ZEN and District heating: Tensions and opportunities

Abstract

District heating’s environmental impact, particularly in areas with direct greenhouse gas emissions from waste incineration, can clash with the zero-emission goals of developers aiming to create Zero Emission Neighbourhoods (ZEN). Developers may also be frustrated by cost issues and a lack of flexibility and influence in choosing heating solutions, compounded by regulatory requirements to connect to district heating systems. This report examines these tensions and identifies key areas for improvement to align on climate goals. Data was collected through online interviews with selected stakeholders and a survey to understand the recognition of barriers, challenges, and potential solutions. District heating companies recognize the environmental issues with waste incineration’s CO2 emissions, but they also see it as a partly necessary solution to waste disposal. Some developers view waste reduction as more beneficial than its use as a resource. Further, some developers also view incineration of biomass as environmentally problematic. To mitigate emissions, district heating companies are investigating carbon capture and storage (CCS) on their incineration. District heating companies have a positive attitude towards developers’ ZEN goals. They see the value in developers pushing towards ZEN, as it drives district heating companies to further develop their own climate strategies. Compatible climate goals between developers and district heating companies, as well as transparent strategies, are an important prerequisite for realizing a zero-emission society. Lower temperature district heating systems will enable energy sharing between neighbourhoods in the same district heating network, allowing for more integration and necessary innovation related to heat pumps, accumulator tanks, and solar panels in district heating systems. One of the challenges for energy sharing in the district heating network lies in business models between district heating companies and building owners, as well as who will invest in the new solutions. District heating solutions should be competitive in terms of technology, emissions, and price compared to alternative heating options. Today, the district heating price is regulated in relation to the available heating alternative, and the interpretation of this principle is being discussed. District heating will likely become more attractive if it is perceived as the cheapest heating solution. Developers and district heating companies should collaborate on regulatory adjustments for balanced sustainability, environmentally and economically. This can foster a more cooperative relationship between the two parties, not only enhancing their collaboration, but also contributing to achieving sustainable and environmentally-friendly heating solutions on the path towards a zero-emission society.