Mergers good for Denmark’s district heating sector

Date: 20 February 2017

A new report has shown that Denmark’s district heating sector is consolidating in what the Danish District Heating Association (DDHA) terms ‘a healthy development’.

According to recent figures from the DDHA, there are currently 46 district heating firms in the country, down from 110 in 2010.

This consolidation has pushed down prices for district heating, with the average price standing at €2.3 in 2010 as opposed to €1.9 today, according to the DDHA’s figures.

Kim Behnke, DDHA deputy director, said: ‘We have for a number of years experienced how a number of district heating companies have created value for their customers by co-operating or merging with nearby district heating companies.

‘Our survey shows that district heating companies across the country are largely very focused on creating more value for their clients. And when they can reduce the price of district heating by working together or merging, they do so. Therefore, I see consolidation as a healthy development.’

Behnke said the statistics expose public ‘myths’ that district heating companies are inefficient and are not reaping the gains from co-operation as ‘baseless’. He said considerable efficiency gains can be achieved when companies co-operate or merge activities in purchasing, administration, rostering, service, operation and maintenance.

And he expects this trend to continue. ‘I expect that in the coming years we will see a number of district heating companies join forces,’ he said.