District Heating policies need urgent attention according to the IEA so here in Europe it’s a good moment to examine what the “Fit for 55” package means for the sector’s future development. On February 10 Energy Post is hosting an online roundtable alongside MEP Pernille Weiss, MEP Morten Petersen, and MEP Grzegorz Tobiszowski – all (senior) members of the ITRE committee – to take in the viewpoints of key Member States and stakeholders (COGEN Europe, Danfoss, Grundfos, Agora Energiewende, Euroheat and Power and PGE). You can register here. Providing excellent background to the discussion, Chiara Delmastro at the IEA explains below how and why progress on district heating is not on track to reach its net-zero goals. District heating is a favoured solution for efficiency gains and emissions cuts because the heat is generated centrally rather than in individual buildings. This is a very popular heating solution especially in chillier climes such as Sweden, Denmark and countries like Poland where 6,000,000 homes are connected directly to heating networks. Globally, district heating today supplies only 8.5% of heat used in buildings. And nearly 90% of that heat is produced from fossil fuels: coal (45%), natural gas (40%) and oil (3.5%). What are the challenges and opportunities for District Heating? Read the IEA summary and register now for the roundtable on February 10 at 10am online.
District heating systems are an important part of heating sector decarbonisation, as they allow for the integration of flexible and clean energy sources into the energy mix, which could be challenging at the individual building level in urban dense areas. However, although many cities are already implementing low carbon district heating solutions, around 90% of global district heat production today still relies on fossil fuels.
Net Zero Emissions by 2050 Scenario
In the Net Zero Emissions by 2050 Scenario, the combined share of renewable sources and electricity in global district heat supplies together rises from 8% today to about 35% in the current decade, helping to slash heat generation carbon emissions by more than one-third.
District heating systems have been in operation since the late 1870s, mostly in densely occupied areas with high and consistent heat demand. Many buildings and industrial sites rely on district heating, ranging from large urban networks in Beijing, Seoul, Milan and Stockholm to smaller networks such as university and medical campuses.
District heating systems are important solutions for decarbonising the heating sector in the Net Zero Emissions by 2050 Scenario. Modern networks with low operating temperature can integrate 100% renewable sources to supply energy-efficient buildings, especially in areas where decentralised solutions would not allow the direct integration of available clean energy sources or efficient operations, for example due to space or infrastructure constraints.
District heating networks operated with electricity could also offer electricity grid flexibility services through demand-response.
Despite these advantages, however, low carbon district heating potential remains largely untapped and future systems need to be redesigned to adapt to a different heat supply mix and meet new conditions for heat delivery.
The global district heating market is growing
Global district heating production was 16 EJ of heat in 2020, jumping 30% from the 2000 level at an annual compound growth rate of ~1.3% (or 2.4% if normalised for climatic conditions). The impressive 2.3% increase from 2019 to 2020 was spurred mainly by China and partially by Korea (7% growth each).
China, Russia and Europe are responsible for more than 90% of global district heat production, and therefore critically influence the average carbon intensity of district heating. China had the greatest growth since 2000, with it more than quadrupling by 2020, and is the world’s largest producer (responsible for more than 35% of global district heat production). The sector is also growing in the United States and Korea. In the latter, district heat production has expanded rapidly, nearly doubling since 2000.
Before its delivery, part of the heat produced is lost during the distribution process. Many networks operating today distribute heat by pipe through pressurised water at supply temperatures of over 80°C, with losses ranging from 10% to 30% or more in the most inefficient systems. The renovation of existing networks towards lower operating temperatures, improved piping insulation and integration of digitalisation solutions, reduces heat losses significantly- and targets values are below 10%.
REGISTER NOW – DIGITAL ROUNDTABLE
FEBRUARY 10, 10.00am to 11.30am CET
Under the “Fit for 55” package, the European Commission proposed several regulatory changes that, combined, are meant to decarbonise district heating in Europe. But are these options workable for all? Register now to engage in seeking answers to that and other questions on district heating with a special focus on the energy and industry perspective.
