In the energy sector, electricity production can be decarbonised relatively quickly, but decarbonising other sectors such as district heating will be much more difficult. In Europe, we have more than 17,000 district heating systems, of which only 43% use renewables and waste heat. However, this may change. Power-to-heat technology shows how renewable energy can also be used for heating. As indicated in the latest report from the Polish Association of Professional Combined Heat and Power Plants, the use of power-to-heat may be one of the most preferred and useful options for decarbonising district heating systems in Poland.
This article comes from the Polish Electricity Association (PKEE) and Polish Association of Commercial Combined Heat and Power Plants (PTEZ)
What is power-to-heat?
The idea of power-to-heat relates to the ability to convert electricity generated from renewable energy sources into efficient heating or cooling. Power-to-heat technologies have been on the market for quite some time now, just to mention e-boilers like electrode boilers and heat pumps.
Heat pumps use electricity to extract heat from the ground, water or air, boost it, and then use it to run heating systems. It is an already highly mature technology, with a broad range of capacities and high efficiency of up to 250-500%. Heat pumps are a source of low-temperature heat (about 80÷90 °C), which in some district heating systems might involve additional investments in district heating networks because of lowering the parameters of the supply water.
Electrode boilers directly convert renewable energy into heat – water is heated in huge tanks to a pre-set temperature – even up to 160°C – allowing the boilers to be a source of heat in the high-temperature district heating networks. The heat production efficiency of electrode boilers is practically independent of the unit’s load and is about 99%. Moreover, there are no emissions of greenhouse gases or other pollutants produced by combustion-based systems.
Power-to-heat technologies are very well suited for the current trend of combining the electricity and district heating sectors. The operation of electrode boilers with heat storage (heat accumulators and seasonal heat storage) simply allows making use of surplus renewable energy, which can be converted into heat, stored and released when needed for district heating. In addition, heat storage operation contributes to buying electricity on the SPOT or balancing markets at favourable prices (low or even negative) regardless of the timing of heat demand, in turn further improving the cost-effectiveness of using power-to-heat technologies.
How can power-to-heat help to drive forward the district heating transformation?
By converting electricity into heat, power-to-heat technologies contribute to increasing the share of renewable energy in the district heating sector. If these systems are run using renewable electricity, this also helps to protect the climate by reducing CO2 emissions and the use of fossil energy sources.
Technologies such as electrode boilers are needed in Central and East Europe, where most of the district heating systems operate at high temperatures because they can provide a stable peak heat source while providing the technical possibilities, which low-temperature technologies cannot yet deliver. Heat pumps, especially large-scale, could also be used in district heating, but they are most efficient at lower temperatures. This means that, at sub-zero outside temperatures, heat from heat pumps requires additional temperature boosting for use in high-temperature networks during the cold winters we have in Poland, for example.
Due to the different working conditions of these two technologies while used in district heating systems, heat pumps have the potential to replace baseload units that use fossil fuels for electricity generation. On the other hand, the use of electrode boilers combined with heat storage can help to replace peak load generation units.
As the process of replacing the district heating networks with low-temperature ones involves considerable costs and inconvenience for the residents as well, it must be assumed that it will take a long time. Hence, both above-mentioned power-to-heat technologies must be treated as complementary in the transformation of district heating systems.
How can power-to-heat technology play a role in power systems?
To achieve climate neutrality, Europe needs 3 760 TWh of clean electricity and has to electrify more than 50% of the European economy, according to the Commission Impact Assessment Report for Europe’s 2040 climate target. Therefore, we cannot afford to lose even one MWh of clean energy. However, when electricity generation from renewable energy is increasing, mostly from solar and wind energy, this can lead to curtailments if the power system is not flexible enough and the demand does not meet the temporary increase in generation from renewables. Converting surplus electricity into heat can help stabilise the grids and integrate a greater share of intermittent renewable energy as demand-side flexibility in power systems. Additionally, when they can be combined with electricity or heat storage, the efficiency of using renewable energy sources increases while at the same time optimising costs and addressing heating needs.
