Socioeconomic heat prices for the Danish capital area

There is a continuous conversion of individual natural gas customers to district heating in the Danish capital area. Project proposals addressing the socioeconomic consequences must be prepared for such conversions and it is thus necessary to determine the socioeconomic district heating prices during the conversion. In the spring of 2016, Ea Energy Analyses prepared an updated methodology and data for the calculation of socioeconomic heating prices for district heating supplied from the large district heating system in the metropolitan/capital area. The material was prepared for HMN (a Danish gas supplier) and VEKS (Danish district heating transmission company).

The project calculated the socioeconomic heating prices for the period 2015 – 2035, based on current economic assumptions from the Danish Energy Agency dated April 2016. The project addresses the following challenges:

• How capital costs of CHP plants should be incorporated and allocated between electricity and heat
• How fuel costs should be distributed between electricity and heat.
• How capital costs of heat transmission network should be included in local projects
• Inclusion of waste heat
• Inclusion of flexibility in the power system
• Inclusion of welfare distortion loss
• The value of increasing the share of renewables (EU target)

In addition to the above prices, which should primarily be used to calculate the expansion of district heating, Ea Energy Analyses have also produced socioeconomic prices for use in the analysis of new, smaller production units. These prices are compiled on a monthly basis to take account for different production profiles.

The prices have subsequently been updated for 2017, 2018, 2019, 2020, and 2022 in later projects.