Heating Budapest city Főtáv

HEATING BUDAPEST CITY

In 2011 the Hungarian government made radical changes either in the former feed in tariff system or the price regulation and funding system for companies in the Hungarian district heating sector. The government’s utility overheads reduction programme, which was started in 2013, has also increased competition among the industry players. In order to overcome these challenges, and to increase the value of the district heated flats, Főtáv Zrt has been focusing on three objectives: cheaper and greener heat production; market expansion and increasing efficiency in all areas of its operations. Edina Beale reports.

Established in 1960 as Budapest DH Works by the previous Local Government and still 100 per cent owned by a municipality of Budapest-owned holding company, Főtáv Zrt provides district heating, domestic hot water and space heating for 238,000 households and 7000 non-residential customers throughout the whole of Budapest. The heat supply of the company’s 550km pipeline network is fed by four combined cycle gas turbine (CCGT) power plants, five heat-only plants, one waste incineration plant, many gas engines and one gas turbine power station.

According to Mr Tibor Orbán, deputy CEO of Főtáv, the company has spent the past 2-3 years working on rationalisation, replanning and renegotiating contracts, expanding the market and implementing effective cost saving measures. The company has also carried out major investments to increase the utilisation of its more efficient and cheaper heat sources, and to improve energy efficiency. It began a flue gas heat recovery programme, and the first element of this was to implement flue gas utilising technology in the Rákoskeresztúr heat-only plant and the second in Füredi heat-only plant.

Another significant project in this field was the establishment of the North-Pest–Újpalota heat cooperation system. Involving an investment of around 5 billion HUF, which will be completed at the beginning of next year, this will allow Főtáv to increase the utilisation of heat produced from burning communal waste for heat supply and reduce its heat purchasing costs significantly. A future project to build a second waste to energy plant in Budapest is currently in the first phase of development. “The realisation of the South Budapest heat cooperation system project is backed up by the Hungarian government as well as other public utility companies as a joint effort is needed to cover the 60–70 billion HUF cost of this development,” explains Mr Orbán.

Főtáv currently owns and operates 3500 consumer substations and their modernisation is a continuous process; the company renews more than 100 substations every year. In previous years, the equipment and implementation of the substations was carried out by subcontractors. In the past two years, Főtáv has developed its own technology to manufacture the module units and established a production factory which is now manufacturing products not only for the company’s own use but also for sales. In 2013 the introduction of remote control systems in 700 substations was a major step towards focusing on the consumer and saving energy and labour costs. The company aims to carry out this development for all its substations in three phases over the next 3–4 years.

Főtáv puts great emphasis on environmental issues and one of its latest small investments demonstrates its commitment to providing a greener energy supply: It has built a 35kW household size power station on the roof of its office building and is now planning to find a solar system solution to replace some of the electric power drives to operate the main circulation pumps. The company is also carrying out reconstruction programmes to replace old pumps with newer, more energy-efficient ones. Similarly, Főtáv spends about 1 billion HUF every year on replacing heat-losing pipelines with more modern, well-insulated ones.

Great prospects

In the heat market competitiveness is mainly dependent on price, as customers tend to go for the cheapest supplier of heating solutions. Mr Orbán said the government’s overheads reduction scheme has helped the company to offer more competitive prices: “As a result of this programme either fixed or variable monthly fees were reduced for our customers whilst our biggest rivals, gas users, have only enjoyed reductions in their gas bills; the price and maintenance of their individual boilers have remained unchanged. On the other hand, we believe that we have vast potential for development and progress in staying ahead of our rivals, but we need the opportunities to find those.

“District heating is a comfortable and environmentally friendly energy source, and today offers competitive prices. Our job is to improve the image of district heating so we can expand our markets, and to break the communication barrier with the residents and convince them that district heating is in fact a value increasing factor of their property.”

Főtáv has played a part in many large property development projects in the past few years. It implemented a district heating system in the recently refurbished Ludovica Military Academy and has won many projects for trading centres and office buildings owned by foreign companies who are environmentally conscious. “District heating has a vital part to play in Hungary’s national energy strategy to 2030,” says Mr Orbán. “Based on this, we are on a significant development path in the future. This is supported by the 2014–20 EU resources for development, from which district heating may receive at least 60 billion HUF if we can show plans for large projects like the South Budapest heat cooperation project. Once an integrated energy plan is implemented in Budapest, district heating will have to go on a significant development journey in the capital city and beyond its borders. For this reason I am looking to the future with optimism.” n

Terra-21 Kft has been acting as a contractor of Főtáv Zrt since 2002. The company’s initial and only activity to build outdoor heating pipes has extended by now. For the request of Főtáv Zrt, our company has completed the refurbishing of the Gazdagréti Pumphouse, demolished the Óbuda Heating station, is taking part in a heating centre development and refurbishment program, is clearing heating centres that had been discarded and is providing maintenance and installation services for present and future clients in Budapest.

This requires complex, fast and high standard work commitment from the planning stage to implementation.

Terra-21 Kft employs experienced engineers and a team of professionals as well as having high standard machinery and a well developed network system. Besides Főtáv Zrt, the company is proud of their stable, long term customer base that was acquired not only in Budapest but lately outside of the capital city too.