Abstract
In this paper, opportunities and challenges of concrete portfolio options of an Austrian district heating (DH) supplier are assessed against the background of current challenges of the DH sector. The following steps are performed: (1) analysis of status quo; (2) analysis of current and possible future economic framework conditions; (3) definition of four concrete future portfolio options for investment planning until the year 2030; (4) modeling of status quo and future portfolios together with the respective framework conditions in a linear dispatch optimization model; and (5) perform techno-economic analysis for each portfolio under the different possible future framework conditions. The expected increase in renewable power generation capacity is likely to increase volatility in future electricity prices with hours of both very low and very high prices. This higher volatility results in higher technical flexibility requirements for the heat generation plants and a need for heat generation portfolios to respond to both high and low electricity prices. The results indicate that the combination of heat pumps and combined heat and power (CHP) plants is well suited to cope with these challenges from a microeconomic point of view. At the same time, we show that a shift to a high share of renewables of more than 60%, implying a complete exit of gas fired CHPs, is also feasible with costs in a very similar range as the current DH generation portfolio.
Highlights
In urban and densely populated areas, district heating (DH) is seen as an important decarbonization option, where it is often the only possible option to integrate large shares of renewable and excess heat into the heating sector
One major challenge is the uncertainty in future framework conditions and how these will affect the feasibility of the suppliers’ portfolio: e.g., as one important policy framework, the revised directive 2018/2001 [3] on the promotion of the use of energy from renewable sources, for the first time sets concrete targets until 2030 for the annual increase of the share of renewable heat in general and renewable energies in the district heating sector in particular
This paper identifies, describes, and evaluates certain concrete heat supply portfolio options of an Austrian district heating supplier under current and a bandwidth of expected future framework conditions by simulating the status quo and the portfolio options in a district heating dispatch optimization model
Summary
In urban and densely populated areas, district heating (DH) is seen as an important decarbonization option, where it is often the only possible option to integrate large shares of renewable and excess heat into the heating sector This was found already in various studies, e.g., in [1] or during the second phase of the Heat Roadmap Europe Project [2]. One major challenge is the uncertainty in future framework conditions and how these will affect the feasibility of the suppliers’ portfolio: e.g., as one important policy framework, the revised directive 2018/2001 [3] on the promotion of the use of energy from renewable sources, for the first time sets concrete targets until 2030 for the annual increase of the share of renewable heat in general and renewable energies in the district heating sector in particular. Only a few assessments have been published on political framework conditions and its influence on the feasibility of district heating systems: e.g., the assessment in [4] evaluates the impact of different policy frameworks on the future of district heating in a case study city in Romania and shows that
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