Just in Poland, curtailments of renewable generation from the beginning of 2024 until the present (20th of June) reached 460 GWh – meaning that this much renewable energy has been lost. Here again, power-to-heat, and especially electrode boilers and heat storage, can be a way to reduce curtailments and increase the potential for using clean energy. In future, it is expected that the installed capacity of RES will increase, and in consequence, the share of RES in the national energy mix will grow too. The share of RES in the electricity generation during the hours of curtailment was then on average 55%. This means that already the heat produced in electrode boilers would be at least 55% RES, and in the future, this share would further increase.
Fig. 1: The level of RES curtailments and the share of RES in electricity generation in specific hours in Poland based on the Polish TSO communications.
Power-to-heat technologies allow a significant reduction in variable costs, which supports the stabilisation of heat prices paid by consumers. The situation in the fuel markets for coal and natural gas has the biggest influence on price parameters, and so does the market for CO2 emission allowances. These parameters are characterised by high fluctuation, which as a result increases the risk of investing in heat sources based on fossil fuels. At the same time, power-to-heat technologies show resilience to environmental costs – they are not directly related to the combustion of fossil fuels and are assumed to be used when electricity prices are low.
Fig. 2: Example of SPOT and balancing market prices in Poland during RES curtailment hours. Based on the data from the Polish TSO and ENTSOE.
During the hours of surplus RES generation and RES curtailments – electricity prices in Poland on the SPOT market and on the balancing market were very low or negative. Power-to-heat technologies could be used during these hours to produce heat from electricity.
How will power-to-heat contribute to the implementation of Fit for 55 targets?
Power-to-heat technologies, both heat pumps and electrode boilers, are among the key solutions that will allow the decarbonisation of Poland’s district heating systems cost-effectively while enabling their transformation in directions consistent with the criteria of efficient district heating systems, as defined by the revised Article 26 of the Energy Efficiency Directive (EED). These criteria set the path to achieving climate neutrality in heating systems, while maintaining the status of an efficient district heating system allows access to finance and is also treated as one of the preferred ways of heating zero-emission buildings, the definition of which is introduced by the amended EPBD (Energy Performance of Buildings) directive.
Are power-to-heat technologies already being used in Europe?
Across the European Union, there are several examples of large-scale applications of power-to-heat technologies. One of the biggest investments that implemented a large-scale power-to-heat project was delivered by PGE Energia Ciepła, which is part of the PGE Energy Group in the city of Gdańsk – In the north of Poland. It consists of two electrode boilers of 35 MWt each and can convert green electricity into heat.
From January to June 2024, these two boilers delivered clean heat to the district heating system for 2 364 hours, resulting in 22 963 tonnes of avoided CO2 emissions that would have come from the combustion of 11 040 tonnes of hard coal delivered in 552 railcars. By 2030, PGE aims to build almost 1 GWt in power-to-heat technologies, comprising both electrode boilers and heat pumps.
Other examples of the implementation of Power to Heat technology in Poland include the Szlachęcin project by the Veolia Group (heat pump system of 1.7 MW) and the Wrompa project by Fortum in Wrocław (12.5 MWt). As for the European projects, the biggest air-to-water heat pump system connected to a district heating network in Espoo (Finland) was commissioned in June 2023 (11 MWt), and two electrode boilers with a total capacity of 100 MW were also commissioned in the same city in 2023.
What are the key considerations for the development of power-to-heat technology?
The goal will be to have all district heating systems meet the criterion of an efficient district heating system. Power-to-heat solutions should be recognised as delivering renewable heat if it is possible to use, for example, the Power Purchase Agreements (PPAs) or a mechanism based on guarantees of origin for proving the renewable nature of electricity used in power-to-heat solutions.
The provisions in the EED and RED III Directives allow for the recognition of this volume of renewable electricity to meet the criteria of an efficient district heating system, and PPAs or a mechanism based on guarantees of origin can be used for this purpose. There is also a need to create financial support mechanisms for power-to-heat technologies. Firstly, implementing the investments will require funding; funds for this purpose should come from both the EU and national sources. The transformation of district heating should be a priority for the new political cycle, and then dedicated funds that would also support power-to-heat technologies should be made available.