Heating and cooling represent almost half of the total energy consumption in the EU. In addition to its size, it has large potential for primary energy efficiency improvements, in terms of both final consumption and system efficiencies. Rapidly developing technologies are introduced at a varying pace in different member states, depending largely on societal and customer expectations and on the flexibility and business orientation of the sector as a whole. These are, to a large extent, defined by the legislative framework within which the heating and cooling companies operate. Furthermore, natural gas is most commonly used directly as a fuel to provide heating for individual houses, underlining both sustainability and security of supply concerns.
A framework strategy for the Energy Union was adopted by the European Commission on 25 February 2015. The forthcoming heating and cooling strategy is linked to the overall goals of the EU energy and climate policies on which the Energy Union approach is also based:
- Competitiveness – enhancing competitive and customer-driven heating and cooling markets, which effectively enable new technologies and solutions to emerge, and which would secure affordable and high-quality heating, cooling and energy savings services for citizens.
- Security of supply – accelerating the use of local and renewable fuels, as well as steering towards a circular economy by enabling and promoting the thermal energy recovery from non-recyclable waste.
- Sustainability – enhancing the efforts for emissions reductions as well as for primary energy savings, seen from a system perspective, and promoting resource-efficient heating and cooling solutions, such as DHC and CHP, utilization of industrial surplus heat, heat pumps and solar thermal.
The focus in this paper is on the space heating markets and on district heating as Fortum has the most experience in district heating and CHP operations in Northern and Eastern Europe (Finland, Sweden, the Baltic countries, Poland and Russia). This does not mean that cooling, industrial heat markets or other heating and cooling technologies are unimportant; in fact, one of our key messages is to promote open and fair competition between the different heating and cooling alternatives.
The potential contribution of efficient district heating and cooling (DHC), and CHP to EU climate policy goals in the context of a heating and cooling strategy is described in Annex II.