Life Cycle Cost of Heat Supply to Areas with Detached Houses—A Comparison of District Heating and Heat Pumps from an Energy System Perspective

Moa Swing Gustafsson,Erik Dotzauer,Jonn Myhren

doi:10.3390/en11123266

Abstract

There are different views on whether district heating (DH) or heat pumps (HPs) is or are the best heating solution in order to reach a 100% renewable energy system. This article investigates the economic perspective, by calculating and comparing the energy system life cycle cost (LCC) for the two solutions in areas with detached houses. The LCC is calculated using Monte Carlo simulation, where all input data is varied according to predefined probability distributions. In addition to the parameter variations, 16 different scenarios are evaluated regarding the main fuel for the DH, the percentage of combined heat and power (CHP), the DH temperature level, and the type of electrical backup power. Although HP is the case with the lowest LCC for most of the scenarios, there are alternatives for each scenario in which either HP or DH has the lowest LCC. In alternative scenarios with additional electricity transmission costs, and a marginal cost perspective regarding the CHP investment, DH has the lowest LCC overall, taking into account all scenarios. The study concludes that the decision based on energy system economy on whether DH should expand into areas with detached houses must take local conditions into consideration.

Highlights

One way to achieve energy efficiency in the building sector, and to help avoid global warming and climate change caused by human beings, is to set requirements for buildings’ energy demand
According to the parameter the distribution costs have a high correlation, with heat pumps (HPs) being the case with the lowest life cycle cost (LCC)
The distribution costs have a high correlation, with HP being the case with the lowest LCC

Summary

Introduction

One way to achieve energy efficiency in the building sector, and to help avoid global warming and climate change caused by human beings, is to set requirements for buildings’ energy demand. Another way is to focus on and make the supply side of the energy system more efficient and renewable. It is not likely that climate and environmental goals can be achieved through actions on one side only Both the demand and supply side need to be improved, not separately, but through joint ventures, to avoid sub-optimization of the systems. Assuming that DH is an effective solution for the buildings, it would be ineffective from an energy system perspective to have DH in areas

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