Interaction with the electricity system DH is not only a heating solution but also a crucial tool for balancing electricity markets. Avoiding curtailment of renewables When wind or solar generation exceeds demand or export capacity, renewable power may need to be curtailed. DH systems with electric boilers or large heat pumps can absorb this surplus electricity by converting it into heat, which can be stored or used immediately. This avoids wasting renewable energy and provides additional system value. Grid investment savings Transitioning from gas boilers to individual electric heat pumps significantly increases electricity grid demand, requiring costly upgrades. DH systems mitigate this by using high-voltage heat pumps (10–60 kV) that are more efficient and cheaper to connect than thousands of low-voltage (0.4 kV) individual units. Furthermore, DH plants can provide demand-side flexibility by ramping electricity consumption up or down depending on grid needs, supported by integrated heat storage. This reduces the need for costly high-voltage lines and interconnectors. Operation and maintenance costs The total operation and maintenance costs over the life time of the system for DH systems are 6–10 times lower than for individual solutions, which further increases their competitiveness. Economic advantages Cost reductions for consumers and producers DH enables heat and electricity producers to share fuel cost savings, resulting in lower energy prices for end-users. When CHP plants set the electricity price, consumers benefit from reduced marginal electricity costs. Investment savings By capturing surplus heat, reducing capacity demand, and optimizing production, DH systems save significant investments in fuel-based plants, renewable electricity capacity, and infrastructure. Participation in electricity markets DH operators can participate in balancing markets, deliver capacity reserves, and frequency response services. When equipped with both electricity-consuming and producing technologies, along with storage, they can profit from multiple revenue streams while supporting grid stability. Societal and environmental benefits Lower emissions: By replacing fossil-fuel boilers and maximizing surplus heat, DH reduces CO2 and pollutant emissions, improving air quality and public health. Lower external costs: Although externalities like climate damage and healthcare costs are often not priced into fossil fuels, DH helps avoid them, representing significant indirect savings for society.
prices, DH strengthens industrial competitiveness, supporting jobs and economic growth.
Integration of future technologies: High-temperature heat pumps, hydrogen plants, carbon capture, and bioenergy facilities can all integrate with DH, making energy systems more flexible and future-proof. Financial and practical considerations DH companies usually secure better financing conditions than individual households, leading to lower interest rates and improved affordability. Moreover, converting a building to renewable individual heating often requires costly retrofits (additional radiators, floor heating, ventilation systems) due to lower system temperatures. In contrast, DH can deliver water at 60 °C, avoiding such expenses and making the transition more practical for existing buildings. Conclusion DH is far more than just an alternative to individual heating - it is a cornerstone of efficient, integrated, and sustainable energy systems. By combining multiple heat sources, optimizing capacity, balancing electricity markets, and reducing environmental impacts, DH delivers value to consumers, producers, and society.
Its advantages can be summarized as follows:
1. Energy efficiency: CHP, surplus heat, and large-scale heat pumps reduce fuel use and emissions.
2. Cost-effectiveness: Lower installation, O&M, and investment costs compared to individual systems, including networks.
3. Grid integration: Balances fluctuating renewable electricity systems, avoids curtailment, and saves grid investments.
4. Environmental and societal benefits: Cleaner air, reduced climate costs, and improved competitiveness.
5. Financial practicality: Easier financing, lower interest rates, and less need for building retrofits.
For policymakers and planners, recognizing and utilizing the full potential of DH makes it possible to achieve overall lower energy prices for consumers and improve industrial competitiveness.
For further information please contact: John Tang, jhntj@ens.dk
Industrial competitiveness: By stabilizing electricity and heat
12 HOTCOOL SPECIAL COLLECTION edition 2, 2025
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