The district heating sector is deeply committed to its ongoing transition. While large boilers and solar collectors were the mainstay in the past, the focus has now shifted to large heat pumps and electric boilers. Michael Søgaard Schrøder, Chief Consultant at the Danish District Heating Association, explores this transformation in an article initially published in GridTech.
December 11, 2024 | Original article in Danish by Michael Søgaard Schrøder, Danish District Heating Association | Translation: DBDH
The electrification of district heating has tripled over the past four years. Large heat pumps and electric boilers provide affordable heat by utilizing surplus electricity from wind and solar energy.
How Heat Pumps and Electric Boilers Work
Large heat pumps use electricity to extract heat from the surroundings – whether it’s from air, water, or soil – and convert it into usable heat for the district heating network. On the other hand, electric boilers use electricity to heat water directly. Both technologies can quickly adjust to demand, making them key components of a more flexible and resilient energy supply.
Electrification of district heating contributes not only to heating but also to balancing the electricity grid.
When there is a surplus of green power, heat pumps and electric boilers can be activated to store the energy as heat. This is particularly important in an era where the share of renewable energy in the grid is increasing, and managing periods of both excess and shortage of electricity is crucial. In this way, district heating naturally supports the green transition and electrification of society.
However, there are also challenges associated with this transition.
Challenges in the Transition
Investments in electric boilers and heat pumps need to be integrated into the overall heat production mix, and there must still be diverse sources for heat production in the future. This increases the robustness of both heat supply and heat pricing. Right now, it doesn’t help that Denmark still has a price cap on surplus heat, which hinders the use of waste heat from businesses for the district heating network.
Additionally, many district heating companies are facing decisions regarding the lifespan extension of existing combined heat and power plants, which can provide valuable electricity production during periods when the wind isn’t blowing and the sun isn’t shining. If the framework conditions do not change, many will choose to shut down the plants, even though they could offer substantial societal economic benefits.
Ensuring Grid Capacity and Cost-Effective Integration
To fully leverage the societal and economic potential of electrifying district heating, there is also a need for significant efforts to ensure sufficient capacity in the electricity grid and to make electricity grid charges more cost-reflective – especially for plants with limited grid access, which currently pay a capacity tariff without using up capacity. Meanwhile, the expansion of renewable energy must not stagnate if the economics of electrifying the large volumes planned by district heating are to succeed.
Despite the challenges, the potential is enormous. The electrification of district heating with large heat pumps and electric boilers is a key piece of the puzzle to achieving our climate goals and ensuring a sustainable future. This development requires cross-sector collaboration and a collective effort to realize the many benefits of powering district heating.
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