The competitiveness of district heating compared to individual heating
When is district heating the cheapest source of heating?
In Denmark district heating supplies heat to 3.6 million people living in 1.7 million buildings, which amounts to 62% of the Danish population. With the long tradition of heat planning in Denmark district heating is constantly evaluated against alternative building heating technologies, to ensure the lowest socioeconomic cost of heating to the population. Only if the socioeconomic analysis shows district heating to be cost effective solution is it allowed to be developed in new areas, which is commonly the case in urban areas.
If district heating is developed in an area the building owners are allowed to choose whether they want to connect to the system or operate their own heat generation units. This individual decision is normally made on the basis of private economics.
The study by Danish think tank »Groen Energi« confirms that district heating is a cost-effective heating solution even with more and more buildings being built according to low-energy requirements. A new district heating system is highly competitive with respect to heating price when compared to individual heating solutions when the district heating system is established in cities and towns. This is the case for both older buildings and for new areas with low-energy buildings.
The study can be found via the following link: https://www.danskfjernvarme.dk/-/media/danskfjernvarme/gronenergi/analyser/03052018-the-competitiveness-of-district-heating-compared-to-individual-heatingv2.pdf
Written by: Oddgeir Gudmundsson, Danfoss