FernWP – District and process heat supply by heat pumps as a replacement for coal combustion

The planned phase-out of coal by 2038 not only makes an important contribution to reducing CO2 emissions, it also has a direct impact on the heat supply. Power plants that still provide district and process heat today will no longer be available in the foreseeable future and will have to be replaced by climate-neutral technologies.

Large-scale heat pumps (LSHP) and high-temperature heat pumps (HTHP) could take over this task in the future. As a basic technology that lays the foundation for the integration of renewable energies, they play a central role in the energy transition.

Numerous obstacles still hamper the dissemination of the technology and prevent penetration of the technology market. LSGPs have comparatively long payback periods, making them only conditionally competitive from an economic perspective. In addition, there is a lack of well-founded knowledge and experience regarding the economic application potentials.

From a technical point of view, providing heat at the required high temperature levels while maintaining high performance and efficiency is still a challenge. In order to meet the growing demands, it is necessary to consider the further development of the technology and the refrigerants to be used.

The project "District and process heat supply by heat pumps as a replacement for coal combustion" addresses the technical and economic barriers that currently still impede the widespread use of large-scale heat pumps. In this context, it provides answers to important questions that arise when integrating GWP into district and process heat supply:

• Which renewable heat sources are suitable for use by LSHP and high temperature heat pumps?
• What are the requirements of district heating networks for LSHP?
• In which direction do the construction elements of LSHP need to be further developed in terms of design?
• Which refrigerants are suitable for use in LSHP?
• How can the economic efficiency of heat LSHP be improved by means of suitable operating strategies?
• What needs to be considered from a techno-economic perspective in the system integration of heat LSHP?
• What framework conditions stand in the way of higher market penetration of LSHP and can these be changed?
• What potential do high-temperature heat pumps have for providing process heat and how do they need to be technologically developed?

In March 2023, the final report on the first work package "Analysis of current economic barriers and further development of the economic framework for large-scale heat pumps" (original title: »Analyse aktueller ökonomischer Hemmnisse und Weiterentwicklung der ökonomischen Rahmenbedingungen für Großwärmepumpen«) was published. The report was produced under the leadership of the Fraunhofer Institute for Systems and Innovation Research ISI and with the collaboration of the AGFW and the Fraunhofer Research Institution for Energy Infrastructures and Geothermal Energy IEG.

The authors analyze the current legal and economic framework conditions for GWP in district heating networks in Germany in three main sections. Against this background, the report provides an overview of the current legal framework of GWP as well as district heating and discusses economic framework conditions, barriers and possible adaptation measures.

Furthermore, the document analyzes literature sources on policy measures that are of particular relevance for GWP and district heating. The following aspects are highlighted:

• Implementation of coal phase-out legislation
• Reform of duties
• Levies
• Taxes
• Combined Heat and Power Act
• Support framework for district heating networks and GWP.

In a final quantitative scenario analysis, the authors estimate the impact of different economic frameworks on the economic viability of GWP in district heating using a detailed cost accounting model.

Link to full report (language: german):

Analysis of current economic barriers and further development of the economic framework for large-scale heat pumps