Abandoning peat in a city district heat system with wind power, heat pumps, and heat storage. (November 2022)

• Record Type: Journal Article
• Authors: Javanshir, Nima; Syri, Sanna; Teräsvirta, Antti; Olkkonen, Ville
• Is Part Of: Energy reports. Volume 8(2022)
• Page Start: 3051
• Page End: 3062
• Publication Date: 2022-11
• Subjects: District heating -- Power-to-heat -- Wind power -- Thermal storage -- Economic analysis -- CO2 emission; Power resources -- Periodicals; Energy industries -- Periodicals; Power resources; Periodicals; Electronic journals; 621.04205
• DOI: 10.1016/j.egyr.2022.02.064
• Languages: English
• ISSNs: 2352-4847

Abstract

Abstract: The Finnish Government has established the target of carbon-neutrality by 2035. In Finland, district heating (DH) networks in most cities rely on carbon dioxide (CO2 ) intensive fuels such as coal and domestic peat. This study assesses the decarbonization of a Finnish city's DH by employing power-to-heat (P2H) technologies, including heat pumps, an electric boiler, and thermal storage together with an ambitious building energy renovation program. This study also aims to use wind power with a calculated fixed price instead of the market price for the electricity consumption of the deployed P2H units to further support electrification and decarbonization of the DH network. Bilateral contract between the wind producer and the DH operator is examined, as new wind power producers receive no subsidies in Finland. The impacts of storage capacity, electricity tax, building-level renovation, and European CO2 emission allowance (EUA) price on the DH's optimal operation and break-even price of heat production were evaluated. The optimization routine minimizes marginal production costs. The optimal scenario eliminated the carbon intensive fuel peat with more affordable heat prices, due to P2H technologies, lower electricity tax, higher EUA prices, and the renovation of buildings. Bilateral electricity contract can bring mutual benefits for the DH company and the wind producer. Highlights: Finland's target of carbon-neutrality by 2035 is a huge challenge for fossil-intensive district heating (DH). Decarbonizing DH by an electrifying technology portfolio and building energy renovation is proposed. Wind power with a calculated fixed price is provided for power-to-heat units. Power-to-heat technologies and energy renovation eliminate peat and lower heat production costs. Bilateral contracting can bring mutual benefits for both parties, i.e., the DH operator and the wind producer.