HOT|COOL NO.2/2021 - "Economics, Finance & Money"

COUNTRIES WITH SMALL SHARE OF DH

The countries with small share are Slovenia, Croatia, the Netherlands, France, Switzerland, Norway, Italy, the United Kingdom, Greece, Spain, Portugal, Ireland.

The fuel type used are typically fossil fuels like natural gas, oil, and petroleum products.

Overall, the installed heat capacity is for all countries very similar, with approx. 75-80% coming from individual boilers (mainly natural gas), 10-15% comes from DH boilers, and the rest from combined heat and power (CHP).

Historical reliance on fossil fuels, as well as extensive natural gas networks. Together with the natural gas prices being relatively low under current market conditions, the switching to DH for heat supply is difficult.

Cooling is primarily supplied by individual chillers, with no or limited district cooling (DC) available.

The majority of the countries does not have a culture of utilizing DH due to the warmer climate. Therefore, the regulatory frameworks put in place are not in favor of DH which creates higher risks for investors and a barrier for further development and refurbishment of the existing systems. General low awareness of DHC and lack of practical know-how. DHC projects are typically heat recovery from incineration, which provides both heat and cooling in smaller networks of buildings.

Dependency on the expertise of international companies to provide solutions for every aspect of developing an efficient DHC market.

COUNTRIES WITH MEDIUM SHARE OF DH

Poland, Czech Republic, Finland, Latvia, Romania, Hungary, Bulgaria, Austria, and Germany are the countries with medium DH share.

The total DH capacity is decreasing in most of the countries.

Individual boilers are the most typical for heat production.

The Eastern European nations have a history of using DH networks, many of those constructed during the Soviet era. These DH systems are today generally in poor condition, with high thermal losses making investing in refurbishment of the existing infrastructure a requirement to improve energy efficiency.

Refurbishment of existing infrastructure is very important, considering the declining heat demand and current state of the network.

Relatively high degree of knowledge regarding DHC, but external forces such as economic influence, competing individual heating solutions, population density, as well as population decrease hinder the improvement and development.

The DH are competing with individual heating solutions.

In the Czech Republic and Germany, DH companies are obligated to pay carbon emission taxes, while the individual heating solutions do not. In Hungary, the price level of natural gas is more attractive than DH heat prices, creating better financial incentive for individual solutions.

The legislative framework generally favors individual solutions. Thus, heat price regulation must be thoughtfully constructed to increase the competitiveness of DH systems.

Typical for newer projects are to focus on heat with heat-only boilers with flexible production based on biofuels. In countries with DHC projects, cooling originates from RES like water.

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