How can heat supply technologies be prioritized in the context of strategic heating transformation planning?
Relevance and the objective of the analysis
One of the reasons for the complexity of the heat transition is that during the transport of heat a lot of energy is lost. For this reason, heat sources must always be in close proximity to heat consumers. Accordingly, each municipality needs an individual heat transformation plan for its path towards climate-neutral heat supply, based on the characteristics of the locally available heat sources and consumers.
The goal of the regionalized or spatial prioritization of heat supply technologies is to identify and prioritize the most suitable renewable heat sources for each area of the municipality.
Regionalized prioritization can be based on different criteria. A methodical comparison of different ways of prioritization is being developed in the FfE research project “Future Strategy for District Heating”. Initial results are summarized below.
Methodical approach to spatial prioritization
The methodical procedure for regionalized prioritization can be divided into 4 important steps:
- division of a municipality into areas or clusters according to a combination of different criteria, such as heat demand density or linear heat density as well as the availability of unbuild land and, if necessary, other criteria
- regionalized analysis of renewable heat potentials and derivation of possible supply options for each region
- prioritization of the supply options for each defined region
- verification whether the results of regionalized prioritization are coherent and viable as an overall concept for the municipality
These four steps will be described in more detail in the following article.
Division of municipality into areas
The first step for the regionalized prioritization is the definition of areas or clusters. These can be defined based on different parameters, the most common being heat demand density, linear heat density, or settlement structure.
The heat demand density indicates the heat demand in MWh per year and area. The linear heat density, on the other hand, describes a possible marketable heat quantity in MWh per year and meter of built heating pipe. It is important to emphasize that these limit values must be determined on a project-specific basis, or, in some cases, concrete local supply options must be compared with each other first (see next step). In literature, different statistical limit values for the heat densities are mentioned, but they cannot be applied equally to all projects. For example, if the regional value of linear heat density is below the specified threshold, the use of decentralized supply options, such as decentralized heat pumps, is recommended in that area. If the value is exceeded, connection to district heating is likely to be more cost-effective. Thus, the preliminary analysis can exclude the areas that are unlikely to be suitable for heat networks.
Another option is to cluster the municipality by settlement or building typologies. The advantage of such clustering method is that several different parameters can be summarized in one settlement or building typology, such as heating system or typical annual heating demands. Settlement typologies are, for example, historical old town, block development, detached single buildings (for further listing see ). Possible building types are defined in  as one / two-family house, medium-sized building and large building depending on the number of residential units. In practice, however, a stringent division of building blocks into these typologies is very time-consuming and the classification chosen may differ depending on the person carrying it out.
Derivation of possible heat supply technology for an area
The analysis of regionally available potentials of climate-neutral heat sources includes a detailed examination of all possibly available heat sources. These can be, for example, high-temperature heat sources such as industrial waste heat, or low-temperature heat sources which are combined with a heat pump, such as wastewater or groundwater. Depending on the type of heat source and available capacity, it can be explored whether these are primarily suitable for centralized or decentralized supply.
If low-cost heat potentials with high capacities are discovered in areas with low heat density, it may make sense to individually adapt the clustering from the previous step. For example, if large data centres, where waste heat is available all year round, are in an area where decentralized supply was initially planned. In this case, connecting the areas to the city’s central heating network or setting up a stand-alone heating network and thus using the heat that would otherwise be released into the environment can be more cost-effective than a decentralized supply.
Once the potentials are identified, an initial spatial allocation of potentials to the defined areas is made. The climate-neutral heat sources should be spatially located as close as possible to the defined clusters since heat should be consumed as close as possible to where it is generated. This results in a rough prioritization concept, to which additional criteria will be applied in the next step.
Prioritization of heat supply technologies
In a further step, heat supply technologies are prioritized for each defined region. There are various methods in literature that describe the methodology. These can be divided thematically into four procedures. The prioritization can be done according to the following points:
- Primary energy factor
- Economic indicators
- Multi-criteria analysis
- Suitability of the areas
In the “primary energy factor” method, a priority list of heat generators is created according to their individual primary energy demand. The primary energy factor is a value that is defined in literature for each heat source. The less primary energy is required, the more recommendable is the use of the respective supply technologies. With the help of this priority list, suitable heat generators are assigned to the individual spatial clusters, as described in  for an exemplary municipality.
Three methods are summarized under the term “economic indicators“: prioritization according to economic feasibility/cost-effectiveness without or with inclusion of environmental impact, and socioeconomic analysis.
- The most common method so far is prioritization according to heat generation cost. This describes the annual costs per generated heat quantity for the respective heat supply technology. The following methods offer further parameters that can be considered in addition to the pure economic calculation.
