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

The DHC outlook

Today, district heating (DH) is far from everywhere – and only green somewhere. If DH is the first step, the next step is the green DH transition – a giant leap for mankind.

In 2018, a little less than 6% of global heat consumption was supplied through DHC networks and is expected to increase lightly by 4% until 2024. But, as heat demand is rising too, DHC share in total heat demand remains flat. Fossil fuels are still by far the dominant energy source in DHC globally due to the extensive use of natural gas in Russia and coal in China; overall, renewables accounted for less than 8% of the energy used in district heating 2018. Yet, renewable energy consumption for DHC increased more than two-thirds during 2009-18, mainly due to the extensive transition from fossil fuels to bioenergy in the European Union. Bioenergy is indeed the largest source of renewable energy in DHworldwide by far. Even though heat pumps and solar thermal systems still account for only a marginal share of DH energy, development continues, as new high-efficiency DH systems with lower operating temperatures make their integration possible.

However, renewable energy consumption for DHC is anticipated to expand more than 40% globally, contributing a little more than 8% of renewable heat consumption growth over 2019-24.

Outside of China, the expansion of renewables in DHC decelerates from the previous six-year period in many countries and regions. In Russia – where district network infrastructure is old and very inefficient – and in the United States, renewable expansion in DHC remains limited or non-existent due to lack of policy support. So, where to look for inspiration on exploiting the opportunities to deploy new DHC infrastructure and improve renewable energy? Of course, large countries have large markets, and not to name the obvious, when comparing DHC markets, it is more relevant to rank the share of district heating in total energy consumption of the countries and rank by renewable energy share in the district heating networks. This story shows markets where DHC penetration is high - but black. Others being small and green. And a few DHC markets where penetration is high and renewable energy share is high too. This is where to look for inspiration!

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