Power-to-heat - How can it decarbonise district heating?

Hello and welcome to today's Power to Heat event, how can

district

heat

ing be

decarbonise

d? Welcome to everyone here in the room and those joining us online. My name is Dave Keting. I am a journalist based here in Brussels and I come to you live. From its active studios in the heart of the EU quarter, today we are going to talk about Pathways to

decarbonise

the EU

heat

ing and cooling sector, which represents a really large part of the EU emissions, in fact this sector represents almost half. of the EU's total gross energy consumption according to Eurostat and almost all of it is made up of

heating

demands, with 60% for space and water

heating

and a third for industrial heat demands now, despite the importance of doing so, the Efforts to decarbonize this sector have proven difficult.

The main EU energy savings target of 20% by 2020 was not met and today renewables again provide only 24.8% of final energy consumption in the heating and cooling sector. refrigeration according to Eurostat, so in this panel we are going to talk about one. specific technology that is very promising for decarbonizing this sector and that is

district

heating which uses energy to heat technology. Current district heating systems across Europe are mostly legacy systems that run primarily on fossil fuels. Typically, it is excess heat energy from

power

plants or industrial plants that is then pumped into the surrounding area to heat homes and businesses in the surrounding area;

However, there is great potential to use these distribution systems with new energy sources and some stakeholders argue that Heat Technologies energy could be a good solution because they use renewable energy for heating. By converting electricity into heat energy, thermal technologies have the potential to help increase the share of renewable energy in the district heating sector and energy for heating could be particularly important in large heating systems which, due to their high heat demand and lack of local energy. Renewable energies are the most difficult to decarbonize. So what is the real potential of energy-to-warm technology? That's what we're going to hear today from the experts.

To begin, I would like to welcome Marius Melac, Chairman of the Board of Directors. the Polish Association of Combined Heat and Power Plants and Vice President of the Board of Directors of PGE energia CA Mr. Mishel I give you the floor good afternoon ladies and gentlemen Garing here in Brussels and our virtual assistance and Welcome to our conference

power

to heat how can decarbonize distribution Heating in the EC communication in the climate of 2040 T Target the electrification of the CEC together with the full decarbonization of the energy sector as the main driver of the energy transition District heating perhaps a small collar on the EC communication mentioned above is an important pillar of the energy system in Europe we have more than 177,000 district heating systems that cover around 133% of final energy consumption and only 43% of them use waste and renewable heat.

If we look at the energy sector, the production of electrical electricity can be relatively decarbonized. However, it is quickly becoming much more difficult to decarbonise district heating, while the share of energy from renewable sources, mainly wind and solar, is increasing in the electricity system. District heating systems still run mainly on fossil fuels. In my opinion, this must change in the coming decades. and energy for heating shows how renewable energy can also be used for heating, therefore the decarbonization of distributed heating with a p-criterion for an efficient district heating system will be an important element in achieving climate goals and for many EU countries this will be a challenge both for the coming years and for the coming decades, the key question will be how to decarbonize our district heating system effectively from the coast, but also in a way that adapts to local conditions and needs .

PGAA is the largest heat supplier in Poland. We supply district heat to more than 2 million users as a member of the board of directors. I would like to share with you a good experience about the latest investment involved in implementing a large-scale heating energy project in the GSK city in northern Poland. It consists of two electrode boilers of 35 megawatts each and can convert electricity green in heat only in 12 uh 2023 uh the two boilers supplied clean heat to the district heating system for 450 hours, resulting in 3200 tonnes of CO2 emissions avoided, which is the equivalent of the emissions capture of rly 800 ears of forest by 2030 PGE aims to build almost a gaw in energy for Heat Technologies com comprising both electrode boiler installations and heat pumps.

The advantage of these boilers is that they enable the decarbonisation of district heating and contribute to the deployment of Rees to achieve the required proportions of renewable heat to meet the criteria for efficient district heating systems. Furthermore, electrode boilers operating with a heat storage system can use the surplus renewable electricity present in the power system to produce green heat and supply it to the district heating network at the time of demand, in addition, in Europe we are also increasingly experimenting with the use of renewable electricity to achieve climate neutrality. Europe needs 3,760 terawatt hours of clean electricity to supply more than 50% of the European population. economy we cannot afford to lose even a single megaw hour of clean energy here again electrode boilers can be a way to reduce cement and increase the potential for clean energy use in conclusion I would like to further emphasize that achieve climate neutrality and the criteria are met For an efficient electrical energy system in the district, it will be necessary to use all possible technologies and energy for heating is one of the solutions.

It will also be important to ensure that the electricity used in the heating energy solution comes from renewable sources. A flexible approach will be taken here. It is advisable that both the ppis and the guarantee of origin are a good solution to confirm the renewable nature of the electricity used to produce heat. I hope this experience is a good start to our discussion on the potential of energy to heat in the decarbonization of distributed heating. Thank you and me. I wish you a fruitful discussion. Thank you very much, Mr. Melac, so now we will move on to the panel discussion.

