This paper addresses the implications on the business model of district heating companies of the technology shift targeting lower temperatures in the distribution network. Lower temperatures are valuable, since heat supply to low-energy buildings with low grid losses is facilitated. In addition, low-temperature heat sources can be integrated into an efficient energy system, improving the environmental performance of the industry. This technology shift opens a window of opportunity to update the business logic in the sector, since the lower temperatures allow a diversification of the value proposed to customers and a closer, long-term customer relationship. The extent to which the business model is impacted by the shift is not known. Thus, six cases of low temperature implementation from five European countries have been identified. Interviews with the project managers of the implementations show that the six cases made limited change to the primary business model when making the technological shift. Consequently, there is an unexplored potential for updating the value proposition and the customer relationship.

Background: The Swedish district heating sector is successfully transitioning to a low-carbon energy system. The industry has expanded since the 1950s and currently meets more than half the Swedish heat demand. The heat market was deregulated in 1996, and thereafter, companies have been exposed to an increasing number of challenges related to technology, institutional factors and market. Since municipal ownership dominates, municipal companies must manage these challenges to ensure future competitiveness. However, theory suggests that business change is difficult when the current model is still working. To date, Swedish district heating companies have revisited their price models and customer perceptions. There is limited knowledge on how the business challenges are managed and on the management strategy’s impact on the business. In this paper, new knowledge is generated regarding how the customer and resource-oriented sides of the municipally owned district heating business in Sweden are changing. Methods: A case study approach was adopted. Data were collected by interviews and by review of the national research programme on district heating (Fjärrsyn). The programme served as a proxy for frontline research on Swedish district heating. The data were analyzed through the business model canvas framework. Results: Changes to meet external pressures are identified on the customer side of the business model, but changes are also spreading to other parts of it. However, the key resource component (distribution networks and production unit) and its logic of economics of scale are unchanged and dominate. The logic is not compatible with shrinking heat demand; nevertheless, it is preferred. Conclusions: It is concluded that external challenges have resulted in changes in the customer side of the business model. However, the largest challenge is the transformation of key resources. Accounting for external challenges extends the life of the current business model, but it is not increasing competitiveness. The prolonged life creates a window of opportunity for the companies to begin the needed transformation of their key resources. If the transformation is successful, district heating will have a role in the future energy system. If the transformation is not undertaken, the future is less certain. © 2018, The Author(s).

The recovery of industrial excess heat for use in district heating systems can be characterised by great political interest, high potential, low utilisation and often high profitability. These characteristics reveal that barriers are present for its greater utilisation. One identified barrier is the risk that industries with excess heat can terminate their activities, resulting in the loss of heat recovery. Excess heat recovery investments are therefore sometimes rejected, despite them being viable investments. The risk of termination of industrial activities has been assessed by a study of 107 excess heat recoveries in Sweden. The analysis verified that terminated industrial activities are one of two major explanations for terminated heat delivery. The other major reason is substitution by another heat supply. These two explanations correspond to approximately 6% of all annual average heat recoveries. The identified risk factors are small annual heat recovery and the use of heat pumps when low-temperature heat was recovered. The main conclusion is that a small proportion of industrial heat recovery has been lost in Sweden because of terminated industrial activities. The risk premium of losing industrial heat recovery for this specific reason should be considered to be lower than often presumed in feasibility studies. © 2018 Elsevier Ltd

In Sweden, district heating meets currently above half of the heat demands in buildings. District heating research in Sweden has a long tradition dating back to 1975. The latest research program period included 34 projects and was executed between 2013 and 2017. In this paper, a synthesis is performed on the Swedish research frontier by assessing these recent research projects. The three study purposes was to provide an overview over the executed projects, to identify new research questions, and to identify future challenges to the Swedish district heating industry. The assessment was based on six defined key areas, such as demand, resources, system frameworks, technology, cold supply, and international perspective. The subsequent content analysis was performed from three perspectives: the perspective of energy system transition, the customer perspective, and the sustainability perspective. Final conclusions include the three future challenges for the Swedish district heating industry. These are future strategies to communicate the value of district heating, vision for district heating beyond the transition to fossil free supply, and technology development for efficient use of low temperature heat sources. © 2018 Elsevier Ltd

Bakgrunden till studien är att nya förutsättningar genom energieffektivisering, konkurrens från värmepumpar och nya krav på kundsidan gör en modernisering av fjärrvärmeverksamhet nödvändig. En del av denna modernisering är att kunna dra nytta av de fördelar som lägre temperaturer i näten medför. Därtill skapas genom den nya tekniken förutsättningar för att ta hand om värmekällor som idag inte utnyttjas (t.ex. värme från kylprocesser och annan infrastruktur såsom värme från avloppsvatten och värme från kollektivtrafik).

Befintlig teknik är beprövad och bygger på att det finns ekonomiska incitament att förbränna biobränsle och avfall. Steget till att pröva en ny teknik där andra värmekällor och en ny gränsdragning gentemot kund blir nödvändig är därför stort och förenat med ett antal frågor. Det är just de frågor som uppkommer i ett fjärrvärmeföretag inför implementering av 4e generationens fjärrvärmeteknik som projektet försöker identifiera. Det blir dock så att enbart en del av frågorna besvaras genom att studien har ett avgränsat fokus. Fokus är på jämförelse mellan ett 3GDHtvårörsystem och ett 4GDH-trerörsystem i ett sekundärnät i ett nybyggnationsområde.

I projektet simuleras hur utfallet blir för olika parametrar om man hade valt att implementera 4e generationens teknik istället för 3e generationens teknik.

