The transmission network in Greater Copenhagen
1979: First Heat Supply Act The first Heat Supply Act, adopted in 1979, provided the legal framework for the heat planning initiatives ahead. National-scale collective heat- and energy infrastructure planning ensued. As a part of this en- ergy planning, a process referred to as “zoning” stra- tegically identified and mapped out nonoverlapping heat supply areas (or zones) for natural gas and dis- trict heating. In this way, zoning prevented internal competition between these two heat supply sourc- es. The zoning processes aimed to ensure a healthy economy throughout the heat supply infrastructure system and that the overall objectives of the Heat Supply Act were met.
The 1980s: The Scramble for Oil and Gas In 1980, American experts estimated that oil and gas from the Danish North Sea could provide Denmark with energy independence for up to 20 years. Natu- ral gas production began in 1984, and the Danish North Sea oil and gas gener- ated revenue for the first time in 1988. In the following decades, the state-owned transmission system for gas from the privately-owned North Sea oil fields was gradually incorporated into the national heat-supply infrastructures.
The 1990s: Energy Inde- pendence and Growing Environmental Aware- ness The Danish energy plan from 1990 (the Energy 2000 Action Plan) was widely considered the first global strategy for greenhouse gas reductions. This Danish en- ergy plan set the scene for the low-carbon energy tran- sitions and sustainable de- velopment initiatives ahead.
The 2000s: Biomass and Wind Power Integration in the Grid Environmental awareness and concern grew in the following decades. Sustain- ability-related issues were the order of the day. The turn of the century marked an era of biomass- and wind power in- tegration into the Danish energy sys- tem. As the ratio of biomass integrated into the Danish heat supply infrastruc- tures increased, some have forwarded questions about the sustainability of this biomass.
In 1990, the second revision of the Heat Supply Act integrated the objectives of the Energy 2000 Action Plan. The revised Heat Supply Act sought to increase the number of CHP plants in the national heat supply infrastructures and to support the econ- omy of the national natural gas project. Heat infrastructure planning was decentralized. Local councils were now the rel- evant heat planning authorities, and future heat infrastructure planning initiatives would take place on a project-to-project approach. Future heat supply infrastructure planning activities ensured the logical continuation of the previous zoning prac- tices. The use of natural gas and biomass was encouraged. Bare Field Plants District heating networks were extended throughout the coun- try with the popularly labeled “bare field” (or greenfield) plants. Typically, the bare field plants were natural-gas fueled decen- tralized CHP plants serving smaller towns or villages. Heat dis- tribution networks were established simultaneously as the heat production plants at these decentralized CHP plants, and the heat was generated via a natural gas-powered motor. In this way, the natural gas companies had none of the risks associat- ed with a natural gas heat distribution network. The price of natural gas increased unexpectedly, however, and the economy of the decentralized CHP plants suffered. For the end-users, this meant increasing heating bills. Technologies allowing for biomass and biogas in the energy system matured rapidly during these years. The biomass agree- ment was adopted and, with this agreement, also ambitious plans for biomass integration into the energy system by the year 2000. In May 1998, Denmark was energy self-sufficient.
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The Nonprofit Principle for Heat Pricing and the Obligation to Connect The “obligation to connect” to collective heat supply infrastructures was adopted in 1982. The “obligation to connect” allowed municipalities to enforce the connection of municipal build- ing stock to the collectively planned local heat infrastructures. This ensured a stable group of end-users / heat consumers and thus a stable economy for the heat suppliers. Citizens subject to the obligation to connect were obliged to pay the annual subscription fees to the heat supply infrastructures but not to use that heat source. Not all municipalities enforced the commitment to connect, and some only enforced it partially. The underground district heating infrastructures were typically financed via favorable long-term loans (e.g., 20–50 years) afforded by the Municipal Credit Bank. The final price of heat was de- termined by the nonprofit principle / the principle of necessary costs. According to this pricing principle, the final price of heat-service provision for the end-user comprises the total and nec- essary heat costs. This includes heat generation-, transmission-, and distribution, as well as heat infrastructure investments-, management-, and service.
Change Readiness? Reflections from the Past and Looking into the Future In the future, large-scale industrial heat pumps and various short-term- and longer-term thermal storage solutions will facilitate the sector coupling processes necessary to integrate even more intermittent renewables into the Danish grid. In Denmark, visionary politicians and public members have pushed for environmental awareness in Danish energy plan- ning and policy from early on. Denmark’s story as a frontrun- ner in the global race toward low-carbon energy transition processes is a popular and widespread narrative. The top WEC ranking of the Danish energy system emphasizes the extent to which it does meet the energy trilemma criteria: energy secu- rity, energy equity, and sustainability.
By the 1990s, the economy of the natural gas project was not doing well.
For further information please contact: Katinka Johansen, katinka.johansen@soc.lu.se
18 HOTCOOL no.3 2022
19 www.dbdh.dk
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