High-efficiency combined biomass-biogas district heating in Kaposvár

In South-West Hungary, surrounded by the hills of the Outer Somogy region, the Kapos River, and the forests of Zselic, the city of Kaposvár has demonstrated a strong commitment to transforming its heating system despite significant challenges. Like many Eastern European cities, Kaposvár operates in an unfavourable market environment for expanding district heating (DH) networks. Rising DH prices and the growing trend amongst dwellings to disconnect from the obsolete, inefficient district networks are common hurdles in the region. 

Despite these challenges, Kaposvár has managed to expand its DH network through attractive pricing and significantly reducing CO2 emissions, putting efficiency and modernisation of their system at the centre of their strategy.

Kaposvár’s effective system

Kaposvár provides today for an 'effective' district heating system in the framework of its 2035 strategy. The city has achieved 50% thermal heat and 53% electricity savings on its network. Beyond the increased efficiency, a fuel switch from gas to biomass on the supply side secured a combined 78% CO2 reduction from 2016 to 2024 on the DH network. 

Applying smart pumps and multi-level control systems at both network level and building level, while also installing thermostatic controls in homes and external-temperature based controls in each building, the city managed to further reduce CO2 emissions. Finally, when condominiums decide on further building-level refurbishments, such as thermal insulation, the potential to decrease emissions is also enhanced.   

Extending the network

Kaposvár’s DH system operator has managed to extend its customer base in two phases: by 30% in 2012, and by 20% in 2019, compensating the reduction in heat demand due to secondary side efficiency improvements. Therefore, it managed to return to its original total DH demand. Today, two 7.5MW biomass boilers – sourced sustainably with forestry waste within 50 km – ensure 60% of the total heat demand. Beyond that, a cogeneration gas boiler (7.9MW) - owned by EoN - provides for the rest of the heat. 

A much-needed refurbishment process

This complete DH refurbishment process was initiated by the Kaposvár DH company in close cooperation with the municipality, which reached out to the local population aiming to make district heating measurable and controllable. In a tripartite financing model, the municipality, the DH company, and the citizens co-financed this renovation stage. This programme was a success: 100% of the condominiums took part in 3 years. 

Getting everyone on board

Key success factors have been the regular and constant communications towards the condominiums. Citizens have themselves addressed those opposing dweller-pairs who didn’t want to take part in the process. They quickly understood that the energy savings implemented through refurbishments landed immediately in their pockets, a critical motivator for widespread buy-in.  Most dwellings built with industrialised technology (known as 'panel') have applied in the national 'Panel-programme' for energy efficient refurbishment, hence achieving almost 50% of energy savings. 

Finally, Kaposvár’s sugar company, Agrana is producing biogas from the sugar that is utilised by the company’s cogeneration plant, fuelling the urban bath and also sourcing the gas network that is ultimately fuelling also the local DH network.  

In October 2024, due to the new biomass power plant, the Kaposvár DH has managed to make the pricing for utility consumers even cheaper: within just one year, prices dropped by 58%!

District heating is the core of Kaposvar’s heat strategy. Opposition to the biomass plant has vanished as all the emissions from the plant is well below the allowed environmental emissions.  

Main challenges to detoxify heat

• Accessing financial resources proved to be the most challenging, requiring persistence and adaptability to navigate an ever-changing landscape. 
• Securing funding often depended on seizing opportunities when tenders became available, bridging hopeless situations. 
• The onset of COVID-19, followed by the war in Ukraine and the resulting inflation, further complicated matters by driving up project costs and making it difficult to secure contractors willing to take on the investment. 
• Additionally, the extensive paperwork and documentation requirements presented significant administrative hurdles, demanding meticulous effort to ensure compliance and progress.

Next steps:

1. Kaposvár has just signed a EUCF grant of 60k EUR to develop its DH long term strategy, which will be used for heat sourcing for further customer base extension.
2. The city is planning to introduce real-time load planning on the network supported by artificial intelligence and their ultimate goal is to re-appropriate the network and make the complete district heating network owned by the municipality. 

Where they are in the heat strategy:

Kaposvár's Heat Detox:

Key Heat Figures

• Emissions related to district heating: 2.6 tons in 2024 
  • decreased by 12.6 tons from 2016 (16e tons), while customer base doubled 
• Km of DHC currently: 36 km
• Km of DHC planned: 4 km more 
• Percentage of renewables in heating system:  
  • 60%  biomass
  • 35%  gas-based co-generated heat  

Covenant Figures

• Signatory to the Covenant of Mayors since: 2015
• Overall CO2 emission reduction target: 40% by 2030

City Awards

• EDEN (2013) – European Destinations of Excellence - touristic places accessible for all
• European Solar Energy Price (2017) – by EREC
• EUCF grant