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Energy transition: there is still a lot of unexploited potential

Three things to know about the unexploited potential of public district heating systems

Johanna Ayrault, postdoctoral researcher at Centre de gestion scientifique at École des MINES Paristech
On September 20th, 2023 |
5 min reading time
Johanna Ayrault
Johanna Ayrault
postdoctoral researcher at Centre de gestion scientifique at École des MINES Paristech
Key takeaways
  • Today, heating and air conditioning account for almost half of the energy consumed in the EU, 90% of which is fossil fuel-derived.
  • District heating is a collective heating system owned by local public authorities and considered to be clean energy.
  • These public district heating systems account for 9% of global demand, but have the potential to cover more.
  • They are therefore a major lever for producing sustainable heat on a large scale.
  • These systems, which are little-known and invisible in the public and political spheres, remain largely under-exploited.

With­in the ener­gy sec­tor, heat­ing is and will remain a major part of the ener­gy con­sump­tion (about half of the ener­gy demand in build­ings). Dis­trict heat­ing could be a great vec­tor of the ener­gy tran­si­tion as it is a way of inte­grat­ing clean ener­gy on a large-scale. How­ev­er, this poten­tial remains very much under-exploit­ed as 90 % of the heat sup­plied through net­works is still fos­sil-based (75 % in Europe, the more adanced con­ti­nent when it comes to the inte­gra­tion of renew­able ener­gy in dis­trict heat­ing sys­tems), and only 9 % of the glob­al heat­ing demand (indus­tri­al and build­ings) is pro­vid­ed through dis­trict heating.

#1 District heating already exists in many locations

Dis­trict heat­ing is a col­lec­tive heat dis­tri­b­u­tion sys­tem. In France, it usu­al­ly also encom­pass­es the pro­duc­tion plants. In the heat plants, a flu­id – steam or water – is heat­ed by incin­er­a­tion heat, bio­mass boil­ers, or geot­her­mal ener­gy. This hot flu­id is then trans­port­ed through insu­lat­ed pipes to sub-sta­tions, con­nect­ing the dis­trict heat­ing sys­tem to sec­ondary sys­tems. The sec­ondary sys­tem cor­re­sponds to the dis­tri­b­u­tion sys­tem inside build­ings – for instance, the pipes run­ning through build­ings from the sub­sta­tion to the radi­a­tors. This sec­ondary sys­tem is dis­tinct from dis­trict heat­ing and is not reg­u­lat­ed under the same con­tract. The type of build­ings sup­plied by dis­trict heat­ing can vary from coun­try to country.

In most cas­es, dis­trict heat­ing is devel­oped in areas where there are already build­ings con­sum­ing much heat, such as hos­pi­tals, malls, office build­ings, or social hous­ing. Pri­vate hous­ing like col­lec­tive hous­ing or indi­vid­ual hous­ing can also be con­nect­ed to the sys­tem, but not in every coun­try. In France, the old­est dis­trict heat­ing sys­tems date back from before the 1950s in some major cities like Paris, Stras­bourg or Greno­ble1. For instance, Paris had its dis­trict heat­ing in 1927. It is still under oper­a­tion and works with steam. From the 1950s to the 1970s, dis­trict heat­ing sys­tems were devel­oped in many cities but main­ly restrict­ed to new neigh­bour­hood or around incin­er­a­tion plants to use the heat. In the 1980s, the oil cri­sis led to the devel­op­ment of geot­her­mal based dis­trict heat­ing, like in the Parisian region. How­ev­er, these sys­tems quick­ly became eco­nom­i­cal­ly unvi­able due to the com­pe­ti­tion with gas.

Dis­trict heat­ing, as an ener­gy util­i­ty, is a pub­lic ser­vice. The local pub­lic author­i­ty owns the sys­tem and is respon­si­ble for its oper­a­tion. In France, oper­a­tion and main­te­nance are often del­e­gat­ed to a pri­vate oper­a­tor through a Pub­lic Ser­vice Del­e­ga­tion. These con­tracts can last for decades (usu­al­ly about 25 years), and the pri­vate oper­a­tor bears the invest­ments2. How­ev­er, more and more local pub­lic author­i­ties are con­sid­er­ing their dis­trict heat­ing sys­tem as a great lever for the eco­log­i­cal transition.

#2 District heating systems are beneficial for the ecological transition

Heat­ing and cool­ing accounts for rough­ly half of the ener­gy con­sumed in the Euro­pean Union3 but cur­rent­ly dom­i­nat­ed by fos­sil fuels4. Dis­trict heat­ing could sup­port large-scale sus­tain­able heat pro­duc­tion. Indeed, instead of ask­ing thou­sands of fam­i­lies to change their old fuel boil­er, the whole neigh­bour­hood can move from fos­sil fuels to sus­tain­able ener­gy by chang­ing the fuel-based pro­duc­tion plant to, for instance, a bio­mass-based one. More­over, by low­er­ing the flu­id tem­per­a­ture and adding ther­mal stor­ages, it is eas­i­er to inte­grate a greater vari­ety of local and sus­tain­able pro­duc­tion means: indus­tri­al waste heat, shal­low geot­her­mal ener­gy, large-scale heat pumps, etc. Dis­trict heat­ing is also a great team­mate: it can be cou­pled with a cool­ing sys­tem or be used as a way of stor­ing renew­able elec­tric­i­ty production.

