Policies and incentives for a 4th generation district heating system

This paper addresses policies and measures which can incentivise the investments necessary for a 4DH development. The analysis uses the city of Aalborg as a case where remunicipalisation through a recent acquisition of a coal fired CHP plant has made an update of a municipal strategic energy plan necessary. Combining datasets on buildings and insulation techniques with economic methodology, we investigate, amongst others, how the local district heating tariff can be adapted to support the transition to lower supply temperatures and improve the conditions for heat savings. The paper concludes that a change in heat tariff design may improve the private economic incentive for optimal levels of heat savings, while fluctuations and shortages in capital markets may also be a barrier for investments in heat savings.