A recent report from Euroheat & Power underlines the key role of digitalisation in European district heating, which is no longer an optional benefit but a necessary means for utilities to survive. By incorporating the different perspectives and concrete learnings of utilities and suppliers across Europe, the report is a testament to the importance of international collaboration from both sides of the table and the shared responsibility of realising the ongoing paradigm shift in district heating.

By Steen Schelle Jensen, Head of Business Development – Heat/Cooling Solutions, Kamstrup

Published in Hot Cool, edition no. 7/2023 | ISSN 0904 9681 |

In May of this year, DHC+ Platform—the technology branch of Euroheat & Power—published its report, ‘Digitalisation in District Heating and Cooling Systems,’ highlighting the important role of digitalisation in modern district heating. 

This report is especially relevant because it does this based on the two-fold recognition that digitalising district heating is widely recognized as a key part of the solution to the challenges facing today’s utilities – but that the status quo varies significantly from country to country.

This taps into the underlying paradox of how in some European markets, utilities have genuinely seized the opportunity to use digitalisation as the lever to optimise their entire value chain and gain a stronger position in an increasingly volatile energy market.

Meanwhile, in other markets, most utilities have just begun their digitalisation journey – and in others still, digitalisation remains somewhat of a foreign concept because utilities don’t feel they have the necessary resources and competencies, or they are not yet fully convinced that new is better.

The report is based on a survey sent out to European utilities and suppliers to uncover how the industry is coping with the challenge of digital innovation. It, therefore, aims to shed a holistic light on the state of digitalisation in district heating across Europe – addressing both opportunities and obstacles – and secondly, to sum up, the options available to inspire utilities that either want to speed up their journey or have yet to get started. The following reflects on three central findings.

From optional to mandatory

One of the key takeaways from the report is that digitalisation of district heating utilities can no longer be considered an optional benefit. In the digitalisation debate, we often – and rightfully – discuss its potential regarding our shared energy system, ambitious climate targets, and the decarbonisation challenges of the energy sector. However, the fact is that the benefits digitalisation brings to the individual utility are even more substantial.

Today, with increasing legislative demands, complexity, and competition, utilities simply cannot afford not to digitalise their operations. The report outlines how the application of technologies available today can prove effective – and in many cases even required – to ensure heat supply’s long-term sustainability and reliability on the transition to 4^th generation district heating (4GDH).

Digital solutions enable district heating professionals to proactively ensure an always-optimised district heating system. This allows them to optimise heat production, reduce temperatures, and lower heat loss while improving key areas such as asset management and customer service based on data-driven information. It is the foundation of integrating waste heat and renewables to become a greener, more resilient, and more attractive option – all contributing to understanding digitalisation as a sound and future-proof investment.

The demand side is underserved.

The report also concludes that while there is no shortage of products, solutions, and services already available, by far, most of them are related to the production side of a district heating utility’s value chain. This includes, e.g., production optimisation, simulation, or planning systems. On the other hand, the demand side remains significantly neglected and underserved even though what happens inside the connected buildings in the network has a direct and massive impact on its performance.

In this way, the ongoing digitalisation efforts, smart meter roll-out, etc., represent somewhat of a paradigm shift in district heating. Previously, utility professionals would supply heat based mainly on assumptions, experience, and maybe a few critical metering points to increase the probability of it matching the need among consumers but not having the overview or all-important feedback loop to reveal if those assumptions were correct. 

Today, the opportunities available through smart meters and digitalisation tools focused on the consumer side give utilities a much more precise picture of the need they have to meet and how to do it most efficiently – again ensuring the best possible basis for optimising their entire value chain. Digitalisation even holds the potential to bring in the connected buildings as a truly active and integrated part of the system offering flexibility in the heat demand.

Regarding demand-side data, it is worth considering the varying progress of rolling out remotely-read smart meters – even though the EU’s Energy Efficiency Directive (EED) requiring European district heating utilities to provide customers with monthly information about their consumption became effective as of October 2020. There is an explicit acknowledgement of the necessary action, but while some countries are more or less done, others are just starting to pick up speed.

Here, another key conclusion from the report is that even though smart meter data is personal data and therefore covered by the GDPR, it is possible for data privacy and energy-efficient district heating to co-exist – and the Danish interpretation of Article 6 proves it. 

In other words, the necessary investment in smart meters also represents a unique opportunity to look beyond the EED demands to ensure that you get the foundation in place to enable the utilisation of smart meter data for optimisation and to support further digitalisation in the future.

The steps are more important than the goal.

When it comes to digitalisation in European district energy utilities, it is more about the journey than the destination. It can seem overwhelming for a utility professional in a less mature market to fully digitalise the operations and the way of work. But as the report concludes, the key thing is to get started – because no matter where you are on your journey, the next step will always be the most important.

This makes it essential for less experienced utilities to have real-life case stories and experiences from their peers to lean on – which is why the second half of the report is dedicated to digitalisation in practice. Here, utility professionals from countries including Denmark, Italy, and France share their stories, perspectives, and the concrete lessons they have learned.

These cases underline what is perhaps the most important takeaway of all: that getting started on benefitting from digitalisation does not necessitate a fully digitalised value chain from day one. But even with a minimum amount of data, a smart system can deliver insights that can help predict the future or improve the impact of the utility’s efforts and investments – and you can build from there. When it comes to digitalising district heating, it is less about how far you have come and more about whether you are moving in the right direction.

International collaboration at its best

The new report is written by an international DHC+ working group, where authors and contributors come from different countries, positions, and companies – including Kamstrup. To some extent, international collaboration may be considered a given in just about any industry today. 

Nevertheless, there is something unique about the closeness and almost family-like mindset in European district heating – especially considering the fact that while it holds enormous potential, it remains a relatively small, albeit soon fast-growing, industry. 

As a result, rather than focusing only on mature markets, best-case scenarios, and the industry players and utilities that have come the furthest, this new report is written with an international and more nuanced perspective of the current situation. As the cases in the report show, developments in the district heating and cooling industry are no longer limited to more mature markets such as Denmark.

This not only calls for more international collaboration to explore all corners towards digitalising district heating. Sharing insights and perspectives with other industry players is a unique opportunity to pick up even more speed by contributing to the conversation and breaking down barriers.

From report to action

As a leading supplier of smart metering and digital solutions and services for the district energy industry – particularly the underserved demand side – Kamstrup has an obligation to contribute to its continued development and prevalence. Collecting and hosting data from over 1.3 million heat meters across 400+ district heating operators highlights the enormous potential of converting all this data into actionable insights.

We take that responsibility seriously and prioritize participating in some of the many great and ambitious initiatives and research projects in the industry. The recent DHC+ report is just one example. 

Another is the IEA DHC TS4 project, which will publish its ‘Guidebook for the Digitalization of District Heating’ later this year. This work is rooted in a research perspective. It provides yet another important angle on digitalisation in the DH industry, giving inspiration and guidance to understand the value of digitalisation and new innovative solutions and services.

At the end of the day, actual progress still requires action from the utility professionals across Europe, who are now wondering what their next step should be. 

In this respect, one of the things that make the report from DHC+ so relevant is that a whole section of the report is dedicated to buildings and end-user strategies and the untapped potential they hold – which is now being unlocked with the roll-out of smart meters. This underlines how digitalisation works as the glue that ties together your entire value chain – and every single step you take.  

Therefore, I only urge you to read the reports – available for free download at www.euroheat.org – explore the cases and reach out to the included utilities, suppliers, or contributors. Ultimately, this is how we can put into play our shared experiences, knowledge, and competencies – for the good of both the individual utility and the energy sector.