Let me tell you a little about our panelists and you can come up to the stage and take your seats. Now, so we have with us here today Matthew bayu, who is the policy officer in the renewable energy unit uh for the Department of Energy of the European Commission, we have a uh a b, who is director general of the Euro Industry Association heat and power. We have dorota yosa, who is director of pte the Polish Association of Combined Heat and Power Plants and joining us online, we have Dr. Andre, who is program manager at the International Energy Agency's technology collaboration program on district heating and cooling.

Welcome to all of you and to Andre who joins us remotely now, you and the audience. You'll be able to ask your questions to the panelist using solido, so whether you're watching online or you're here in the room, you can scan that QR code and the slider will appear on your phone write your questions to the panelist there, they'll go up here to my tablet and I'll do them to the panelists at the end of the panel, so Matthew, let's start with you, so, as I mentioned, this is an area with There is a lot of potential for decarbonization and, in terms of the political framework of the EU, there are a lot of different policy areas or actually laws that affect it.

What is the policy framework in the EU dealing with heating and cooling? Thanks Dave. It's a pretty broad question, so I'll try to give the general picture. Electrification itself is a key element of what we call energy system integration, which is the planning and anticipation of the optimal and most profitable paths. towards our decarbonisation by 2050 and over the past year and we are still finalizing an extensive renewal of the entire EU energy and climate framework that is guided by this vision of energy system integration and, if necessary, to describe let's say I will move from supply to demand to show you a little bit what it encompasses because there are many elements that are directly relevant to today's discussion, so of course now there are new rules to accelerate the deployment of renewable electricity, which is, of course , the first prerequisite.

We see the share of electricity in overall energy use in the EU rising sharply from around 23% today to around half of all energy used in the EU in 2050. With new laws and reforms of EU laws EU on renewable energy, for example, we help Member States speed up permits to accelerate administrative procedures. In this is the infrastructure dimension, which starts with good planning at the national level, but also at the local level, which is really a challenge and also integrated planning because, in the past, electric gas heating systems often They were planned independently, so we have introduced many rules to make sure that there is an integrated vision in that planning than at the local level.

Level municipalities can also make their heating and cooling plans. There is coordination between electricity operators and district heating and cooling systems to ensure that the system services they can provide are actually taken into account across that whole. planning and then, of course, beyond the physical dimension, there is the digitalization of that infrastructure, we need an intelligent infrastructure, we need to be able to have the data on the real-time content of that electricity, on the storage capacities and on the relationships with other end uses, so massive investments are required for that, the commission launched an action plan on networks specifically to try to address that bottleneck, then there is the whole dimension of markets and business models, how does it develop? markets that are conducive to this development of renewable electricity and its uptake by the market that reward the flexibility that uh systems that district heating and cooling that thermal storage can also provide to the electricity system um how do systems like power agreements develop? power purchasing that have been successful in driving large projects on the electricity side, how can it be expanded to other systems, heating systems and energy in general?

How can electricity be made competitive with gas in the heating sector? That is something that is very much dependent on taxation, where we as EUR, as a commission, have much less say that it is a matter of unanimity, but we are also working with the member states and then there is an ongoing reform of the directive on energy taxes to try to influence. that and then we get to the appliances themselves to the end uses where we again have elements of implementation but also manufacturing to stimulate the development of efficient appliance heat pumps in general. We also work with the industry on interoperability, which is essential again in the data dimension.

If you want to be able to pilot those demands and deliver those flexibility benefits, you need to have devices that can communicate. And of course it's a question of competitiveness, so there are many blocks there and we are now working with the member states to make sure that they are actually used and that the legislation is implemented in a useful way because the pressure of time is. very high, the timing is right to meet our renewable energy targets for 2030 and of course we are already looking towards 2040, the communication on 2040 was just the beginning of a conversation with which we have the European elections, we cannot know that. the next commission will be, but we already have solid elements for 2030 and we are trying to think about what the options could be for 2040, yes, as you say, 2030 is just around the corner, and particularly with this area, as you mentioned.

There are a lot of different blocks, uh, as part of the policy puzzle here. Ori, we're going to turn to you next, so when it comes to you and your members, when you look at these district heating technologies, how does energy compare to heat? other possible technologies that can be used in heatingurban. Well, I think that's strong. I'll start by thanking you for inviting us here and also for being able to have this important conversation, because it would also challenge you a little bit. what you said at the beginning that despite the efforts we made, it had been difficult to decarbonize heating and cooling.

I would like to know what kind of real efforts we have made in Europe because, when I compare it, you know the push that kind of incentives and regulatory instruments that we have supported, let's say, the deployment of renewable electricity sources or infrastructure. I certainly don't find an equivalent kind of political will and commitment to achieve similar results in heating and cooling, so I think it was a really high time to have this conversation and, in fact, the deployment of renewable electricity sources has now also opened up new opportunities to decarbonize district heating and cooling and to decarbonize heating and cooling in general because that's really what's at stake and the benefits. are really multiple of course, the most obvious one that Matthew alluded to is this energy system integration and it's true, it's important to say that energy system integration is not just electrification, it's actually increasingly a question of what Maybe what do we do with all this electricity and how can we convert it into something else and here also the nuance in the terms uh is absolutely essential.

