by Linda Bertelsen
Taarnby heat pumps

The fluctuating wind and solar PV shall be the main source for electricity in Denmark, but the ordinary electricity demand does not match these fluctuations. This creates problems for the grid company and wild price fluctuations for all consumers. But something happens.
Let’s have a look at the electricity supply from the power grid to a typical Danish town. The annual average load is 20 MWe, and the peak load (the cooking peak 6 p.m., December 24) is close to 100 MWe, which is the maximal capacity of the power cable to the city. Recently the annual average demand has increased to 40 MWe without changing the maximal load. What has happened?

By Anders Dyrelund, Senior Market Manager, Ramboll, John Flørning, Lead Consultant, Ramboll, Søren Møller Thomsen, Energy Engineer, Ramboll

A closer look at the fluctuations of the demand shows 4 interesting features:

      • The maximal demand increases to 100 MWe when the electricity price is close to zero, which it often is in a windy period during night hours
      • The demand falls back to the original 20e MW or even to zero MWe when the price is high, which it often is in weeks with no wind. 
      • The town exports up to 20 MWe capacity to the grid in case of very large prices
      • The town offers competitive up and down regulation services to the grid, typically from 40e MW up regulation to 80 MWe down regulation.

    What is the secret of the town? Do they have a magnificent electric battery? No, they have a typical Danish district heating system, which has supplemented the existing 40th MW gas fueled CHP plant and the thermal storage tank with an 80 MWth electric boiler and a 40 MWth electric heat pump. As we can see, this smart integrated system acts like a battery – therefore we have called it a virtual battery. 

    Some have argued that it is not 100% CO2 neutral. True, but it is not of importance for the cost effective decarbonization. Moreover, within 10 years we can foresee that the gas from the Danish gas grid will be 100 % biomethane and that electro fuels can substitute the fossil fuels in boilers offering vital resilient back-up capacity for wind, solar and gas in the European gas grid.

    How do we decarbonize the energy sector? 

    The simple answer is: “we establish solar PV and wind turbines” and “buy green electricity.” But the ordinary electricity consumption cannot be adjusted to the fluctuations of wind and solar production. In periods with low wind and solar, the electricity consumption will be covered by hydropower or thermal power stations. 

    Furthermore, the electricity market operates by the marginal pricing principle, meaning that it is always the most expensive marginal unit setting the electricity price. In case of high prices, the most expensive plant will likely be an inefficient natural gas-fueled condensing power plant. And in the case of zero or even negative prices, it is likely that wind or solar energy is curtailed, as it functions as the marginal unit.

    The million-dollar question is not whether we can build enough renewables but how to use the renewable energy produced cost-effectively. This article will discuss how the fluctuating renewable energy from wind and solar can be used for heating and cooling buildings.

    It will be very expensive or even impossible if we only look at the electricity system and individual buildings. The answer will likely be that we need huge electric battery capacities. But it will be very expensive and inefficient, seen from a societal perspective.

    Looking at the whole energy system, we can do it cheaper and more efficiently due to the economy of scale and sector couplings. The answer is that modern hot water district heating systems are crucial to utilizing fluctuating renewable energy in a smart, cost-effective way. In fact, the district heating system acts as if it was a battery – for almost a decade, we have called it the virtual battery. 

    Some have argued that the “battery” is not 100% CO2 neutral, as the renewable electricity stored in the “battery” does not return to the grid. True, but not important, as the impact on the power system is the same. Soon, we see new sector couplings in the pipeline, namely Carbon Capture and Utilization, CCU, and electrolysis, which close the circle.

    But how do we get started?

    We can describe the development of the virtual battery in steps in line with the development from the 1st to the 4th generation of district heating and district cooling.

    Figure 1: Electricity prices fluctuate mainly due to wind and solar PV – and it’s getting worse in the years to come.

    Electricity prices fluctuate mainly due to wind and solar PV – and it’s getting worse in the years to come.

    Individual buildings

    In case all buildings at a campus or a city are supplied with building-level heat pumps for base load and small electric boilers for peak load, the electricity consumption can only be interrupted for a few hours in case of very high electricity prices. Some building owners may claim that they hour by hour have bought renewable electricity and left the black electricity to the others, but that does not change the production. It is greenwashing.

    The flexibility provided to the electricity system to help integrate renewable energy is very limited if we install individual electric heating solutions per building. The recently seen combination of the individual heat pump solution with shared heat source “Ambient loop” (or mistakenly referred to as 5th generation district heating) has the same disadvantages in terms of flexibility as an individual heat pump.

    1st generation district heating

    In case all buildings are connected to a 1st generation DH steam system supplied by a Combined Heat & Power (CHP) plant and steam boilers, this system can be backup in case of high electricity prices and shifted to boilers in case of low electricity prices. It is, however, expensive and inefficient and has no thermal storage capacity. 

