State energy policy and legal regulation of district heating in Denmark

1. District heating workshop Visegrad 2012, november 5-6. State energy policy and legal regulation of district heating in Denmark • Historicaloverview of energy policy in Denmark • Regulation of district heating in Denmark • 2020 plan - political agreement in the danish parlament, march 2012 Peer Andersen, Fjernvarme Fyn A/S

2. Historical overview of the danish energy policy • Production of oil in the danish part of the norhseastarted in 1972 • Production of natural gas from the danish part of the North Sea began in 1984 • From the beginning of 1990s Denmark has beenself-sufficient with oil

3. Historical overview of the danish energy policy Production of oil and natural gas in the danish part of the North Sea Oil production and consumption Natural gas production and consumption

4. Historical overview of the danish energy policy • Oil crises in 1973 and 1979 initiated a new energy policy in Denmark • First law on heat supply from 1979: • Reduction of dependency of oil import • Security of supply • Energy efficiency

5. Historical overview of the danish energy policy Means to obtaingoalsaboutreduction of dependency of oil import: • Heat planning: delineation of areas for natural gas and for district heating • Municipalitieswasauthorized to require mandatory connection to public heat supply in someareas (natural gas or district heating) • Taxes on fossil fuels for heat production • Investments grants for decentralized CHP • Subsidies for electricityproduced by CHP on natural gas and biomass

6. Historical overview of the danish energy policy • Heat planningwasimplemented by the municipalities in the 1980s • From 1990 heat planningwasreplaced by projectapproval by the munipalities: • All projects for construction or renovation of district heating productionfacilities and distribution systems for district heating or natural gas must beapproved by the municipalities under provisions of the law on heat supply: • Projects canonlybeapprovediftheyaresocio-economic optimal relative to alternative solutions. • Heat productionfacilities (exceptpeak and reserve load) > 1MW must be CHP • Decentralized CHP canonlyusenatural gas, biomass, waste or biogas as fuel

7. Historical overview of the danish energy policy Energy consumption in Denmark 1950-2000 Natural gas Renewables Coal Oil

8. Historical overview of the danish energy policy Decentralized CHP production

9. Historical overview of the danish energy policy CHP share in thermalproduction of electricity and district heating

10. Historical overview of the danish energy policy Politicalinitiatives to promote renawables in the energysector: • Physicalplanning of windpower (1990s) • Subsidiesfor windpower • Subsidies for electricityproduced by biomass and biogas • No tax on renewableenergy • Stop for landfill of waste (1997) suitable for incineration

11. Historical overview of the danish energy policy Production of renewables Heat pumps Waste Biogas Wood Straw Wind

12. Historical overview of the danish energy policy Waste incineration in CHPs Not degradable Degradable

13. Historical overview of the danish energy policy Share of renewables in grossenergyconsumption

14. Regulation of district heating • Privatisation / liberalization of the electricityproduction in 2000 • District heating companiesare still monopoliesregulated as nonprofit business • District heating pricesarestrictlycost-based • DecentralizedCHPsaretypicallyowned by district heating companies • Central CHPstypicallyowned by private commercialcompanies. • Distribution of costs of cogeneration. Regulatorypraxis is to split the advantage of co-generation whendistrict heating companiesbuy heat from private electricitycompanies • The Danish Energy Regulatory Authority monitors prices

15. Danish energy agreement 2012-2020 • Politicalagrementamongmajority of parties on long term goal: • Transition to green economy • 100% renewable energy in the energy and transport sectors in 2050 • In 2035: 100 % renewable energy in the production of heat and electricity • In 2030: Coal phased out

16. Danish energy agreement 2012-2020 • In march 2012 the government and a majority of political parties in the parlament made an agrement on the energy policy until 2020. • In 2020 the following results should be obtained: • 50 % of electricity production in 2020 from windpower. • 35 % renewables in final energy consumption in 2020 • 34 % CO2 reduction in 2020 compared to 1990 • 7,6 % reduction in gross energy consumption in 2020 compared to 2010

17. Danish energy agreement 2012-2020 Means to obtaintargets: • Obligation for energycomapanies to realise energysavings: • 2,6 % in 2013-2014 • 2,9 % in 2015-2015 • Energy refurbishments of buildings • Expansion of windpowerproduction 2013-2020: • 1.500 MW offshore • 500 MW onshore • Research, developmentand testing of new technological solutions

18. Danish energy agreement 2012-2020 Means to obtaintargets: • Subsidies for use of renewables in process industries • A halt to installation of oil-fired and gas-firedboilersin new buildings from 2013 • A halt to installation of oil-fired boilers in existing buildings from 2016 in areas with district heating or natural gas • A strategy for the promotion of energyefficientvehicles • Fuels must contain 10% biofuels in 2020 • Conversion from coal to biomass at large-scale CHP plants will be made more attractive by allowing producers and consumers to make price agreements • Increase subsidies for biogas production • Smart grid

19. Thankyou for your attention. ? Mail pa@fjernvarmefyn.dk