Supporting district heating and cooling networks

Proposals submitted under this topic should demonstrate the impact of the supplied investment plans and guidance on the transition towards “efficient district heating and cooling” networks and on integration of renewable energy and waste heat. The expected results together with a detailed analysis of the starting point, including a set of well-substantiated assumptions and clear links between the results, should be given in the proposal.

Proposals should demonstrate how they will contribute to equip district heating and/or cooling operators and/or local authorities and other key stakeholders with investment plans which are endorsed and ready to be implemented after the end of the project, as well as guidance, internal capacity and other elements which are required to either build new systems (fully based on renewable energy or waste heat) or to meet the criteria defined for “efficient district heating and cooling”, encouraging potential waste heat suppliers to consider becoming heat suppliers to district heating.

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. 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:

• Number of endorsed investment plans for existing or new district heating and/or cooling systems, allowing them to fulfil the criteria for “efficient district heating and cooling” defined in the Energy Efficiency Directive.
• Number of follower cases (DH companies) for which transfer of knowledge will be effectively provided.
• 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).

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

• Primary energy savings triggered by the project in GWh/year.
• Final energy savings triggered by the project in GWh/year.
• Renewable energy generation triggered by the project (in GWh/year).
• Reduction of greenhouse gas emissions (in t CO₂-eq/year).

Funding rate

Other Action Grants (OAGs) — 95%

To advance towards carbon neutrality and to phase out EU dependence on fossil fuels imports, there is an urgent need to reduce fossil fuel consumption for heating and/or cooling purposes. In that context, in particular modern and efficient district heating systems can connect local demand with 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, the revised Energy Efficiency Directive (EED) and the revised Renewable Energy Directive (RED) set out ambitious measures, including the increase of the share of renewable energy and waste heat in district heating systems. District heating and/or cooling operators/owners need to prepare and implement plans so that existing systems fulfil the criteria for “efficient district heating and cooling”, defined in the EED. This will require, among other aspects, the integration of renewable energy (e.g. from solar thermal, ambient energy and geothermal resources) and waste heat. Furthermore, district heating has been identified as a key option for the decarbonisation of the heating sector in countries and regions without a long tradition and experience in the technology.

Guidance, recommendations and technical advisory services have already been developed and tested at the EU, 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 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 should address one of the following aspects and are expected to work either:

• with operators/owners of existing district heating systems to provide them with the required technical support for the preparation of investment plans for the fuel switch of existing district heating systems to fulfil the criteria for “efficient district heating and cooling” as defined in the Energy Efficiency Directive. This can include the extension of existing district heating and cooling networks provided that they are fully based on renewable energy or waste heat and the achievement of efficient district and cooling networks criterion is assured; or

• with municipalities and the relevant key stakeholders in the development of investment plans for new district heating and/or cooling networks, provided that they are fully based on renewable energy or waste heat, and with particular attention to existing buildings.

For both aspects, the focus should be on identifying and offering concrete ways to integrate renewable energy or waste heat, assessing investments needed, and affordability with economic accessibility for residents and businesses.

The investment plans to be developed should include technical requirements and technical concepts, detailed identification of the investments and pre-feasibility studies, 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 proposal should clearly describe the methodology and planned activities regarding:

• the identification of local energy resources, the required infrastructure and potential investment costs.
• the assessment of the compatibility with the existing building stocks.
• the involvement of local stakeholders, as relevant, in particular potential waste heat suppliers and potential customers.
• the preparation of a business plan that includes projected revenues, operating costs, capital expenditures, and return on investment.
• the identification of funding sources (grants, loans, private investments …), and a strategy to secure the capital for the project.
• the official endorsement process for the investment plans by relevant stakeholders, e.g. Management board of the district heating company or local authorities; this should be reflected in the deliverables.
• the compliance with local, regional, and national laws and regulations related to energy production, distribution and consumption.

The investment plans to be produced should enable the targeted district heating system to fulfil the criteria for “efficient district heating and cooling” as specified in the Energy Efficiency Directive Recast within a timeline of 10 years. Actions may also include the assessment of the potential to participate in electricity markets by providing balancing, storage and other flexibility services.

Proposals should support the development of a substantial number of investment plans in at least 3 eligible countries, and work with follower cases for which transfer of knowledge should be described and effectively provided during the project life time.

Proposals should demonstrate, in a clear and convincing way, the commitment of operators/owners of the district heating networks that will be targeted for the collaboration. Proposals should also explain the content of the support to be provided and how the consortium will deliver this support on the ground.

Additionally, actions are expected to provide an adequate risk assessment, identify barriers, provide recommendations for regulatory bodies, inputs for local administrations for the preparation of the local heating and cooling plans and promote replication through other district heating operators/owners.

Actions under this topic are not expected to finance the equipment or the development of new tools (e.g. software or the upgrade of existing ones, platforms; applicants are encouraged to make use of existing commercial software, as needed).

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

The Commission considers that proposals requesting a contribution from the EU of up to EUR 2 million would allow the specific objectives to be addressed appropriately. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts.