Heat prices for public buildings in Tianjin

Abstract

Energy-saving awareness of heat users and heating enterprises can be stimulated by implementing heat metering for public buildings and by establishing scientific and reasonable policies for heat prices in China. In this paper, a two-part heat price for public buildings in Tianjin is introduced, which divides the heat price into a basic part and a metering part. According to the statistical analysis of information collected from two pilot heating enterprises, the specific heat load for public buildings in Tianjin is calculated, and three candidate schemes of heat price are proposed. A simulation of heat cost is also conducted, and the benefits for both heat users and heating enterprises are balanced. Finally, the two-part heat price for public buildings in Tianjin is determined: the basic heat price is recommended to be 20 CNY/m², and the metering heat price is recommended to be 76.10 CNY/GJ. Such a price could be implemented in the initial stage of heat metering for public buildings in Tianjin.

Keywords

heat metering / public buildings / two-part heat price / specific heat load

Introduction

Heat metering

Heat metering refers to an implementation of heat measurement and charging by household in a given heating district. This system usually includes heating control technologies, measurement tools and pricing policies. The purpose of heat metering is to improve heat comfort and mobilize energy saving initiatives for heat users [ 1].

Heat metering originated in the 1970s in Western Europe [ 2]. In Denmark, mandatory policies of heat metering have been implemented since 1996. Calorimeters and heat allocation meters were used in buildings for heat metering [ 2]. Combined heat and power with district heating (CHP-DH) was promoted vigorously, and heat metering devices and facilities were improved consistently [ 3]. The German government announced metering and charging regulations for heating and hot water in 1981. In 1992, heat-metering corporations were introduced in Poland and gradually became more prolific. Calorimeters and heat allocation meters were used for heat metering in both Germany and Poland [ 1]. Heat metering achieved remarkable effect in many countries; for example, Denmark saved 11%–34% of their previous building energy usage due to these regulations [ 4]; the energy saving rate of heat supply reached 30% and 20% in Poland and Lithuania, respectively [ 5, 6]. These European countries at similar altitudes set good examples for heat metering in China.

In July 2003, eight ministries in China jointly issued the “Guiding opinions of pilot project on urban heating system reform.” The guideline clearly proposed the target of implementing heat metering in heating regions of China [ 7]. During the period of 11th five-year plan (the national economic plan in China, 2006–2010), heat metering and energy efficiency retrofits for existing buildings were developed in order, and the renovation task of 0.15×10⁹ m² was accomplished ahead of schedule [ 8]. Heat metering can improve indoor thermal comfort effectively while reducing the energy consumption of heating systems [ 9]. This system thus has significant potential energy savings and emission reductions [ 10] and supports the national strategy of sustainable development.

Although heat meters have been installed in new and existing buildings in China, most heat users are still charged with an area-based heat price. Because area-based heat prices are contrary to the original intentions of heat metering reform, the utilization rate of heat meters is relatively low, and heat users rarely have independent controls over their heat consumption according to their own demands. Therefore, mandatory constraint conditions are needed to realize heat metering.

Price policies

Charging policies play a decisive role in heat metering. Energy efficiency retrofits must be combined with individual heat metering and charging mechanisms to achieve the highest energy-saving effects [ 11]. Under the direct stimulation of metering heat price, heat users can have independent controls over their heat consumption according to their actual demand, which improves indoor comfort and avoids heat waste. Conversely, heating enterprises can improve their heating technologies based on specific situations, make efforts to reduce heating costs, and increase heating efficiency to gain additional profit. A reasonable price system is the most effective way to realize the benefits of heat metering: heat users are charged according to the heat they consume instead of being charged by a heat price based on the heating area in the building they reside. Considering the current method of pricing heat, the commercialization and monetization of the heat supply is shown to clearly follow the idea that “the more heat consumed, the more money paid [ 10].

