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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 École des MINES Paristech
On September 20th, 2023 |
5 min reading time
Johanna Ayrault
Johanna Ayrault
postdoctoral researcher 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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