TS2: Low Temperature District Heating - Summary of the IEA DHC TS2 Guidebook

Welcome to this talk on low temperature district heating implementation. My name is Cristina and I'm here to guide you through the contents of this book. It was released in September 2021 under the IEA DHC umbrella. We drafted the book because there was a lot of information on low temperature existing but no implementations taking off. And we decided to collect empirical data and put it into one guidebook in order to facilitate implementation. It has been a work that has been ongoing for three years, starting in 2017 with a pre phase and ending in September 2021. There are a number of people involved in writing the book from several different countries. Germany, Austria, Norway, Sweden and Denmark. And one of our first tasks was to define what is low temperature. And when you engage in low temperature district heating discussions, there are many opinions about this and also many different generations. We also started out in that way, but over time we realized that it's good to have a very easy and simple definition. So we concluded that that all heat distribution technologies with Supply temperatures below 70 degrees as annual average would be low temperature. And that means that systems can be warmer or cooler, but they are all part of the low temperature family like siblings. For the full definition, you find it in the book. Then we spent some time thinking about economic impacts of low temperature. And we have realized that it goes in the entire chain from heat supply to end usage. And we have seen that there are nine major things to think about. First, if you have the ability to use geothermal, then you can probably use more geothermal heat from wells because of the lower temperatures. You can use less electricity in heat pumps because of lower pressures applied in the heat pump condensers. You can extract more industrial excess heat and more heat from solar collectors. You can also generate more electricity per unit of heat recycled from combined heat and power plants. And you can recover more heat from flue gas condensation. You have better and improved heat storage capacities. You will have lower heat distribution losses and the ability to use plastic pipes. So as you understand, if you tick box the nine components, you will see if low temperature is having a big economic impact in your investment case or not.

Then we made an exercise looking into something called the cost reduction gradient and it describes the cost reduction per lower degree Celsius for a reference volume of heat. And it's measured in euro per megawatt hour and degrees Celsius. And we identified that for renewable heat sources like geothermal and waste heat, the cost gradient is significantly larger than if you have a more conventional heat supply from a boiler of biomass or a combined Heat and power, incineration of biomass or waste. And then the first conclusion is that the lower system temperatures the they render the largest cost savings in combination with renewables. And then the second conclusion is that if you have an existing network with the conventional heat supply, then the motivation is much lower to lower temperatures than if you have got other heat sources. So then you end up in a situation of catch 22. Should you lower temperatures first and then engage with the renewables or should you do it at the same time for the biggest bang of the buck? You would probably do both at the same time.

We have also been thinking about the business models and their particularities. And we find that the green value is very strong when it comes to the low temperature district heating implementation. The green mix will be more pronounced than compared to a conventional mix in a conventional district heating system. We also see that you will need new relationships. You will have to engage actively with customers that are both customers and providing heat to your system, so called prosumers. And you will engage long term with them and have long term contracts. And probably you will engage new staff at your own end as district heating provider to engage in a closer customer dialogue, but also purchase assets like heat pumps and such in order to meet the different temperature demands of different systems. So to conclude, the business case of low temperature is not identical to the business case of high temperature. And it is possible to use the low temperature offer as a complementary to the high temperature offer. And then a common error is to assume that you can just apply the high temperature on the low temperature. And in the book, in the cases that we studied, this was happening. The technical aspects were accounted for first. And then the conventional business case was just applied to the low temperature solution which completely erodes the business case and the synergies from the low temperature installation.

We identified more than 160 low temperature implementations worldwide with which indicates that this is not a single event happening here and there. This is now a trend. And we looked into detail into 12 of them and you can find the details again in the handbook. And key conclusions on the technical side were that there is a large variety of cases and configurations to show flexibility across the board. So technology does not seem to be the problem here. Rather there is something else hindering implementation. We also saw that another aspect is that you have a multiple heat source.

You have to consider multiple heat sources and for that digitalization is needed in order to make them work together in an efficient way. And we found that university sites where there is know how on to use low temperature Heat sources. This is where first implementations were often made. In terms of regulatory conditions. We found that it's not beneficial in most countries because, for example, there is no legislation on waste heat. So it's difficult for an investor to know if it's comparable to renewables or not. And this creates another layer of risk to this kind of investment. So this kind of harmonization is needed between countries. And also there is very little preparation for sector coupling in Europe today between different sectors. For example, between electricity and district heating. We also looked into four cities that have district heating and we tried to understand how they are working with low temperature implementation. These cities are very different in terms of size and heat delivery volumes per year. Where the smallest one was Gleistorff in Austria, then we had Viborg in Denmark, Geneva in Switzerland and Munich in Germany. And we have some interesting key takeaways from the cities where the first one is that all four cities had lowering temperatures in the district heating networks as an important part of their energy transition. So they were really interested in how to engage in that kind of activity in all four cities. There was also a demand for heat sources that do not require incineration for the future energy system. And there was a long term goal on having a renewable district heating system in three out of the four cities. And also expansion of district heating was a strategy in these cities of both new and existing networks. So to conclude, also at city level, low temperature seems to be very important and acknowledged. And there is work ongoing across Europe.

Then some concluding. What have we learned? What are the main takeaways from the book? Well, we know technology is there. We know that you should combine lower temperatures with renewables for the highest cost efficiency. We know that the low temperature business model is not identical to the high temperature one. So. So you should never just apply the high temperature business case on a low temperature implementation. And we know that we need upgrades of the policy framework surrounding this technology to really kick it off.

And then the largest conclusion from the handbook is that it's not about technological innovation anymore. We have the technology we need. Rather it's about stakeholders who have access to or who have identified the potential to use waste heat sources in urban areas to come together and start working in new ways so we don't have lock in effects or hurdle effects remaining. Thank you for listening.