Metering and billing of consumption in ULT DH systems

In general, metering of district heating consumption in ultra-low temperature district heating (ULT DH) systems is not different from traditional district heating. However, when electricity is used to boost DHW temperature, this share of the DHW production is no longer metered by the district heating company,or must be metered separately by an additional electricity meter.

There might be different ways to bill the consumer. One option is that the consumer is just billed the district heating consumption with usual tariffs, and then pays the additional electricity consumption over the general electricity bill. Though, this typically results in higher costs for the consumer, as electricity is typically priced higher than district heating. Another option is that the district heating company is compensating the consumer for the costs of the electricity consumption used for boosting. A third option is that the tariffs of ultra-low district heating can be adjusted to reflect the system advantages of using ultra-low temperature and thus compensate the electricity consumption for boosting. In this section, we will first take a look at general metering and billing practices and then finally discuss specific ultra-low temperature challenges and options.


Meter per dwelling or per building

In multi-dwelling buildings with collective heating systems, the district heating meter can be placed at the interconnection with the district heating systems and the collective substation that provides space heating and DHW. Alternatively, meters can be placed in the individual dwelling in combination with an individual substation (flat station). In the first case(A), electricity for boosting may be included in the general metering of the building’s shared electricity consumption or can be measured separately, typically at relatively low costs. In the individual dwellings(B), the electricity for boosting may be included in the general metering of electricity or can be measured separately by an additional electricity meter.

Meter parameters

Modern district heating meters have various properties:

  • Measured standard parameters: Flow, supply and return temperature.
  • Calculated standard parameters: Temperature difference, heat power, accumulated energy, accumulated volume and time.
  • Additional calculated parameters: ‘Supply energy’ and ‘Return energy’. These parameters are the integration of the temperature over the volume (∑temperature x volume). The parameters can be very useful as they make it possible to calculate the average supply or return temperature by dividing by the accumulated volume.
  • Additional input parameters: Some meters have the option of including additional temperatures or pulse signals from e.g. water meters or electricity meters.
  • Data storage: The different registers may be stored such as hourly values, daily values, monthly values, yearly values
  • Display: Showing the standard measures and calculated parameters.
  • Power supply: battery and/or AC/DC supply. AC/DC power supply is typically required when the sampling frequency of the meter data is high (also dependent on communication and battery technology, as well as the amount of data).
  • Communication: Multiple options including M-Bus (wired/wireless), buses used in Building Automation and Control Systems (BACS), radio frequency networks, analogic output, etc. Some meters have the option of providing more communication channels within the same meter,e.g. one communication channel for billing and another communication channel for BACS.

Smart metering

Smart meters are mostly referred to as meters giving the option to register energy consumption on an hourly basis, which allows for billing based on hourly prices. Further, there must be a communication of these data to the trader of energy, which relief the reading and reporting of the meter stand. In other words, the smart meter must be remotely read.

Other intelligent meter applications include e.g. leak surveillance detection or sensor fault detection


Billing information and frequency

The information on the energy bill should explain and reflect the tariffs which apply to the district heating system. Some tariffs are a fixed contribution per year, others are variable tariffs where the final bill will depend on the actual use of energy or other measurable entities. The fixed tariffs may reflect the fixed costs of the district heating scheme, including the appreciation on the assets, and the variable part the variable costs. But it is not necessarily so. Billing based on just variable tariffs exists as well. The questionnaire sent to the project partners has confirmed that.

The frequency of billing is typically based on the amount of consumption. Customers with smaller consumptions will typically be billed an interim 3-4 times per year with a yearly calculation of the actual consumption, and the large consumers more often, e.g. every month. The introduction of smart meters, also for customers with smaller consumptions, makes it applicable to provide bills more often. The district heating company may provide the consumer with a web interface or an app to look up its own consumption. Monthly bills may be sent by the means of electronic communication. In principle, future billing can be done down to the hour in case the meter resolution and communication/remote reading allows.

Variable district heating tariffs may be related to the energy and the transport costs of supplying the district heating to the consumer.

Variable district heating tariffs

Variable district heating tariffs may be related to the energy and the transport costs of supplying the district heating to the consumer. Transport costs are in some sense equivalent to the costs the electric distribution system operator (DSO) charges for distributing electricity:

  • Energy: The energy consumption as metered is multiplied by the district heating tariff. This tariff is typically set for one year and will remain unchanged throughout this year. However, also seasonal tariffs are used by a few of the Danish DH suppliers today, and perhaps in the future hourly tariffs may be applicable.
  • Transport: The transport tariff can take many shapes but would, in most cases, be based on the actual volume of district heating used. When the actual volume used is related to the actual energy used, the cooling-off of the district heating water can be calculated. The better the cooling-off is, the less the consumers are drawing on the capacity of the district heating system. The transport tariff can also be based on a return temperature limit that must be 40 °C. Thus, the transport tariff is expressing both capacity issues and temperature issues that are relevant, e.g. concerning flue gas condensation at production plants or utilisation of renewable distributed energy resources. The transport tariff may also be seasonal or even hourly.

