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District heating system as the infrastructure for competition among producers in the heat market

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  • Pažėraitė, Aušra
  • Lekavičius, Vidas
  • Gatautis, Ramūnas

Abstract

Heating and electricity account for one-quarter of annual global greenhouse gas emissions. Many countries still use natural gas and oil for central heating, but interest in district heating as a possible low-carbon alternative is growing. District heating is well-developed in some countries, such as Sweden, Denmark, Poland, and Lithuania. However, there are considerable differences in the organisation of district heating markets in different countries. As these differences may have apparent implications for district heat pricing, competitiveness against other heat supply options, and clean energy uptake, this research explores existing approaches toward competition in the district heating market. We describe the differences in the conceptual frameworks and quantitative outcomes of district heat markets in selected countries and discuss the consequences of the different approaches. This study also considers the possible impacts on consumer prices relative to market opening to competition among heat producers. An important conclusion is that introducing third-party access on the supply side and a one-sided auction may positively affect consumer price downhill development. Finally, we provide insights that could interest other countries and contribute to the future development of the district heating market.

Suggested Citation

  • Pažėraitė, Aušra & Lekavičius, Vidas & Gatautis, Ramūnas, 2022. "District heating system as the infrastructure for competition among producers in the heat market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 169(C).
    • Handle: RePEc:eee:rensus:v:169:y:2022:i:c:s1364032122007705
    DOI: 10.1016/j.rser.2022.112888
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