The integration of heat pumps can increase the cost effectiveness of existing heating networks and counter the high costs for the expansion of power grids at the same time. Aim of the project is to develop innovative business models for small and medium municipal heating networks with focus on synergies between heat and power market. Main focus is a heat pump pooling for several heat grids.

Short Description

Background and motivation

The massive development of regenerative power generation in Austria has led to an installed capacity for wind and PV of around 4.080 MW, imposing severe challenges on the networks due to the stochastic production characteristics. As a consequence, suitable flexibility options for balancing via the electricity markets, the regulatory energy markets and other short-term possibilities such as balancing markets and re-dispatch are required. On the other hand, the district heating sector in Austria is confronted with a large number of small and medium size biomass plants of which in sum approximately 900 MW have been installed around 20 years ago. Many of these systems are reaching the end of the technical lifetime. Additionally, they are facing changing market conditions (especially energy prices and decreasing heat demand), resulting in an unprofitable operation and unsecure future perspectives.

Contents and objectives

heat pumps can provide a connection between the electricity and the heat sector. Therefore, they can counteract the high costs associated with the expansion of electricity grids and at the same time increase the profitability of the thermal networks. Although technical solutions are already available and demonstrated in the market, only a few examples are realized in Austria. The aim of the project fit4power2heat is to develop and investigate innovative business models enabling the economic integration of heat pumps in small and medium urban heating networks by creating synergies between the heat and the electricity sectors. One main focus is the application of heat pump pooling over multiple heating networks, supporting the requirements of the balancing market for which availability of electricity consumption must be guaranteed. Small and medium sized cities offer high potentials for integrating heat pumps due to a) less complexity of the heating network supply structure and players, b) in general lower supply and return temperature levels and c) a good availability of sources for the heat pump (e.g. waste heat, sewage water channels).


initially, several representative use cases are defined, based on ENGIE Austria GmbH´s portfolio of thermal networks. This definition is supported by a literature review on typical thermal networks in Austria, in order to create generalizable and replicable solutions. Afterwards, the use cases are simulated under state-of-the-art and future scenarios by means of an optimization model, which provides the optimal operation of the heat suppliers and the optimal bidding strategy for the heat pumps. Lastly, the results are economically assessed to evaluate the feasibility of each use case and several business models are proposed.


technical solutions are developed, which enable a reduction of the heat generation costs up to 28 % compared to a baseline thermal network with no heat pump. An evaluation of the economic potential of heat pump pooling in thermal networks is presented, which shows that the technical solutions proposed are feasible. Business models are developed with more attractive earnings before interest and taxes (EBIT) values than the baseline (up to 8 % higher) due to the synergy effects between the heat and electricity grid. The transferability of the technical solutions to representative thermal networks is proven.

Suggestions for future research

In order to facilitate the market penetration of heat pumps, further work needs to be done, especially in the direction of demonstration projects. Further development of communication devices, control and forecasting algorithms are crucial for a successful implementation of business models for flexibility. Future changes in the electricity market should also be followed in detail to quantify their impact on the business models proposed.

Project Partners

Project management

Austrian Institute of Technology GmbH

Project or cooperation partners

  • ENGIE Gebäudetechnik GmbH
  • ENGIE Energie GmbH

Contact Address

Johanna Spreitzhofer
Sustainable Thermal Energy Systems 
Center for Energy
AIT Austrian Institute of Technology GmbH
Giefinggasse 2
A-1210 Vienna