How to Promote Local District Heat Production Through Real Estate Investments

Future energy systems must be clean, efficient and profitable. Previous cases have shown that incorporating local production into district heating networks is often unprofitable due to high temperature levels. This article suggests a new way of determining areas in existing networks suitable for low temperature district heating, which makes investments by real estate owners into local production profitable. A simulation of district heating network is used together with an investment optimization model to analyse the spatial potential of local production. The results show that some local production was profitable at current temperature levels, but it could be increased significantly if supply temperatures are decreased. This was shown to decrease losses and emissions of the system. Spatial optimization models are needed to increase knowledge on the effects of local production and lower network temperatures in district heating networks. Furthermore, new pricing models for customers have to be developed.