Energy Storage Technologies in Buildings and District Energy Systems for Flexible Sector Coupling (FSC)

Introduction and Background

Sector coupling is a concept that is well understood, in which the electrical, thermal, and/or mobility sectors are coupled with one another. For instance, renewable electricity from the grid, originating from intermittent sources such as solar or wind, can be used to run an electric heater or a heat pump (e.g., for space heating and domestic hot water supply), thereby coupling the electrical and thermal sectors. However, this possibility is limited to periods when the sun is shining or the wind is blowing, which does not necessarily coincide with peak heating demand. Flexibility in the use of these renewable sources is therefore not provided by sector coupling alone. When energy storage is introduced into the equation, the heat pump can be operated when the sun is shining or the wind is blowing (when excess and often cheaper electricity is available), and heat can be charged into a TES. Later, when heating demand reaches its peak, this charged TES can be discharged to cover those peak demands. Both economic and environmental benefits can be thereby achieved, often through the replacement of fossil-based heating that would otherwise be used to meet peak demand. Energy storage is thus identified as the flexibility enabler (see Figure 1), allowing a transition from sector coupling to FSC (IEA ES, 2024).

Figure 1. Flexible Sector Coupling explained. (Redrawn from (IEA ES, 2024))

Buildings today comprise the potential to employ different energy storage alternatives including thermal and electrical energy storages, as well as self-production through e.g., solar photovoltaic (PV), solar thermal and PV-thermal (PVT) technologies. Even the buildings themselves, through the thermal inertia of the building envelop, can become distributed thermal energy storage (TES) nodes. Thus, buildings are becoming energy hubs, with potential to provide flexibility services as distributed storage points. Likewise, energy communities or district energy systems act as a mid-scale alternative where medium- to large-scale storage assets not physically or economically suitable for single buildings can be deployed within the energy system/network.

Although FSC and buildings/districts as energy hubs are respectively recognized as essential for holistic energy system optimization, their potential synergies remain underutilized in Sweden and across Europe (Guelpa, Bischi, Verda, Chertkov, & Lund, 2019), (Gunasekara, et al., 2021). Recent developments show promising trends, including the deployment of advanced building energy management systems (BEMS) and the emergence of new market mechanisms such as frequency control reserves (FCR) (Svenska kraftnät, 2025) and Open District Heating (Stockholm Exergi AB, 2025), which provide foundations for enabling FSC. Increasingly, buildings are evolving into active system participants, functioning as prosumers and potential energy hubs. Nonetheless, well-defined frameworks and business models that explicitly compensate buildings for delivering FSC services are still lacking.

In addition to these market and organizational challenges, the technical realization of FSC depends not only on physical assets such as thermal energy storage (TES), heat pumps, chillers, and PV/PVT systems, but also on digital capabilities – i.e., conceptual abilities that enable their coordinated operation (e.g., ability to monitor system state). While comprehensive building digitalization involves complex systems, practical FSC implementation could begin with a minimum viable set of such capabilities. These capabilities will require specific functions to be implemented in practice (as a simple e.g., collecting temperature data). Identifying both the capabilities and their associated functions, together with interoperability requirements, is essential. Furthermore, defining pathways for scaling toward full digital maturity represents an important step for unlocking FSC potential in buildings.

In this context, a comprehensive understanding of the available energy storage technologies, their potential in various building types, and the drivers and barriers that shape effective cross-sectoral energy system integration—particularly those facilitated by storage within FSC— are essential yet unavailable today. These knowledge gaps can be attributed to persistent silo-based optimizations in the different energy and building sectors, combined with technical, economic, policy, market, and stakeholder-related challenges. Importantly, there is also a shortage of in-depth techno-economic assessments that integrate the perspectives of diverse stakeholders, hindering the development of actionable strategies for large-scale FSC deployment.

