COMMON VISION FOR RENEWABLE HEATING

AND COOLING IN EUROPE

DRAFT - VERSION 1

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TABLE OF CONTENTSABBREVIATIONS..................................................................................................................................31. INTRODUCTION..............................................................................................................................42. RENEWABLE HEATING AND COOLING AS KEY ENABLER FOR A SUSTAINABLE DECARBONISATION............................................................................................................................53. HEATING AND COOLING IN BUILDINGS......................................................................................84. HEATING AND COOLING IN CITIES AND DISTRICTS...............................................................135. HEATING AND COOLING IN INDUSTRIES..................................................................................176. SOCIAL AND POLICY INNOVATION............................................................................................20ANNEX I – TECHNOLOGY STATE-OF-THE-ART..............................................................................24

i. Solar thermal..........................................................................................................24ii. Biomass..................................................................................................................26iii. Geothermal............................................................................................................28iv. Heat pump.............................................................................................................30v. Thermal energy storage.........................................................................................33vi. District heating and cooling....................................................................................35

ANNEX II - OVERVIEW OF RENEWABLE HEAT AND COLD SOURCES AND RELATED TECHNOLOGIES.................................................................................................................................36REFERENCES......................................................................................................................................39

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ABBREVIATIONSDHC: District Heating and CoolingDHW: Domestic Hot WaterEE: Energy EfficiencyHC: Heating and CoolingSET Plan: Strategic Energy Technology PlanRES: Renewable Energy SourceRHC: Renewable Heating and Cooling

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1.INTRODUCTIONThe decarbonisation of the heating and cooling (HC) sector is an essential milestone to achieve the ambitious climate and energy targets of the European Union. In fact, heating and cooling account for about half of the total energy demand in Europe and it is by far the largest energy consuming sector. The annual consumption of thermal energy in Europe in 2017 amounted to about 5.600 TWh, against 2.700 TWh of electricity and 4.000 TWh used in the transport sector (EUROSTAT, 2019). However, in the same year only 19,5% of thermal energy was generated from renewable energy sources and considerable differences exists between EU Member States (EUROSTAT, 2019). With the communication “an EU strategy on heating and cooling” (COM(2016) 51 final), in February 2016, the Commission strongly enphasized the role of the HC sector in the decarbonisation process. This new attention led to the target of 1,3% annual average increase of renewable energy in HC, as foreseen in the 2018 recast Renewable Energy Directive (Directive 2018/2001). Overall, about 40% of the 32% target of renewable energy share of total energy consumption established in the directive is projected to come from the HC sector. Therefore, the evolution of climate related policies is giving new momentum to renewable heating and cooling (RHC) technologies. To effectively decarbonise HC we need to act quickly, since the window of opportunity is quite narrow. In fact, HC

technology (both conventional and renewables) have a relatively long lifespan, with an average of 15 to 20 years; therefore, the solutions in place by 2030 will deeply influence the sector’s outlook by 2050. However, due to the high level of decentralisation of HC solutions, the low level of awareness on the alternatives to fossil fuel technologies, the lack of economies of scale and the great variety of RHC technologies, fostering the energy shift in this sector is a challenging task. This Vision is intended to provide a clear prospect for the HC sector by 2050. It helps to understand the potential of the various RHC technologies and it shows, through a multidisciplinary approach, the way to follow to achieve a carbon-free HC sector by 2050. Both technical and non-technical issues are discussed, along with the presentation of relevant best cases.This Vision was developed by the European Technology and Innovation Platform on Renewable Heating & Cooling (RHC ETIP); it is the result of the joint effort of a pool of experts from industry and research, divided in four multidisciplinary working groups, respectively focusing on individual buildings, districts, cities and industries. This approach was adopted to look at HC from a system perspective, stressing the need for integration of different technologies and highiliting promising solutions for different use contexts. The Platform’s Technology Panels supported this exercise by providing relevant information on the technology state-of-the-art.

The European Technology and Innovation Platform on Renewable Heating & Cooling (RHC-ETIP) brings together stakeholders from the biomass, geothermal, solar thermal and heat pump sectors, as well as the related industries such as district heating and cooling and thermal energy storage, to define a common strategy for increasing the use of renewable energy technologies for heating and cooling. Officially endorsed by the European Commission since October 2008, the RHC ETIP aims at

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playing a decisive role in maximising synergies and strengthening efforts towards research, development and technological innovation which will consolidate Europe’s leading position in the sector. The scope and operational structure of the RHC-ETIP are such as to ensure a balanced and active participation of the major stakeholders at the appropriate levels, including all concerned industries, scientific research organisations, public authorities, users and civil society.The European Technology and Innovation Platforms (ETIPs) are one of the main implementation mechanisms of the EU Strategic Energy Technology (SET) Plan, which was created to accelerate the deployment of low carbon energy technologies in Europe.

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2.RENEWABLE HEATING AND COOLING AS KEY ENABLER FOR A SUSTAINABLE DECARBONISATION

RHC provides significant benefits to the society and the energy systemHeating and cooling our homes and businesses, as well as generating process heat and cold, makes up more than half of the EU’s energy demand. Heating dominates cooling in terms of energy demand, but demand for cooling is rising significantly and is expected to become even more relevant in the upcoming future. The use of renewable sources, as well as excess heat and cold, in heating and cooling is a key element in the path towards a fossil carbon-free society. The direct use of these resources brings considerable benefits to the society and the energy system, including: Efficiency: a significant part of

energy consumption can be saved by promoting a more rational use of primary energy and fostering RHC technologies uptake. According to the exergy analysis1 approach, the quality levels of energy supply and energy demand need to be matched, in order to minimise energy wastes. Heating and cooling applications usually require low exergy levels (except for industrial processes), which can be easily matched with low valued thermal energy from renewable sources, ambient heat and excess heat (e.g., using low temperature heat sources for low temperature heating in residential and commercial buildings). This leads to a more efficient use of energy and allows to free high-exergy energy carries, such as electricity, for other purposes.

Decarbonisation: RHC technologies play an essential role in developing a carbon-neutral building stock and industry in Europe, thus providing a fundamental contribution to the achievement of the EU climate targets. Existing technologies, including efficient heat pumps and district heating and cooling, have an enormous potential to support a carbon-free economy, since those sources significantly contribute to the overall portfolio of renewable energy sources and thus relieve the limited renewable electricity resources, such as wind and PV, in favour for e.g. mobility and industry applications.

Flexibility: cost-efficient thermal energy storage solutions and the thermal inertia of buildings allows to compensate the temporal mismatch between heating/cooling demand and heating/cooling source availability: they provide a great degree of flexibility in heating and cooling supply, allowing to cover demand on different size scales (building to city level or load profiles of industrial processes) and time scales (hourly to seasonal). Moreover, the benefits of thermal energy storage go beyond the heating and cooling sector and extend to the power sector; together with sector coupling, thermal energy storage helps to provide flexibility and to balance the electricity grid when high levels of variable renewable energy are introduced.

1 Exergy analysis is an analysis technique based on the second law of thermodynamic, which provides an alternative means of assessing and comparing processes and systems rationally and meaningfully. In particular, exergy analysis yields efficiencies that provide a true measure of how nearly actual performance approaches the ideal and identifies more clearly than energy analysis the causes and locations of thermodynamic losses (Dincer and Rosen, 2013).

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Reliability and security of supply: RHC solutions are based to a large extent on mature technologies, which ensure reliable heat and cold supply with low maintenance and operation costs. Moreover, they are based on largely available resources and can virtually be optimised for every climate condition in Europe. Consequently, RHC technologies not only allow to harvest locally available resources, but also to emancipate EU Member States from fossil fuel imports in a strategic sector.

Added value: Many renewable heating and cooling technologies are available whether locally or in another European country and their massive integration is resulting in a high socio-economic value due to the work force required for technology development, production, installation and maintenance.

Planning and managing the transitionThe transition from conventional (fossil-based) to RHC solutions is unavoidable to reach EU climate targets, but it must be carefully managed as it requires extensive planning, high-level expertise and awareness and continuous investments in buildings’ retrofitting, industrial process technology adaptation, installation, storage capacity and transmission systems. The future mix of renewable heating and cooling technologies should be as less disruptive as possible, in order to guarantee a smooth and inclusive transition, and it should focus on both ready-to-adopt and quickly deployable technologies (in the short-term) and innovative technologies and systems (in the medium-term). Moreover, a high potential for scalability is essential to ensure the success of the energy transition.Supporting the renewable energy transition in the heating and cooling sector is challenging, since RHC strongly depends on local conditions and there

are no one-size-fits-all solutions. However, with a strong political will, adequate planning, high awareness levels and a balanced mix of incentives and obligations, it is feasible to decarbonise heating and cooling in Europe. To this purpose it is important to foster a significant change of paradigm, including:

● a shift from centralised to decentralised structures, which are based on the systematic use of locally available renewable energy sources;

● a strong integration with the power sector enabled by the persistent diffusion of coupling points, such as CHP-based district heating systems and efficient heat pumps, and the wide uptake of smart energy management systems;

● the optimisation of energy demand and supply, through smart metering and self-supply of heat and electricity in buildings.

Great technology variety: a solution for all tastesBioenergy, solar thermal, geothermal and ambient energy sources, complemented with renewable electricity e.g. Wind and PV, will be the bedrock of renewable heating and cooling generation in the 2050 energy system. A wide range of technologies, including efficient heat pumps and district heating, solar thermal and biomass-based systems, will allow to take the best out of available local resources in all European regions. These technologies will be complementing each other, as all sources and components are needed to create a cost-efficient, robust and secure energy system to decarbonise the HC sector by 2050. In fact, different technology applications will allow to properly meet energy demand in individual buildings, urban districts, cities and industrial processes. The technology mix will differ from city to city (local level), region to region (regional level), country to country (national level) and industry sector to industry sector,

