DISTRICT HEATING AND GREEN FUELS COMBINED: A CATALYST FOR THE GREEN TRANSITION

27.01.2023

With green fuels, also referred to as Power-to-X, we could potentially cover up to 20% of the Danish district heating demand. This is why the interconnection between district heating and green fuels is vital for the success of the Danish green fuels strategy – a key catalyst that we simply cannot afford to miss.  

Denmark is one of the pioneers in developing energy-efficient district heating, using waste or surplus energy from power plants and waste incineration facilities. But energy-efficient strategies alone are not enough: We also need to cut carbon dioxide emissions and eventually reach zero emissions. Green fuels are expected to solve two of the major challenges on this path: converting renewable power into carbon-neutral fuels with the goal of replacing fossil fuels and cutting carbon dioxide emissions. 

A WIDE RANGE OF BENEFITS

Green fuel production also generates considerable waste heat as a by-product, with up to 25 percent of the plant energy intake wasted by heat generation. A 6 GW hydrogen production plant could meet around 20 percent of Denmark’s total district heating demand. Other than high energy efficiency, waste-heat recovery includes many other benefits, including the competitiveness of electrolysis plants, which will create future jobs and revenues from the export of green technologies. Studies conducted by COWI show that the estimated price of hydrogen production could be reduced by five to 10 percent if district heating was combined with electrolysis processes. This could encourage stakeholders to invest in establishing more hydrogen plants in countries with high heating demands, such as Denmark.  

The calculation is based on a simple estimation of the value of heat and the value of electricity. District heating delivered to district heating networks costs around 20-30 EUR/MWh, depending on the heat network. The Danish regulation sets a ceiling for the price of surplus heat of 37 EUR/MWh, based on a calculation of investment in the cheapest alternative supplies (heat pump or biomass). 

The heat income compared with the value of electricity results in a financial "recovery" of approximately 50% of the wasted energy when utilised as district heating. The income from selling the surplus heat goes straight to the bottom line as there is no additional operating expense. The investment in heat recovery is estimated to be insignificant compared with other green fuel investments. It can simultaneously reduce alternative cooling process costs if integrated from the beginning. 

As with all other waste heat integration in district heating networks, the realisation and profitability of the recovery will, by the end of the day, come down to the temperatures and the demand in the network, as well the alternative heat supply options already in place. 

More cost-efficient hydrogen plants will also lead to cheaper production of carbon-neutral fuels and the establishment of more green fuel plants. Undoubtedly, ensuring sufficient carbon-neutral fuels and providing efficient district heating solutions will contribute to better integration across sectors such as power generation, transportation, agriculture, etc. All these elements are essential for the more sustainable and cost-efficient energy solutions we imagine for the future.  

Besides energy-efficient solutions such as district heating, Denmark is also known for progressive technologies such as wind and solar power generation. We aim to bring them all together to create an interconnected, state-of-the-art system of green energy production. 

THE WAY FORWARD

Utilising the waste heat from green fuels, however, is not an easy task. The main objective is to ensure cost-effective technical solutions, including low-temperature waste heat issues. Also, expenses for upgrading existing infrastructures, such as heat transmission and heat storage, must be identified and communicated to stakeholders, and costs must be reasonable and attractive for investors. 

We continuously work on bringing the integrated district heating concept to the top of the agenda. For example, together with the Danish think tank, Grøn Energi and district heating supplier, TVIS, we have prepared the study “Power-to-X and District Heating” for Dansk Fjernvarme. This study shows how this concept contributes to improved finances, higher energy efficiency, and security to increase the deployment speed of green fuel plants in Denmark. 

With soaring energy prices and climate crisis, we should aim to recover waste energy as much as possible and encourage everyone, including the authorities, investors, and even end users, to join this movement.