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

COUNTRIES WITH LARGE SHARE OF DH

The countries with large share of DH, above 50% of their gross heat production, are Denmark, Lithuania, Slovakia, Estonia, and Sweden.

The countries have an overall increasing heat production with a focus on using biofuels.

Heat-only boilers are mainly used in Baltic countries, while Nordic countries use CHP. The Scandinavian countries’ DH production mostly originates from solid biofuels and natural gas.

General high awareness of the DHC technology as well as a historical utilization of DH together with a sustained effort for continuous development of the networks.

Themain distinction between the countries appears in the general state of the networks and the political framework related to investments and operation of the system.

Loans with very low interest rates available for non-profit companies through government schemes decrease the risk of the DH companies, and the non-profit structure drives down the cost of heating.

Saturatedmarkets shift the development from extension of networks towards increasing the overall efficiency of the networks by use of RES and new technologies.

There is a natural limit for when DHC is feasible and when individual solutions are, which partly has to do with the density of the population. Thus, most of the DH system are facing challenges in competing with new individual solutions, such as high-efficient HPs.

Support schemes that make individual heating solutions attractive for private households can undermine the potential for DHC.

Some countries have tax regulation on the utilization of this excess heat from industrial processes, consequently, heat that could have been used for DH is now simply wasted.

Fossil fuels still represent a great proportion of the heat production. Often solid biomass is seen as the easiest substitute, however, biomass is a scares resource.

The typical DHC project focus on using RES and excess heat in the DHC production. In some cases, smart solutions are implemented using wastewater as an energy source for both production of heating and cooling.

Lessons learned from current DHC stock and trends in Europe The huge variety of DHC systems and climate zones in the EU calls for improvements with very different starting points. However, the following are some of the generally identified lessons learned regarding the regulatory and planning measures that are important to allow for the development of sustainable energy systems:

Create a sound methodology and guideline for carrying out cost-benefit analyses of heat supply options in line with the EU’s Energy Efficiency Directive (EED) provisions.

Creation of long-termfinancing schemes in linewith other infrastructure projects and buildings at a low, competitive interest rate - while ensuring a transparent market for electricity-related services, consider time-dependent energy prices, capacity, and regulation.

Access to laying pipes on public and, if necessary, private land.

Ensure fair competition between DHC and building-level solutions. Implement the EU directives regarding the building codes to improve the performance of the buildings, as DCH often is the most cost-effective way to integrate renewable energies.

Existing DHC can be retrofitted to provide higher technical and institutional performance. E.g., by establishing combined heating and cooling and installing pressure and temperature control of all end-user substations.

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