And we already had in the district heating sector some good tools and technologies that allowed this balance of the electrical system, so that cogeneration units were already actively supporting the electricity system in many countries. E boilers are not a new technology. We already have some systems developed, it was mentioned in Poland, but also very close in the Netherlands, where there is a 150 megawatt boiler operated by Vattenfall and, for example, it is very interesting to see what it does: it basically activates when there is excess. solar and wind energy production, and when it does, the ccgt unit is reduced, so it is direct gas, savings for the heating system in Amsterdam and direct fossilization of the buildings, of course, this aspect of the flexibilization now with Large industrial heat pumps are still very relevant and with large industrial heat pumps we have, in some cases, a much higher police and coefficient of performance, so all this really adds, let's say, a dimension to our portfolio. of flexibility technologies that it has I think it has still been overlooked by policy makers and that is what we have seen, for example, in the discussion on the EU repowering or the market design review, where part of the storage was almost non-existent and the role also of some technologies was overlooked, but it's not just about flexibility and that's kind of the beauty of power to heat.

I feel that, especially if we look at large industrial heat pumps, it's about unlocking new heat sources and with them we can not only play with the interface with the electrical system but we can create new sources or use sources that we couldn't use before certain types of geoo energy that had lower temperature uh excess heat from uh tertiary residential and industrial buildings and the excess heat has recently been cited in a study as the largest untapped energy source in Europe, so it is not a minor element What we are talking about, is really the opportunity to give a boost to the European heating and cooling decarbonization strategy and actively defend the fossilization of heating because the resources that we could take advantage of.

In particular, with large heat pumps that exceed 2,000 terawatt hours per year, it's more than the total European heat demand forecast for 2050, so I'm not saying we should use it all, but if we just look at the potential. The business case is clearly here, and yes, for us, it is a very promising part of our technology spectrum and we are definitely willing to introduce a lot more, yes, and we will return to some of these policy tools. in the discussion, dorota, let's talk, let's now approach the situation in Poland, so we heard in the opening comments about the district heating situation in Poland, what would be the transformation of the district heating system in Poland using this technology, so that thank you for this question and I think Poland is a good example for district heating, the carbonization process, how difficult it can be because, in Poland, we have more than 52 inhabitants, they have heat from the district heating system.

It is more than half of our society and all the regulations and all the requirements interfere very strongly in the society and in general in the prices of heating, which is important in our case in Poland, many people have heat from the heating system. district heating, we have many large cities with large and the largest district heating systems and we have a high density of inhabitants, which results in the carbonization process being extremely difficult in my opinion and what is important in the case of the carbonization process decarbonization and creating the legal environment for this process, any additional limits on regulation have the potential to create a problem. with this process and increase heating prices and what is also important in the case of Poland and analyze the complete package of regulation results from the package suitable for 55 we have a short list Short spectrum of Technologies that we can use within the process of carbonization and taking into account our local conditions, the climatic conditions as well, we have C generation based especially on gas, because taking into account the eight public regulations eight regulations uh it is difficult and it is not uh economically efficient to build the uh dinner based on biomass uh we also have the conventional biomass convention uh Heaton boilers uh we also have uh waste heat uh uh geothermal but It largely depends on the local availability of sufficient geothermal source.

We also have energy technologies for heating, which are very important from our point of view and from a realization perspective. the carbonization process in the most optimized way for both district heating market participants and end customers because they expect interference in the decarbonization process to be as slow as possible at this time. maybe I'll finish my speech, yeah, so we've been hearing about the situation in Poland, we've been talking about the situation in Europe, let's turn to Andre, uh, join us online for a little bit of the global perspective here, so Andre , we've talked about some of the hurdles that have been put in place to introduce this, what issues would you say need to be addressed to achieve the full decarbonisation potential through energy for heating technology and district heating?

Yes, thank you for inviting me, thank you for the interesting Spees before me. I think the main issue will be where to get all the green electricity to heat this energy, which really means additional green electricity. We must not forget that globally we are trying to electrify a large number of sectors such as the mobility of industrial production and, obviously, we need to decarbonize the existing electricity demand and if we now add energy to the demand for heat to the electrical grid, it will be everything a challenge to ensure that green energy is actually built on top of existing green energy. energy that is already online or being planned, so there needs to be something in place to ensure this actually happens to achieve the full potential of the technology.

The second is essentially efficiency. While we are talking about boilers, they are very flexible and I. I think they are a good solution as peak load providers, however they are quite inefficient so electricity is a very high value energy as heat has a fairly low value and space heating has a very high value. low, so very high quality efficiency power is used to supply very low quality power. The demand is not efficient even if we use additional green electricity, this could be a problem because everything, I want to give an example. Imagine that you are using wind energy to heat something if you are using an electric boiler instead of, for example, a large heat pump in a district heating network uses about three times as much electricity, which means that two more windmills are essentially blocked or electric boilers waste their energy, so in the end if we want to achieve total decarbonization. potential, we must ensure that efficient technologies also prevail, which means lowering temperatures for district heating, which means using heat pumps wherever possible.

