Background

The daily production of the CHPs and DHPs is prioritised according to an aggregate financial optimisation of the power and heat production. Since 7 January 2008 Varmelast has worked out heating plans for the Greater Copenhagen area. Since 27 April 2009 we have also worked out plans for production of district heating within the same area.

Prior to the liberalisation of the Danish power market in the year 2000, the CHP producers were responsible for deciding which units were to bear the heat load, i.e. the producers organised the power and heat production at the plants. Considering the competitive situation between Ørsted, owner of Avedøre CHP Plant, H.C. Ørsted Power Plant and Svanemølle Power Plant, and HOFOR, owner of Amager Power Plant, on the power market, the producers could no longer make a total financial optimum load distribution for the power and heat production in the Copenhagen metropolitan area.

Prior to the establishment of Varmelast a considerable report and analysis work clarified how the heating companies could ensure a reliable supply and eco-friendly district heating at the lowest possible expenses, both in the short and long run. The analyses were carried out in 2005 and 2006 in cooperation with EA Energianalyse A/S and established that:

  • A liberalised district heating market like the power market could not be established as there were not enough producers to create an actual competitive market.
  • District heating consumers in the Copenhagen metropolitan area could lose up to DKK 200 million a year if the heat load distribution was not assigned as a total optimisation of power and heat.
  • It would not be financially optimal if the district heating market was divided between the large producers and the extensive coherent transmission network would not be utilised for the daily production optimisation.

Therefore it was concluded that the district heating companies were to ensure that the daily production of the CHPs and DHPs is prioritised according to an aggregate financial optimisation of the power and heat production where the hourly based power is the most important input. Consequently, the production and the district heating companies agreed to have a load distribution of the CHP plants which resulted in the establishment of Varmelast.