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European heating sector well positioned for renewables integration

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The recently released Euroheat & Power Country By Country Survey shows plenty of evidence that district heating can flourish further under the ongoing energy transition.

In the preface to the survey, Paul Voss, Managing Director of Euroheat & Power, says while there is a perception that the industry is not growing apace, the contents ‘tell a story of gradual but certain progress, city by city, street by street, building by building.’
Euroheat & Power Country By Country Survey
Voss said much optimism can be drawn from the increasing attention being dedicated to district heating and cooling by policymakers, as well as the emergence of cities as the drivers for decarbonization.

He noted that heating and cooling in general and DHC in particular have risen rapidly up the EU policy agenda. In parallel, the emergence of cities as increasingly active players in the energy transition is helping to drive the development of DHC at local level. 

“In nearly every country in Europe, district energy’s share in the heating and cooling market is greater than it was in 2015. There are challenges, both economic and regulatory, but the overall direction of travel is undeniably positive.”

The biennial Country by Country Survey is the most detailed and comprehensive statistical overview of the district heating and district cooling sector in Europe and beyond and the report’s authors are more conscious than ever that extensive data is vital to inclusion in the frameworks set by Eurostat and the International Energy Agency, so influential bodies such as these can incorporate the merits of the technology in its overall energy and efficiency plans.

In recent years, Euroheat & Power started liaising with the relevant EU bodies encouraging them to address the issue of and harmonise, at least to an extent, reporting practices and data collection in Europe. 

“District heating has a potential to be at the very centre of the decarbonisation efforts,” says Voss. “Secondly, good-quality data is essential for investors active in the district heating and cooling market, known to have high up-front costs. This is especially relevant for the district cooling segment, which witnessed significant growth in recent years.”

With over 50% of the final Europe’s energy consumption, heating is the largest energy sector and will remain so in the foreseeable future. Three quarters of European heat is still generated using fossil fuel based sources, almost half of which is natural gas but that is changing and represents an opportunity for the sector to continue to affirm its relevance. Heat decarbonisation now has huge impetus thanks to European and global climate commitments entrenched in the Paris Agreement. 

“As noted by the European Commission’s EU Strategy on Heating and Cooling, district heating stands out as one of the most effective and economically viable options to reduce the sector’s dependence on fossil fuels and cut down CO2 emissions,” Voss stated.

“District heating has already proven its ability to integrate more renewables, especially geothermal, biomass, biodegradable waste and solar energy. Renewable electricity powered large heat pumps are also increasingly being connected to district heating networks in Europe. Furthermore, district heating is starting to utilise the massive untapped potential of excess heat from industrial and commercial activities, which could meet most of Europe’s heat demand and bring immense efficiency gains. Finally, with a rapidly increasing amount of variable renewable electricity, district heating offers an effective energy storage solution to absorb excess renewable electricity and help balance the grid.”

Currently, approximately 60 million EU citizens are served by district heating, with an additional 140 million living in cities with at least one district heating system. According to the Heat Roadmap Europe data, if the urbanisation trend continues and appropriate investments are in place, almost half of Europe’s heat demand could be met by district heating by 2050. 

The impact of the clean energy transition and the greening of heat networks is a growing phenomenon according to Voss.

“On average, the share of renewable energy in district heating increased by 10% since 2011 in the 15 European countries that provided data. Lithuania’s growth of 37% especially stands out. 

“It is mostly explained by the strategic geopolitical decision to reduce the country’s dependence on imported natural gas and shift the district heating from natural gas to biomass-based systems. A significant increase of renewables is also noted in Switzerland (14%), France and Finland (both 13%).”

“The Renewable Energy Directive for the first time includes a substantial part dedicated to the decarbonisation of the heat sector, as well as special provisions on consumer rights and market structures in district heating. The Directive, together with the earlier published EU Heating and Cooling Strategy.. shows …  newly found support opening some great opportunities for district heating, and now it is up for the industry to live up to expectations and deliver its part in the energy transition.”

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