They can also be quite flexible nowadays and only use these large boilers when there is peak demand and nothing else is really working. because green electricity becomes a scarce resource if everyone wants it and if it runs out, those who fill the gap are obviously fossil fuels, in addition, obviously AP, apart from the supply problem, we have demand management, like this that there is no way to stabilize the electrical grid. both storage on the power grid District heating and cooling can provide a storage option by transforming electricity into heat at times of excess electricity or high electricity production and storing it for times when electricity production is quite low from from green sources, which can help a lot. but it is also necessary to upgrade the electrical networks and here I think it is necessary to find a way to make the network upgrade as effective as possible so that all the roads do not need to be dug up and I think also district heating cooling. can play an important role by having centralized generators instead of decentralized generators that would need an upgrade of the entire electrical grid across the country in Canada.

They have calculated the costs of turning to decentralized heat pumps compared to, for example, heat pumps in um. The level of district heating is much higher for network expansion, so I think there is also something that needs to be done. To summarize, there are still many outstanding issues. This is not a complete list of what I just said. We also need updated legal information. Marcos, etc., etc., as well as Le He said that we need a harmonized approach to really achieve the full potential that is examined, tested, efficient and ensures that the electricity that goes into these systems really thanks, yes, that makes sense .

Well, Matthew, let me put forward some of the points that have been raised. I mean, you mentioned that we have a new commission coming in, so in terms of the 20 240 goal in terms of the next steps for the legislation, we have to wait and see what the new, what the new College will bring, but hearing some of the things that have been set out in terms of some of the obstacles, how could the Commission's policy decisions in the next mandate help to address some of the things that we have? I just found out so if I start from the last one and Andre's comment, I completely agree on the issue of shortages in general and the pressure on the electrical system as a whole um and I think.

The concept that we described in the energy system integration strategy was a kind of pyramid in which first the potential for energy efficiency, energy savings and also the direct use of renewable energy for heating, geothermal energy B, ambient energy, Thermal solar energy. energy, then the next block is the electrification of end uses, but there will be a lot of demand from other sectors, also transportation, and the last part for the sectors that cannot be easily electrified, maintaining that image integrated into and guaranteeing a level even more advanced integration and ensure that this is fully integrated into national strategies and local planning.

We have elements in place now, but it is a complete change in the way the policy is implemented. It is being done at the national level and we have to do it. I mean, it's a little boring part of what the commission can do. Not necessarily introducing flashy new legislation, but making sure that we also help local administrations understand this. We now have a requirement for the largest thousand municipalities in the EU to have integrated plans. Heating and cooling plans. How is that done in practice? So we really need to do what we don't necessarily know much about. especially in heating and cooling, so far go to the actual people in charge of planning this and making sure that this integrated approach is there at the most local level because it really is about optimizing resources that will be scary and that is the condition to be able to evaluate whether one technology or another makes sense and that will also depend on the specific context, as explained very well in the case of Poland, so I would say that theImplementation really needs to get down to the local level and help those who have to implement that on the ground or would you agree that we don't necessarily need flashy new legislation, but we need better implementation of what exists?

Mat already knows not, but maybe if I can back up a little bit. Regarding what was said before, I think it's getting a little confusing. We keep talking about the shortage of green electricity and I really wonder if that is really the problem because yesterday we were at this event organized by the commissioner on EU repowering. and what the electricity sector did not say was that at all the solar and wind sector was saying please Electrify they want an electrification roadmap they keep talking about electrification it does not seem that they are afraid of being able to provide a Many situations in which the networks are under pressure, even, as far as I know, in Poland, it is not about too much demand, but about putting those capacities on the grid and connecting those solar and wind capacities to the grid instead of being able to meet a demand that is not there, so I think, on the contrary, maybe I don't know exactly where the problem is, but the pressure today does not come, at least, from a booming demand for electricity;

The pressure comes from the fact that we are not able to create this demand and that is exactly what energy for heating can be and EAS is the ability to absorb this electricity that today would be reduced and yesterday, the executive director of the networks initiative renewables, said clearly if we are not able to create more demand for renewable energy. electricity we will not install more capacities because what they see is the lack of demand, so at some point the idea arose that hydrogen would be the great absorber of all that, in some cases it will be there.

There aren't that many projects going on, but the initial power to heat up is there, so I think for us it's really a big potential. I totally agree with what Andre said. The further we get into this, the more efficient technologies we must promote, so also when it comes to the district heating and cooling industry when we see our future for 2030 2050It will increasingly lean towards large industrial heat pumps that clearly have higher efficiency, but yes, I think lack of demand, or scarcity, is not the obstacle that I see, and I see more power for heating as an enabler in some cases, of course, it has to be smart, it has to be dynamic, we have to activate the heat pumps, preferably when electricity prices are low and when production is excessive, but the good thing about this is that usually that is What happens?

