Cogen, district heating, and grid stability |
How district heating can help improve grid stability: an Energinet perspective
District heating plants are among Denmark’s largest flexible electricity consumers. With large hot water tanks, they can store surplus electricity as thermal energy for later use. Additionally, electric boilers help maintain grid balance by quickly adjusting power consumption in response to fluctuations in the electricity system. During springtime, solar power often drives electricity prices down in the middle of the day. This benefits district heating customers, as electric boilers are activated to produce low-cost hot water. But when, for example, a cloud covers a solar park and creates an imbalance in the grid, district heating plants can also respond swiftly. Through participation in the balancing services market, Energinet can activate these plants to pause their consumption and help restore balance – until the cloud passes and solar production resumes. The same applies when wind production exceeds expectations: if wind turbines generate more power than the grid can accommodate, electric boilers can absorb the surplus, preventing energy waste.
Denmark’s green transition and electrification are ongoing efforts, with a continued need for more solar and wind capacity. However, increased renewable energy also introduces greater variability in production, often with rapid shifts throughout the day. Flexible electricity consumption is therefore critical to managing these fluctuations.
Today, the district heating sector is one of the most important sources of flexible consumption – until future technologies like Power-to-X can also contribute.
“District heating has a built-in advantage when
it comes to balancing the electricity system – our pipes and storage tanks act as thermal batteries. We can absorb excess electricity when solar and other renewables are producing at full capacity, and we can shut down heating elements when a cloud dims solar output. In this way, district heating supports the power system with both balancing and storage – functions the grid wasn’t originally designed to handle,” says Michael Søgaard Schrøder, Chief Consultant at Dansk Fjernvarme (Danish District Heating Association). Energinet welcomes the flexibility of the district heating sector and considers it a key player in the green transition. Kia Marie Jerichau, Head of Flexibility and Balancing at Energinet, adds: “At
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Power consumption by the district heating sector Electricity spot price
Example of flexible consumption by the Danish district heating sector. Western Denmark, a week in April 2024. Source: Energinet
Energinet, we welcome all participants – large and small – and district heating is certainly in the premier league of actors driving the green transition and electrification forward. In recent years, we’ve seen a surge of interest in balancing the grid. In 2024 alone, the number of new market participants in balancing services increased sevenfold compared to 2023. And we need all kinds of contributors – greenhouses, public swimming facilities, even aggregations of charging electric vehicles. Imagination is the only limit,” says Kia Marie Jerichau.
Energinet currently spends DKK 2–2.5 billion annually on system services to maintain power grid stability.
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A new role for a modernised district heating sector?
A report from economics consultancy Compass Lexecon, commissioned by Wärtsilä, Flexible solutions to advance low-carbon district heating & power generation, looks at the potential role a modernised European district heating sector could play in decarbonising both heat and power.
Skagen CHP plant
A striking feature of the EU’s district heating sector, noted by the report, is its continuing use of large amounts of coal.
The importance of district heating varies significantly across Europe, the report notes – with Sweden and Denmark reaching 50+% of comfort heating demand met by district heating in 2022. There is also significant variation across Europe regarding the number of district heating (DH) systems per head (<1 to 43 systems per 100 000 inhabitants) and their average size (3 to 130 MWt per system).
However, in the majority of European countries, district heating is still largely fossil based – with coal or lignite playing an important role (>10% share in heat generation in 10 countries). According to the report, public data suggests that there are several hundred district heating
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systems in Europe that still rely on coal in their heat generation mix.
But EU-level policies aim to drive district heating decarbonisation – with the EU emission trading system (ETS) and the Energy Efficiency Directive (EED), with its specification of “efficient district heating”, currently exerting the most pressure, the report’s authors contend.
Among the thermal generation options investigated (piston based gas engines and various gas turbine configurations), gas engines tend to be the most flexible technology, the report finds (which will be good news for the report’s sponsor).
Already running on natural gas, ICE (internal combustion engine)-CHPs of course produce significantly lower emissions than even best in
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