DEGREE PROJECT IN MECHANICAL ENGINEERING, SECOND CYCLE, 30 CREDITS STOCKHOLM, SWEDEN 2021 Simulation of decarbonization objectives for the district heating system in the Helsinki metropolitan area YIJIE SU KTH ROYAL INSTITUTE OF TECHNOLOGY SCHOOL OF INDUSTRIAL ENGINEERING AND MANAGEMENT Master of Science Thesis Department of Energy Technology KTH 2020 Simulation of decarbonization objectives for the district heating system in the Helsinki metropolitan area TRITA: TRITA-ITM-EX 2021:68 Yijie Su Approved Examiner Supervisor 29.6.2021 Dilip Khatiwada Dilip Khatiwada Aalto Supervisor Contact person Sanna Syri Pauli Hiltunen Abstract District heating (DH) is of great significance for the Nordic countries due to the high heat demand especially in the winter. In Finland, 40% of heat was generated by fossil fuels in DH system, and DH sector emits 10% of the total emissions. The Finnish government aims to achieve carbon neutrality as the national goal by 2035. This study aims to evaluate the decarbonization objectives of each city (i.e. Helsinki capital city, Espoo and Vantaa) in the Helsinki metropolitan area and their influences on DH oper- ation from 2010 to 2030 by energyPRO. A model of a joint DH system with the interconnec- tions between Helsinki-Espoo and Helsinki-Vantaa is developed, in order to describe the whole Helsinki metropolitan area DH under the decarbonization objectives. The study pro- vides a least-cost DH operation solution while matching the supply and demand conditions. The optimum performance of the DH is simulated considering different operation strategies (technical aspect), operation expenditures (economic aspect), CO2 emission (environmental aspect). The results are presented from 2010 to 2030 in five years intervals. From the technological option, heat pump has great potential operating in DH in the Helsinki metropolitan area, it will be turned from peak load producer to the baseload heat producer. Instead, heat pro- duced by combined heat and power plants (CHPs) will not be dominant in DH system in the future year. Waste incineration power plant in Vantaa will increase the total annual opera- tion time to about 7000h, it will export more heat to Helsinki city when heat transmission is allowed. From the economic aspect, average heat production cost will decrease with more biomass penetration and heat recovery technology implemented in the future year. Natural gas may appear less profitable with higher CO2 prices after phasing out the coal. About cli- mate change impact, CO2 emission has an 88% reduction in 2030 compared with 2010. Keywords: District heating; CO2 emission; Decarbonization goal; Helsinki metropolitan area; EnergyPRO Abstrakt Fjärrvärme (DH) har stor betydelse för de nordiska länderna på grund av det höga värmebe- hovet, särskilt på vintern. I Finland genererades 40% av värmen, i DH-systemet av fossila bränslen och DH-sektorn släpper ut 10% av de totala utsläppen. Finlands regering strävar efter att uppnå koldioxidneutralitet som ett nationellt mål år 2035. Denna studie syftar till att utvärdera målen för koldioxidutsläpp för varje stad i Helsingfors storstadsområde (d.v.s. Helsingfors huvudstad, Esbo och Vanda) och deras påverkan på DH-drift från 2010 till 2030 av energyPRO. En modell av ett gemensamt DH-system med sammankopplingarna mellan Helsingfors-Esbo och Helsingfors-Vanda utvecklas för att beskriva hela Helsingfors storstadsregions DH under målen för koldioxidutsläpp. Studien ger en billig DH-driftslösning samtidigt som utbud och efterfrågan stämmer överens. Den optimala prestandan för DH simuleras med beaktande av olika driftsstrategier (teknisk aspekt), driftskostnader (ekonomisk aspekt), CO2-utsläpp (miljöaspekt). Resultaten presenteras från 2010 till 2030 i femårsintervaller. Från det tekniska alternativet har värmepumpen en stor potential i DH i huvudstadsregionen, den kommer att förvandlas från topplastproducent till baslastvärmeproducent. Istället kommer värme som produceras av kraftvärmeverk inte vara dominerande I DH-systemet under det kommande året. Avfallsförbränningsanläggningen i Vanda kommer att öka den totala årliga drifttiden till cirka 7000 timmar, den kommer att exportera mer värme till Helsingfors när överföringen tillåts. Ur ekonomisk aspect kommer den genomsnittliga värmeproduktionskostnaden att minska i takt med större penetration av biomass samt värmeåtervinningsteknik som imple- menteras under det kommande året. Naturgas kan verka mindre lönsamt med högre koldi- oxidpris efter att kolet fasats ut. Vad gäller klimatförändringarnas påverkan så minskar koldioxidutsläppen med 90% år 2030 jämfört med 2010. Nyckelord: Fjärrvärme; CO2-utsläpp; Dekarboniseringsmål; Helsingfors storstadsområde; EnergyPRO Preface This thesis aims to simulate the development and operation of the district heating