Thermo-Electrical Co-Optimization and Grid Flexibility Valuation of Zero-Carbon Urban District Energy Systems

Abstract

The electrification of urban heating and cooling through fifth-generation district heating and cooling (5GDHC) networks and decentralized water-source heat pumps creates coincident electrical peaks that threaten medium-voltage distribution infrastructure. Conventional energy management strategies treat buildings as passive electrical loads, ignoring the latent thermal storage capacity of building structures and district thermal piping. This paper introduces a bi-level equilibrium optimization framework that aligns distribution grid congestion management with 5GDHC thermal network dispatch. The upper-level problem minimizes transformer overloading and carbon intensity for the distribution system operator (DSO), while the lower-level problem optimizes heat pump electrical consumption via a second-order building envelope thermal model; because the lower level is convex under a slowly varying coefficient of performance (COP), the two levels are combined into a single-level program through the lower level's Karush-Kuhn-Tucker (KKT) conditions, and occupant comfort chance constraints are enforced through a standard convex deterministic reformulation. Applied to a 25-building urban district during a winter peak period, the framework reduces electrical peak feeder demand by 28.4%, improves transformer load factor by 41.4%, and cuts daily carbon emissions by 19.1%, all while maintaining indoor temperatures within 0.5^°C of occupant setpoints.