the drive for innovation in the district heating sector is not only at the heart of our work at heatbeat, but also a fundamental motivation for our newsletter, in which we aim to support the dissemination of innovative ideas from research into practice. And while each paper we select for a given newsletter issue provides insights into a certain aspect of the district heating sector, we are happy to focus this issue on a systematic study of innovation in the district heating sector in general. To this end, this newsletter issue presents the findings of the review paper Is Innovation Redesigning District Heating? A Systematic Literature Review by Håkan Knutsson et al. from Halmstad University in Sweden.
For their study, the authors considered around 900 research papers on district heating published between 2000 and 2020 and performed an in-depth analysis of how these papers relate to innovation. They conclude that district heating has not been a highly innovative industry in the past. Yet, exposure to competitive market conditions has been driving a long-term process towards lower network temperatures. And in that context, the authors have found major trends for innovation in district heating and grouped them into 3 main themes:
Furthermore, the paper puts emphasis on the finding that most research in the district heating sector currently focuses on "what must be done and why" but that the questions of "how to do it and by whom" are not addressed sufficiently. As a solution, the authors suggest that a better understanding of the innovation processes can help to identify how to organize innovations within organizations and across the district heating sector.
One aspect of the paper is that a better formal understanding of innovation can help the district heating sector to better organize and drive innovation forward. Therefore, the authors define innovation as described in the Oslo Manual as significantly new or improved products and services applied into practice, i.e. made available to users or applied internally within an organization. For more context, the paper identifies district heating as a "scale-intensive industry" (i.e. high market shares and scale are important for its feasibility) and from the innovation-perspective as a "supplier-dominated industry" (i.e. technology suppliers drive innovation and pass it on to operators).
Furthermore, the view on district heating innovation is structured into different levels (from the component level to the system level) and the novelty of the innovation (from incremental to radical change). For these different classifications, the paper lists locating leaks and faults in the building substations as an example for incremental innovation on the component level, holistic predictive maintenance for weak pipes as a radical innovation also on the component level, and lower network temperatures as an incremental innovation on the system level. For radical innovation on the system level, the literature review does not provide clear-sighted answers, but the authors name bidirectional, ultra-low temperature networks with distributed storages as a potential setting for such radical innovation.
To gain more insight into the different directions innovation can take in the district heating sector, the authors group all of the considered research papers into 8 categories: The first 4 correspond to the steps in the district heating value chain of fuel input, heat supply, heat distribution, and heat transfer. As additional categories the authors define the district heating system as a whole, a more broad view towards an integrated city system, and both the impact of district heating as well as district heating in the context of business and social science.
Based on this grouping, the paper finds that most research is done on the heat supply part of the system (35 % of all considered papers), with the strongest focus either on specific supply or storage technologies or on the modeling demand forecasts and supply optimization. The second most important group (18 %) was found to be the impact of district heating on its customers, the environment and the local society. These papers focus mainly on sustainability, policies, renewable energy, and cogeneration. And the third most important group (16 %) was identified as the district heating system as a whole. In this group, the paper finds that the research focus is often on early-phase potential of innovations (including topics like low temperatures, optimization, renewables, and smart energy systems), but that innovation historically has come largely on the component level and that radical system innovation is not well represented in the literature.
On the other end of the spectrum, the authors raise the important point that there is a discrepancy between the role of the heat distribution, i.e. the piping network, in practice versus its role in research. While the authors mention that typically a district heating company needs to employ half its capital for the distribution network, which can amount to costs of many millions of euros, heat distribution makes up the smallest group of the considered body of research with only 4.7 % of all papers. Of these, around 2/3 deal with new-built networks and 1/3 focus on existing networks. Yet in general, this contrast between economic importance and little amount of research may point towards some unused potential for more innovation.
As summarized in our introduction, the detailed study of the innovation potential across all 8 groups leads the authors to identify 3 main themes of innovation in the district heating sector. Of these, the transition from fossil-fuels to renewables is of course a common theme across all energy systems, not only district heating. In the district heating context, the authors find that this research interest is accompanied by an increasing interest in storage solutions to provide flexibility to other energy sectors. In addition, this leads to a decrease in the research about fuel inputs in general and a stronger focus on how to integrate the renewable sources into district heating systems.
As a second major theme, the concept of 4GDH leads to research on the increased use and integration of decentralized heat sources into district heating networks. In this context, the main focus for district heating may no longer be on the heat production in central supply plants but rather on the distribution of heat between different producers and consumers. This is of course driven by lower network temperatures, which also require the demand side to operate on lower input temperatures. For this, the paper notes that a transition of many heat consumers to lower temperatures seems feasible, either by optimizing their building systems for lower temperatures or by raising the temperature level with booster boilers or heat pumps.
And finally, while the authors emphasize that they are not taking a position in the discussion of 4GDH vs. 5GDH and whether these are different concepts at all ultra-low temperature networks, often published with a 5GDH label, are identified as the third major theme of innovation. In their analysis, the authors find that with these networks, local energy storage is an important field of innovation to minimize the electric consumption of heat pumps and to avoid demand peaks. Furthermore, the paper finds that such networks call for new system boundaries, the management of more active components (e.g. the heat pumps and storages), and offer the potential for bidirectional operation for heating and cooling, which can all lead to more radical innovation.
And in a general sense, the authors raise the point that current district heating research focuses most on "what must be done and why" instead of "how to do it and by whom". This last change in perspective is deemed as an important point to bring more innovation into practice. Of course, this paper focuses exclusively on the research sphere for district heating. At the same time, we see many innovations mentioned in the paper already being applied to practice by district heating operators and not least in our projects at heatbeat. But we fundamentally agree that strengthening the perspective about actors and roles in driving innovation also in the research landscape can be an important catalyst for innovation and positive change in the district heating sector.
The paper is freely available at https://doi.org/10.1016/j.segy.2021.100003 and we recommend reading the whole article for more detailed information about the innovation in district heating. In conclusion, the paper we presented also stresses that the district heating industry has adapted to changing requirements for more than a century and thus is no stranger to innovation and adapting to always changing requirements. For the trends identified, we see some parallels and also interesting additions to what we learned from our own analysis of the district heating research trends which we brought you in one of our previous newsletter issues for 2021. In one of our future issues, we will pick up that topic again to bring you an updated version of District Heating Research Trends for 2022.
Meanwhile, our next issue will be published on March 02, 2022.
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