Supply-Side Optimisation and P2H Sizing for a 2040 Net-Zero District Heating System: The Kapfenberg Case

Transformation Planning With Industrial Waste Heat and Sector Coupling

Abstract

This paper presents a techno-economic optimisation of supply-side transition pathways for the district heating system of Stadtwärme Kapfenberg GmbH (Austria), aiming at full decarbonisation by 2040. Conducted within the SUPPORT DHC project, the study assesses how industrial waste heat, renewable heat options, and Power-to-Heat (P2H) can be combined to provide cost-efficient and reliable heat supply under evolving boundary conditions. A detailed energy system model was implemented in energyPRO and optimised at hourly resolution over a full year using validated demand profiles and operator-specific constraints, including source availability, maintenance schedules, technology priority constraints, operational cost parameters, and fixed installed capacities for existing assets.

The analysis pursues two objectives: one with identifying cost-optimal supply portfolios for the current and planned expanded system, and the other with sizing P2H under two operational modalities (PV-only and PV plus grid electricity – grid import is permitted only when day-ahead prices are at or below a threshold; proxying hours with high renewable availability and/or low marginal emissions) within predefined capacity ranges.

Across the analysed scenarios, industrial waste heat remains the dominant component of the cost-optimal portfolio. For the PV capacities considered, PV-only P2H exhibits a limited system-wide impact, indicating that achievable benefits depend strongly on local generation scale. In contrast, grid-enabled P2H improves economic performance and operational flexibility under the applied electricity price threshold formulation. Minimum levelized cost of heat occurs at approximately 2 MW P2H capacity with a grid price threshold of around 40 €/MWh; beyond this point, marginal benefits diminish as low-price operating hours saturate.

The paper provides decision support for municipal utilities by demonstrating an optimisation-based heat production planning workflow that informs EED-aligned transformation and investment planning for accelerated integration of industrial waste heat and low-grade renewable heat, with sector-coupling options assessed to strengthen operational feasibility.