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depending on the availability of local sources, the demand mix, regulatory conditions and the existing infrastructure.The key role of hybrid systems solutionsBy 2050 a central role will be played by hybrid systems, which are integrated systems combining two or more renewable heating and cooling technologies. In fact, the integration of different technologies in a system allows to overcome technology-specific limitations and to achieve higher performances. Therefore, hybrid systems will be key enablers for year-round reliable and affordable heating and cooling, as well as industrial process heat and cold, at different scales. Several energy- and cost-efficient, user friendly and competitive off-the-shelf products and services will boost the demand for RHC technologies.Eliminate wastes and inefficienciesExcess heat from industrial and commercial processes, data centres and other urban infrastructure, such as sewage channels, that is currently in large part dissipated in the atmosphere or water, will be used in complement of other renewable sources for space heating and cooling directly (where possible) or indirectly via heat pumps. Circular economy approaches will be widely adapted including the surrounding buildings, thus allowing excess heat and cold to be efficiently utilized in DHC networks and at the same time creating a valuable business case and added value for the local community. Indeed, excess heat will be directly channelled through DHC networks for heating purposes, or first converted through chillers for space cooling as well as low temperature processes.Not only buildings: industrial process heating and coolingIndustrial process heating and cooling is a crucial part of manufacturing in many sectors. It comes with a broad range of diversity regarding temperature demand,

sectors, and countries. Process heating and cooling can either be direct fuel-driven, electricity supplied or based on a liquid (water, thermal oil, refrigerant) or gaseous (steam, air) distribution system or a combination of these. Irrespective of the method, heat generation requires a high amount of energy. On the one hand, technologies are needed to allow lower process temperatures as this simplifies the design of the supply side, where the technology is already advanced. On the other hand, advancements on the supply side technologies for high-temperature supply, including the use of hydrogen and ammonia, will meet the demand of energy intensive industry sectors. Moreover, the consideration of the combination of process/process or process/supply technologies will be necessary. This could be seen as an impulse for companies to rethink their current process design, as a change to emerging technologies and afterwards to use renewable heating and cooling in a hybrid way. Thermal energy storage: a key enabler for RHC penetrationAs mentioned above, thermal energy storage will be a key enabler for the deployment of renewable HC, both in DHC and individual buildings. The use of big underground storages shared by several heat generation systems, instead of a high number of small individual storages, will unlock additional efficiency potential. The combination of thermal energy storages, predictive control algorithms and technologies like power-to-heat and power-to-gas, will help to increase the share of renewable heat and in the same time stabilise the electric grid. In fact, these technologies will enable the cross-utilization of flexibility potentials to manage and mitigate temporal imbalances of supply and demand in the electricity grid with a high share of variable renewables. As a result, a cost-efficient decarbonisation and at the same time improved reliability, supply safety and efficiency will be reached. Thermal storage is robust,

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cheap and efficient technology if compared to electric storage.Smart management and new business modelsBy 2050 smart energy management systems will be widely adopted both at centralised and decentralised level. These systems will allow to optimise generation and operation in heating and cooling networks. Local heating and cooling markets connecting private, commercial and industrial consumers, producers and prosumers will enable them to actively participate and make best use of local generation and conversion potentials and storage capacities. Moreover, radical new business models will characterise the HC sector. Market operators will likely sell integrated services rather than components, thus spreading upfront

costs for customers over long period (through instalments or leasing schemes) and creating a win-win situation for building owners and energy service providers. Companies will engage in partnerships to provide a stronger combined “package” of products and/or services.Why research and innovation?Research and innovation on all technologies, infrastructures and system aspects, together with the development of economies of scale, will lead to radically lower costs, higher efficiency, better system design and integration, enhanced operations and increased resilience as well as security of supply. To this purpose, an integrated approach taking into consideration all relevant actors is needed.

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3.HEATING AND COOLING IN BUILDINGSBuildings are the largest energy consumersBuildings represent almost 40% of total final energy consumption in the European Union, with transport accounting for 28% and industry for 23% (EC, 2016). Two-thirds of the energy consumption in the buildings sector is in the residential sector. In 2017, households, or the residential sector, represented 27.2 % of final energy consumption or 17.2 % of gross inland energy consumption in the EU (EUROSTAT, 2019). In 2017, natural gas accounted for 36 % of the EU final energy consumption in households, electricity for 24 %, renewables for 18 % and petroleum products for 11 % (EUROSTAT, 2019). Derived heat (through district heating) accounted for 8% and solid fossil fuels for 3% (EUROSTAT, 2019). The main use of energy by households in the EU in 2017 was for heating their homes (64 % of final energy consumption in the residential sector), with renewables accounting for almost a quarter of EU households space heating consumption. In EU households in 2017, heating and hot water alone accounted for 79% of total final energy use (EUROSTAT, 2019). A generalised picture is that, today, the Nordic countries have a large RE-based contribution to HC, through biomass-based systems in individual buildings, district heating systems (based to a large extent on biogenic fuels) and power-to-heat using RE electricity. District cooling is implemented to a low degree, due to moderate summer temperatures. Cooling at the warmest summer days is typically done using heat pumps, chillers or conventional air conditioners. In Western and Central Europe natural gas and heating oil systems are dominating today, district heating is less developed compared to the Nordic region and biomass or solar based systems are much less implemented compared to fossil heating systems. Similarly, in

Southern and Eastern Europe fossil fuels are extensively used, while cooling becomes increasingly important. What to expect from the future?The expected HC demand (final energy use) in Europe in individual buildings towards 2050 depends on a number of factors, including demographic development, building standards (refurbishment of old buildings), typology (residential – including single-family, multi-family or block of flats - and commercial), square-meters per person, and climate. An increased population will rise the overall demand, while more energy-effective buildings will likely more than compensate for this. Warmer climate will decrease the heating need while increasing the cooling need, and improved standard of living will likely increase the fraction of the population being willing to pay more for heat comfort (including cooling). Towards 2050 a large increase in cooling demand can be expected in the residential sector, and heat comfort will become increasingly important as new and highly insulated buildings will continuously increase its fraction of the total buildings stock.Large regional and local differences with respect to energy availability, costs and HC need in individual buildings will demand feasible and sustainable solutions covering the needs of individual consumers. Hence, for individual buildings especially, the individual consumer will increasingly shape the HC future, where sustainability should be promoted and prioritised to the highest possible extent. The decarbonisation of HC in buildings is a challenging, but feasible taskWhen it comes to HC, a shift to 100% RE for individual buildings is a huge undertaking. Still today, due to historical reasons and no grid connection except for electricity, direct resistance heating

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with electricity is commonly applied. Heat and air conditioning comfort is an important consumer factor, making people choose direct electric resistance heating in selected floors (in e.g. bathrooms, washroom, hallway) or standalone chillers even if becoming relatively expensive. In other words, in the consumer perspective heat comfort is very central, and it may lead to not optimum solutions, if consumers have low awareness level.Commercial competitive technologies already allow heating of buildings with only RE. These technologies will further develop, as will the insulation level of buildings, so that 100% RE for individually heated and cooled buildings until 2050 is technologically possible. In addition to that, the self-supply of buildings with electricity will increase, as well as the supply of excess RE based electricity to the grid from these residential buildings. For example, electricity from photovoltaics (PV) or combined heat and power (CHP) production using micro- or small-scale biomass CHP units has the potential to be used for heating and cooling purposes and to further increase the share of RE for individual buildings. Furthermore, expanding the domestic European biomass feedstock base with also lower grade fuels would lead to an increased use biomass for HC purposes. Hence, the goal of 100% net RE HC in residential buildings in 2050 becomes a realistic one.The heating market today depends very much on country/region, as do the market share covered by RHC. Going from north to south in Europe, the potential for active solar based HC increases. Shallow geothermal HC possibilities are numerous and are more geological and less country/region specific. The HC market share currently (2017) covered by renewables (not including electricity) in the different European countries ranges from 1.5 to 46.3 %, with an average of 17.5% for EU-28. To reach the 100% RE target within

2050, a total phase-out of mineral oil in the residential HC sector is needed, which is already enforced in some European countries. Using solid fossil fuels will also become history. However, the extensive use of natural gas for HC will be much harder to eliminate and replace.Heat pumps are already a widely spread solution, often in combination with other technologiesUsing electricity for heating is already commonly applied in some countries/regions, especially for residential buildings not connected to either a district heating network or a natural gas network. Ideally, the electricity (preferably RE electricity) is driving a heat pump providing heat from a lower temperature heat reservoir. The heat pump can also operate to provide cooling, i.e. being a consumer-friendly two-in-one operational solution, known also as VRF-technology. Often the heat pump, especially air-to-air heat pumps, are just a partial heating solution in a building equipped with point heating appliances, such as pellets or wood log stoves. If a residential building is equipped with a central, water-based, heating system, where a boiler is fuelled with e.g. biomass, then a heat pump is less interesting, except for cooling purposes. In the future also new technologies like solar cooling will be considered. Exploiting existing infrastructures by substituting natural gas with biomethane in the gas gridMost privately-owned residential and commercial buildings in Europe are not connected to a district heating network, i.e. they are individual buildings (with individual heating and cooling systems). Today, these buildings are often equipped with fossil fuel boilers (mainly natural gas, heating oil), although 100% renewable heating solutions are available and competitive, such as biomass boilers in combination with solar thermal collectors. Many buildings that not connected to a district heating

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network are, however, connected to a natural gas grid, hence enabling using natural gas for heating, and cooking. This natural gas has the potential to be replaced by biomethane (synthetic natural gas, SNG), making it possible to utilise the well-developed natural gas grid infrastructure also in a 100% RE Buildings scenario in 2050. The great variety of technologies can provide an optimal solutions for any contextSeveral fully commercial and cost-efficient technologies exist for HC RE sources in individual buildings, while some promising technologies are in the pipeline and need further development. The best technology or combination of technologies in a system to provide heating, hot water and cooling for individual buildings depends very much on the type, size and architecture of the building, its insulation level and its geographical and physical location.Regarding bioenergy-based solutions, wood logs, pellets stoves and boilers are widely used, and the best available technologies (BAT) today achieves high energetic performance and low environmental impact by applying automatic control and/or operations. Technological advances have also been made in small-scale combustion systems using various agrobiomass feedstocks. Downscaled unit sizes and effective heat storage solutions also make these solutions feasible options for modern highly insulated buildings. For multi-family houses with hydronic heating systems the unit sizes can be bigger, while larger systems can be installed in blocks of flats or other large individual buildings (e.g. a wood chips fired boiler with optimized air staging is an option for maximized emission reduction by primary measures). An organic Rankine cycle (ORC) can also provide electricity in such a larger combustion system. Gasification based systems provides both heat and power, using the syngas in e.g. a micro gas turbine or an engine. Alternatively, biogas or synthetic natural

gas (SNG) can also be used in a gas boiler for heat only. The latter is a clear option when natural gas-based heating systems will need to be phased out, in order to reach overall 100% RE HC in individual buildings.Solar thermal systems can cover a large share of the building’s heat demand required for domestic hot water preparation and space heating. In so-called SolarActiveHouses predominately solar energy is used for domestic hot water preparation and space heating. With typical solar fractions in the range of 70 to 80 %, SolarActiveHouses are by far the most cost effective and environmentally friendly technological solution to provide the predominant share of the building’s thermal energy demand on a large-scale basis by renewable energies. A further advantage of SolarActiveHouses is the fact that the seasonal storage of heat is an integral part of the solar thermal system installed. Hence, they have no negative impact on the electrical grid and do not require reinforcement of the electrical transmission lines or installation of additional power stations, as is the case for heating technologies based on the use of electrical power.Heat pumps operating as chillers typically cover active cooling needs in SolarActiveHouses and can also provide heating covering the heat need partially or fully, depending on the type of heat pump system. Ground source heat pumps (GSHP) delivering heat to a hydronic system is a BAT system, making it possible to maintain an optimum temperature difference between the lower and higher temperature heat reservoirs and ensuring a maximum coefficient of performance (COP). Air-to-water heat pumps provides acceptable performance, while air-to-air heat pumps, which are the least effective, are the most frequently installed due to low investment cost. Absorption and adsorption-based heat pumps have the potential to effectively provide both heating and cooling. In these, heat is

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driving the heat pump instead of electricity. New options in shallow geothermal systems, e.g. the sheet pile system, allow for more effective heat extraction from the ground, decreasing the costs of the installations and increasing the efficiency of the GSHP.A combined solar thermal and bioenergy system allows to optimize solar thermal contribution and reduce the bioenergy load. Solar thermal collectors can also be integrated in the facade of a building or placed on the roof of or next to the building. Solar cooling is also possible using heat from a solar thermal collector or by using heat driven natural cooling. Also, a photovoltaic thermal (PVT) system can be used, producing electricity and covering heat need at the same time. PVT or PV systems producing in-house RE electricity can cover also RE electricity needs for heating and cooling in a heat pump. Finally, reliable RE HC in individual buildings can be achieved by supplying RE electricity from the grid if or when needed, while excess in-house electricity can be exported to the grid, yielding in the end net 100% RE HC.When considering investments on HC technologies, we should keep in mind that the final goal of HC systems in individual buildings should be:1. to minimize their needed

size/power/capacity with energy efficiency measures;

2. to apply solar thermal or passive geothermal HC where possible;

3. to supplement HC provision with bioenergy sources, when needed.

