Power-to-Heat: Use of Excess of Electricity for the Production of Heat as Option to Integrate Renewable Energy

Cooperation and Funding: Federal Ministry for the Environment, Nature Conservation and Nuclear Safety

Within the project, the Chair of Energy Economics calculated potentials for the use of power-to-heat-systems in Germany. Power-to-Heat means to convert electricity into heat. It is a flexibility option which is technically feasible and comparably cheap. In periods of high renewable feed-in and cheap electricity prices it can be used as flexibility option. Storing the resulting heat may be an additional source of flexibility. The aim of the project was to identify technical, economic and political potentials of power-to-heat in Germany until the year 2020. Additionally, the market design was analysed and potential barriers identified

Main results of the project are the following: Power-to-heat is a ready-to-use flexibility option. There exists a various amount of technical applications for industrial purposes, district heat suppliers and households some of which do economically pay off while others do not. In the past, the market for negative control power was the most promising one. Due to an increasing competition in the market, there is an ongoing decrease in its prices. They are expected to remain on a low level until 2020. Hence, the economic situation has become more difficult during the last years. Taxes and fees on electricity consumption is a main reason why other fuels are preferred to electricity for heating purposes. However, within energy intensive industries there exists a wide range of exemptions concerning taxes and fees. Hence, for some firms the usage of electricity as a heat source may pay off due to savings of other fuels such as natural gas or oil.