Till innehåll på sidan
Till KTH:s startsida

Quantifying the economic value of electric heating to buildings when coupled with District heating

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 [1].

Since the European energy shock due to the removal of Russian natural gas, electricity prices have become significantly more volatile. Prices peaked in 2022, triggering a boom in intermittent renewables and heat pumps, and in 2025 daytime prices are routinely negative with large spikes in the evenings. This is a strong signal for storage, but also sector coupling; when prices are low, heat can be generated with heat pumps or resistance boilers, either used directly or stored for later. Identifying an economically viable or optimal solution is a function of electricity price signatures, marginal district heating costs, thermal energy demand signatures, and the capital costs for electric heating and storage equipment. Stockholm Exergi already has heat pumps and resistance boilers in their plants, but there is much more capacity potential within the buildings in the network. The advantage of distributed sector coupling is lower operating temperatures and the utilization of unused space within the property. The key downside is higher capital costs as compared to centralized equipment. As a first step, it is valuable to describe the economic value of distributed sector coupling, which can help establish CAPEX limitations, define the total addressable market, and be used as a foundation for business model innovation.

Project Description

This project aims to define the economic value of distributed sector coupling between district heating and electricity networks. The key analyses will be done through data-driven modelling, identifying base (business-as-usual) cases and several scenarios incorporating the use of electric heating devices in representative buildings.

Research Questions

The specific research questions of interest include:

  • How many hours per year is electric heat cheaper than DH (efficiency effects)?

  • What is the heat demand that needs to be served during those hours?

  • Are there building characteristics that make coupling more or less interesting?

  • Are there network characteristics (e.g. underserved regions) that make coupling more interesting?

  • Is electric heat a threat or opportunity for DH? E.g. should they change their energy pricing strategy?

  • Are there benefits to decentralized vs. centralized sector coupling? (e.g. do lower delivery temperatures help the economy?)

Methodology

The project combines literature review, data collection, modelling, and scenario analysis to evaluate sector coupling in buildings. Models must be developed using existing building energy demand profiles and consumer price models, informed by several years of hourly electricity prices and marginal district heating cost as a function of outdoor temperature. A review of existing studies on urban energy systems, district heating, electric heating devices (central at DH production and also decentralized at buildings-level), and demand flexibility use will establish the theoretical foundation, help develop key performance indicators (KPIs), and inform modelling assumptions. Scenario analyses should compare performance under varying technical and market conditions along the identified KPIs, and may be complemented with sensitivity analyses to identify the most influential parameters. Results should be validated against literature and critically analyzed to identify synergies and trade-offs between electrical and thermal sectors, as well as their sustainability implications. Findings should be synthesized to address the research questions and guide interpretation in the broader context of energy transition as well as sustainability.

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. Writing must be a continuous process parallel to the project work, with reviews at 6-week intervals. The working language is English.

Learning objectives

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

  • Knowledgeable in performing data-driven modelling, with hands-on experience, to identify key trends and characteristics of the analyzed systems and their interactions

  • Experienced in conceptualizing and performing scenario analyses within the stated context, to answer specific research questions

  • 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 analytical methods/numerical analyses and/or modelling.

  • Fundamental knowledge on heat and mass transfer and thermodynamics

  • Basic knowledge of cost analyses and techno-economic analyses

Advantages of being engaged in the project

  • Meaningful contribution to a real research project that can lead to relevant energy system solutions for the decarbonization of heating

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

  • With support of the project team, the potential to publish a conference or even a journal scientific article based on the results obtained and the quality of the work

Main Supervisor and Contact

Nelson Sommerfeldt
Nelson Sommerfeldt forskare

Examiner:

Saman Nimali Gunasekara
Saman Nimali Gunasekara assistant professor, forskare

Co-supervisors:

Saman Nimali Gunasekara, Energy Technology, KTH

Fabian Levihn, Johan Dalgren, Stockholm Exergi AB

References

[1] IEA ES, “Annex 35- Flexible Sector Coupling,” International Energy Agency (IEA)- Energy Conservation through Energy Storage (ECES), 2024. [Online]. Available: https://ieaeces.org/annex-35/. [Accessed 30 November 2023].

