District heating and cooling: Enabling modernisation and fuel switch through support for investment plans and skills development

Topic description

Objective:

To advance towards carbon neutrality and to phase out EU dependence on fossil fuels imports, there is an urgent need to reduce fossil fuels consumption for heating purposes. In that context, modern and efficient district heating systems can connect local demand with low-temperature renewable and waste energy sources, as well as the wider electric and gas grids, thereby contributing to the optimisation of supply and demand across energy carriers.

The REPowerEU Plan and the proposals for a revision of the Energy Efficiency Directive (EED) and the Renewable Energy Directive (RED) set out ambitious measures, including to increase the use of renewable energy and waste heat in district heating systems.

District heating operators/owners need to prepare and implement plans so that existing systems fulfil the proposed criteria for ‘efficient district heating and cooling’, as proposed for the revision of the EED. This will require, among other aspects, the cost-effective and energy efficient retrofitting of existing, inefficient district heating networks and the integration of low-temperature renewable energy (e.g. from solar thermal, ambient energy and geothermal resources) and waste heat, including supported by heat pumps. Furthermore, district heating has been identified as a key option for the decarbonisation of the heating sector in countries and regions without long tradition and experience in the technology.

The option to further develop district heating and cooling systems should be integrated in energy planning and heat mapping by public administrations, taking a district approach when addressing the policy priority of deploying renewable and efficient heating and cooling, including for instance building or modernising district heating systems when planning renovation programmes.

Guidance, recommendations and technical advisory services have already been developed and tested at the national and local levels. Notwithstanding, a large share of existing district heating and cooling systems still overly rely on fossil fuels. Additionally, the switch to low-temperature renewable energy and waste heat and the development of new systems in emerging markets is hampered, among other factors, by limited human, technical and financial capacities. Technical support and enabling frameworks are therefore needed to support the preparation of modernisation and development projects.

Proposals are expected to focus on one of the two scopes below. The scope addressed should be specified in the introduction of the proposal.

Scope A: Technical support for the development of investment plans for the modernisation, fuel switch and system integration of existing district heating systems

Proposals should work with operators/owners of existing district heating systems and provide them with the required technical support for the preparation of investment plans to fulfil the criteria for ‘efficient district heating and cooling’ as defined in the revised Energy Efficiency Directive.

The focus should be on identifying concrete ways to modernise the systems and to integrate low-temperature renewable energy or waste heat (the latter defined in the Renewable Energy Directive). However, the transformation into low-temperature of the district heating networks is not compulsory and other feasible approaches enabling the fuel switch to low-temperature renewable energy or waste heat are possible.

The investment plans should include the detailed identification of the investments, their timing, the internal and external resources required, the public and private funding sources, in particular for the first tranches of investments and the potential identification of alternative funding sources and models. The investment plans to be produced should enable the targeted district heating system to fulfil the criteria for “efficient district heating and cooling” as proposed for the Energy Efficiency Directive Recast within in a timeline of 10 years.

Activities should include, among others, financial planning and pre-feasibility studies including, where relevant, the assessment of the compatibility with the existing building stock and options to link district heating retrofitting to local building renovation plans. Proposals under this topic are not expected to finance the development of new tools, e.g. software, or the upgrade of existing ones. On the other hand, applicants are encouraged to make use of existing commercial software, as needed.

Proposals should support the development of a substantial number of investment plans in at least 3 eligible countries.

In line with the Renewable Energy Directive, actions may also include the assessment of the potential to participate in electricity markets by providing balancing, storage and other flexibility services.

Additionally, proposals should clearly demonstrate the interest/commitment of the district heating operators receiving support, and explain the content of the support to be provided and how the consortium will deliver this support on the ground.

Proposals should promote replication by other district heating operators/owners.

• For actions focused mainly on specific investment project development, including preparation of a detailed business plan, project documentation, procurement and award of investment contracts, please refer to topic LIFE-2023-CET-PDA.

Scope B: Skills development of professionals, operators and public authorities

Proposals should strengthen the capacity of targeted professionals across the district heating and cooling value chain (including white collar workers) and/or civil servants in national, regional and local authorities.

In particular, proposals should provide the technical and practical knowledge required to:

• develop new district heating and/or cooling systems based on low-temperature renewable energy sources and waste heat; and/or
• modernise and integrate low-grade renewable energy and waste heat sources into existing systems; and
• operate district heating networks at low temperatures.

