Feasibility of district heating in a mild climate: A comparison of warm and cold temperature networks in Bilbao

District heating and cooling systems can aid in decarbonisation and the provision of efficient heating and cooling in Europe. However, whereas these systems have achieved high penetration rates in colder climates of Northern, Central and Eastern Europe, they remain marginal in milder climates of Southern Europe. In terms of network design, district heating and cooling systems can be configured in different ways. In so-called warm networks, the required temperature for all the consumers is attained city-wide, and in so-called cold systems, the necessary temperature is achieved at the consumers' premises by ancillary equipment. The most cost-effective heating and cooling solution for urban areas requires investigation. This research models and compares cold and warm district energy systems with other heating and cooling solutions through a comprehensive case study executed in the city of Bilbao, Spain. The city is characterised by a mild climate and a high population density which is characteristic of many Southern European cities. The results show that district energy systems are economically advantageous compared to other low-carbon solutions, such as air-source heat pumps. However, these systems are not able to outcompete natural gas under current cost and taxation levels. Warm networks provide a cheaper source of heat compared to cold networks, but both network types lead to similar expenditures for combined heating and cooling supply. This paper, presents the study context and its results, and is complemented by an exhaustive detailed methodology document and a separate supplementary material repository. • Comprehensive comparative analysis of various district energy network configurations. • District energy is feasible compared to air-source heat pumps in Southern Europe. • Low-carbon heating is not viable if the carbon costs of fossil fuels are not internalised. • Warm networks are more cost-effective than cold networks for heat supply. • Cold networks are nearly cost-equivalent with warm networks for combined heating and cooling.