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Is Electrified Low-Carbon District Heating Able to Manage Electricity Price Shocks?

To comply with the European Union’s carbon-neutrality target for 2035, the decarbonization of fossil-fuel intensive city district heating networks (DHN) is imperative. With electricity production nearly emission-free in Finland, electrification of the DHNs can assist in decarbonizing the heating sector. However, concerns regarding this solution are the volatility of electricity prices and the security of heat supply. This study examines the feasibility of electrified DHNs during the high energy market prices of2021. Two case study DHNs in Espoo and Kuopio are simulated using EnergyPro with an optimization routine to minimize production costs. The results of February and December were compared, and they show that the heat pumps maintain their competitiveness even with high electricity prices in Espoo, where the production relies still heavily on imported natural gas. However, in Kuopio, where peat and biomass are the most important fuels, high electricity price makes the heat pumps significantly less attractive.