Sound of Green: Making green heat mandatory

As heating accounts for more than 40 percent of global energy-related CO2 emissions, it is crucial that our heat supplies are part of the green transition of our energy systems. Until recently, in most countries, there has been a lack of a clear thread from national energy visions and policy to the planning in regions, municipalities and energy companies. But now, heat planning is on the agenda in countries all across Europe – and several of them are looking to Denmark for inspiration on how to see it through.

In this episode, we explore how decades of Danish experiences with heat planning and district heating are being disseminated and tell the story of the value they’ve already created just south of the Danish border. The story is told by Toke Liengaard advisor and team leader at the Danish Energy Agency, Volker Kienzlen, managing director of Klimaschutz- und Energieagentur Baden-Württemberg and Markus Lempp, Head of International Policy, Markets and Energy Economics at Danfoss.

Planning for resilient, cost-effective and green heat

In Denmark, 2/3 of all households are connected to district heating. This development can be traced back to the oil and energy crisis of the 70s. Denmark was 99% dependent on imported fossil fuel, and individual oil powered installations made up most of the heat supply. To increase the security of supply as well as cost- and energy efficiency of the heating sector, in 1979, it was politically decided to make heat planning mandatory for local authorities.

Heat planning is the work of determining the most optimal heat supply of an area. What is most optimal is ultimately a political and socio-economic question. But in Denmark, district heating is considered a crucial part of the answer, and this is due to the many advantages it provides to both the energy system and consumers, as Toke Liengaard states

District heating is important because it can be a very cost-effective heating solution and be very accommodating to a transition to renewables. District heating also has benefits that it can provide to the energy system at large. It can help balance out the power market because district heating can both be a producer and consumer of electricity, which can greatly increase the flexibility of the power sector. And then district heating is also able to absorb otherwise wasted heat sources such as geothermal and industrial waste heat.

Toke Liengaard, advisor and team leader at the Danish Energy Agency

The political decision to engage with the question of how to create a socio-economically beneficial heat supply five decades ago is the reason why other countries now look to Denmark as a frontrunner in the heat transition. Simply put, it’s because 50 years of Danish experience has shown that consistent planning towards district heating has been key to providing secure, affordable, and increasingly green heat, as Toke Liengaard explains:

The reason we promote heat planning and district heating is that it has been a core part of our green transition. Our work is to help other countries going through their green transition with some of the experiences that has helped us in the Danish system. And in Denmark district heating has played a huge role in the overall transition of our energy system and heat planning has been at the core of how we have carried it out.

Toke Liengaard, advisor and team leader at the Danish Energy Agency

One of the countries where this promotion has been most successful is Germany.

From Danish experiences to German regulation

The Danish inspired shift in the German approach to the heat transition started in the state of Baden-Württemberg. In 2015, the Danish Energy Agency and other Danish knowledge partners began sharing Danish know-how in heat planning and district heating. Together with local authorities, like Klimaschutz- und Energieagentur Baden-Württemberg, they explored how Danish experiences could be adopted local boundary conditions. During a visit to Denmark, a ministry delegation from Baden-Württemberg observed the effects of mandatory municipal heat planning firsthand. And this was an important factor in persuading decision makers, as Volker Kienzlen states

We saw that the fraction of district heating that you achieved was significantly higher. District heating was implemented in the rural areas where we didn’t even think about district heating. I think the key point is traveling to Denmark and look at it firsthand and see how it works in and not simply listen to presentations. Looking at it firsthand helped to convince the decision makers that it should be possible to try a different approach.

Volker Kienzlen, Managing Directior at Klimaschutz- und Energieagentur Baden-Württemberg

In 2020 the state introduced an amendment to its existing climate law, which obliges the state’s 103 biggest cities and towns to work out their vision on how to achieve a fossil-free heat supply by 2050 and to develop a roadmap. And four years later, mandatory municipal heat planning was adopted in a national level in Germany with the heat planning act. While it’s too early to say what effect the legislation will have in Germany, the preliminary results from Baden-Württemberg’s work with planning for more district heating suggest that it could make a meaningful difference, according to Volker Kienzlen:

Looking at the results that we’ve seen in Baden-Württemberg, I assume that the share of district heating will raise significantly. We expect that it will at least double within the next 20 years. And this will not be an easy process for the cities. But if you really want to decarbonize the heat supply, at least in the denser populated neighbourhoods, I don’t see a real alternative to district heating.

Volker Kienzlen, Managing Directior at Klimaschutz- und Energieagentur Baden-Württemberg

The moment for heat planning is now

The momentum for heat planning and district heating is not just a German phenomenon, as the energy crises of 2022 has underlined the need for a resilient, flexible and green heat supply across Europe. The updated Energy Efficiency Directive from the EU makes heat planning mandatory for all cities with over 45,000 inhabitants. This renewed energy around the heat transition is also felt in the market for district heating technology and it provides a significant opportunity to push for greener solutions as Markus Lempp from Danfoss can attest to,

The timing for district heating is very good. A lot of investors and a lot of municipalities and municipal owned utilities across Europe are moving. People know we are depending on an old infrastructure, and we do not know how the future of this infrastructure will look – will we always have enough gas for heating? Here, it’s important that we can prove that the introduction of district heating does not come with a cost explosion. There are many good examples where, and we have seen this in the Ukraine crisis, that district heating is a sustainable and financially sustainable solution as well.

Markus Lempp, Head of International Policy, Markets and Energy Economics

This was the case in Denmark. While the heat price for many European households skyrocketed, the average price for a household supplied with district heating in Denmark stayed stable. This was in no small part due to the fuel flexibility and balancing potential that district heating offers, and the high degree of digitalisation in the Danish district heating system. But the prerequisite for achieving unlocking these benefits, is ultimately good planning and regulation as Toke Liengaard can attest to.

You you need to make sure that district heating actually makes sense in an area – that it provides the benefits that you’re promising. So planning is a very good approach to it, but also just having a regulatory framework that can balance out consumer protection with making sure that investments are being made in the sector.

Toke Liengaard, advisor and team leader at the Danish Energy Agency

This article is an excerpt of our podcast episode on heat planning and part of our podcast series Sound of Green. Listen to the episode in its entirety on your preferred podcast platform or by clicking below: