E-commerce grows district heating significantly
New customers increase Vaggeryds Energi’s heating deliveries by at least 30 percent. The expansion means that the energy company is looking at its largest investment ever.
“That’s why we have hired FVB, which has extensive experience with district heating projects. We do not have the right expertise within the company and an investment of this size has to be done right,” says Peter Waldenström, District Heating Manager at Vaggeryds Energi.
The e-commerce sector has grown rapidly during the pandemic and there is a greater need for large storage facilities for goods sold online. Thirty kilometers south of Jönköping is Vaggeryd Municipality and European route E4 goes through both of the municipality’s larger towns – Vaggeryd and Skillingaryd. The highway is key for the companies putting down roots in the municipality, including several e-commerce companies.
“In Vaggeryd Municipality, there is cheap land that is also easy to build on. It’s easy to transport goods from here by truck, and also by rail. The train terminal also works directly with the Port of Gothenburg, which makes handling of goods smooth and easy. All in all, this has meant that in the past year the municipality has received inquiries from several companies that want to build warehouses,” says Peter Waldenström.
In 2019, there was only one warehouse in the municipality with 60,000 square meters of available space. This year, there have been inquiries from several companies for warehouse space of 300,000 square meters.
“These companies and several other companies in the municipality want district heating. They see district heating as a simple and reliable solution at a reasonable price,” says Peter Waldenström. Waldenström continues:
“More and more, companies are asking about our environmental ratings in production. We burn solid wood fuels and return all the ash to the forest. This means that we have very good environmental ratings, which is important to them.”
Major interest in single-family homes
Many homeowners in the municipality also have district heating, and there is record interest in building new single-family homes in Vaggeryd Municipality.
“Twelve residential plots were recently put up for sale and they sold in 20 minutes. That shows how eager people are to move here,” says Peter Waldenström.
This past year, Vaggeryds Energi has signed agreements with several new customers, which will lead to an increase in heating deliveries by 30 percent.
“We are also in dialogue with additional customers, which may provide a further increase of 10 percent. Though no agreements have been signed yet, these companies are likely to also want district heating.”
With individuals and companies moving to the municipality and the demand for heating increasing, the energy company’s current production facilities are getting to be too old. This has led to Vaggeryds Energi making the company’s largest investment ever. They will build a heating plant at a new location in the municipality and also expand the district heating network.
“From 1985–2020, we invested around 160 million SEK in district heating and in the next few years we will invest 200–250 million SEK. That comparison shows how big the investment is for us.”
Three options for development
To implement these investments, Vaggeryds Energi has hired FVB, which is involved in several different parts of the project, including layout design of lines, procurement, permit management, and network calculations.
“FVB’s extensive experience with district heating projects is obviously important. Another factor that has been important to us is that FVB has a large number of consultants who have extensive knowledge of district heating. If anyone at FVB was to quit, there are several others who have similar skills. This is a key part of the risk analysis that we done,” says Peter Waldenström.
Vaggeryds Energi currently has heating plants in both Vaggeryd and Skillingaryd. Three different options have been looked at for the future of district heating in the municipality:
- Replacing the existing heating plants with corresponding plants in the same locations, which is a relatively simple solution. The disadvantage is that it limits the development opportunities.
- Building a new heating plant between Vaggeryd and Skillingaryd. This would facilitate good development opportunities.
- Building a line from Jönköping and buying heat from Jönköping Energi.
“The solution that provides us with the most development opportunities is to build a plant between Vaggeryd and Skillingaryd and simultaneously connect these two district heating networks, which is what we have decided to do,” says Peter Waldenström.
The new heating plant has a permit for 20 MW and will burn solid biofuels. The plant will be located near the Waggeryd Cell pulp mill, which may also become part of the district heating system in the future.
“We are in dialogue with Waggeryd Cell regarding the possibilities of using waste heat from their plant, which could be a good addition to our production. FVB is helping us to investigate the technical conditions for such a collaboration,” says Peter Waldenström.
The new heating plant is expected to be operational in 2024, and two of the existing boilers in Vaggeryd and Skillingaryd will then be taken out of operation, which represents half of the current production. However, two other boilers will remain at these facilities.
“This requires changes to our district heating network, and FVB has solid knowledge in that area that we as a small company do not have.”
The flow has to be changed 180 degrees
The production plants in each network are currently at the opposite ends compared to where the new plant and line that will connect Vaggeryd and Skillingaryd will be. This means that the energy company has to change the flow 180 degrees, which means they will have to make adjustments to both existing networks to be able to connect them at the new heating plant.
In addition, a new district heating network will be established in Stigamo, which is at the border with Jönköping Municipality, where they will use heat from Jönköpings Energi.
“We have a lot going on at the same time and everything has to work out just right, but it feels like we’ve started on an incredibly fun journey,” says Peter Waldenström.
This year, Vaggeryd Municipality has received inquiries for warehouse areas of 300,000 square meters and they will be heated with district heating. Photo: Vaggeryds Energi.