5th generation heating networks: A challenge to integrate the new business model

Published by caroll chemali

5th generation heating and cooling networks are now showing up with the promise of new services. What are these new services and how can blockchain technology facilitate their implementation?

Heating and cooling accounts for 50% of the EU's total energy consumption but only 19.1% comes from renewable sources, and in 5 of the 7 North-West European countries, this share is less than 8.2%.

The European D2Grids project aims to promote 5th generation heating networks by:

  • A better definition of the technical concept
  • A reduction in investment costs
  • An innovative reflection on business models

5th generation heating networks are defined by the implementation of an intelligent energy loop in urban areas optimized and driven by demand, characterized by:

  • A low-temperature network with decentralized low-carbon energy production,
  • A closed thermal loop for heat recovery between cold and hot sources,
  • The coupling of electrical and thermal networks by ensuring the electrical needs of auxiliaries through renewable production (PV) and storage,
  • An upstream reflection on consumers and erasure mechanisms ![1],
  • A territorial vision that integrates heat recovery from industrial or large commercial actors.

The 5th generation heating and cooling network encourages the decarbonisation of the energy mix by making greater use of renewable energies. In addition, it introduces a break in terms of the services offered to stakeholders.

Based on a closed low-temperature loop, the possibilities of contributing to the network are widely extended and facilitated: low-temperature fatal heat from industries, heat recovery from the cold production of Data Centers or retail outlets, low-temperature geothermal energy, etc., so the number of stakeholders will be larger. To manage the decentralization of actors, Blockchain technology appears to be an interesting solution because it allows tracking the contributions of each actor.

On the consumer side, this new generation of network could make it possible to change the game concerning the tariff model:

  • By economically encouraging big consumers to smooth out their peaks in hot and cold consumption through flexibility mechanisms.
  • By integrating the component of electricity market prices. The heating and cooling network consumes electricity for the operation of equipment (heat pumps) and auxiliary equipment (distribution pumps, etc.), this operation can be encouraged by electricity market price information.

Blockchain technology facilitates the implementation of these models through information tracking and automatic contract validation and triggering.

Intrinsically transparent and immutable, it could also make it possible to respond to the growing interest of consumers in knowing their consumption, the origin of the energy produced and the understanding of invoicing rules. The latter also helps to increase investor confidence.

Blockchain therefore has essential assets to facilitate the emergence of these new services, which are strongly linked to decentralization and consumption optimization.

The D2Grids project, through the programs planned by pilot sites, will test the implementation of these new value-added services, leading the way to decentralization. The blockchain technology that seems essential to deliver these new services will be tested during the project, in particular to identify and understand:

  • The technical and operational obstacles of its implementation
  • The improvement of the experience and the confidence it allows to bring

[1] the erasure mechanism consists in voluntarily restricting one's electricity consumption for a certain period of time, or transferring it to other periods (Editor's note)

An article written by GreenFlex, partner in the D2Grids project


Moderated by : Alice Dupuy

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