Heat price policies vary in different areas of the world. In most European countries, two-part heat prices have been implemented for many years [ 12]. The two-part heat price includes a basic heat price and a metering heat price. The basic part is charged according to the construction area or volume, while the metering part is charged according to the record of calorimeters. In Denmark, the basic part of heat costs could not exceed 60%, and the metering part was not less than 40%. In Germany, the basic part could not exceed 50%, and the metering part was between 50%–70% [ 12]. In Poland, the “Heating Price Law” was enacted in 1998, which stipulated the heat price and calculation principle. To households with calorimeters or heat allocation meters, the basic part of heat costs was 40%, and the metering part was 60%; to users with only a total calorimeter but no household calorimeter, the heating costs were distributed according to the construction area based on total heat consumption [ 2].

In China, household metering and charging requirements based on heat consumption were proposed in the “Guiding opinions of pilot project on urban heating system reform.” In 2008, the Ministry of Housing and Urban-Rural Development issued the “Heat metering and management measures for civil buildings” to promote individual heat metering and charging mechanisms in all types of buildings.

With the reform of heat metering, implementation approaches for different types of buildings must be developed. For instance, public buildings may have certain open hours, but residential buildings are occupied all day long. With different heat demands and heat supply modes, public buildings and residential buildings must be treated separately. However, at the initial phase of heat metering reform in China, only residential buildings were addressed. Therefore, research on heat metering is still required for public buildings.

Public buildings

Public buildings refer to non-residential civic buildings, which primarily include office, commercial, historical, university campus, communication and transportation buildings. With regard to the heating systems for public buildings, a single building is usually taken as a unit for central heating supply. The whole building is concerned for heat metering and regulation instead of having household controls, as in a residential building. Unlike residential buildings, cost differences between rooms with different orientations and uses do not exist in heat metering systems for public buildings [ 9]. Therefore, it will be easier to implement heat metering and charging in public buildings and thus heat metering reform. Several studies have already explored heat metering in university campus buildings and commercial buildings [ 13, 14].

In March 2010, the Beijing Municipal Committee of City Administration and Environment and other commissions jointly issued the “Interim managing arrangements of heating metering for public buildings in Beijing,” which was the first policy document of heat metering and charging for public buildings in China. It specified that a two-part heat price should be implemented in non-residential buildings in Beijing and proposed specific prices of both the basic and metering parts of those prices [ 15]. Such policy played an important role in promoting heat-metering works for public buildings in China.

The heat price policies in some places in China have been released, which are partly shown in Table 1.

For public buildings, a two-part heat price has been applied in most places. A two-part heat price contains a basic heat price (i.e., a fixed part) and a metering heat price (i.e., a variable part). The two-part heat price highlights the commodity attribute of heat: heat price can be used for the repair and management of heating systems, ensuring the recovery of funds and promoting heating enterprises to provide more heat at less cost; conversely, heat users must pay for the heat according to the amount of heat they consume, which encourages them to develop energy-saving habits such as independent controls [ 10]. Therefore, a two-part heat price can balance the benefits of both heating enterprises and heat users. It is a scientific and reasonable price mechanism that provides a useful reference and guidance for heat metering prices in Tianjin.

In 2008, the Tianjin Economic-Technological Development Zone and the Tianjin Airport Economic Zone were selected as pilot areas for a heat-metering scheme with a two-part heat price [ 16]. However, the two-part heat price was primarily set in accordance with the standards of residential buildings, which could not reflect the energy consumption characteristics of public buildings. The government did not issue relevant policy documents, either. In this case, it is more necessary and urgent to publicize the heating price mechanism and a suitable scheme for public buildings in Tianjin, making full use of the data and experience from pilot heating enterprises.

Research contents and purposes

This paper aims to explore a two-part heat price for public buildings in Tianjin and specify the criteria of heat metering and charging. There are two primary research targets. The first one is to determine the specific heat load in unit area of the city. After collecting the flow rate and temperatures of supply water from heating enterprises and the heating area of the public buildings in service, the specific heat load could be obtained which represents the heat consumption of heat users, providing a key parameter for calculation of the two-part heat price. The second one is to propose heating price policies. According to the specific heat load of unit area and the regional heating characteristics of Tianjin, heat metering and charging regulations for public buildings can be proposed. Then, the heat price mechanism can be determined, and the benefits of heating enterprises and heat users can be balanced according to the simulation results.

