The competitiveness of district heating compared to individual heating

The Danish Green Energy Association has analysed which heat price can be obtained for a household by establishing a new district heating system in an area and compared it to the cost of establishing an individual heating system. The purpose of the analysis is to examine under which circumstances district heating is cost-effective compared to individual heating solutions and therefore under which circumstances it is preferable/beneficial to establish a new district heating system.

The overall outcome of the analysis is that 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 the state of buildings as of today and for new areas with low-energy buildings. Even if the taxes on electricity for space heating is lowered or even completely removed, new district heating systems will be able to compete with individual heating solutions, such as individual heat pumps.

The analysis builds upon prices, technologies and efficiencies from the Danish system and the cost calculations include Danish taxes and tariffs. The taxes and tariffs are further shown specifically to simplify comparison between countries.

Read the full analysis.