    The 1st generation DH systems do not add many benefits to the integration of renewable energy, seen from the electricity system.

    2nd generation district heating

    If the steam system is converted to a 2nd generation DH hot water district heating system supplied by a natural gas boiler and a natural gas-fueled CHP in combination with a thermal storage tank, it is significantly more efficient. The thermal storage tank will unbundle the heat and power production. 

    The CHP plant will replace inefficient, expensive condensing power-only plants in the electricity market in case of high electricity prices. The CHP plant will bypass the low-pressure turbines or stop if the electricity prices are low, and the wind is on the margin. Thereby the system efficiency of heat generated by the CHP plant will be 2-300% once it is in operation. 

    The ability to stop electricity production (in case of low electricity prices) and operate at full capacity (as soon as the electricity price increase) has the same impact on the electricity system as if an electric boiler or a battery was installed. Hence, from the development of 2nd generation DH, we begin to see the effect of the virtual battery. 

    3rd generation district heating

    Suppose the district heating company installs a large electric boiler, e.g., with a capacity equal to the electric capacity of the CHP plant or the maximal capacity of the cable to the plant. In that case, the system has been upgraded to a 3rd generation DH system. This opens up the following benefits:

        • The electric boiler utilizes “surplus” renewable electricity and reduces curtailment of wind and solar, e.g., loading the thermal storage tank with cheap electricity, which otherwise would be curtailed.
        • The electric boiler can be interrupted at any time in case of capacity problems in the electric grid. 
        • The electric boiler can deliver down-regulation services to the ancillary service markets fast and efficiently in combination with the thermal storage tank.
        • The electric boiler can, combined with the storage, the CHP plant, and backup boilers, deliver more cost-effective, low carbon peak and spare capacity to the district heating system.

      This system will positively impact the power grid and its ability to integrate renewable electricity. It can operate even in case the buildings connected to the district heating system need high temperatures for heating. 

      However, some heat may still be generated by gas boilers if neither the electric boiler nor the CHP is competitive over a long period.

      District Heating Generations

      District Heating Generations

      4th generation district heating

      In case the buildings have lowered the return temperature, and the need for a high supply temperature, the district heating system can reduce the supply temperature and install efficient heat pumps and thereby be upgraded to what we call the final 4th generation district heating system. Thereby all heat can be generated by an optimal combination of CHP, electric boilers, heat pumps, and boilers. 

      If the storage capacity is optimized, the boilers will deliver large capacities but only generate a minor part of the heat energy. The boilers will serve as a vital backup capacity for the wind and solar, much cheaper than a natural gas turbine. Yet, as we all understood during the energy crisis, natural gas turbines are of high value to the electricity system, albeit they have very few operating hours for the security of supply reasons.

      4th generation district heating and cooling

      District cooling (DC) can develop from 1st to 4th generation cooling and complement the 4th generation DH forming a DH&C system. This 4th generation DH&C system is a further natural development in case there is a significant demand for comfort cooling and process cooling. 

          • A DC network and a chilled water tank benefit from economy of scale and replace expensive and inefficient individual building-level chillers.
          • The chilled water tank levels the consumption and opens for optimal operation of chillers in response to the electricity prices.
          • The heat pump will generate combined heating and cooling to the 4th generation DH and the 4th generation DC grids.
          • Some ambient energy sources, e.g., drain water, groundwater, or wastewater, can provide ambient heat to the heat pump for heating in winter and ambient cold to the heat pump for cooling in summer.
          • To some extent, groundwater with two interconnected wells can store ambient cold and warm energy interseason.
        Figure 2 CHP plant and electric boiler, Vestforbrænding, Greater Copenhagen

        Figure 2 CHP plant and electric boiler, Vestforbrænding, Greater Copenhagen

        Figure 2 How to fit a 40 MW electric boiler into an existing 33 MW gas-fuelled CC CHP plant The 33 MW CHP plant and the 40 MW electric boiler owned by Vestforbrænding is a perfect match, generating 33 MW of heat at high prices and 40 MW of heat at low prices to be stored in the 8,000 m3 pressure-less heat storage tank. Besides, the plant can regulate up and down and thereby stabilize the power grid.

        4th generation district heating and cooling in buildings

        In large complex buildings, e.g., hospitals, the designers often look for decentral solutions as an alternative to the traditional centralized ventilation systems, e.g., to install a large number of decentralized ventilation systems with a local source for heating, cooling, and dehumidification. 

        In such cases, a 4th generation district heating and cooling system inside the building is the perfect solution. Each ventilation unit will be connected to the building-level DHC system and equipped with a coil for cooling and a coil for heating. 

