District Heating 4.0 for a successful low-carbon transformation

District heating is an important part of the German energy system. However, in order to meet the requirements of ambitious climate and energy policy goals, it is necessary to undertake a fundamental transformation of the predominantly fossil fuel-based district heating. New fourth-generation heat grids can have a positive impact on the structural change that is necessary for a low-carbon transition. Innovative district heating systems can integrate renewable energy and waste heat in a cost-efficient and flexible manner, thus making a significant contribution to the decarbonisation of the heating supply.

The research report aims to take stock of the political-administrative conditions and possible obstacles for the implementation of innovative district heating systems. The focus of the analysis is on the governance structure of district heating systems: consideration is given to systemic aspects of grid-based heat supply, particularly to the funding and regulatory landscape. This includes an in-depth analysis of the regulatory conditions and funding and financing instruments for innovative district heating of the fourth-generation. In doing so, regulations along the vertical structure of the administrative structures in Germany - the federal government, the federal states, municipalities - will be examined while energy policy strategies and standards will be analyzed at the European level. Observations on future organizational structures of district heating and related business and economic challenges play a central role.

The strategic importance of innovative district heating systems results from the challenges to achieve a low-carbon energy system: due to the technical properties, such concepts can contribute to a transition for a future-oriented, climate-friendly and adaptable district heating.