RODEO

District Heating and Cooling (DHC) is a major tool for the energy transition of city neighbourhoods, featuring prominently in many local climate plans. However, in most cities in NWE grids still need to be developed. 

Main challenge

The main challenge is no longer technological, but economic: the existing alternative, i.e. natural gas, does not require upfront investments, is well known and therefore the default option. This is why most DHC systems start by only connecting large consumers to a backbone grid of limited length. Capital expenditure is relatively limited and perceived risk is reduced as there is a predictable income stream – but the potential of DHC is also severely constrained. 

A participative business model

RODEO breaks down this barrier by introducing a more participative business model that rebalances the costs, benefits and risks of developing DHC. This enables heat grids to be deployed at scale and eventually reach individual homes. The initiative almost always resides with the local authority, but it is the interplay between all stakeholders - local governments, grid operators, heat suppliers and heat consumers – that is key to the model. This is a clear departure from traditional arm’s length business models that put the burden on the operator to figure out how to compete with gas. 

Pilot cities

RODEO will co-create this business model and validate it in 4 pilot cities that are developing their own DHC systems: 

• Dunkerque (FR)
• Oostende (BE)
• Assen (NL)
• Dublin (IE). 

Each city’s grid is in a different stage of development, while all still rely predominantly on natural gas for heating. The exchange between the 4 cities, supported by subject matter experts Exceedence, Hanze and Endeavour, ensures all parties will learn and evolve far more quickly. Such learning would not be achievable in a purely national context; there are simply not enough grids yet in NWE. To maximize impact the lessons learnt during this project will be put into a training program aimed primarily at local authorities and DHC operators across NWE.