A scientific mechanism of heating price can effectively arouse heat users’ awareness of energy conservation and promote the technologic optimization of heating enterprises. This will improve the energy efficiency of all public buildings in Tianjin, which is of profound significance for energy savings and emission reductions.

Case study

Currently, there are two pilot heating enterprises with heat metering and charging in public buildings in Tianjin, the TD Thermal Power Corporation in Tianjin Economic-Technological Development Zone and the TB Thermal Power Corporation in Tianjin Airport Economic Zone. The data including heating system performances, price mechanisms and heat cost payments in recent years have been collected by conducting detailed field investigations.

The heating season typically lasts for 5 months from November 1st to March 31st of the second year for the public buildings covered by the TD Thermal Power Corporation. Both mechanisms of a one-part heat price and a two-part heat price are applied at TD. Conversely, the heating season lasts only for 4 months from November 15th to March 15th of the next year for the public buildings covered by the TB Thermal Power Corporation. At TB, only a two-part heat price is applied. The specific pricing schemes of the two companies are demonstrated in Table 2.

In the two-part heat price of the TD Thermal Power Corporation, the basic heat price is calculated based on the installed heat load of the heat exchanger rather than on the charging area. The reason for this is that there are many industrial buildings with large indoor areas, but there is no uniform standard to measure the charging area. With the data in Table 2, it is not easy to directly compare the heat price in the two pilot heating enterprises. The area-based heat price can be obtained after the conversion of the two-part heat price of the TD Thermal Power Corporation, which is accomplished using the data obtained from the heating enterprises; the installed capacity of the heat exchanger is approximately 120 W/m². The heat price of public buildings in Beijing (Table 1), where the climatic and heating conditions are similar to those of Tianjin is listed in Table 3 for comparison.

The area-based heat prices in the three heating regions are shown to be similar, but significant differences exist in the ratio of the heat-metering price to the basic heat price. These ratio variances are caused by many factors. The difference of heating costs between heating enterprises and the difference of heat consumption in different regions will both influence the cost of heat. At present, individual heat metering and charging work conducted by the two pilot enterprises has not changed for more than 5 years. Heating enterprises can achieve a general balance budget with certain subsidies from the governments. Heat users pay monthly for the heat they consume, which can produce good energy-saving effects. Therefore, the formulation method of a two-part heat price by the pilot heating enterprises provides a good reference for determination of the heat price for public buildings in Tianjin. The heat price values also provide a clear reference range for consideration.

Specific heat load and heat price

The TD and TB corporations have provided detailed records of the heat costs and consumptions of each public building under their management using an energy-monitoring platform. For each heat user, the monitoring platform has a recording frequency of more than 5 times per hour, and the total recording time covers more than 3 heating seasons. Based on the collation and analysis of the heating data, the specific heat load of the public buildings in Tianjin in a single heating season can be calculated. With the specific heat load, the proportion and value of the fixed and variable parts of the two-part heat price can be determined, and heat metering price schemes can be proposed.

Calculation method of heat price

Heat price consists of heating costs and additional profit. Heating cost is important for the formulation of heat price, and it consists of fixed costs and variable costs. The salaries and welfare of the workers, depreciation and maintenance costs of the equipment, operation and management costs are all fixed costs, which basically do not change with heat consumption. The energy consumption (including coal, water, electricity, oil and so on) costs of heating enterprises are variable costs, which are closely connected with the heat load change.

The two-part heat price is the essence of a heat metering price scheme. According to the heat prices at the TB Thermal Power Corporation and in other cities of China, the formula for a two-part heat price are expressed as Eqs. (1) to (3).

(1) F_a=F\times p,

(2) F_c={\displaystyle \frac{F\times (\mathrm{1}-p)}{K_a}},

(3) C=F_a\times A+F_c\times \mathrm{Q,}

where A is the construction area (m²), C is the total heat costs paid by heat users (CNY), F is the basic heat price in area-based heat price (CNY/m²), F_a is basic heat price (CNY/m²), F_c is metering heat price (CNY/kWh), K_a is the specific heat load of unit area in a heating season (kWh/m²). Q is the actual heat consumption in a heating season (kWh), and p is the ratio of basic heat price to total heat price.

