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Sector Coupling / Smart Energy System

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Sector coupling is a key strategy for achieving a low-carbon and integrated energy system that can meet the growing energy demand and climate goals. Sector coupling can also create new opportunities for innovation, business models, and consumer choices.

What is sector coupling?

Sector coupling is a term that describes the interconnection and integration of different energy sectors, such as electricity, heat, transport, and industry, to increase the efficiency and sustainability of the overall energy system.

Sector coupling can provide flexibility and stability to the power grid.

Sector coupling can enable the use of renewable energy sources in sectors that currently rely on fossil fuels, such as heating and mobility, and thus reduce greenhouse gas emissions and enhance energy security. Sector coupling can also provide flexibility and stability to the power grid by using technologies that can convert, store, or use electricity and heat from variable renewable sources.

The use of excess electricity from renewable sources

Windmills in the sunriseExcess electricity from renewable sources can produce heat for buildings or industrial processes. For instance, electric boilers, heat pumps, or resistance heaters can convert electricity into heat and store it in thermal energy storage systems, such as water tanks or underground reservoirs. With more and more electricity produced from renewable sources such as wind and solar, electricity production becomes more volatile.

Sometimes, there is too much power production and wind power must be turned off to balance the power grid, and sometimes there is not enough power production from solar and wind – due to weather conditions. In a smart energy system with district heating, the heating sector can support the power sector in many ways.

CHP plants, based on green energy sources, can produce power if there is a lack of renewable electricity production and, at the same time, produce heat. The heat can be stored in thermal energy storage (TES).

Two large day-to-day storage tanks at the Avedøre Plant near Copenhagen optimize the plant's economy by allowing electricity production when prices are high and storing surplus heat for later use.Thermal energy storage

If renewable power production exceeds the use of electricity, the heating sector can produce heat from electrical sources such as heat pumps and electrical boilers. If this produces too much heat, it can be stored in thermal energy storage that can be used later. This is by far the cheapest approach to store energy.

Producing Power-to-X

Another opportunity is to produce Power-to-X: This is a general term that covers any technology that converts electricity from renewable sources into other forms of energy or products, such as chemicals, fertilizers, plastics, or metals. The waste heat in these processes can be used in district heating systems.

Waste heat from industrial processes

A facility powered by a combined heat and power CHP system utilizing waste heat to generate electricity

Using waste heat from industrial processes or power plants to provide district heating or cooling for buildings or communities.
This is also referred to as Smart Energy System. A smart energy system is a system that uses renewable energy sources, such as wind, solar, hydro, biomass, and geothermal, to produce electricity and heat for various applications. A smart energy system also uses technologies that can store, convert, or use energy in different forms and sectors, such as batteries, hydrogen, electric vehicles, or district heating and cooling.

Benefits of Sector Coupling – a Smart Energy System

A smart energy system aims to optimize the overall energy system’s efficiency, reliability, and sustainability by using digital technologies, smart devices, and data analytics to monitor, control, and coordinate energy flows across different domains and regions.

A smart energy system can provide many benefits for the environment, the economy, and the society. Some of these benefits are:

      • Reducing greenhouse gas emissions and air pollution by avoiding the use of fossil fuels
      • Increasing the share of renewable energy in the energy mix and enhancing energy security and diversity
      • Lowering the energy costs and creating new business opportunities and jobs for the energy sector
      • Improving the power quality and resilience of the grid by providing flexibility and stability
      • Empowering the consumers and enabling them to participate in the energy market and benefit from dynamic pricing schemes.

    Sector Coupling in District Energy Systems

    In district energy systems, sector coupling can significantly enhance the efficiency and sustainability of heat and power distribution. Here’s how:

    1. Integration of Renewable Energy: District heating systems can incorporate excess electricity from renewable sources, like wind and solar, through the use of electric boilers or heat pumps.
    2. Combined Heat and Power (CHP): CHP plants are a prime example of sector coupling, as they generate both electricity and useful heat, optimizing fuel use and reducing emissions.
    3. Thermal Energy Storage (TES): TES systems can store surplus renewable energy as heat, which can be used later when demand is high, balancing supply and demand effectively.
    4. Electric Mobility: District energy systems can support the charging infrastructure for electric vehicles, using renewable energy sources to power transportation.

    Challenges and Considerations

    • Infrastructure Investment: Significant investments are required to develop the infrastructure needed for integrated energy systems.
    • Regulatory Frameworks: Effective policies and regulations are necessary to support sector coupling initiatives.
    • Technological Advancements: Ongoing innovation in energy storage, smart grids, and efficient conversion technologies is essential for successful sector coupling.


    Sector coupling represents a transformative approach to energy management, offering a pathway to a more sustainable, efficient, and resilient energy system. By integrating electricity, heating, cooling, and transportation, it maximizes the use of renewable resources and minimizes environmental impact, paving the way for a cleaner, greener future.

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