From an energy quality point of view, RE electricity for active HC, should only be used if no other RE option exist. In the end, all HC systems are part of a value chain, where in principle the sustainability of the whole value chain should provide priorities with respect to the choice of HC technologies and systems.Sector coupling and energy storage are key elements enabling 100% RE in buildings

Even though a competition will exist for biomass as this is our only long-term hydrocarbon source, the potential increase in the utilization of other RE sources is very high. The future European energy system will likely be characterised by the intermittency of especially wind and PV power and solar thermal heating. Therefore, increased focus on energy and electricity storage - including power to fuels and power to hydroelectric – is extremely important. Energy storage is a key to 100% RE HC in individual buildings, allowing for optimum utilization of a combination of different RE sources over a day or even a year.Another key to a well-functioning system based entirely on RE sources is their optimum integration in the European energy and electricity system. For individual buildings, it will be important to couple on-site HC production, energy storage, RE-based electricity generation and to some extent a SNG-based gas grid; this will allow to essentially provide the level of energy services we have today in a more sustainable and customer satisfactorily manner. For individual buildings in the service sector an increased electrification of HC can be expected, using heat pumps to provide space heating and cooling, and combining it with solar thermal for domestic hot water where feasible. System solutions and consumer participation The demand for renewable heat, cold and electricity will rise, and customers will be increasingly aware when choosing HC systems for their individual buildings. HC systems, which will be more and more based on combined technologies, will increasingly move towards building integrated system solutions, i.e. optimised with respect to the design criteria of the building. HC systems will become more intelligent and user-friendly, allowing e.g. remote operation and control. This does not automatically exclude certain types of RE sources or HC technologies, as the industries will

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strive to adapt to this future and will provide technology combinations and solutions satisfying customer expectations. Increased participation of consumers in the energy system and benefits from self-production and new technologies, including smart meters, can be foreseen. Need for suitable framework conditionsEven though there are significant technological improvement potentials for some of the existing individual technologies, other aspects as framework conditions become even more important for the further implementation of those technologies: Optimum system integration: this

includes the integration of an array of technologies that together perform the services that are expected, i.e. covering the HC needs of individual buildings, in order to reach 100% RE HC in individual buildings throughout the whole year. As there are large differences in Europe regarding HC needs, it is essential to find the best system integration for specific conditions.

Installation friendly systems (plug and play) are needed, in order to provide HC with minimum practical implications for the user, especially when it comes to refurbishment of old buildings. RE technologies will increasingly become consumer friendly. In this respect, automation of technologies and systems is also needed. Finally, effective control systems and algorithms are needed to enable optimum operating conditions.

Fuel flexibility contributes to broadening the feedstock resource and the fuels availability, and in the future, with an expected increasing competition for the biogenic feedstocks for multiple end use applications, this implies that the use of lower quality biogenic feedstocks in the RE area will become increasingly important.

Then, there is a need to assess the resource base available, its possible implications on the choice of technologies and the need for development of new technologies capable of tackling such new feedstocks directly or of upgrading them. Tools such as sustainability criteria evaluations (LCA and LCCA) will aid in the selection of technologies by including their whole value chain and providing recommendations regarding the optimal use of our RE feedstocks and sources.

Relatively high initial investment costs for many systems represent a barrier against the implementation of 100% RE HC in individual buildings, although the lifetime costs are often very competitive. Investment cost reduction must therefore be in focus. Increased energetic performance of the RE system, including e.g. increased coefficient of performance for heat pumps, will also contribute to decrease operational costs. Emerging technologies will become more cost-effective with more effective production and increased production rate.

Reducing the time needed for building refurbishment from 1 to 3 months (as it is today) to a few weeks is another important point. This may be done by applying innovative renovation concepts, where e.g. a complete façade or roof elements are manufactured in a highly automated way in a factory and installed on the building in a few days.

Modelling and simulation tools considering the dynamic behaviour of energy systems will need to be developed and actively used to ensure optimum performing and resilient RE systems. Individual buildings will increasingly be part of the overall energy system, delivering e.g. PV electricity to the grid, and using RE electricity or gas to cover

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the energy needs for some purposes and periods. Emphasis should be put on the development of cognitive platforms for the monitoring of the RE systems operation (by analysing the information deriving from workflows and the building environment), with the goal to increase its cost effectiveness. This includes development of building energy management systems

(BEMS) able to effectively control multi-generation system with high renewable energy sources integration.

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4.HEATING AND COOLING IN CITIES AND DISTRICTS

The ambition: 100% renewable energy districtConsidered that 72% of the European population (EU28) lives in urban areas - defined as cities, towns and suburbs -, the decarbonisation of cities and city districts represents an imperative and an obvious area of priority. Europe has the ambition to become a global role model in integrated, innovative solutions for the planning, deployment, operation and replication of Positive Energy Districts (PED) with the aim to have at least 100 Positive Energy Districts by 20252. A 100% renewable energy district makes optimal use of locally available renewable energy sources and waste heat. For historic reasons, cities and towns developed along rivers, lakes and seashores, which provide access to environmental heat. All these sources make high and low-temperature renewable energy available, and their usage is highly replicable as it is accessible right where it is needed. In order to use local sources, municipalities, energy utilities and the industry must collaborate across sectors.The biggest challenges are not technologicalBringing robust, reliable and sustainable HC to the heart of our cities is far more than a vague aspiration, it is a basic and entirely achievable necessity. By exploiting the potential of existing technologies such as efficient district heating and cooling (DHC) networks, renewable energies, excess and ambient heat, and fossil-free cogeneration, it is possible to move away from dependence on imported fossil fuels and towards sustainable energy supply in high population density areas, such as cities and city districts. Innovation priorities

should consider also financial issues, market uptake measures and citizens’ engagement initiatives, for renewable solutions to replace fossil fuel-based solutions. In doing so, it will be ensured an orderly and highly cost-effective transition to a full decarbonized heating and cooling sector by 2050, creating smarter, greener and, more liveable cities along the way. Multi-source DHC integrating renewable and recovered heat sources In the vast majority of urban areas, district energy is technically and economically more viable than individual-based solutions and can be 100% decarbonised through the use of renewables (biomass, including residues, solar thermal and geothermal energy), excess and ambient heat, and fossil-free generation. Efficient DHC systems improve energy efficiency (EE) and enable to increase the share of local renewable and recycled energies in HC. Deploying solutions for DHC in districts with high energy density will also offer savings and risk sharing, thus increasing attractiveness to private investors.Therefore, it is of utmost importance to develop and implement measures to: integrating additional RE heat

sources in various sizes on existing DHC networks in a cost-efficient manner;

targeting the combination of constant and fluctuating sources considering specific needs for base load supply and competing base load sources, seasonal loads vis-à-vis the seasonal availability of sources, peak loads, peak availability of sources vis-à-vis the investment costs.

2 SET-Plan Action n° 3.2, Europe to become a global role model in integrated, innovative solutions for the planning, deployment, and replication of Positive Energy Districts, available at: https://setis.ec.europa.eu/system/files/setplan_smartcities_implementationplan.pdf, last accessed on 26 July 2019.

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Local leadership and the subsidiarity principleIn 2050, the subsidiarity principle will likely be applied to the European energy systems. Monitoring and control of generation, conversion, storage and consumption in all energy sectors will be done in an integrated, highly automated, fully trusted way, within regions which are dynamically sized and cell based. The subsidiarity principle entails a paradigm change, where energy systems are operated in such a way that actions are primarily taken at local and regional level (i.e. at the most immediate level). Only actions that cannot be properly addressed locally are handled at the next level. While this is a macro-trend for the whole energy sector, the inherently local nature of heating and cooling supply means cities must play a leading role in developing and implementing strategies for their decarbonization.Cities can and must show leadership in this area and decisions must be taken locally. However, cities’ efforts will only have the desired impact if they are complemented by compatible regulatory frameworks and favourable investment environments established at European and national level. Therefore, regional and national governments and the EU should define targets and provide clear direction to the local actors. How to enable energy leadership at local level, while at the same time coordinating the different local dimensions over the entire continent from a system and market perspective, remains an important RD&I topic to be solved well before 2050.Heat planning should be compulsory for cities and municipalities. These obligations should be complemented by regional and national support schemes. In addition, cities should be allowed to autonomously carry out zoning planning, in order to empower them to implement the changes they need. Planning tools and methodologies specific to the DHC sector are necessary, in order to coherently model, analyse, and design

HC systems as an integral part of the entire energy system.RES integration at regional and local levelThe successful integration of RES in DHC systems requires to develop and demonstrate tools, technologies, systems and solutions to: matching system temperatures with

locally available low-carbon sources, including the setting-up of new networks with low and very low supply temperatures and the reduction of the temperatures in existing networks. The system design/operation should also be adapted to the lower temperatures, as well as to the integration of heat pumps, cooling options and storage.

allowing to efficiently provide, host and utilise high shares of renewables up to and beyond 100% in the local or regional supply, by following a holistic view on the energy system, i.e. linking different energy domains (electricity, heat/cold, green gas, mobility) at different scales.

Increased flexibility for a reliable supplyTo minimise the discrepancy between the load and supply profiles of alternative heat sources (including power-to-heat), reduce the use of fossil fuels in peak load and wintertime and avoid supply competition in summer, it is essential to develop and demonstrate technologies, systems and solutions to increase the short (hours to days) and long term (weeks to months) flexibility of DH networks. Solutions should improve the cost–benefit ratio of storage options and/or improve the customer side integration, where smart buildings learn and offer flexibility to existing customers.Digital innovation for RES integration and sector couplingDevelopment and testing of technical and operational modelling, simulation and optimization of multi energy

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technologies and systems is required to identify the technological and systemic constraints. Moreover, technical interoperability between DHC technologies, automation and electricity market standards will enable private equipment contributing to sector coupling (e.g. heat pumps, EV loading stations, etc.) to be seamlessly integrated into a wider system of systems.ICT systems for DH sector coupling should be improved with regard to: real time supervision of energy flow

at building and system level; intraday forecasting for demand; source prices and flexibility

potential; cost competitive deployment using

cloud-based systems and configuration templates;

strengthened AI smart algorithms; financial and transactional systems

with multiple consumers, prosumers and suppliers;

virtual power plant aggregation systems adapted to DHC stakeholders;

interaction of high-level (energy management systems) and low-level controls operating the single technologies, distribution networks, etc.