Addressing these research gaps, this project aims to map existing energy storage technologies and their potential for implementing new and innovative energy storage solutions in buildings and districts towards flexible sector coupling, including techno-economic and socio-political drivers and barriers. The study should span over different types of buildings in Sweden (residential, commercial, service etc.), various energy storage technologies for both thermal and electrical energy storage, placement within networks, and how buildings themselves could contribute to energy storage. The analysis should consider the specific energy portfolios of each building type, concerning whether they are connected to district heating, district cooling, the buildings’ own energy production/harnessing technologies (e.g. Solar PV, PVT, Solar thermal, so on), the available conversion technologies (e.g. heat pumps, electric heaters, electric boilers, and chillers, among others) and digitalization frameworks to enable FSC.

Project Description

This project will explore energy storage technologies and systems implemented or with potential to be implemented in buildings or districts. Technologies will be categorized for their interactions, services, benefits and drawbacks in realizing FSC between thermal and power sectors with buildings/communities as distributed energy hubs. Additionally, the role of buildings’ thermal inertia and their implemented respective energy storage technologies as a whole in delivering FSC interactions and services and therein benefits and possible drawbacks will be investigated. Energy storage types like thermal energy storage (TES) and electrical battery storages (BESS) are considered, with particular consideration for their service times (short-term, medium-term and seasonal) and possibly hybridization. Sector coupling enablers like heat pumps, electric heaters and chillers, and available renewable energy technologies (e.g. solar PV, PVT and solar thermal) for the buildings to function as prosumers will be mapped and analyzed for their interlinkages through energy storages in the buildings.

In addition to mapping physical energy storage technologies, the project will identify the minimum digital capabilities required to enable basic FSC setups in buildings. These capabilities refer to conceptual abilities such as monitoring system states, executing coordinated control, and ensuring interoperability across assets. For each capability, the project will map the specific functions needed to implement it in practice, such as collecting and transmitting sensor data, and sending control commands to assets. This structured mapping will also consider interoperability requirements and outline pathways for scaling toward higher levels of digital maturity to enable more advanced FSC setups. The outcome will provide actionable insights for low-complexity FSC pilots and contribute to the development of digital maturity frameworks for buildings in support of FSC and renewable energy sources (RES).

Various FSC implementation strategies in buildings/districts as flexibility hubs, with energy storage, and the possible flexibility services towards each energy sector will be identified herein. The technical mapping and analyses above, will be complemented with stakeholder inputs using suitable methods (questionnaires and/or interviews) to identify the non-technical drivers and barriers, concerning also social and regulatory contexts to FSC implementation via buildings/districts.

Relevant quantitative and qualitative FSC Key Performance Indicators (KPIs) will be presented, through a comprehensive literature review combined with case study exploration and stakeholder inputs. The project will use (IEA ES Task 35, 2025) on FSC and (IEA ES Task 41, 2025) on Economics of Energy Storage as a basis for these FSC KPIs. The project will move beyond the traditional siloed definition of energy storage services restricted to peak shaving, load shifting, levelized cost of storage and payback.

As a whole, the project will synthesize the findings and identify technical and non-technical drivers and barriers to adopt FSC of thermal and electrical sectors through buildings as distributed energy storage and FSC hubs. The results obtained through mapping and comparative analyses should be critically analysed by comparing against available literature findings and discussed along the drivers and barriers for implementing FSC. The implications of the results will be used to answer the research questions listed next.

A comprehensive MSc thesis report along the KTH and Energy Technology’s guidelines should be delivered at the project's end, closely working with the supervisors and the research team. In the project report, you need to critically and comparatively discuss the results on the contexts of electrical and thermal sectors and their synergies and the role of buildings in it to enable FSC, and as overall the sustainability aspects.

Research Questions

1. What are the Energy Storage (ES) technologies available today that can be utilized in buildings and districts, and how do they perform across different timescales (short-, medium-, and long-term)?

2. How can ES technologies enable flexible sector coupling (FSC) between thermal and electrical systems in buildings/districts, and what services can they provide to both sectors?

3. Which system configurations and implementation strategies have the greatest potential to facilitate renewables generation (e.g., PV, PVT, solar thermal, other) with FSC enablers (heat pumps, heaters, chillers) through ES in buildings?

4. Which qualitative and quantitative Key Performance Indicators (KPIs) are the most suitable to evaluate FSC services of ES in buildings?

