by Linda Bertelsen

By Roelof Potters and Hans Korsman

Kick the habit

In the past 50 years, the Netherlands has allowed itself to become addicted to its own supply of natural gas. Going forward, it will need to kick this habit and find alternatives to heat homes.

The ‘neighborhood energy approach’ aims to address three major issues:

  • Upgrade local environmental thermal energy
  • Connect existing housing at a reasonable cost
  • Offer freedom of choice of primary energy supplier

Current situation

The Groningen Gas Field was discovered in 1959 in the north of the Netherlands. It has since been a dominant factor in Dutch energy policy. In less than a decade, an extensive network was built to make natural gas available almost everywhere at affordable prices, facilitating a swift transition from coal and oil. Now, the field is depleting, diminishing pressures cause local earthquakes, and the natural gas supply is switched to mostly foreign sources.

Around 2000, the Dutch markets for electricity and natural gas were liberalized, introducing competition between energy suppliers and giving consumers freedom of choice. This freedom of choice, however, was not extended to district heating (DH).

The transition toward renewable sources

The Netherlands has been lagging somewhat in adopting renewable energy sources. Offshore wind may stage a comeback since 57,000 km2 of the European Continental Shelf in the North Sea is Dutch. The development of large wind farms at sea is ongoing and is expected to significantly increase the share of renewables in coming years.

Extensive infrastructure will have to be built to connect production to consumers all over the country. While homes can be heated with electricity, current electrical networks lack capacity. Measured in power for heating, natural gas networks, and connections capacity is at least ten times larger. The transition from natural gas to electricity cannot be met without major restructuring and massive expansion of the grids on all voltage levels. The use of heat pumps will reduce the ‘power gap’ between electrical and natural gas infrastructure considerably, but likely not enough. Even without the capacity for electrical heating, network operators experience an unprecedented rise in requests for additional capacity and struggle to meet demand.

DH is considered a viable alternative in densely populated areas. It has seen some success even during the Groningen natural gas epoch in large-scale urban expansion, that is, for newly built housing. Connecting existing housing is much more difficult and costly. However, it also has much more potential in volume.

The DH networks use traditional, fairly high-temperature, large-scale thermal energy sources such as waste incineration and (natural gas-fired) combined cycle cogeneration plants. There are not enough to replace natural gas, and the renewable content is debatable. Burning biomass (wood) was heavily subsidized initially but is now facing increasing opposition and decreasing subsidies. Alternative renewable thermal sources need to be developed.

Neighborhood energy approach as a scalable alternative for gas heating - Hot Cool no. 1-2022

Current market model for district heating

Another reason why new development in DH is proving particularly difficult: DH is operated as a local monopoly by a commercial enterprise, in stark contrast with the liberalized markets for electricity and natural gas. There, consumers have learned to use competition and free choice of the supplier as weapons against otherwise assured commercial exploitation.

It is a common opinion amongst DH customers that they are paying too much. Recent price hikes due to much higher prices for natural gas (which serves as price reference) have made things worse and refueled the debate on heating prices. With the current market model, local councils are hesitant to force a monopoly on unwilling citizens.

At the same time, it is not attractive for commercial enterprises to make large upfront investments in infrastructure with low and uncertain returns. Circumstances being what they are, the development of DH as an alternative to natural gas is not going well. Up till today, DH has rarely been used to help existing natural gas-connected private homes make the transition to renewable heating sources.

Community approach

In some neighborhoods, a community approach was taken, where local inhabitants joined together and established, often with help from the municipality, a cooperative DH venture. This process typically takes a lot of effort and time and results in one small neighborhood switching from natural gas to DH with its own source, often heat pumps.

Whereas the cooperation itself is a member’s democracy, community cooperation leaves the freedom of choice of the heat source, the service providers, and the energy supply companies to the neighborhood, thus approaching the individual freedom of choice.

We designed a step-by-step process that standardizes the process of preparation, communication, finding enough participants, and building and exploiting the DH system. We are improving and testing this approach in two pilot projects in Nijmegen and Arnhem.

