Decarbonizing the Dutch Energy System: The Impact of Renewable District Heating on the Electricity and Heating Sector

Abstract

Urgent and significant changes in all parts of the current Dutch energy system are required to achieve the national climate goals. This thesis explores the impact from traditional to renewable district heating (DH) on the Dutch electricity and heating sector, at both a national and regional level. The results provide relevant lessons for policy-makers and project developers regarding the realization of DH projects and the electricity and heat transition overall. The main research question is answered: What is the impact of the transition from traditional to renewable district heating on the Dutch electricity and heating sector?

Both qualitative and quantitative methods are applied within this exploratory research. On the national level, future trends within the electricity and heating sector are analyzed using scenario analysis and energy flow analysis (EFA). On the regional level, regional energy plans are analyzed in order to determine how the trends are substantiated within the region North-Holland South. This case study includes a stakeholder analysis, interviews with involved actors and an EFA.

The results show that there is uncertainty regarding the realization of the national heat and DH transition. The national transition to renewable DH does not always seem to make sense alongside the strong expectations of a fully renewable electricity supply. Nonetheless, within the region North-Holland South, renewable DH is expected to be one the main heating alternatives. The transition to renewable DH can partly substitute the current natural gas-based heat supply and provide some relief for the electricity sector, when renewable high- and/or low-temperature DH sources are available. However, local renewable DH sources are still uncertain.

The desirability of the shift to renewable DH depends on the regional context. Important factors are energy source availability and the decision-making by municipalities. In the region North-Holland South, uncertainty regarding the source availability of the planned renewable heating alternatives results in risks. The implementation of renewable DH can contribute to spreading these risks, and can provide some relief for the electricity sector, as a significant electrification is expected. However, spreading the risks does naturally not remove these risks. Municipalities in the region North-Holland South lack experience regarding the local heat transition. This can lead to ineffective decision-making, resulting in misaligned local initiatives and malfunctioning infrastructural and heat source lock-ins.

To steer the heat transition, concrete choices regarding renewable heating sources and synergies between electricity and heat must be made and effective legal and regulatory frameworks are urgently required. Therefore, municipalities are strongly advised to collect new knowledge, expertise and competences and assertively collaborate with provinces, energy producers and grid operators. It is particularly important to be aware of the risks and stimulate the development of renewable heat sources and heat storage. Implementing these recommendations within the region North-Holland South and possibly within other energy regions contributes to the realization of the national heat transition and therefore a future low carbon Dutch energy system.