Moving Towards Fourth-Generation District Heating as a Power-to-Heat Strategy: Techno-Economic Issues

About 50% of Italian households’ overall energy consumption is satisfied by natural gas, mainly for space heating, leading to substantial CO2 emissions. In Italy’s mild climate, fourth-generation district heating (4GDH) networks coupled with renewable energy sources (RESs) could represent a viable option for reaching the ambitious space heating decarbonization objectives set by the EU. In this paper, such a decarbonization pathway, consisting in a centralized heat pump (HP)-powered 4GDH network, with and without the addition of a distributed PV plant, is assessed and compared with the individual natural gas boilers-based Italian reference scenario. A cluster of buildings, comprising 200 dwellings, representative of common households in Rome, has been chosen as the case study. Starting from the cluster’s hourly space heating demand, a semi-dynamic MATLAB/Simulink model has been developed to size the technological components and evaluate their performance with respect to outdoor environmental conditions. The scenario comparison is carried out by means of techno-economic and environmental indicators: the levelized cost of heat (LCOHE), CO2 emissions, and carbon avoidance cost (CAC). Moreover, a sensitivity analysis has been carried out to address the uncertainty regarding the main economic parameters, namely the electricity and natural gas price and the HP and DH investment cost. The results show that 4GDH-based layouts significantly reduce CO2 emissions, at the expense of the LCOHE. The sensitivity analysis highlights how a significant reduction in both the electricity price and the DH network capital cost are required for achieving price parity with the fossil-fuel based scenario.