Resilient decarbonization strategies for district heating: A techno-economic analysis of ambient and waste heat sources considering economic risks due to uncertainty in future energy prices and waste heat availability

Abstract

District heating (DH) systems can contribute substantially to the decarbonization of the heating sector by enabling the implementation of sustainable heating solutions on a large scale and the use of heat sources that are difficult to integrate on a small scale. This includes ambient heat (AH) and waste heat (WH), two heat sources with large, untapped potential. However, DH systems with AH and WH are subject to economic risks arising from uncertainty in the future development of key factors such as energy prices and WH availability. Accordingly, this thesis evaluated the technical and economic performance of AH and WH sources employed for the resilient decarbonization of DH networks considering economic risks due to uncertainty in future energy prices and WH availability.

Specifically, a model was developed that simulates DH systems with and without AH and WH sources and evaluates the levelized cost of heat (LCOH) across a wide range of energy price scenarios and WH cessation scenarios. WH cessation scenarios reflect the possibility that the WH source is no longer available due to bankruptcy, relocation, or a change in processes such that internal heat recovery increases. The model was applied to various DH system configurations (defined by the heat supply technologies in the DH system and their capacities) in the context of both a general model and a case study application for a small city in northwestern Poland. The mean LCOH and standard deviation across energy price and WH cessation scenarios provided a measure of average cost and associated economic risk of the configurations analyzed.

Results indicate that the average cost and economic risk of DH systems is strongly influenced by the DH system configuration. Additionally, results show that a tradeoff exists between average cost and economic risk. The inclusion of industrial WH in DH systems is beneficial to the techno-economic performance of DH systems in terms of average cost and often also economic risk. However, this is largely due to the assumptions that industrial WH has a relatively low price, the price remains constant across energy price scenarios, and the probability of WH cessation is relatively low. Another key research outcome is that the presence of AH and WH sources in DH systems leads to a reduction in economic risk in the face of future uncertainties. Increased supply side flexibility in the form of a greater variety and installed capacity of heat supply technologies, also leads to reduced economic risk.

These outcomes highlight the importance of the careful consideration of heat supply technologies and DH system configurations, accounting for uncertainty in the future development of key factors, such as energy prices and WH availability, in the resilient decarbonization of DH systems.