Chris Waggett

14 January 2013 – Letter: I read with interest your article “District Energy: it’s cool (or hot), green, cheap…needs to come out of the closet” by Jonathan Prendergast, Prendergast Projects, 13 December 2012, and felt compelled to offer a contrasting view.

I am chief executive officer of D4 Urban and was formerly an inaugural director of the Green Building Council of Australia, in 2000-2002, and was also president of Lend Lease Communities based in Denver, Colarado 2006-2011.

My company is the developer of the Denver Design District, a 67 acre (27.11 hectare) assemblage between two light rail stations, 1.5 miles from the CBD, where we intend transitioning the existing 95 per cent leased, 1 million square feet (92,903 square metres) bulky goods power centre, specialty retail and commercial tenants into a model transit-oriented, mixed use, urban redevelopment community adjacent to established and desirable residential neighborhoods.

Our goal is to be minimum LEED Gold, for individual buildings regardless of typology, and LEED-Neighborhood Development for the overall community. The initial phase of 275 multi-family apartments is slated to commence construction Q3/2013.

In this context, we were intensely interested in the notion of district energy as both a competitive advantage and for “protective obsolescence” and we therefore commissioned a leading environmental engineering consultancy, Group 14 to undertake a feasibility study, carried out for us through the local power utility, Xcel Energy’s energy design assistance program.

Despite the multiple systems analysed, including multiple configurations of cogeneration with woodchip steam boilers and photo-voltaics, none had a positive 25 year net present value. The cogeneration system results, combined with recent published research, indicate that such a system is not economically viable in our context.

The main drivers of this conclusion are the relatively low electricity costs (in Colorado), combined with low continuous heating loads due to the nature of the anticipated future development (residential, hospitality, retail and commercial office). Indeed the main summer heating load is for domestic water heating for the residential units and this load is simply not large enough to make a cogeneration system viable.

Some results of a very recent study carried by the globally renowned National Renewable Energy Laboratory  based in nearby Golden, Colarado, for Denver Housing Authority were able to be directly applied to our site. Where conditions of that study were directly applicable to our Phase 1 residential project they were not re-analysed. For example, NREL analysed a gas turbine appropriately sized to loads for DHA. Unfortunately the 75 year payback period that they found would be the same for an appropriately sized system on our site so, again this was unviable.

After discussing these results, Group14 and D4 Urban agreed that the energy efficiency analysis going forward should focus on energy efficiency at the building level. Campus?wide systems are very unlikely to be economically beneficial, especially relative to payback periods of five years or less for many building level efficiency strategies.

In conclusion, district energy systems while conceptually appealing are fundamentally driven by project density, phasing and loads, together with annual ambient conditions prevailing at the site and critically, energy costs.

I hope this perspective is helpful to your readers.

Chris Waggett is chief executive officer of D4 Urban and previously president of Lend Lease Communities in Denver Colarado and a founding director of the Green Building Council of Australia.