Heat and cold – getting it, spending it and what if we could be sharing it?

Raise your hand if you’re thermally comfortable right now? Is the weather cold outside? Have you made a cuppa tea in the past hour, had a hot shower or if you’re in a desert climate like myself, have you heard the click and whoosh of air conditioning coming on? Ever think of heating and cooling as a service or something to share?

Let’s look at hot or cold as two nouns for services, in whatever form we get them – air, water, gas. Just like electricity doesn’t come from the wall socket, neither do the hot and the cold – they need to be generated somewhere, brought to us in some form we can handle, they are consumed over some period of time (don’t you wish time is endless after those 24 degrees are reached indoors with outside being 40+ in summers?), and then they are gone – either by convection through walls, windows or by simply opening the doors to the non-cooled space.

In a nutshell, this is the way heating and cooling (or HVAC, if you’re into tech/engineering jargon) work. Linear, right? Can it be circular? What about sharing – can we create a subset of the sharing economy out of it? Maybe there are some solutions towards that idea already?

Should we even look into this and should we care?

Why it matters

Cities – the final frontier. Star Trek may have skipped this part but with 80% of humanity living in cities in not that far of a future, it’s easy to see how, before we set off for Alpha Centauri and boldly go where…, buildings are going to be the subject of a lot of R&D, tech discovery and policy discussion – simply because so many of us will be living and working in buildings. It doesn’t take much research to find basic stats, indicating that up to 90% of the time across the year is spent indoors – meaning buildings again. There’s a whole plethora of things to consider when thinking about buildings, for example see the following image:


Structure of the buildings sector model (Source: IEA)

The topic has been dissected virtually a million ways with just as many solutions – the question is how it ends up looking today, after all said and done – certainly a lot will be done and global projections indicate that trends are indeed changing, with both contributors to (almost exponential) growth of consumption in the future, as well as measures to reduce the impact of growth through better technology, product performance and building envelope improvements as indicated here:


Decomposition of global final energy demand in buildings by key contribution (Source: IEA)

The first question is – what if expected savings are not delivered, for whatever objective reason? What if the feasibility studies of individual measures don’t pan out? What if building envelope retrofits never becomes an attractive investment? One risk mitigation measure might be to target primarily the biggest systems in buildings, hoping that innovation and global awareness will drive savings even beyond the ones expected.

This is where heating and cooling in buildings comes into the picture.

When it comes specifically to heating and cooling, focusing on the green (light and dark) and dark blue colours in pie charts in the following picture becomes increasingly interesting. Since 2002, energy demand per person consistently rose to more than 3.3 MWh per person in 2014, as increasing living standards and growing demand for energy services and thermal comfort continued to drive demand for commercial fuels. Globally, space and water heating demand continue to account for the lion’s share of energy consumption in buildings, representing nearly 65% of buildings final energy use in OECD countries and roughly 50% in non‐OECD countries (largely based on traditional use of solid biomass for water heating purposes).


Buildings energy intensity per capita and final energy use by key regions in 2017 (Source: IEA Technology Perspectives 2017, http://www.iea.org/etp/)

District heating and cooling

Remember economy of scale, marginal costs and associated topics from Economy 101 back in school? It works well for heating and cooling too. The fundamental idea of district heating is to use local fuel or heat resources that would otherwise be wasted, in order to satisfy local customer demands for heating, by using a heat distribution network of pipes. Traditional excess heat resources are combined heat and power (CHP) plants, Waste-to-Energy (WtE) plants, and industrial processes. Established expertise of district heating has paved the way for introduction and deployment of district cooling systems, mainly for covering space cooling demands in buildings. However, this district cooling development has been more recent compared to the development of district heating. District cooling systems are therefore neither as common nor as extensive as district heating systems.

Many a European will have experience in paying bills for district heating. This resident of Dubai can tell you a lot about the Dubai market for district cooling – not least because it’s the biggest in the world (source here), with goals set by the Dubai Supreme Council of Energy of 40% of all buildings to be district cooled by 2030, from current approximate 16%.

A great overview of both district heating and cooling markets has just been published by Sven Werner here, so whoever is interested can read more on it. One interesting outtake from near the end of the paper goes to show this is an increasingly interesting topic for research lately (and you thought thermal comfort a boring topic, right?). If (research) money talks, it’s increasingly talking about heating and cooling for the sustainable future.


Investments into R&D in heating and cooling in European Union
(Source: Sven Werner, Energy, 2017)

Technological scale-up does work – providing heating and/or cooling at a large, district scale indeed has benefits – for example, for cooling only 0.92 kWh per refrigeration tonne delivered while other cooling methods may require almost double the energy, as per RSB Dubai study available here.

