Denmark is a European frontrunner in heating decarbonisation. The country’s district heating systems serve the majority of buildings nationwide, especially in urban and suburban areas. District heating in Denmark increasingly relies on clean energy, benefits from efficiencies and economies of scale leading to competitive heat prices, and enjoys high end-user satisfaction.

The district heating system’s expansive coverage and consumer popularity did not happen overnight but are the result of decades of strong government ambition and support, an enabling regulatory framework and active municipal governments. European governments considering further development of district heating in their jurisdiction would do well to look at Denmark.  

Making Europe’s homes ‘Hygge’: Danish lessons on district heating examines the Danish experience. The paper explores the role of district heating in Danish heating policy, surveys supportive regulations and outlines the main actors and their responsibilities. It concludes with both recommendations and insights into how the Danish example can inform further development of district heating systems in European countries.

The seven lessons for policymakers and regulators outlined in the report include:

  • Start with local heat planning. Local heat planning is critical in determining the clean heat solution with lowest societal cost.
  • Make district heating secure and predictable. Key to Denmark’s success has been its long-term outlook and making district heating a secure investment and a reliable, and increasingly clean, source of heat for end users.
  • Leapfrog outdated technologies: go for clean, efficient and smart.
  • Start small and aim for gradual expansion. It takes time to learn, develop institutions and grow value chains.
  • Set incentives that reward clean, efficient and smart district heating. Over time, Denmark has continuously adjusted the economic incentives for operators and end users to guide developments in line with policy targets.
  • Regulate heat prices and ensure price transparency. Price regulation is needed to ensure end-user trust and competitiveness with other clean heat solutions.
  • Foster end-user participation in new district heating projects, including through the possibility of (co-)ownership, to improve project viability.