[2] IEA ES, “Annex 35- Flexible Sector Coupling,” International Energy Agency (IEA)- Energy Conservation through Energy Storage (ECES), 2024. [Online]. Available: https://ieaeces.org/annex-35/. [Accessed 30 November 2023].

Innehållsansvarig:Oxana Samoteeva
Tillhör: Energiteknik
Senast ändrad: 2025-09-22
Experimental Investigation and Optimisation of Granular Flow Dynamics in Gravity-Driven Moving Bed Electric Heaters for CSP Applications
Experimental Investigation of a Vertical Electric Heater Concept for Powder Particles in CSP and Energy Storage Applications
Techno-Economic Analysis of Transport Cooling Technologies in the Nordic and European Cold Chain
Design and Techno-economic Analysis of a Cold Storage for an innovative Cooling System from IceHeart AB
Quantifying the economic value of electric heating to buildings when coupled with District heating
Evaluation of Temperature-Based Occupancy Detection in Residential Buildings: An Experimental Study in a Lab Environment
Towards Zero-Waste through a Circular Recovery Model – Lessons for Managing Municipal Solid Waste in cities
Net Zero Energy Design for Data Centers: A Multidisciplinary Approach (Competition)
Development of a Computational Tool for Evaluating Energy Storage Installations in the Swedish Electricity Market
Predicting Occupant Behavior in Fully Automated Energy Communities
Feasibility study on Component Test Bed for Cryogenic Renewable Fuels (CTB-cryo)
Techno-economic analysis and experimental pre-study of hydrogen production with improved catalytic process
Optimal control of networks of borehole heat exchangers with machine learning
CFD analysis of an air-based waste heat recovery solution for telecommunication base stations
Experimental analysis of waste heat recovery systems for telecommunication base stations
Safe Use of Flammable Refrigerants: Evaluating Refrigerant Leakage Flow Rate in Small Heat Pumps
Development of AI-Based Data-Driven Aging Model for Li-Ion Batteries
Investigations on heat-transfer in a rotating heat-pump
Numerical Simulations of a supersonic multiphase ejector for high-temperature heat-pumps
Sodium-Ion Batteries: Building the Foundation for a Greener Future via Life-Cycle Assessment and Techno-Economic modelling
Development of compact I-V curve tracer and load simulator for photovoltaic laboratory test rig
Development of remotely accessible battery laboratory exercise test rig
Investigation of usage of different methane fuel qualities for rocket engines with respect to the pyrolysis stability
CFD based design study of heat exchangers for high temperature heat pump applications.
Biogaslagring/optimering för minskat beroende av råolja
Refurbishment Strategy Based on Smart Radiator Controllers
Solar Photovoltaic-Thermal Integration with Ground Source Heat Pump Systems for Single-Family Houses
Integration of Solar Photovoltaic-Thermal (PVT) Collectors in District Heating Networks
Heat Propagation in High-Temperature Geothermal Wells
Experimental evaluation of advanced features of a modern heat pumping system
Energy use optimization of vertical farming systems
Rethinking Capacity Development in Energy Modeling: Integrating Local and Indigenous Knowledge Systems in Transboundary Contexts
Optimizing Waste Treatment Pathways for Sustainable District Heating Development: Integrating Material Flow and District Heating Models in OSeMOSYS
Social Life-cycle impact assessment of innovative cascade PCM based thermal energy storage solutions
Water Demand Forecasting from Multipurpose Reservoirs in Cochabamba, Bolivia, to 2050: A Sustainable Energy Perspective
Electrification of the heating sector in Europe
Safe use of flammable refrigerants-literature review
Safe use of flammable refrigerants-Modeling concentrations of the leaked refrigerants in case of accidental emissions in different scenarios
Boiling inside rectangular microchannels: Investigating the use of high-speed IR camera for temperature readings
Characteristics and kinetic study on catalytic and non-catalytic pyrolysis of PVC and wind blades in molten salts via thermogravimetric analysis
