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Heating price analysis: District heating is still price robust

by Linda Bertelsen

PRESS RELEASE | The district heating price for 2023 is expected to stay generally unchanged. However, the development in the energy market makes it difficult to predict. But district heating still proves to be a price-robust form of heating, concludes Dansk Fjernvarme.

Most consumers have yet to experience a significant price increase on their district heating bill. This is evident in a new price analysis made by Dansk Fjernvarme, where the association’s members were asked about their heating price as of January 2023 and expectations for the year.

Like other heating sources, the price of heating with district heating has also increased as part of the high energy prices. Thus, the district heating price for a standard house from January 2022 to January 2023 has increased by 17.8 percent per year. Despite the price increase, district heating prices are still at a low level compared to other forms of heating.

– 2022 put the energy market under the microscope, and we became aware of how much energy prices affect society. Therefore, it is positive to see that most district heating consumers have avoided the high price increases, and they can look forward to a year when their heating prices stay calmer, says Bettina Aagaard Vester, consultant and responsible for the heating price analysis in Dansk Fjernvarme.

From August 2022 to January 2023, the average heating price for a standard house has increased by 13.4%. The price increase is at the same level as the price increase that the district heating companies expected in September 2022, based on a similar price survey in which Dansk Fjernvarme asked about the companies’ expected prices for 2023.

The falling natural gas price can be seen in district heating companies.

In August 2022, the district heating companies were asked about their expectations for price developments in January 2023. In August, natural gas and electricity prices were at record highs, creating great uncertainty regarding the expectations for the winter and heating season. Because the Danes have been good at saving their energy, and the natural gas stores have been full, several district heating companies have been able to defy the enormous price increases.

– For several companies that use natural gas as their primary fuel, many have been able to reduce or limit the expected price increases in light of the falling gas price. Therefore, we see that the companies have been able to keep prices stable, and others have even lowered prices in connection with developments in the gas market, says Bettina Aagaard Vester.

154 companies expect to keep prices steady for almost one million consumers in 2023, while 23 expect to lower prices for approximately 100,000 consumers; 66 companies are still awaiting developments on the energy market and thus cannot announce expectations for the heating price in 2023.

– 2021 and 2022 have taught us that predicting how the energy market will develop is very difficult. Therefore, looking into the crystal ball is associated with significant uncertainties, such as the weather and China’s demand for natural gas. What we can see is that district heating has considerable robustness to external factors due to the flexibility of heat sources for district heating production, says Bettina Aagaard Vester and concludes:

– Therefore, amid an extensive energy and supply crisis, it also does not make sense to adopt a bill on competition suspension of stable waste energy production, which will lead to bankruptcies and the reduction of a significant and cheap heat source for many district heating companies.

Translated from the Danish District Heating Association