District heating and cooling networks with decentralised energy substations: Opportunities and barriers for holistic energy system decarbonisation

Decarbonisation of the thermal grid whilst ensuring affordability and security of supply, requires a holistic approach which relies on sector coupling and energy storage. District heating and cooling networks with decentralised energy substations featuring heat pumps and thermal energy storage could provide such holistic heat decarbonisation. However, the extent of sector synergies, technoeconomic and market uptake hurdles are still unclear. This paper evaluates the opportunities and barriers related to technoeconomic performance, sector coupling facilitation and market uptake of district heating and cooling networks with decentralised energy substations. It follows a systematic literature review process and integrates its findings with insights from interviews held with 18 stakeholders from leading academic and industrial institutions. Findings suggest that high seasonal demand co-occurrence is crucial to minimize operational costs. Networks with a low number of prosumers can avoid hydraulic instabilities and control complexities and offer grid stability through voltage and frequency regulation when correctly coordinated. Novel mechanisms on business models, asset ownership and tariff structure are vital for a widespread market uptake. Overall, the system needs to be viewed as a tool in the arsenal of decarbonisation solutions with further research required on beneficial operation boundaries, hydraulic operation standardisation and business structure redefinition.