District Heating in the Heat Transition: Investment, Regulation and Energy Prices (FIRE)

The bridge project ‘District Heating in the Heat Transition: Investment, Regulation and Energy Prices (FIRE)’, run by the Climate Policy and Energy, Transport and Environment departments, examines the compatibility of district heating's pricing structure with its key role in the heat transition.

The aim of the research project is to gain a better understanding of the effect of decarbonization and the role of market power on district heating price levels.

The project investigates whether observed price differences are driven by variations in the generation and operating costs, differences in the building stock, or by monopolistic pricing behavior of suppliers. To this end, various factors influencing the differences in prices and heating costs between district-heated and other buildings are analyzed. Additionally, the effects of decarbonizing generation on district heating prices are examined. Finally, the results will be used to evaluate reforms in the district heating market.