utmost importance to explore local renewables and synergies in the local surrounding. Local renewable heat sources can, for example, be geothermal, lake, river, or sea. Typical synergies can be found with the waste sectors (household waste and wastewater), power generation, local agriculture waste bio- mass, and excess heat from industries. Local resources are commonly well suited for base and mid- load heat supply, as these energy sources are often both stable in cost and availability. C. Identify importable energy vectors. Importable energy vectors are generally any form of energy easily transported over long distances, such as electricity, natural gas, coal, oil, electro-fuels, and biomass. The common factor among these energy vectors is that their costs are influenced by their energy quality and international market conditions. Consequently, cost developments, both in the short and long term, tend to be unpredictable. The history has further shown that fossil-based energy vectors have been weaponized, e.g., the oil crisis in the 1970s and the war in Ukraine in 2022. D. Assess the capital expenditure (CAPEX) and operating expenditure (OPEX) of potential heat plants. Once the available energy sources have been identified, the next step is to access the key economic parameters influenc- ing the cost of heat from using them. For an initial evaluation, financial data can be found in various technology cost cata- logs, for example, from the Danish Energy Agency [1] . It is important to note that CAPEX is a one-time cost, the cost of establishing the heat plant, while OPEX is both fixed and variable. The fixed OPEX is the cost that falls irrespectively of the use of the heat plant; these can be due to general main- tenance schedules of building and equipment. The variable OPEX is the cost directly related to the heat generation; this is the fuel and maintenance costs directly associated with the plant operation (wear and tear). The rule of thumb is that heat plants with high CAPEX and low OPEX should be base load providers. In general, the cost of heat from these plants becomes lower the higher the plant utilization is, as shown by the blue line in Figure 2. At the other end of the spectrum are heat plants with low CAPEX and high OPEX. These plants are well suited as peak load plants, as the cost of the heat will reach a plateau around the variable OPEX, as shown by the black line in Figure 2.
E. Determine the most suitable mix of heat plants con- cerning CAPEX, OPEX, and heating demands being fulfilled. The following provides a simplified example of the heat cost optimization for the heat demand case shown in Figure 1. The case is based on three heat generation technologies, waste in- cineration (WtE), an air source heat pump, and a natural gas boiler, see Figure 3. Figure 2. Heat generation cost in respect to unit annual utilization. The black line represents low CAPEX / high OPEX heat plant, and the blue line represents high CAPEX / low OPEX.
Table 1 shows the cost of heat from a single heat generation technology fulfilling the demand in Figure 1. As the table shows, the air source heat pump is the most cost-effective solution from a single technology perspective. Figure 3. Cost of heat from 3 heat generation technologies given annual utilization.
Table 1. Cost of heat given a single heat generation technology.
Capacity [MW]
Share of annual demand
Plant utilization
Heat cost [EUR/MWh]
Plant
WtE boiler Air source heat pump Natural gas boiler
100
100%
37.9% 42.8
100
100%
37.9% 34.9
100 37.9% 41.7 Table 1. Cost of heat given a single heat generation technology. 100%
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