Potential tariff structures for Fifth-Generation District Heating and Cooling

An exploratory study of tariff structures that can stimulate efficient and sustainable heating and cooling for Dutch households

Master thesis (2021)

Authors

M. Knipscheer Electrical Engineering, Mathematics and Computer Science

Contributors

A. Correljé Economics of Technology and Innovation - TPM (supervisor 1)
A.A.J.F. van den Dobbelsteen Climate Design and Sustainability - Architecture and the Built Environment (supervisor 2)
I.W.M. Pothof Support Process and Energy (supervisor 2)
Saskia Geerts (coach)
Peter Vlek (coach)
Faculty
Electrical Engineering, Mathematics and Computer Science
Copyright: © 2021 Mitchel Knipscheer
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Published Date

13-10-2021

Language

English

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Faculty

Electrical Engineering, Mathematics and Computer Science

Abstract

5GDHC has the potential to decarbonize our heating and cooling provision. However, the lack of existing project and thus knowlegde of its tariff design is hampering its roll-out. The aim of this research is to provide insight into 5GDHC tariff design and potential tariff structures to support 5GDHC roll-out and thus encourage the uptake of renewable energy in the DHC sector.
The exploratory5GDHC tariff design in this study prioritised cost-reflectivity, efficiency and sustainability. Dynamic tariffs aimed at load shifting offer possibilities to promote these objectives. The proposed tariff structures contain a variable demand charge - based on subscription levels - an energy charge and fixed standing cost. Test indicated a significant improvement for cost-reflectivity and efficiency compared to a pure volumetric reference tariff. The sustainability component needs further review, as the results are not conclusive.
The criteria that should be fulfilled by future 5GDHC systems are decisive for tariff design options. Moreover, factors influencing 5GDHC design - like role distribution, data security and transaction cost - are becoming increasingly important to consider. Not only do they raise social acceptance issues for the technology itself, they could have a significant impact on the criteria tariff design.
The results of this thesis research show that a tariff structure containing a variable demand charge, an either flat or a TOU structured energy charge, and fixed standing cost can promote cost-reflective, economic efficient and sustainable heating and cooling for Dutch households by 5GDHC. Optionally, rebates to increase participation in automated operation can be included.