Business models combining heat pumps and district heating in buildings generate cost and emission savings. (1st November 2021)

• Record Type: Journal Article
• Authors: Lygnerud, Kristina; Ottosson, Jonas; Kensby, Johan; Johansson, Linnea
• Is Part Of: Energy. Volume 234(2021)
• Publication Date: 2021-11-01
• Subjects: Heat pump -- District heating -- Business model -- Cost -- CO2; Power resources -- Periodicals; Power (Mechanics) -- Periodicals; Energy consumption -- Periodicals; 333.7905
• DOI: 10.1016/j.energy.2021.121202
• Languages: English
• ISSNs: 0360-5442

Abstract

Abstract: There are currently several challenges facing the Swedish district heating (DH) industry. To address these challenges, new business models are needed. One such model involves the widespread use of Heat Pumps (HPs) in DH networks (DHN). However, HPs compete with other more conventional heat sources and their inclusion in DH business models is not yet common. In this study, efficiency gains impacting cost and CO2 emissions for HP inclusions are compared to the current state of affairs and different business model concepts are developed and discussed for a typology of DH systems. The results of this analysis show that using HPs in DHNs can be profitable, achieving maximum cost savings of 33% and emissions savings of 75% (CO2 ). However, the shift needed in business models for successful HP/DH combination—in spite of significant cost and emission savings potential—will be a significant challenge, considering: (i) the tendency of Swedish DH companies to see HPs as competition and something to avoid, (ii) an overall low level of maturity in terms of service provision, (iii) an arms-length distance to customers (co-creation of value is rare), and (iv) a difficulty in capitalising the value of green technology adoption. Highlights: Describes business model concepts for combining heat pumps with district heating. Cost savings of up to 33% from optimised heat pump and district heating use. Reduced emissions of up to 75% from optimised heat pump and district heating use. Describes the servitisation process of Swedish district heating sector.