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The core element of a district heating system is as a minimum a heat-only boiler station. Additionally a cogeneration plant (also called combined heat and power, CHP) is often added in parallel with the boilers. Both have in common that they are typically based on combustion of primary energy carriers. The difference between the two systems is that, in a cogeneration plant, heat and electricity are generated simultaneously, whereas in heat-only boiler stations - as the name suggests - only heat is generated.

In the case of a fossil fueled cogeneration plant, the heat output is typically sized to meet half of the peak heat load but over the year will provide 90% of the heat supplied. The boiler capacity will be able to meet the entire heat demand unaided and can cover for breakdowns in the cogeneration plant. It is not economic to size the cogeneration plant alone to be able to meet the full heat load.

The combination of cogeneration and district heating is very energy efficient. A simple thermal power station can be 20-35% efficient, whereas a more advanced facility with the ability to recover waste heat can reach total energy efficiency of nearly 80%.Other heat sources for district heating systems can be geothermal heat, solar heat, surplus heat from industrial processes, and nuclear power.

Nuclear energy can be used for district heating. The principles for a conventional combination of cogeneration and district heating applies the same for nuclear as it does for a thermal power station. Russia has several cogeneration nuclear plants which together provided 11.4 PJ of district heat in 2005. Russian nuclear district heating is planned to nearly triple within a decade as new plants are built.

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There are several ways that an industrial heat pump can be used, for example:

1-As the primary base load source where a low grade source of heat, e.g. river, fjord, data centre, power station outfall, sewage treatment works outfall (all typically between 0˚C and 25˚C) are boosted up the network temperature of typically 60˚C to 90˚C. Such heat pumps, although consuming electricity, will deliver over 3x and perhaps 5x the heat output as consumed electricity.

2-As a means of recovering heat from the cooling loop of a power plant to increase either the level of flue gas heat recovery (as the district heating plant return pipe is now cooled by the heat pump) or by cooling the closed steam loop and artificially lowering the condensing pressure and thereby increasing the electricity generation efficiency.

3-As a means of cooling flue gas scrubbing working fluid (typically water) from 60˚C post injection to 20˚C pre-injection temperatures. The heat is recovered using a heat pump and sold into the network side of the facility at 80˚C.

4-In situations where the network has reached capacity, large individual load users can be decoupled from the feed pipe at around 80˚C and coupled to the return pipe at 40˚C. By adding a heat pump locally to this user, the 40˚C pipe is cooled to 20˚C (the heat being delivered into the heat pump evaporator). The output from the heat pump is then a dedicated loop for the user at 40˚C to 70˚C. Therefore the overall network capacity has changed as the total delta T of the loop has changed from 80-40˚C to 80˚C-x (x being a value lower than 40˚C).

Recent advances in technology have allowed the use of natural refrigerants such as CO2 (R744) or ammonia (R717) which also have the added benefits, depending on operating conditions, of improved heat pump efficiency.