Economic benefits of fourth generation district heating

The main impetus for lower distribution temperatures in district heating systems is the lower heat supply costs obtained by these lower temperatures. In this paper (2020), the differences in heat supply costs for two different temperature levels have been estimated for various future heat supply options. The estimations were obtained by modelling a district heating system characterised by typical climate conditions for Central Europe. High sensitivity to lower supply costs from lower temperatures was found for geothermal heat, industrial excess heat, and heat pumps, whereas low cost sensitivity was estimated for combined heat and power plants using waste or biomass.

Lower heat distribution loss constitutes a minor component of the total cost reductions. The current use of high heat distribution temperatures was identified as an important barrier for the transition to renewable and recycled heat supply in district heating systems. Hence, lower distribution temperatures would facilitate this required transition because lower distribution temperatures provide higher profitability for these renewable and recycled heat sources.

Authors: Helge Averfalk, Sven Werner (Halmstad University)

Keywords: low temperature, district heating, cost reduction gradients, 4GDH, economic motivation