Boosters or building renovations? An evaluation of 4th generation district heating strategies

Decarbonising the urban heating sector is critical for achieving sustainable cities. Low-Temperature District Heating offers a promising pathway, yet its implementation in existing unrenovated buildings presents significant challenges. This study develops a dual-perspective techno-economic framework to compare three competing district heating strategies, applied to Griesheim-Mitte, an urban district of Frankfurt (Germany) that currently lacks district heating infrastructure. Using a custom-built simulation framework, we model three configurations: a High-Temperature system (90 ℃ supply), a Low-Temperature system requiring deep building renovations, and a Low-Temperature system employing building-level booster heat pumps. All scenarios use large-scale heat pumps as the central generation technology. Analysing costs from both grid operator and end-customer perspectives, we find that the operator’s Levelised Cost of Heat (LCOH) varies widely across strategies: 135 €/MWh for High-Temperature, 113 €/MWh for the Booster configuration, and 99 €/MWh for the renovation-based pathway. The High-Temperature system requires the largest capital investment (€85.1M) and produces the highest LCOH, resulting in heat prices approximately 37% above gas heating for all customer types. Building renovations yield the lowest LCOH and heat prices at parity with current gas costs, but impose €146M in upfront renovation costs on building owners that cannot be recovered over the 25-year analysis period, creating a split-incentive dilemma. The distributed booster strategy emerges as the most balanced pathway: it achieves heat prices within 14% of gas parity without requiring building renovations, and a carbon price of €71-€102/tCO 2 under the forthcoming ETS2 would suffice for customer break-even. • Dual-perspective framework compares operator cost-efficiency and customer viability across three district heating strategies. • Booster heat pumps achieve heat prices within 14% of gas parity without building renovations. • Carbon pricing of €71-€102/tCO 2 would close the remaining customer cost gap for the Booster scenario. • Building renovations create a split-incentive dilemma: lowest operator LCOH but a customer renovation burden that cannot be recovered over the 25-year analysis period.