Data creates value for utility, end users and city

Remote Meter reading, Digitalisation, Automatic Meter Reading Infrastructure

By using hourly values from smart meters to optimise their operations and business, Næstved District Heating has lowered their forward temperature by 10 degrees, return temperature by 5 degrees and pipeline losses by 8%. Going forward, the utility expects to see even better results despite the fact that their original business case did not include the value of data.

Næstved District Heating was among the first in Denmark to boast a remotely read metering system. But the system was unstable, error-prone, and data was used only for billing. ”We spent all our time getting the system to work rather than utilising data for optimisation,” explains Jens Andersen, CEO of Næstved District Heating. In 2014, when the utility was faced with replacing a large portion of the meters, they calculated the costs over a 12-year period of continuing with their old meters or investing in new technology and replacing the entire meter park. ”We saw a really good business case in a clean cut.” 

A strong business case

Kamstrup was chosen as the supplier for several reasons. ”Over the 12-year period, which was the battery lifetime, and with reverification of the meters, Kamstrup’s solution had the lowest TCO. And if we were to further develop our solution, Kamstrup was the right partner for us,” says Arne Ulstrup, customer manager and meter park responsible. The first new meter was installed in august of 2015 and the last one just under 10 months later. This was a deliberate choice to ensure that the utility could quickly start realising the business case – which did not originally include the benefits from data-driven optimisation, says Jens Andersen.

”The business case was based solely on hardware and infrastructure maintenance. We had not factored in the gains from working with our data.” The utility found it difficult to put a number on the value of data. ”What we could quantify in money terms was the hardware and all the time we knew we spent correcting errors.” However, they had no doubt that more frequent data would allow better utilisation of their resources: ”Our mantra is ’Accurate data on time’. Because without them, we can’t make the right decisions.”

Results from acting on data

The building’s boiler operator

Around the same time as the new meters were implemented, Næstved District Heating introduced a scheme enabling customers to rent a district heating unit including service. This necessitated a change in the customer department’s skill set. ”We started spending our time differently and suddenly got very close to our customers. The result was partly a replacement of competencies and partly the allocation of additional resources,” says Jens Andersen.

The utility currently has ownership of 2,000 installations and the ambition to own all installations in the network within 10 years. Arne Ulstrup estimates that 75% of the installations in the previous infrastructure were worth optimising – but there were no demands to do so. ”If we can use data to target the customers with the poorest cooling performance in the distribution network, we can operate more efficiently. That delivers value – for us, our customers and the city of Næstved.”

Today, 2½ employees are dedicated to energy optimisation of the individual customers’ district heating unit based on a daily sheet that shows the load rate. ”You can see our cars all over town all the time because we’re out there tweaking, adjusting and guiding our customers about their options and our rental scheme. In that way, we take responsibility and essentially become the building’s boiler operator.” According to Jens Andersen, this effort results in three things: ”The customer avoids the motivational tariff, and we reduce our pipeline losses. But the biggest benefit is a lot more capacity in the distribution network. In other words, we can take on more customers without having to scale up our main transmission pipes” 

Just the beginning

Based on more frequent meter data, Næstved District Heating has created clear results. ”We have lowered the return temperature by 5 degrees, and, for large periods of the year, we have lowered the forward temperature by up to 10 degrees. Already now we have therefore reduced our pipeline losses by 8%, and we expect to reach 10%. Additionally, many of our customers have saved up to 10% on their heating bill,” says Jens Andersen.

The financial savings from operational optimisation have also had a huge impact on the utility. ”Today, none of our customers get more than 75 degrees, so we use a lot fewer cubic metres of water. Also, 10% less pipeline losses alone represents an annual cost of DKK 1 million without even touching the assets underground. This is all generated automatically through temperature reduction. And we are nowhere near done.” In addition to their 10 temperature metering points in the distribution network, they are currently integrating 50 priority meters delivering data down to every 96 seconds. In the SRO system, they can ensure even better management of temperature and flow in the distribution network and increase energy efficiency.

Additionally, the utility expects to save a lump sum of DKK 1-1,5 million as a result of energy savings. ”We haven’t made the final calculations, but based our results so far, the business case is even better than we had expected.” 

“Today we look at meter data, and when we compare 50 year old pipes with pipes 20 years younger, we don't see increased heat loss. Based on that, we have been able to postpone replacing a lot of the service pipes we had planned on replacing. In this way, we can allocate our resources to areas, where they matter more.”

Jens Andersen, CEO of Næstved District Heating

Every day better than yesterday

The effort to ensure that customers get exactly the temperature they need is breaking away from the hallowed principles to better be safe than sorry. ”We know that supply reliability is the most important thing to 90% of our customers. We must respect that. But we must also try every day to do things just a bit better than yesterday,” says Jens Andersen.

The same ambition applies to the maintenance of the utility’s distribution network, which was previously based primarily on age. ”Today, we look at our meter data, and when we compare 50-year-old service connections with some that are 20 years younger, they don’t lose more heat. This allowed us to postpone the replacement of several service connections and use those resources elsewhere.” Based on smart meter data, the utility has also reduced the number of bypasses in the network from 131 to 10.

”We don’t sell district heating”

At a time where individual heat pumps are making their entry into many private homes, they are not worried at Næstved District Heating. Instead, they are working actively to change the reputation district heating has for being invisible. ”We haven’t had mandatory connection for 8 years now. We sell district heating into new areas on the fact that we provide the entire solution including unit rental and service.” According to Jens Andersen, it comes down to the risk profile they have chosen. ”We have to have the courage to engage in a dialogue directly with our customers. They can remove their unit at any time. That is the risk we take. But not doing anything is a risk too. We have to meet supply reliability standards. But if we are to stay competitive, we have to offer other services as well. We don’t sell district heating. We sell comfort and convenience.”

About Næstved District Heating

Length of network
Næstved District Heating is managing and maintaining a distribution network with approximately 150 km of pipes.

Meters
5200 intelligent meters in the network providing data 365 days per year and giving the utility the opportunity to optimise.

Solutions
Heat meters with Wireless M-Bus READy network reading, securing delivery of frequent data from intelligent meters

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