Case Study F – District Heating In Denmark

Context

District Heating (also known as heat networks) is the localised distribution of heat from a central source to multiple buildings or homes through a network of hot water carrying underground pipes. The central heat source providing input to a heat network can come from a variety of technologies including: power stations, Energy from Waste (EfW) facilities, Combined Heat and Power (CHP) plants, heat pumps, geothermal sources and solar thermal arrays. Denmark has been a world leader in district heating for over a century. For much of the twentieth century, driven by a rationale based on energy efficiency and the provision of reliable, affordable heat supplies – and fuelled by municipal waste and thenby imported oil – District Heating expanded steadilyand organically.

The period between 1976 and 2011, however, saw the rapid expansion, decarbonisation and decentralisation of District Heating in Demark (Sovacool and Martiskainen, 2020). This radical transformation occurred in two distinct phases: the
first was precipitated by the oil crisis of the 1970s; and the second ‘environmental’ phase by growing concerns about climate change and other environmental issues during the 1990s and 2000s. Across these two phases CHP use, fuelled primarily by natural gas alongside low-carbon renewable sources such as biomass, straw, and solar, expanded by a factor of four. This transformation in the generation and distribution of heat led to a 20% reduction in carbon emissions (ibid).

Key Elements of Change

The ‘environmental’ phase of Denmark’s energy and heating infrastructure transformation (post-1990), was predominantly driven by growing environmental concerns and the need to minimise air pollution and reduce carbon emissions. The Danish government published the Energy 2000 Action Plan in 1990, the first low-carbon energy transition strategy in the world, and over the next 20 years successfully phased out coal and converted much of the District Energy system to low-carbon, renewable energy sources.

A crucial galvanising issue that supported the radical restructuring and rapid transformation over the period 1976 -2011 was the idea of decentralised, community control of energy systems, and the localised benefits that this brought. The Danish Government introduced various policies, and legislation, to promote decentralization and local governance. This included incentives for district heating expansion, support for CHP plants and the establishment of energy planning and regulatory frameworks to facilitate local energy initiatives. The rationale for decentralisation of heat infrastructure planning was that increased ownership of local heat-planning initiatives would strengthen the integration of local ideas and initiatives in municipal heat planning practices (Johansen and Werner, 2022).

Decentralisation brought into play a broad range of local mid-level actors including municipalities (local authorities), local utility companies, energy cooperatives, local industries and businesses, and various community groups and associations. Collectively, these groups assumed complete responsibility for local District Heating and energy systems governance including planning and community engagement, ownership and operation.

Denmark’s commitment to decentralised district heating has also brought with it important justice-related benefits in terms of affordable and reliable energy access to all residents, including low-income households. Municipal powers to support community ownership models for district heating projects, have also empowered local residents to have a stake in energy decision-making processes. Community-owned district heating cooperatives promote democratic participation, transparency, and accountability, ensuring that the benefits of energy projects are shared equitably among stakeholders.

Lessons for Net Zero

What the rapid expansion and decarbonisation of the Danish District Heating sector over the period 1976-2011 shows is that:

• Deep, wide reaching and transformative energy/heat transitions are possible within (relatively) short timeframes (see also Case Study G – Gas Central Heating).
• Decentralisation of energy systems, and the establishment of community ownership models, can lead to a range of collective co-benefits, including the embedding of justice priorities, increased transparency and greater community trust and engagement, and increased access to affordable energy. Such models and associated benefits can reduce community resistance to renewable energy projects.
• There are additional economic benefits to localised, non-private sector energy production models. Hvelplund and Djørup (2019), in their study of the Danish electricity distribution sector, for example, argue that consumer ownership of natural monopolies has historically played an important role in keeping prices low and in so doing has provided the financial ‘space’ for innovation in renewable technologies

Elements of Social Change

Multi-factor DRIVERS OF CHANGE

• Political ambitions around energy self-sufficiency (reduce dependency on imported oil)
• Environmental concerns – air pollution and carbon emissions
• Local employment and economic development
• Community ownership and participation

Mid-level ACTORS • Municipalities (Local Government)

• Local utility companies
• Local energy/heating cooperatives;
• Community groups and associations

Galvanising ISSUE

• Collective/Neighbourhood control of energy

JUSTICE Considerations

• Contribution to increasing access to affordable energy

CONTESTATIONS and CONFLICTS

• Private sector vs. community ownership models

REFERENCES

• Djørup, S., Odgaard, O., Sperling, K. & Lund, H. (2021). Consumer ownership of natural monopolies and its relevance for the green transition: The case of district heating. Energy Regulation in the Green Transition 34
• Gorroño-Albizu, L., Sperling, K. & Djørup, S. (2019). The past, present and uncertain future of community energy in Denmark: Critically reviewing and conceptualising citizen ownership. Energy Research & Social Science 57 101231
• Hvelplund, F. & Djørup, S. (2019). Consumer ownership, natural monopolies and transition to 100% renewable energy systems. Energy 181, 440–449
• Johansen, K., & Werner, S. (2022). Something is sustainable in the state of Denmark: A review of the Danish district heating sector. Renewable and Sustainable Energy Reviews 158, 112117
• Sovacool, B. K. & Martiskainen, M. (2020). Hot transformations: Governing rapid and deep household heating transitions in China, Denmark, Finland and the United Kingdom. Energy Policy 139, 111330