Future business model for district heating based on renewables in Ile-de-France

University essay from KTH/Energiteknik


District heating is an efficient way to integrate renewable energies in the energy mix. In the French region Ile-de-France, district heating and renewables have known strong developments for several years, and they are expected to grow much more in the future. The expansion of renewable energies depends partly on their competitiveness compared to fossil fuels, which is related to public subsidies, and on the spread of district heating networks in the region. Thus, it could be assess what is the future business model for district heating based on renewables in Ile-de-France.

The data at the disposal of ADEME, the French agency for environment and renewable energies, show that district heating systems based on biomass could soon become more competitive than fossil fuels, whereas systems based on geothermal heat have fairly high costs. Yet, geothermal heat is more developed than biomass, and is expected to reach the targets set by the regional action plan for 2020, on the contrary to biomass. Though the increasing competitiveness of renewables will cut the necessity of public subsidies, the difficulty to reach some regional targets might mean that further actions should be implemented. From the energy operators’ point of view, the sector of district heating will surely grow considerably and therefore represent a large potential of development for those companies.

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