In the meantime, we are working together in a coalition with EnergieSamen, the Dutch union of energy cooperation, Klimaatverbond Nederland, a union of public organizations that aims for climate solutions and sustainability and Rabobank, one of the large Dutch banks which is a cooperation itself. The coalition works on institutionalizing the community approach and seeks support from the national government.

The designed process, the lessons learned from the pilot projects, and the work of the coalition leads to the desired standardization and makes the cooperative solution scalable and bankable, thus making it efficient to establish.

This leads to the opportunity for over a thousand neighborhoods in the Netherlands, varying from 200 to about 1,000 houses, to transition from natural gas to a sustainable heating source.

Technical approach

The community approach needs to be supported with standardized solutions that are technically robust and economically viable. Based on earlier experience with traditional DH and some experience using heat pumps, we devised our approach. We want our solution to be:

Modular We aim to exploit readily available local sources of environmental thermal energy by upgrading temperature to usable levels with heat pumps, to avoid large upfront investments in long-distance transmission pipelines. However, the availability and cost of local sources may vary considerably. In some places, ground or surface water is easily accessible; in other places, you need to drill hundreds of meters to gain access. We generally want the best quality thermal source available at the lowest cost. Modularity must allow us the flexibility to adapt whilst allowing us to employ most of our solutions unchanged. We decided to start with perhaps not the best, but certainly the most ubiquitous, heat source available: outside air.

Scalable It is a lot easier to get small projects going, whereas sharing common costs and scaling advantages work in favor of bigger projects once you have them. We want to be able to serve small projects as well as larger ones, and we want to be able to connect nearby small projects to create bigger ones. Modularity must serve this same purpose. The intent is to reuse a component that has become too small due to local growth in some project elsewhere that is just starting.

Sufficiently low-temperature yet practical Heat pumps work most efficiently at low-temperature lift, that is, the limited temperature difference between source and delivery. Very large heating surfaces, such as underfloor heating, are preferable, which can be done at a reasonable cost in newly built houses. Not so in existing housing, where the cost of underfloor heating would often be prohibitive. For cost reasons, we aim to use existing radiators and intend to employ control technology to always operate at the most efficient temperatures.

Furthermore, too low temperature difference distribution systems are impractical and costly, and we need to supply domestic hot water, which requires somewhat higher temperatures of around 60°C. The lowest return temperature possible optimizes transportation. As it happens, this fits well with an array of heat pumps, once you connect those in series. We run the array as close to 60°C as weather permits, whilst every degree of lowered return temperature improves array efficiency. In our first implementation, the array consists of 10 heat pumps supplemented with natural gas-fired boilers with 1.5x heat pump capacity. In series with the heat pump array, which allows us to further reduce the heat pump supply temperature once boilers are needed.

Modern Control of DH equipment in homes is usually done with passive regulators, which cannot connect to apps on mobile phones. We need active (electronic) components to optimize function anyway, which opens a pathway to modern user interfacing.

Connected Heat meters must be connected by law, necessitating some communication channels. This channel allows for firmware upgrades, which we made a requirement for control equipment.

Affordable We need to be cost-competitive compared to alternative solutions. Therefore, we prefer the use of standard (mass-produced) components. Field modules are preassembled by design to reduce installation costs and transported to the site.

Upgradable Having too much ambition for the time available, we were forced to run design teams concurrently on assumed operating conditions, having to settle for less than perfect in the process. We chose to promote this drawback to the guiding principle: the first edition will work, and the next one will improve. Wherever possible, we design upgradable solutions, which are easiest in software. With production fully operational and about half of the houses connected, we see ample room for improvement.


DH is an important tool in transitioning from natural gas to sustainable heat sources in existing houses. This transition can only be made with a combination of a cooperation-based community approach and a modular technical system approach.

Meet the authors

Roelof Potters
Innovation Manager Alliander, NL
Hans Korsman
Principal Consultant, Qirion, NL
“Neighborhood energy approach as a scalable alternative for gas heating” was published in Hot Cool, edition no. 1/2022
Neighborhood energy approach as a scalable alternative for gas heating - Hot Cool no. 1-2022
Download the article from the Hot Cool magazine here