Public heat planning (1970s and 1980s)

Public heat planning - an introduction

Denmark passed its first heat supply law in 1979. The law contained regulations on the form and contents of heat planning in Denmark and was the beginning of new, public planning.

The planning was divided into phases.
1. In the first phase, local authorities were to prepare reports on their heat requirements, the heating methods used and the amounts of energy consumed.
2. They were also asked to assess heat needs and heating possibilities.

County councils then used this data to prepare regional heat supply summaries.

In the second phase, local authorities were to prepare a draft of future heat supply while the county councils prepared "regional summaries". On this basis, the county councils then prepared a definitive regional heat plan, which became the third phase in overall heat planning.

The plans were required to show:
- in which areas the various forms of heat supply should be prioritised
- where future heat supply installations and pipelines should be located.

This planning made it possible to combine the desire for more environmentally friendly supply with the desire to benefit from the investments made following approval of the natural gas project in 1979.

During this same period, the possibilities for co-generation of heat and electricity were examined in order to exploit surplus heat from electricity generation.

With the 1986 Co-generated Heat and Electricity Agreement, decentralised co-generated heat and electricity became a major energy policy priority.

The agreement was made between the government and utilities, which were obliged to arrive at a capacity of a total of 450 MW electricity at decentralised CHP. Furthermore, it was emphasised that research and demonstration projects should be extended to various types of installations, such as those processing biomass and waste.

Obligatory connection and ban on electric heat in support of public supply

The first law on heat supply also gave local authorities the power to oblige new and existing buildings to connect to public supply. Most consumers were obliged to connect to individual natural gas or DH systems.

In 1982, the obligation to connect was finalised in an executive order which was essentially unchanged until the most recent amendment in 2000. It remains in effect.

The ban on installing electric heat in new buildings dates back to 1988. It arose from the desire for more efficient energy utilisation. Later on, in 1994, the ban was extended to electric heat installations in existing buildings with water-based central heating systems. The objective with the ban was to prevent the installation of domestic electric heat in areas with public supply or zoned for such supply.

The ban on electric heat remains in effect.

Both the ban and obligatory connection were in keeping with the policy laid down in 1979 by the first heat supply law. The objective was to promote public heat supply and energy utilisation as a means of achieving economically sound use of energy.

In practice, the ban and obligatory connection made it possible for local authorities to ensure that energy supply companies' earnings were not undermined by an insufficient number of connected consumers, in turn ensuring that investments made were not lost.

Taxes and savings as control instruments

As early as 1979, the energy plan known as Danish Energy Policy presented initiatives to enable consumers to save energy.

For example, initiatives were undertaken to improve building insulation and a heat appraisal programme for houses was set up. Energy savings were introduced according to the logic that energy saved needed to be neither produced nor imported.

In addition to administrative control instruments, programmes were set in place in the heat supply sector to provide information on energy saving and on economic ways of controlling energy use.

During the 1970s and 1980s, taxes were applied to fuels used in heat generation with the objective of encouraging the use of environmentally friendly energy and efficient energy utilisation. Biomass and biogas were exempted from taxes.

Although oil and gas prices fell at the end of the 1980s, the tax level was maintained to ensure that consumers would continue to be motivated to save energy.

Supply subsidy and the development of environmentally friendly fuels

The conversion to more environmentally friendly fuels and co-generation of electricity and heat at new plants using new technology was achieved by means of various subsidy and grant programmes.

For example, a programme for energy research was set up in 1976 (the Energy Research Programme). The goal was – and is - to prioritise and support energy research and technological development.

Shortly thereafter, in 1981, the Development Programme for Renewable Energy (DPRE) was put in place. The objective in this case was to supplement the ERP so that research into renewable energy could lead to commercially viable technologies.

Private consumers or enterprises could receive subsidies for advanced systems or standard-ceritified renewable energy installations. Implementation of biofuel boilers, solar heat installations and heat pumps derived particular benefit from the subsidy programme. For example, the DPRE supported the setting up of more than 10,000 biofuel boilers.

Test stations and research centres with special knowledge in a particular field could receive a subsidy for the type approval of renewable energy installations and for disseminating knowledge and information.