HOT|COOL NO. 4/2020 - "Large and Growing Markets"

The way forward? Avoid losses! The current EU strategy on energy system integration highlights the need to reuse energy in urban areas to develop an integrated, circular energy system. The plan is a perfectly timed push in the right direction for policymakers all over Europe. For district heating companies in Scandinavia, the strategy feels like a pat on the back for a job well done so far, but it also serves as inspiration for the years to come. In Norway, the reuse of recovered heat fromwaste incineration, other types of waste heat, heat pumps, and bioenergy (mainly waste fractions from forestry, buildings, and sawmills) already accounts for 85 % of the energy output from district heating. It will continue to be the primary source also for the next decade. However, we now also see an immense potential for reusing waste heat originating from both electrification and hydrogen production, which are the two other trends highlighted in the EU strategy.

In the 1980s, large scale heat pumps, using sewage water as a source, were introduced in Sandvika, close to Oslo. Other cities followed, and similar heat pumps, most of them sea water- based, are the backbone of several district heating systems in Norway today. Also, electrical boilers have been present in developing district heating systems throughout the country. In practice, the electrical boilers are used as a flexibility mechanism for the power grid with a specific tariff system. The grid operators are allowed to turn off the electrical boilers in the district heating systems at short notice whenever peak demand is threatening the grid's stability. The district heating companies will then immediately switch to other sources in their production. In return, district heating companies get a rebate tariff for the use of the electrical boilers. Because of this flexibility mechanism, approximately 10 % of the Norwegian district heating production came from electrical boilers in 2019. However, the share of power-to-heat was much larger in some DH systems, most notable in Norway's capital Oslo, by far the largest city in Norway. Here the production from electrical boilers was 19 % in 2019. Oslo's district heating system has 250 MW electrical boilers for flexible use, giving the power grid operator a powerful tool for balancing the grid. EV + DH = Efficient The absence of (fossil) CHP in Norway, and the large share of direct electrical heating, gives Norway a unique possibility to use the heating and cooling sector to free up capacity in the power grid for the necessary electrification of other sectors. A great example of this is the ongoing electrification of the transport sector. Throughheavy government tax cuts for electric vehicles in the last decade, Norway now has the largest market share of electric cars globally. However, the EV revolution has put our power grid to the test. It highlights how electrification is driving the need for costly strengthening of power grids at the local level, especially in the cities. On the other hand, the roll-out of charging infrastructure is a market opportunity for district heating companies. We are experiencing several cases of real estate companies switching from stand-alone electrical boilers in commercial buildings to district heating, making room for EV charging without additional grid cost. A telling example of this trend is Storogården in Oslo. The owner Malling & Co, replaced two 700 kW stand-alone electrical boilers with district heating, freeing up capacity for 700 standard EV charging stations.

In short, in a circular, integrated, renewable energy system, district heating will be an efficient tool to reduce energy losses.

Surplus heat from large scale data centers is a perfect example of this and a prominent district heating source. In Sweden, most notably in Stockholm, data centers have been built into district heating systems for years. In Norway, the use of surplus heat from smaller, in-house data centers is nothing new, but next year the first large-scale data center is connected to the district heating network in Oslo. The surplus heat from this data center alone will annually provide heat corresponding to the heat demand of 5,000 apartments through the district heating network. It makes sense to reuse data center heat for those apartments instead of providing them with direct electrical heating solutions, which would only add to peak hour demand in the power grid. In a circular energy system, reuse is a must! The same will apply to the production of green hydrogen from electricity (PtX), a process that generates a large amount of waste heat. To achieve the ambition of circularity in the energy system, the potential for utilization of waste heat should influence both data centers and hydrogen production plants' location. Innovation needed The case of Norway can serve as an example of how district heating can function as a cost-cutting flexibility mechanism for the power grid. However, the Norwegian district heating companies' challenge is the relatively small penetration of waterborne heating systems in the existing building stock due to the large share of direct electric heating systems. In this respect, district heating's potential is much more considerable in other European countries, where waterborne heating is the standard. On the other hand, there are now signs of new, innovative waterborne heating solutions designed for retrofitting of electrically heated buildings. This kind of innovation is essential for unleashing the true potential of the Norwegian power grid's best friend.

2019 6.6 TWh

For further information please contact: Trygve Mellvang Tomren-Berg,

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