Oslo has set itself an ambitious target of 50% CO2 emissions reduction by 2030 and carbon neutrality by 2050. One of the main measures the city is pursuing is “phasing out fossil fuels for stationary heating”, in parallel with the modernisation of the district energy system, which attracted extensive investments over 2006-2013. The district heating network currently covers 20% of the city’s total heating demand (1.7 TWh), with almost 60% of heat production coming from waste incineration, heat pumps from sewage and biofuel plants. Oslo is also planning for low-temperature networks (receiving heat from ice arenas, data centres, stores, air-conditioning, solar heating, etc.) to be potentially integrated with the existing high-temperature network. To support the development and modernization of its district energy, Oslo has implemented a wide range of policies and enabling tools.


Oslo’s use of various policies to encourage connections is supporting the expansion of the district heating network.xxxix xl The city mandates that all municipal buildings that have the ability to connect to a district heating system do so, unless they can prove their current energy use has lower CO2 intensity than the district energy option (this is a “connect unless” policy, which is different than for example CPH mandatory connect policy ). To ensure that end-users who are mandated to connect are not disadvantaged, tariffs are regulated to be lower than those for similar technologies. Oslo also encourages private building owners to connect to the network. Streamlined rezoning and permitting processes give preference to developers that design buildings to be district energy-ready. Similarly, the location specific sole-supplier franchise licences allocation, driven by the national policy and objective to expand district energy by 10 TWh by 2020, helps de-risk private investment, and enables local authorities to mandate connections for the specific developments and protect consumers by establishing service standards and regulating tariffs. Oslo is also advocating for a national policy on zero fossil fuel consumption in buildings to support the city’s forward-looking green agenda and expansion of the district energy network. Finally, Oslo is using its Climate and Energy Revolving Fund as an additional enabling tool, providing subsidies and low-cost financing for, among others, district energy projects. Established in 1982 and originally funded through a surcharge on electricity, project financing now comes from the interest on the existing fund. In 2012, the fund supported 2,592 climate and energy efficiency projects, with half of the funding directed to new renewable energy projects, such as heat pumps, district heating, bioenergy and solar power.

Reasons for success

The relatively strong regulatory powers of the local government enabled Oslo to adopt mandatory connections policy for public buildings. However, the success of other innovative policies and tools was based on recognition of opportunities for the local government to use crucial points of urban development planning to support the district energy business case (i.e. preferential permitting process, specific franchise license allocation, grants from the Revolving Fund, etc.). 

C40 Good Practice Guides

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  • Environmental
Key Impact
20% of heat demand (1.7 TWh) supplied by district heating
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