It is important that the production, distribution and consumption control systems are fully digitalised and integrated, in order to: developing operational analysis,

optimisation and predictive maintenance using AI principles (production side).

improving operational analysis, perform real-time control and enhance the overall efficiency of the system (distribution side). Digitalising the distribution system will facilitate a more balanced energy distribution, leakage detection and minimise heat loss.

enabling consumers and buildings to behave better and more efficiently in the DH network (consumption side).

further developing the connection between operational grid optimisation and efficient heating controllers, increasing the digitalisation ability of the substations with cost effective communication and data management hardware/software, developing business models enabling grid operators to manage, and possibly own, the substation (building level). This will provide ways to develop the offer to building owners and tenants, as well as, to integrate the substation into the grid’s energy system.

developing and apply new methodologies, tools and processes allowing for integrated energy infrastructure planning and supporting day-to-day decision-making process of cities’ administrator, energy utilities and other decision makers (e.g. property developers). This will eventually lead to a socio-economic optimum, while allowing at the same time the implementation of new business models (e.g. prosumer integration).

Excess heat recoveryIncreasing the awareness and knowledge level of urban excess heat recovery among technicians, local administrators, investors and industry sectors which may provide excess heat (e.g. data centre owners, sewage managing authorities and service sector operators) is an important milestone to achieve 100% renewable energy districts. Other important key steps include: assessing and integrating excess

heat recovery solutions in both national and local energy strategies and developing heat networks and thermal storage facilities near sources of excess heat;

upscaling advanced, modular and replicable solutions enabling the recovery and reuse of excess heat

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and developing cooling networks from waste heat, based on absorption and adsorption chillers;

promoting technical integrated solution to optimize the cost of using excess heat for DHC;

scaling-up successful contractual arrangements and new business models for excess waste heat recovery system with the goal to guarantee economic advantages to all actors involved in the process.

4th Generation Low-Temperature DH (4GDH) NetworksTo enhancing the efficiency of DH networks, it is essential to optimize building heating systems’ design and operations, in order to adjust them to the operating conditions of the 4GDH (lower supply and return temperatures). This include: improving the operation control of

the indoor heating system in order to operate under 4GDH principles;

identifying how heating systems can be adapted to the lower energy requirements;

developing technologies to ensure tap water quality even at lower heating temperatures;

developing optimised solutions for non-uniform temperature DH systems, using advanced distribution solutions, integrated with decentralized and/or centralized heat storage, in order to simultaneously cover space heating a DHW with low water temperature distribution.

District coolingLike district heating, district cooling (DC) is offering solutions tailored to local conditions and using the flexibility of the district infrastructure. District cooling system (DCS) is recognized to be highly energy efficient compared to equivalent conventional systems being operated at individual buildings (Wu and Chen, 2017). The potential of DCS will be further enhanced by:

developing higher temperature DC for the integration of more natural cooling and increased efficiency;

developing specific tools that can provide more confidence and thus more openness to DC systems’ deployment and use;

developing a highly efficient and intelligent DCS based on innovative and optimized DCS management strategies, and the integration of predictive controllers at component level.

Energy integration as driver for circular economy renewables and further efficiency It is vital to take an integrated approach towards the energy systems planning, development and operations across all energy infrastructures. Buildings and district systems will work together to optimise temperature levels, time of use and storage opportunities to minimise total life cycle cost (emissions and cost), recording input from usage patterns, weather predictions, and future utility costs. Transport and other IT usage predictions will be considered. Furthermore, appropriate cross-sectoral software interfaces need to be established to achieve interoperability. Energy efficiency and renewable energies should be maximised and the synergies between them optimized by tapping into existing local resources and innovative technologies.

An integrated approach implies better exploiting the potential of thermal storage. Energy storage will be key in the future energy transition. The cost-effective potential of all types of renewable energy storage, including combined storage, long-term and seasonal solutions, should be identified and unlocked. Beyond traditional heat storage, cooling storage will provide flexibility and improve efficiency in cooling production, while at the same time reducing the electricity peaks and providing a smart and cheaper way to store electricity. This will prove crucial in

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a system which includes a high share of variable renewable energy and, in the future, it is expected that thermal storage will be a cost-effective solution.

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5.HEATING AND COOLING IN INDUSTRIESThe typical load profiles and temperature level of HC in different industry sectors determine the short- and midterm decarbonization potential of these sectors. low temperature heat (< 150 °C) is already easy to decarbonize with renewable heat as there are several efficient and renewable HC technologies available. The higher the temperature of the heating demand is, the more limited are the options for decarbonisation by renewable heat. To estimate the short- and midterm decarbonization potential of industrial sectors and to identify the need of developments (especially for high temperature heat demand), it is important to cluster the industry sectors regarding energy de-mand, load profiles and temperature.There is a considerable demand for HC in industriesThe overall final energy consumption in EU28 was about 11,900 TWh in 2015 (Eurostat, 2019). With approximately 2,400 TWh, the final energy consumption for HC in industry has a share of 20 % of the total final energy consumption. The 15 countries with the highest final energy consumption for HC in industry (Germany to Portugal) account for 93 % of the overall final energy consumption for HC in industry in EU28. Germany's final energy consumption for HC in industry is by far the highest (see Figure 3-1). It is as twice as high as the second biggest consumption (Italy) and higher

than the consumption of the 18 countries with the lowest final energy consumption for HC (Fleiter et al. 2017).

Figure 3-1: Overall final energy consumption for HC in industry (2015) (Fleiter et al., 2017)

Fossil fuels sources still dominate the landscapeThe share of energy carriers in industrial energy supply is dominated by fossil fuels (see Figure 3-2). For HC in industry gas and coal are the most important energy carriers. With a share of 9 %, Biomass is the most important renewable energy source. Other renewables (geothermal, heat pumps etc.) and solar thermal have a disappearing low share of 1 % and below 1 % (Fleiter et al., 2017).

Figure 3-2: Share of final energy carriers for HC in industry (2015) (Fleiter et al., 2017)

Need for sustainable solutions for medium and high process heatingThe final energy consumption for process and space cooling accounts for 5 % of overall final energy consumption for HC (see Figure 3-3). Most of the final energy (51 %) is used to generate heat above 200 °C. Heat under 200 °C (process and space heating) represents 44 % of overall final energy consumption for industrial HC (Fleiter et al., 2017).

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Figure 3-3: Share of final energy consumption for h&c on different temperature levels in EU28-industry (2015) (Fleiter et al., 2017)

The share of temperature levels of HC is similar for most of the European countries. Especially the countries with a higher final energy consumption for HC have very similar share of temperature levels. Final energy consumption by industry sectorsFigure 3-4 shows the relative share of the final energy consumption of industry sectors in the EU28 and the 15 EU28-member-states with the highest final energy consumption for HC. The most energy-intensive industry sector is chemical & petrochemical (20 %). It is followed by paper, pulp & printing (13 %), non-metallic minerals (13 %), food, beverages & tobacco (12 %) and iron & steel (11 %). With a few exceptions, the final energy share of the industry sectors is similar for most of the depicted countries (Eurostat, 2019).

Figure 3-4: Share of total final energy consumption of different industry sectors in the 15 EU28 member states with the highest final energy consumption for h&c (93 % of total h&c) (2017) (Eurostat, 2019)

The steps towards the decarbonisation of industry HCThere are several ways to introduce renewable heat in industrial heating and cooling processes. First step is to investigate which renewable fuels are available locally, expecting that in most cases more than one fuel should be available. Solar irradiation, ambient heat/cold, biomass and geothermal energy are available, to some extent, in most places in the world. The next step is to define the most suitable technology to make use of the renewable heat: each

fuel can be utilized with specific technologies, generally more than one. In the case of biomass, for example, the fuel can be produced and transformed in gasified, liquid and solid state and accordingly exploited through different kinds of thermal devices. Heat transfer mediumSeveral heat transfer media can be used: Water is a good medium up to 100°C

or slightly above, due to its large availability and high specific heat capacity.

Steam is very common when required temperatures exceed 100°C significantly. It can be found in closed loops, where it is used as heat transfer medium, or in open loops where steam itself is directly used in the process (or in systems with a partly use of direct steam).

Thermal oil is used where high temperature is required, mainly due to the fact that oil has a significant higher evaporation temperature compared to water, therefore no high-pressure systems must be handled.

Air is used as heat transfer medium mainly in drying processes.

A solution for every needRHC ETIP defines four typologies of renewable fuels: solar irradiation; ambient and excess heat, the former

being mainly available in form of water basins (ambient air is basically possible, but rather suitable for the civil sector than for the industrial sector due to required temperature levels), the latter meaning excess heat from anthropic thermal processes;

biomass in all its multiple forms (including biogas);

geothermal heat including both, soil and underground water.

Flexibility vs volatility: thermal storage is there to helpRenewable fuels do not necessarily need distribution grids infrastructure. All this

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makes renewable heating and cooling extremely flexible and technically applicable anywhere. The main issue when it comes to renewable fuels is volatility: except for biomass and biogas, which can be stored like any fossil fuel, other fuels are volatile. This happens with solar irradiation along the day and the year, with ambient heat and geothermal energy along the year, with excess heat according to production processes. Nonetheless, volatility can be overcome using thermal energy storage. A wide range of short- and long-term storages is available on the market and innovative storage materials are in an advanced stage of research.Seasonality and related challenges: once again, the solution is thermal storageSeasonality is an issue for almost any renewable heat source, not only in the heating and cooling sector. When it comes to industry, though, heavy fluctuations may occur also on the demand side. This is typical in batch production processes (daily; weekly and seasonal fluctuations), but also occurs when manufactured products change, or a new production line is installed. In such cases, heat/cold demand may change in both, quantity and profile. Nevertheless, fluctuations can be managed with thermal energy storage. Challenges here are innovative high temperature storages, e.g. to store steam, such as PCM or sorption storages or even direct steam storage (the latter having bigger issues with storage efficiency). Eliminating wastes by reusing excess heatSome issues should be considered when talking about excess heat. Excess heat is usually available at low or medium temperature (20-150°C), although higher temperatures are also possible (e.g. from exhaust gases). Depending on its temperature, excess heat can be used for direct heating of lower temperature processes or as heat source for a heat pump. Since relatively high temperatures are often required in industrial facilities,

high temperature heat pumps have been developed and are commercially available (often custom-made). Finally, excess heat can be used as a source for sorption chillers, given that its temperature level reaches at least 55-60°C. Excess heat should better be used in the same industrial facility where it is generated but can basically be moved to neighbour facilities via micro district energy grids, or even to neighbour cities via large district energy systems.Other energy vectors support the transition to RESThose listed in the Table in annex II have been selected by RHC ETIP as fuels best representing the RHC sector. Nevertheless, some energy vectors are likely to be increasingly used in the future for heating and cooling. Those are electricity and hydrogen. Depending on which energy source is used to produce them, they can be considered as renewable energy, or not. Renewable electricity shall in the future be used mainly for high temperature applications, which cannot be easily covered with renewable fuels. Apart from that, growth can be expected in microwave drying, for example in the pulp and paper production. It is also worth mentioning here that electricity consumption in industry will increase significantly due to the use of heat pumps. Hydrogen and ammonia are considered to be an important energy vector, as long as produced through renewable energy. In the future it is likely to become common in high temperature industrial processes (e.g. steel industry, cement industry).

