1. 11 Measures to support high- efficiency district heating and cogeneration Anders Hasselager Senior Policy Advisor Kiev, 19 May 2016

2. Danish Energy mix Energy mix Gas and oil from the Danish part of the North Sea Import of coal Renewables (bio, wind, solar, geothermal) No nuclear energy No hydro power plants Renewable energy 2016 More than half of all electricity comes from renewables (42% from wind and 10% from biomass) In total 28% of all energy comes from renewables

3. A look towards 2050: Independence of fossil fuels Means: Strong improvement of energy efficiency in all sectors Increased use of renewable energy Electrification of energy consumption Use of Energy 3

4. Facts on District Heating - 2016 5.7m people – 2,6m homes 60,000 km DH-pipes 65% of all homes heated – 98% in Copenhagen Ownership: Municipalities or Consumers via Cooperatives.

5. Characteristics of the Danish heating (DH) sector District heating is a natural monopoly – need for political control. Long term perspectives for the sector – pay back time is 30 years District heating sector is regulated via standardized planning tools and tax on fuels The collective heat supply price must offer consumer prices based on the exact “true costs”.

6. Danish Heat planning – key elements A planning system, which ensures investigations and planning - when needed Clear policy direction and broad political consensus about the direction Central provision of assumptions (fuel price projections, technology data etc.) for the analyses and guidance to the sector in, how to prepare heat plans 6

7. More Danish Heat planning A well defined decision making system Clear definition of roles and responsibilities for all involved parties Well defined decision criteria according to 1) Zoning of heating areas and 2) Choice of heat production form and fuel-mix Attractive financial incentives and/or necessary instruments (”carrots and/or whips”) 7

8. Supply zones established in 1980-90’s

9. Appeal Board for DH - consumers The Energy Board of Appeal is the final administrative appeal body for decisions by public authorities. If you are not satisfied with a decision reached by the Board of Appeal, you can institute legal proceedings against the Board in the courts

10. Combined Heat and Power (CHP) 665 CHP plants by 2016. CHP reduces fuel consumption by up till 30% and increases net efficiency of fuel from 40% till max. 90% 10

11. From Centralized to Decentralized CHP Centralized production in the mid 80’sDecentralized production of today Decentralized CHP Wind mill park Centralized CHP Legend: 11

12. Compliance with article 14(1) in EED (2012/27/EU) Promotion of efficiency in heating and cooling By 31 December 2015, Member States shall carry out and notify to the Commission a comprehensive assessment of the potential for the application of high- efficiency cogeneration and efficient district heating and cooling, containing the information set out in Annex VIII. (…) 12

13. 13 DH – analysis District Cooling analysis Scena- rio analysis Technical analyses Comprehensive assessment (EED initiative) System integration Separate handling of questions related to District heating District cooling Cogeneration Assessment of strategies, policies and measures Primary energy saving Support measures and impact analysis

14. The technical analysis * CHP was not analyzed separately, but is an integrated part of several studies, including the District Heating Analysis and Scenario Analysis The District Cooling Analysis Large untapped potential Economically competitive and technically feasible Smart grid advantages Possible synergy with DH Main barriers: Knowledge, organization and regulation The District Heating Analysis ≈ 50% (199 PJ) of demand covered with DH (2013) Potential for up to 70% (189 PJ) by 2020 Socio-economic potential mainly in densification of current DH net Production: Solar Surplus heat Heat pumps/electric boiler Boilers CHP

15. Scenario Analysis A cross sectoral scenario analysis Aims to present possible technical paths to a fossil-free energy system by 2050 5 scenarios: Wind, biomass, hydrogen, Bio+ and “Reference” Method: For each scenario, the most cost- efficient energy system in 2050 is constructed, hereafter back-casting to 2035 and 2020

16. Scenarios for energy analysis - a decision tool for the post 2020 period RE 16

17. Heat demand in Denmark 17 Heat demand - Mwh/km2

18. Results for District Heating Regulation by the Heat Supply Act and socio economic criteria Individual solutions (e.g. bio-boilers and heat pumps) are becoming more competitive – especially for new dwellings Danish Energy Minister in 2016: Cheaper prices for heat consumers by 2020

19. Thank you for your attention ah@ens.dk

20. Approval of Projects (1) Approval of projects by City Councils must include: Economic net present value of the project must be positive Economic analyses should be based on latest guidelines from the Danish Energy Agency & the Ministry of Finance E.g. Discount rate of 4 percent Economic fuel prices & environmental costs (CO 2, SO 2 etc.) Financial analyses (DH company & different size of consumers) Ensure compliance with other planning

21. Approval of Projects (2) Approval of projects by City Council: Consider input from public hearing process Define which area covered / building owners Energy consequences (before and after project) (natural gas, oil, DH and other fuels) CO 2 consequence & energy saving Investment costs (DH, Consumers, other Utilities, etc.) Commercial consideration & change of DH tariff by consumer category