100% Renewable Heating by 2033: Pathways for a French Urban Heating Network under uncertainty and flexibility

We study strategic pathways to achieve 100% renewable in Grenoble Metropolitan Aria, the second largest heating network in France. More specifically, we use a real options approach to investigate the optimal planning of potentially available energy resources that can be carried out over the long term. In this sense, the methodological approach, based on scenarios and decision trees, incorporates long-term uncertainties in market demand influencing investments. We show that the uncertainty and the flexibility to adapt to future demand shifts significantly increases the NPV (Net Present Values) compared to a deterministic framework. We conclude that the increase to 100% renewable heating is economically feasible when adaptive strategies for urban heating planning are considered. In addition, waiting for more information may also increase the value of investments.