Liberalized market designs for district heating networks under the EMB3Rs platform

TL;DR

This paper explores innovative market designs for district heating networks inspired by electricity markets, assessing their performance and revenue potential to support waste heat reuse and deregulation.

Contribution

It introduces new market design proposals for district heating, comparing centralized and decentralized approaches, and evaluates their effectiveness using a Nordic case study.

Findings

Market designs align with new industry trends.

Inclusion of waste heat sources is feasible.

Different market structures offer varied revenue opportunities.

Abstract

Current developments in heat pumps, supported by innovative business models, are driving several industry sectors to take a proactive role in future district heating and cooling networks in cities. For instance, supermarkets and data centers have been assessing the reuse of waste heat as an extra source for the district heating network, which would offset the additional investment in heat pumps. This innovative business model requires complete deregulation of the district heating market to allow industrial heat producers to provide waste heat as an additional source in the district heating network. This work proposes the application of innovative market designs for district heating networks, inspired by new practices seen in the electricity sector. More precisely, pool and market designs are addressed, comparing centralized and decentralized market proposals. An illustrative case of a Nordic district heating network is used to assess the performance of each market design, as well as the potential revenue that different heat producers can obtain by participating in the market. An important conclusion of this work is that the proposed market designs are in line with the new trends, encouraging the inclusion of new excess heat recovery players in district heating networks.