How lowering temperatures drives savings and futureproofs your heating network 

7 min read

Many district heating companies face the challenge of high temperatures and heat losses, resulting in high fuel costs and CO2 emissions. But how much do they cost each year? And what is the impact of high temperatures on your future production setup, like heat pumps or other temperature-sensitive renewable sources? This article explains the impact and cause of high temperatures and measures to ensure future-proof temperature control.  

Heat losses within distribution networks pose a common challenge for many district heating companies across Europe. These losses force companies to set a margin between the supply temperature with which the heat source is operated and the temperature of the heat that arrives to consumers. 

Different parts of a network have varying orders of magnitude of heat losses across different seasons. At the same time, various users have different contractual arrival temperatures. This makes assessing the weak spots in the network difficult since they change over time and depend on many factors. It also limits the degrees of freedom to reduce supply temperature, resulting in higher fuel costs than needed and, more importantly, deteriorating the business case of renewable sources such as heat pumps or geothermal. 

Reducing temperatures to lower heat losses across the system is a cornerstone in the decarbonisation strategies of heating companies. Transporting heat through pipes will always be bound to generate some losses – but should be minimised.  

How do you know when you've reduced your losses to a minimum? When will reducing temperatures a bit more only skyrocket pumping costs? Is there still room for optimisation? Last but not least, how much do heat losses actually cost each year, and what is their impact on your renewable transformation?  

This article aims to help heating companies assess the amount of heat losses, related fuel costs, and CO2 emissions high network temperatures generate today, how much renewable energy power it blocks, and what options they have to reduce these losses immediately.  

Considerable annual costs for your heat losses  

The first obvious consequence of using higher temperatures than needed is unnecessary heat losses. The example heating network calculation below shows how much of the annual fuel costs are associated with heat losses. In general, the higher the number of fossil fuel sources in the network, the higher the costs due to heat losses.  

The numbers used in Figure 1 give a good indication of the cost magnitude for different types of heating operators. They are based on average gas and electricity cost prices from Eurostat in 2024 and some average efficiencies for boilers, cogeneration plants, waste incineration and heat pumps from various European networks.

Figure 1: Example steps to calculate the yearly costs and emissions related to heat loss in your network 

Note that the average cost of heat is different for each heating network. It depends on which fuel is available per country, type of contracts and macro-economic trends. For instance, across Europe, the availability, type and price of bio-energy can differ significantly (biomass, biogas, biodegradable waste). Nevertheless, what many European countries still have in common is that they are too dependent on natural gas: according to the DHC Market Outlook in 2023, natural gas was used for 27.4% of the total heat production in Europe.

Let's imagine the following scenario:

  • A heating network produces 400.000 MWh each year and runs on a biomass base load, but it also uses gas for demand peaks and in winter.  

  • Altogether, bills for 330.000 MWh are sent out to all heating customers. 

  • This means the heat losses amount to 70.000 MWh, or 17,5% of the total production. 

  • The cost for this setup per MWh of heat produced is €28, raising the annual costs for heat losses to €1.926.000 (!) already (if this network had been mostly gas-operated, the cost would have been even higher: €3.780.000). 

  • In addition, the amount of CO2 emissions is 36 kg per GJ of heat, making the total emissions for the heat losses 2520 tons per year. 

Also, the cost of CO2, varying between €75 and €100 per ton in 2024 and expected to continue rising every year, will make burning fuels for heat losses even more painful. In the above example, this would add another €252.000 to the annual cost of heat losses. According to Bloomberg, prices will almost triple towards 2035!

Figure 2: Price outlook for the price of EU emissions towards 2030

The question is: what is causing these emissions and heat losses, and how can you reduce them? 

Too high network temperatures drive unnecessary fuel costs and emissions 

The main factor that determines the amount of heat losses and emissions of your network is the supply temperature. The graph below, from an real heating network in the Nordics, illustrates this relationship.

Figure 3: Relation between the absolute heat losses and the supply temperature for a Nordic network. Each datapoint represents a single hour between October and March. 

While an increase in flow and heat losses are correlated, the temperature is stronger correlated to the absolute heat losses in a pipe. This is due to the temperature difference between the surroundings and the flow going through the pipe. 

From Gradyent's experience working with several European district heating networks, a dynamic reduction of 10 °C. supply temperature on average could already reduce the amount of heat losses by 10-15% over a full year. 

For the 400.000 MWh network case described above, with a renewable base load, this would immediately lead to €200.000 - €300.000 of cost savings and 250 - 350 tons of CO2 emission reductions (this could even reach half a million for a gas-fired network!).  

Fuel savings can even double with lower temperatures when heat pumps are involved 

Another essential benefit of lowering network temperatures becomes clear when temperature-sensitive renewable sources like heat pumps are integrated into the network. 

Projections from the Heat Roadmap Europe (HRE) studies indicate the potential for 25–30% of district heating to be supplied through heat pumps by 2050.

For many heating networks it’s not a question if they will switch to heat pumps, but rather when. And when that moment comes, network operating temperatures should be ready to ensure smooth commissioning and operation of the heat pumps so they can deliver the most affordable heat from day one. 

