Planning centralised or decentralised district heating: Which is the best option?

The heat transition is increasing the planning pressure on local authorities, energy suppliers and specialist planners: climate targets, cost trends and security of supply must all be taken into account. For new-build and refurbishment projects, this raises the question of whether district heating should be generated centrally or decentrally, directly at the building. District heating is fundamentally grid-based, but its generation structure can vary.

Which solution is best suited to a neighbourhood, a local authority property or a larger construction project depends, amongst other things, on the connection density, the building structure, the available heat sources, the existing infrastructure and the development plans. This article outlines the key technical, economic and planning factors.

Centralised and decentralised heat supply: What is the difference?

A centralised heat supply serves several buildings or units via a shared infrastructure. In the case of traditional district heating, heat is generated outside the connected buildings and distributed via a heating network. Possible heat sources include, for example, combined heat and power plants, large-scale heat pumps, geothermal systems or usable waste heat, such as that from data centres.

A decentralised heat supply, on the other hand, relies on dedicated generation systems located directly on the building or in its immediate vicinity, such as a heat pump. Within a district heating network, however, generation may still be spread across several sites. The difference therefore lies primarily in the level of supply: a shared network infrastructure connects several consumers, whilst a building-specific decentralised heating solution supplies individual buildings or properties.

Technology at a glance: How the systems work

Whether district heating is generated centrally or decentrally, does not alter the basic operation of the heating network. The function of district heating is based on a circuit that connects the heat source to the connected buildings. The technical design of the systems depends primarily on the supply level and the respective operating conditions.

• District heating network: In water-based district heating networks, heated water flows through insulated supply pipes to the connected buildings. In the case of an indirect connection, a heat exchanger transfers the energy to the separate building circuit. In the case of a direct connection, the network medium flows through the building’s heating system. The cooled water then returns to the heat generation plant via the return pipe. Heat losses in district heating depend, amongst other things, on the network temperatures, the length of the pipes, the pipe dimensions, the insulation and the ambient conditions.
• Decentralised heating solution: A dedicated system generates the required heat on the building itself or in its immediate vicinity. Depending on the technology used, it utilises ambient heat, solar radiation or a fuel, and transfers the generated heat to the heating and domestic hot water circuits. Heat pumps raise ambient heat to the required temperature level. Biomass boilers and combined heat and power (CHP) units generate heat through combustion, with CHP units also supplying electricity. Solar thermal energy can supplement the system and feed heat into a storage tank. Control, storage and distribution take place within the respective building’s system.

Conventional local heating networks operate in a technically similar way to district heating networks, but usually supply a smaller, geographically limited area. The difference between district heating and local heating cannot be defined by a fixed distance or network size.

Centralised district heating or decentralised heat supply: a comparison of the pros and cons  

When comparing centralised district heating with decentralised heat supply, the focus is primarily on investment structure, operational organisation, heat distribution, interdependencies and available heat sources. Even within a heating network, the question of whether district heating is generated centrally or decentrally influences the technical design and operation. The heat sources used, the design and the operation of the respective system are decisive for the environmental impact. 

Investment and planning for the heating network and building systems  

At the level of the entire district heating system, investments cover generation plants, the pipeline network, building connections and heat transfer stations. These components must be planned, financed and coordinated with one another when the system is expanded. Building-related systems, on the other hand, can be planned on a property-by-property basis and implemented in stages. Investments and subsequent replacement measures are incurred individually for each system.

Operation of the district heating network and decentralised systems 

In district heating, generation, network operation, monitoring and maintenance are coordinated across the system. Buildings generally do not require their own main heat generator but are dependent on the local network and its supply conditions. Furthermore, distribution losses occur during transmission. Building-specific systems generate heat directly on site. This eliminates external network losses, and the technology can be controlled at building level.

Heat sources and environmental impact of district heating and decentralised systems

District heating networks can also tap into larger or geographically distant heat sources to serve multiple consumers. With decentralised systems, the choice is determined more by the conditions at the building and the location. In both cases, the environmental impact is largely determined by the energy sources used, the technical design and the operation. Whether district heating can be described as ‘green’, therefore depends on the heat sources actually used and the associated emissions.

Centralised district heating and decentralised heat supply at a glance 

Technical requirements for the planning of district heating networks

The technical design of a district heating network is based on the expected heat demand and the intended operating conditions. The individual parameters are interrelated and should therefore be considered together at an early stage of planning.

• Capacity and hydraulics: Heat output and flow rate form the basis for pipe sizing and pump design. Load fluctuations and any potential future connections must also be taken into account.
• Temperature and pressure: Flow and return temperatures, as well as the pressure level, determine the requirements for pipework, components and thermal insulation. The systems used must be designed for the intended operating ranges.
• Route and pipework system: Pipe length, ground conditions, available space and existing infrastructure influence the route selection. Pipe material, connection technology and insulation must be adapted to these installation conditions and the permissible heat losses.
• Expandability: Branches, additional feed-in points and future network sections should be planned at an early stage. This allows for subsequent adjustments to be taken into account during the design and routing phases.

• Additional feed-in points are particularly relevant in hybrid heating networks. These connect a central generation plant with geographically distributed heat generators or storage units within the same network. To achieve this, the hydraulics, control systems, temperature levels and flow rates must be coordinated. The necessary branch lines and connection options should be taken into account as early as the pipe sizing and route planning stages. The gradual integration of additional heat sources can also play an important role in the decarbonisation of district heating.

District heating expansion in Gateshead

As part of the expansion of the district heating network in Gateshead, the existing network was extended by 1.3 kilometres in 2018. The aim was to carry out the project cost-effectively whilst minimising disruption to local residents, businesses and traffic. For the new section of the network, the pre-insulated PP-R pipework system aquatherm energy was used, instead of steel pipes. D The shorter welding times enabled rapid installation in limited construction sections. The also lower weight played a role (comparative LCA: 100 ft of pipe weight: aquatherm blue (= medium-diameter pipe from aquatherm energy: 7.44 kg; steel pipe: 48 kg).

• These characteristics also had an impact on construction and installation costs: compared with a steel design, the estimated savings amounted to around 460 euros per metre. The energy centre utilises two 2-MW CHP units and uses up to 85 per cent of the waste heat generated during electricity production for heat supply. aquatherm energy thus proved to be the appropriate pipework solution for the expansion of the existing network in an inner-city environment.

Conclusion: The right heating solution depends on the project

Whether district heating is generated centrally or locally, forms part of an overarching supply strategy. The key factor is how generation, network structure and building services interact. Centralised plants, geographically distributed feeders and building-specific solutions fulfil different functions and can be combined depending on the project. For grid-connected concepts, the choice of pipework system influences, amongst other things, hydraulics, route planning, expansion options and the installation process.

aquatherm provides PP-RCT pipework systems for this purpose, which are designed for specific pressure and temperature ranges and can be dimensioned to suit individual projects. Early coordination between specialist planning, network operations and system selection lays the foundation for a technically suitable and adaptable long-term heating infrastructure.

aquatherm: your partner for centralised and decentralised heating networks

Are you planning a heating project? Get in touch with our experts at an early stage. We support local authorities, energy suppliers, planners and developers with a technology-neutral approach, in-depth expertise and tried-and-tested solutions.