- CO2 reduction costs describe the heat generation costs but include an environmental parameter. With this method, the heat generation costs of the technologies are extended by the amount of CO2 emissions that occur due to heat generation. CO2 reduction costs are always calculated in reference to another heat supply technology (often fossil-fuelled). In practice, the approach was used for example in the project Climate-neutral Heat Supply in Munich 2035 .
- In the socio-economic analysis the benefits and costs for society are included as relevant determining factor in addition to the heat production costs. The analysis has its origin in Denmark, where the best result for the common welfare of the citizens is also strived for in the context of municipal heat planning. The advantage of such an approach lies in the fact that infrastructure projects that require time-consuming planning and implementation bring long-term benefits to society . Such projects are especially the construction of heat networks and high-capacity heat generation units. Several methods exist to evaluate the benefits of different technologies for society. In , only CO2 taxes are considered together with classical heat production costs, whereas, for example, other taxes, subsidies, and other local tariffs, are excluded from the evaluation of costs, because these (taxes and subsidies) offset each other from the overall perspective, and thus bring neither costs nor benefits to society.
“Multi-criteria analysis” allows comparison of heat production technologies based on a variety of different criteria, in the form of a weighted sum model. These are often economic criteria, such as heat production costs, but also ecological criteria, such as CO2 or pollutant emissions, as well as social-cultural criteria, such as local acceptance. Further exemplary criteria (25 in total) can be found in .
The multi-criteria analysis can be supplemented by a pairwise comparison of the heat generation technologies against each other with the help of technology criteria. This method was used, for example, for the investigation and comparison of climate-neutral district heating technologies in Hamburg and is described in . Here, all possible heat supply options are qualitatively compared with each other based on the criteria and thus sorted according to their prioritized order of expansion. For example, industrial waste heat ranks higher in the list than metro waste heat, since the “system integration” criterion is better met with higher temperatures of industrial waste heat . The resulting list of prioritized generators can support the decision-making process.
In the methods presented above, heat generation technologies are prioritized for each defined area. In contrast, in the “regional suitability” method, the geographical areas in a municipality are checked for their suitability for certain technologies, for example with the aid of simple weighted sum model. Here, the regions are prioritized according to the locally available potentials. For each possible heat supply technology, criteria are defined that are important for the implementation of this technology. These are, for example, a higher heat demand density of the area for the expansion of the heat network or good logistics for biomass transport in the area for constructing a biomass heating plant. The criteria are weighted and given a score to evaluate the areas. The points are summed up per area and again a priority list of the areas is created. This procedure is described in  and is used as a guideline in many municipalities, especially in Baden-Württemberg.
The summary of the methods can be seen in Figure 1.
Selection of a suitable methodology
The choice of the appropriate prioritization method depends on the defined goals of the analysis, for example, the desired degree of detailedness of the results. Possible questions to ask in order to determine the objectives are: Should it be a preliminary rough planning? Which criteria are important to the user – economic efficiency, environmental compatibility, or social acceptance? The procedure used at FfE for prioritizing methods is described in , and the summary is described below.
To select the appropriate strategy, a weighted sum method is performed. At this point, the object of comparison and evaluation are not the heat supply technology itself, but the methods that describe the process of prioritization of these technologies.
First, the criteria by which the methods are evaluated are defined. The 13 criteria shown in Figure 2 have been defined as a result of literature research and experienced experts.
Since not all criteria are equally important from the point of view of the evaluators, a ranking list of the criteria must be drawn up. To facilitate the weighting process, the criteria are evaluated using the pairwise comparison . Scores are used to evaluate whether, between the two criteria, one is more important (2 points), equally important (1 point), or less important (0 points) compared to the other. After all criteria have been compared in pairs, the points per criterion are summed up – the more points a criterion has, the more important it is.
From the evaluation of the methods for all criteria and the prioritization of individual criteria, the result of the weighted sum model is then obtained. Based on this, the most suitable method is selected.
Selection of a suitable methodology in practice
In practice, the methods are primarily used in which prioritization is based on economic parameters, such as heat generation costs, CO2 reduction costs, and socioeconomic costs. Economic feasibility has the highest significance from the point of view of the investor (such as the public utility or the homeowner), as it affects return on investment. In addition, economic parameters are easy to quantify unlike social or environmental parameters, making them easier and more objective to compare.
The described procedure for the evaluation of methods forms the basis for the further procedure in the corresponding work package of the project “Future Strategy for District Heating”. Although one method was given the highest score in the analyses, the comparison also showed that the best result can be achieved by combining several methods. Therefore, in the next steps, a compilation and definition of individual criteria for prioritizing the heat supply technologies will take place. These will then be made available to the users as a list. Just as with the methods, the choice of criteria depends on the desired results and aims. Finally, based on the findings, an overview of criteria for heat supply technologies, for the spatial clustering of areas in a municipality, and for the prioritization of renovation zones will be developed and all compiled into a higher-level methodology that can be used in rolling heat planning.
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