäev

Gas provider Eesti Gaas has turned to the justice chancellor to demand redrawing of Tallinn’s heating districts and abolition of regulation that obligates buildings in heating districts to switch from gas heating to Utilitas district heating after carrying out renovation work.

“It seems to me that the district heating regulation is a blatant violation of the law; figuratively speaking, it obligates one to switch from gas heating to buying heat from Utilitas if one wants to repaint their window frames,” said CEO of Eesti Gaas Ants Noot. “This policy of preferring a single type of heating will lead to a hike in prices and clear Estonia of trees in a decade.”

Tallinn expanded its heating district mainly to the Suur-Sõjamäe industrial area in May that will force nearly 700 small businesses to buy heat from Utilitas, that pays the city for use of its heating network, instead of Eesti Gaas.

The gas company is fighting regulation, according to which persons not using district heating during the time of the district’s designation are obligated to join the district heating system upon reconstructing or constructing buildings inside the district. Eesti Gaas is also seeking the restoration of former district heating areas and abolition of new ones.

Expensive district heating

The justice chancellor has accepted Eesti Gaas’ application after recognizing strong arguments, her bureau communicated. Because the complaint is voluminous and needs to be divided between several departments, the justice chancellor’s position will become clear in late September at the earliest.

“I believe everyone should be free to choose the heat source they want, while today one has to ask Utilitas’ permission for use of gas heating inside the heating district,” said CEO of OÜ Gaas-Soojusprojekt Peet Parikas.

The designer described a case where he had to apply for an exception for a client after Utilitas’ bid proved hugely expensive in a situation where the building was already connected to the gas network. “The fees of joining the district heating network are two and a half times those of gas heating,” Parikas said.

“District heating is more complicated as heating water moves in an isolated piping system that necessitates a boiler plant for heating the building’s domestic hot water. There is no need for additional devices in case of gas heating.”

Parikas said that gas heating is more effective because a gas boiler immediately reacts to change in outside air temperature and turns down the heat in warm weather. District heating systems must maintain a temperature of 70 degrees also in warm weather.

The new regulation will hit owners of buildings that use gas heating. If new buildings must take district heating into account from day one, renovation of existing buildings spells major additional expenses.

“Utilitas has been given the right to force buildings that use gas heating to join the district heating network also in cases where it would call for a thorough reconstruction of the heating system and bring with it major expenses for the utility line. That is why designers must apply for exceptions from the city that makes projects doubly complicated,” said a project manager who preferred to remain anonymous.

“We want to get our exceptions, and no one wants to pick a fight with them,” they said. Tallinn’s Municipal Engineering Services Department said the heating district was expanded and new restrictions for gas heating introduced out of a desire to maintain Tallinn’s district heating networks as environmentally friendly utilities for use of combined heat and power.

“The borders of the heating district were adjusted considering ongoing real estate developments, location of developments, and the existing district heating network,” said head of the engineering department Hannes Vaga.

The city government believes prices could come down as a result of new clients joining the system. While consumers leaving the district heating network could produce the opposite effect.

“In general, fixed costs of district heating stations remain unchanged when consumers leave. Operational costs are reduced, while pipeline dissipation remains the same, meaning housing expenses could grow,” Vaga said.

Head of Tallinn’s leading heating provider Utilitas Priidu Nõmm said that gas heating exceptions could be allowed in case of renovation, but not new buildings.

“District heating is currently the most environmentally and user-friendly form of heating in countries sporting a cold climate. If district heating covers approximately 60 percent of Tallinn, that figure is more than 90 percent in Helsinki.”

Preferred solution

Nõmm said that district heating is the best way to make use of heat created during energy production. Major Tallinn combined heat and power producers are Utilitas’ Väo power stations and Eesti Energia’s Iru refuse burning plant. Utilitas’ CEO also said that the European Union has designated district heating as the most efficient heating solution in dense urban areas.

A precondition of efficiency is producing the lion’s share of energy from renewable sources and co-generation. “Combined heat and power stations are the only sustainable way to produce electricity in our area as wind, solar, and other types cannot reliably ensure constant supply,” Nõmm said. “Only the district heating network makes it possible to supply consumers with thermal energy from renewable sources, which in Estonia’s case is mainly wood chips.

The switch to wood chips has caused district heating prices to come down by almost a third in recent years. In a situation where the city’s systems would be dependent on the world market price of gas or oil, we could not forecast future prices. The price of wood fuel is stable, and its availability depends solely on local circumstances.

“A switch to local boiler plants would give us more than five thousand chimneys in Tallinn. We can only imagine what the city would look like on a clear winter day when air quality would surely suffer,” Nõmm said.

District heating is the most secure heat source for Utilitas in urban regions; the state has placed on the company the obligation to maintain reserve fuel. There is no such obligation in place for local boiler plants, meaning it will prove impossible to heat buildings that rely on gas in case of an emergency.

“Heating districts make for an easily defended city planning decision. While one might argue it constitutes a restriction, cities also regulate the height of buildings, their appearance, and location,” Nõmm said.