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18 December 2012

Heat trading warms up

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A new heat-trading simulation tool could help create the kind of open-market for heat trading as a means to avoid dumping useful heat and save energy while reducing carbon dioxide emissions

Liberalising the heat market is, in theory, possible. It would operate in the same way that enables owners of domestic-scale wind turbines, or any other electricity producer, to sell surplus into the grid and draw power from the network.  Currently, about 60 million EU citizens benefit from district heating. In the future, more could benefit from locally produced heat, from solar collectors, biomass-fired boilers and micro-scale combined heat and power (CHP) plants. Until now, one of the limiting factors to heat trading is the lack of robust models to simulate local heat networks and inform the ‘use, sell or store’ decision.

An initial heat-trading simulation tool has now been developed by CSTB, a technical specialist in the building sector, headquartered in Marne la Vallée, France, as part of a wider EU funded project called IntUBE. “The tool enables us to demonstrate and analyse various heat trading concepts within virtual district heating networks," Mia Ala-Juusela tells; she is the project co-ordinator based at the Technical Research Centre of Finland VTT, located in Epsoo. This tool could be used, for example, to explore the impact of adding a new micro-scale CHP plant on the network performance.

However, there are significant obstacles to creating a truly open market for heat. “The size of heat networks is very limited as compared to electricity,” Sabine Froning, director of the sector’s trade association Euroheat & Power tells, “In most cases, the network has been tailored in relation to heat demands nearby.”  This poses challenges in establishing a cost-competitive market.

Furthermore, many of today’s major heat suppliers may have limited flexibility in responding to the supply-and-demand dynamics of the network. That’s because they primarily define themselves as electricity producers; heat is merely a by-product.

Further hindrances to smaller producer’s involvement are structural. “It’s generally cheaper to generate heat centrally,” agrees Sten-Erik Björling, a researcher specialising in civil and environmental engineering solutions at Luleå University of Technology in Sweden. “However, fairly extensive infrastructure is required for distribution and there are significant losses incurred during distribution,” he adds.

Soon, the advantages of local supply could become more obvious. “Local generation may be more expensive, but you don’t have the risk that one or two major burst pipes could jeopardise supply and the distribution costs are somewhat lower,” says Björling. It could therefore make perfect sense to match fluctuations between commercial buildings, where heat demand is highest during the day, and residential schemes, where it’s higher in the mornings and evenings.

However, Björling acknowledges that the division of many urban areas into separate residential and commercial zones is an additional obstacle, in the current absence of storage options. “This is a consideration for planning the energy efficient cities of the future,” he says.

“We will be further developing this tool in a follow-on project looking at the management of small-scale energy networks,” Ala-Juusela tells CSTB is planning to develop a more commercial tool that will incorporate weather-forecast data to help district heat plant operators decide on a day-to-day basis whether it is more economic to produce heat centrally or buy it locally while also exploring storage options. And perhaps it may bring the opening of the heat market a step closer. provides its content to all media free of charge. We would appreciate if you could acknowledge as the source of the content.