Within the framework of the European RED III legislation, an indicative target of 49% renewable energy for the air conditioning sector (heating and cooling) by 2030 has been set. District heating systems represent an interesting solution for energy transition.

The subject of this report is the description of the software equations and cost data used in the software for economic optimization in identifying renewable technologies and corresponding sizes capable of meeting 15-minute thermal demand profiles to minimize the cost of heat produced for the two hypothesized cases.

The optimization software was tested in the case of rewamping an existing power plant. Building upon the results obtained in 2022, which allowed us to identify renewable resources usable in the Po Valley, renewable technologies suitable for the revamping of an existing plant have been modeled. Through an economic optimization algorithm for plant management and thermal tank management, technologies and sizes minimizing economic cost and CO2 production have been identified. It is identified that a cogeneration ORC system, a heat pump, and thermal storage represent the best solution as they are minimally affected by electricity price variability, with zero CO2 emissions and zero primary energy consumption.

A comparison between the solution with a mix of renewable technologies and the current solution fueled by fossil fuels reveals a cost increase of 30% in the case of a gas cost of €28/MWh and PUN (Single National Price) of €87/MWh (October 2023 prices), and a cost increase of 9% for a gas cost of €46/MWh and PUN of €140/MWh (January 2024 prices), with wood chip cost remaining at €22.6/MWh. Exploiting waste heat represents an opportunity to lower the heat price provided suitable conditions of power, energy output, and distance from the heat source to the district heating network are met.

We have included an explanatory graph showing how the relationship between these three parameters varies the cost of recovered heat from less than €40/MWh upwards, with a quantified heat valuation of €20/MWh without investments and operational costs. By varying the district heating delivery temperature to reduce losses, very small savings will be achieved.

Additionally, an atlas is intended to be created to assess waste heat utilization costs by identifying the most promising sites. For this purpose, an Italian atlas of waste heat sites and thermal demands has been created. Furthermore, some algorithms have been tested for heat cost minimization (LCOH – Levelized Cost Of Heat) based on matching available heat with heat required by neighboring users.

The Report is available on the Italian site