Regulatory integration of district heating supply

The client, a municipal utility from southern Germany, pursues a climate-friendly strategy and built an innovative combined heat and power (CHP) plant to provide climate-friendly district heating as well as a self-sufficient power supply throughout the city. As part of the “Saalachwärme” project, the municipal utility built a district heating network to ensure a sustainable heat supply for end customers. At the time, the project was the first plant of its kind in Germany. Currently, the project is in the planning and construction phase, trial operation started at the end of 2020, and commissioning is planned for 2021. E-Bridge supports the client in questions concerning the regulatory integration of the district heating supply.

E-Bridge first defines the market roles in three, partly overlapping work packages and then describes the interaction of these market roles on a process level . The target function is an optimization of the fee structures in the context of the integration of district heating into the existing business model of the municipal utilities. Finally, suggestions are made to the municipal utilities on how to structure the business relationships and the advantages and disadvantages for each constellation of market roles are described.

As part of a management summary, E-Bridge will make a recommendation to management from its case design research.

The integration of district heating supply has a significant impact on electricity and gas supply as well. In particular, a substitution of gas consumption by the district heating connection takes place with a corresponding influence on the network charges of all lines of business. E-Bridge optimizes the network tariffs of the divisions taking into account the overall energy performance of the municipal utilities. The new processes resulting from the district heating connection are assigned to the market roles in such a way that the internal structures can be optimized while complying with the funding requirements.

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