In the parameters above, basic heat price reflects the fixed costs, metering heat price reflects the variable costs, and basic heat price in area-based heat price represents the total heat costs. There is a strong correlation between heat price and heat costs, but it is difficult to formulate an accurate functional relationship.

Therefore, three parameters must be determined for any heat metering price scheme, the first being the basic heat price in the area-based charging form, the second being the ratio of the basic heat price to the total heat price, and the third being the specific heat load of public buildings. The basic heat price and the ratio of basic heat price vary in small ranges, but the specific heat load represents the heat consumption of public buildings in Tianjin, which varies markedly in different regions. The specific heat load significantly influences the metering heat price and the total heat cost, so it is the key value in this paper.

Specific heat load

In the current two-part heat price mechanism of the pilot heating enterprises, the reference specific heat load is 73 kWh/m² (TD Thermal Power Corporation) and 98 kWh/m² (TB Thermal Power Corporation). Using Eq. (2), the metering heat price varies with different specific heat loads (Table 3). Therefore, acquiring the actual heat consumption of public buildings is a key step in determination of the heat-metering price. Statistical results of actual heat consumption can provide a direct and accurate way to determine the specific heat load of public buildings in Tianjin.

With the data collected from the TD and TB corporations, the heat consumption of public buildings in these two regions can be evaluated, and the average specific heat load can be obtained.

According to the heat consumption data of the three measured heating seasons (2008–2009, 2009–2010, and 2010–2011) at the TD Corporation, records from 120 days starting on November 15th are selected. The calculation results of heat consumption by unit area are shown in Fig.1.

There are 23 public buildings in the heating regions of the TD Corporation, most of which are office buildings. The heat consumption by unit area in each heating season is 8.16–321.53 kWh/m². Significant difference can be found in the heat consumption of different buildings; however, their mean value is 110.91 kWh/ m².

According to the heat consumption data of three measured heating seasons (2010–2011, 2011–2012, and 2012–2013) at the TB Thermal Power Corporation, records of 120 days starting on November 15th are selected. The calculation results of heat consumption by unit area are illustrated in Fig. 2.

There are 25 public buildings in the heating regions of the TB Thermal Power Corporation: 15 office buildings and 10 commercial buildings. For office buildings, the heat consumption per unit area in each heating season is 29.19–150.72 kWh/m², and the mean is 68.98 kWh/m². The difference in energy consumption between each building is small. For commercial buildings, the heat consumption per unit area is 38.36–173.39 kWh/m², and the mean is 97.51 kWh/m². The difference in energy consumption between each building is slightly larger than that in office buildings.

Statistical analysis is pertinent to the average heat consumption per unit area of each public building, especially if the effects of construction areas are ignored. Considering statistical significance, the data are further analyzed.

The average values of specific heat consumption per unit area are classified by frequency statistics. With the results of frequency and cumulative frequency, a histogram is obtained (Fig.3). Compared with the bar graph of direct statistics, the histogram demonstrates the data distribution more clearly, including the concentration and the dispersion.

As displayed in Fig.3, in the heating regions covered by the TD and TB corporations, a bimodal distribution is evident. The heat consumption in more than 70% of the public buildings is 50–100 kWh/m², and the distribution is concentrated. However, the heat consumption in the remaining public buildings is greater than 120 kWh/m².

Conversely, the data are also separated according to building type (i.e., office or commercial) and heating enterprise (i.e., the TD or TB corporation). The means, medians, extreme values, and upper and lower quartiles of the heat consumption per unit area are summed, and the results are presented in Fig. 4.

Each characteristic value in the statistics shown has its specific meaning. The extreme value determines the interval width of the actual heat consumption distribution. The mean value represents the average heat consumption of public buildings in the corresponding regions. The upper quartile, median value and lower quartile, respectively, represent the beginning of the top 25% of heat consumption data points, the middle data point and the end of the lowest 25% of the data points after ranking the heat consumption data per unit area from the highest to the smallest. The practical implications of these three values are that there are, respectively, 75%, 50%, 25% heat users whose heat consumption per unit area is less than the corresponding characteristic value.