MEP Pernille Weiss, Member of ITRE and ENVI Committee of the European Parliament
MEP Morten Petersen, Vice-Chair of ITRE Committee of the European Parliament
MEP Grzegorz Tobiszowski, Member of ITRE Committee of the European Parliament
With interventions from the following stakeholders:
Birger Lauersen – President, EUROHEAT and POWER
Andrea Voigt – Head of Public Affairs, DANFOSS
Przemyslaw Kolodziejak – CEO, PGE EC
Hans Korteweg – Managing Director, COGEN EUROPE
Jonas Fredsted Villadsen, Head of Public affairs, Grundfos
Michaela Holl, Project Lead EU Green Deal, AGORA ENERGIEWENDE
Nearly 40% of the heat generated globally in district heating plants goes to the industry sector, which also impacts a network’s ability to reduce distribution temperatures, as industrial users often require high temperature heat. Using heat pumps to increase temperatures at local substations can offer solutions in such cases. China leads, with more than 50% of global district heat consumed in its industry sector in 2020, up from around 34% in 2010. By contrast, this share fell to 24% in Russia, down from more than 40% in 2010.
Globally, district heating supplies a relatively small share of heat used in buildings, at only 8.5% of the sector’s heat consumption – a share that has remained impressively constant since 2000, considering that floor area increased 65% at the same time. However, although the global average share is low, district heat does cover a high portion of heat delivered in buildings in some European countries, such as Denmark and Sweden (above 45%), as well as in Russia (~45%) and China (~15%).
Despite market growth, the potential of low carbon district heating remains largely untapped
One of the main strengths of district heating systems is their capacity to integrate several energy sources, including waste heat and renewables. Nevertheless, in 2020 nearly 90% of heat globally was produced from fossil fuels, prevalently coal (45%), natural gas (40%) and oil (3.5%), down from 95% in 2000.
The share of coal used to generate district heat globally jumped from 35% in 2000 to 45% in 2020 owing to China, which consumes nearly 70% of coal used for district heating globally and accounted for all coal-based growth since 2000. 2020 was no exception, with coal use rising 1.3%.
Meanwhile, the share of natural gas in district heat generation dropped from 51% in 2000 to 40% in 2020, and oil use declined from 9% to 3.5%. The use of electricity for district heating is still low, at below 0.3% in 2020. Interestingly, Helsinki is currently using its wastewater to run a heat pump for the city’s district heating network; and Vienna uses a power-to-heat plant to convert electricity from wind turbines into district heat for 10,000 homes.
The share of renewables and electricity together should quadruple by 2030
Renewables are already being integrated into the district heating generation mix, but not in large enough quantities. They made up 8% of energy inputs for district heat production in 2020 (mainly as bioenergy), which is similar to 2019 but is an increase from the share in 2015 (7%) and 2000 (less than 4%). The primary renewable resources with potential to be employed in district heating systems are solar thermal, geothermal and bioenergy. Europe leads in the use of renewables for district heating, accounting for most global solar thermal and geothermal use and 75% of bioenergy-based production.
Many networks have successfully integrated renewable energy sources. For instance, Silkeborg, Denmark, has 110 MWth of installed solar thermal capacity, sized to supply around 20% of district heating capacity in 2017, while Munich has several geothermal plants in operation (the first since 2004) for a total of 40 MWth, and it aims to shift to 100% renewable district heating by 2040. A total of more than 260 large-scale solar-based district heating systems were in operation in 2020. Denmark has more than 120 of these systems, followed by China with 18.
Bioenergy currently accounts for the largest share of renewable district heat supplies, especially for use as a conversion fuel in old plants or in areas with high biofuel availability (e.g. biomass-rich mountain areas). For instance, district heating plants were converted to use biomass and waste in Copenhagen (covering more than 95% of all heat generated) as well as Vilnius, Lithuania (supplying 45% of heat produced in 2018).
Annex TS5 of the Technology Collaboration Programme on District Heating and Cooling (DHC TCP) – Integration of Renewable Energy Sources into Existing District Heating and Cooling Systems – is exploring technical solutions to integrate renewable energy sources into both existing and modern district heating systems.
