LIFE: Integration of low-grade renewable energy or waste heat in high temperature district heating

Objective

The whole transformation of the heating and cooling sector plays an essential role in the climate transition, and it is necessary to support the further application of efficient and renewable technologies to make the sector fit to meet this challenge. The “Fit for 55” package proposes revisions of the Energy Efficiency Directive (EED) and the Renewable Energy Directive (RED) with specific targets to increase the use of renewable energy and waste heat in district heating systems.

Guidance, recommendations and replication models to support municipalities and operators in the modernisation of district heating systems have been developed and tested at the national and local levels. However, despite significant energy efficiency improvements, a large share of existing district heating and cooling systems still overly rely on fossil fuels. The need to reduce fossil fuels consumptions for heating purposes, including in centralised district heating and cooling systems, is clearly singled out in the framework of the REPowerEU plan^[2] to phase out EU dependence on fossil fuels imports.

To advance towards carbon neutrality, district heating operators/owners need to prepare investment plans allowing the existing systems to fulfil the proposed criteria for ‘efficient district heating and cooling’, as defined in article 24 of the proposal for a revised EED. This will require the integration of low-grade heat sources or waste heat (as defined in Article 2 (9) of the proposal for a revised RED).

To that end, district heating operators/owners need to identify local renewable energy and waste heat sources and to coordinate with local stakeholders in order to contract supply. Investments are needed to integrate low-grade heat sources into the existing network and, where needed, to upgrade it as well as potentially adapt infrastructure on the demand side. This is particularly challenging for existing district heating systems operating at high-temperatures, notably considering the limited human and technical capacities of district heating operators/owners. Therefore, technical support is needed to develop investment plans.

Scope

Proposals should work with operators/owners of high temperature district heating systems and provide them with the required technical support for the preparation of investment plans to fulfil the proposed criteria for ‘efficient district heating and cooling’ as defined in the proposal for the revised directive on energy efficiency. Activities may include among others, identification of available renewable energy and waste heat sources, contracting with owners, pre-feasibility studies, financial engineering, etc.

The investment plans to be produced should allow the targeted district heating system to fulfil the criteria for “efficient district heating and cooling” within in a timeline of 10 years. The focus should be on low-grade renewable energy or waste heat (as defined in Article 2 (9) of the proposal for a revised RED). The investment plans should include the detailed identification of the investments, their timing, the internal and external resources required, the public and private funding sources and potential involvement of the private sector, in particular for the first tranches of investments.

Proposals should explain how they will select the district heating systems which will receive technical support, the content of the support to be provided and how the consortium will deliver this support on the ground. The district heating systems supported should be located in a territory covered by a Sustainable Energy and Climate Action Plan (or similar).

Activities should support district heating operators/owners in at least 3 eligible countries; proposals should clearly identify the targeted countries (possibly regions) and explain how they intend to cover the variety of situations in each targeted area.

Additionally, proposals should:

• Support the engagement and commitment of key stakeholders (internal and external) in order to ensure that the investment plans are implemented after the end of the project.
• Build the capacity of the targeted district heating operators/owners to implement the investment plans: design, procurement and operation to secure the highest application and utilisation of low-grade renewable or waste heat sources.
• Identify regulatory barriers and promote solutions (e.g. new regulations, tariffs, funding programmes) in order to facilitate the integration of low-grade renewable energy or waste heat in high temperature DHC systems at national and EU levels.
• Promote replication by other district heating operators/owners.

The Commission considers that proposals requesting a contribution from the EU of up to EUR 1.5 million would allow the specific objectives to be addressed appropriately. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts.

Expected Impact

Proposals should result in increased capacity of DHC owners/operators to implement the investments necessary for the integration of low-grade renewable energy or waste heat in high temperature district heating. Investments are not expected to be implemented during the project, but DHC owners/ operators could start to implement the investment plans, e.g. through procuring the necessary engineering studies and works. Proposals should also result in the demonstration of the technical and financial feasibility and replicability of the transition to the ‘efficient district heating and cooling’ criteria of high-temperature district heating systems; and in an improved regulatory framework for district heating and cooling allowing fulfilment of the EED criteria.

Proposals should quantify their impacts using the indicators listed below, where relevant, as well as other project-specific performance indicators:

• Number of district heating systems equipped with an investment plan allowing them to fulfil the proposed criteria for ‘efficient district heating and cooling’.
• Number of market stakeholders with increased capacity to implement the investment plans for the integration of low-grade heat sources or waste heat.
• Number of local and regional authorities integrating the outcomes of the project in their energy planning.
• Investments in sustainable energy triggered by the project (cumulative, in million Euro).
• Primary energy savings triggered by the project (in GWh/year).
• Renewable energy generation triggered by the project (in GWh/year).
• Amount of energy generated from low grade heat sources triggered by the project (in GWh/year).

The impacts of the proposals should be demonstrated during the project and within 5 years after the project lifetime.

Deadline

16 November 2022

For further information: Funding & tenders