Heating transformation 2030 | Small district heating systems


87.5% (463 out of 529) of all district heating systems in Poland do not have the status of efficient systems. They must change this if they want to maintain access to public aid in the future and continue to provide Poles with heat at a reasonable price. 

On November 23, 2017, Forum Energii presented an analysis entitled: "Heating transformation 2030. Small heating systems". Forum Energii proves that modernisation of the Polish district heating system is realistic and feasible. However, decisions need to be taken.

Of the 50 most polluted cities in the EU, 33 are located in Poland. There is an urgent need to address the issue of modernising district heating. Otherwise, the air in the following years will not only not improve, but it may become more and more polluted - says Jan Rączka from RAP, the author of the analysis. That is why it is so important for the government to support the modernisation of district heating systems.

According to the Forum Energii's report, there are opportunities for a cost-effective transformation of district heating, only the government should already take action now - with a view to 2030.

The aim of this transformation should be first and foremost:

  • providing heat to citizens at a reasonable price  
  • improving air quality.

All district heating systems in Poland must obtain the status of efficient systems within the meaning of the Energy Efficiency Directive. Otherwise, they will not be able to benefit from EU funds. An efficient system is one that makes significant use of renewables and cogeneration. In our opinion, this is possible until 2030. 

- says Joanna Maćkowiak Pandera, President of the Forum Energii.

By taking appropriate measures, Poland will be able to reduce CO2 emissions by more than 40% from this sector by 2020.

The most important theses of the report

  • Modernisation of district heating will improve air quality
  • The future belongs to RES and cogeneration
  • Sources of funding are available
  • The share of heat in household costs will not change.
  • Small systems are particularly important
  • Energy efficiency of buildings needs to be improved
  • A government strategy is needed

Modernisation of district heating will improve air quality

Connecting new buildings to district heating networks is a solution that improves air quality and reduces emissions. If old coal-fired boilers in these networks are replaced, for example, by new biomass-fired boilers and gas-fired cogeneration sources, CO2 emissions in district heating will fall by 40% - 43% by 2030. Poland will have a chance to meet its European commitment to reduce emissions.

The future belongs to RES and cogeneration

Forum Energii is analysing technologies that can be used to modernise district heating. In the first stage of the transformation of thermal systems, biomass (or RDF) boilers and gas-fired cogeneration will be suitable for wide use. Geothermal energy and surplus heat will only be used in specific cases if local technical and economic conditions allow it. On the other hand, solar panels with energy storage will be used after the thermal renovation of buildings and after the transition to low-temperature installations.

Sources of funding are available

Modernisation of district heating is a long-term process requiring large outlays - a total of PLN 13-14 billion. In order to complete the transformation of the sector in 2030, it is necessary to provide sources of financing already today. The Forum Energii estimates that district heating could benefit from:

  • EU funds from the perspective of 2021-27,
  • money from the National Fund for Environmental Protection,
  • revenues from the Modernization Fund, which has revenues from the sale of CO2 emission allowances,
  • free emission allowances for the energy sector under the EUETS.

For this to be possible, Poland must already today start preparing strategies and plans for spending these funds in line with the EU's common commitments.

Share of heat in housholds' costs without changes

Forum Energii foresees that with well-planned activities, the share of heating costs in family budgets will not change. Although modernisation and improvement in the quality of services may increase unit heat prices, the real income of households is growing year on year. It will be important to improve the energy efficiency of buildings in order to reduce transformation costs, improve air quality and reduce CO2 emissions. At the same time, it will be important to introduce energy allowances for the poorest people. The essence of this program should be to ensure that Poles with the lowest incomes will not have a problem with the supply of the basic good - heat.

Small heating systems especially important

Forum Energii's report focuses on small and medium-sized district heating systems that require special attention. They are often inefficient and mostly operate in towns and cities below 100,000 inhabitants. Each of these systems requires an individual approach and assessment of which technologies to choose in order to achieve heat at a reasonable price. Small heating systems - their modernization, development and selection of appropriate technologies will be key to solving the problem of smog. It is more difficult for small district heating companies to organise financing and the transition to new heat generation technologies. That is why a government strategy is needed to show the direction of modernisation, so that the systems can start to benefit from support. 

Necessary improvement of the energy efficiency of buildings

The transformation of district heating should be accompanied by a programme of thermal renovation of residential and public buildings. This is the only way to reduce change costs and fuel combustion. Thermomodernisation simultaneously improves energy independence, CO2 balance and air cleanliness and reduces costs. The launch of the national thermal modernisation programme will result in a reduction in the demand for district heating capacity by 8% by 2030.

Government strategy needed

The different conditions under which district heating systems operate and the many available technologies mean that there is no single, simple solution for district heating. The process of modernisation of the sector requires a detailed strategy. Forum Energii recommends the development of a strategy to manage the change process. The basis is the national heat supply strategy until 2030. The document should contain, inter alia:

  • a programme to transform all district heating systems into efficient systems,
  • advanced national programme of thermal modernization of buildings,
  • action programme for households.

Forum Energii's analysis shows a possible path for the transformation of district heating up to 2030. It does not cover all district heating, but only a critical area of small and medium-sized district heating systems - sources with a capacity of 1-50 MW in inefficient systems.

Full text of the raport is available only in Polish. 

Title of the study: "Heating transformation 2030. Small district heating systems".
Date of publication: November 2017.
Author: Jan Rączka, Regulatory Assistance Project 
Support: Andrzej Rubczyński, Forum Energii

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