Optimizing district heating in a fully renewable energy system: An Austrian case study

This study examines cost minimization of Austrian district heating systems in the context of a fully renewable national energy system, where the marginal value of energy changes constantly with conditions for solar, wind, and hydropower, as well as energy demand. We first construct a model of an Austrian energy system using only renewable sources that meets demands for all forms of energy in each hour of a model year. We then embed models of local district heating systems in the national model, revealing cost-minimizing approaches to district heating within the national context of fully renewable energy use. Optimum management of district heating with existing plant equipment would change somewhat if national energy sources were all renewable. Long-run optimum district heating plant configuration would change considerably if only renewable energy were used throughout the country, including much more hot water storage, dual-fuel heating, and wood-fired combined heat and power plants. This demonstrates the need for a system-level model to inform local decisions. The embedded model approach is an alternative to simple minimization of LCOE for energy system components when marginal values are dynamic, as in a fully renewable energy system using mostly variable sources.