Excess heat is also an important resource that can be exploited by district heating networks. Excess heat can be recovered from industrial facilities and data centres, but also from unconventional sources such as supermarket refrigeration, sewage and wastewater. Ongoing projects are filling the knowledge gap to better understand the potential of this resource. For instance, the MEMPHIS project (DHC TCP) focused on a methodology to map and identify low-grade excess heat at the local level and the ReUseHeat project showcases replicable models enabling the recovery and reuse of waste heat available at urban level.
In the Net Zero Emissions by 2050 Scenario, the combined share of renewables and electricity used in district heat quadruples by 2030: renewable production jumps to more than 20% in 2030, nearly tripling today’s level. The share of electricity (using electric heat pumps) also grows to around 12%, while fossil fuel use decreases by more than 40% compared with 2020. For Net Zero alignment, the average carbon intensity associated with district heat production must drop by more than one-third in the next decade.
Innovative systems are emerging, and their potential must be exploited
More heat source diversification (especially through shifting from fossil fuels to renewables, electricity and excess heat) and the integration of large-scale heat pumps will propel the transition towards lower-temperature and more flexible district heating networks – a progression from third-generation to what is called fourth-generation district heating.
Meanwhile, the concept of fifth-generation district heating, which arose in 2015, refers to combined district heating and cooling networks operating at ambient temperature and using distributed heat pumps. In addition to network adjustments, the deployment of low-temperature district heating networks must be co‑ordinated with energy efficiency improvements of buildings, however, as better energy performance of buildings are compatible with low temperature heat supply.
Modernisation of existing networks is also key to reduce losses and inefficiencies and to enable the shift to new-generation district heating systems. For this reason, the KeepWarm project, founded by the EU Horizon 2020 programme, aims to accelerate the modernisation of district heating systems in Eastern Europe and provides several case studies in the region. Similarly, the REWARDHeat project aims to demonstrate a new generation of low-temperature district heating and cooling networks, which will be able to recover renewable and waste heat, available at low temperature in urban environments.
Next generation district heating systems are expected to contribute to the integration of variable renewables in power systems by increasing flexibility resources through the use of large scale electric heat pumps and demand-response, enabled by heat storage capacities.
Automated controls can also be employed for peak-shaving, reducing installed capacity requirements and optimising overall network operations. For example, as part of its modernisation process the district heating system of Bolzano, Italy, introduced a control system that reduced overall energy losses by up to 5%.
Innovative concepts are also being tested to fully exploit waste heat, deep geothermal technologies, and the integration of heating and cooling networks. For instance, recovering heat from metro stations has been explored in London and Turin. New deep geothermal solutions are also emerging, such as the Eavor closed-loop system, which do not require a permeable aquifer. Solutions to integrate district heating and cooling networks are also appearing. Oil-free compressors in heat pumps and chillers make these technologies more competitive for such applications.
The Global District Energy Climate Award has been in place since 2009 to identify best practices and innovations in district energy. Among the 2019 recipients were a system in Braunschweig, Germany, which was given the New Scheme award for using waste heat from a data centre; a system in Kaunas, Lithuania, which received the Modernisation award for modernising the network; and the Barredo Colliery district heating system in Mieres, Spain, which was granted the Emerging Markets award for having introduced innovations in geothermal energy use. Applications for 2021 are still available.
Policy support and initiatives vary significantly by country
District heating deployment is often spurred by the benefits it can offer (energy efficiency, reduced pollution, etc.) and by national/local policy frameworks.
National policies are fundamental to extend district heating system deployment and support local government actions. Policies that prompt greater district heating penetration and modernisation have been linked to: grants, subsidies and incentives for renewables (as in the European Union); fossil fuel, polluter and carbon taxes (diffused in Nordic countries and China); energy and heating plans/strategies (such as the EU Energy Roadmap 2050); the integration of district heating into energy standards for buildings (as per the zero-carbon-ready buildings concept); tariff regulation (as in Armenia and Denmark); and renewables targets (as in Finland).
In China, the Clean Winter Heating Plan in Northern China (2017-2021) defines measures that also impact district heating production. In June 2020, Denmark signed a Climate Plan for a Green Waste Sector and Circular Economy to regulate how wastes would help meet the goal of reducing GHG emissions 70% below the 1990 level by 2030. As a Covid19 crisis recovery measure, Denmark also introduced funding to renovate social housing, which includes replacing old oil-fuelled boilers with district heating systems or heat pumps.
