Financial obstacles to the implementation of heat pumps in district heating

Abstract

The use of powerful industrial heat pumps (HP) is a fairly effective means of rational and environmentally friendly use of energy resources both in individual households and in district heating (DH), as well as in production processes in various industries. Powerful HPs are used in Ukraine much less than in developed European countries. In fact, these are isolated cases. The post-war reconstruction of destroyed cities with their district heating systems gives Ukraine a unique chance to use modern energy-efficient technologies, including HP. As a result, efficiency will improve and DH competitiveness will increase due to the low cost of thermal energy for consumers. Almost all developed countries of the world have government financial support for the HP implementation. The purpose of this study is to determine the level and form of government financial support for projects to implement HP in DHs of Ukraine. Financial modeling of the implementation of heat pump plants shown that they are more expediently to be used in the mode of generating thermal energy than in the mode of regulating the electric load of power systems. It is shown that the projects of heat pump plants, which use the heat of flue gases as a source of low-potential heat (LPH), are the most economically attractive and practically do not require government financial support. Projects of heat pump plants, which use air, ventilation emissions, waste water, soil and groundwater, sea, rivers, and waste heat of technological processes as LPH, are not financially attractive without government financial support, and some of them are even unprofitable. The most appropriate comprehensive financial support is tax incentives and interest compensation on the loan. Sensitivity analysis showed that projects for the implementation of heat pump plants may be the most sensitive to the amount of generated thermal energy, the price of natural gas and electricity. Keywords: heat pumps, low-potential heat sources, district heating, financial obstacles, tax incentives, grants.