        If the building can be connected to a city-level DHC system, the pipes can continue directly into the building, and each decentralized unit will, in principle, be a DHC consumer. In case city-level DHC is unavailable, a building-level heat pump connected to a ground source system (ATES) and even with a heat storage tank and a chilled water tank can be almost as efficient as a large DHC system. It can later be an integrated part of a larger DHC system.

        In case odd end-use demand – which deviates from the demand for comfort, e.g., refrigeration or process heat, and therefore cannot be served directly by the DHC system – a local compressor can upgrade the cold or heat to the requested temperature and use the DH as a cold sink and the DC as a heat sink. 

        This is, e.g., best practice at universities, e.g., at DTU, and it is demonstrated on a large scale by Høje Taastrup District Heating in Greater Copenhagen serving 70 end-users inside a large building owned by Copenhagen Markets, a whole market for the sale of fruit and vegetables. A compressor boosts the temperature from 10 °C in the district cooling system to minus 8 °C in the antifreeze network to the building.

        The CO2 negative 4th generation DHC

        To be independent of fossil fuels, we must produce renewable fuels in e-fuel factories combining CO2 from Carbon Capture (CC) and H2 from electrolysis, as electricity cannot supply all end-use demand. CO2 will suddenly be a resource.

            • CO2 from waste incinerators, biomass CHP plants, and plants for upgrading biogas to biomethane are the most cost-effective sources of CO2. The surplus heat from this generation can be utilized by 4th generation DH. In a few years, a new infrastructure for CO2 will connect the largest point sources of CO2 with facilities for e-fuel production, storage, and shipment.
            • H2 from electrolysis can act in the electricity market like heat pumps, as they can interrupt at any time if needed in case of a shortage of renewable electricity (albeit with a small stand-by electricity consumption). Moreover, electrolysis can offer upregulation services shifting the power consumption from maximal demand to zero.
              And finally, the process generates surplus heat, which can be used as DH – some of it directly without heat pumps. A new hydrogen infrastructure will supplement the methane gas grids and interconnect electrolysis with large industrial consumers and fuel factories. 
            • Finally, fuel factories combining CO2 and H2 can offer surplus heat for the DH.

          Good cases

          In Denmark and other countries benefitting from DH, the virtual battery is utilized by more than 100 district heating companies, mainly in Denmark, Sweden, and Finland. This operation is not only profitable for the district heating consumers but also important for the electricity system. You may find several good cases in the reports from JRC, the Joint Research Center of the EU, and the State of Green.

          The CCU (Carbon Capture and Utilization) and CCS (Carbon Capture and Storage) are not fully commercial. Still, the first full-scale projects are in the pipeline in Denmark as well as plans for a CO2 infrastructure, e.g., the C4 collaboration (Carbon Capture Cluster Copenhagen).

          Electrolysis is also not fully commercial, but projects are in the pipeline both on a small and large scale. Considering that the losses can be reduced significantly if the heat is utilized, it is likely that such plants can be among the main sources of DH in larger cities.

          It is essential to remember energy planning at a national and local level, as the challenge will be to plan and develop a resilient, low-carbon infrastructure most cost-effectively. This is the main message in the UN SDGs (United Nations Sustainable Development Goals), and the EU enforces it in the Energy Efficiency, Renewables, and Buildings directives.

          For further information please contact: Anders Dyrelund, ad@ramboll.com

          Taarnby heat pumps

          Figure 3 Heat pump for combined heating and cooling, Taarnby, Greater Copenhagen.  The heat pumps, owned by Taarnby Forsyning, generate combined heating and cooling with a 2,000 m3 chilled water tank on the cold side and the Greater Copenhagen district heating system on the warm side. Besides, the treated wastewater loop provides the plant with ambient heat in normal operation and can also provide ambient cold energy.

          Virtual battery

          The district heating systems, which use electricity for heating can do it in a very smart way taking into account the fluctuations of the prices. Large electric boilers use large capacities of electricity at low prices and prevent curtailment of wind and solar. Large electric heat pumps generate most of the heat, but can be interrupted as long time as needed at high prices. CHP plants can take over and generate electricity at high electricity prices. Heat storage tanks accumulates the cheapest heat for later use and minimize the use of back-capacity from boilers. Seen from the power system, it looks like there is installed a huge electric battery in the district heating system.

          JRC reports:


          IEA Study:

          “The Virtual Battery” was published in Hot Cool, edition no. 2/2023

          The Virtual Battery, article in Hot Cool no. 2, 2023
          Download and print article here

          Meet the authors

          Anders Dyrelund
          Senior Market Manager, Ramboll
          John Flørning
          Lead Consultant, Ramboll
          Søren Møller Thomsen
          Energy Engineer, Ramboll