District energy is the key for unlocking climate solutions in cities

Tuesday, May 4, 2021

Cities are the frontrunners for climate action, but several challenges remain for achieving total carbon neutrality. For example, how can a city like Helsinki which is heated 50% by coal, switch to greener sources by 2035? The answer lies in district energy. Their city government recently hosted the Helsinki Energy Challenge to generate ideas and one of the winning projects, called Hot Heart, aims to build artificial islands that will store heat from seawater heat pumps to be integrated into the local district heating system. Additionally, the islands will serve as recreational greenhouses for the community!

This is just one example of how versatile and innovative district energy systems can be. Together with cities, we must continue to think creatively about how to utilize our existing district energy infrastructure in new ways to further action on sustainability. The district energy sector must also become bolder and more ambitious to achieve its full potential. We need to scale up district energy, and strong policy frameworks can incentivize a faster rollout of the needed solutions.

The beauty of district energy is that the heat is produced centrally, meaning cities have more flexibility for changing how it is produced. When new energy sources become available we plug them in-directly at the source to quickly distribute sustainable heating. This is much faster than replacing every single heat generator in individual buildings. In other words, there is no lock-in effect with district energy.  For example, Sweden has moved away from fossil fuel-powered district heating, to a cleaner system that only produces 10% of its heat from fossil fuels. Studies suggest that if we would use the full potential of district energy in Europe, it could cover 50% of the heating demand in a sustainable way. We also know that most large and middle-sized municipalities would be suitable for district heating.

State-of-the-art, low-temperature district heating is highly energy-efficient and enables systems to utilize renewable sources such as geothermal energy, solar thermal, or renewable electricity, such as in Helsinki’s Hot Heart project. Excess heat from industry and the tertiary sector can also be used. Cities come with many hidden potentials for utilizing excess heat, for example, data centers.  To preserve the servers, data centers use heavy cooling infrastructure which traditionally comes at a high energy cost. With smart technology, we can capture the excess heat given off by the cooling equipment, to be distributed through the district energy system to the community.

When it comes to heating, it’s not a matter of inventing new solutions. We have the technology already today. We now need to work together on implementation to roll out the solutions faster.

Transitions like these don’t happen overnight. We need to create the right policy frameworks and market conditions to support and scale up these technologies. To capitalize on the full potential of district heating, we need to create incentives that encourage the construction of smart district heating systems in cities around the world. We must support ambitious climate targets and timelines such as the one Helsinki has in place, and strengthen European Union level policies such as the Energy Efficiency Directive.

Strong legislation should include…

  • Pricing for CO2 emissions through taxation to create a level-playing field where sustainable heating solutions can compete fairly
  • Clear targets and plans so that oil and gas boiler projects can be phased out before these emissions are locked in
  • Integrated energy planning among district heating and electricity operators so that we can identify synergies and opportunities to use district heating grids to balance the electricity grids   
  • Support for pilot projects that explore new business and market models such as multi-directional district energy and platforms where customers can trade their heat
  • Knowledge sharing mechanisms to support cities that need more experience and resources in order to implement the right district heating solutions

The risks poised by climate change call for bold and swift action, and heating is an important place to start due to its high share of emissions and the readiness of the solutions. We must raise our ambitions for district energy, to unlock several sustainability solutions including sector coupling, integration of renewables, and the capture of excess heat. Now we must work together to create the right tools for a smooth and fast rollout.