Efficient district heating: A path to lower CO2 in Europe

In a world where climate change and sustainability are at the forefront, the choice of heating source for buildings and domestic hot water is crucial. District heating stands out as an especially effective solution for reducing CO2 emissions and supporting the green transition.

Increased adoption and potential

District heating is growing across Europe, and the potential for further expansion is significant. Urbanisation in the EU is expected to reach nearly 84% by 2050, creating an expanding market for district heating, especially in densely populated areas. In Denmark, we are seeing an increase in district heating customers, and in Finland, two-thirds of all new buildings are opting for district heating, often powered by renewable energy. In the Netherlands, district heating is also on the rise, particularly driven by waste heat from industry.

Benefits for consumers

District heating offers significant benefits to both consumers and society. For heating customers, it means security and convenience, as the local utility company handles the operation and maintenance. Consumers can rely on consistent heating, and with intelligent district heating units, the heat in the home is regulated according to demand. This leads to lower heating prices for customers, especially in countries like Denmark, where heat supply companies are non-profit organisations that are only allowed to include necessary costs in the heat price.

Consumer behaviour is crucial

Consumer behaviour regarding heat usage is often an overlooked factor, but it plays a large role in the efficiency and CO2 emissions of the district heating sector. A substantial portion of district heating energy is used to heat domestic hot water, so there is potential for savings in both heating and hot water. In modern, well-insulated homes, the proportion of energy used for hot water increases, as better insulation does not reduce hot water consumption.

The more consumer behaviour can be geared towards saving on heating and hot water, the better the delivered energy is utilised. Greater transparency in individual energy consumption and better guidance on savings can motivate consumers to optimise their energy use.

Modern district heating units are energy-efficient and provide consumers with precise meter data, promoting energy conservation. Decentralised solutions offer better individual metering than central systems, where consumption is often monitored by property management, and the incentive to save is less for individual residents.

Societal benefits

District heating provides an efficient solution with strong climate and energy efficiency benefits, along with high energy security. This has garnered political support for district heating in Europe, where the EU is working to promote a low-emission economy focused on sustainable energy.

According to Euroheat & Power, over 3,900 TWh of district heating was produced in Europe in 2019, an increase of approximately 30% since 2010. The majority of this heat comes from renewable energy sources, which accounted for over 60% of production in 2019.

In Denmark, district heating companies experienced the largest customer increase in 30 years, partly due to energy prices and uncertainty in gas markets, which is driving the green transition. In Finland, over two-thirds of new buildings use district heating, and 70% of municipalities produce heat from renewable sources. The Netherlands has also seen a rise in district heating, with plans to triple the number of district-heated homes.

Urbanisation in the EU is expected to reach almost 84% by 2050, according to State and Green, increasing the demand for district heating in densely populated areas. While district heating penetration varies, the general trend is growth, contributing to sustainable energy and CO2 reduction.

Heat pumps are becoming an increasingly important part of the district heating sector due to their high energy efficiency and carbon neutrality. With technological advancements and falling costs, they are becoming a competitive replacement for fossil fuels, supporting the green transition and a more sustainable future.

Integration with other technologies

District heating can easily integrate with other green technologies. Hybrid heating systems that combine district heating with solar thermal energy or geothermal heating maximise the use of renewable energy sources. Additionally, district heating can work alongside energy storage systems to optimise energy consumption.

Challenges and future outlook

While district heating has many advantages, the sector faces challenges. These include the integration of renewable energy sources, system optimisation for energy efficiency, and scaling infrastructure to meet growing demand. Investments in new technologies and infrastructure are necessary to ensure economic sustainability and efficient operation.

Supporting the green transition

District heating plays a central role in the green transition of building and heating systems. By choosing district heating and supporting its expansion, we can contribute to a more responsible future. It requires collective effort from developers, consultants, installers, and consumers to maximise climate impact and optimise energy use in buildings.