You're not going to turn on your heat pump when market prices for electricity are skyrocketing, so there's a kind of virtuous system here and that's why also with heating and cooling we need to have this perspective of the system which is very important because the energy to heat. It's not just about saying hey, look, they're green, we're going to say we're going to use that to make us look green, we're going to be green if we use this electricity, but in addition to that, if we co-develop with the deployment of heating infrastructure urban we are going to provide new storage infrastructure.

We are going to relieve the demand for electricity in many places because the development of urban heating also allows the use of direct heat resources such as solar thermal energy, geothermal energy, and sustainable bioenergy, such as biomethane. It is also about deploying a variety of energy and not just electrical infrastructure that allows us to diversify the heating and cooling mix, so from my point of view all of that is not yet fully reflected. The energy system integration strategy was a very good piece, but it was totally achieved. Lost in Translation uh I don't know, the first chapter was the US district fueled by the circular economy, the integration of excess seats, the second chapter was green electrification, the third chapter was hydrogen, chapter 2 and three received great attention.

The first one, one, was totally forgotten and I think the best proof of this is that in the 2040 strategy we got even though the largest sectors that are not yet decarbonized are building an industry where heating and cooling represent the largest part of the demand and CO2 emissions are hardly mentioned. of Heating and Cooling in this strategy, what is the best evidence you want to understand that the political focus is not there and therefore we definitely want to have a more solid framework? We need to take advantage of what exists, but we need a more ambitious and better ambition. tools uh and this morning I think it's 15 European member states that got together to ask exactly that of the European Commission, so it's quite intriguing to see that despite what a lot of people call regulatory fatigue F, uh 15 member states and not small.

Actually, they are asking for more. Good point Andre, I just want to ask you a question: do you agree that it is not necessarily a question of scarcity but rather a lack of demand? That was a very interesting point. I think both things. are true, in terms that we do not have a shortage yet, but when I look at the plans, then the shortage is there, so we must not forget that Europe is not decarbonized, its electricity sector, so everything we have in terms of excess of green energy is due to the current grids and their management, so we could use all the electricity just for the existing electrical demands, but currently the electrical grid and storage capacities are not there to do it, so we need other solutions, for example, electric boilers. use that electricity so that we don't waste it, so I totally agree that if the solar and wind producers say we can build more, we need more demand, these electric boilers as a stopgap solution are a good solution and will probably be quite cheap, I think. everyone has this small electric kettle for their cup of tea at home, it is essentially a similar technology, but in the long run they should not play too big a role and we should keep in mind that we will encounter this shortage situation in the future and The current shortage is only due to network and storage restrictions.

Well, on that topic D, when people think about electrification of heating, the first thing they probably think of is heat pumps, right? And heat pumps have already come up in this discussion. to lead us to the electrification of heating, so Andre also talked about the electric boiler, so we see the different rules both for large-scale heat pumps and of course, for example, the hybrid installation in buildings which means . heat pumps and photovoltaic volts and district heating that is provided to the building and large scale heat pumps, as I said, but in general, heat pumps we see the role of heat pumps at the base of the system, so In general, heat pumps work all the time and, in the other sense, we see the very important role of electric boilers, because electric boilers, in cooperation with heat accumulators, for example, are a very good way to balance the national power grid system and, for example, in the last two months, due to the essential reduction of electricity production in the Polish power grid, we lost almost 300 G hours of renewable electricity and electric power.

Boilers are the best solution to balance the national electricity grid and we see the role of electric boilers in the district heating system as a capacity reserve, but what is important for us as producers. District heating system operators, we need to reach the next milestones of the efficient district heating system criterion and, in my opinion, we cannot lose every megawatt hour of renewable electricity and what is important from this point of view. Therefore, it means to achieve the state of efficient district heating system, is that it is necessary to make green electricity heat, renewable electricity from the national power grid, because we need to achieve the required level of renewable heat, waste. heat and uh High Efficiency C Generation uh heat and that's the point and if I can ask, say a little more on the issue of possible amendments in the regulations surrounding uh From the perspective of the timeline uh of the decarbonization process uh From the perspective of the uh uh investment process uh processes uh uh that last uh uh uh the surrounding regulation is necessary to be stable because we have a very difficult but very clear path towards climate neutrality in 2050 so it's it's it's our comment on the question of stabilization of regulation in the well matu D mentioned large heat pumps in terms of large heat pumps, what do you think they need in terms of a legal framework and possible subsidies for them to really maximize their performance? contribution to decarbonisation, such large heat pumps now have simplified rules for permitting under the new renewable energy directive, meaning they can now be deployed much more quickly than we see and understand also from the industry that our Key bottlenecks are the fact that it is still a limited market and for one industry and one user, say an energy consumer, there is a lack of standard plug-in play solutions, so that is one of the TOS Avenues we could use for typical use cases, support the development of standard solutions and business models, the other, the other question is always the cost of electricity, that is, what increases overall.

