Climate-neutral waste heat can be economical

Climate-neutral heat sources are essential for the heat transition. Unavoidable waste heat from industry, data centers, or electrolysers is a resource that has often been untapped in heating networks to date. However, an EWI analysis shows that it can have a system value of 1.9 to 3.3 cents per kilowatt hour of waste heat in new district heating networks. The system value is a measure of the cost-saving potential. In existing networks, the system value is even higher, at 3.1 to 4.6 cents per kilowatt hour. The waste heat profiles examined for industry and data centers result in high system values, while the electrolysis profile is slightly lower. The system value is offset by the costs of tapping the waste heat, which vary greatly depending on the temperature level and utilization. This means that waste heat from industry can be economical, especially in existing networks. In new networks, waste heat from data centers is particularly economical.

In the analysis “Waste Heat Utilization in District Heating Networks – Model-Based Analysis of the System Value of Exemplary Waste Heat Profiles,” a team from the Institute of Energy Economics at the University of Cologne (EWI) examined the costs and benefits of various waste heat sources. Using the EWI’s own district heating model DINO, three exemplary waste heat profiles were examined: industry, data centers, and electrolysis plants. The system value of the waste heat corresponds to the share of the heating network costs that could be saved by using the waste heat in the heating network. The analysis was funded by the „Förderinitiative Wärmewende“ of the Gesellschaft zur Förderung des Energiewirtschaftlichen Instituts an der Universität zu Köln e.V.

System value decreases as the amount of waste heat in the heating network increases

The system value of waste heat for the energy system depends on which technologies for heat generation are replaced by waste heat utilization. In the sample cases examined, large heat pumps could often be smaller in size if waste heat was available. Due to high flow temperatures, the efficiency of large heat pumps in existing networks is lower, making their use more expensive. Therefore, the system value of waste heat is higher in existing networks than in new networks with lower flow temperatures. “The specific system value of waste heat decreases as its share of heat demand increases, since the most expensive generation plants are replaced first,” says Dr. Ann-Kathrin Klaas, who conducted the analysis together with Maximilian Walde and Tobias Leibfritz.

In order to analyze the economic efficiency of waste heat utilization, the analysis considered not only the system value but also the costs of waste heat utilization. Components such as heat exchangers, pumps, and pipes are required to integrate the waste heat. The costs depend on the utilization rate and temperature of the waste heat source as well as the distance between the waste heat source and the heating network. If the components are used more intensively, the costs per kilowatt hour of waste heat provided decrease. If the temperature of the waste heat source is below the flow temperature of the heating network, a heat pump must also be installed to bring the waste heat to the correct temperature. If the distance between the waste heat source and the heating network increases, the pipe costs also increase.

The waste heat profiles examined are suitable for different heating networks

The economic efficiency of the profiles examined varies significantly depending on the sample case considered. For example, the data center profile examined has a high system value and lower usage costs due to its continuous and high utilization, even if the temperature would have to be raised by an additional heat pump in existing networks. The electrolyzer profile examined is volatile, has a low temperature level, and has a low system value due to its correlation with low electricity prices. It is therefore only economical over short distances and in new networks with low flow temperatures. The industrial profile examined has a high system value, but volatile generation and low utilization mean that the costs of using the waste heat are high. One advantage, however, is the high temperature level, which means that industrial waste heat can be used in existing networks without additional temperature increases.

“While high-temperature industrial waste heat is suitable for decarbonizing existing networks, data centers and electrolysis with lower temperatures can be used to supply new networks. For municipal heat planning, it is crucial to analyze the available waste heat potential and take its respective characteristics into account,” says Dr.-Ing. Klaas.