Heat is currently produced from fossil fuels such as coal and natural gas, and from renewable sources such as solar energy, bio energy, and using heat pumps. The heat production is both from combined heat and power plants and from heat only plants. Electricity is increasingly used for heating purposes, mainly in the form of heat pumps and electric immersion heaters. Thus, a continuous transformation of heat production is required to reach Denmark’s goal of fossil energy independence by 2050.
Difference between individual and collective heat supply
In general, there is a distinction between individual and collective heat supply. Today, approximately 80 percent of homes in Denmark are supplied collectively, while the remaining 20 percent are heated individually.
Individual heat supply
Individual heating is typically from oil boilers, individual heat pumps, or biomass boilers. Previously, most heating in Denmark was from individual supplies such as oil boilers, but due to the expansion of the collective heat supply, individual heat supply is now mainly dominant in rural areas and small towns.
At the same time, many owners of houses and buildings are replacing oil boilers with biomass boilers or heat pumps, as these are typically more economical.
Since 2017, Danish house owners with an oil boiler as their heating system and who are located outside district heating areas have been able to order a climate-friendly heat pump on subscription without having to invest too much upfront. This opportunity is due to the Danish oil - and since 2020 also natural gas - boiler scrapping scheme, established by the Danish Government. Read more on the Danish oil and natural-gas boiler scrapping scheme
Collective heat supply
The collective heat supply mostly consists of district heating technology whereby hot water is distributed from a central district heating plant to houses and other buildings. Two out of three Danish houses are heated in this way. Another form of collective heat supply is natural gas, which supplies gas to each household via a collective grid of gas pipes. Individual natural gas boilers produce the heat and hot water in each house. 15 percent of all houses are heated this way. Collective forms of supply are mainly advantageous in urban areas or other areas with a high heat density.
The collective forms of heat supply are regulated by the Heat Supply Act.
The municipalities and utility companies are the key players in the collective heat supply. The municipalities carry out the heat planning and are responsible for expanding grids and for the demarcation of the different forms of collective heating. The municipalities also ensure that this is done in accordance with the Heat Supply Act.
District heating, cogeneration, and natural gas companies hold operational responsibility for delivering heat to consumers.
The Danish Energy Agency has put forward the general conditions for establishing and operating the collective forms of supply. The purpose of this regulation is to ensure a positive bottom line for utility companies and favourable prices for consumers.
Further information about legislation regarding the heating area is available here.
The Danish Utility Regulator and Energy Appeals Board supervise the district heating sector and handle complaints about prices and terms.
Complaints about the decisions of the authorities and interpretation of laws and regulations can be addressed to the Energy Appeals Board.
Analysis of the role of district heating in a fossil-free future
The Danish Energy Agency has carried out an analysis of the role of district heating in future energy supply, when Denmark is independent of fossil energy sources. Among other things, the analysis shows that there is a need for comprehensive reorganisation of heat production, and that, within the current district heating supply areas, increased connection to district heating could bring macro- and micro-economic advantages.