Predictive model control design for a small-scale steam engine based multi-source CHP system
Solar hydrogen production by photocatalytic reforming of cellulose with concentrated sunlight
Circularity of batteries
Battery application in harbour environment
Empowering the Future: Innovating Sustainable Energy with Digital Heat Pump Solutions
Optimizing Energy Performance in Existing Urban Building Stocks: A Comprehensive Analysis and Strategic Approach for Sustainable Operation
Techno-economic and feasibility assessment for nuclear plants combination with CO2 sequestration and green fuels production units
Techno-economic and feasibility assessment for nuclear plants integration in flexible future energy systems for grid balancing and ancillary services
Life-cycle impact assessment of innovative cascade PCM based thermal energy storage solutions
Techno-economic assessment and optimization of seasonal thermal energy storage in district heating networks
Final Commissioning and Experimental Performance Characterization of a Bench-scale Thermochemical Heat Storage System (SEU/SPG)
Renewables and Demand Side Management
Circularity measurement for automotive industries
Experimental Investigation of Optimal Flow in Borehole Heat Exchanger at KTH Live-in Lab
Low Global Warming Potential Refrigerants for high temperature heat pumps
Development of battery test rig: Remote Battery Lab
Comparative analysis of thermal storage options for industrial steam generation in a solar thermal integrated system
Development, Implementation & Evaluation of an optimized operation algorithm for a Li-Ion battery Energy Management System (EMS) at Tezpur University
De-icing of trains in a Nordic climate
Calibration of a measurement system for methane pyrolysis detection in rocket nozzles
Experimental study on the effect of rocket nozzle wall materials on the stability of methane
Examensarbete om vattenflöden för bostäder
Evaluating the potential of energy efficiency improvement in combined cycle power generation to minimize the CO2 footprint in the context of Sri Lanka
Smart and Sustainable Oskarshamn: Energy Management and urban system analysis
Photovoltaic system design, installation and performance evaluation: PV Lab test rig
Ground source heat pumps in densely populated areas - a techno-economic study
Replacement of old ground-source heat pumps – a techno-economic study
PV-ESS system optimization to maximize self-consumption of PV-generated in KTH live-in lab
Environmental assessment of SESS applications based on cradle to grave LCA
High and low temperature electrolysis integration in Combined Cycles
Novel solar technologies and SOEC integration for synthetic fuels
Digitalization of HVAC schema drawings
Development & implementation of an improved operation algorithm for a Li-Ion battery energy management system (EMS) at Tezpur University
Techno-economical analysis of large refrigeration systems - operational and maintenance strategies
Comparision of high fidelity and real-time CFD methods for simulating thermal comfort
Data driven heat pump models for generation of electrical load profiles at DSO level
Energy–Transport System Modelling for ASEAN (dual placement)
Towards Zero-Waste through a Circular Recovery Model – Lessons for Managing Municipal Solid Waste in cities
EPIC Africa CLEWs assessment supporting Burkina Faso’s development plans
Using machine learning to spatially classify current technologies used for cooking in developing countries
Accounting for affordability constrains in geospatial modelling of clean cooking access
Rethinking Capacity Development in Energy Modeling: Integrating Local and Indigenous Knowledge Systems in Transboundary Contexts
Optimizing Waste Treatment Pathways for Sustainable District Heating Development: Integrating Material Flow and District Heating Models in OSeMOSYS
Enhancing Socio-Economic Impact Assessment in Climate-Compatible and Self-Sufficient Rural Communities through Integrated Resource Optimization Models