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Profitability and costs of 5GDHC / anergy networks

When deciding which energy system to implement in a neighborhood, profitability and costs are decisive factors. On this page, you find information on the profitability of 5GDHC networks (anergy networks) and answers to the questions of whether and in which cases 5GDHC networks are economical and which levelized costs of heat can be expected.

Factors influencing the economic efficiency of 5GDHC networks

A number of factors influence the economic efficiency of 5GDHC networks. Some important influencing variables are listed in the following:

  • Balancing of heating and cooling demands: The demand structure of a neighborhood can have a major influence on the profitability and efficiency of 5GDHC networks. 5GDHC is particularly suitable if heating and cooling demands occur simultaneously at as many points in the year as possible. This is the case, for example, when residential buildings have a demand for domestic hot water (heating demand) and a demand for room air conditioning (cooling demand) in summer. In this case, the waste heat from the room air conditioning, which is fed into the heating network, can be used to cover domestic hot water demands. Various indicators have been developed to assess the simultaneity of heating and cooling demands, such as the demand overlap coefficient (DOC).
  • Existence and characteristics of waste heat sources: One promising option for establishing highly efficient heat supply systems is to connect to waste heat sources or ambient heat. For example, waste heat from sewage water can be recovered by heat exchangers and used to supply a 5GDHC network. In some cases, higher-temperature waste heat is also available. In this case, it is recommended to use the existing temperature of the waste heat source directly and to set up a heat network whose operating temperature is just below the temperature of the waste heat source. This means that a 5GDHC network is not very promising if a waste heat source is present at a temperature level of, for example, 80 °C. In this case, it is advisable to operate a heat network at around 75-80 °C, so that buildings can be heated directly without installing an additional building heat pump. In the case of sewage water, which is usually at around 12 °C, a 5GDHC network is again a promising solution. In principle, waste heat sources in a neighborhood significantly increase the economic efficiency of a heat network solution.
  • Costs to develop heat sources: In many neighborhoods with 5GDHC networks, geothermal probes are installed and used as the primary heat source. Alternatively, however, other heat sources can be tapped, such as ground collector fields (near-surface geothermal, agrothermal), sewage water heat, or surface water (aguathermal). These heat sources can have very individual costs due to local conditions.
  • Installation costs: The costs of laying heating networks vary greatly depending on the area in which the network is built. The most expensive laying costs are in high-density urban areas and existing neighborhoods, while the lowest costs are in rural areas for newly built neighborhoods. Furthermore, civil engineering costs themselves can vary from place to place depending on the availability of contractors. For new construction neighborhoods, heating networks should be laid together with other infrastructure (electricity and fiber optics) to reduce laying costs.
  • Use of self-generated electricity: A major advantage of 5GDHC networks is that electricity from an own photovoltaic system can also be used to operate the building heat pumps. This increases the self-use of the PV electricity and thus also the economic efficiency of the PV system. The economic viability of a 5GDHC network thus also depends on the availability of roof areas for the installation of PV systems as well as the political will to also use them for PV systems.
  • Use of subsidy programs: An important influencing factor is the use of political subsidy programs. Often, sustainable districts concepts only reach economic viability by using subsidy programs. An important German subsidy program for 5GDHC networks is the Bundesförderung effizienter Wärmenetze.

What levelized cost of heat can be expected?

As already explained, the heating costs for 5GDHC networks cannot be quantified across the board. Nevertheless, the experience from past projects can give some indications: In Schallstadt (Germany), a 5GDHC network is planned for residential buildings with a KfW40+ building standard. The levelized cost of heat heat in this district are 12.8 EUR-ct/kWh. With a heating demand (space heating and domestic hot water) of 36 kWh/m², this results in area-specific heating costs of 458 € per 100 m² and year. For comparison: In three comparable neighborhoods with conventional (hot) heating networks, which went into operation in the period from 2014 to 2016, heating costs were determined in the range of 15.6 and 16 ct/kWh (data according to utility bills). In the hot grids, this resulted in area-specific heating costs between 867 € and 1001 € per 100 m² per year.
An important aspect that is often not sufficiently considered in comparisons of the economic efficiency of 5GDHC networks is the possibility of almost cost-free passive cooling. Considering increasingly pronounced heat waves, the demand for room air conditioning will steadily increase in the coming years. However, the benefit of providing free cooling is often not taken into account in the economic analysis. As an example of an economic feasibility study on 5GDHC, reference should be made to a scientific study published in 2021. Here, 5GDHC networks were compared with conventional heating networks for two locations in Denmark and Great Britain. The authors concluded that there were slight cost advantages for the conventional heating network. However, in this study, the advantage of free building air conditioning was completely neglected. In addition, cost advantages due to the use of own electricity from photovoltaic systems or subsidy programs were not considered.

Case study: Vohbach district in Burgheim, Germany

For the conceptual planning of the district Vohach in Burgheim, different energy concepts were compared. A profitability analysis was carried out to find out which concept had the lowest total annualized costs. Here, a decentralized solution with gas boiler and solar thermal collector, a conventional heating network and a 5GDHC solution were compared. The conventional heating network had the highest total costs and was 12 % higher than the solution with gas boilers and solar thermal collectors. The total costs of the 5GDHC network were below the gas boiler solution (cost savings of 15 %).

The nPro tool enables to make quick cost estimations for different district energy system configurations in the conceptual phase.

Conclusion on profitability

Overall, there is a general perception among professional planners that 5GDHC solutions are not inferior to conventional neighborhood solutions in terms of economic viability. Some planners generally see 5GDHC networks as the most economical option, but this cannot necessarily be generalized, especially for existing neighborhoods or neighborhoods with different types of building use (not exclusively residential). It is important to examine the economic viability individually for each neighborhood and to compare different neighborhood concepts for this purpose. In addition to local boundary conditions, current political subsidy programs also play an important role.


  1. Oddgeir Gudmundsson, Anders Dyrelund and Jan Eric Thorsen: Comparison of 4th and 5th generation district heating systems, E3S Web Conf., Volume 246, 2021. DOI: 10.1051/e3sconf/202124609004
  2. Quantifying Demand Balancing in Bidirectional Low Temperature Networks. M. Wirtz, L. Kivilip, P. Remmen, D. Müller. Energy and Buildings, 224, 110245, 2020.

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