Meanwhile, in 2021 Canada initiated a National Infrastructure Assessment consultation to compare the status of its infrastructure with the country’s key priorities. It also introduced a new standard for thermal energy meters in 2021 (CSA C900:21) to regulate thermal meter design. In the United Kingdom, the government has proposed a Green Network Fund to help new and existing networks adopt low-carbon technologies during 2022-2025.
Harmonising national and local policies is also necessary to advance district heating. Local policies can involve advance planning to integrate and co‑ordinate infrastructure investments (for instance in Bergen, Norway) or synchronise building renovations with district heat expansion (as in Hong Kong). Other examples include targets for renewables or excess heat (as in Copenhagen), goals for district heating expansion (as in Helsinki), connection policies (as in Flanders, Belgium) or broader targets for reducing carbon emissions or fossil fuel consumption (as in Vienna).
In addition to policy support for district energy systems, several associations, programmes and initiatives are also working to promote their expansion. For instance, the DHC TCP has led research in the field since the 1980s and now comprises 13 members from major district energy markets. Likewise, the District Energy in Cities Initiative, a multi-stakeholder partnership co‑ordinated by UN Environment, helps local and national governments enlarge their investments in district energy.
In Europe, Euroheat & Power connects several district energy stakeholders to create momentum for sustainable heating and cooling. As part of Euroheat & Power, the DHC+ Technology Platform enables further networking and organises several events to promote district energy and increase awareness of technology options. Meanwhile, the Celsius Initiative (created from the Celsius Project concluded in 2017) is a collaboration hub that helps cities exchange information on innovations, best practices and policies to develop their heating and cooling networks.
Furthermore, founded in the United States and now comprising more than 2,400 members, the International District Energy Association (IDEA) works to connect, inform and expand the district heating industry. In China, the China District Heating Association supports the nationwide deployment of district heating.
Implement policy targets to support the establishment of district energy markets
Together with broader policy goals, targets related specifically to district heating (e.g. goals for district heating penetration, objectives for integrating renewable energy sources, and waste heat recovery subsidies) are important to drive the transition to efficient networks.
To set such targets, an awareness of current and future heat demand and resources is fundamental to assess district heating potential. Energy mapping is key, and projects such as Heat Roadmap Europe provide valuable knowledge to support heat strategies and define national targets.
In addition, building capacity for energy and infrastructure mapping at the local level would allow advanced urban planning practices to integrate energy, infrastructure and land planning. For instance, excavation costs for district energy systems could be shared with other infrastructure construction projects, and district heating expansion could be co‑ordinated with building renovations.
Accelerate innovation to modernise district heating
RD&I of innovative technologies (such as innovative deep geothermal wells, new pipeline designs, advanced control and measurement systems, insulation materials and optimisation solutions for heat pump systems) for low-temperature district heating is crucial to exploit its full potential. Research at the demand level (buildings) is also needed to further integrate local renewables-based heat production and increase the efficiency of building substations, heat exchangers and distribution systems.
Financial and legal schemes to support the deployment of low carbon district heating as effectively as possible are also needed.
Enhance system integration opportunities
Demonstration project development can be useful to define configurations for assessing flexibility options. Digitalisation can be a useful tool for this process, not only because it can optimise network operations and maximise the integration of renewables, but also because it facilitates system maintenance. Broader diffusion of heating system connected meters and data-driven advanced control systems helps to balance generation and consumption patterns.
Storage is also necessary to enable both short- and long-term flexibility. It is worthwhile to exploit the storage potential of the network itself, as well as decentralised storage at the consumer level. By decoupling the availability of renewable energy from the time when it is needed, thermal energy storage enables sector coupling between electricity and heating/cooling.
To take full advantage of cross-sector (buildings, industry, and heat and power generation) and cross-service (heating and cooling) synergies, integrated infrastructure planning as well as interoperability need to be developed and tested. Improved collaboration, transparency and communication between stakeholders from different energy sectors is an essential condition to make all the sectors develop towards higher integration, through, for example, standardised monitoring systems, data sharing protocols and collaborative platforms.
Chiara Delmastro is an Energy Analyst, Buildings, at the IEA