District heat planning under conflicting stakeholder objectives: A multi-level optimization approach

Abstract

Decarbonizing the heating sector is central to achieving climate neutrality by 2050. Municipalities play a key role in developing district-level target scenarios for the future supply of heat. However, this depends on decentralized decisions by a variety of stakeholders, whose individual incentives are rarely considered in existing planning frameworks. This paper therefore proposes a multi-level, stakeholder-oriented optimization framework for generating feasible and diverse district-level target scenarios. At the building level, multi-objective optimization identifies Pareto-optimal solutions for each building based on owners, landlords and tenants costs, as well as CO2 emissions. A heat grid expansion model determines whether buildings are suitable for a district heating connection. At the district level, these results are aggregated and used in a secondary multi-objective optimization to derive target scenarios that balance CO2 emissions, total costs, and rental costs. A case study on a German urban residential district comprising 1,314 buildings revealed that, while CO2 emissions can be reduced significantly across all target scenarios, district targets differ in terms of stakeholder burden, technology usage and renovation intensity.