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District heating

The future of district heating

9. October 2023

Solution provider

Energy Modelling Lab

Our expertise is analyses of energy systems, energy markets and potential impact of new technologies and policies. We develop scenarios showing the most feasible and low-cost pathways to accomplish a green transition on national, regional, and local levels and for specific sectors. Our services include capacity building.

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The green transition implies major changes in the district heating systems. In Denmark, district heating supplies about 66 percent of the households. The Danish authorities are planning to increase this number and connect as many households as possible during the upcoming years. So far, district heating is produced by using waste, biomass, wind, sun, gas, coal, oil, surplus heat from industries, and the like.

To serve as a basis for developing and planning new projects, the Danish district heating producers needed an analysis estimating the future thermal electricity and heating production capacity and future demand.


Energy Modelling Lab developed an analysis based on analyses of three scenarios. The scenarios were generated by using the advanced energy system model TIMES-DK and input from the members of the Danish District Heating Association. The TIMES model is internationally recognized and developed by an IEA working group.


The report “Development of thermal power and heat capacity – analysis towards 2040” was published in 2022. The report was financed by the Danish District Heating Association.

The main finding was that by 2040, 50 percent of district heating will be generated by electric heat pumps and 25 percent from surplus heat, mainly from PtX facilities and data centers.

Also, the analysis found that thermal power capacity will be phased out to a large extent and faster than expected by previous estimates. Investments in new thermal power plants are already diminishing. Existing plants are being phased out as their lifetime and contracts come to an end. Since the utilization rate of about two-thirds of the remaining thermal capacity will be rather low, there is a high risk that the plants will be closed.

Concerning the security of supply, it will be reduced when electricity is the primary source of energy for the district heating system. Ancillary services can in the future be provided by PtX facilities. If the PtX facilities are not built as fast as planned, the thermal power plants will still have a role as providers of ancillary services.