Economic Attractiveness of the Flexible Combined Biofuel Technology in the District Heating System

European Union (EU) energy markets are changing rapidly. After the recent turmoil, a new wave of EU legislation is once again reshaping the way energy should be used in the EU, emphasizing not only the increasing importance of using renewable and local energy sources but also highlighting the importance of energy efficiency and decarbonization of high to abate sectors (including aviation and marine fuels). Heating and cooling account for about half of the total gross final energy consumption in the EU. This article explores the novel concept of using waste heat from the flexible Fischer–Tropsch (FT) process (FLEXCHX) in the existing district heating network, resulting in tri-generation: FT C5+ liquids, heat, and electricity. FLEXCHX provides operation flexibility and combines advanced biomass gasification, catalytic liquefaction, electrolysis, and waste heat recovery, allowing use of biomass residues in a more sustainable way. Our results, based on the Kaunas district heating (DH) system, show that this process could be integrated into the existing district heating network in Northern Europe and successfully compete with existing heat-only boilers and CHPs using biomass or municipal waste, resulting in more efficient use of biomass and savings accumulated up to EUR 200 million over the study period in the analysis (2020–2050), supplying up to 30% of the heat in the Kaunas DH system. Enriching the FT process with hydrogen (using electrolysis) could result in additional FLEXCHX utilization benefits by creating demand for cheap excess electricity that might otherwise be curtailed.