Utilizing excess heat through a wholesale day ahead heat market ? The DARKO model

District heating has already proven to be a suitable solution for the decarbonisation of the most energy intensive energy sector in Europe, heating and cooling. However, to achieve this, it needs to incorporate renewable and sustainable energy sources into the generation mix which is still dominated by fossil fuels in many countries. Alongside traditional renewables like solar thermal, geothermal and biomass, excess heat from the industrial and service sector has a high untapped potential. Nonetheless, to utilize it in district heating, third party access must be granted. For that reason, a wholesale day ahead heat market has been modelled in this study and validated on a case study in the city of Sisak in Croatia. The idea was twofold: to evaluate the functionality of such a heat market and its effect on the existing system, as well as to analyse the integration of high and low temperature excess heat sources in different conditions, including the use of thermal storage, as well as the competition with low-cost renewables, i.e. solar thermal. The results have shown that the introduction of a wholesale day ahead heat market would ensure the positive total welfare in all the scenarios. The benefit for the demand side and the total welfare would increase even more if excess heat sources are integrated in the system and especially if they are combined with a thermal storage to increase their capacity factor, which would also decrease the competing effect of solar thermal. Finally, it was shown that low temperature excess heat is not feasible in the high temperature district heating and the transfer to the 4th generation district heating is required to feasibly utilise low temperature sources.

Automated summary

District heating has been proven as a suitable solution for decarbonisation of the energy sector in Europe, but it requires the incorporation of renewable and sustainable energy sources, including excess heat from industrial and service sectors. A wholesale day ahead heat market was simulated and validated in a case study in Croatia. Results show that introducing such a market can increase total welfare, especially when combined with thermal storage and low-cost renewables.