Advancing Sustainable District Heating: Insights from Act!onHeat’s Financial Studies

Act!onHeat has been at the forefront of developing actionable insights for sustainable district heating solutions. Recent efforts have culminated in a series of financial studies—both theoretical and practical—designed to empower European municipalities and stakeholders in their transition to sustainable energy systems. These studies were highlighted in a webinar and a subsequent conference, providing a platform for stakeholders to learn about innovative approaches to finance district heating projects.

The Aims of the Financial Studies

The financial studies serve as a comprehensive guide for stakeholders, combining a summary of the general policy framework, technical aspects of heat network development, highlighting financial mechanisms and enabling stakeholders to understand the feasibility, financial viability and profitability of their projects over time.

Types of Financial Studies

The studies are divided into:

1. Practical Financial Studies: These focus on real-world applications, based on interviews with applicants before and after implementation. Lessons emphasise regulatory alignment, funding strategies, and local economic contexts.
2. Theoretical Financial Studies: Publicly available, these studies outline potential projects with detailed technical, financial, and environmental projections, demonstrating the scalability of district heating solutions.

Key Lessons from Practical Studies

Practical studies highlight the importance of tailoring strategies to local regulatory frameworks, while ensuring alignment with broader policy objectives. Key lessons include: 

• Policy Alignment: Early engagement with regulators and clear documentation of climate and energy contributions are crucial.
• Funding Strategies: Projects benefit from blended financial approaches, combining grants, loans, and guarantees, with strategic timing to boost investor confidence.
• Economic Feasibility: Success depends on local factors such as heat demand density, energy prices, and available infrastructure.
• Technical Innovations: Tailored technical solutions, like optimised temperature regimes and diversified heat sources, enhance long-term project viability.

Theoretical Studies: Exemplary Projects and Locations

The theoretical studies showcase advanced district heating technologies and their applications:

1. Enhanced Geothermal Systems (EGS) in Upper Austria
   • Location: Ried im Innkreis, Molasse Basin.
   • Features: A 4,500-metre geothermal reservoir generating 5 MWe of electricity and 40 MWth of thermal energy, supplying 11,000 households.
   • Benefits: €59.1 million investment leading to 17,740 tons of annual CO2 savings, advancing Austria’s climate neutrality target.

2. Expanded Heat Pump System in Malmö, Sweden

• Location: Malmö Harbour District.
• Features: A 40 MW ammonia heat pump system, using sewage water at 14°C, with a planned expansion to 90 MW to serve 22,500 households.
• Benefits: High efficiency (COP 3.8), €113 million investment, and an annual reduction of 62,500 tons of CO2 emissions.

Read the theoretical studies here.

Webinar: Sharing Knowledge to Drive Action

The first theoretical study was presented in a webinar entitled "How to Finance Sustainable Solutions in District Heating." Speakers such as Luca Angelino (European Commission), Giulia Conforto (e-think), and Vlad Surdea-Hernea (eclareon) addressed:

• The role of district heating in achieving EU climate goals.
• Strategies for financing sustainable heating solutions.
• Case studies illustrating practical and theoretical approaches.

The session provided actionable insights for attendees, emphasising the importance of policy support, innovative technologies, and strategic funding. Watch the webinar here.

Looking Ahead

The Act!onHeat initiative underscores the importance of holistic planning in transforming urban heating systems. By integrating policy, financial, and technical solutions, these studies offer a roadmap for European cities to achieve ambitious climate goals