In case the district heating tariff is based on volume only, this is to some extent a combined energy and transport tariff. In the case of the transport tariffs, these can take advantage of some additional calculated meter parameters available in modern heat meters, such as the ‘Supply energy’ and ‘Return energy’.

Fixed district heating tariffs

Compared with the transport tariff mentioned in the previous section, district heating tariffs can also include a fixed part attributed to the capacity provided. This can be a fixed tariff based on the living area of the building, or it can be a tariff based on the heating power capacity provided. Another capacity tariff exists as well. Besides, a fixed tariff is sometimes also put on the heat meter related to the lifetime cost of metering. This fixed meter tariff is sometimes denoted as a subscription of the meter. Other administrative costs can be included in the fixed tariffs as well.

When boosting the temperature with electricity, the electricity consumption as metered is multiplied by the electricity tariff to get the number to be billed.

Electricity tariffs

When boosting the temperature with electricity, the electricity consumption as metered is multiplied by the electricity tariff to get the number to be billed. The electricity tariff can, as for district heating, typically consists of variable parts taking into account the traded electricity and the transport on the distribution (DSO) and transmission (TSO) level. Fixed parts may include a subscription to the meter, as well as other administrative costs. Besides, different taxes may be part of the electricity tariff. The roll-out of electricity smart meters in Europe will facilitate the use of hourly tariffs, which are expected to be variable in a wider range in the future due to the massive introduction of renewable fluctuating electricity production plants such as wind turbines and PVs.

Connection fees

When connecting a building to the district heating system, the new customer would typically have to pay for the connection/branch pipe based on the actual enterprise costs. Different incentive schemes may apply when introducing a new district heating network to an area. The connection fee may also include a lump sum e.g. taking into account the administrative costs associated with getting a new customer.

Discussion of specific ULT metering and billing challenges and options

When applying ULT DH to an area, the district heating tariffs should optimally reflect the benefits of ULT for the district heating system. This may imply that the district heating company is operating with two different tariff structures –one for traditional district heating and one for ultra-low temperature. A non-exhaustive list of general benefits is:

  • When ULT DH is supplied to a new area from the return pipe of an existing system, the capacity of the whole system is expanded.
  • When ULT DH is supplied to a new area at the end of an existing network, no additional increase of the supply temperature is required at the plant(s) in the existing network to cope with the temperature loss in the new area.
  • When ULT DH is supplied to a new area, the distribution losses will be lower than if supplied with traditional temperatures.
  • When DH(not only ULT) is supplied to a new area with low energy buildings, the required capacity for each building is less than for traditional buildings.
  • When ULT DH is supplied to a new area, local distributed energy resources based on renewables or low energy waste heat are applied easier.
  • When ULT DH is supplied to a new area, because of the low temperature, pipe materials with less demanding properties can be used which can result in lower connection costs.
  • When ULT DH is supplying micro-booster units to boost the temperature at the consumer, the built-in storage tank can take advantage of the variation in hourly electricity tariffs to minimise the cost of boosting.

Thus, optimally these benefits should be divided into variable and fixed ULT DH tariffs as well as the connection fees. A threshold between when to apply the traditional and the ULT tariffs can be based on the ULT definition used in the RELaTED project:

District heating systems that supply district heating to the customers at a temperature level where the production of domestic hot water requires a supplementary heat source to deliver satisfactory domestic hot water temperatures. The supply temperature limit will depend on national requirements set to prevent legionella bacteria growth in domestic hot water systems. Though, all district heating systems supplying district heating at temperatures below 50 °C will be considered ultra-low temperature district heating systems (ULT DH).

Supplying district heating for low energy buildings and applying ULT also introduces challenges that can be handled in the tariff structure and billing practice:

  • In low-energy buildings, the consumption of DHW can be relatively high compared to the consumption for space heating. For the most efficient buildings, DHW consumption equals space heating consumption. In case, an exhaust air ventilation heat pump is used to produce the DHW. In the worst case, half the expected heat sale may disappear.
  • ULT DH tariffs should preferably reflect the real cost reductions due to ULT DH to motivate its use. For calculation of the private economy for the consumer, the electricity consumption of boosting the temperature cannot be neglected.
  • Separate electricity meters may be required and remote-read over the district heating meter (possible with extra inputs). Alternatively, a fixed reduction can be applied. In any case, this will require some additional posts on the bill.
  • In some countries, the tariffs of district heating schemes must be approved by a legal body. Adapting and getting new tariffs approved can be a time-consuming process that must be taken into consideration when addressing specific ULT-tariffs.

This information has been extracted from section 5 of document D.2.2. Interconnection schemes for consumer installations.