As shown in Fig. 4, the distribution range of heat consumptions in the regions covered by the TD Thermal Power Corporation is much wider and larger than that covered by the TB Thermal Power Corporation, which indicates that the difference between public buildings is large. With regard to building type, the difference between commercial and office buildings is only significant in the extreme values of heat consumption while the primary distribution range and median values are similar. It can be seen that only the classification results of building types are comparable, and the difference between the quartile and median values of the two types of buildings is small. Considering all the pilot public buildings investigated in the two zones, the statistical result is illustrated as the right column box plot and shown in Fig. 4. The quartile and median values are similar to the results classified according to building type, indicating that the specific heat load in half of the buildings is less than 72.72 kWh/m², while the specific heat load in 75% of the buildings is less than 128.6 kWh/m². In addition, the average heat consumption per unit area for public buildings in investigation regions is 95.02 kWh/m². These characteristic values can be used as important references for the specific heat load per unit area for public buildings in Tianjin.

According to Eqs. (2) and (3), if the actual heat consumption is lower than the specific heat load, the total heat cost paid by heat users will decrease. Therefore, if the median value or upper quartile is used as the specific heat load, the proportion of heat users who would pay less after changing from a one-part to a two-part heat price scheme is near 50% or 75%. If the mean value is used as the specific heat load, the fluctuation of heat consumption above and below the benchmark is generally symmetrical, indicating that after heat price reform from a one-part to a two-part scheme, the extra heat cost paid by heat users with a higher heat consumption would partially offset the refund of heat users with a lower heat consumption. If the generalized mean value is used as the specific heat load with full consideration of the influence of building area, the income of heating enterprises could roughly remain the same, compared with the one-part heat price. The generalized mean value is defined by Eq. (4).

(4) q_a={\displaystyle \frac{{\displaystyle \sum _{i=\mathrm{1},j=\mathrm{1}}^{m,n}{Q}_{i,j}}}{{\displaystyle \sum _{i=\mathrm{1},j=\mathrm{1}}^{m,n}{A}_{i,j}}}},

where q_a is the generalized mean value of heat consumption per unit area, kWh/m²; Q_i,j is the total heat consumption of Building No. i during the heating season j, kWh; A_i,j is the construction area of Building No. i during the heating season j, m²; m is the total number of public buildings; and n is the total number of heating seasons.

q_a represents a weighted average value by considering the quantity and area of public buildings. Based on Eq. (4), the generalized mean values of heat consumption per unit area in the heating regions of the TD and TB corporations are, respectively, 65.58 kWh/m² and 60.59 kWh/m². The generalized mean value of heat consumption per unit area throughout the investigation region is 62.61 kWh/m².

To reach a specific heat load, the schemes as listed in Table 4 are proposed.

Heat price schemes

To determine the total heat price, the real expense of heating enterprises should be fully considered. According to the energy consumption bill from the TD and TB corporations, the variable heat cost is approximately 56.9 CNY/GJ, accounting for 55%–65% of the total cost. In accordance with the heat supply of 0.4 GJ/m², the total heat costs are equivalent to 37.9 CNY/m². At present, the Tianjin Price Bureau stipulates 40 CNY/m² as the total heat price for non-residential buildings, which is close to the heat costs calculated. After considering various factors and in order to keep heat prices stable, a basic heat price in area-based heat price of 40 CNY/m² is still recommended.

The ratio of the basic heat price to the total heat price is also important: as the proportion of the basic price increases, the income change of heating enterprise will decrease. The data provided by heating enterprises show that the proportion of variable costs is approximately 55%–65%, so the proportion of the fixed costs is about 35%–45%. According to the “Interim management arrangements for city heating prices,” the basic heat price can account for 30%–60% of the total heat price. At the beginning of the implementation of the two-part heat price, the ratio of the basic heat price can be made moderately high. Therefore, after comparing the two-part heat prices implemented in the different regions studied, the ratio of the basic heat price could be set at 30%, 40% or even 50% in principle.

Using Eqs. (1) and (2), a two-part heat price for public buildings in Tianjin can be calculated. Three candidate schemes as listed in Table 5 are recommended.

