C40 Good Practice Guides: Copenhagen - Supportive policies

Summary

In Copenhagen, the district heating system^xli was intensively developed in the 1970s as a way to protect citizens and the economy from the dramatic rise in fossil fuel prices. Today, 98% of heating is supplied by modern district heating networks, which not only produce 40% less carbon emissions than individual gas boilers and 50% lower than oil boilers, but also save the city money. In 2009, Copenhagen Energy, which manages the city’s district heating network, estimated that district heating costs for a typical home were around 45% of those for oil heating and 56% of natural gas for a typical home. The unprecedented coverage and effectiveness of the network is in large part due to enabling policies developed at the national and local level.

Results

The introduction of supportive policies dates back to 1979, when the national Heat Supply Act required local authorities to provide a regional heat plan. This spurred a wave of zoning and land-use planning, especially as the local authorities were newly enabled to mandate connections to the networks. The Copenhagen Heat Plan (1984) introduced new CHP units and, in 1980s, further policy measures were put in place: high levels of taxation of fossil fuels; requirement for utilities to provide at least 450 MW of electricity via decentralised CHP (1986); and ban on electrical heating in new buildings (1988, extended to existing buildings in 1994) that led to expansion of consumer base for district energy utilities. As environmental concerns became more prominent in early 1990s, two CHP plants were converted from fossil fuels to biomass and the waste-to-energy share increased to the current 30%. A new planning system (1979) mandated local authorities to oversee conversion of all heat production to CHP. In 1992, subsidies for renewable electricity production were extended to CHP and gas, later replaced by an electricity transfer surcharge. Starting in 2016, Copenhagen will not allow new or old oil-fired installations in areas where district heating or natural gas networks are available. To provide a long-term vision for district energy networks, Copenhagen also integrated specific targets into its CPH 2025 Climate Plan, which sets down guidelines for achieving carbon neutrality by 2025. By 2025, Copenhagen should have a 100% share of renewable energy and waste-incineration heat in the district heating system (up from 35% today)^xlii.

Reasons for success

The success of enabling policies in Copenhagen (98% average connection to an increasingly low-carbon network) is driven by the integrated, consistent, coordinated and long-term heat-planning framework, which allows for exploring enabling policies’ synergies and for reducing real and perceived risk for investors. General public support for CO₂ emissions reduction also enabled the city to implement policy mandates (e.g. heat production conversion to CHP, ban on oil-fired installations).

When/why a city might apply an approach like this

Cities with strong regulatory powers can adopt this approach to ensure the commercial viability of their district heating projects. Those with the strongest authority, and potentially supportive national policies, could consider a mandatory connections policy to drive district energy development and expansion. Cities without that authority could still consider using their land use, zoning and other policies to facilitate district energy development. Adopting enabling policies and tools can also substitute for subsidies or other financial support to district energy utilities, in particular through helping to secure the customer base for district energy projects. 

C40 Good Practice Guides

C40's Good Practice Guides offer mayors and urban policymakers roadmaps for tackling climate change, reducing climate risk and encouraging sustainable urban development. With 100 case studies taken from cities of every size, geography and stage of development around the world, the Good Practice Guides provide tangible examples of climate solutions that other cities can learn from. 

The District Energy Good Practice Guide is available for download here. The full collection of C40 Good Practice Guides is available for download here.  

All references can be found in the full guide.