Through sector integration, district heating can provide more flexibility to the electricity system
New electricity consumers such as data centres, electric vehicles, heat pumps, air conditioners, hydrogen electrolysers and electrified industrial processes drive a strong growth in electricity demand. Much of the increased demand is met by new variable renewable sources, which require more flexibility in the system. District heating can use low-cost renewable electricity from wind and solar generation at times of high generation to produce heat in electric boilers and large heat pumps. In Aarhus, Denmark, the district heating system uses large electric boilers to absorb surplus wind electricity during low-price periods, contributing to both the emissions reduction in heat and the stability of the power grid.
District heating can support electrification by easing the burden on the electricity grid. Already today, cogeneration plants, which produce both electricity and heat, play a particularly important role in maintaining the balance in local electricity grids, as these plants are often feeding heat into district heating networks and are therefore located closer to population centres than other electricity sources. Furthermore, district heating can help free up grid capacity to electrify other end-use sectors if deployed in a flexible manner to manage periods of peak electricity demand or by absorbing surplus renewable energy when abundant. By using thermal storage, district heating systems can absorb more of this surplus electricity and produce heat for later use. In Helsinki, Finland, one of the world’s largest underground thermal storage facilities is being developed to store heat produced during the summer or surplus electricity-derived heat for use during winter heating demand, supporting seasonal balancing. Similarly, in Hamburg, Germany, a 2 million litre water tank inside an energy bunker acts as a thermal storage unit, balancing supply and demand into district heat and helping reduce grid congestion.
Digitalisation enhances the responsiveness and flexibility of district heating systems. Smart heat meters and advanced controls enable district heating networks to adjust demand and supply more precisely to optimise operations, using real-time data, including weather, consumption patterns, and electricity market signals. In the Greater Copenhagen area, widespread deployment of smart heat metering enables improved load forecasting, demand response, and operational efficiency. In the Netherlands, a heating network digital twin is used to optimise district heating operations, displaying temperatures, water flows, and pressures based on real-time weather forecasts, smart meter data, and heating system sensors.