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District Heating and Cooling

Annex XIV Project 05

The Research / IEA DHC Annexes / 2023-2026 / Annex XIV / Annex XIV Project 05

Flexibility and DH value chain (FlexVal) – advanced analysis & compatible pricing

Project summary

Currently, district heating (DH) systems are developing within energy systems experiencing an accelerated introduction of renewable electricity production, mainly wind and solar power. This is a fertile environment for the electrification of heat production, but also requires the DH systems to be both more responsive and flexible. This growth of wind and solar energy is taking place globally – translating into a wide target audience for this very topical study. Also, mitigating the natural gas dependency within the heating sector especially in Europe has become a priority. DH is one of the main technologies to support this development. A flexible implementation of DH can boost its economic performance and make it compatible with the needs of the future energy systems.

The proposal aims to investigate the impacts of measures increasing the flexibility of DH systems, including costs, emissions, utilization of renewable and excess heat resources, and changes throughout the DH value chain. Systemic solutions, such as large-scale heat storage and flexible heat supply using heat pumps (HPs) or flexibility combined heat and power (CHP) production, can utilize excess heat sources.

To enable this, also new building-level actions, such as digital building services and demand response, and future-proof domestic hot water (DHW) substations, are central. This development is part of the transition towards low-carbon DH systems. The topic of flexibility will be studied within the Nordics and the Nordpool electricity market area as an advanced operational environment, including a sensitivity analysis of the impact of different weather years within a system with high penetration of wind and solar power. However, the results are applicable for countries and regions anywhere.

The work will be based on a practical DH industry's point of view based on concrete case systems. The flexibility assessment is complemented by studying the impact of different pricing alternatives on the flexibility and their consequent value, including comparisons between different dynamic pricing options and integration with the motivation tariff concept. Also, the role and impact of the distribution network structure from the flexibility point of view will be studied. The work builds upon the outcomes of Annex XI and XII, utilising the developed tools and methods. The main deliverable and end-product of the planned work is a final report with supplementary material as defined by the IEA reporting guidelines. Furthermore, the results are disseminated in international research conferences and suitable national events.

Target audience and specific issues

  • DH companies

  • Relevant technology providers

  • Interest groups and

  • Governmental and regional decision-makers

  • Researchers

Deliverables / Outcomes

  • Final report on assessment of the existing and potential flexibility measures and options that DH systems can provide to overcome the challenges associated with renewable and fluctuating electricity generation.

Project lead

VTT Technical Research Centre of Finland
P.O. Box 1000
02044 VTT

Dr. Miika Rämä,
Phone: +358 40 592 4000
Email: miika.rama@vtt.fi

Partner Organizations

  • IVL Swedish Environmental Research Institute, Sweden

  • DTU Technical University of Denmark and the Civil Engineering Department, Denmark

  • VITO, the Flemish Institute for Technological Research, Belgium