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

This requires that you be in complete control of your network, so you know the exact risk you take on as well as the potential you can unleash. But that also allows you to propose the ideal offering because when you know everything in your system, you can take more responsibility and extend customer relations. Næstved District Heating, did precisely that by adopting a business model offering to take full ownership of their customers’ heat installations and using digitalization to monitor performance. Not only is the leasing agreement very attractive, but Næstved has effectively moved the entire population to lower, and more uniform forward temperatures plus eliminated the highest return temperatures (figure 3).

As mentioned, one way to reduce temperatures is through more efficient temperature management on the supply side, including optimizations based on actual conditions out by the end users instead of assumptions or fixed network metering points, e.g., in wells. This requires utilities to tie the entire chain much closer together from production to buildings, so you know the demand and forecasts and can operate accordingly. Low temperatures naturally also generate savings from less heat loss in the network, accounting for 11% of an average Danish utility’s costs (figure 1). DTU studies state that lowering temperatures can deliver as much as a 20% reduction of heat loss.

The next step could be business models that tie together flexibility in the buildings (e.g., in relation to peak shaving) with the production link allowing utilities to continually balance the district heating system across the entire value chain. Peak load is costly compared to baseload, and digitalization plays a vital role in evening out supply and demand and enables the necessary control and planning. It’s time to know Navigating the complexity of operating a district heating system today is one thing, but it only becomes more volatile as it becomes a piece in a much bigger puzzle. For utilities, the goal remains to produce, manage and distribute energy as efficiently as possible – but efficiency requires transparency that you can translate into actionable knowledge. This

2019 vs. 2017

Supply Temperature

Figure 3: Temperature optimization in Næstved District Heating

makes smart meter data and digitalization the foundation for fulfilling district heating’s full potential as an attractive and cost-effective heat source and the cornerstone of an integrated and truly intelligent energy system. Fortunately, there are already solutions on themarket designed to solve the challenges in different parts of the value chain. And as the examples above reflect, close collaboration between utilities and suppliers leads the way for district heating that is sustainable in every way.

Finally, there are significant savings in handling the increasing complexity ofmultiple heat sources and fluctuatingproduction in an energy system where district heating connects the different sectors. Here, data provides the basis for utilities to continuously balance production and consumption in the best and cheapest way possible – e.g., forecasting when to produce, sell, or use electricity based on electricity prices. Or deciding when to overproduce thermal energy to store in buildings and the distribution network. Electricity prices will fluctuate even more in the future, so the consequences of misjudgements due to wrong or inaccurate information will be very costly. Ultimately, the more data you have, the better your basis will be for making the right decisions. Enhancing customer attraction There are different ways to improve end users’ perception of district heating as an attractive product. But all of them revolve around customer closeness and digitalization as a crucial lever. It could involve expanding your product portfolio with new offerings and services – possibly defined by whether a customer prefers heat that is green, convenient, or low-priced. Or it could be optimizing your price models to accurately reflect both the energy used and the capacity available to ensure fair earnings.

For further information please contact: Steen Schelle Jensen,

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