District heating and cooling is one of Europe’s top solution to reduce fossil imports, but we need decisive EU action to tap-into this potential [Promoted content]

Providing 20% of the EU heat demand with district heating by 2030 would save 24 billion cubic meters of gas, representing 32% of Europe’s Russian gas imports in 2022. Decisive EU action is needed to leverage this potential. 

The Ukrainian crisis was the wake-up call we needed to finally grasp the urgency of reducing Europe’s dependence on fossil fuels, and address the decarbonisation of our heating and cooling sector. Space heating & cooling and hot water supply in buildings represent about 31% of the EU’s primary energy consumption with over 75% coming from fossil fuels. Despite a successful reduction of the EU domestic gas demand in 2022, the heating and cooling sector remains structurally dependent on natural gas. To achieve the  EU’s climate targets and regain energy independence, decisive action to deploy clean heating and cooling solutions is needed.  

The challenge is immense, but the solutions are numerous. 

With 41,3% shares of renewables and climate-neutral heat sources, district heating and cooling networks keep warm 67 million EU citizens, and are a powerful tool to replace  fossil-based heating in buildings.  

Essentially made-in-Europe, it is also the only energy infrastructure enabling the use of  local renewable heat sources (such as geothermal energy, solar thermal, or sustainable  bioenergy) or waste heat sources (from industrial or tertiary sectors) to decarbonise  buildings. In a context of energy supply crisis, this is far from being anecdotic. The  untapped potential for clean and renewable heat sources in Europe is indeed quite  significant, above 2,000 TWh/year according to most recent estimations. This is more than the total estimated heat demand by 2050, reaching 1850 TWh! 

A ground breaking study from Aalborg university, “Heat matters: the missing link with REPowerEU”, singles out district heating and cooling  as one of Europe’s most efficient measure to reduce fossil fuels import in Europe, over the next decade. According to the study’s results, expanding district heating and cooling to cover 20% of the EU heat demand by 2030 (compared to 13% today) would save 24  billion cubic meters of gas demand, corresponding to 32% of Europe’s Russian gas  imports in 2022! The bulk of natural gas savings is achieved though the phase-in of clean and renewable heat sources in district heating networks (18 bcm), while the expansion and modernisation of existing network infrastructures in EU cities delivers a fair share (6  bcm). 

These results are all the more striking considering that heating networks play an  anecdotal role in the Commission’s REPower EU strategy. Luckily, The energy crisis is far  from over, and it’s never too late to put things right. So how can we fully unlock the  potential of efficient district heating and cooling networks to decarbonise Europe? 

The Fitfor55 package established a clear pathway to 100% renewable and climate neutral district heating and cooling networks by 2050. To achieve this target, the  European district heating and cooling sector needs the right framework and tools to deploy clean and renewable sources at scale, modernise more than 190.000 km of district heating and cooling pipes and build at least 3500 new networks by 2030!2In other words, the EU DHC is at the dawn of a profound transformation. 

On Tuesday 14, Euroheat & Power released a set of policy recommendations to move  forward with ambition.  

First, the European district heating and cooling industry calls for a paradigm shift in the  implementation of building renovation policies, which must be aligned with the results of  mandatory local heating and cooling plans introduced by the reviewed Energy Efficiency  Directive. 

Put in simple terms, successful renovation strategies should not only aim at making  buildings more efficient, but also ensure that these buildings are configured to switch to  the right clean heating and cooling solution (individual, or collective), adapted to local  resources and building characteristics. For example where nearby renewable and waste  heat sources have been identified, building performance criteria should require the possibility for buildings to connect to district heating and cooling networks. As a result,  the sector also recommends adopting zonal distribution for clean heat incentives, which should encourage consumers to adopt the most cost-effective and climate-efficient heating solutions, avoiding wastage of clean heat resources and ensuring cost-optimal investment in energy infrastructure. 

Then, the EU must stand ready to invest heavily in the decarbonisation and expansion of heating and cooling systems across Europe. According to the recent Aalborg study, a  total of 144 billion euros must be invested by 2030.  

To overcome the obstacles posed by the fragmentation of existing funding instruments,  the district heating and cooling industry recommends the establishment of aggregated  European and national “heat funds”, which can be mobilised to de-risk all stages of a district heating and cooling project (from impact assessment to project delivery), and  through the whole project scope (from building renovations to heating and cooling  infrastructure). Euroheat & Power also sector calls for the introduction of de-risking schemes for clean and renewable heat projects, as well as an urgent simplification of state  aid approval procedures.  

A new political mandate is on the horizon, and with it, the prospect of continuing our  decarbonisation efforts right up to the next milestone: 2040. This is a perfect opportunity  for the European Union, to further accelerate the transition away from fossil fuels in its  largest energy-consuming sector, and build a smarter energy system which isn’t only  decarbonised, but also locally owned, circular, and resilient.