5. What minimum digital capabilities are required to enable basic FSC setups in buildings, and which specific functions are needed to realize these capabilities in practice? How do these requirements affect interoperability and scalability toward higher levels of digital maturity?

6. What technical, economic, social and regulatory drivers and barriers influence the adoption of FSC-enabled buildings as flexibility hubs?

Learning objectives

After the project is performed, the student should be able to/should be:

• Knowledgeable in comprehensively review scientific and technical literature and identify key trends and characteristics of the analyzed systems, technologies and their interactions

• Knowledgeable in performing stakeholder interviews and/or questionnaire-based information collection and synthesis to identify the key messages

• Understand and map the digital requirements for FSC, including identifying minimum digital capabilities, associated functions, and interoperability considerations.

• Process, analyze, report and critically and comparatively discuss the obtained results, including uncertainty and/or sensitivity analysis, and compare findings to available literature data on the relevant /comparable contexts

• Generalize the obtained results into the contexts of energy transition and sustainability

• Seek advice effectively and perform the research tasks independently when necessary, and take initiatives as necessary for the progress of the project

• Draw key scientific and design conclusions based on the critical analysis of the obtained results and therein propose relevant future work to improve the presented results and employed methods.

Pre-requisites

• Knowledge and preferably experience in numerical/analytical analyses and/or modelling.

• Fundamental knowledge on heat and mass transfer and thermodynamics

• Familiarity with relevant digital communication protocols, building automation and control.

• Basic knowledge of lifecycle cost analyses and techno-economic analyses

Advantages of being engaged in the project

• Obtaining hands-on experience concerning techno-economic analyses of relevant energy system solutions for energy sector decarbonization

• Close collaboration with the Swedish district heating and cooling company: Stockholm Exergi AB

• Opportunity to explore the intersection of building energy systems and digitalization, and contributing to the developing of digital maturity frameworks for buildings in support of FSC and RES.

• The potential to write a conference or even a journal scientific article based on the results obtained and the quality of the work, together with the project team

Main Supervisor, Examiner and Contact Person:

Co-supervisors:

Rafael Gomez Garcia , RISE ,Stockholm

Fabian Levihn, Johan Dalgren, Stockholm Exergi AB

References

Guelpa, E., Bischi, A., Verda, V., Chertkov, M., & Lund, H. (2019). Towards future infrastructures for sustainable multi-energy systems: A review. Energy, 184, 2-21. doi:10.1016/j.energy.2019.05.057

Gunasekara, S. N., Barreneche, C., Fernández, A. I., Calderón, A., Ravotti, R., Ristić, A., . . . Stamatiou, A. (2021). Thermal Energy Storage Materials (TESMs)—What Does It Take to Make Them Fly? Crystals, 11, 1276. doi:https://doi.org/10.3390/cryst11111276

IEA ES. (2024). Annex 35- Flexible Sector Coupling. (International Energy Agency (IEA)- Energy Conservation through Energy Storage (ECES)) Retrieved November 30, 2023, from https://iea-eces.org/annex-35/

IEA ES. (2024). Annex 35- Flexible Sector Coupling. (International Energy Agency (IEA)- Energy Conservation through Energy Storage (ECES)) Retrieved November 30, 2023, from https://iea-eces.org/annex-35/

IEA ES Task 35. (den 11 05 2025). Task 35- Flexible Sector Coupling. (International Energy Agency (IEA)- Energy Conservation through Energy Storage (ECES)) Hämtat från IEA ES: https://iea-eces.org/annex-35/ den 30 November 2023

IEA ES Task 41. (den 11 05 2025). IEA ES Task 41- EcoEneStor. Hämtat från Economics of Energy Storage – EcoEneSto: https://iea-es.org/task-41/

Stockholm Exergi AB. (den 11 05 2025). This is what our suppliers say about Open District Heating. Hämtat från Stockholm Exergi: https://www.stockholmexergi.se/en/heat-recovery/this-is-what-our-suppliers-say-about-open-district-heating/

Svenska kraftnät. (2025). Frekvenshållningsreserv störning nedreglering (FCR-D ned). Hämtat från https://www.svk.se/aktorsportalen/bidra-med-reserver/om-olika-reserver/fcr-d-ned/ den 11 05 2025