Key role for DHC in new EU Energy System Integration Strategy

This document recognises the considerable potential of district energy networks to contribute to the European energy transition and the need for regulatory and financial support to ensure that this potential is transformed into reality.

The European Commission has published the long-awaited strategy on energy system integration, which aims to set out a vision of how to accelerate the transition towards a more integrated energy system, supporting full decarbonisation across sectors while promoting growth and technological innovation.

This document recognises the role of DHC in achieving these objectives. Overall, Euroheat & Power are pleased with this text as it underlines both (A) the considerable potential of our networks to contribute to the European energy transition and (B) the need for regulatory and financial support to ensure that this potential is transformed into reality.

Several key points of relevance for our sector can already be identified, with other elements related to heat supply expected to be addressed in the upcoming ‘Renovation Wave’ text:

• Waste heat:
The strategy highlights the need to make more use of waste heat from industrial sites, data centres, or other sources via DHC networks and foresees new enabling measures as part of the revision of the Renewable Energy Directive and Energy Efficiency Directive (both expected in June 2021).

• DHC networks as enabling infrastructure for a smart energy system:
Very much in the spirit of Heat Roadmap Europe, the paper makes numerous references to the ability of DHC to contribute to the development of a smarter and more flexible energy system, notably thanks to its interaction with the electricity and gas grids. This concept helps to establish DHC as not only a local heat supply solution but a strategic asset for Europe as a whole.

• Taxation and State Aid:
The text refers explicitly to the lack of a level playing field regarding the internalisation of CO2 costs in the heating sector and identifies the extension of the ETS and a revision of the Energy Taxation Directive as possible remedies. The prominence of DHC in the Commission’s vision for an integrated energy system will strengthen our sector’s arguments during the debate on the revision of the State aid framework in 2021.

This communication is a positive step forward for DHC and it’s great to have confirmation that our message is getting across. If you work in district energy, whether you’re in engineering, marketing, admin, research, or anything else, you’ve helped get us there and all of us at Euroheat & Power are proud to represent you. We’ll be prouder still when we’ve delivered on our decarbonisation pledge and contributed to the emergence of a cleaner, smarter and more efficient energy system!