Demand response in district heating systems: on operational and capital savings potential

Most district heating systems are operated in an inflexible way, mainly due to legacy operational software, business-as-usual state of mind and lack of awareness of new possibilities brought by digitalization. Moreover, shares of variable renewable energy generation are continually increasing, which causes large oscillations in electricity prices in day-ahead markets. Electric boilers are already common in district heating systems, and it is expected that heat pumps will gain a stronger ground in the future, resulting in variation and uncertainty in the cost of heat production. This calls for a more dynamic representation of the district heating system, including the implementation of demand response that could react to the cost of heat production. In order to check the potential of increasing the flexibility in district heating systems based on a price signal, a high-level energy planning model was soft-linked with the flexibility algorithm, including feedback between them. The case study was carried out for a district heating grid in Zagreb, Croatia. Flexibility was utilized by varying the forward temperature in district heating systems by 3.5 o C compared to the baseline operation. Compared to the relevant literature, flexibility was used much more in our case often due to the accurate representation of the flexibility dynamics. Results showed that both capital and operational savings were achieved. The best performing scenario resulted in socio-economic savings of 5.4%.