Making the most of waste heat

The total excess heat in the EU covers almost all of the EU’s total energy demand for heat and hot water in residential and service sector buildings. This potential needs to be utilised, especially during these times of energy and climate crises.

There are multiple ways to use excess heat and the three main ones are described below.

The easiest way to use excess heat is to reintegrate it into the same activities. A heat recovery unit is beneficial where unused heat energy is produced as a “waste product” in order to increase the efficiency of the overall industry. These units make waste heat usable for processes at a similar or lower temperature level. For example, supermarkets have cooling systems which generate significant amounts of excess heat, which is often released directly into the atmosphere and wasted.

SuperBrugsen, a local supermarket in Southern Denmark, has successfully reduced its energy consumption by reusing and selling excess heat from its cooling systems. Since 2019, the supermarket has covered 78% of its heat consumption by reusing heat generated by its cooling processes, and has also sold 133.7 MWh of excess heat to neighbouring buildings through the district heating grid.

The outcome was driven by three key initiatives: first, the supermarket switched from using chemical refrigerants to a natural refrigerant that has excellent heat recovery properties. Second, a heat recovery unit was installed, which enables the recovered heat to be reused to heat the store and produce domestic hot water. Third, SuperBrugsen has implemented energy efficiency programmes to ensure long-term efficiency. These programmes involve monitoring the cooling systems, adjusting technical parameters and conducting regular maintenance, resulting in further energy efficiency improvements and reduced energy consumption.

Another important solution is sector integration and smart urban planning.  The process of optimising the combination of at least two different sectors of energy demand and production is important in harnessing excess heat (i.e. electricity, heating, cooling, transport and industrial processes). Sector integration is about maximising synergies between sectors, converting and storing energy. This can take place on a small scale through urban planning or a larger scale through district energy networks. Urban planning can connect energy producers with energy consumers through a smart grid. Large synergies can occur when a producer of excess heat, for instance a data centre, is located close to entities that can buy and use large amounts of the excess heat (for example, horticulture).

In Dublin, Amazon Web Services has built Ireland’s first, custom-built sustainable solution to provide low-carbon heat to a growing suburb. The recently finished data centre will provide heat for initially 47,000 m2 of public sector buildings. It will also provide heat for 3,000 m2 of commercial space and 135 rental apartments.

Another example is found in Norway, where a data centre has been co-located with the world’s first land-based lobster farm. The co-location company uses a fjord cooling solution, with seawater entering the facility at 8°C and then being released back at 20°C. This is the right temperature for the optimal growth of lobsters. So, moving forward, a new production facility will be built in close proximity to the data centre, allowing it to use the heated seawater for the breeding of lobsters.

Synergies like these in urban planning are known as industrial cluster planning and can contribute to decarbonising our energy system. Furthermore, the collaboration between nearby companies has been shown to provide economic benefits to both the buyer and the seller.

Developing district energy systems is also an important measure. In many parts of the world, district energy systems supply homes and companies with heating as well as cooling. The district heating network taps into heat from a combination of sources, such as renewable sources (solar, geothermal and biomass) and fossil sources, such as at power plants, and distributes it through pipelines to end users in the form of heated water. Today, the majority of global district heat production relies on fossil fuels.

According to the IEA, the world needs to double the share of renewable sources in district heating by 2030 to reach net zero. If successful, this will help cut carbon emissions from heat generation by more than 33%. One of the main strengths of district energy systems is their capacity to integrate different heat sources that can push fossil fuels out of the heating and cooling mix. Today, the so-called 4th generation district energy system allows very low temperature heat sources to be integrated into the district energy system and provide heating for new buildings that can operate at low temperatures. The fact that more and more renewable sources of energy can be used in district heating and cooling puts district energy systems at the heart of the green transition.

Another vital benefit of district energy is that it supports the balancing of the grid. By looking at the energy system holistically and connecting different energy sources, district energy allows for the flexible use of power. It enables discrepancies in supply and demand to be evened out so we can use the full capacity of the grid. Balancing the peaks will be especially important as we increase the use of renewables and electrification. There are vast district energy systems in China and Europe, and more are expected to come. Denmark is one of the world’s most energy-efficient countries, due primarily to the widespread use of district heating. In Denmark, 65% of buildings cover their demand for heating with district heating, and more than half of the heat is from green sources such as waste, biomass and excess heat from various commercial processes.

In addition to the technical and structural solutions, it is essential that decision makers are aware of the potential of excess heat when managing urban planning and designing the financial and regulatory framework for the future energy market. Below are some policy recommendations which can enable the usage of excess heat.

First of all policy makers must ensure that regulations support rather than prevent the use of recycled heat.

Today there are a number of market barriers that prevent market players from leveraging the potential of reusing excess heat. Regulation can remove these barriers, for instance by supporting the equal treatment of waste heat and renewable energy sources used in heat networks. Regulation can also push for greater use of excess energy by making it mandatory for entities such as data centres or industries to draw up plans to exploit their excess heat.

For example, in Denmark, municipalities were asked to map existing heat demand, the existing heat supply method and the quantities of energy used. They also estimated future demand and supply possibilities. Based on this information, overall energy plans were prepared to show the priority of heat supply options in any given area and identify locations for future heat supply units and networks.

To further improve energy efficiency by using wasted energy, it is essential to remove financial barriers. The current design of the energy market is, in many places, a barrier to sector integration technologies. It either hinders the use of sector integration technologies in specific markets, or it fails to internalise all positive and negative externalities of low-carbon and carbon-intensive technologies respectively. It is crucial that tax legislation favours the use of surplus heat and that appropriate network tariff structures are considered. Additionally, administrative barriers need to be removed to incentivise users to connect to district heating networks, which will also encourage district heating utilities to boost their efficiency.

A final policy recommendation is to establish partnerships. As more systematic  use of excess heat is, at its core, an exercise that spans sectors and stakeholders. Partnerships between local authorities, energy suppliers and energy sources such as supermarkets, data centres, wastewater facilities and industries can help to maximise the full potential of excess heat.

The world cannot afford to waste this valuable resource, and governments, industry and other stakeholders need to take action to harness the power of excess heat. With the right policies, investments and collaborations, excess heat recovery could become the world’s largest source of clean energy, helping to mitigate climate change and build a more sustainable future.

Emilia Samuelsson

Based on report by Danfoss. (2023). The world’s largest untapped energy source: Excess heat. https://www.whyenergyefficiency.com/solutions/allsolutions