Impact of district heating and cooling on the potential for the integration of variable renewable energy sources in mild and Mediterranean climates

•District heating and cooling play a vital role in the EU’s decarbonisation effort.•The H2RES tool has been upgraded to including district cooling.•Power to heat is a valuable demand response tool.•Wind and PV could cover up to 73% of Croatia’s electricity demand in some scenarios.•District cooling has a significant positive impact on the reduction of curtailment. Europe’s decarbonisation ambitions can’t be achieved without the full and rapid decarbonisation of its buildings which represent over 36% of its greenhouse gas emissions, the majority of which are linked to space heating and domestic hot water preparation. District heating, and in recent times, cooling must play a large role in satisfying this demand, especially in densely populated urban areas which already hold over half of the World’s population. Besides the decarbonisation potential linked to heating and cooling production, these systems hold a strong potential for increased flexibility in the power sector using power to heat technologies thus increasing the potential for the utilization of intermittent renewables such as wind and solar. The goal of this research is to demonstrate the impact district heating and cooling can have on the potential for the utilization of intermittent renewable electricity sources in mild and Mediterranean climates, which traditionally have lower shares of district energy systems. Additionally, this paper presents the newly implemented capabilities of the H2RES linear optimization tool to model district cooling systems alongside the existing capacity to model district heating systems. The results demonstrate a significant capacity of district heating and cooling systems to act as demand response tools thus greatly increasing the potential for the utilization of wind and PV for electricity generation. In some scenarios, up to 73% of the total electricity demand could be covered with wind and PV and a production of excess electricity of only 5% on an annual basis. The Republic of Croatia has been used as a case study for this research.