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6.SOCIAL AND POLICY INNOVATIONNeed for structured plans for phasing out fossil-based heating systemsThe fulfilment of the objective of 100% RE for the HC sector by 2050 requires a clear plan at the EU and the member country level for phasing out fossil-based heating systems. Considering the lifetime of boilers of 20-35 years, this plan must be implemented as fast as possible and shall include both new buildings and infrastructures, as well as the existing building stock. Several European countries (e.g. Finland, Netherlands, Norway) followed the Danish example of banning the installation of new fossil boilers. From a given date onwards, it is forbidden to install new fossil boilers. Also, the replacement of existing boilers with RE systems could be requested within a given transition period. This is a rather simple but extremely powerful mechanism. Such bans may be accompanied by incentive schemes, in order to mitigate the risk of energy poverty.Developing national building codesOne of the key elements to achieve the target of 100% RE in the buildings sector will be the application of binding RE targets for the building stock. National building codes throughout Europe are recommended for the refurbishment of existing buildings. For new buildings there exists a variation of building codes throughout Europe. To reach 100% RE buildings by 2050, we need building codes and legislation with crystal clear requirements and ambitious targets for the use of renewable energy. Valuing energy performance certificateAt present energy performance certificates, rolled out as mandatory in Europe by national governments, has been treated by the ‘mainstream’ as another bureaucratic hurdle to overcome when selling a building. Media has also reported uncertain content by a small

minority of the assessments in some EU countries. The certificate process is not yet used for any specific purpose, but it could be a vehicle to invigorate the use of RE HC. For buildings, as the energy performance certificates have been sufficiently accepted by the EU countries, there is an opportunity of using them to drive a methodology of tax incentives or penalties on the municipal building taxes.Freezing subsidies for individual fossil heating systemsIn some countries, the installation of efficient fossil fuel boilers (gas, oil boilers) is still subsidised if they replace old systems. For example, in Germany this is supported by the KfW and BAFA programmes, which use public money. In Austria, the fossil oil sector has set-up a private support programme for the installation of oil boilers. These subsidies slow down the RE transition and need to be removed.Introducing effective investment incentivesDirect investment subsidies for RE heating systems can be a powerful tool to boost market uptake of RE technologies. The principle is that among the public “carrots” are offered instead of the “stick”. It is important that these measures are thought through carefully, that there is a clear objective and that there will be enough funds to achieve this objective. Subsidies need to be technologically mature, easy to understand for the end consumer and have a low level of bureaucracy. Most importantly, they need to be directed towards lowering the high upfront cost. To have a chance to reach the envisaged decarbonisation targets by 2050, the price advantage of RE compared to fossil fuels has to be increased dramatically. In order to enhance the competitiveness of RE, a tax on fossil fuels needs to be progressively introduced. This money

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could be used for supporting schemes to incentivise RE solutions.Supporting the ESCO modelsESCO is a recognised financial model to drive the penetration of RE HC solutions, but it has not been fully applied to its potential throughout the EU, yet. The core stakeholders are usually SMEs. The enlargement of the ESCO sector throughout Europe will be very important to drive performance expectations of the RE HC sector, as the ESCO model dictates that the earnings of the professional stakeholders designing, installing and maintaining the system, are directly related to performance/energy revenue criteria of the systems installed. However, at present there is no simple method for an SME to raise the initial finance to initiate an ESCO contract. There is a need for suitable framework conditions allowing the further uptake of this business model.Enhancing stakeholder’s awarenessThe main challenge to get to the 2050 100% RE HC target will be to engage ‘mainstream’ stakeholders to use RE HC applications. All building owners should be engaged. EU countries have different market make-up of ownership of individual buildings, defined as rental or occupant ownership. The rental market has been recognised as a challenge to promote the usage of RE HC. As a matter of fact, building owners and tenants have different interests. The tenant’s motivations to invest in RE technologies is often low due to high investment costs, which lower the profit. In order to transfer rented buildings also to 100% RE, suitable legislation is needed, in order to set targets and clarify the role of tenants and building owners in changing the heating systems.Another important action is mainstream awareness raising through fact-based and proactive communication and a combination of expert partners enabling the creation of transparent regional/national internet portal hubs,

that could potentially evolve into self-funding platforms. The platforms should include information on loan distribution related to energy savings, technical validation with all the ‘checks and balances’, demonstration and dissemination of financed projects, information such as design to metered energy and CO2 savings. This will foster the engagement of professionals and building owners.European wide application of RE HC, and mainstream education, will also need to take into consideration the wide range of ‘engagement variables’ such as geographical location, economic levels of development, building characteristics, local environmental conditions over an annual cycle and cultural differences. Citizens’ engagement and participation A modernised HC sector empowers local communities, small businesses and citizens, giving each citizen the possibility to take part in the energy transition as a consumer, worker, investor or even producer. Citizens’ engagement and participation in decision-making processes should be enhanced through:

a transparent and inclusive framework for public participation in decision-making processes (public consultation procedures and consultation meetings);

the involvement of enthusiastic community members, which often function well if engaged as local/regional “ambassadors” from the beginning;

initiatives for local/regional communities to increase and sustain acceptance (i.e. creating relatable “win-win” solutions);

strategies to handle local/regional initiatives that seek to prevent progress in decarbonisation.

Energy communities can be the entry point for a change in the traditional business model in which operators own the assets, to a new one in which citizens

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take up this role. Community-based projects should be prioritized under the premise that community-owned solutions have to do better in terms of decarbonisation and air quality improvement than other available solutions. As investment plays a key role in final energy prices when using renewables, this new approach will provide better prices for end users, while operators can concentrate their efforts in what really is their core business (managing the production and distribution of energy). As a consequence, many small and medium low-temperature DHC networks will emerge, so digital tools must be created to manage operations under these conditions.In this scenario, customers can assume both the role of energy consumers and producers, thus becoming prosumers. Business schemes will be developed with energy users as a focal point, trying to gather social acceptance and triggering the wide adoption of the solutions implemented within this framework. The financial benefits for prosumers should be structured to reflect the needs of the overall system. Moreover, policies and price signals should encourage flexible interactions for prosumers to help balance energy grids instead of simply maximising the owners’ self-consumption.The role of middlemenConsumer decisions are usually made based on recommendations of middlemen such as installers and chimneysweepers, and even architects. Currently, the installation of oil or gas boilers is often the simplest solution for the replacement of heating systems. Middlemen often recommend the installation of oil or gas boilers as it is a low risk technology with low maintenance efforts and generally high consumer satisfaction. Thus, middlemen must get support to be motivated to promote RE systems instead of fossil fuel

systems. This support can be monetary, e.g. by tax reductions, training, etc. Engaging professionalsSeveral analysis of the HC consumers3

show that certain professional groups, such as architects and engineering consultants, still consider RE as a potential risk to their clients, due to the complexity of design/installation compared to existing HVAC systems in the marketplace. These reservations from the professional groups must be considered and dealt with, using transparent platforms providing and disseminating information on the design and performance data of installed systems. Environmental and financial savings should demonstrate to the professional groups the necessity of engagement.Due to the high number of RE HC systems installations needed to reach the EU 2030 (50% of EU Buildings) and 2050 (100% of EU Buildings), the need for engagement of technician and professionals’ groups cannot be underestimated. Again, dissemination of RE systems design, installation and performance data will enable these stakeholders to engage themselves into the marketplace. The use of professional certifications would be beneficial but should not be mandatory at the initial stage. Investments decisions should be based on the overall costsToday’s common practice is that an investment decision is made by an investor based on the costs that will result for him. However, from an overall economic point of view this approach can lead to not optimum decisions. An example of this is e.g. the promotion of self-consumption of PV electricity. For the individual homeowner this will lead to a reduction of the amount of electricity he has to extract from the grid and hence in a reduction of his electricity bill. However, if less electricity is

3 Final report on the analysis of the heating and cooling consumers -Contract number PP-2041/2014 - VITO / EnergyVille /Fraunhofer ISE - 1 March 2019

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consumed the prices per kWh electricity from the grid will increase, because the cost for operating and maintaining the grid as well as providing backup power by conventional power stations are more or less fixed. As a consequence, the electricity prices for all consumers will increase. One way to deal with this is assessing not only the amount of renewable energy produced, but also the influence of specific technologies on the grid. In this context, e.g. solar thermal and water-based biomass systems are interesting options, since these systems usually include heat storage. Hence, they do not have a negative impact on the electricity grid and can even help to stabilize the grid.Avoiding spontaneous consumer decisionsThe breakdown of old heating systems occurs often suddenly at times with high heating demand. Thus, spontaneous consumer decisions for heating systems must be considered: system breakdowns usually lead to “like-for-like” replacements because there is little time to make an informed decision. Support must be given so that consumers as well as middlemen have the needed awareness and knowledge to take an informed and optimum decision. There should be a mandatory consulting (like the “Feuerstättenschau” in Germany) with the goal to setup a master plan for a deep renovation of the building.Gaining the trust of the mainstream marketTransparency is a necessity to gain the trust of the mainstream market, as previous RE experiences over the last 30 years have somewhat damaged the image of RE expectations. To ensure mainstream take-up and a solid growth of the RE HC sector, installed systems should be guaranteed to function according to the envisaged performance. To enhance trust in RE HC solutions, dissemination platforms should provide historical data of different RE system (including hybrid variations). These data, should be integrated with a method of

comparison of performance to installation cost, giving guidance to mainstream clients of the business sector. Once this has evolved, certain business leaders will appear to establish expected benchmarks of cost/performance. At this present time, there are disruptive open source control platforms already established in the marketplace, such as Arduino and Raspberry Pi, providing a low-cost methodology of historical/real data platforms. The application of these platforms will be required to build the benchmark data, with the goal to establish the RE HC business model as mainstream.Moreover, in order to ensure the installation of systems that fulfil at least minimum quality requirements, appropriate product certification schemes, such as the Solar Keymark certification for solar thermal products, should be established for all kind of RE energy systems. Only the installation of certified products should be eligible within public subsidy schemes.Financial innovations for DHCThe current business model of the DHC sector, where a solid customer base is needed before an investment is made, does not work well and does not contribute to quickly scaling up renewable and efficient HC solutions. Extending the ability of cities to generate revenue and access financing at lower cost will support their efforts to undertake sustainable energy programmes and infrastructure projects.There is a need to develop business models that move from the conventional approach of “heat as a commodity” to “heat as a service”, in order to examine the investment appetite of institutional investors. Business models and tariffs should benefit consumers who want to contribute to demand-side management. To scale up investments, innovative approaches must be found, enabling investors to understand how an efficient contract can be built and how the

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investment risk shifts from low investment and high operation cost to high investment and low operation cost for renewable energy usage. Moreover, in the context of decreasing financing availability, crowdfunding can have a major role in adding new sources of finance and raising capital from diffused investors. Need for new skillsNew skills will be required from energy planners and heating system providers and installers as energy efficiency, automation and IT solutions and services will become prevalent in the HC sector. A mix of skills from different disciplines, including control engineering, energy engineering and computer science will be essential. In cities and districts will emerge the new position of energy manager, whose role will be central to drive the energy transition; the role will

combine both energy planning and public policy skills. A shift is also needed in terms of business logic, moving from large production plants and distribution networks to decentralized, efficient production and distribution of heating and cooling. For district energy providers and policy makers this implies a better understanding of the new demand and needs of the customers, who will increasingly be prosumers.The public sector should pave the wayThe deployment of 100% RE HC and cooling solutions can be more effectively boosted by public authorities, if they take over the pioneering role of first movers by considerably investing in public buildings and HC network renovations.

