The best hotwater system setup

As I am waiting for more details on the up coming government program for renewable energy, I had a long talk with someone that deals with heating systems every day. He told me about a way to setup your hot water heating system so that it will operate at it's top efficiency.

Most contractors setup heating systems by just connect up a thermostat to the control unit that runs the circulating pump. When you need heat it turns on the pump and you get heat. This is actually the worst way to run a hot water system because your heating system will keep over shooting the temperature that you want. You will find that the house will get really hot, then cool then hot again. This all takes a lot of extra energy. It also means that the furnace it's self keeps will run for 2-3 minutes at a time trying to stay hot. When it takes a minute or so to heat up all the parts of the furnace before it starts heating the water again you can see how this would reduce your efficiency.

The (not so new) setup that I was told about is much more efficient because it allows the furnace to cool off, right down to room temperature when it is not needed (like during the summer and maybe night time), when heat is needed the furnace will turn on and heat up, the pump that is connected only provides enough heat to the house to bring it to temperature. The control that is used keeps track of the water temperature that is in the radiators, the temperature outside and the requested indoor temperature. All of this data is used to tell the system exactly how hot to make the water that is pumped into the radiators. So for example, if it is -20degC out side then the system may need water temperatures of 180degF but if it is only -5degC out side then the system may only need water temps of 130degF (or maybe less). This means you get a much more even heated house and a system that uses less energy/oil.

Here is a diagram of the basic system
(This is very basic diagram so don’t try to use it to setup a system. You things like heat traps, expansion tanks etc. Once I get it all figured out I will post another diagram with more details)
Pump#1 – this pump is controlled by the furnace and will only turn on when the furnace is running at a set temperature, this is what allows the furnace to be turned off completely when no heat is being called for. (Prevents cold water from being circulated)

Pump#2 – this is a variable speed pump. The control senses the temperature of the zone pipes as well as the outside temperature then decides how fast to run this pump to get the radiators at the correct temperature. (This is basically a mixing pump; it pulls just enough hot water out of the furnace to get the water in the radiator loop to the target temperature)

Pump#3 – this pump is used to keep all the radiators at the same temperature, it just circulates the water with in the radiator loop.

Pump#4 – used when the hot water tank calls for heat (I am not sure that I put this in the correct spot) the hot water tank is an indirect tank, it has a coil in it that the water from the furnace circulated in to heat the drinking water contained with in the tank.

Each of the zones would also have a zone valve on the return so that each zone could be controlled individually.