CM: District Heating Economic Assessment
Introduction
This calculation module enables users to identify potential district heating (DH) areas through a GIS-based method focused on estimating heat distribution costs. The core functionality is based on heat demand and gross floor area density maps, available for both base and target years.
Users can either rely on the default datasets provided by the toolbox—such as the heat demand density map and the gross floor area density map—or upload their own layers via their account.
The tool estimates DH potential by conducting sensitivity analyses on heat demand densities under user-defined conditions, such as grid cost ceiling, depreciation time, market shares in DH areas, and interest rate. Based on these inputs, the tool generates GIS layers that indicate areas suitable for DH development, accompanied by key output indicators such as heat distribution costs, trench length, and potential DH zones.
This module supports planners and analysts in evaluating how various assumptions impact the feasibility and expansion of district heating networks.
Input
The module requires a combination of user-defined parameters and geospatial input layers. These inputs guide the calculation of district heating potential and associated costs.
Input Parameters
- Country – Default construction cost constant and coefficient
- First year of investment
- Last year of investment
- Current DH market share in DH areas [%]
- Expected DH market share in DH areas at the end of the investment period [%]
- Minimum heat demand to be supplied to DH areas by DH system at the end of the investment period [GWh]
- Minimum heat demand in each hectare of DH areas at the target year [MWh]
- DH grid cost ceiling [EUR/MWh]
- Depreciation time [years]
- Discount rate [%]
- Maximum allowed trench length constructed additionally per year [km/year]
- Existing trench length [km] – Required if annual trench expansion is limited
- Use country-specific construction cost values? – If not, provide:
- Construction cost constant [EUR/m]
- Construction cost coefficient [EUR/m²]
Input Layers
- Heat density map (base and target years)
- Gross floor area density map (base year)
Default maps provided in the toolbox or user-uploaded datasets. Custom, uploaded maps can also be used in the CM:
- in raster format (*.tif)
- with 1-hectare resolution
- with units: MWh/(ha·a) for heat demand, m²/ha for gross floor area density
Output
The module generates several key indicators and one output layer to visualise potential district heating zones and evaluate cost-effectiveness.
Output Indicators
Total heat demand in the selected region:
- First year of investment [GWh]
- Last year of investment [GWh]
Total DH potential in the selected region:
- First year of investment [GWh]
- Last year of investment [GWh]
Cost-related indicators:
- Absolute DH grid costs at the start year [Mio. EUR]
- DH grid costs per unit of energy [EUR/MWh]
- DH distribution pipe costs per unit of energy [EUR/MWh]
- DH service pipe costs per unit of energy [EUR/MWh]
- DH distribution pipe costs per meter of trench [EUR/m]
- DH service pipe costs per meter of trench [EUR/m]
Infrastructure indicators:
- Total distribution pipe trench length [km]
- Total service pipe trench length [km]
- Total number of coherent DH areas
Output Layer
Potential DH areas – Delivered as a shapefile containing calculated indicators for each coherent area.
Method
This section provides a brief overview of the methodology used in the calculation module. For a detailed explanation, including the mathematical formulations, please refer to the open-access journal article that describes the full methodology.
The goal of the module is to identify regions where district heating (DH) systems can be implemented without exceeding a user-defined average heat distribution cost (in EUR/MWh). The process is outlined in Figure - Overview of the DH area identification procedure.
The methodology proceeds as follows:
- All 1-hectare cells with annual heat demand below a minimum threshold are excluded.
- The remaining cells are grouped into coherent areas.
- For each coherent area, the average heat distribution cost is calculated.
- If the cost is below the specified ceiling, the area is retained.
- The pixel threshold is then increased by 10 MWh, and the process repeats for the remaining areas.
- If constraints on annual grid expansion are defined, these are checked after identifying potential DH areas.
- If expansion limits are not met, the calculation is restarted with a higher threshold.
This iterative process continues until all specified conditions are satisfied.
Figure - Overview of the DH area identification procedure (Fallahnejad M. (2024))
The GitHub repository of this Calculation Module can be accessed from here.
Sample Run
To run the calculation module, select the city of Offenbach am Main in Germany. Use the navigation bar to quickly zoom into the city (see Figure - Select the working region). Use the boundary selection at the LAU2 level.
Figure - Select the working region
Go the to calculation module tab and select the CM "district heating potential economic assessment with temperature levels". Below you find the list of the input parameters that you can enter. As input layers, we use the default layers. However, it is possible to use your own layers from the user account if you have such layers. Furthermore, it is possible to use CM "Scale heat and cool density maps" or CM "Demand projection" to calculate future heat demand densities.
| Parameter | Unit | Value |
|---|---|---|
| Country - Construction cost constant and coefficient | - | DE: (349, 4273) |
| First year of investment | - | 2025 |
| Last year of investment | - | 2045 |
| Current DH market share in DH areas | % | 30 |
| Expected DH market share in DH areas at the end of the invest ment period |
% | 60 |
| Min. heat demand to be supplied to DH areas by DH system at the end of the investment period |
GWh | 3 |
| Min. heat demand in each hectare of DH areas at the target year. Change if it's absolutely necessary. |
MWh | 20 |
| DH grid cost ceiling - Avg. DH grid cost in a DH area may not exceed this value |
- | 45 |
| Depreciation time | years | 30 |
| Discount rate | % | 4 |
| Max. allowed trench length constructed additionally per year | km | 100000000 |
| Existing trench length. Accurate value is required if annual additional trench length should be limited. |
km | 100000000 |
| Use country-specific construction cost values? If not, provide them separately under the BASIC INPUTS. |
- | Yes |
Run the calculation module and wait until the calculation is over. Below you find the list of the indicators and identified DH areas. See Figure - The results of the CM run for the visualization of results in the SAPHEA Tool.
| indicator | value | unit |
|---|---|---|
| Country | DE | DE |
| Total demand in selected region in the first year of investment | 982.41 | GWh |
| Total demand in selected region in the last year of investment | 982.41 | GWh |
| Total DH potential in selected region in the first year of investment | 293.54 | GWh |
| Total DH potential in selected region in the last year of investment | 587.08 | GWh |
| Absolute DH grid costs at start year (2025) | 346.3 | Mio. EUR |
| DH grid costs per unit of energy | 41.76 | EUR/MWh |
| DH distribution pipe costs per unit of energy | 26.26 | EUR/MWh |
| DH service pipe costs per unit of energy | 15.5 | EUR/MWh |
| DH distribution pipe costs per meter of trench | 723.42 | EUR/m |
| DH service pipe costs per meter of trench | 475.24 | EUR/m |
| Total distribution pipe trench length | 301.03 | km |
| Total service pipe trench length | 270.45 | km |
| Total number of coherent areas | 1 |
Figure - The results of the CM run
How To Cite
Mostafa Fallahnejad, in SAPHEA-Wiki, CM District heating potential economic assessment
Authors And Reviewers
This page was written by Mostafa Fallahnejad (e-think Energy Research). This page is reviewed by Ardak Akhatova e-think.
License
Copyright © 2025: Mostafa Fallahnejad
Creative Commons Attribution 4.0 International License
This work is licensed under a Creative Commons CC BY 4.0 International License.
SPDX-License-Identifier: CC-BY-4.0
License-Text: https://spdx.org/licenses/CC-BY-4.0.html
Acknowledgement
We would like to convey our deepest appreciation to the HORIZON Europe Actions SAPHEA Project (Grant Agreement number 101075510), which co-funded the present investigation.