Written evidence submitted by the Embassy of Denmark (DHH0072)

Dear BEIS Committee

By way of context and introduction, as part of the Danish Government’s climate and green energy agenda, Danish embassies work directly with other ambitious countries on the green transition of the energy sector. For decades, Denmark has sought an ambitious green energy policy. This focus has generated policy and technical experiences, which we believe may be of interest to other ambitious nations around the world.

At the embassy in London, we uphold a particular focus on the decarbonisation of the heating and building sector. For around three years, we have been following and supporting policy efforts within this field in the UK. Many of our activities have evolved around supporting the Scottish Government’s ambitions to develop their Local Heat and Energy Efficiency Strategy (LHEES) as well as their recent push to introduce regulation of the heat networks sector. For the latter we have, on request, provided evidence to the Economy, Energy and Fair Work Committee’s scrutiny of the Heat Networks (Scotland) Bill. We were also developing a programme for a visit to Denmark by the Bill Committee, to see in person some of the solutions discussed in the response, but this has unfortunately been cancelled in response to COVID restrictions. 

In London, we are also in close contact with teams in the Department for Business, Energy and Industrial Strategy (BEIS). Our activities have so far included study tours, webinars and bilateral knowledge exchange between policy experts. If the Committee is interested in gaining further knowledge about any aspects of Danish energy policy, we would be very happy to engage and assist.

We believe the Danish case of decarbonisation of the heating and building sector can provide interesting insights for the UK with regard to heat decarbonisation, and in particular this Committee’s Inquiry into Decarbonising heating in homes. We do not believe that the Danish experience is one that can – or should – be replicated identically; it is not a ‘silver bullet’ solution. Nonetheless, we hope that we can provide a useful case study in progress on buildings decarbonisation, and some solutions for problems that will be shared by any country seeking to decarbonise a substantial heating sector. Our response is therefore shaped around question 1 (lessons learnt from international comparators), but does also provide input for the remaining part of the inquiry. As indicated above, we would be very happy to provide further information on any areas of potential interest.

Best regards,

Lars Thuesen

Ambassador of Denmark to the UK

Introduction to response

This response introduces Denmark’s current progress on decarbonisation, especially around the successful transition within heat and buildings. The response highlights the important role of energy efficiency in lowering consumption and the pivotal role of district heating in enabling fuel and system flexibility, as well as the efficient use of resources. Finally, the response draws out some of the key learnings from the Danish route to decarbonise heat in buildings.

Denmark and the UK have shared climate ambitions

Denmark, like the UK, has an ambitious climate agenda. Denmark is required by law to deliver a 70% reduction in greenhouse gas emissions by 2030, and achieve climate neutrality by 2050. By 2016, emissions had already reduced by an estimated 35% on 1990-levels, while at the same time the economy grew by an estimated 51% (see Figure 1). Although there is still much to be done, these achievements underline that it is possible to achieve decarbonisation across a number of sectors, while continuing to grow the economy.

Figure 1 - Decoupling economic growth and GHG-emission in Denmark (Danish Energy Agency)

Like the UK, much of the Danish success in reducing emissions is owed to extensive decarbonisation of the power sector – especially due to impressive developments within wind energy. Another key factor however, is the successful progress towards decarbonisation of the Danish heating sector.

Decarbonisation of the Danish heat sector

In 2019, estimates by the Danish Energy Agency were that without further political intervention, the share of renewables in heating would increase from roughly 45% to 60% by 2030 (Figure 2 – RES-H/C).   

Figure 2 - Estimated developments (2019) in renewable energy within different sectors in Denmark in a BAU/frozen policy scenario (before recent Climate Agreement). Renewable share of electricity (RES-E), district heating (RES-DH), individual heating and cooling (RES-H/C) and transport (RES-T) (Danish Energy Agency, 2019).

Earlier this year, a new Danish Climate Agreement introduced a range of additional measures focused on decarbonising the remaining part of the heating sector (particularly incentivising households to switch from natural gas and oil boilers to district heating and electric heat pumps). New estimates on the expected share of renewables have not yet been released, but there is good reason to expect a significant further increase in heat decarbonisation by 2030.

A key reason for the strong progress on heat decarbonisation in Denmark is the dedicated political effort to promote energy efficiency in buildings and district heating (also known as city-wide heat networks). Today, more than 65% of Danish households are connected to a district heating network. These networks in turn deliver around 50% of Denmark’s total heat demand as illustrated in Figure 3.

Figure 3 – The source of heat consumed in Denmark between 1972 and 2018 (Danish Energy Agency, 2020).

The share of renewables in district heating has rapidly increased in recent years, and is expected to increase to roughly 80% by 2030 (Figure 2). Combined with the latest initiatives from Climate Agreement (2020), it is expected that the only non-renewable contribution to the district energy mix by 2030 will be the non-renewable share of waste incineration.

Like the UK, Denmark also has a natural gas grid that covers most of the country, which has been providing heat to households since the 1980s. In the near future, many of these households are expected to switch to either electric heat pumps or district heating. This does not mean that the main gas grid will be decommissioned. But by moving households away from gas heating, the remaining gas decarbonisation challenge is reduced and high value green gases are effectively reserved for “hard to abate” sectors such as industries and heavy transport.

The following map on Figure 4 shows the geographical coverage of the district heating networks and the natural gas grid. District heating dominates the major cities and many towns, while the natural gas network covers many towns and some suburban areas, for example around Copenhagen.