An often-overseen factor regarding district heating systems is that combining heat sources dependent on different fuels and electricity can provide flexibility to the electricity system. If this flexibility is combined with a heat storage system, the bene- fit for consumers and the electricity system will increase. This will result in low heat prices if the heat source with the lowest marginal heat price is always preferred first. The benefits only increase with increasing demand for flexibility from the elec- tricity system. It is not just heating. Most cooling can be produced in combi- nation with heat, and especially for large buildings demand- ing both heat and cooling, combining the heat and cooling production can be beneficial, leading to lower prices for both. The heat can be used for heating, tap water, or delivered to a district heating network. The technologies are there and can be based on natural refrigerants not having significant green- house gas effects. When district heating networks are established in zones near cheap waste heat sources, the heat delivery capacity is some- times larger compared to heat demand. Then the heating network should be expanded into nearby urban areas. Alterna- tively, transmission lines can be established to nearby district heating networks areas having relatively high prices. Transmis- sion lines for heat will only decrease heat prices for consum- ers if the price difference between the two areas can finance a transmission line. It is for district heating networks important that tariff systems support flexibility in the same way as for electricity systems. Consumer payment according to actual costs should be pre- ferred. To avoid losses and ensure low heat prices, the payment for waste heat sources should never get higher than obvious al- ternative heat sources, which could be implemented in con- tracts or legislation. If many heat sources can deliver to a heat network, the lowest marginal price should always be preferred. It then can be considered to split heat source payment into marginal price payment and capacity payment. Learning 11: Establish district heating networks in all suitable urban areas. If a large heat pump solution in a heat network is cheaper than individual heat pump solutions for the same area and number of consumers, the area is suitable for district heating networks.
market marginal price setting is related to power-alone pro- duction, the electricity price is around 2.5 times higher than the fuel price. Then it does not help much if the heat pump COP (Coefficient of Performance) is on the same level (COP 2.5). And that is because the heating price using electricity will be close to the fuel price and often higher due to high electricity transportation costs. Then learning about low-cost electricity is also important for individual electricity-based heat prices.
An often-overseen factor regarding district heating systems is that combining heat sources dependent on different fuels and electricity can provide flexibility to the electricity system.
CHP and waste heat from the incineration of waste and in- dustrial processes delivered to a district heating system is the most important way to decrease fuel and electricity consumption and heat prices. Ultimately, a district heating system can be almost independent of fuel price variations. Combined with an electrical boiler, the CHP plant can deliver flexibility to the power system both when the electricity pric- es are high and low, which will benefit heat and electricity consumers. Electrical boilers can avoid curtailing renewable electricity from wind turbines and solar PV collectors. This is possible if production exceeds demand in a price area and may be cheaper and more flexible than building more cables to other areas with the same renewable electricity produc- tion profile. District heating systems can be non-fuel-based but will still depend on electricity prices for heat pumps to collect low-temperature waste and ambient heat sources. Howev- er, these sources have higher temperatures than individual heat solutions. This means that large heat pumps in district heating network systems will be more efficient than individ- ual heat pumps, including losses in heat networks, which will decrease costs and heat prices compared to individual solu- tions. Fuels should only be used in district heating systems for reserve and peak load purposes or if electricity prices, for some reason, are getting very high and CHP capacity is need- ed. Waste CHP incineration and, in some countries, not hav- ing much renewable electricity production, fuel-based CHP may be the exemption.
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