What we are trying to do from a regulatory point of view is also to help member states reward the flexibility that large heat pumps combined with thermal storage could provide to the energy system by shifting electricity demand to times when there is electricity. What's more, is it cheaper or renewable electricity is more abundant, etc., some of the needs again for that are the electrical grid, and yes, again on the topic of scarcity, it is less about the scarcity of electricity in yes, but of capacity. a bottleneck around the supply of electricity, where it is, when it occurs and, uh, and how we can manage the variation, and that is both an issue for supply and demand, as well as the capabilities of piloting that demand to aggregate the demand at the level of a district heating system of a city or a country, well, we have received tons of questions from the audience, so thank you for them.

I'm going to answer them now, since we've had so many, um, first questions. I'm going to ask you right from the start that this is an interesting question because I think we've talked a lot about Legacy dist district heating systems and the energy sources for them, but Derek Custers asks what his advice would be on developing new ones. Future-proof district heating networks, given all the different technologies we just talked about, how do you design the network to make sure it can connect to whatever ends up being what we use? I think the good thing is that it is already happening that many of the new district heating and cooling systems already have a very high proportion of renewable or climate neutral sources and usually the problem will always be in the end in the backup, as in the case of the electricity system, but the best way for me, especially for cities, is to just start with those heating and cooling plants.

It's a wonderful tool that we have on the Fit 455 with the Eed. I think we should give it some teeth because it is beautiful to tell. all those cities to make those plans, but we will need to give them the means and the proper financing and the regulatory instruments to implement the plants, um, so identify in each city where the resources are, can we put in some solar thermal production, um, Uh, can we do? We have some geothermal energy here, we have an industry or a building like a hospital or a supermarket that generates heat that we could recover and the network, the district heating and cooling network, has to be developed based on exactly that and that is usually how they operate our companies, start with the plan they model, identify the various resources and, based on the optimal distribution of resources and the characteristics of the building, that is also very important, they digitally design a network that is then built to meet the purposes and Of course, as Andre said, there is also a much lower temperature and in those networks, heat pumps, large industrial heat pumps, in particular, are playing an increasing role, although we have this beautiful complementarity of technologies , I think whatever the district heating network is, um and for the new GS.

An issue that will be similar for new or existing buildings is how the building is unlocked because if we can't eject the gas boilers it won't happen, neither for individual heating bmps, nor for district heating, and for your heating and en power, we are really trying to work or plot thecontours of what we call a citizen agreement because we feel that today the bottom neck is the building and we also need to understand the citizens and the financial obstacles they may face. complexity the administrative jungle I think that the deep renewal rate today in Europe is 0.2% per year, it is nothing compared to the objectives.

Most of our buildings today will be here in 2050, so we really need something to get them. Renovations are not a landlord's problem, but I found out that over 70% of Europeans own their house 70, so they are actually in possession of their building, but something is stopping them from renovating, we think it's the weight of the extra cost we live in a bubble for most people 7K is actually a big demand not just vulnerable uh consumers we think it's the complexity of the bonus schemes the administration we think it's a hustle and they just don't want to leave the point from the point of view that because heating is not a positional good, you can show off outside with your electric vehicle, you're not going to show off your heating system, you just want to be warm and comfortable and you want it to be affordable, so we need to have Appropriate. strategies implemented to unlock the consumer that those beautiful District hits can uh power the buildings, okay, dorot, I'm going to ask you the next question, it's about flexibility, so the question is from Evan Bernardy.

There has been a lot of talk about District heating flexibility in To safeguard stability of supply, but also as a way towards decarbonisation, what types of heat sources do you think will be critical to providing this flexibility and stability? So which of these sources we've been talking about best contributes to that? In the case of flexibility, as I said before, we see it because we have a group of sources whose characteristic work characteristic is stable and they work on the basis of the district batting system and, of course, it differs. between district heating systems of different sizes and, in general, we see the capacity reserve rule for electric boilers and what is important in this case.

The capital expenditure for electric boilers is for really low, it is, for example, of course, it is a different type of work and it is difficult to compare electric boilers and heat pumps on a large scale, but electric boilers are between six and seven times cheaper than uh lar SK heat pumps and this results in heat prices in the overall costs of the uh transition process and uh consequently, heat prices for end customers uh will be lower than, for example, using the different heat sources uh uh for For example, gas heating only boilers, which can also offer flexibility for the district heating system, but in my opinion it is better to build and boost the district heating system, but with boilers electric, powered by uh.Renewable electricity than Heaton gas boilers.

Well, you mentioned final prices for consumers, which is the topic of the next question I'll ask Andre, so this question is from daa, how do different types of technology options translate into the final price of heat? Looking at both capital expenditure and operational expenditure, which clean heating source is the most cost-effective for district heating and individual homes, yes, well, if I knew it would probably be in much higher demand, I think it's not a simple question, The main thing I think is that it is necessary to understand from a scientific perspective that prices are largely determined politically, so if we look at energy prices, production prices are, for example, coal prices or even coal prices. wind energy, coal costs three euro cents per kilowatt hour. and I think solar and wind are under seven cents per kilowatt hour and we're paying for heat easily over 10um now when it's based on CHP and gas boilers and it's likely to go up by For electricity, we pay 50 cents per kilowatt. hour, so there is a large gap between production costs and the costs paid by the consumer.

