Opportunities and Challenges of Future District Heating Portfolios of an Austrian Utility

Richard Büchele, Lukas Kranzl, Michael Hartner and Jeton Hasani
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Richard Büchele: Energy Economics Group, Institute of Energy Systems and Electrical Drives, TU Wien, Gusshausstr. 25-27, 1040 Vienna, Austria
Lukas Kranzl: Energy Economics Group, Institute of Energy Systems and Electrical Drives, TU Wien, Gusshausstr. 25-27, 1040 Vienna, Austria
Michael Hartner: Energy Economics Group, Institute of Energy Systems and Electrical Drives, TU Wien, Gusshausstr. 25-27, 1040 Vienna, Austria
Jeton Hasani: Energy Economics Group, Institute of Energy Systems and Electrical Drives, TU Wien, Gusshausstr. 25-27, 1040 Vienna, Austria

Energies, 2020, vol. 13, issue 10, 1-20

Abstract: In this paper, opportunities and challenges of concrete portfolio options of an Austrian district heating (DH) supplier are assessed against the background of current challenges of the DH sector. The following steps are performed: (1) analysis of status quo; (2) analysis of current and possible future economic framework conditions; (3) definition of four concrete future portfolio options for investment planning until the year 2030; (4) modeling of status quo and future portfolios together with the respective framework conditions in a linear dispatch optimization model; and (5) perform techno-economic analysis for each portfolio under the different possible future framework conditions. The expected increase in renewable power generation capacity is likely to increase volatility in future electricity prices with hours of both very low and very high prices. This higher volatility results in higher technical flexibility requirements for the heat generation plants and a need for heat generation portfolios to respond to both high and low electricity prices. The results indicate that the combination of heat pumps and combined heat and power (CHP) plants is well suited to cope with these challenges from a microeconomic point of view. At the same time, we show that a shift to a high share of renewables of more than 60%, implying a complete exit of gas fired CHPs, is also feasible with costs in a very similar range as the current DH generation portfolio.

Keywords: district heating; portfolio options; dispatch optimization; economic framework conditions (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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