Capturing flexibility gains by price models for district heating

Abstract

Flexibility can support the energy transition and improve the efficiency of heat supply to buildings. This study tests price models for the inclusion of heat pumps (HPs) in district heating network (DHN). Various price models were tested in two cases in Sweden. In Sweden, DH companies are increasingly confronted with instances where building owners invest in a HP and only use DH when it is too cold for the HP to function efficiently. This poses challenges for DH companies due to the high costs associated with peak load production. Potential gains in HP-DHN flexibility and the investment and operational risks of HP-DHN integration are therefore important topics to understand and investigate. Our results show that HPs can increase the flexibility of DHNs, reduce costs and environmental impact. We also identify that the lowest risk exposure to DH companies, in HP-DHN arrangements, is when the building owner invests in the HP and the DH company operates it.