Simulation of heat cost

According to the three candidate schemes in Table 5, the income change of heating enterprises and the associated decreased or increased payments of heat users can be easily determined after the calculation and comparison of heating costs. Finally, an objective and reasonable evaluation of heat price schemes can be summarized.

Comparison of heat costs

The construction area and heat consumption data of 48 public buildings are available for the calculation of heat costs. All of these buildings belong to the TD or TB corporations, and the data covers the five most recent heating seasons from 2008 to 2012. During calculation, one-part heat prices are based on the current situation in Tianjin, namely charging 40 CNY/m² (i.e., area-based form); a two-part heat price is divided into a basic heat price and a metering heat price, as shown in Table 5. Parts of the results are shown in Fig. 5.

Because of the large amount of data, calculation results cannot be listed completely. By calculating and comparing the heat costs of all pilot public buildings, the change of the total income for heating enterprises and the refund to heat users can both be calculated. The results are shown in Figs. 6 and 7 and Table 6.

Analysis of advantages and disadvantages

The calculation of heat costs shows that when the ratio of the basic heat price to the metering heat price is fixed, the metering heat price will decrease with an increase in the specific heat load. This indicates that heating enterprises will not have much profit after the implementation of a two-part heat price. For example, with Scheme 3 (i.e., the specific heat load is 95 kWh/m²), the profit of heating enterprises will be seriously reduced. When the specific heat load is fixed, as the ratio of the basic heat price decreases, the profit of heating enterprises will change markedly. For example, when the basic heat price ratio is 30%, the heating enterprises will receive the greatest change of their profit (Fig. 6). For the heat users in public buildings, the heat cost will decrease with an increase in the specific heat load, indicating that more users will receive a refund from the reformed heating tariff. However, the basic heat price ratio only affects the refund of heat users, but is not related to the number of users who receive a refund (Table 6).

In Scheme 1, the profit of heating enterprises will be maintained, but the refund proportion will be low. In Scheme 3, more heat users can receive a refund, but the profit of heating enterprises will decrease significantly. In Scheme 2, the effects are between the other 2 schemes (Fig. 7). The three candidate schemes have their respective characteristics, and the final decision must strike a balance between the profit of heating enterprises and the incentive of energy-saving behaviors of heat users.

Conclusions

It will be a long-term and complex work to establish a heat metering price system for public buildings. According to the experiences of European countries and other heating regions in China, a two-part heat price system with a basic heat price (i.e., charged by area) and a metering heat price (i.e., charged by heat consumption) should be established for public buildings in Tianjin.

The specific heat load of public buildings in Tianjin, which significantly influences the final heat price, is the focus of this paper. According to the statistical results, three typical values of the specific heat load are 63 kWh/m² (i.e., the generalized mean value of heat consumption of all users), 73 kWh/m² (i.e., the median value of heat consumption) and 95 kWh/m² (i.e., the mean value of heat consumption). With a total heat price of 40 CNY/m² and a basic heat price ratio between 30% and 50%, three candidate heat price schemes are compared to balance the benefits of both heating enterprises and heat users.

In the initial attempt of the heat price reform for public buildings in Tianjin, heat users will support the scheme which can bring them more refund, while heat enterprises have to invest more to maintain the stable operation of heating systems. In order to strike a balance of interests between both sides, Scheme 2 (i.e., specific heat load of 73 kWh/m²) is finally recommended as the best price system for current implementation. The basic heat price ratio is set to 50%, which is 20 CNY/m² based on area form. The metering heat price is 0.2740 CNY/kWh, which is equivalent to 76.10 CNY/GJ.

Although the quantity and types of public buildings surveyed are limited, the heat metering mechanism for public buildings in Tianjin should be initially established with a feasible and specific two-part heat price. These values can be adjusted according to future investigations to achieve higher performance and further improve heat metering reform.

It is of great significance to implement heat metering reform and two-part heat pricing for public buildings in Tianjin. Scientific and reasonable heat pricing can have significant effects on heat users and heating enterprises: lower costs for heat users, more profit for heating enterprises, and overall energy savings. Heat-metering price is certain to be supported by the local government for its economic, environmental and social benefits.

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