20-02: Sector coupling of district heating with the electricity system: profitability and operations (SeCoHeat)

The sector coupling between district heating and electricity systems can play key roles in meeting the challenges associated with the energy transition. This project aims at investigating this sector coupling by developing models of district heating systems (DHS) that can be used to simulate operation and scheduling of units of any DHS and their participation on electricity and grid service markets. 

The Paris agreement, the European Green Deal and the national Swedish climate targets call for an ambitious energy transition in the coming decades. Sweden is to have zero net emissions at the latest in 2045 and 100 % renewable electricity production by 2040. Electrification of industries and transport will play an essential role at achieving the climate targets. 

Massive electrification will lead to additional local grid and production capacity challenges, which district heating systems can help remedy by both decreasing the need for electricity use for heating and providing local electricity generation in combined heat-and-power plants. 

The transition to a production mix based on renewable intermittent generation will create a larger need for grid services such as frequency-regulation services. While sector coupling units do not typically participate in grid service markets today, studies have shown that it is technical possible to do so and that these units have a role to play in these markets in the future.

The project will result in models that can be used to evaluate the extent to which DHS can participate in different electricity and grid service markets. The extent of their participation will condition the profitability of investing in sector coupling units such as combined heat-and-power plants. Altogether, the analysis will determine what roles DHS can play on electricity and grid service markets now and in the future.