Lessons learned from the ongoing WEDISTRICT project
The Horizon 2020 project Renewable District Heating and Cooling (DHC), in short W.E.DISTRICT, investigates technologies in four demonstration sites in Europe. The WEDISTRCIT project aims to showcase DHC systems that help improve efficiency, enable fluctuating renewable energy sources (RES), and provide cost-effective security of supply.
By Mathilde Johanne Cordua – Climate Assistant and Frederik Palshøj Bigum – Project Manager, Ramboll
Through theWEDISTRICT project, an overviewof the current stock of DHC and the future development trends for the district energymarkets inEurope has been assessed. By identifying inefficiencies, barriers, and improvement potentials in the current DHC systems in Europe, the ‘lessons learned’ are taken into account in theWEDISTRICT designs for new and retrofitting of existing DHC.
Today, the heating and cooling of buildings in the EU account for 50% of the total energy consumption. 70% of this energy is still generated from fossil fuels. To identify improvement possibilities, it is necessary to understand the current stock of DHC and the energy market of the European Union member countries.
The state of the DHC and market structure vary significantly between the member states of the EU. Hence the assessment of each country of the EU28, and Norway, the UK, and Switzerland are divided into three groups based on their share of district heating (DH) compared to the total heat demand in the residential sector.
Most of the countries are represented in the group of small shares of DH, which also shows the most diverse range of the state of the DHC. The medium share group is a mix of countries, some of which have older DH systems that need investments for refurbishments. Some countries have traditionally relied on other sources for heating, although they have invested in the development of DHC. Lastly, the countries with a significant share of DH are generally at the forefront of innovation, with political support and established market structures that can further improve.
COUNTRIES WITH SMALL SHARE OF DH
The countries with a small share are Slovenia, Croatia, the Netherlands, France, Switzerland, Norway, Italy, the United Kingdom, Greece, Spain, Portugal, and Ireland.
The fuel types used are typically fossil fuels like natural gas, oil, and petroleum products.
Overall, the installed heat capacity is very high for all very similar countries with approx. 75-80% comes from individual boilers (mainly natural gas), 10-15% comes from DH boilers and the rest from combined heat and power (CHP).
Historical reliance on fossil fuels and extensive natural gas networks. With the natural gas prices being relatively low under current market conditions, switching to DH for heat supply is difficult.
Cooling is primarily supplied by individual chillers, with no or limited district cooling (DC) available.
The majority of countries do not have a culture of utilizing DH due to the warmer climate. Therefore, the regulatory frameworks put in place do not favor DH, which creates higher risks for investors and a barrier to the further development and refurbishment of existing systems.
General low awareness of DHC and lack of practical know-how.
DHC projects are typically heat recovery from incineration, which provides both heat and cooling in smaller networks of buildings.
Dependency on the expertise of international companies to provide solutions for every aspect of developing an efficient DHC market.
COUNTRIES WITH MEDIUM SHARE OF DH
Poland, Czech Republic, Finland, Latvia, Romania, Hungary, Bulgaria, Austria, and Germany are the countries with medium DH share.
The total DH capacity is decreasing in most of the countries.
Individual boilers are the most typical for heat production.
The Eastern European nations have a history of using DH networks, many of those constructed during the Soviet era.
These DH systems are generally in poor condition today, with high thermal losses, making investing in refurbishment of the existing infrastructure a requirement to improve energy efficiency.
Refurbishment of existing infrastructure is very important, considering the declining heat demand and current state of the network.
Relatively high degree of knowledge regarding DHC, but external forces such as economic influence, competing individual heating solutions, population density, as well as population decrease hinder the improvement and development.
The DH is competing with individual heating solutions.
In the Czech Republic and Germany, DH companies are obligated to pay carbon emission taxes, while the individual heating solutions do not. In Hungary, the price level of natural gas is more attractive than DH heat prices, creating better financial incentive for individual solutions.
The legislative framework generally favors individual solutions. Thus, heat price regulation must be thoughtfully constructed to increase the competitiveness of DH systems.
Typical for newer projects are to focus on heat with heat-only boilers with flexible production based on biofuels. In countries with DHC projects, cooling originates from RES like water.
COUNTRIES WITH LARGE SHARE OF DH
The countries with large share of DH, above 50% of their gross heat production, are Denmark, Lithuania, Slovakia, Estonia and Sweden.
The countries have an overall increasing heat production with a focus on using biofuels.
Heat-only boilers are mainly used in Baltic countries, while Nordic countries use CHP.
The Scandinavian countries’ DH production mostly originates from solid biofuels and natural gas.
