Decarbonising (sub-)urban districts through neighbourhood heating and cooling networks: Financing and organizational pathways

Peer-reviewed paper 5-032-26

In existing urban and suburban areas with medium heat density neither conventional large district heating systems operating at high temperatures, nor heat pumps for individual buildings, offer optimal decarbonisation solutions for both technical and economic reasons.

Neighbourhood heating and cooling (H&C) networks can bridge this gap. These networks are low temperature grids (4^th generation) or anergy grids (5^th generation), primarily supplied by locally available renewable energy sources, such as near-surface geothermal energy, groundwater, solar thermal energy, waste heat, or ambient energy. Heat pump technologies raise the temperature to the required level, and depending on the source and dissipation system in the buildings may also offer free or low cost cooling.

Although the technical concept of neighbourhood H&C networks is well-proven, the concept has seen limited practical application. Against this background the paper addresses the following topics, based on experience gained in pioneer neighbourhoods in Germany, Austria, the Netherlands and the Czech Republic:

• What are the driving factors behind neighbourhood H&C networks, compared to district heating or individual heat pump solutions?
• Which organisational and financial models are most suitable for neighbourhood H&C networks in existing (sub-)urban areas, depending on the prevailing starting conditions and applicable regulatory and legal framework? Which billing models (e.g. consumption-based, flat-rate, hybrid) best ensure competitiveness, economic viability and attractive heating and cooling costs for customers, including potential co-owners?
• What energy policy framework conditions are appropriate for accelerating the roll-out of neighbourhood H&C networks?