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ANNEX I – TECHNOLOGY STATE-OF-THE-ARTi. Solar thermalWhat is solar thermal? The functioning of solar thermal systems is quite simple: solar radiation is collected and converted into heat in the collector absorber and that heat is then exchanged with a heat transfer medium, which can be in air, water (liquid and steam), mixture of water and glycol or oil (for higher temperature applications). Depending on the system design, the thermal energy of the heated medium is transferred, through a heat exchanger to a storage tank and used to supply heat in buildings (e.g. swimming pools, domestic hot water or space heating), industrial processes and district heating systems. Solar thermal technologies are highly flexible, scalable and easily integrated with both fuel-based and electricity-based heating solutions. Furthermore, solar thermal systems have very low operating and maintenance costs, solar thermal components are almost 100% recyclable or reusable, and this technology has no health risks or hazards.State-of-the-art of solar thermal technologiesCurrent key applications of solar thermal technologies are:

domestic hot water preparation for single- and multi-family houses with typical solar fractions (i.e. the share of heat demand covered by solar energy) between 40 – 90%;

space heating of single and multi-family houses with typical solar fractions between 15 – 40%;

space heating for non-residential buildings; district heating, with solar fractions going up to 50%, depending on the type of

storage; low, medium and high temperature heat for industrial process applications; other applications, as solar thermal for swimming pools and solar cooling

applications.Solar heat technology is extremely scalable, ranging from decentralised domestic solar water heaters with a 2-kW capacity, to large scale plants in the MW range. The most common applications today range between 40-70°C for domestic hot water and space heating, including residential and commercial buildings. Solar-assisted district heating systems can go above 100 MW and are commercially available today, and particularly developed in Central and Northern Europe. Large-scale solar thermal systems can produce heat at a cost of around 20 to 30 EUR/MWh. In comparison, the full cost of generating heat via gas boilers ranges between 28-35 EUR/MWh (Solar Heat Worldwide, 2019). Solar heat costs are highly predictable and virtually fixed for the whole lifetime of the solar plant; therefore, solar thermal represents a risk mitigation against fuel prices fluctuations. Solar Active Houses are buildings that use predominately solar energy for domestic hot water preparation and space heating. With typical solar fractions in the range of 70% to 80% Solar Active Houses are by far the most cost-effective technological solution to provide the predominately share of the building’s thermal energy demand on a large-scale basis by renewables.There are also well-known applications of solar heat for industrial processes in almost all industry sectors with an appropriate heating demand (including space heating, cleaning processes and drying), and in particular in food and drink (breweries, dairies, etc), mining, automotive, rubber and textile sectors. These solar thermal systems show great potential and are well suited for generating heat up to 150°C with good economics, but there is still a need for promoting further demonstration projects and feasibility studies.

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Solar thermal provides clear benefits for local economies. With 90% of products available in the internal market being of EU origin, this solution allows the production of clean local energy, creating new businesses and new jobs and job-reconversion. Furthermore, this is an exporting sector, with an annual net exports surpassing at times 1 billion Euros. Within the heating and cooling sector, solar thermal (ST) has some key specific strengths, as it:

is based on a standardised design process offering fixed energy costs over the system lifetime (more than 20 years);

is easily integrated with other RES heating and electrical solutions, or with conventional fossil fuels systems, which makes it a positive factor for renovation;

always leads to a direct reduction of primary energy consumption; is an infinite source of energy which does not produce CO2 making it a no regret

option; creates local jobs along the value chain (distribution, planning, installation and

maintenance); is a scalable solution, applicable at different temperature levels and for very

different purposes; has no exposure to the volatility of prices and doesn’t cause increase of

electricity demand; allows a real self-consumption and energy independence.

Potential of solar thermal technologyRenewable heating solutions are expected to take a prominent role to achieve a 2050 decarbonised scenario. This could not be reached without solar thermal, which is expected to cover at least 50% of the final energy demand for heating and cooling in Europe. The market in Europe is showing positive trends, and first estimations for 2018 indicate strong growth rates in some of the largest markets and this is expected to continue (Solar Heat Worldwide, 2019).Nowadays, the potential for renewable based district heating is underestimated and its implementation limited in areas with natural gas networks. Solar-based district heating is an innovative and promising solution which can be more cost-effective than gas-based district heating. Integration of solar thermal with other low temperature heat sources will also prove beneficial: solar thermal is an effective solution for peak shaving in summer and contributes significantly to winter heat demand, especially if coupled with seasonal thermal storage.Another growing reality is the one represented by the use of solar heat for industrial processes, which shows already good results especially in sectors as the food and beverage4, mining, automotive, rubber and textile industries. Furthermore, large scale systems need project finance and bankability tools, which implies, among other issues, standardisation, system validation and risk assessment procedures.Among the mega trends influencing the potential of the solar thermal technology, digitalisation will play a key role. It will allow a further integration between different technologies and devices but will represent a challenge especially for the small-medium enterprises, which characterise the solar thermal sector. The internet of things (IoT), industrial digitisation (industry 4.0), domotics and overall the integration among power and thermal appliances are expected to have a deep impact in making grid and off-grid solutions smarter.Like every other renewable HC technology, solar thermal is facing the hurdle of beating natural gas, which is an extremely cheap fuel, readily available all over Europe.

4 During last years the largest plant in Europe grew from 2 MW up to 12 MW. 31

Therefore, a Europe-wide carbon tax is a necessary step to protect the environment and induce meaningful investments towards solar thermal and renewables. Additionally, as solar thermal solutions used in Europe are mostly manufactured in Europe, this will also provide additional advantages for local economies and job creation, while enhancing European industrial competitiveness at global level. Finally, a clear streamlined legislation at EU level facilitating and incentivizing the use of available surfaces (rooftops, industrial and commercial buildings, industrial ground surface, reclaimed areas, etc.) for solar thermal installations would accelerate the deployment of solar thermal solutions, thus valuing solar thermal’s high energy efficiency in the context of higher energy density requirements in urban areas.

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ii. BiomassWhat is biomass?Biomass is plant or animal material used for energy production, heat production, or in various industrial processes as raw material for a range of products. Biomass contains stored energy from the sun, which is absorbed by plants through the process of photosynthesis. As a storable energy carrier, biomass can significantly contribute to increase the share of renewable energy consumption and to reduce CO2 emission from fossil fuels. Biomass is not only an energy carrier, but is also used as food, feed, chemicals, and for biomaterials. In a bio-based economy, these different uses are linked to each other and if managed well, complementary and sustainable.Biomass can be collected from many sources and converted into many forms of energy. Current sources of biomass include:

Forest products (e.g. firewood); By-products of the wood industry (e.g. bark, saw dust, shavings or black liquor); Energy crops (e.g. rapeseed, cereals or corn for biofuels; short rotation coppices,

energy grass); Agricultural by-products (e.g. straw, manure, fruit wood, pruning residues); Biomass from waste streams (e.g. municipal waste, animal by-products); Aquatic biomass (e.g. microalgae).

Biomass is converted into energy through combustion. Direct combustion is the most common biomass conversion technology. However, A main advantage of pure or converted biomass is its storability in liquid, gaseous or solid forms, that allows for a high degree of flexibility. In fact, there are several thermal (gasification, pyrolysis, torrefaction), biological (anaerobic digestion, fermentation), mechanical or chemical processes, through which biomass is first converted into other solid, gaseous or liquid forms to obtain biogases or biofuels with far greater energy density and calorific value on mass basis than the original feedstock. State-of-the-art of biomass technologyBioenergy is currently covering 10.5% of the gross final energy consumption in EU28 and the largest share of this energy, about 75%, is used for heat. The remaining share contributes to the power and transport sectors. Biomass currently covers around 87% of the total renewable HC demand in Europe, corresponding to 17% of the total EU HC demand. 50% of the bioheat is directly used for the residential sector, 26% for industrial processes, 16% is derived heat (heat only and CHP plants) and the remaining 8% is used in services and other residual sectors. The development of new technologies will enable the production of secure and sustainable biomass supplies, clean and effective conversion processes, high-quality fuels and optimally integrated solutions for households, services, industry, and district heating and cooling. The great variety of biomass products enable or facilitate the multiple use of biomass in the bio-based economy. For heating purposes, biomass conversion technologies are manifold, depending on the biomass type, the system size, its value chain, and its final use. Typical biomass fuels for heating are logwood, pellets and woodchips. Stoves are used for heating individual rooms and partly adjacent rooms, with typical capacities of a few kW. Boilers with capacities of a few tens of kW up to the MW scale are used for central heating systems and hot water supply for individual houses, large buildings, industries, or heat networks. Biogas and biofuels can be burned directly in a boiler for heat or in a CHP system for cogeneration, while upgraded biogas (biomethane) can be injected into the natural gas grid. However, biogas or plant oil use is still at a much lower

