Why data and digital are key to operating a decarbonised district heating system

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As the district heating industry faces the urgent need to decarbonise and fulfil the ambitious EU climate objectives, lower network temperatures become critical to the sector future. However, accomplishing them is difficult. In the following we investigate the challenges facing district heating companies and explore the solution to maintaining reliable operations while adopting renewables and lowering network temperatures. 

The district heating sector faces the simultaneous challenges of decarbonisation and network expansion. With space heating and hot tap water in buildings accounting for one-third of the EU’s final energy consumption, attaining the 2030 objective of 43% clean heat requires all district heating systems in Europe to increase at a 2% annual rate over the next seven years. However, the intermittency of renewables and the rising cost of fossil fuels complicate the process of establishing the optimal path to net zero while keeping operational expenses in check.

Low temperatures are poised to be critical enablers of this change as they open the door to the adoption of renewable heat sources, the utilisation of industrial waste heat, and the performance of heat-generating systems such as combined heat and power. “Efficiency as the first fuel” is commonly posited as the industry’s future objective and is very difficult to achieve without decreasing temperatures.

Operational complexity is growing

Maintaining security of supply, not just in terms of capacity but also cost, is becoming an increasing concern across the entire value chain. The operational complexity of heating systems is rising due to several causes (Figure 1):

  • Heating networks must operate at lower temperatures without exceeding flow and pressure re- strictions to decrease heat losses and allow for renewable energy sources.

  • Systems that generate heat from several sources distributed throughout the network are more challenging to manage.

  • More advanced thermal storage options may improve network flexibility but also make the system more complex.

  • System integration with industrial, electrical, and cooling networks results in greater interdependence.


Figure 1. District heating grids are transforming into complex energy systems

Following European legislation, organisations have started adding smart heat meters and other sensors to their networks. Data is regarded as a crucial enabler for controlling more complicated district heating systems. As more data is received from the generation, network, and substations, it allows district heating providers to forge a path towards improving the system’s overall efficiency.

However, district heating providers often lack the required support systems or data expertise to draw the correct conclusions from data about how to manage the heating system more efficiently. What the sector needs is building connected systems and using data to drive and enable this transformation, while ensuring supply security.

Prevent system complexity from increasing costs

As system complexity increases, district heating businesses will face greater uncertainty about whether the system functions as expected and ensures supply security. Many companies choose to employ safety margins in their operations to ensure that they’re in control. However, this raises concerns about having too much capacity in a variety of areas, including over-dimensioned pipelines, too much pumping capacity, and too high temperatures across the network.

How can companies manage expenses and system complexity? There are three approaches to consider:

  • Creating a realistic and dynamic model of the complete heating system – by modelling a longer time period rather than a “snap- shot” of a peak or baseload situation, businesses have a greater chance of knowing when and how frequently a specific issue arises.

  • Using historical system operations to generate models during expansions – rather than depending on the “theoretical” historic parameter model from the system’s inception, businesses should leverage existing system data from sensors, heat sources, and smart meters.

  • Considering future control systems carefully – peak needs often define system cost and size, but a sensible strategy for reducing peaks is to use dedicated buffers or frontload the system (temporarily boosting temperatures). These strategies are worth consideration throughout the design phase since they lower the system’s peak capacity.

Improve understanding of the current system

Installing smart meters to ensure a consistent data flow is only the first step. Companies need the necessary tools to derive commercial value from data, decrease costs, and achieve higher levels of decarbonisation. This need becomes more pressing since massive data volumes pose two problems for teams looking to extract value from data:

  • Data is commonly held in isolated silos: departments, servers, or even computers that aren’t accessible to the rest of the organisation.

  • Data doesn’t always lead to business value; hence, increased automation in data analytics is critical for unlocking insights to fuel decision-making processes. Companies can use the following two tactics to address these issues and unlock the benefits of their data.

Start analysing the existing data Many district heating companies assume they need a lot of data before using it for analysis and decision-making. Even a modest data collection from a SCADA system or IoT sensors can provide insights into predicting the future or recommending what should be done when analysed by a sophisticated digital solution. As a result, district heating companies may profit from insights and automation as soon as they link the datasets or sensor tags to a solution such as a Digital Twin.


Figure 2. A real-time Digital Twin based on thousands of smart heat meters, field sensors and live asset data

Connect data to prevent silos District heating suppliers require flexibility in their heating systems’ ability to store heat in storages, networks, and even buildings to balance generation and e-trade in numerous markets. However, disconnected tooling and data prevent them from realising the full value potential of such circumstances.

Traditionally, tools get assigned to a certain component of the system and are used only by a single team. This leads to a limited understanding of how the entire system works together. That is why companies need to connect data from various sensors, systems, and tools across the heating system. A full view of the entire grid allows for flexibility and exploration of future situations, resulting in informed decision-making and effective cost minimisation.

Work towards full automation capability

As heating systems become more intricate, real-time coordination across systems and roles poses in- creasing challenges. Many district heating companies recognise the need to address this complexity through automation, envisioning a future where energy systems operate in “autopilot mode”, allowing human operators to oversee the system’s behaviour with intelligent digital control.

To navigate this complexity, companies require innovative optimisation systems that analyse heat sources and the network in an integrated manner. This marks a departure from traditional data analytics tools that may oversimplify the network, neglecting critical factors like heat propagation, hydraulics, energy sources, storage, and consumer dynamics. In the absence of comprehensive data, making optimal decisions becomes nearly impossible.

For district heating companies committed to embracing automation, a digital solution capable of calculating real-time optimal operating setpoints is essential. Current practices involve optimising generation for the day ahead and managing system parameters with static temperature curves. To fully leverage system flexibility, a solution must be able to forecast at a granular network level and optimise the entire system dynamically, offering flexible setpoints while respecting temperature restrictions and production schedules.

Best practice example

The Finnish energy company Helen, which supplies Helsinki with 7 TWh of district heating, used a Digital Twin solution to accomplish its carbon neutrality goals. The Digital Twin generates a precise and accurate physical representation of the network, which is continually up- dated with smart sensor data, source data, and forecasts. It establishes the best balance between flow and temperature, ensuring that little heat is wasted, consumers receive the appropriate quantity of heat, and heat pumps function properly.

The Digital Twin has also been used for scenario modelling. As a result of the analysis, the company closed one of its coal plants and reduced CO2 emissions by up to 40%, with plans to shut down another by 2025. Helen expects to cut CO2 emissions by up to 80% compared to 1990 levels while also lowering generation costs by 10% due to these developments.


District heating systems are poised to become increasingly challenging to develop, manage, and maintain. To navigate this evolving landscape, companies can proactively enhance their understanding of these systems, leveraging digital solutions to extract value from the growing volume of collected data. The success story of Helen, a Finnish energy company using the Digital Twin, demonstrates the positive impact of such solutions, leading to significant CO2 reductions and lowered production costs.

By prioritising lower network temperatures, embracing data-driven tools, and learning from industry best practices, district heating companies can accurately address the most pressing challenges and achieve their sustainability objectives while ensuring supply security.


Oxenaar, S.; Lowes, R.; Rosenow, J.: Warming up to it: Principles for clean, efficient and smart district heating. November 2, 2023. https://www.raponline. org/knowledge-center/warming-up-to- it-principles-clean-efficient-smart-district-heating/

Helen builds an energy platform of the future and develops a digital twin of the district heating network with Gradyent. https://www.helen.fi/en/ news/2022/helen-builds-an-energy- platform-of-the-future-and-develops- a-digital-twin-of-the-district-heating-network-with-gradyent

This article was originally published in the Euroheat & Power magazine

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