Remember how distributed generation came into play for large utilities? What if district heating/cooling industry is about to face the same challenge? Here goes…

Sharing the heat and the cold

Once upon a time (okay, the 80-ies of last century), electric power systems meant large, vertically integrated utilities that were the omnipresent „mom and dad“ of your electricity supply, usually set-up as monopolies. Renewable energy, if anybody talked about it, meant large hydropower in places which had the predispositions to build them. Things slowly started changing with introduction of the concept of „distributed generation“, largely an area of interest of energy enthusiasts who looked into way of local, building-level energy generation and reducing dependency of a building on the electrical grid.

Enter 2017 – hearing about utilities forming venture capital funds is becoming more and more common.  I’ve listened to a presentation of one of the managers of such a fund based in Dubai – the utilities are seeing the changing landscape, the markets have become free and open worldwide more then ever before, independent power producers are everywhere – the landscape seems to be one where a large electricity supplier is simply not needed. Because your whole neighbourhood will be one big energy hive of generation and consumption, utilizing advanced local trading algorithms together with artificial intelligence to deliver thermal comfort and electricity needed to run your household – completely sourced locally. Throw in the fact that energy can now be stored at increasingly lower prices (while getting my engineering degree, we were told „electricity grid is tricky because whatever energy is produced must be instantly consumed“… well Mr Professor, times have changed). If you think any of this is outlandish, here’s a good example of a company creating localized „energy hives“ – and it’s been well recognized in media and globally – to the point of being invited to testify in front of US House of Representatives recently. Artificial intelligence developers going to discuss advancements with the government… anybody thinking of Skynet and Arnold Schwarzenegger yet?

So, what does this have to do with heating and cooling?

At a Mission Innovation Workshop held in Abu Dhabi, 1-2 November 2017, an interesting discussion developed. Data centres have large demands for cooling, evacuating heat from indoors. At the same time, a nearby industrial plant might need additional heat for its operations. A nearby laundromat is hot when busy – why should you be cold in your apartment and/or pay the full heating bill to the utility company? And what if we have some sort of a district thermal storage, or even use geothermal energy as a heat source or heat sink, depending on climate? Just for a rough idea, here’s what the group I participated in came up with conceptually:


Office building, low-rise multi-family residential and a family home – connected with a heating and cooling network underground, with possible use of geothermal energy as sink/source. Conceptual from Mission Innovation Abu Dhabi workshop, 2 November 2017

Some ideas have been implemented and seem to be working well, but are quite recent and still considered an engineering novelty – for example in UK as shown here.

So, we have prosumers appearing increasingly, with a growing difference between “base” and peak loads in energy supply, including heating and cooling as subsectors. On the other side we have central generation assets that today sit idle some of time, more or less called into use only to meet the peaks – the bulk energy system’s decreasing load factor is a sign of increasing asset underutilization … just like the spare bedroom in a house that’s vacant most of the year (and hello Airbnb).

Are there compelling sharing economy opportunities in the electricity sector? What products or services can be shared in tomorrow’s Smart Grid? Energy efficiency, demand response (demand flexibility), distributed generation such as rooftop solar, distributed storage such as batteries, smart thermostats, heat pumps and more can become the front lines of a sharing economy revolution for the grid – and mini-heat pumps, linked to district-level thermal storage might just well be the next frontier.

Barriers, enablers, future and research

The Mission Innovation workshop provided some insights into barriers and enablers for the concept of shared economy applied to heating and cooling:


  • Many synergies with technological ecosystems of smart grid, distributed prosumers
  • Mitigates the urban heat island effect by reducing heat rejection into the environment in urban centers (heat and/or cool air/water is used where it’s needed instead of being released as waste)
  • End-user would retain ultimate control of the electricity consuming equipment (the heat pump or fan coil)


  • Infrastructure requirements might be high – mini heat pumps, metering equipment, sensors and control software
  • The concept competes with the existing industry of district energy – this may also be an opportunity if district energy providers create synergies with start-ups in the sharing economy arena
  • A technical solution for metering heating and cooling in such a structure would need to be developed
  • Business model and even infrastructure type could be highly dependent on climate and use mix – basically, every situation and combination of buildings would require a slightly customized approach

What’s there to do?

Well first of all if you actually went through all of the above and got the idea, make yourself a well-earned cup of tea. The idea of applying shared economy to heating and cooling, when googled yield about 3 useful results, and even then the content is a stretch.

On the other hand, the group of researchers and some members of industry i sat down with for a discussion along the above lines seem to think that if we plug in some measured numbers into new models, new and hopefully positive conclusions might start to come up. Someone must model feasibility of different configurations, figure out the lifecycle cost and what technologies need to be developed to enable such a system of sharing thermal comfort or heating/cooling energy in general. A pilot project or two would be the next step before we let economists develop a win-win business model.