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level than solid biomass. Biogas is mainly used in industrial processes, as the industry is constantly striving towards higher fuel quality and more efficient and low emission equipment, as well as in the CHP and transport sector.Technologies for providing biomass-based heat to households, companies and industries are available, reliable and efficient. Bioenergy can provide low-temperature heat, steam, and high temperature heat suitable for industrial processes. Thus, it is one of the most convenient solutions for decarbonising the industry sector, where not many options are available. Small-scale heating systems fired with logwood, chips or pellets offer good ease of use, low operating costs and are replacing heating oil in many European regions. Biomass district heating is of growing importance in several EU countries (Scandinavian countries, Austria, Lithuania and others), where demand for heat by the residential and service sectors is high and/or fossil fuel-based district heating could be retrofitted to biomass fuels. When supplying a district heating system or industry, biomass is often used not only to provide heat, but also for power generation in combined heat and power plants (CHP), allowing a better use of the primary energy. In 2016, 58% of the bioelectricity produced in the EU28 came from CHP plants, while only around 16% of biomass is used in CHP plants today. Medium to large CHP plants can be based on steam cycle or Organic Rankine Cycle turbines. Small CHP systems based on piston engines or recuperated gas turbines can be used for districts heating, larger building or small industrial sites. Looking more closely at technological development, household-scale CHP (so-called “micro-CHP”) are still at market infancy but have the potential to increase the share of bioelectricity. As a controllable energy source, biomass in CHP can also be used to compensate fluctuations of other renewable sources and thus help to promote the use of renewable energy in different sectors.Potential of biomass technologyThe future development of biomass depends to a large extent on policies at EU and national level. The potential of bioenergy technologies to further penetrate the heating market depends on:

the existence of a supportive and stable legislative framework for bioenergy; the development of well-established biomass market chains, from supply to

equipment installations and maintenance, as well as effective marketing and communication;

the creation of a level playing field in the HC market, eliminating subsidies for fossil energy;

secured supply of high-quality biomass fuels, which meet sustainability standards; adaptation of biomass technologies to market needs and reduction of investment

cost (CAPEX); support of middlemen in the heating sector (installers, chimney sweepers,

planners); innovation in biomass technologies (including those for harvesting and processing

the biomass).Developing a long-term R&D strategy to support the bioenergy industry is, therefore, key to keep improving the performances of the technologies allowing a faster decarbonisation of all sectors.Existing studies have calculated the domestically available potential for energy generation from biomass in Europe to be between 169 and 737 Mtoe (7 - 30 EJ) a year from 2050 onwards (with the middle range being 406 Mtoe), taking sustainability issues into account. Hence, there is still a large margin for development of bioenergy compared to the projections in the EU energy roadmap (see Table 1). It is very difficult to give

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reliable estimates for the end-use division in 2030 and 2050. Indeed, this will depend on many parameters linked for example to political choices, the market growth or the feedstocks development evolution and their physical characteristics. However, it is very likely that heat will remain the main sector for bioenergy use. Table 1 bioenergy evolution from 2000 to 2050 (in Mtoe)

2000 2016 2020* 2030*

* 2050**Total primary energy consumption 60.5 134.5 167 245 322Total final energy consumption 55.4 115.9 139 192 252

Made up of:Bioheat (biomass for heat and derived heat)5 51.8 86.6 90.0 /Bioelectricity 2.9 15.5 19.8Biofuels for transport 0.7 13.8 29.1

* From the NREAPs; ** From A Clean Planet for all scenario 1.5TECH, EU Strategy - 2018.

iii. GeothermalWhat is geothermal?Geothermal energy is, by definition, the energy stored as heat beneath the earth’s surface, and has all the characteristics to play a crucial role in the future energy mix, providing flexible, affordable and carbon-free energy while enhancing competitiveness of European industry. Geothermal HC can supply energy at different temperatures (low or high temperature), loads (it can be base load and flexible) demands (from less than 10 kWth to a tenth of a MWth) and with no geographical restriction:

On the one hand, geothermal heat pumps can use the temperature at shallow depth without any geographical restriction.

On the other hand, higher temperatures are available at greater depth everywhere, which constitutes a resource for buildings, services and industry process heat.

State of the artCurrently, geothermal energy sources provide about 31 GWth for heating and cooling in Europe. In particular, geothermal energy is used for heating (and cooling of DHW) of individual buildings, including both small (5-30 kW, mainly residential), medium (30-500 kW, mainly commercial) and large schemes (> 500 kW), as well as for district heating. The range of users comprises residential houses, offices, shops, health care, schools, universities, museums, as well as commercial, institutional and historic buildings. Geothermal HC also supplies heat to greenhouses, aquaculture, agricultural and industrial processes, etc., and of course to numerous spas and swimming pools. A number of new and innovative applications of geothermal energy have been developed, and some of those have already been demonstrated, such as geo-cooling, melting snow or ice, and sea water desalination.Existing housing infrastructure represents an overwhelming share of the low temperature energy demand that can be logically supplied by geothermal heat pumps and geothermal district heating systems. Geothermal district heating will be increasingly targeted at existing buildings and old inner cities rather than new housing developments. Current benchmark studies indicate that geothermal energy and small thermal grids are probably the most effective option for this market, both in terms of carbon footprint and economics.

5 According to Eurostat methodology, the final energy consumption of biomass equals the energy content of biomass used for heat, except when heat is sold (this is the case of CHP and district heating). This sold heat is called derived heat.

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Potential of geothermal technologyThe key challenge for the widespread use of geothermal heat in the coming decades will be the ability to reliably design, engineer and control both geothermal district heating and ground source heat pump installations, in order to be able to use the year-round potential of geothermal energy for sustainable heat and cold supply. The further development of heat from cogeneration geothermal systems, such as combined heat and power (CHP) plants with low temperature installations and new generation of geothermal systems (like EGS), will also play a crucial role.Geothermal heat pumps will be firmly established in the markets of all EU countries, and a continuous growth is expected everywhere. They will be classically integrated in energy systems for buildings, combined with other renewable systems, in particular in HC networks. Multi-functional networks (buildings and industrial processes) will be developed, too. Geothermal energy storage (UTES) will be built-up for seasonal storage, with specific applications for residual heat from industry and storage of solar energy (high temperature storage). For low temperature heat pump supported applications, natural heat and cold from the air, or surface water will be stored underground and used for combined heating and cooling. These systems will become an important provider of heating and cooling for individual houses, industry and services, but also within DHC systems. Moreover, geothermal HC will be further developed, notably for agri-food applications (heating greenhouses, etc.). Finally, new applications for pre-heating in high-temperature industrial processes will begin to be installed. The enhanced geothermal systems (EGS), a real breakthrough technology, will experience a strong development in Europe, producing a large amount of electricity and combined heating/cooling through cogeneration installations. These installations will allow the development of new district heating systems for urban areas.Thanks to the continued technological development, in 2050 Geothermal Heating and Cooling systems are expected to be available and economic everywhere in Europe, for both individual buildings and geothermal HC from enhanced and combined systems for urban areas, industries and services. To fully realise the potential of geothermal energy in supporting a decarbonised HC, however, strong technology-specific regulatory and “playground evening” measures will also be required, especially in DH and energy intensive areas.

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iv. Heat pumpWhat is a Heat Pump?At its core is the refrigeration cycle, a technological concept known for more than 160 years, used in a device that can provide heating, cooling and hot water for residential, commercial and industrial applications. Any heat pump installation can provide heating and cooling in parallel. Depending on which service is used predominantly, the machine is called a heat pump, an air-conditioning unit, or a cooling/refrigeration machine. Numerous thermodynamic principles exist and are used to provide HC. Consequently, the term heat pump does not refer to a single solution but to an array of technologies that can be used. This was enough reason for the International Energy Agency (IEA) to rename its knowledge centre into “technology collaboration program on heat pumping technologies (IEA HPT TCP)” .State of the art of heat pump technology The potential of heat pumps in heating and hot water provision is increasingly recognized in Europe and world wide. Figure 1 shows a double-digit growth in unit sales for the last four years and industry experts expect this trend to continue and potentially accelerate.

Figure 1 – European Heat Pump market development 2009 - 2018 | Installed heat pumps: 11.8 million

With the increase in deployment, the technology is now becoming a keystone to the energy mix, decarbonising heating and cooling in residential and commercial buildings as well as in industry. But heat pump technologies are also the preferred choice when it comes to improving energy efficiency in white goods – dish washers, washing machines, tumble dryers and even electric cars rely on this technology. With most of the energy generated extracted renewably from the environment (air, water and ground), HPs can also use:

excess energy from industrial processes, infrastructure installations (sewers, subway, underground parking), reuse exhaust air from buildings and industrial processes.

Time differences between energy production and use can be bridged by integrating thermal storage into the system design (e.g. when cooling is required, the waste heat from the cooling process can be used for hot water production), as well as easily by combining it with other renewable energy systems (e.g. solar photovoltaics).

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Heat Pumps can operate at outdoor temperatures ranging from -25° Celsius (C) to 25°C. They typically cover a temperature range of about 50-70 Kelvin (K) per operating stage, depending on the refrigerant used and the system design. Larger temperature gaps can be overcome by a multi-stage design combining two or more compressors, typically with different refrigerants, that lift the temperature in multiple steps from source temperature to useful temperature level. In this case, the heat provided by the first heat pump unit is the energy source for the second refrigeration process, and so on. Compression cycle (electrically driven) HPs transform thermal renewable energy at low temperature levels to heat at higher temperature level. The system consists of a heat source, the heat pump unit (with pumps, heat exchangers, valves and compressor) and a distribution system to heating/cooling the building, device or industrial process. A transfer fluid transports the heat from a low-temperature source to a higher temperature sink. The compressor is typically run by electricity, but also engine driven compressors are available in the market. The auxiliary energy needed to run the compressor and the pumps can be minimised by reducing the temperature gap between the heat source and the heat sink, as well as by optimizing the components. Therefore low-energy heat distribution systems play a major role in allowing heat pumps to work efficiently. The same system provides heating and cooling. Making use of both services results in highest efficiencies and gives an additional economic advantage as only one hardware investment is needed.Thermally driven HPs (sorption chiller) are based on the thermal sorption cycle (equivalent to the compressor). Therefore, thermal energy is needed to drive the cycle and electricity is needed only for auxiliary components like pumps to circulate the working fluid. Thermally driven HPs are mainly used for cooling purposes in combination with waste heat or heat produced by renewable sources. Sorption chillers can be used for air conditioning of buildings with driving temperatures between 70°C and 100°C, or for refrigeration purposes, where driving temperatures of over 100°C are needed to reach temperatures below 0°C in the chiller. They can be realised in single, double or triple effect, leading to enhanced coefficient of performances and achieving driving temperatures up to 250°C. A wide range of renewable energy sources and technology combinations can reach a wide range of possible driving temperatures.Industrial Heat Pumps are most often bespoke systems designed to cater to specific needs. Depending on the system design and refrigerant used, a temperature difference of about 70K is covered with a maximum useful heat of around 150 - 170°C. The majority of applications is providing heating at 30 - 55°C and hot water at 55°C to 65°. The latter can be increased by deploying CO2 heat pumps that efficiently provide hot water at 90°C. Research is now aiming at the 200° - 250°C temperature range. This will have to be tackled with new system designs. Innovation and research in the sector is focused on improving components, products and systems, while on a conceptual/experimental stage, promising development is being conducted into new fields (e.g. magneto-caloric heat pumps).Potential of heat pump technologyOne unit of electricity can provide between three and five units of heat (in very specific designs even six to seven units are possible). At the same time, such a system provides additional two to four units of cooling, making overall heating and cooling efficiencies of between five to eight possible. In more practical terms, exchanging a fossil boiler with a heat pump saves about 50% of primary energy, while exchanging a direct electric heating system with a heat pump frees 2/3 to 3/4 of final/primary energy used; in other words, the energy needed to heat one building with fossil energy is sufficient to heat two buildings with heat pump systems. If a

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direct electric system is replaced, savings are big enough to heat 3-4 buildings with heat pump technology. The savings potential is even bigger in a systems perspective: if the fossil energy saved by replacing boilers with heat pumps is converted to electricity in efficient cogeneration plants, not only can the electricity generated be used to heat 2-3 houses with heat pump technology, but the waste heat can be fed into district heating and made useful on top. Thus, a wide deployment of heat pumps will lead to a reduction of energy demand for heating while having only a small impact towards the maximum load on the electricity grid.To summarize, heat pump technology:

mature and reliable; can be easily integrated with other systems; can use a divers set of (renewable) resources; comes in many shapes and sizes (capacities covering few Kilowatts to several

Megawatts, catering to household appliances as well as to industrial appliances); works with a wide range of temperatures and atmospheric conditions; can be used in energy storage and grid management; and has complementary advantages (dehumidification, air quality improvement).

