District heating tariffs based on the next-alternative technology

July 5, 2016


Client:  Infrax
Period:  2015
Team:  3E, Ingenium


The heat tariff at the cost of the next-alternative technology is the upper boundary for which the willingness to pay by the end user (the client of the heat network) is considered equal to the reference situation (considering a gas condensation boiler). This methodology defines the upper limit of the price that can be charged for heat originating from a heat network.

This study provides a substantiated overview of the various cost items that are applicable in this tariff principle. A calculation tool, made available by 3E for Infrax, allows changing input parameters in a user-friendly way and calculating the heat tariff for different scenarios.

3E defined the heat tariff for five cases: individual housing, apartment units with individual heat generation, apartment units with collective heating, small and large office buildings. Both an E60 and BEN scenario was considered for each of the five cases in order to generate the widest possible range of relevant future cases.