Resultaten påvisar att:

• 4e generationens lösning ökar energieffektiviteten i byggnader, detta främst genom att behovet av varmvattencirkulation försvinner.• Beaktas enbart distributionsförluster i näten så är 4e generationen mer effektiv än 3e generationen.• Genom lägenhetsväxlaren i 4e generationens lösning så elimineras risken för Legionella helt. En möjlig barriär för 4e generationens teknik består dock i att boverkets byggregler inte är konstruerade för att varmvattencirkulation inte finns.• Lägenhetsväxlarna innebär en kostnad per lägenhet vilket begränsar lösningens kostnadseffektivitet jämfört med en större värmeväxlare i fastighetens bottenplan. Idag är 4e generationens teknik lämpad för fastigheter med 10-15 lägenheter, är det fler lägenheter blir 4e generationens lösning dyrare än den konventionella 3e generationens lösning.• En viktig aspekt med 4e generationens lösning att värmeförlusten från huset förflyttas från fastighetsägaren till fjärrvärmeföretaget, genom att värmeleverans sker till varje lägenhet och inte vid husvägg. Initialt kan sådan börda på fjärrvärmeföretaget verka negativ med avseende på kostnad. Diskussionerna i projektet mynnade ut i att parterna enas om att affären blir mer rättvisande och att fastighetsägaren får ökad insyn i värmeförbrukningen vilket, med rätt affärsmodell, kan skapa ökat förtroende och en möjlighet att dela på förlusten mellan de två parterna.

Projektet har omfattat löpande dialog med EKSTAs VD vilket varit värdefullt för att skapa förståelse kring fastighetsägarens perspektiv och frågor rörande 4e generationens teknik. Därtill har en workshop med EKSTAs driftspersonal hållits för att diskutera relevansen i de resultat som tagits fram. I projektet ingår BengtGöran Dalman med över 35 års erfarenhet av fjärrvärmeverksamhet vid Göteborg Energi. Projektets verklighetskoppling leder till slutsatsen att det inte föreligger någon särskild driftsproblematik för implementering av 4e generationens system.

Som en egen del i projektet uppmärksammas den diskussion som förs i branschen kring möjligheten att dra nytta av billig el, främst under perioder då det blåser mycket och det blir ett överskott av el i elnätet. I studien analyseras möjligheten att inte använda en konventionell pelletspanna som tilläggsvärmekälla utan en eldriven panna. Resultaten visar att med dagens styrning genom skatter och avgifter så är det inte möjligt att dra nytta av att det förekommer perioder med mycket lågt elpris. Rådande regelverk stödjer istället installationer såsom pelletspannor.

© ENERGIFORSK

Industrial heat recovery can be used in district heating systems. It is a possibility to make use of heat that is otherwise lost. Increased usage of industrial heat recovery reduces the need for fuel combustion lowering green-house gas (GHG) emissions, such as CO2. Industrial companies can, however, move or close down industrial activities. This is apprehended as a risk and lowers the interest of district heating companies to invest in industrial heat recovery.

In Swedish district heating systems, industrial heat recoveries have been undertaken since 1974. Today, the heat recovery is active in about seventy systems. This leads to the question of how risky it is, for district heating companies, to engage in industrial heat recovery.

Over forty years of operation statistics have been collected and analyzed in order to estimate the risk of industrial heat recovery to district heating companies. Key results show that the risk is not linked to different industrial branches. Recommendations include suggestions to management on how to consider risk and consequence when assessing potential industrial heat recovery investments. © 2017 The Authors. Published by Elsevier Ltd.

Industrial heat recovery can be used in district heating systems. It is a possibility to make use of heat that is otherwise lost. Increased usage of industrial heat recovery reduces the need for fuel combustion lowering green-house gas (GHG) emissions, such as CO2. Industrial companies can, however, move or close down industrial activities. This is apprehended as a risk and lowers the interest of district heating companies to invest in industrial heat recovery.

In Swedish district heating systems, industrial heat recoveries have been undertaken since 1974. Today, the heat recovery is active in about seventy systems. This leads to the question of how risky it is, for district heating companies, to engage in industrial heat recovery.

Over forty years of operation statistics have been collected and analyzed in order to estimate the risk of industrial heat recovery to district heating companies. Key results show that the risk is not linked to different industrial branches. Recommendations include suggestions to management on how to consider risk and consequence when assessing potential industrial heat recovery investments.

This paper presents a review of the sparse district-heating research programme undertaken in Sweden between 2002 and 2006. The goal of the programme was to increase the future competitiveness for district heat in low heat density areas, e.g., suburban single-family houses and small villages. Such areas are unfavourable, since revenues from heat sold are low compared with the investment cost for the local distribution network. In Sweden, district heat has a dominant position in the heat market for residential and service-sector buildings. In order for the business to grow, it is necessary to increase the rate of expansion in the detached-house segment. This is why the programme was initiated. The extent of the programme was set at € 3.6 million with equal financing from the Swedish District-Heating Association and the Swedish Energy-Agency. The research was carried out in three phases: a state of the art survey; a development phase focused on productivity gains where new research on both technology and customer interaction was performed; and finally a demonstration phase where new methods were tested in full-scale field operation. The programme has shown that the Swedish district-heating industry needs to adjust in order to reach a higher profitability for sparse district-heating investments. Tradition from large-scale high-density district heating is hard to scale to fit sparse district-heating systems. For example, the construction becomes very labour intensive and the industry is weak when it comes to market-oriented business logic, sales and private customer interaction. Innovation seems to be a way forward and active management of innovations is a way to create increased value of the investments. Other keys to improving the profitability of sparse district-heating investments are more efficient working routines (resulting in higher productivity) and revised ways of customer communications. These seem more important than increasing efficiency in district-heating technology. © 2007.