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v. Thermal energy storageWhat is thermal energy storage?Thermal energy storage (TES) is a technology that stocks thermal energy by heating or cooling a storage medium so that the stored energy can be used at a later time for heating and cooling applications and power generation. Therefore, TES solutions are used to correct the mismatch between heat supply and demand, thus allowing for optimum utilization of a combination of different RE sources over a day or even a year. The storage medium is responsible for temporarily separating energy production and energy consumption, for heating, cooling and DHW. Therefore, TES technologies can contribute to increase the share of RE and at the same time enhance energy efficiency for heating, cooling and DHW production. Through sector coupling, TES can also contribute to balance the power grid.State-of-the-art of thermal energy storage technologyTES technologies can be divided in Sensible Heat Storage (SHS) technologies, Latent Heat Storage (LHS) technologies and thermo-chemical heat storage (TCM). SHS is the simplest method based on storing thermal energy by heating or cooling a liquid or solid storage medium (e.g., water, sand, molten salts, or rocks), with water being the cheapest option. The most popular and commercial heat storage medium is water, which has several residential and industrial applications. Underground storage of sensible heat in both liquid and solid media is also used for typically large-scale applications. SHS has two main advantages: it is cheap and without the risks associated with the use of toxic materials. However, SHTS based on water cannot be used efficiently for cooling and the energy storage density (amount of energy per unit of volume or mass) is relatively small. LHS can solve both these problems: it can be used for different storage temperature levels, including for cooling (by using materials such as such as paraffins and hydrated salts), and depending on the storage medium used, it is possible to find solutions with higher energy storage density than SHS. LHS is based on Phase Change Materials (PCM) a storage medium releasing or absorbing energy with a change in physical state (mainly solid/liquid). The energy storage density increases and hence the volume is reduced, in the case of LHS. The heat is mainly stored in the phase-change process (at a quite constant temperature) and it is directly connected to the latent heat of the substance. The use of an LHS system using PCMs is an effective way of storing thermal energy and has the advantages of high-energy storage density and the isothermal nature of the storage process.Thermo-chemical heat storage (TCM) is based on reversible exothermic and endothermic chemical reactions. This technology has a theoretical storage density up to ten times higher than water-based heat storage systems. Furthermore, TCM allow for a quasi loss-free storage as the energy is stored in a chemical way and not as heat, which leads to heat losses. As TCM are a relatively new technology, substantial efforts are still required in order to develop appropriate market ready products for various types of applications.Thermal energy storage enable the increased use of renewable and waste heat sources in energy systems and increase the flexibility of these energy systems on all scales and in multiple application fields. The main developments in technology can be subdivided into large, sensible thermal energy storage and in compact thermal energy storage technologies.Potential of thermal energy storage technologyAspects for further development or improvement of TES technologies are:

liner materials for high temperatures that have a (very) long lifetime and acceptable costs;

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construction techniques for large volumes, deep pit or tank storage in different geological settings;

thermal insulation materials and techniques to cost-effectively lower the heat loss and improve storage performance;

floating or self-carrying lid constructions to enable the use of the storage top area; optimized system integration and hydraulics and controls to optimise system

performance. Important for cold storage are the development of phase change materials with working temperatures between 5 and 15 degrees C, the integration of cold storage in cooling systems and the optimization of these systems.Several compact TES technologies (CTES) have reached a TRL 5 to 6. Further improvement towards cost effectiveness of such systems is dependent on the parallel development of novel materials, improved components and further development and demonstration of systems based on the present generation of compact thermal energy storage materials. Regarding materials, novel material classes, like mesoporous materials or composite materials, need to be further developed; moreover, testing methods need to be developed and assessed and the materials have to be integrated in the reactor components. Cost reduction is an important target for the storage materials development. As for the components, new reactor principles need to be developed and improved, and existing heat exchanger designs need to be optimized for the storage materials. At system level, the components need to be controlled in an optimal way, with novel sensor technologies to determine the state of charge and control strategies that take the typical characteristics of thermochemical processes into account. Furthermore, current generation CTES systems need further development towards demonstration, in order to tune the systems to the practical application situations and to find the optimal market introduction schemes for the next generation of CTES systems.Phase-change materials, such as paraffins and hydrated salts, can be used for latent cooling storage, contributing to increase the energy efficiency and the share of renewable energies such as geothermal, aerothermal and solar energy, for cooling. The range of values most suitable for storing cold according to the most favourable charging and discharging conditions vary between about 5 ° C and 12 ° C; there are several solutions of paraffins and hydrated salts that cover this temperature range. The most traditional solutions have been based on tanks filled with water and PCMs inside small containers with different shapes (plates, balls, cylinders). More recent developments include tank with heat exchangers where the PCM is immersed in the exchanger and transport fluid (water) passes through the interior of the tubes. The main objectives are to reduce the volume of tanks and increase the rate of energy transfer. Some recent investigation has been done to increase the thermal conductivity of paraffins using nanoparticles (nano enhanced, NPCM); this solution can be useful mainly for cooling systems where the delta T in the heat changers are more limited.

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vi. District heating and cooling

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ANNEX II - OVERVIEW OF RENEWABLE HEAT AND COLD SOURCES AND RELATED TECHNOLOGIES

Solar irradiation Ambient heat and excess heat/cold Biomass Geothermal heat/cold

Available fuels- Solar direct irradiation

- Solar diffused irradiation- Water (lakes, rivers)- Excess heat and cold

- Wooden (pellets, chips, logs)- Liquid (biogas, bioethanol)

- Gasified

- Ground heat and cold- Underground water heat and

cold

Issues with renewability? None (100% renewable)

- Ambient heat: None (100% renewable)

- Excess heat: even if generated from fossil fuels, this energy

would otherwise be lost

Biomass is 100% renewable, only issue is related to regeneration time. None (100% renewable)

AvailabilityNot constant across Europe: usually: the southern, the higher.

- Ambient heat: Not constant across Europe: usually: for

heating the southern, the higher. Opposite for cooling.

- Excess heat: depending on processes from which it is

generated

Basically, possible all over Europe. Import possible but should be limited to

neighbour countries.

- Low enthalpy: not constant across Europe: usually: for

heating the southern, the higher. Opposite for cooling.

- Medium enthalpy: to be found in limited areas in EU.

Volatility Daily and seasonal- Ambient heat: Mainly seasonal- Excess heat: can be daily and

seasonalNone Mainly seasonal

Intermediate transformations

required to generate

Transformation from electromagnetic energy

into heat.

- Ambient heat: as it cannot be exploited directly due to

exergetic issues, it is usually used as source for heat pumps.

- Combustion- Thermal gasification & synthesis

- Low enthalpy: as it cannot be exploited directly due to

exergetic issues, it is usually used as source for heat pumps

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heating/cooling- Excess heat: dependent on the

exergetic content, it can be exploited directly or through

heat pumps.

- Anaerobic digestion- Fermentation- Torrefaction

(heat -> heat -> heat).- Medium enthalpy: direct use

possible.

Available technologies for

fuel exploitation in the EU

- Flat Plate (vacuum and no vacuum);

- Evacuated Tubes (low and high temperature);

- Parabolic Trough (vacuum and no

vacuum);- Linear Fresnel (vacuum &

not).

Compression, absorption and adsorption heat pumps;

Free cooling technologies.

- Boilers- CHP plants

- Biogas plants- Bioethanol plants

- Gasifier technology- Synthesis technology

Compression, absorption and adsorption heat pumps;

Free cooling technologies.

Typical storage typologies used

- Daily for small systems.- Seasonal for large systems, especially in

DHC sector.- Water, pcm,

underground, steam possible.

Daily (mainly water)

- Daily for small systems.- Seasonal for large systems, especially

in DHC sector.- Water, pcm, underground possible.

- Daily for small systems.- Seasonal for large systems,

especially in DHC sector.- Water, pcm, underground

possible.

Temperature achievable

Up to 250°C with “conventional technologies”.

Above 250°C possible.

- With heat pumps 50-60°C- Direct excess heat: up to >100°C

- Up to 540°C (CHP)- Above 1000°C (flame temperatures)

With heat pumps 50-110°C

Typical back-up sources

Any. A back-up source is needed in most cases.

Any. In heat pumps, often electric resistances are used for direct

heating when ambient temperature is below given values.

Basically, not needed, but recommended in households in summer

to avoid burning wood in the hot season. Solar thermal collectors and

fossil fuel boilers are good candidates.

Basically, not needed.

Main advantages 100% carbon free, Can be used as heat source or Does not have volatility issues. Can be used as heat source or

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available anywhere (with differences) heat sink. heat sink with high efficiency.

Main drawbacks VolatileExcept for excess heat, cannot be

used directly, therefore the resulting system may not be 100%

renewable.

Competition with nutrition-based agriculture for first generation biofuels

(biodiesel, bioethanol)

- Low enthalpy: cannot be used directly, therefore the resulting

system may not be 100% renewable.

- Medium enthalpy: available only in limited areas in Europe.

- High upfront investments needed, with significant financial

risk profile.

Best practicesDatabase for solar heat integration in industrial

processeshttps://www.aidic.it/cet/

18/70/125.pdf Horizon 2020 Project BIOFIT https://geothermie.es.fr/en/references/projet-ecogi/

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REFERENCESDincer, I., Rosen, M.A. (2013). Exergy and Energy Analysis. In: Exergy (second edition). Elsevier. Pages 21-30. European Commission, EC. (2016). Communication “An EU Strategy on Heating and Cooling”. COM(2016) 51 final.Eurostat (2019). Energy balances April 2019 edition. Fleiter, T., Esland, R. Rehfeldt, M. et al. (2017). Heat Road Map Europe 2050. A low-carbon heating and cooling strategy, Deliverable 3.1: Profile of heating and cooling demand in 2015, Data annex, Karlsruhe.Lauterbach, C. (2014). Potential, system analysis and preliminary design of low-temperature solar process heat systems. Dissertation, University of Kassel, Kassel university press, Kassel.Schmitt, B. (2014). Integration thermischer Solaranlagen zur Bereitstellung von Prozesswärme in Industriebetrieben. Dissertation, University of Kassel, Shaker Verlag, Aachen. Wu, X., Chen, Z. (2017). Performance analysis of a district cooling system based on operation data. Procedia Engineering. Vol. 205. P. 3117-3122.Weiss, W., Spörk-Dür, M. (2019). Solar Heat Worldwide – Global markets developments and trends in 2018 – Detailed market figures 2017.

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