Published July 31, 2022 | Version v1
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Decarbonisation Pathways for District Heating Sector: A Policy and Private Business Perspective


DISTRICT HEATING refers to a central supply of heat to fulfil the space heating and hot water demand of buildings.
District heating network comprises of central production units along with distribution network and occasionally, a
transmission network for larger district heating networks. District heating offers many local environmental and
economic benefits like reduced air pollution by eliminating individual heating at houses, utilising local energy
resources, flexibility in choice of heat production technology, creating more jobs, and eliminating energy poverty[1].
At a national level, high penetration of district heating makes the whole energy system more efficient and increases
the share of renewable energy, as evident from the experiences of Denmark and Sweden [2], [3]. While the penetration
of district heating is very high in Nordic countries of Denmark, Sweden, and Finland, a substantial potential of district
heating expansion exists in other European countries where about 50% of heat demand at the European level can be
supplied by district heating to achieve decarbonisation that is affordable [4].
The district heating sector faces the challenge of decarbonisation just like the whole energy sector. Furthermore, the
reduced heating demand resulting due to temperature increase and investment in energy renovations of buildings due
to ambition policy push [5] threaten the profitability of existing district heating companies in the future.
In this study, a comprehensive assessment of the future development of the district heating sector is conducted from
the perspective of a whole energy system. This study tackles the challenges concerning future optimal fuels and
technology shifts to achieve decarbonisation in future when heat demand is expected to reduce. The implications of
future development in the district heating sector on policymakers and district heating companies are discussed.

Publication supported by EMB3Rs.



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EMB3Rs – User-driven Energy-Matching & Business prospection tool for industrial Excess heat/cold Reduction, Recovery and Redistribution 847121
European Commission