District heating needs flexibility to navigate the energy transition

Heating in buildings is at the core of energy consumption – space heating and hot water production account for around 70% of energy consumption in residential buildings in IEA countries, resulting in significant CO 2 emissions. This is receiving increasing attention in many countries, including through a renewed focus in IEA’s in-depth reviews of energy policies of IEA member countries.There are a range of solutions for reducing energy consumption and emissions from heat. District heating is one option; a system that uses heat produced in a centralised way and distributes it to consumers through pipelines using hot water or steam.The centralisation of heat production enables the use of different energy sources, including excess heat from industry. It also allows heat from biomass and waste to be produced with low emissions thanks to effective flue gas cleaning, a process that is not typically available at a local building scale. While most district heating systems globally still rely on fossil fuels, some Nordic countries have utilised the benefits of centralised heating systems to decarbonise large shares of their heat supply. In Sweden, for example, district heating provides over one third of total residential energy demand and only 10% of that heat is produced from burning fossil fuels (coal, peat, oil and natural gas).