Using Industrial Waste Heat in District Heating: Insights on Effective Project Initiation and Business Models

Abstract

The recovery of industrial waste heat and its reuse in district heating networks can be economical for both the industry and the district heating operator. While the potential for external use of industrial waste heat remains significant, there are already many implemented practical examples. This paper describes an Austria-wide survey of industrial companies that supply waste heat to district heating networks in order to assess the (i) initiation and implementation, (ii) business model design, and (iii) risks and uncertainties associated with external waste heat cooperation. Based on the survey results, good personal relationships are essential, and local politicians can be crucial for initiation. Major changes in the industrial supplier or district heating company are triggers for contact and implementation. For negotiations to be successful, the partners must feel they are being treated fairly, which requires a high degree of transparency. The most commonly used business model is the use of clear interfaces, i.e., a point that separates investment, billing, and responsibility. Billing is usually per kWh, possibly supplemented by other contractual arrangements such as take-or-pay. The lower the industry’s share of the joint investment, the less it receives for the waste heat. Conversely, the more guarantees and risks the industry takes on, the higher the price per kWh.