New project advances sector coupling and the use of surplus heat

The Danish energy system is undergoing rapid change.

New technologies such as Power-to-X and data centres create significant opportunities, but also add complexity. In 2024, a group of researchers and utility professionals therefore joined forces to assess the value of sector coupling – the interaction between electricity, heating, cooling, transport and industry – in a collaboration facilitated by Energy Cluster Denmark.

The work was carried out through the innovation project Sector Coupling Southern Denmark, which was supported by the Danish Board of Business Development and successfully completed in spring 2026.

“When we connect sectors, we can make use of residual resources, such as surplus heat, and create new synergies across the energy system,” says Buster Bukart Hansen, PhD at the Department of Mechanical and Electrical Engineering at the University of Southern Denmark and a project partner.

From potential to concrete decisions

A key challenge for the energy sector is turning technical opportunities into concrete investment decisions.

The project has therefore developed a decision-support and screening tool that can identify and assess the value of sector-coupling projects involving multiple stakeholders.

The tool includes analyses of energy flows, stakeholder screening and barriers, combined with financial models that assess both the overall socioeconomic value and the business case for each individual stakeholder.

A central part of the project has been finding answers to some of the most complex questions associated with sector coupling.

“For the district heating sector, it has been essential to determine what constitutes a fair price for surplus heat – and how the value should be distributed between the stakeholders,” says Buster Bukart Hansen.

The project has therefore developed a new method that combines technical analysis with game theory to support a fairer distribution of value. This is an area in which concrete tools have previously been lacking.

Greater insight into a complex energy system

At DIN Forsyning, the innovation project has provided new knowledge about how the energy system of the future can be developed and integrated.

“We already work with sector coupling and operate a complex energy system with many different energy sources. The project has given us an even better understanding of how we can utilise surplus heat and engage with new stakeholders such as Power-to-X operators,” says Kim Stenholdt Madsen, Senior Project Manager at DIN Forsyning.

The analysis focuses partly on Esbjerg, where there is significant potential to utilise surplus heat, for example from electrolysis, and where cooperation between industry and the utility sector is essential.

Significant benefits – but also complexity

Sector coupling offers considerable benefits to society. These include increased energy efficiency, reduced CO₂ emissions, greater flexibility in the energy system, improved resilience and increased security of supply.

At the same time, Kim Stenholdt Madsen emphasises that the solutions are not simple.

“Five years ago, sector coupling was primarily about electricity. Today, it involves much more – residual streams, heat and cooperation between a wide range of stakeholders. It is complex,” he says.

A scalable model for all of Denmark

The collaboration between DIN Forsyning and the University of Southern Denmark is not only relevant at a local level. The methods and models developed through the project have been designed for use in other parts of Denmark – and potentially internationally.

The ambition is to create a stronger basis for investment decisions concerning the energy system of the future, enabling utilities, industry and public authorities to make better-informed choices.

“The project accelerates the development of the business models needed to realise sector coupling on a large scale. This will benefit both industry and society,” says Buster Bukart Hansen.

Facts

The innovation project Sector Coupling Southern Denmark began in 2024 and concluded in April 2026.

The project partners were DIN Forsyning and the University of Southern Denmark, with Energy Cluster Denmark facilitating the collaboration. The Danish Board of Business Development supported the innovation project under the Fyrtårn Syd initiative.

The ambition is clear for the HiFLEX partners: to move from research to a market-ready product that can be used directly in the Danish and European energy systems.

At the heart of the innovation project is a data-driven, AI-based platform capable of predicting energy consumption and flexibility up to 24 hours ahead. The solution integrates data from buildings, heat pumps, energy storage, and street lighting, which can be intelligently controlled according to the needs of the electricity grid.

The project builds on previous research and demonstration projects, and according to Samira Rahnama, project manager and researcher at Aalborg University and a HiFLEX partner, it is not research for the sake of research, but for delivering solutions.

“We work purposefully with applied research that is translated into solutions with a green impact, as demonstrated in HiFLEX. We simulate, but we also test in real-life conditions,” says Samira Rahnama.

Aalborg University is responsible, among other things, for developing AI-based algorithms that can be directly integrated into existing energy management systems. The technology is expected both to be patented and made available through joint licensing models between the university and participating companies.

Testing across Denmark

The innovation project’s solution is being tested at scale through several pilot projects in Denmark, including in Aarhus city centre, in an industrial area, and in a smaller town. Skanderborg Municipality contributes as a partner by ensuring dialogue and communication of the project’s results to end users. The company SCANGRID provides expertise in aggregator technology, which can act as a link between the electricity market and the physical energy assets of companies and institutions.

“We are the bridge between Energinet’s needs and the equipment that already exists. HiFLEX enables us to set standards so that companies and municipalities can quickly and safely contribute to stabilising the electricity system,” says Carsten Vammen, CEO of SCANGRID.

Monetising flexibility

Together with Aalborg University, SCANGRID is developing an open and easily integrable API structure designed to make it easier for new actors to connect and deliver flexibility – for example through heat pumps, buildings, or street lighting.

“The solution will reduce pressure on the grid and ensure better utilisation of our green electricity.

It enables us and many others to generate revenue from working with flexibility solutions, and in the long term our innovation project also opens up for cities and citizens to benefit financially from providing flexibility—without compromising operational or data security,” says Carsten Vammen.

According to Center Denmark, which provides the digital data infrastructure, HiFLEX is an example of how cross-sector partnerships can accelerate the transition.

“HiFLEX brings together research, companies, and infrastructure into one coherent solution. These are the kinds of projects needed if we are to turn data and digitalisation into real system value in the energy sector. We are proud of the collaboration that improves the electricity grid with buildings, AI, and street lighting,” says Søren Skov Bording, CEO of Center Denmark.