Size of compensation in Denmark’s 3 natural gas distribution areas
HMN
DONG
NGF
(Danish Kroner = kr.)
1 Euro = 7.45 Danish kr. Naturgas
(Now Ørsted)
(Now Nature Energy)
< 6,000 m3 per year
756 kr.
8,236 kr.
6,344 kr.
6 – 12,000 m³
0.380 kr./m3
4.123 kr./m3
3.168 kr./m3
12 – 45,000 m³
0.361 kr./m3
3.977 kr./m3
3.070 kr./m3
45 – 110,000 m³
0.312 kr./m3
3.382 kr./m3
2.622 kr./m3
110 – 200,000 m³
0.244 kr./m3
2.612 kr./m3
2.018 kr./m3
200 – 1,000,000 m³
0.117 kr./m3
1.296 kr./m3
0.994 kr./m3
1-10,000,000 m3
0.088 kr./m3
0.965 kr./m3
0.692 kr./m3
Compensation to Denmark’s three natural gas distribution companies in 2012.
The annual adjustment of the lump sum towards 2020 is exemplified below for individually owned houses and other small-scale customers.
(Kr.)
2012
2013
Compensation
After 5% reduction
Net Price Regulation
Compensation
HMN
756
718
1.9%
732
DONG
8,236
7,825
1.9%
7,974
NGF
6,344
6,025
1.9%
6,141
Annual adjustment in compensation for small-scale customers in 2013.
Thus, if it is economically sound to implement a new project or heat zone, even if the existing project etc. is relatively new or only has written off a modest part of the investment, compensation is offered. The size and the specific rules for such compensation follow a set of standardized rules.
A compensation scheme in other countries The specific conditions must be taken into account and must be reflected in the secondary legislation. One issue to consider is how to establish a feasibility study based on quality assured methods and calculations. This is needed to document the long-term economy and consumer prices of a new district heating supply versus a continued natural gas supply. Such a feasibility study – or a temporary, simpler method – must be developed. The Danish District Heating Assessment tool (DHAT) could serve as such a feasibility study. This excel-based tool and manual can be downloaded free of charge from the homepage of the Danish Energy Agency: https://ens.dk/en/our-responsibilities/global- cooperation/district-heating-assessment-tool-dhat.
Another issue is access to the required data on natural gas consumption, prices and remaining debt etc. from the (maybe private) natural gas companies must be ensured. Legal amendments may be required, before the data can be accessed. A third issue is the size of the inflation. If the net consumer price index increases with more than 5 % per year, the compensation will increase and not decrease from year to year. This may give the gas companies an incentive to slow down the compensation projects, as their compensation increases until the end of the compensation period. Alternatively, a fixed annual reduction of e.g. 5 % or X % can be used.
For further information please contact: Ole Odgaard, oleodg@mail.dk.
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