This is important because there is a direct correlation between low-temperature heating systems and a high Coefficient of Performance (COP) for heat pumps. Research shows that in systems supplying temperatures below 70°C, the average COP is 25% higher than in systems operating above 70 °C.

For example, let's assume the heating company in the example above also integrates a large 30 MW heat pump as 25% of the base load, producing around 100.000 MWh each year. Taking the same supply temperature reduction of 10°C, the COP of the heat pump could also increase by ~10%. This would boost the heat pump output by 10%, leading to another €280.000 of additional cost savings on fuel needed by other sources, based on the renewable base load in Figure 1. When replacing gas-fired sources, these savings could even reach half a million!  

This magnitude of savings is doubling the amount of fuel savings that were immediately realised by lower heat losses due to the lower temperatures. And if you simply replace gas boilers with heat pumps, increase the heat pump share even more, or achieve higher temperature reductions, the savings will rapidly increase further. (Alternatively, you could also monetise the heat pump efficiency increase by producing the same energy output but using less electricity.) 

So, a significant additional value driver for reducing temperatures is the increased energy output from renewable sources like heat pumps. Similar savings can be expected for other renewable sources, such as geothermal and solar thermal sources [Geyer]. Next to that, in contrary to the additional cost of carbon emissions, supplementary running hours of green sources are subsidised by governments, making the benefit of additional heat pump output even larger. 

How to achieve lower temperatures while maintaining or even increasing the security of the heat supply? 

The business case for lowering temperatures is clear: it reduces heat losses and improves the operation of your renewable sources, saving costs and emissions. Also, scientists and heating leaders across Europe are unified in their opinion that futureproof district heating runs on low temperatures and is required to achieve energy efficiency goals.  

Hence, heating companies need to futureproof their operations with low temperatures to prepare for renewable and decentral operations, coupled with (industrial) waste heat, power markets and various temperature-sensitive sources. But where to start? 

Recalibrate your supply temperature every hour dynamically based on demand 

You will know what (low) temperature to supply only by knowing heat demand throughout the network on a granular basis. In other words, by forecasting the demand as a sum for the total network as well as per area, divided into flows and temperatures. 

Good forecasting takes into account all network dynamics and heat propagation and is key to understanding what heat flows can be expected. This can be done based on historic demand and flow patterns, the demand of the past hours and days, weather conditions and other variables.   

Assess your network hydraulically 

Temperatures alone aren't enough to guide your operations. If temperatures are (too) low, flows will increase, which can cause severe pressure issues or pump tripping. Companies need to prevent this from happening and know where their limits or bottlenecks are in the network. 

To assess all bottlenecks, a full real-time hydraulic picture of the network is critical. Did you know that many heating companies also have several (unused) shortcut valves in their network which could probably be used to reduce temperature spikes by opening and closing them at the right time? 

Find the bad-performing heat exchangers in your network 

The 'classic' problem of operating a heating network is having heat exchangers with return temperatures that are too high. This causes both increased flows on the supply line and unnecessary heat losses on the return line.  

However, sorting your users' performance by delta T is only the first step. The real benefit lies in understanding which of the bad-performing users really has the largest overall impact on your total network performance. For instance, a bad heat exchanger at the end of the net that demands heat in the morning peak might cause more heat losses than a user with relatively flat demand, close to your heat source, but with a worse delta T. 

To identify those, you need an hourly understanding of all flows, temperatures and pressure throughout the network and compare it in real-time to find the most urgent action to increase efficiency. In that way, the substations or users that have the biggest impact on the total network performance with their temperatures and flows can be found. 

In the future, this will even be of more importance. Demand peaks will be shifted by active user control, or customers themselves will act on price signals, mandating real-time monitoring and control to ensure this is always converted into benefits for the entire district heating system. This can also significantly lower the heat losses in your network. 

Use your storage capacities dynamically 

The modern solution to beat demand peaks (which require high temperatures and result in higher absolute heat losses) and minimise peak source usage is to use accumulators for charging and discharging (green) heat. Or, even more sophisticated, you can use the network's pipe volume to charge heat before it's used (also known as frontloading). 

With decentral storage capabilities, demand peaks that otherwise require heat to propagate through the entire system can be covered. However, to maximise your accumulator's capacity, you also need a detailed understanding of the flows (and bottlenecks) in the upcoming hours around it.   

Real-time end-to-end dynamic temperature control 

One way to effectively lower temperatures is by recalculating every hour the lowest temperature possible that still meets your customers' demand based on the actual and predicted heat flows throughout your network. This is also known as 'real-time dynamic temperature control' and is new compared to the conventional ambient temperature control table approach. 

Many heating companies in Europe have already decided to go for lower temperatures to enable the decarbonisation of their system. For instance, the city of Mantova used dynamic temperature control and saved 550 tons of CO2, while the Dutch energy company Eneco reduced 600 tons of CO2. 

Would you like to learn more about this approach to reducing temperatures? Book a demo with one of our specialists to explore a modern end-to-end solution for smarter temperature control. 


DHC Market Outlook Insights & Trends – Euroheat & Power (2023)

Roman Geyer, Jürgen Krail, Benedikt Leitner, Ralf-Roman Schmidt, Paolo Leoni, Energy-economic assessment of reduced district heating system temperatures 

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