The Danish parliament has decided to introduce a price ceiling on district heating to stabilize the large differences in consumers’ annual heating costs, which in 2023 ranged from around 8,000 Danish kroner to as much as 39,000 Danish kroner. The decision, supported by a majority in parliament, aims to ensure that district heating does not become significantly more expensive than other green heating options. The price ceiling will be based on the costs of a heat pump.
Minister of Utilities Lars Aagaard emphasizes in a press release the importance of keeping district heating prices at a competitive level to promote the rollout of this green heating solution. The Utility Regulator will now annually publish a list of the district heating companies that exceed the price ceiling, allowing consumers to compare prices.
If a district heating company fails to bring its prices below the ceiling for three consecutive years, any obligations on consumers will cease, and they will be free to choose an alternative heating solution. This initiative aims to strengthen transparency and regulation in the district heating sector as part of Denmark’s transition from fossil gas to green heat.
The agreement also allows district heating companies to depreciate investments in new pipes over a longer period, better reflecting the pipes’ lifespan and supporting the expansion of district heating to new areas. This new regulation follows previous agreements on green electricity and heat from 2022, as well as the criticism from the National Audit Office of the oversight by the Utility Regulator in the heating sector.