"Scale up, CO2 down!”: Highlights from DHC Market Outlook 2024

The Euroheat & Power Congress 2024 brought together over 450 people from businesses, energy agencies, and district heating associations , as well as more than 30 exhibitors and 85+ speakers from all over Europe. The event focuses on legislation, business models, technology, and market development related to district heating and cooling. The congress serves as a shared platform for industry leaders, policymakers, and experts to discuss and advance district heating and cooling solutions.

Following the congress, Euroheat & Power’s Market Intelligence Unit publishes a report, the DHC Market Outlook, describing current industry developments based on input from their internal committee as well as external contributors from the sector. To shed light on this year’s event and explain the most significant highlights from the report, we have talked to Steen Schelle Jensen, Head of Business Development at Kamstrup, who attended Euroheat & Power Congress 2024.

First of all, this year’s Euroheat & Power Congress was one to remember purely from its increased interest.

“Previously, the congresses hosted around 250-300 attendants. For the first time, the attendance number was close to 500, which is a clear indication that district heating is gaining attention.”

Besides from attracting more attention, Steen Schelle Jensen also describes a rising curiosity and increasing interest in seeking tangible solutions and figuring out how to implement district heating solutions to alleviate European society’s dependency on fossil fuels, e.g. Russian gas.

“The interest in district heating is no longer driven only by climate change and the green transition. To a larger degree, the case for investing in district heating is now fuelled by the need for energy security.”

Moving away from fossil fuels is far from a new topic on the agenda. But in the light of Russia’s invasion of Ukraine and its geopolitical influence on European energy supplies, seeking a stable alternative to oil and gas in the nearest possible future has gained serious traction over the last few years. 

“In the most recent years, the importance of securing stable energy supplies has grown significantly. One of the key changes from previous Euroheat & Power Congresses is that energy security has become a topic with unprecedented influence on the district heating debate.”

By upscaling district heating – not to mention district cooling as well, Europe can strengthen its energy security by both minimizing the risk of potential energy crises as well as reducing carbon emissions significantly. However, on the road towards implementing large scale district heating and cooling across Europe, certain speed bumps are causing concern and reason for hesitation.

Though the benefits of utilizing district heating have become clear to both industries and authorities, implementing new collective energy initiatives remains a challenge: “At the moment, there are lots of discussions on three key areas: planning, ownership, and consumer protection.”

Although exhibiting multiple discussions, the different disputes all stem from one shared concern: “The dispute is rooted in concerns of potential monopolistic ownership,” as Steen Schelle Jensen explains, “for example, the liberalised gas market has meant that customers can choose a new gas supplier almost on a weekly basis. With district heating, there is a risk that customers can potentially get locked in a monopoly.”

Therefore, there is a shared wish to develop a set of boundaries for district heating ownerships to provide ensured consumer protection. “For example, the Netherlands have proposed a 50+1 rule to enforce public majority of ownership to prevent district heating monopolies from happening.”

However, despite justifiable concerns related to planning, ownership, and consumer protections, Steen Schelle Jensen describes a common desire to figure out a way forward so that more European countries can reap the benefits from district heating and cooling:

 “Everyone seems convinced that district heating is in fact a good idea. A district heating network is in itself a piece of technology neutral infrastructure, which is quite frankly just used to transport heat by circulating hot water. It is a flexible solution where the customers get to decide how they want their heat produced, whether it is from surplus heat or whatever.”

Besides from district heating gaining serious traction across the European energy landscape, district cooling is also becoming increasingly relevant. “Another thing that made this year’s congress stand out was its focus on district cooling. While there have been talks about cooling for years, the tone has now taken a more serious now or never attitude with countries working on exact solutions in the nearest possible future.”

The increasing interest in district cooling is heavily influenced by growing electricity demands. “A significant percentage of the world’s total electricity production goes to cooling. But with rising demands of electricity supplies, perhaps best demonstrated by the increased use of electric vehicles, a reasonable way of ensuring energy security would be to use district cooling instead of electricity for cooling purposes.

In addition, district cooling is a considerable upgrade when it comes to both efficiency and environment. “Centralised district cooling is 30% more efficient than individual cooling, and as it turns out, growing emissions from the refrigerants used in individual cooling machines challenge our global efforts to keep temperature rise at a minimum.”

To learn more about the negative impact of refrigerants, also called hydrofluorocarbons (HFCs), we recommend having a look at the Kigali Amendment in the Montreal Protocol.

As always, Denmark remains the shining example of large-scale district heating with close to 70% of the country’s heating demands covered by district heating. However, as Steen Schelle Jensen mentions, “Denmark’s current situation is the product of clever decisions taken all the way back in the 1970s that led us on a path towards where we are now. We cannot just go out and tell the world to copy us. Instead, it is hugely important that we understand district heating outside of our borders and then use our experience to assist others in making clever decisions in a much more complex situation.”

In this regard, the Danish Energy Agency is working hard to support this process in other countries – and to great success, as Steen Schelle Jensen tells, “it is worth emphasising that Denmark was frequently recognised for its contribution. For example, the Dutch authorities mentioned that they are specifically looking towards Denmark for inspiration.”

Inspiring our fellow nations is not just an advantage for them, but also an important priority from a Danish business perspective. “It is good that Danish authorities and companies help addressing the important issues within district heating, such as ownership and consumer protection, to pave the way for Danish solutions.”

District heating is no longer a question of why, but how. However, while the distribution networks of traditional power plants are quite simple, district heating requires complex planning with multiple layers, as Steen Schelle Jensen explains:

“District heating sits lowest in the energy food chain, so to speak, picking up leftover surplus heat from data centres, industry, electricity, etc. This means that district heating is categorically a decentralised energy source dependant on other sectors. As the result, the systems are more complex and operations more difficult to optimise.”

This is exactly where Kamstrup’s contribution ads an important piece to the puzzle, as Steen Schelle Jensen says, “with an increased pressure on district heating, utilities will need to push systems closer to their limits. Through digitalisation, Kamstrup optimises district heating utilities, both when it comes to systems and operation.”

Kamstrup can potentially play a pivotal role in inspiring, leading, and delivering on clever district heating solutions across Europe – not only regarding digitalisation, but also when it comes to consumer protection. Through our digital solutions, customers can gain full transparency of their consumption, while our Return Temperature Optimizer service proactively informs consumers about faulty heat installations. This serves in both customers’ and utilities interest, as customers can reduce large heating bills and utilities can optimise private parts of their distribution networks.

The DHC Market Outlook 2024 is sponsored by Kamstrup. By shedding light on the European district heating and cooling markets, the report identifies the key aspects shaping the future of the sector. If we are to decarbonise heating and cooling, policy makers and industry leaders must find common ground to lay the foundation for informed decision, and this is exactly the purpose of the DHC Market Outlook 2024.
Read the DHC Market Outlook 2024 here.