I think it is necessary to find a smart combination of technologies by planning heat for each situation, so each city has a different climate, each city has different heat sources. available in terms of excess heat, geothermal heat potential for solar thermal and depending on the circumstances, some technologies become cheaper, others become more expensive because yes, the circumstances essentially dictate the surrounding work, so I would say that There is no clear answer, the only thing we can already say, for example, is that indirect electrification using hydrogen boilers will probably be the most expensive solution of all, and then we have to see how, essentially, people, district heating operators , they mix up their sources and what they build to provide cheap energy.

I also think an important point is that individual systems will lack the flexibility that district heating can provide, so if you buy an individual heat pump now you will be able to use the electricity from that heat pump whenever you need it heavily . In heating networks, you can have a lot of storage and, for example, you can use cheap electricity from maybe half a day ago to generate heat and create lower prices, even when network losses and costs are considered, so That, in short, there is no easy answer. but I'm pretty sure that district heating operators will try to provide the cheapest climate neutral heating possible because that's also in their best interest to ensure customer satisfaction and grow their business well, there's certainly some uncertainty there and I think we've heard some uncertainty when it comes to these various technologies, which brings me to my next question from Derek Kusters Matthew, this is for you.

I think this refers to the Green Complaints Directive, which I don't think is your department, but let's see if you can respond to this. So the question is: what is the outlook on legislation regarding carbon emission reduction claims that waste heat suppliers could make? Is this something you are thinking about? I have no idea about the next question, well do you have any ideas? about how ecological claims would actually be quantified about one thing I know is that we are not doing enough in this regard and that when we talk to municipalities it is often a question that they ask us, they are a little bit hesitant. when it comes to recovering waste heat because they don't know to what extent they will be able to value it, they have the Goos, they don't necessarily have similar tools, they don't have similar tools, when it comes to waste heat and I know it's a question for the local authorities.

They have a lot of uncertainty about how they can value it and it is becoming an obstacle for projects. That's certainly fine, so Matthew, I have three questions. for you here, which I think is your department and then yes, we can reverse the green claims okay so I'm going to ask three questions here if you need me to repeat any of them let me know so the first question is from Peter Demian, how? Doesn't the Commission's plan to integrate small modular reactors into its heating policy mean closing the door on nuclear energy by entrusting this work to the unit in charge of renewable energies, so it does not directly address the issue we are talking about? here today, but to another potential? source for powering the district eh, next question is from Samuel Parolan: is the commission planning to recognize the full potential of heat recovered from waste processes to convert it to energy by recognizing it as waste heat according to the two guidance documents issued to help member states to implement renewable energy? directive and the energy efficiency directive and Carlos Emanuel's third question: how can the next EU mandate level the financial playing field for heating and cooling? the epbd focuses heavily on the topic, in the first one, I am afraid it is even less within my topic than in the previous one, nuclear energy has not been integrated into the mandate of the people who work We are talking about renewable energy , so we passively watch what is happening there like most of you and we will see what comes of this, but at the moment, smrs are not at all on our list of things we are doing.

We are looking again from the perspective of energy renewal policy, waste heat to energy and in general waste heat, so there is a definition of waste heat in the renewable energy directive, it is not new, was already there in the old 2018 directive, the complexity comes from the fact that it is a very complicated definition with many cumulative criteria and, when talking about the energy system in general, the terms waste heat, excess heat, are used interchangeably, but here there is a definition in the renewable energy directive, what we are trying to do at the request of Member States and stakeholders who have used that definition to some extent over the last six years is to try to help understand what can be considered waste heat in In the context of the renewable energy directive, its scope is actually limited and contributes in part to certain sub-objectives in heating and cooling, where some of its renewable heat objectives can be achieved through waste heat, that's how it is.

We are working on that, on that definition to try to at least give member states a grid where they can interpret and say, okay, this should be in, this should be out, but it's a commission guide, it's not, uh, only the court can really interpret in a binding way and the next about leveling the financial playing field. Again, our hands are largely tied on that because it's hard to judge what political momentum will emerge. of the upcoming elections we saw throughout the current commission that the interest in heat as a concept really grew, of course, within the whole EU repowering exercise and then came out of its hole a little bit with the dark technical stuff. and all of a sudden, politicians have that on their radar and that's our perception as technical people working on it, so hopefully we can continue to push that and really sell it well to our next critical buses.

