To meet future demands, district heating must become the most attractive option in terms of reliability, price, and colour. Utility professionals know this. What many of them don’t know is how to get there. Fast. The key lies in optimising across the entire value chain and balancing supply and demand better. Unlocking the demand side through end-user engagement and data-driven transparency is especially important. The good news is that ambitious utilities and solution providers are already leading the way with innovative digital solutions available today.
By Steen Schelle Jensen, Head of Business Development – Heat/Cooling Solutions, Kamstrup
European district heating utilities are at a crossroads. While recognized as an established and proven technology today, there is little dispute that the future district heating system must be green, reliable, and attractive. At the same time, district heating has never been more relevant, necessary, or popular – which means the pressure truly is on to connect more and more consumers and buildings to both new and existing district heating networks.
The green transition is undeniably linked with low-temperature district heating. First and foremost, lowering flow and return temperatures is a prerequisite for integrating more renewable energy sources and waste heat. Secondly, it also allows district heating systems to be operated more efficiently – in terms of energy as well as costs. And finally, reducing return temperatures is vital for utilities to ensure that they are utilising their existing network capacity to the fullest as they connect new buildings and end users.
Involving the end users and putting frequent data from mandatory remotely read smart heat meters into play is critical to achieving all three things.
Unlocking the demand side
After years of intense focus on digitalising district heating, there’s no shortage of insights and digital tools tapping into which heat sources utilities should use or how to build and optimize their distribution network, etc. As a result, most utilities today have a good understanding and full control of the production and distribution parts of their value chain – both of which are also made up of the utilities’ own assets.
The demand side of district heating, however, remains severely underserved. While this part of the value chain is the end users’ territory – and responsibility – it holds enormous potential for utilities because what happens inside the connected buildings in your network significantly impacts its overall efficiency.
Considering, for example, that reports have shown 50-60% of all heat installations to be either faulty or installed incorrectly and that some utilities say that as little as 6% of their poorest performing customers account for 20% of the total flow in the network, there’s no time to waste. The problem is that many utility professionals don’t have the right tools for the job.
One goal – three tactics
Engaging and motivating end users to optimize their heat installation to improve return temperatures and lower supply temperatures is both difficult and time-consuming. On top of that, optimizing faulty heating systems is a continuous task if you want to avoid temperatures going back up.
Today, a lack of overview and scalability means that issues are mitigated reactively as they arise. Manual processes mean that diagnostics often require experts to interpret graphs and trends. Finally, limited knowledge of effects and results means utilities don’t always know what actually works, what doesn’t – and how to get the most out of their efforts.
Attacking the demand side, therefore, requires a whole new set of knowledge, competencies, and digital tools for engaging and serving end users. Together with some of our most ambitious customers, we have seen the pros, cons, and effects of three concrete digital solutions to this challenge.
— No. 1: Motivation tariff
When influencing customers to lower their return temperature, implementing a motivation tariff is one of the lowest-hanging fruits. It may be the obvious place to start. Still, it is also a somewhat one-dimensional approach that relies solely on the financial punishment of poor-performing end users rather than optimization as such.
This approach also adds an obligation to the utility itself as incentivizing your customers to make a change – rather than just paying the added tariff – requires you to educate, support, and guide them. After all, even if they do contact, e.g., a plumber to help solve a particular issue, they will still need to know what to tell that person. In other words, this option cannot stand alone, which is also the experience we hear back from our customers.
— No. 2: Customer guidance
Data-driven customer consultancy and guidance is the next step in motivating customers to take responsibility for their heat installation and return temperature. This can occur in many interactions – from onsite visits and targeted letters to digital notifications (often well-hidden behind demotivating three-step log-ons).
Kamstrup’s customers’ experiences show that by combining the best of both worlds with customized letters, utilities can multiply the effect of their communication to end users whose installations are faulty or misadjusted. But just as these letters must be customized, relevant, and easily accessible for the consumer, they must also be efficient for the utility to make – and both demands speak to the need for data.
DIN Forsyning in Esbjerg, Denmark, has taken the first significant steps from reactive fault detection to proactive low-temperature operation in its network supplying heat to its 27,000 consumers. The utility’s energy consultant saw positive results from creating customized letters outlining specific challenges and potential, which led to a temperature of 9-12 °C – compared to almost no reduction from generic letters simply stating that something is wrong. However, each letter took approximately 30 minutes because he had to pull data from different systems manually.
Through a collaboration with Kamstrup, it became clear that he didn’t need a longer, more detailed list of optimization opportunities – he only tackled the tip of the iceberg anyway. Instead, he needed help prioritizing the most relevant heat installations to address and generating customer-specific letters in seconds. Today, a dedicated cloud solution does just that. As a result, the utility now sends out 16 times more customized letters.
With an innovative digital low-temperature assistant tool, DIN Forsyning also benefits from continuously monitoring all installations to ensure issues are identified, prioritized, and resolved efficiently. In addition, the tool enables easy access to notify end users and keep track of interactions, plus full transparency in progress and results.
And this is only the beginning. Imagine a future where data is used to pinpoint the problem and enable the utility to provide exact information on what needs to be fixed – maybe even putting the end user in direct contact with somebody who can help immediately.
— No. 3: Heat Installation as a Service
The third option takes utilities one step closer to their customers. By offering rental units and service agreements to monitor, maintain, and optimize utilities, they can take responsibility – and thereby control their end users’ heat installations’ performance. This move naturally demands significant effort from the utility’s side, especially in the beginning.
Several Danish utilities have already seen great success with this option – which only highlights the importance of having the right tools and data for the job. Having network optimization in their hands not only enables direct influence and transparency but potentially allows for new offerings and business models.
Danish Næstved District Heating utilises all three tactics to optimize the demand side of its value chain. In addition to a motivation tariff and energy consultants doing customer visits, the utility developed a rental and maintenance program for heat installations, which they offer to end users as a customer service – with great success.
One of the results of their proactive approach is a reduction in the average flow temperature at the entrance of the distribution network from 85.3 to 73.7 °C in 2020. In addition, the average return temperature at the end of the distribution network was reduced from 47.9 to 43.9 °C, and the heat loss in the distribution network was reduced by 8%. Finally, the utility also reduced the number of bypasses in their network from 131 to 10.
Næstved District Heating has seen total annual savings of €350,000. And today, none of the utility’s customers get a flow temperature of more than 75 °C. The resulting lower return temperature also means that significantly fewer cubic meters of water now have to be pumped.
From more efficient to better and beyond
As the examples from DIN Forsyning and Næstved District Heating clearly show, with the proper insight and tools, the optimization potential on the demand side is enormous. And with more data, we can go so much further.
What if we didn’t stop at enabling utility professionals to be more efficient but even better? What if we co-created digital solutions designed to provide some specialist knowledge that would otherwise be both time and resource-heavy to acquire? What if we fully utilized the value of data from smart energy meters and innovative digital tools?
One thing is certain: To future-proof district heating, we’re beyond simply showing our understanding of the challenges utilities face. It’s time for solution providers to present real-world results and proven solutions – ready for implementation.
Figure from Næstved District Heating
- Best effort approach with the available resources
- Limited overview and scalability
- Reactive fault detection
- Limited tracking of results and impact
With a digital assistant tool
- Continuous monitoring of all heat installations at scalE
- Prioritized list of most relevant heat installations to address, but existing and future problems
- Easy access to notify end-users and to keep track of who has been contacted when
- Full transparency in the progress and results achieved