OPEN HEAT GRID - Open Heat Grids in urban hybrid systems

Starting point / motivation

Industrial excess heat is available in large quantities at different temperature levels. Basically, this excess heat could be used in existing district heating systems.

Content and goals

The OPEN HEAT GRID project primarily examined the barriers to the integration of industrial waste heat into district heating networks. Subsequently, it was analyzed how political instruments can and should be used to accelerate the integration of waste heat.

Results and findings

Technical barriers primarily concern the temperature levels of the excess heat in relation to the district heating network's temperatures as well as the heat recovery system and industrial process continuity. Basically, it can be attested that most technologies for processing and storage are available but often not economical. Depending on the characteristics of the excess heat source (temperature, time availability, location ...) different technologies can be used.

From an economic point of view, it can be attested that (contrary to what has often been said) waste heat is not free. Although the variable costs of recovered excess heat are close to zero, since the provision virtually requires no use of energy, fixed costs (investment costs) need to satisfy usual payback periods, which implicitly leads to a minimum average "feed-in tariff" in euros / kWh. This average "feed-in tariff" depends primarily on the amount of investment and the amount of heat fed in. The primary energy costs saved by the heating network operator over the years constitute a limit of investment costs. In the profitability calculation, deductions for risks (closure, process adaptions, variation of energy market prices) are to be taken into account.

The investments for the feed-in of industrial excess heat must be amortized by the heat generation cost savings of the heat network operator. In the analyzed cities of Vienna and Linz, amortization is currently only possible in winter, because in summer virtually free district heating is available due to the must-run waste incineration plants.

Outlook

The analysis of stakeholder interests and economic incentives shows that the feed-in from alternative sources of heat (this can be excess heat, solar thermal energy, power-to-heat, etc.) functions like a market and therefore (from an economic-theoretical point of view assuming "rational decisions") no regulation in the sense of a feed-in obligation or market liberalization is needed. On the basis of the stated arguments for cost-effectiveness, the recommendation for higher investment subsidies can be derived from this.

However, it can also be said that the current situation of an external feed-in is highly complex (interacting technical, economic and legal parameters). From an economic point of view, information asymmetries are therefore present, which makes it possible for the individual situation that rational decisions often cannot be made. Therefore, guidelines should be developed for targeted negotiations and associated cost-benefit analyzes. A legally based "regulated access", as it is given in Sweden, which clearly does not disadvantage the heat network operator in the case of external access, is a motivation for negotiations.

A substitution of the operation of the gas-fired cogeneration plants is also of economic interest to heat network operators if the price of the excess heat is more favorable than the variable costs of existing production units. Concerning the period during and after amortization, agreements on profit sharing between heat network operators, industrial companies and, if necessary, energy service providers should be considered before the investment.