Economic comparison of 4GDH and 5GDH systems – Using a case study

For decades the focus of district heating (DH) has been on energy efficiency and minimum operating temperatures. This quest for continuous efficiency improvements led to the modern 4th generation of DH (4GDH), operating at lowest possible temperature for direct utilization by end-user. In recent years the term 5th generation DH (5GDH) has become popular for individual heat pump systems sharing thermal sources via uninsulated pipe network. While 5GDH has similarity with 4GDH it is a technically different solution, as the heat generation is moved to the end-users. When discussing 4GDH and 5GDH the focus quickly revolves about the efficiency of the distribution grid, however the discussion should be on the overall system efficiency and the levelized cost of the heat (LCOH). This paper analyzes LCOH for a mixed building area consisting of a central heat source, high or low energy buildings connected to 4GDH, 5GDH or a 4GDH variant with end-user temperature boosting for domestic hot water purposes. The analysis considers two countries: DK and UK. The analysis further explores the impact of the heat source temperature, from 10 °C to 60 °C, on the LCOH. The results indicate that 4GDH is the more competitive heat supply solution for the considered case. •Levelized cost of heat from 4GDH and 5GDH systems are compared.•The centralized aspects of 4GDH provides clear economic benefits compared to 5GDH.•4GDH is a preferred solution for both high and low energy consuming buildings.