Something to keep us sustainability leaders more than occupied in the upcoming decades, isn’t it?

7 thoughts on “Heat and cold – getting it, spending it and what if we could be sharing it?

  1. An enjoyable read raising some really good questions and possibly even some solutions for consideration by others. The challenge we face in Australia is one area in particular has made the leap of faith to renewable energy and now faces the highest electricity costs in the western world. Politically this was unacceptable after several major failures (i.e. no wind meant no power and an inability to retrieve extra power back from a national grid). So maybe going where man (or woman) has yet to go needs to come with a Q&A sheet of how to tackle the political climate at the same time for when it doesn’t quite go to plan and it appears easier to turn back to the status quo of fossil fuel resulting in a short term gain for long term pain…..

    Liked by 1 person

    1. Oh wow, my first blog commenter ever, thanks for that 🙂

      As for political climate – yeah, it seems that while politicians should be leading, when it comes to tech they are usually way behind and regulate reactively instead of proactively (think Facebook and privacy), and sometimes with different motivations (Germany subsidized renewables because they saw the economic multiplier of domestic manufacturing of components for wind)… but we’ll get them there 🙂

      As for tech, this was indeed an issue in early days when individual sources were affecting supply a lot (wind vs. no-wind, rainy day on a solar farm), but to the best of my knowledge things have improved both with predictive algorithms as well as with control… we also have a much diversified portfolio of renewables in some areas so they balance each other out + knowledge of how to use existing non-renewable sources for balancing services in the grid is much more advanced. Of course, more is always better, and at high penetrations of renewables it will be interesting to see tech that will manage the mix from second to second. Cheaper energy storage would sure help in that, to act as a buffer in transitory periods.


      1. Predictability doesn’t help when one leads with their chin rather than with their head ! I too agree we will get there but it makes the argument for change harder when it isn’t thought through completely and back up plans established. Look forward to your next blog 🙂

        Liked by 1 person

  2. Hey Luka, It is an interesting read. Regarding, to your idea cooling and heating centralize in a city level. There are lots of city already doing so in names of ‘‘District Cooling’’ and ‘‘District Heating’’ as you mentioned. Europe is leading this frontier. There are currently 12 EU countries and the UK currently using this arrangement. According to the figures from the European Commission, Iceland top the table with 95% use of district cooling and heating and the UK have lowest with only 2% use district cooling and heating. From my experience previously, worked as a consultant most of the seaside cities such as Singapore and Hong Kong have long use central cooling (by seawater) for commercial building’s air-conditioning. Started because of these cities leak of fresh water sources in the early days. Now, it links to environmental and cost elements. However, that is not perfect as seawater district cooling system have much shorter life spend than conventional systems. Think, your idea about utilities forming venture capital funds is some new and interested to study further. I will say in the model by using residential and commercial building using sustainable method to produce energy than sell back to the grid which currently widely testing may be something worth looking at.

    Liked by 1 person

    1. Interesting points there, thank you!
      Indeed, use of seawater would be great but as tested on the Dubai Palm, seawater is quite abrasive so pipe material has to be of specific and quite costly quality to endure, and even then there’s maintenance issues, so we turned more to use of desalinated water, the economy (currently) works out way better.

      But here’s hoping price signals change!

      Liked by 1 person

  3. I’m raising my hand as I’m thermally comfortable and of course I’m having a cup of tea!

    This is a really interesting post. For me, heating (not so much cooling in the UK) is something I think about a lot. I always think how long and how much energy it has taken to heat up the house for someone to open the door and have all the hot air escape. (Maybe every building needs a heat/cool-lock similar to an airlock in spaceships and submarines.)

    There have been significant improvements in UK building regulations making sure houses are well insulated, have an energy efficient boiler or power source. However, nearly-zero-energy requirements for new buildings’ will not come into force until 2019 at the earliest. 

    Building retrofits should be an attractive investment, however, they can be expensive and most people can’t and don’t want to spend even more money or have to make amendments to their homes.

    District heating systems are a great idea. There are over 17,000 heat networks in the UK. It would be great to look at how people can be incentivised to extend this even further and develop cooling systems as well. I am concerned though about the amount of infrastructure this requires (digging up roads etc). Potentially all new developments should incorporate these heating and cooling systems and has to be part of building regulations?


    1. Thanks Rebekah! 🙂 UK seems to be the testbed for many technologies and is recognizing new challenges (i.e. recent report I believe by Ofgem recently recognized the important role of energy storage and the need to incorporate it into energy systems on strategic, policy, regulatory and technical level ASAP).

      I’d also be interested to see if someone of math/physics/thermodynamics knowledge would be able to look into feasibility of sharing heat and how economics of it would work, and also which pressure points should be addressed to perhaps unlock wider usage.


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