Dear Reader,

For the 48th issue of our heatbeat Research Newsletter, we take a deeper look into waste heat integration into district heating networks. Therefore, we present two recent research papers in the field.

The first one, "Waste heat from the London Underground: an investigation of the potential benefits of integrating heating and cooling" from Lagoeiro et al., investigates the potential of waste heat recovery from the London Underground and the integration into an existing district heating network. The second paper, "Waste-heat recovery utilisation for district heating systems under diverse pricing schemes: A bi-level modelling approach" from Monsalves et. al. investigates different pricing models for waste heat integration from data centers into district heating networks.

Waste heat usage of London Underground

The first research paper explores the potential of utilizing waste heat from the London Underground (LU) as a sustainable energy source, specifically through the Bunhill Waste Heat Recovery (WHR) system. The Bunhill WHR project recovers waste heat from a LU ventilation shaft and integrates it into a district heating (DH) network to supply low-carbon thermal energy to surrounding buildings. Additionally, the system can cool the LU tunnels during operation, reducing temperatures in the network.

Key findings demonstrate that the WHR system can meet about 51% of the heat demand for the DH network while also reducing LU tunnel temperatures by up to 7.2°C, improving passenger comfort. The system's efficiency is highest when it operates in "extract mode," using waste heat from LU tunnels, but it also achieves high overall performance when it supplies both heating and cooling in "supply mode."

The potential for replicating this system outside London is strong, especially in other dense urban areas with underground rail networks. It highlights the versatility WHR offers for decarbonizing heating and cooling in cities globally, where similar infrastructures exist. However, local policy support and alignment between stakeholders (e.g., rail operators and heat network providers) will be crucial for implementation.

Impact of waste heat pricing models

The second paper "Waste-heat recovery utilization for district heating systems under diverse pricing schemes" focuses on how different pricing strategies for waste heat recovery (WHR) impact its economic and environmental outcomes, especially in district heating (DH) systems. The analysis uses a bilevel optimization model that simulates the interaction between a DH utility and a waste heat source, in this case, a data center (DC). The DH utility strategically sets waste-heat prices, which influences the DC’s operational decisions.

Four pricing schemes are evaluated:

1. Marginal cost pricing (S1): This assumes no strategic pricing, and the waste heat is priced at the marginal operational cost of the heat pump. WHR utilization is steady, with about 70-73% of the available waste heat recovered. The DH utility benefits the most, capturing most of the cost savings.
2. Discretionary hourly pricing (S2): The DH utility freely adjusts prices to maximize its benefits. It strategically lowers prices close to the DC's cooling substitution cost, ensuring waste heat utilization remains high (similar to S1), while shifting most of the economic gains to the DH utility. The DH captures nearly all savings, while the DC's financial outcome remains unchanged.
3. Uniform annual pricing (S3): Waste heat is priced uniformly throughout the year. This approach shifts WHR to periods when electricity costs are lower, particularly in summer. The uniform pricing increases WHR in smaller DCs (+12%) but reduces it for larger DCs (-5%). Economically, S3 leads to a more balanced distribution of savings, with the DC retaining a greater share (up to 72% cost reduction for the large DC). However, the overall system-wide savings are lower compared to S1 and S2 due to reduced flexibility.
4. Electricity-cost indexed pricing (S4): Prices are linked to daily electricity costs. For smaller DCs, this encourages consistent WHR throughout the year (up to 95% utilization). For larger DCs, this approach results in reduced WHR (24% utilization), as the DH utility lowers waste heat prices when electricity prices are high to prevent revenue losses from cogeneration. S4 is beneficial for balancing the DH’s electricity revenues but reduces overall WHR potential.

The study shows a trade-off between cost savings and carbon emissions depending on the pricing scheme. Granular pricing schemes like S1 and S2 maximize economic efficiency for the DH utility but offer limited carbon reductions. Conversely, less granular schemes like S3 and S4 displace more carbon-intensive generation, offering better environmental outcomes but fewer cost savings.

The results highlight the importance of aligning pricing strategies with operational goals, especially when optimizing between cost-effectiveness and emissions reduction. Additionally, uniform pricing schemes offer a more balanced benefit distribution between the DC and DH utility, while discretionary and indexed pricing heavily favor the DH operator.

More Information

As always, we recommend reading the articles in full. The first article investigates an uncommon waste heat source and evaluates the efficiency for the integration into existing DH networks. Whereas the second article shows that waste heat usage is an important heat source for DH networks where the efficiency is dependent on the pricing scheme.

The next issue of our newsletter will be published on November 6, 2024.