This could cover, among others, one or more of the following aspects:

• Development, testing and validation of new training schemes and/or upgrade and replication of existing training schemes, including on-site training and mentoring schemes.
• Development or upgrade and dissemination of technical guidelines, including for buildings preparation for low-temperature district heating and solutions for heat storage.
• Capacity building for deploying renewable and efficient district heating and cooling networks, integrating district heating development and building renovation programmes, including links with planning and heat mapping.

Activities should:

• build on the lessons learned and material developed from previous projects and other programmes.
• be based on concrete successful examples.
• be tailored to local contexts.
• enable peer-to-peer learning; and
• be carried out, where applicable, through the use of existing software and tools.

Proposals should provide details on the actual scope and content of the training and capacity building activities to be developed, e.g. professional profiles and levels in the European Qualification Framework targeted; thematic coverage; duration of the training; validation mechanisms. Additionally, proposals should include the training of trainers and a testing and validation phase for the new or upgraded schemes developed. However, the actual, long-term, running of training schemes is not covered by this topic. Thus, a key element should be the development of a strategy ensuring that the schemes will be sustained after the end of the project, linking to available sources of funding at national and EU level.

Where relevant, applicants should aim to bring together employers, trade unions as well as training providers.

For public authorities, activities may also aim to support the development or strengthening of an enabling regulatory environment.

Proposals must be submitted by at least 3 applicants (beneficiaries; not affiliated entities) from 3 different eligible countries.

For Scope A, the Commission considers that proposals requesting a contribution from the EU of up to EUR 1.75 million would allow the specific objectives to be addressed appropriately.

For Scope B, the Commission considers that proposals requesting a contribution from the EU of up to EUR 1.5 million would allow the specific objectives to be addressed appropriately.

Nonetheless, this does not preclude submission and selection of proposals requesting other amounts.

Proposals should present the concrete results which will be delivered by the activities, and demonstrate how these results will contribute to the topic-specific impacts. This demonstration should include a detailed analysis of the starting point and a set of well-substantiated assumptions, and establish clear causality links between the results and the expected impacts.

Proposals submitted under this topic should demonstrate how they will contribute to:

• equip district heating operators with investment plans, guidance, internal capacity and other elements which are required to transition towards the criteria defined for ‘efficient district heating and cooling’ (for scope A).
• build the capacity of professionals and/or civil servants to develop new district heating and/or cooling systems based on low-temperature renewable energy sources and waste heat; and/or modernise and integrate low-temperature renewable energy and waste heat sources into existing systems; and operate district heating networks at low temperatures (for scope B).

Proposals should quantify their results and impacts using the indicators provided for the topic, when they are relevant for the proposed activities. They should also propose indicators which are specific to the proposed activities. Proposals are not expected to address all the listed impacts and indicators. The results and impacts should be quantified for the end of the project and for 5 years after the end of the project.

The indicators for this topic include:

For Scope A:

• Number of existing district heating systems equipped with an investment plan allowing them to fulfil the criteria for ‘efficient district heating and cooling’ defined in the Energy Efficiency Directive.
• Number of local and regional authorities integrating the outcomes of the project in their energy planning.
• Investments in energy efficiency and renewable energy sources triggered by the implementation of the investment plans developed thanks to the project (cumulative, in million Euro).

For Scope B:

• Number of training schemes and capacity building activities developed, upgraded and replicated of existing, including on-site training and mentoring schemes for professionals, operators and public authorities.
• Number of trainers trained.
• Number of professionals and civil servants trained.
• Number of operators with strengthened capacity (when relevant).
• Number of stakeholders and organisations endorsing technical guidelines and core material for specialised training.
• Number of local, regional, or national regulatory frameworks strengthened.

Proposals should also quantify their impacts related to the following common indicators for the LIFE Clean Energy Transition subprogramme:

• Investments in sustainable energy (energy efficiency and renewables) triggered by the project (cumulative, in million Euro) – covered as topic-specific indicator, see above.
• Primary energy savings triggered by the project (in GWh/year).
• Renewable energy generation triggered by the project (in GWh/year).
• Reduction of greenhouse gases emissions (in tCO₂-eq/year).