system in Helsinki metropolitan area from 2010 to 2030, based on the city level plans. It is also a part of the EU-funded collaboration project FINEST twins, which is intended on constructing a cross-border smart city between Helsinki, Finland and Tallinn, Estonia. This thesis is also under the supervision of both Aalto University, Finland, and KTH Royal Institute of Technology, Sweden. First of all, I would like to express my sincere thanks to my supervisor Professor Sanna Syri, who accepted me and provide me this treasured oppor- tunity to conduct my thesis at the Energy Efficiency and Systems group, Aalto University, who also pointed out the direction of the thesis and provided insight feedbacks promptly. I would like to thank my advisor Pauli Hiltunen M.Sc. (Tech.) from Aalto University, who guided me at every stage in my thesis process and always provide me a timely help, from information searching to model analysis. I would also like to thank my supervisor and ex- aminer Professor Dilip Khatiwada from KTH Royal Institute of Technology, for detailed comments and modification suggestions every time. Even we cannot meet physically, he al- ways put effort into my thesis reviewing. To be honest, it is a quite hard experience and is also my first time to complete a project alone for 6 months, especially during a pandemic situation. Except for my supervisors and advisors’ help, I would like to thank my friends and parents, who encouraged me and was my best support in spirit. During the thesis, I learned a lot about the DH system in Helsinki metropolitan area, and other skills such as time management, scientific writing and so on. Thanks for you all and without you, I cannot finish such a huge project for me on time. It will be the best memory in my life journey and I will keep on going, always work hard and always make progress. Otaniemi, 2021 Yijie Su Abbreviations CCGT Combined-cycle gas turbines CCS Carbon capture and storage CHP Combined heat and power plants COP Coefficient of performance CO2 Carbon dioxide DC Data center DH District heating DSR Demand side response - ETS Emission trading system EU European Union FIT Feed-in tariff HDD Heating degree days HFO Heavy fuel oil HOB Heat only boiler HP Heat pump IT Information technology LFO Light fuel oil NG Natural gas OCGT Open-cycle gas turbines O&M Operation and maintenance PV Photovoltaic PV/T Photovoltaic/thermal RES Renewable energy source ST Steam turbine 4GDH 4th Generation District Heating Content Preface ......................................................................................................................................2 Abbreviations .......................................................................................................................... 6 1 Introduction .................................................................................................................... 10 1.1 Background ............................................................................................................... 11 1.2 Research gaps and objectives ................................................................................... 12 1.3 Research Scope ......................................................................................................... 13 1.4 Structure of the thesis ............................................................................................... 13 2 Literature review ............................................................................................................ 16 2.1 Components of city district heating system ............................................................. 16 2.2 District heating system development ....................................................................... 17 2.3 State-of-the-art in district heating (DH) systems .................................................... 18 2.3.1 Heating supply options ....................................................................................... 18 2.3.2 Fuels for DH system ........................................................................................... 19 2.4 Exploring promising technologies in district heating system ................................. 20 2.4.1 Heat pumps........................................................................................................ 20 2.4.2 Waste heat recovery ............................................................................................ 21 2.4.3 Heat storage ........................................................................................................ 21 2.4.4 Solar thermal systems ....................................................................................... 22 2.4.5 Biomass technology ..........................................................................................