During the decades the district heating's (DH) advantages (more cost-efficient heat generation and reduced air pollution) overcompensated the additional costs of transmission and distribution of the centrally produced thermal energy to consumers. Rapid increase in the efficiency of low-power heaters, development of separated low heat density areas in cities reduce the competitiveness of the large centralized DH systems in comparison with the distributed cluster-size networks and even local heating. Reduction of transmission costs, enhancement of the network efficiency by optimization of the design of the DH networks become a critical issue. The methodology for determination of the key drivers of the cost-efficiency of the DH networks to implement the most efficient (cost-minimal) thermal energy transmission was developed in this study. An inductive benchmarking modelling was applied; the general causal regularity is based on the observations of specific cases, thus determining the relationships between the network's design and thermal indicators as predictors and transmission costs as the target variable. The key drivers of the network efficiency were disclosedthe network length and the largest inner diameter of the pipes. The methodology is applicable for use by municipalities and heat providers for the heating planning of the new housing developments as well as renovation and/or expansion of the existing DH networks.

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Energy policy of the European Community is implemented by setting various goals in directives and developing support mechanisms to achieve them. However, very often these policies and legislation come into contradiction with each other, for example Directive 2009/28/EC on the promotion of the use of energy from renewable sources and Directive 2012/27/EU on energy efficiency, repealing Directive 2004/8/EC on the promotion of cogeneration based on a useful heat demand. In this paper, the authors attempt to assess the potential conflicts between policy political objectives to increase the share of high-efficiency co-generation and renewable energy sources (RES), based on the example of Riga district heating system (DHS). If a new heat source using biomass is built on the right bank of Riga DHS to increase the share of RES, the society could overpay for additional heat production capacities, such as a decrease in the loading of existing generating units, thereby contributing to an inefficient use of existing capacity. As a result, the following negative consequences may arise: 1) a decrease in primary energy savings (PES) from high-efficiency cogeneration in Riga DHS, 2) an increase in greenhouse gas (GHG) emissions in the Baltic region, 3) the worsening security situation of electricity supply in the Latvian power system, 4) an increase in the electricity market price in the Lithuanian and Latvian price areas of Nord Pool power exchange. Within the framework of the research, calculations of PES and GHG emission volumes have been performed for the existing situation and for the situation with heat source, using biomass. The effect of construction of biomass heat source on power capacity balances and Nord Pool electricity prices has been evaluated.