Hydrogen-Fuelled Combined Heat and Power for District Heating

Abstract

The decarbonization of district heating systems requires flexible and dispatchable generation technologies capable of integrating high shares of renewable energy. This study investigates the techno-economic competitiveness of hydrogen-fuelled combined heat and power (CHP) plants embedded in a district heating network, using the Coastal Power Plant Kiel as a reference case. The existing natural gas-fired CHP units are assumed to be retrofitted for hydrogen operation, complemented by power-toheat, seawater heat pumps, a proton exchange membrane electrolyser, thermal storage, and hydrogen cavern storage.
A two-stage modelling approach is applied, combining a detailed non-linear simulation model with a linear optimization framework using a rolling-horizon dispatch strategy. Historical electricity prices (2024) and a generic district heating demand profile serve as boundary conditions. A parameter study evaluates system operation under varying hydrogen prices (1–5 €/kg) and competing heat source (CHS) costs (20-80 €/MWh).
Results show strong competition between hydrogen-fired CHP and seawater heat pumps. CHPs become increasingly competitive at hydrogen prices below 3 €/kg, while higher hydrogen prices shift dispatch toward heat pumps. With CHS costs of below 40 €/MWh the plant is increasingly outcompeted by the CHS. The findings indicate that future reductions in green hydrogen production costs could enable hydrogen-based CHP dispatch in district heating systems, particularly when combined with flexible heat pump integration to exploit electricity market volatility.