By inte­grat­ing a vari­ety of local resources, dis­trict heat­ing is a great lever for many local tran­si­tions. It is a lever for local pub­lic author­i­ties to act on decar­bon­i­sa­tion, air pol­lu­tion, ener­gy pover­ty, etc. It can even become an object of local democ­ra­cy if cit­i­zens are inte­grat­ed to its plan­ning and gov­er­nance. It can also pro­mote local ener­gy sov­er­eign­ty by secur­ing a local ener­gy sup­ply and reduce ener­gy depen­dence. For instance, Dunkirk is the biggest French dis­trict heat­ing sys­tem based on indus­tri­al heat recov­ery. Since the oil cri­sis, the munic­i­pal­i­ty want­ed to have more ener­gy sov­er­eign­ty and be able to con­trol the prices of heat. They devel­oped in 1986 a dis­trict heat­ing recov­er­ing waste heat from Arcelor-Mit­tal, a major steel man­u­fac­tur­er. Thanks to this recu­per­a­tion, Arcelor-Mit­tal has to burn less of its remain­ing gas, improv­ing both the air qual­i­ty and the local attractivity.

In 2009, the Heat Funds, a French pub­lic sub­sidy sup­port­ing the devel­op­ment of renew­able heat was set up. It aims at mak­ing renew­able and recov­ered heat com­pet­i­tive with gas-based solu­tions. It par­tic­i­pat­ed to secur­ing the remain­ing geot­her­mal-based dis­trict heat­ing and helped the devel­op­ment of new ones, based on at least 50 % of renew­able or recov­ered heat. Thanks to this new dynam­ic, France has now 898 dis­trict heat­ing sys­tems in oper­a­tion, with 62.6 % of renew­able or recov­ered heat pro­duc­tion in aver­age5.

#3 The potential of district heating is greater than its current visibility

You have prob­a­bly already heard about green elec­tric­i­ty with wind tur­bines or solar pan­els. You have prob­a­bly heard about bio­gas, green gas­es, and hydro­gen. But had you heard about sus­tain­able dis­trict heat­ing sys­tems? Can you name one com­pa­ny pro­vid­ing dis­trict heating?

Dis­trict heat­ing is under-rep­re­sent­ed in the ener­gy sec­tor, and not a lot of insti­tu­tions are sole­ly advo­cat­ing for these sys­tems in a vis­i­ble way. The major Euro­pean net­work pro­mot­ing dis­trict heat­ing is named Euroheat&Power… a name giv­ing no explic­it indi­ca­tion on its focus towards dis­trict ener­gy. Many French com­pa­nies pro­vid­ing dis­trict heat­ing are also major actors of the elec­tric­i­ty and gas mar­kets, which can lead to inter­nal inter­est con­flicts. More­over, some coun­tries – like France – had his­tor­i­cal­ly made the polit­i­cal choice to nation­al­ly devel­op the gas and elec­tric­i­ty networks.

Dis­trict heat­ing is under-rep­re­sent­ed in the ener­gy sec­tor, and not a lot of insti­tu­tions are sole­ly advo­cat­ing for these sys­tems in a vis­i­ble way.

With these two util­i­ties in place and the under-rep­re­sen­ta­tion of dis­trict heat­ing, it can be hard for local pub­lic author­i­ties to 1) gain knowl­edge about dis­trict heat­ing, 2) jus­ti­fy the devel­op­ment of a new ener­gy util­i­ty when two are already ful­ly oper­a­tional and able to pro­vide heat. To add to the sec­ond point, a dis­trict heat­ing sys­tem needs a high lev­el of heat demand and den­si­ty to be eco­nom­i­cal­ly viable. In places where there is no manda­to­ry con­nec­tion to the sys­tem, it can be hard to achieve and secure this lev­el of demand. Indeed, there are a lot of solu­tions – sus­tain­able or not – to be pro­vid­ed with heat­ing and hot water: indi­vid­ual gas or fuel boil­ers, elec­tri­cal heat­ing, indi­vid­ual heat pump, solar ther­mal pan­els, etc. Some of these solu­tions are also sup­port­ed by pub­lic poli­cies, like the set­ting up of indi­vid­ual heat pumps or elec­tri­cal heat­ing – a very inef­fi­cient heat­ing means, but quite devel­oped in France due to the low price of elec­tric­i­ty and the poli­cies sup­port­ing nuclear-based electricity.

Two things make it even hard­er for dis­trict heat­ing to be vis­i­ble. First, its invis­i­bil­i­ty! The whole sys­tem runs under­ground, and heat is not as vis­i­ble in our land­scapes as elec­tric­i­ty. The only vis­i­ble parts are plants, which can lead to a rather unpop­u­lar opin­ion on dis­trict heat­ing… Sec­ond, the dis­con­nec­tion to final users. As men­tioned ear­li­er, dis­trict heat­ing is dis­tinct from the sec­ondary sys­tem. The cus­tomers are the build­ing own­ers, not the final users, and there is no direct link between heat users and dis­trict heat­ing actors. Many cus­tomers do not even know that they are pro­vid­ed heat through dis­trict heating!

1Cere­ma, 2023. His­torique du développe­ment des réseaux de chaleur en France. His­torique du développe­ment des réseaux de chaleur en France | Cere­ma. Accessed 04.08.2023.
2Cour des comptes (Gen­er­al Account­ing Office), 2021. Le chauffage urbain : une con­tri­bu­tion effi­cace à la tran­si­tion énergé­tique insuff­isam­ment exploitée.
3Euroheat&Power, 2023. Vision 2050. Vision 2050 (euro​heat​.org). Acessed 03.08.2023.
4Inter­na­tion­al Ener­gy Agency, 2021. Dis­trict Heat­ing. Dis­trict Heat­ing – Analy­sis – IEA. Accessed 13.05.2022.
5Fedene – SNCU, 2022. Enquête des reseaux de chaleur et de froid – Edi­tion 2022.

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