2022

Pursiheimo, Esa; Lindroos, Tomi J.; Sundell, Dennis; Rämä, Miika; Tulkki, Ville

Decarbonisation of district heating and cooling (DHC) system in Helsinki metropolitan area requires investments in new energy technologies and approaches to replace fossil fuel fired district heating (DH) production. Investment paths involving (a) DH heat pumps (HP) from low quality heat sources and (b) small modular nuclear reactors (SMR) are compared by utilising investment analysis based on optimisation model depicting the assumed 2030 situation. Several scenarios, with varying assumptions concerning existing DHC system, investment costs and electricity prices, are analysed in terms of new capacity and total annualised costs. The results indicate that the SMR option is more cost-efficient than the HP option with 4–8 €/MWh difference in operation costs including annualised investments. Biomass fired boiler investments, enabled in both options, are preferred to heat pump investments in most scenarios. The cost-efficiency of HP investments is sensitive to investment cost, whereas SMR investments are relatively stable to investment cost variations. Varying electricity market prices affect cost-efficiency of large-scale heat pumps, and investments in SMR cogeneration units take place only with high electricity prices.