Investigating techno-economic effects and environmental impacts of energy renovation of residential building clusters on a district heating system

•Study includes stock of 343 apartment buildings facing renovation and district heating system.•Applied simulation and optimization tools to determine effects from building energy renovation.•Reduced district heat demand mainly affects combined heat and power plants.•Released biofuels substituting for fossil fuels in power plants will reduce CO2 emissions.•Involved actors face financial deficit with a renovation strategy for code compliance. Studying energy renovation of older residential building stocks together with the surrounding district heating (DH) system is essential to fully understand implications from a reduced district heat demand and for involved actors. This study reveals the benefit of integrating the simulation and optimization tools OPERA-MILP, IDA ICE, and MODEST to investigate thoroughly the effect of energy renovation strategies on heat load supply, building and DH system-based life cycle costs (LCCs), primary energy use, and total of direct and indirect CO2 emissions. Energy renovation considered different cluster combinations of slab and tower blocks of a stock of 343 apartment buildings in two Swedish municipalities and strategies for lowest LCC and code compliance. Applied tools were thoroughly validated and verified including heat demand and load duration curves and numerical accuracy. Results with all aggregated clusters and renovation strategy for code compliance showed a reduced combined heat and power production with 35.7 GWh/a (heat) and 6.5 GWh/a (electricity), deceased primary energy use with 36.2 GWh/a and reduction of marginal CO2 emissions with 8.4 kton/a mainly from released biofuels substituting for fossil fuels in power plants, increased CO2 emissions of 0.5 kton/a with electricity production mix, and financial deficit for building owners, energy companies, and industries of respective 44, 33.9, and 2.2 M€/50a.