I mean politicians at national level or politicians at EU level. I would say yes, so the next question is specifically for Dorota. This question is from Kuba hki. What is your opinion on the role of the climate neutrality plans that will be presented in June this year? District heating sector in Poland, so I see the role of NCP plans rather in case, of course, we are talking about the street heating system, so I would like to say something only about this part of the energy sector. Overall, I think the NCP rather needs to provide the package of tools that are needed to implement in national law to support the decarbonization process rather than, for example, some additional decarbonization pathway for this. system because uh uh this path we see in the Ed directive and uh network so uh for uh for me uh this uh this path and the regulations included in this directive uh are the most important and the role of uh NCP may not be only but the most important function of this document is to provide the tool package.

Well, next question is for Andre. This question comes from Rafal Nowakowski. Do you see the additional potential of combining electric boilers with heat storage to store electricity in the form of heat to support electricity operators when there is an excess of renewable energy sources on the electricity grid yes, thanks for that question. I think the potential is definitely there, however, we have to remember that storage is not like energy storage, yes, but the quality of electricity is not stored in thermal energy when it is transformed into thermal energy, so There is a significant loss in transforming electricity directly into heat, so it should be a transitional technology as long as we don't have enough demand to motivate.

Solar and wind companies need to build as fast as they can, but in the long term I think the excess electricity is better used for the production of hydrogen that we will need for industry, so I think this electricity storage solution has It makes sense with heat pumps because they are a fairly efficient technology that uses renewable electricity. They can also use excess heat. They can also be adjusted quite quickly. Last week we found out that we have in Germany a heat pump that can now ramp up and down in about 15 minutes which isn't that bad, I guess in Scandinavian countries it's even faster so I think so, electric boilers and storage are a temporary solution.

They could also playa role when we really don't have a better solution, but they are not the best solution to store excess green electricity. they were indicating that they would enter, so the next question is for oreli, it is essentially about its members, the question is from R kaste, many power grid operators and district heating companies are natural monopolies, how do you see the real possibilities of increasing collaboration and integration of actions? for the common good between these monopolies, first of all, would you agree with that characterization? and secondly, address the second part of the question, how do you achieve greater cooperation?

Yeah, I mean, there's a lot of different ownership models for food districts, huh. I think it's always a little bit for me to compare district heating with electricity, it's really comparing apples and evens because we are talking, on the one hand, about an infrastructure if we look at electricity, which is national and even pan-European, I mean, and there is this. The whole idea of ​​the copper plate and here the perspective of having an operator only at the scale of a nation and at the scale of each citizen who is generally in a country connected to an electrical infrastructure, I don't think so.

We have any citizen free of electricity in Belgium or in France. That's a different question than when we look at district food systems, which are by nature local and much smaller. I mean, I think it's the largest food system in the district. It's in Bucharest and it has about 1 million people, but that's the largest number in Europe. Most district attack systems will be much smaller and will cover perhaps 500 to 1,000, several thousand in some cities, so it is not at all the same from my point of view, however it is true that in some models you have this integrated nature, in Denmark it is owned by more municipalities in countries like Sweden, it is much more private, you know, it is a mix between public and private, etc., the point is that I think it is in our mutual interest to collaborate more and that is one of the things that I think is also very good in the three reds where it is actually a requirement now for electricity operators and heat network operators to talk to each other and plan better and when it's about us, we want that and we ask for it because we know that even for us better coordinated planning will help us expand or dismantle our networks where necessary and also have this interaction with electricity. system that we also need to increase our flexibility, so I want to say that at least my Association is asking for it a lot, speaking of coordination, that brings us to our last question that I will ask Matthew.

This question is from Miko V vorena. uh, since many tools to enable electrification of district heating are in the hands of member states, is there a plan to collect and publish good practices from member states that have supported electrification? So, there is no specific plan as such, but we are talking to members. states um and we have some structured discussions, one of which will take place next week at a meeting called concerted action on the renewable energy directive where experts from member states come together to discuss the implementation of the renewable energy directive and related issues .

There will be a session dedicated to the electrification of heating and cooling, so we will have that space where we will really organize in a structured way with a kind of community of experts and exchanges on best practices of implementing the legislation. working finishing I mean, we, we commissioned a study assessing the progress made in our energy system integration strategy, which will be published in the coming weeks, which is a snapshot of the progress made in many of these aspects and of course , electrification, district heating and cooling storage will be highly featured in that study and will also compile best practices from Member States.

It is an essential part and is probably the first stage and the first step. that we need um under the next commission to understand what exists in the member states uh whether as a result of the EU framework or because some member states are pioneers and digest that information have a full picture of what is happening on heating and cooling in terms of regulation in terms of finance and see if some things can be replicated naturally by talking to others and which ones might need a boost from the EU, yes, because, as you say, the situation of the member states varies immensely. with district heating and of course some best practices are likely to be replicable and others might not be due to specific circumstances.

It is very interesting to see that some member states that did not have district heating, until now, are really moving towards it and there is interest from Everywhere now yes, sure, well, I want to thank all our panellists for some really interesting points. I know I learned a lot on this panel. So how about a round of applause for our excellent panelists and thanks to everyone who was there? looking at us online and here in the room for some really great questions. uh if you're here in the room, I invite you now to a reception and if you're at home, I wish you a great excellent rest of your day, take care.