General high awareness of the DHC technology as well as a historical utilization of DH together with a sustained effort for continuous development of the networks.
The main distinction between the countries appears in the general state of the networks and the political framework related to investments and operation of the system.
Loans with very low interest rates available for non-profit companies through government schemes decrease the risk of the DH companies, and the non-profit structure drives down the cost of heating.
Saturated markets shift the development from extension of networks towards increasing the overall efficiency of the networks by use of RES and new technologies.
There is a natural limit for when DHC is feasible and when individual solutions are, which partly has to do with the density of the population. Thus, most of the DH system are facing challenges in competing with new individual solutions, such as high-efficient HPs.
Support schemes that make individual heating solutions attractive for private households can undermine the potential for DHC.
Some countries have tax regulation on the utilization of this excess heat from industrial processes, consequently, heat that could have been used for DH is now simply wasted.
Fossil fuels still represent a great proportion of the heat production. Often, solid biomass is seen as the easiest substitute. However, biomass is a scarce resource.
The typical DHC project focuses on using RES and excess heat in the DHC production. In some cases, smart solutions are implemented using wastewater as an energy source for both the production of heating and cooling.
Lessons learned from current DHC stock and trends in Europe
- The wide variety of EU DHC systems and climate zones calls for improvements with different starting points. However, the following are some of the generally identified lessons learned regarding the regulatory and planning measures that are important to allow for the development of sustainable energy systems:
- Create a sound methodology and guideline for carrying out cost-benefit analyses of heat supply options in line with the EU’s Energy Efficiency Directive (EED) provisions.
- Creation of long-term financing schemes in line with other infrastructure projects and buildings at a low, competitive interest rate – while ensuring a transparent market for electricity-related services, considering time-dependent energy prices, capacity, and regulation.
- Access to laying pipes on public and, if necessary, private land.
- Ensure fair competition between DHC and building-level solutions. Implement the EU directives regarding the building codes to improve the performance of the buildings, as DCH is often the most cost-effective way to integrate renewable energies.
- Existing DHC can be retrofitted to provide higher technical and institutional performance. E.g., by establishing combined heating and cooling and installing pressure and temperature control of all end-user substations.
- The stage of the DH system influences the development of DC, and large-scale HPs will play an essential role in integrating possibilities to develop combined heating and cooling.
- Create regulations to protect the consumer, including price and profit structures, consumer influence, and utility transparency, in close collaboration with the industry.
- Make energy planning by dividing the cities and regions into zones best suited for gas, DH, or individual heat supply. Zoning ensures that the networks do not compete within the same areas of parallel infrastructures.
- Consider energy planning as a natural part of urban infrastructure planning, if possible, with the interaction between buildings, DHC, and thermal generation.
- DH has a significant market share in countries where the cities have established a public utility. These public utilities are responsible for heating, gas, electricity, and waste and can, therefore, optimize the zoning of the networks and ensure integration of the sectors.
- Attaining reliable and long-term energy solutions calls for the proper structural balance between the private sector knowledge and public sector framework, enabling DH infrastructure for the long term by having a relatively clear view of future market changes and low risks.
Smart and local reneWable Energy DISTRICT heating and cooling solutions for sustainable living, in short, ‘W.E.DISTRICT,’ is an ongoing EU project that brings together 21 partners from across Europe, aiming to demonstrate innovative fossil-free DHC systems. The objective includes the demonstration of integrated DHC solutions that exploits the combination of RES, thermal storage, and waste heat recycling technologies to satisfy 100%of the heating and cooling energy demand in new DHC and up to 60-100% in retrofitted DHC. For this purpose, the WEDISTRICT project focuses on four large-scale demonstration projects, as well as a set of simulated virtual demos selected from the identification of potential demo-followers.
Further work and demonstration
To fulfill the ambitions of the WEDISTRICT, four demonstration sites across Europe are set up – to showcase success stories. The four real-scale demo sites are carried out in different climate zones, where there are distinctive DHC systems and construction traditions. Each of the demo cases is based on the integration of two or more RE-based technologies.
Eventually, the WEDISTRICT project expects the main result to be a portfolio of replicable solutions for various DHC systems in different climates and different buildings in different business scenarios. At the same time, the project aims for a higher public acceptance of DHC systems through dialog with the end users carried out along the project.
By switching to fossil-free energy, the sector would bring us one step closer to climate neutrality, better air quality in European cities, and thus higher quality of life for the citizens. The project is funded from the EU’s Horizon 2020 research and innovation program under grant agreement N°857801.